Opinion ID: 1173836
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Heading Rank: 3

Heading: The Indemnity Provisions of the Lease

Text: The Shell lease provides in relevant part: Lessee shall indemnify Shell against any and all claims and liability for injury or death of persons or damage to property caused by or happening in connection with the equipment or the condition, maintenance, possession, operation or use thereof. Shell's cross-complaint against Flying Tiger was grounded on the above indemnity clause and prayed that if plaintiff recovered damages against Shell, the court enter judgment on the cross-complaint against Flying Tiger in a like amount plus the amount of Shell's attorney fees, court costs and investigation expenses. In its answer thereto, Flying Tiger asserted by way of affirmative defenses that Shell was not entitled to indemnity because it was actively negligent in supplying a defective ladder to Flying Tiger and it breached its written lease by so doing, and because under the circumstances equity and good conscience required a denial of indemnity. The trial court nonsuited Shell on the cross-complaint on the ground that the indemnity clause was in general terms and not sufficiently specific to provide indemnity where Shell was responsible either because of its active negligence or on a basis of strict liability which the court considered to be in the same category. (7a) Shell contends that in granting the nonsuit the trial court erred because (1) the indemnity clause clearly covered the accident in question and, (2) in any event Shell's responsibility based on strict liability in tort, amounts to no more than passive negligence and therefore does not preclude indemnity. (8) Since the parties to the tank-truck lease expressly contracted with respect to the lessee's duty to indemnify the lessor, the extent of that duty must be determined from the contract and not from the independent doctrine of equitable indemnity. [Citations.] ( Markley v. Beagle (1967) 66 Cal.2d 951, 961 [59 Cal. Rptr. 809, 429 P.2d 129].) (9) Where, as in the instant case, the indemnity clause was construed by the trial court without the aid of extrinsic evidence, we are not bound by such construction and the interpretation of the clause is a question of law for this court. ( Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865 [44 Cal. Rptr. 767, 402 P.2d 839]; Markley v. Beagle, supra, at p. 962.) In Markley, supra, we summarized the rules governing express contracts of indemnity as follows: An indemnity clause phrased in general terms will not be interpreted, however, to provide indemnity for consequences resulting from the indemnitee's own actively negligent acts. [Citations.] Mere nonfeasance, however, such as a negligent failure to discover a dangerous condition arising from the work will not preclude indemnity under a general clause such as the one in this case. (66 Cal.2d 951, 962.) [11] (10) As we said in Goldman v. Ecco-Phoenix Elec. Corp. (1964) 62 Cal.2d 40, 44 [41 Cal. Rptr. 73, 396 P.2d 377]: Although the cases have held that one may provide by agreement for indemnification against his own negligence [citations], the agreement for indemnification must be clear and explicit; the agreement must be strictly construed against the indemnitee. (Fn. omitted.) In both Markley and Goldman we relied upon our previous decision in Vinnell Co. v. Pacific Elec. Ry. Co., supra, 52 Cal.2d 411 [340 P.2d 604]. There we dealt with a broadly drawn indemnity clause under which the plaintiff-contractor releases and agrees to indemnify and save [defendant] Railroad harmless from and against any and all injuries to and deaths of persons, claims, demands, costs, loss, damage and liability, howsoever same may be caused resulting directly or indirectly from the performance of any or all work.... (52 Cal.2d at p. 414; italics added.) We held that in the absence of a specific agreement to protect the indemnitee railroad against the consequences of its own negligence, the indemnity clause could not be construed to do so. [I]f an indemnitor such as the plaintiff is to be made responsible for the negligent acts of an indemnitee over whose conduct it has no control, the language imposing such liability should do so expressly and unequivocally so that the contracting party is advised in definite terms of the liability to which it is exposed. The indemnification clause in the present case, by not expressly stating that the defendant was protected against acts of its own negligence, failed to meet this requirement. ( Vinnell Co. v. Pacific Elec. Ry. Co., supra, at pp. 416-417.) [12] (7b) In the indemnity clause before us in the instant case, there is no language expressly and unequivocally requiring Flying Tiger to indemnify Shell for liability or damages caused by Shell's own act in furnishing a defective tank truck or its equipment. No language of such essential specificity indicates that the lesseee is to be held responsible for the negligent acts of the lessor, much less for the strict liability in tort imposed upon the lessor for placing on the market a defective article. [13] Indeed it would do violence to the doctrine of strict liability and thwart its basic purpose, if we were to interpret so general a clause as transferring the liability for a defective article from the party putting the article in the stream of commerce, to the user or consumer of the article who is within the class the doctrine was designed to protect. The judgments are affirmed.