Opinion ID: 4528125
Heading Depth: 2
Heading Rank: 2

Heading: The Indemnification Provisions

Text: Both the Master Agreement and Amendment One contain indemnification clauses, but these clauses differ in material respects. Under the Master Agreement’s indemnification clause, ABB agrees to fully indemnify “Persons Indemnified” for all covered claims except those “result[ing] from the sole 3 Case: 19-11148 Date Filed: 04/23/2020 Page: 4 of 16 negligence, fraud or intentional wrongdoing of a Person Indemnified.” The Master Agreement’s definition of “Persons Indemnified” includes Georgia Power. In Amendment One, ABB again agreed to indemnify “Persons Indemnified,” which continues to refer to Georgia Power. However, the indemnification provision in Amendment One provides that, upon determination that “Company” was negligent, “Company” would be responsible for a pro rata share of its own negligence: General Indemnification. To the fullest extent permitted by applicable law, Contractor will indemnify, defend and hold harmless the Persons Indemnified from and against any and all loss, damage, costs . . . , or liability, except to the extent caused by Company’s negligence . . . . Contractor shall assume the defense of any claim subject to this Indemnity and defend it until such time there is a determination of negligence by the Company, either by court, arbitrator, or agreement, and at which time liability for the fault shall be shared on a pro rata basis to the extent of the Company's negligence.1 Both parties agree that the indemnification clause in Amendment One, and not the indemnification provision in the Master Agreement, governs this dispute. C. The Contract’s Definition of “Company” and “Affiliate” The Master Agreement defines both “Company” and “Affiliate” in its preamble paragraph: This Agreement is entered by Southern Company Services, Inc., an Alabama corporation with its principal office at 600 North Eighteenth Street, Birmingham, Alabama 35203 (acting for itself and as agent for 1 While the parties dispute the meaning of “Company” in the Contract, they agree that “Contractor” refers to ABB. 4 Case: 19-11148 Date Filed: 04/23/2020 Page: 5 of 16 Alabama Power Company, Georgia Power Company (“GPC”), Gulf Power Company and Mississippi Power Company (individually, “Affiliate” and collectively “Affiliates”) as may be applicable under the circumstances), (“Company”) and ABB, Inc., a Delaware corporation with its principal office at 501 Merritt Parkway, Norwalk, Connecticut (“Contractor”). Meanwhile, Amendment One defines “Company” in its title, which reads: “AMENDMENT NO. ONE (1) to Master Agreement for Services between Southern Company Services, Inc. (‘Company’) and ABB Inc. (‘Contractor’) Agreement No. 8981 (‘Agreement’).” Paragraph 1.3 of the Master Agreement explains the relationship between “Company” and its “Affiliates”: The Parties agree that Company is entering into this Agreement not only for its own benefit, but also and equally for the direct benefit of its parent, Southern Company, and Affiliates, both present and future. All rights, benefits, discounts, remedies and warranties accruing to Company in this Agreement will likewise accrue to the Affiliates, including the right to enforce this Agreement in their respective names. The same provision says that Affiliates could make purchase orders to ABB under the Master Agreement, but that for any such order, “[e]ach Affiliate [would] be solely responsible for its own transactions, including payment obligations.” D. District Court Proceedings After ABB refused to fully indemnify Georgia Power—including for liability arising out of Georgia Power’s own negligence—Georgia Power brought a third-party complaint against ABB. The complaint made claims for 5 Case: 19-11148 Date Filed: 04/23/2020 Page: 6 of 16 indemnification; breach of contract with respect to ABB’s failure to indemnify; and attorney’s fees and costs for enforcing the Contract’s indemnification provision (collectively, “Indemnification Claims”). Separately, the complaint alleged a breach of contract with respect to ABB’s failure to add Georgia Power to its liability insurance (“Insurance Claim”). Georgia Power sought summary judgment on all claims. The district court granted summary judgment to Georgia Power on its Indemnification Claims after concluding the Contract unambiguously defined “Company” as referring only to SCS, and not Georgia Power. The district court based this conclusion primarily on the fact that “Company” was defined as SCS in the introductory paragraph of the Master Agreement. It also held that even if the term “Company” were ambiguous, it would resolve that ambiguity in favor of Georgia Power because holding otherwise would render certain terms in the contract meaningless. Finally, the district court granted Georgia Power summary judgment on its Insurance Claim because (a) ABB did not contest that part of Georgia Power’s summary judgment motion; and (b) the undisputed facts showed that ABB breached its contractual duty to provide Georgia Power with insurance in connection with the Garrisons’ claims. 2 This appeal followed. 2 The district court also held (1) based on the undisputed facts, ABB or a member of its personnel had been negligent, thus triggering ABB’s obligation to indemnify under the Contract; and (2) the language of the indemnification clause was sufficiently explicit, under Georgia law, 6 Case: 19-11148 Date Filed: 04/23/2020 Page: 7 of 16