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An indemnification clause in a contract between a table rental company and restaurant was held to be unenforceable where the Indemnitee sought to be indemnified for its own negligence. The indemnity claim arose out of a suit by patron at a restaurant who was injured when a table collapsed and then sued the restaurant and the rental company that owned the table to recover damages for his injuries. The appellate court found that the clause didn’t include express language that clearly and unequivocally showed the parties’ intent to transfer liability to the Indemnitee where that liability arose out of the indemnitor’s own negligence. It therefore reversed the trial court which concluded that the clause covered liability for the Indemnitee’s own negligence because the only exception to the indemnity obligation that was stated in the clause was for “intentional misconduct.”

The appellate court explained that the courts in the state disfavor agreements “seeking to indemnify the Indemnitee for losses occasions by its own negligence.” The court explained the strict rules applicable to finding contractual indemnity for one’s own negligence. It must have an express provision stating the parties intent. Dewitt v. London Road Rental Center, Inc., 910 N.W.2d 412 (Minn. 2018).

The background on the decisions from the lower level courts was the following:

“The district court granted London Road summary judgment on its contractual indemnity cross-claim, concluding that the terms of the rental agreement’s indemnity clause required Tower Tap to defend and indemnify London Road. Relying on the clause’s exception for claims directly resulting from London Road’s intentional misconduct, the district court concluded that the clause unequivocally covered liability for London Road’s own negligence and “[t]o find otherwise would make the entire clause nonsensical.”

The intermediate court of appeals, “substantially followed the district court’s reasoning, relying on the indemnity clause’s exception for London Road’s intentional misconduct and explaining that the clause was “so broad” that it “ ‘necessarily includes claims of the indemnitor’s [London Road’s] negligence.’ ”

In reversing those decisions, the state supreme court explained:

“For an indemnity clause to pass strict construction, the contract must include an “express provision” that “indemnif[ies] the indemnitee for liability occasioned by its own negligence; such an obligation will not be found by implication.” Id. Such a provision need   not include the word “negligence,” but it must use specific, express language that “clearly and unequivocally” states the contracting parties’ intent for the indemnitor to indemnify the indemnitee for the indemnitee’s own negligence.”

“The test is therefore not whether the language of an indemnity clause is “so broad” that it necessarily includes the indemnitee’s own negligence. [citation omitted]. That test would be inconsistent with the rule we set forth in Farmington, 281 N.W.2d at 842. Rather, the proper test is whether the clause includes specific language that expressly shows, in clear and unequivocal language, that the parties intended the clause to obligate the indemnitor to indemnify the indemnitee for the indemnitee’s own negligence.”

In this case the indemnity clause provided as follows:

HOLD HARMLESS/INDEMNITY. You assume all risks associated with the possession, use, transportation and storage of the Equipment.

ACCORDINGLY, YOU HEREBY WAIVE ANY AND ALL LIENS AND CLAIMS ARISING FROM OR ASSOCIATED WITH, AND AGREE           TO INDEMNIFY, DEFEND AND HOLD HARMLESS THE RENTAL COMPANY FROM AND AGAINST, ANY AND ALL LIABILITIES,                 CLAIMS, DAMAGES, LOSSES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION, ATTORNEYS’ FEES, CLAIMS FOR  BODILY INJURY(IES) (INCLUDING DEATH), PROPERTY DAMAGE, LOSS OF TIME AND/OR INCONVENIENCE) RESULTING FROM OR ARISING IN CONNECTION WITH SUCH POSSESSION, USE, TRANSPORTATION AND/OR STORAGE, REGARDLESS OF THE CAUSE AND INCLUDING ANY INJURIES AND/OR DAMAGES SUFFERED BY YOU, YOUR EMPLOYEES AND/OR ANY THIRD PARTY(IES), EXCEPT TO THE EXTENT DIRECTLY RESULTING FROM OUR INTENTIONAL MISCONDUCT.

The supreme court found that this did not expressly refer to “negligence” and did not expressly state that the restaurant agreed to indemnify the rental company for the restaurant’s own acts or omissions.

 

About the author: Article written by J. Kent Holland, Jr., a construction lawyer located in Tysons Corner, Virginia, with a national practice (formerly with Wickwire Gavin, P.C. and now with Construction Risk Counsel, PLLC) representing design professionals, contractors and project owners.  He is founder and president of a consulting firm, ConstructionRisk, LLC, providing consulting services to owners, design professionals, contractors and attorneys on construction projects.  He is publisher of ConstructionRisk.com Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932.  This article is published in ConstructionRisk.com Report, Vol. 20, No. 7 (Aug 2018).

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