No. 90-627 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

WAYNE and TERESA AMAZI, et al., 

Plaintiffs, 

ATLANTIC RICHFIELD COMPANY, a Delaware Corporation, CGG AMERICAN 

SERVICES, INC., a Colorado Corporation, GRANT-NORPAC, INC., a 

Delaware Corporation., et al., 

Defendants, 

ATLANTIC RICHFIELD COMPANY, 

Cross-Claimant, Respondent and Cross-Appellant, 

GRANT-NORPAC, INC., 

Cross-Defendant, Appellant and Cross-Respondent, 

LONNIE AND PHYLLIS BROOKSHIRE, et al., 

Plaintiffs, 

ATLANTIC RICHFIELD COMPANY, a Delaware Corporation., CGG AMERICAN 

SERVICES, a Colorado Corporation, GRANT-NORPAC, INC., et al., 

Defendants, 

ATLANTIC RICHFIELD COMPANY, 

Cross-Claimant, Respondent and Cross-Appellant, 

-vsGRANT-NORPAC, INC., 

Appellant and Cross-Respondent. 

AUG 9 - 1991 

CLERK 86 SUPREME COURS 

STATE OF MONTANA 
APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Jeffrey Sherlock, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Rockwood Brown and Guy W. Rogers; Anderson, Brown, 

Gerbase, Cebull, Fulton, Harman & Ross, Billings, 

Montana. 

For Respondent: 

James M. Ragain and Kyle A. Gray; Holland and Hart, 

Billings, Montana. 

Filed: 

Submitted on briefs: June 28, 1991 

~ecided: August 9, 1991 

I ' Clerk 
Justice R. C. McDonough delivered the Opinion of the Court. 

This appeal involves an indemnification dispute. The parties 

involved were both defendants in two underlying suits. Appellant 

and Cross-Defendant Grant-Norpac (GN) appeals the order of the 

First Judicial District Court, Lewis and Clark County, granting 

summary judgment to the Respondent and Cross-Claimant Atlantic 

Richfield Company (ARCO) on its cross-claim for indemnification in 

the underlying lawsuits. We affirm. 

GN raises a sole issue on appeal: 

Did the District Court err in granting summary judgment to 

ARCO on its cross-claim for indemnification, including 

indemnification for ARCOts own alleged negligence, based on the 

language of the contract between the parties? 

ARCO also raises an issue on cross-appeal: 

Did the District Court err in not awarding ARCO its attorney's 

fees expended to prove its cross-claim for indemnification? 

This case arose out of seismic exploration in and around the 

Helena Valley. On January 3, 1983, ARCO entered into an agreement 

with GN, whereby GN was to conduct seismic testing activities for 

ARCO for the purpose of mineral and oil exploration. Pursuant to 

the agreement, ARCO would designate certain services it wanted GN 

to conduct in locations designated by ARCO, with specific 

instructions contained in a series of supplementary agreements. 

In 1983 and 1984 GN ran shot-lines in the Helena Valley at 

locations designated by ARCO. Shot-lines consist of a linear 

series of sticks topped with explosives running in a particular 
direction. The explosives are detonated simultaneously and the 

velocities of the resulting shockwaves that pass through the ground 

provide data that may be indicative of mineral or oil deposits in 

the area. The contract indicates that the location of the shotlines and the equipment used, as well as specifications for the 

work, were provided by ARCO. 

About this same time two other companies, Geosource, Inc., 

and CGG American Services, Inc., were also conducting geophysical 

surveys in the area, setting off similar explosive devices. 

These suits arose when the plaintiff landowners sued ARCO, GN, 

Geosource and CGG alleging that the exploration work of the 

defendants had damaged their property. The landowners contended 

that the use of above-ground explosives in the Helena Valley was 

negligent. 

GN and ARCO requested the District Court to interpret the 

indemnity clause of the contract between the parties. The court 

ruled that the indemnity provision required GN to indemnify ARCO 

if the trier of fact determined that both ARCO and GN were 

negligent to some degree; GN would not have to indemnify ARCO only 

if the plaintiffsu injuries arose due to the sole negligence of 

ARCO. ARCO offered the defense of this matter to GN in October of 

1986. GN refused to defend. ARCO incurred in defending some 

$64,000.00 worth of attorney's fees and costs. GN eventually 

settled the plaintiffsv cases and obtained releases for itself and 

ARCO. ARCO did not contribute to the settlements. ARCO moved for 

summary judgment requesting that under the contract GN indemnify 
ARCO for its attorney's fees and costs. The District Court granted 

summary judgment ruling that ARCO was entitled to costs and fees 

expended in defending the underlying claims, but not to the fees 

expended in proving its contractual right to indemnification. GN 

appealed from the orders granting ARCO1s indemnity claim and fees. 

ARCO cross-appealed from the order denying its claim for costs and 

fees expended in establishing its right to indemnification. 

First, we note that this is an appeal from summary judgment. 

Our standard of review is the same as that of the District Court 

considering the motion. In order for summary judgment to issue, 

the movant must demonstrate that there is no genuine issue as to 

all facts deemed material in light of the substantive principles 

entitling the movant to judgment as a matter of law. Rule 56(c), 

M.R.Civ. P. ; Frigon v. Morrison-Maierle, Inc. (1988) , 233 Mont. 113, 

117, 760 P.2d 57, 60; Cerek v. Albertsonfs, Inc. (1981), 195 Mont. 

409, 411, 637 P.2d 509, 511. If the movant meets this burden, the 

burden then shifts to the non-moving party to demonstrate a genuine 

issue of material fact. Friqon, 760 P.2d at 60. "Mere denial or 

speculation will not suffice, the non-moving party must show facts 

sufficient to raise a genuine issue." Frison, 760 P.2d at 60; 

Gamble Robinson Co. v. Carousel Properties (1984), 212 Mont. 305, 

312, 688 P.2d 283, 287. 

I. GNls Appeal 

In its opening brief, GN narrowly defines the issue on appeal: 

We are not concerned with the remedy of contribution, 

nor with the common law indemnity involving 

active/passive negligence. This appeal relates solely 

to whether ARCO has a right of contractual indemnity 
against Grant-Norpac under the written agreement between 

those parties. The issue can be narrowed even further 

by stating that we are not concerned with any claimed 

sole negligence on the part of ARCO which would allow 

indemnity in favor of Grant-Norpac. The limited auestion 

presented in this appeal is whether the indemnitv 

provision of the Basic Asreement allows ARCO to recover 

attornevs' fees and costs which were expended to defend 

asainst claims of ARCO1s own direct neslisence. (Emphasis 

added. ) 

For purposes of this appeal, GN has abandoned its argument below 

that a genuine issue of material fact existed concerning whether 

ARCO was solely negligent, which would allow indemnity in favor of 

GN. Furthermore, GN concedes that it was partially negligent, 

thereby eliminating questions of fact under the indemnity provision 

of the contract. The only issue remaining involves the legal 

interpretation of the indemnity provision in the contract. The 

provision provides: 

CONTRACTOR shall protect, indemnify, defend and save 

CLIENT harmless from and against all claims, liabilities, 

demands, causes of action and judgments (including costs 

and reasonable attorneys fees) arising in favor of or 

asserted by third parties on account of personal injury 

or death or on account of damage to property, which 

injury, death or damage is the result, in whole or in 

part, of the negligent acts or omissions or willful 

misconduct of CONTRACTOR, its employees, agents or 

subcontractors. CLIENT shall protect, indemnify, defend 

and save CONTRACTOR harmless from and against all claims, 

liabilities, demands, causes of action and judgments 

(including costs and reasonable attorneys fees) arising 

in favor of or asserted by third parties on account of 

personal injury or death or on account of damage to 

property, which injury, death or damage is solely the 

result of the negligent act or omissions or willful 

misconduct of CLIENT, its employees and agents. 

(Emphasis added.) 

GN contends that while the provision requires GN to indemnify ARCO 

for any negligence resulting in whole or in part from GN1s actions, 
the contract does not indemnify ARC0 against its own negligence. 

We disagree. In order for a contract to indemnify a party 

against its own negligence, such indemnification must be expressed 

in "clear and unequivocal terms." Sweet v. Colburn School Supply 

(1982), 196 Mont. 367, 370-71, 639 P.2d 521, 523; Lesofski v. 

Ravalli County Electric Cooperative (1968) , 151 Mont. 104, 108, 439 

P.2d 370, 372. In Sweet, this Court held that indemnity language 

in a lease was not clear and unequivocal, noting that the language 

in that case was not comparable to the indemnity language in Ryan 

Mercantile Co. v. Great Northern Railway Company (9th Cir. 1961), 

294 F. 2d 629. In Ryan, the wife of an employee of Ryan was injured 

while riding in a car when the car was struck by a boxcar being 

pushed by a Great Northern locomotive. She only alleged negligence 

on the part of Great Northern. The Ninth Circuit Court found that 

Great Northern should be indemnified for its own negligence, 

stating: 

[I]n order to uphold an indemnification agreement for 

damages caused by negligent acts of the indemnitee there 

must be clear and unequivocal terms. . . . An 

examination of the indemnity agreement discloses no 

ambiguity. The phrases used--''any and all personal 

injurieslt, Itof every name and nature which may in any 

manner arisew, "whether due or not due to the negligence 

of Great Northernn---demonstrate that Ryan's indemnity 

would cover any claim made against Great Northern . . . and shows that the parties had in mind that the 

negligence of Great Northern would be no bar to Ryan's 

indemnity obligation.If 

Ryan, 294 F.2d at 633. While the indemnity provision in this case 

does not contain language exactly parallel to the language in Ryan- 

-i.e., "whether due or not due to the negligence of ARCOW--when 

both sentences of the provision are read together it is clear that 
the provision requires GN to indemnify ARCO "against all claims, 

liabilities, demands, causes of action and judgments (including 

costs and reasonable attorneys fees" resulting "in whole or in 

part" from "the negligent acts or omissions or willful misc~nduct~~ 

of GN, its employees, agents or subcontractors. Under the 

provision, liability attaches to ARCO only when ARCO is solely 

negligent. Thus the provision clearly and unequivocally provides 

that ARCO will not be indemnified against its own sole negligence, 

but it will be indemnified where an injury is due to concurrent 

negligence of ARCO and GN in any proportion. We conclude that the 

District Court did not err in ruling that the indemnity provision 

allows ARCO to recover attorneysf fees and costs expended to defend 

against claims of ARCOts own direct negligence. 

11. ARCO1s Cross-Appeal 

On cross-appeal, ARCO alleges that the District Court erred 

in not ruling that the indemnity provision also entitles ARCO to 

indemnification for its costs and fees incurred proving its right 

to indemnification. ARCO sought indemnity totaling $70,250.75. 

$50,449.51 of this requested sum was expended in defending the 

case. ARCO incurred the remaining $19,801.24 attempting to secure 

indemnity from GN. 

This is an issue of first impression in Montana. The majority 

rule is that a party is not entitled to its fees and costs incurred 

establishing its right to indemnity: 

The general, and virtually unanimous rule appears to 

limit the allowance of such fees to the defense of the 

claim indemnified against and not to extend such 

allowance for services rendered in establishing the 
right to indemnification. 41 Am.Jur.2dt Indemnity, 5 36 

(Supp. 1974) ; 42 C.J.S. Indemnity, 5 13d (1944). . . . [I]n the absence of exDress contractual terms to the 

contrary, an indemnitee may not recover legal fees 

incurred in establishing his right to indemnification. 

Jones v. Strom Construction Co., Inc. (Wash. 1974), 527 P.2d 1115, 

1119. ARCO contends that it should be entitled to recover its fees 

incurred in establishing indemnification because a contract 

provision providing for indemnification is similar to a contract 

of insurance. We disagree. Here the indemnity provision is merely 

one provision in a contract to perform geophysical exploration 

bargained between the parties. It is not specifically a contract 

for insurance. We adopt the majority rule that absent an express 

contractual term an indemnitee may not recover attorneyst fees 

incurred in establishing indemnity. 

ARCO argues that Section IX, paragraph 3 of the agreement 

constitutes such an express term and allows recovery for fees 

incurred in establishing indemnity. The provision provides: 

If indemnity is required by any of the terms of this 

Agreement, the responsible party shall defend the other 

and pay all settlements, judgments, costs, including 

reasonable attorneys fees, and other related expenses 

similar or dissimilar to the foregoing. 

ARCO argues that such "related expensesw include attorneysw fees 

incurred in establishing its contractual right to indemnification, 

citing the rule that contracts for indemnification are to be 

liberally construed in favor of the party intended to be 

indemnified. See Capital Hill Shopping Center v. Miles (1977), 

174 Mont. 222, 231, 570 P.2d 295, 298. 
We disagree with this argument. While contracts of indemnity 

are to be liberally construed in favor of the indemnitee, the 

provision here is not in and of itself such a contract. Rather 

it is a contract term allowing for recovery of certain attorneysf 

fees. Under the majority rule just adopted, such a term must be 

express in order for an indemnitee to recover legal fees incurred 

in establishing its right to indemnification. We conclude that the 

provision here is not sufficiently express, and affirm the District 

Court's adoption of the majority rule regarding such fees. 

The order of the District Court is 

AFFIRMED. 

We Concur: /'