Opinion ID: 601518
Heading Depth: 2
Heading Rank: 2

Heading: The Indemnity Clause Language

Text: 9 Anheuser alleges that its relationship with Force is governed at least in part by the disputed indemnity clause. Force counters that even if the clause in issue were part of a contract between Force and Anheuser (which Force vigorously denies), and even if that clause were effective here, it would not require Force to reimburse Anheuser for its costs and legal fees incurred in defending McDaniel's suit. Assuming without so deciding that this indemnity provision did govern the relationship between Anheuser and Force, we begin our analysis by examining the language of that clause: 10 The contractor hereby agrees to indemnify and hold harmless Anheuser-Busch Companies, Inc. its subsidiaries and affiliated companies (hereinafter referred to as ABC) from all claims and suits by the parties and third parties for damages to property and injuries, including death to persons, including but not limited to, Contractor or any subcontractor and their respective agents, servants and employees, if any such event of damage or injury shall occur during or incident to the performance of work required under the terms of this Contract, and from all judgments recovered therefor, and from all expenses in defending said claims and suits, including court costs, attorneys' fees and other expenses, caused by the act or omission of the Contractor or any subcontractor or their respective servants, agents and employees, and not by the sole fault or negligence of ABC, its servants, agents or employees. 10 11 The determination of whether a contract is ambiguous is one of law. 11 This is not a standard indemnity clause by any means; it is unique and was tailor-made by Anheuser for its own use. Still it is not ambiguous. In the lexicon of indemnification, the instant provision is properly classified as a limited indemnity clause in that it does not require Force to defend Anheuser against claims and suits; neither does it require Force to indemnify Anheuser for the costs it incurs in defense of baseless claims. Cause is an operative, limiting term in this indemnity provision; it requires Force to pay all costs and expenses incurred by Anheuser in defending claims and suits for injuries if--but only if--such injuries are actually caused by an act or omission of Force. 12 A careful parsing of the subject clause confirms that conclusion. Such an examination begins with the indemnity clause's general identification of that for which Anheuser is to be indemnified: claims and suits by the parties and third parties. Next, the clause limits the claims and suits covered to those for damages to property and injuries to persons. Skipping over the language that limits the claims to those, such as here, with a nexus to the work covered by the contract of which the clause ia a part, we encounter a list of the elements of the claims and suits for which Anheuser is to be indemnified: judgments recovered therefor, and all expenses of defending the claims and suits. 13 At this point in our dissection of the clause, we encounter--albeit somewhat attenuated due to the archaic, run-on drafting techniques employed--the words caused by the act or omission of [Force]. Force's causation applies to that for which it must indemnify Anheuser: claims and suits, all judgments recovered on such claims and suits, and all costs and expenses of defending such claims and suits. 12 But which claims and suits? Those for personal injury and property damage. Beyond peradventure, then, that which must be caused by the act or omission of Force are those very same injuries and damages. 14 Conversely, as the suits and claims are first defined as those by the parties and third parties, caused by could never be read to modify claims and suits. The assertion of a claim or suit by Anheuser or a third party could not be caused by an act or omission of Force unless those parties were mere marionettes controlled by Force. Caused by can only refer to injuries and damages. 15 In effect, Anheuser itself recognized the causality requirement in its pleadings. In its First Amended Third Party Action Against Force Corporation, Anheuser describes the indemnity clause as an indemnification agreement whereby FORCE agrees to indemnify and hold harmless BUSCH from all claims and suits and from all judgments recovered therefore, and from all expenses (including court costs and attorney's fees) caused by the act or omission of Force. More obtusely, but no less certainly, this allegation confirms that indemnity lies only if it relates to injuries and damages caused by Force. Clearly, a baseless claim (as McDaniel's turned out to be) alleging fault regarding Switch # 23 cannot be said to have been caused by Force or anyone else but McDaniel. It is the injury, not the claim or suit, which must be caused by Force to trigger indemnification under this unique, limited clause. 16 Before Anheuser can recover its defense costs and expenses from Force, it must establish that an act or omission of Force's caused the injuries for which McDaniel brought suit. Mere allegations of causation and responsibility are insufficient, even in opposition to a motion for summary judgment. 13 To its irreversible detriment, Anheuser failed to establish this indispensable causal link in the trial of McDaniel's claims. Therefore, Anheuser is not entitled to a second opportunity to establish causation. The procedural maneuverings of the parties must be examined in detail to see how and why this happened.