No. 81-298 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

JOANIE SWEET, 

Plaintiff and Respondent, 

COLBORN SCHOOL SUPPLY, 

BURLINGTON NORTHERN INC., 

& M & L REALTY COMPANY, 

Defendansand Appellants. 

Appeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone 

Honorable William J. Speare, Judge presiding. 

Counsel of Record: 

For Appellants: 

K. Kent Koolen, Billings, Montana 

Anderson, Brown, Gerbase, Cebull & Jones, 

Billings, Montana 

For Respondent: 

Hennessey Law Office, Billings, Montana 

Submitted on briefs: November 5, 1981 

Decided: January 28, 1982 

Filed: JAN 2 8 1982 

r @ Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the 

Court. 

Joanie Sweet (Sweet) sued Burlington Northern, Inc. 

(BN) and Colborn School Supply and M&L Realty Co. (Colborn) 

in Yellowstone County District Court for personal injuries 

suffered while crossing the BN track adjacent to the Colborn 

building located on BN property. BN settled by the payment 

of $60,000 to Sweet. BN cross claims against Colborn claiming 

indemnification under the BN-Colborn lease. The District 

Court granted summary judgment to Colborn against BN on the 

cross claim. BN appeals. We affirm the District Court. 

The issues are: 

(1) Does the BN-Colborn lease indemnify BN against 

damages suffered as a result of the sole negligence of BN? 

(2) Is BN estopped from denying that Colborn at all 

times was in full compliance with the BN-Colborn lease? 

Sweet claimed that she sustained injury in the course 

of her employment as a delivery van driver for United Parcel 

Service, while enroute to Colborn's building in Billings, 

Montana, for purposes of pick-up and delivery on April 12, 

1976. Sweet claimed that as she was operating her delivery 

vehicle upon or across railroad tracks located behind the 

building occupied by Colborn, the steering wheel of her 

vehicle was caused to suddenly spin and strike her hand, 

causing injury. She claimed that the steering wheel was 

caused to spin as the result of ruts, depressions, and 

chuckholes in the ground adjacent to the rails over which 

she was operating her vehicle. 

Colborn is located on the southwest corner of Montana 

Avenue and North 27th Street in Billings. This four story 

building occupies railroad right-of-way owned by BN and is 
served by a railroad spur track adjacent to the loading dock 

at the rear of the building. The land occupied by Colborn 

was leased from the railroad by M&L Realty in 1957. The 

lease was revised and renewed in 1975. M&L Realty subleased the property to Colborn. Only the property physically 

occupied by the building and by the loading dock is leased 

from the railroad. The ground on which the spur track is 

located is owned by BN and is not covered by any lease 

agreement. 

It was customary for Colborn to receive freight shipments 

at its loading dock by delivery truck as well as by rail. 

Such delivery trucks necessarily passed over the rails of 

the spur track. Colborn and BN were aware of this. 

It was an undisputed fact that the strip of land where 

the accident occurred was under the exclusive control of BN 

and that BN was the only party with a duty to maintain the 

area. BN would not allow businesses such as Colborn to 

conduct or perform separate maintenance procedures in the 

area where the accident occurred. 

Paragraph 5 of the BN-Colborn lease provides: 

"Lessee shall not nor shall Lessee foster, 

sanction or permit others to operate any 

equipment, motor driven or otherwise, for 

the purpose of serving Lessee, upon or across 

any railroad track located on or adjacent to 

the demised premises except at established 

crossings. 

"Lessee agrees to indemnify and save harmless Lessor from all loss, damage, penalties, 

costs or judgments that may be assessed against 

or recovered from it on account of or in any 

manner arising or growing out of a violation 

of the provisions of this paragraph 5." 

The issue is whether the foregoing lease provisions are 

sufficient to indemnify BN against damages sustained because 

of the negligence of BN. 
On this issue BN maintains that the language of the 

lease agreement provides that Colborn will indemnify BN for 

any losses assessed against BN as a result of Colborn violating 

the terms of the lease. BN claims that there was a violation 

of paragraph 5 of the lease when Colborn permitted the 

plaintiff to operate a motor vehicle on tracks other than at 

an established crossing. 

This Court recognizes the validity of a contract provision 

of indemnity. Lesofski v. Ravalli Co. Elect. Coop. (1968), 

151 Mont. 104, 439 P.2d 370; Western Construction Equipment 

Co. v. Mosby's Inc. (19651, 146 Mont. 313, 406 P.2d 165. 

However, this Court held that a party cannot be indemnified 

against its own negligence unless the contract provisions 

are "clear and unequivocal." In Lesofski a widow of a 

deceased employee of a highway contractor brought an action 

against an electric power company for the death of the 

employee who was electrocuted. The company brought a 

third-party action against the contractor. The District 

Court entered a summary judgment for the contractor which 

the Company appealed. The third-party complaint was based 

upon an indemnity agreement in a contract between the Company 

and the State Highway Commission. 

The contractor had no contract of any sort with the 

Company, and there had not been any bargaining by the Company 

for indemnity for its own negligence. This Court stated 

that "to contend that we should liberally construe the 

contract of respondent with the State Highway omm mission to 

include the appellant's negligent acts would in our opinion 

annul the recognized rule that to indemnify a party against 

his own negligence it must be expressed in 'clear and unequivocal 

terms. ' " Lesofski, 146 Mont. at 108, 439 P.2d at 372. The 
District Court could not find such clear and unequivocal 

language in the present case. 

BN argues that it had the right to protect itself 

against an increased risk incurred by permitting Colborn to 

occupy premises adjacent to the BN tracks. BN also argues 

the validity of the indemnity clauses which they contend 

indemnify BN against its own negligence. BN relies upon 

the Montana case of Ryan Mercantile Company v. Great Northern 

Railway Company (9th Cir. 1961), 294 F.2d 629, which was an 

action brought by a railroad's tenant for a judgment declaring 

the rights of the parties under a lease. 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 

switch engine. She alleged only negligence of the Great 

Northern. While finding that the Great Northern should be 

indemnified for its own negligence, the 9th Circuit Court 

stated: 

". . .[Iln 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 injuries,' 

'of every name and nature which may in any 

manner arise,' 'whether due or not due to the 

negligence of Great Northern' -- 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." Ryan, 294 F.2d 

at 633. 

The Ryan Mercantile Company lease states that it extends to 

personal injuries "whether due or not due to the negligence 

of Great Northern." There is no comparable provision in the 

BN-Colborn lease. We agree with the conclusion of the 

District Court that the language from paragraph 5 of the BNColborn lease does not provide clear and unequivocal terms 
necessary for BN to recover under a theory of indemnification 

against its own negligence. 

Because we recognize the close question in the interpretation of the lease provision, we will consider the next 

issue which is whether BN is estopped from denying that 

Colborn was in full compliance with the BN-Colborn lease. 

BN claims a violation of the lease agreement's paragraph 

5 because Colborn allowed the plaintiff to cross the tracks 

at an area not "an established crossing." It was undisputed 

that BN was aware that the tracks were being crossed for 

deliveries to Colborn. This had been occurring since the 

original lease in 1957. The undisputed evidence also shows 

that trucks have been making deliveries across this crossing 

to the building now occupied by Colborn for more than 60 

years on a continuing basis. A new lease was drawn up in 

1975 partly because of the construction of a new loading 

dock. The record shows that BN was aware that Colborn 

intended to and did use the loading dock, that vehicles 

could not service the loading dock without crossing the 

tracks, and that BN maintains the tracks so that vehicles 

could cross them to service businesses. 

Colborn asserted the defense of estoppel, and the 

District Court held that BN was estopped, as a matter of 

law, from asserting that a violation of the lease caused 

plaintiff's injuries. The District Court memorandum opinion 

stated: 

"BURLINGTON NORTHERN, by its conduct as apparent 

from the record, has acquiesced in the use of 

the area where the accident happened as an area 

for vehicular travel; BURLINGTON NORTHERN has 

sanctioned such travel and has at least attempted to maintain the area for the specific purpose of vehicular travel to serve such businesses as COLBORN SCHOOL SUPPLY." 
In support of the finding of estoppel, the deposition 

of Blane Pound, BN executive, in part states: 

"Q. Well, if you consider what they've been 

doing for 23 years a violation of the provisions 

of this lease, Burlington Northern hasn't done 

anything to prevent them from doing that, have 

they? 

"A. That is correct. 

"Q. As a matter of fact, you well know that 

Burlington Northern has, at least at some time, 

built that area up there so that vehicles could 

drive in and out of there. 

"A. Correct. 

"Q. I see. So what, I guess at the very least 

Burlington Northern assisted in the violation 

of the terms of this lease, if that's a violation, huh? 

"A. That would appear to be correct. 

"Q. And it would also appear that that has 

been with the approval and blessing of Burlington Northern, wouldn't that be correct? 

"A. Yes. 

"Q. It's either one of two things. It's either 

that Burlington Northern assisted Colborn 

School Supply in violating the terms of the 

lease -- and I'm referring to full Paragraph 

3 under Paragraph 5 -- they've either assisted 

and approved all these years of that violation 

or Burlington Northern considers that area back 

there an established crossing. 

(Ob j ection) 

"Q. Well, I want you to answer that. It's 

either one of those two things, isn't it? 

"A. Yes, your statement would be correct." 

Six essential elements have been held necessary to 

constitute an equitable estoppel: 

"(1) there must be conduct, acts, language, or 

silence amounting to a representation or a 

concealment of material facts; (2) these facts 

must be known to the party estopped at the time 

of his conduct, or at least the circumstances 

must be such that knowledge of them is necessarily imputed to him; (3) the truth concerning these facts must be unknown to the other 

party claiming the benefit of the estoppel at 

the time it was acted upon by him; (4) the 
conduct must be done with the intention, or at 

least with the expectation, that it will be 

acted upon by the other party, or under the 

circumstances that it is both natural and 

probable that it will be so acted upon; (5) 

the conduct must be relied upon by the other 

party, and, thus relying, he must be led to 

act upon it, and (6) he must in fact act upon 

it in such a manner as to change his position 

for the worse." Smith v. Krutar (1969), 153 

Mont. 325, 332, 457 P.2d 459, 463; Hustad v. 

Reed (1958), 133 Mont. 211, 223, 321 P.2d 

1083, 1090; Mundt v. Mallon (1938), 106 Mont. 

242, 249-50, 76 P.2d 326, 329. 

As to element (I), the actions of the BN in maintaining 

this particular area as a crossing and allowing vehicles to 

continuously use the same as a crossing for more than 60 

years amounts to a representation that it was a proper 

crossing for use. As to element (2), the holding out that 

this was a proper crossing for usage was clearly known to 

BN as established by the testimony of the BN executive. As 

to element (3), the facts show that Colborn did not know 

that BN claimed this was not a proper crossing. As to 

element (4), the facts show that BN's conduct with regard to 

the crossing was done with the expectation that Colborn 

would continue to use the crossing as would its invitees. 

As to element (5), the facts clearly show that Colborn 

relied upon such actions of BN and continued to have deliveries 

made across such crossing to Colborn. As to element (6), 

the actions of Colborn, of course, are sufficient to change 

its position for the worse so that BN could contend a potential 

breach of the lease. The record contains clearly sufficient 

uncontradicted evidence that the six elements of equitable 

estoppel were present so far as BN is concerned. As a 

result, regardless of the contentions on the part of BN as 

to the technical indemnity provisions of its lease with 

Colborn, BN is estopped from claiming any right to indemnification. 
The District Court properly granted summary judgment to 

Colborn against BN. We affirm. 

We Concur: