A county retained an engineer to design a wastewater treatment plant, and under separate contract the county hired a construction contractor to build the plant. Part of the design called for two pumps. After construction, the pumps failed, and the concrete floor in one of the tanks heaved and ruptured, rendering the tank nonoperational. The county sued both the engineer and the contractor. The engineer filed a cross claim against the contractor to enforce the indemnification clause whereby it alleged the contractor was obligated to indemnify the engineer for the alleged damages. Court held no indemnity was owed because the clause very clearly stated that indemnity was only for personal injury and destruction of property other than the work itself. A plain reading of the clause precluded coverage for loss of use of tangible property resulting from damage to the work. County of Saratoga v. Delaware Engineering, D.P. C, 189 A.D.3d 1926 (NY 2020).
The indemnity clause in question provided the following:
“[Contractor] shall indemnify and hold harmless Engineer … from and against all claims … caused by, arising out of or resulting from the performance of the work, provided that any such claim, cost, loss or damage: (i) is attributable to bodily injury, sickness, disease or death to or injury to or destruction of tangible property (other than the work itself), including the loss of use resulting therefrom, and (ii) is caused in whole or in part by any negligent act or omission of Contractor.”
In analyzing the facts and the law, the appellate court held that the Contractor’s motion to dismiss the indemnification claim should have been granted by the trial court. The reasons for that holding said the court are, “Here, plaintiffs assert claims for damage to the tank, specifically the rupturing and heaving of its concrete floor; however, such claims clearly arise from the work itself, as [Engineer] designed the tanks and [Contractor] installed the same as part of their respective agreements with the County.”
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 ConstructionRisk 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 Report and may be reached at Kent@ConstructionRisk.com or by calling 703-623-1932. This article is published in ConstructionRisk Report, Vol. 23, No. 2 (April 2021).
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