Opinion ID: 767146
Heading Depth: 5
Heading Rank: 2

Heading: Contractual Indemnity Claims against Barton

Text: 52 Article 25 of the contract between Budd and Barton contains the following indemnification clause: 53 With regard to the work to be performed hereunder by the contractor on the owner's premises, contractor agrees to and will indemnify and hold harmless owner from and against any claims, losses, or damages due to the death of or injury to the person or the property of any person, or persons, ... arising out of, or in connection with, contractor's performance hereunder, except as to any such loss or damage which is causedby the sole negligence, or wanton and willful misconduct of owner or owner's agents, servants or employees. 54 The first issue is whether such a clause includes attorney fees. In United States v. Hardy, 916 F. Supp. 1385 (W.D. Ky. 1996), the United States District Court for the Western District of Kentucky addressed a contract that provided indemnity for any and all loss, damage, injury, liability, and any claim or claims therefor, including claims for injury or death to any and all persons or property. Id. at 1390. The court awarded attorney fees based on this contract, but two qualifications must be noted. First, liability had already attached. SeeHardy, 916 F. Supp. at 1388 (noting that indemnitee had already paid the United States for CERCLA liability). Second, the court noted that award of attorney fees was not automatic but based on equitable distinctions. See id.at 1391 n.5. 55 Applying Hardy, the language against any claims, losses, or damages encompasses more than legal liability (i.e., damages). It is not dispositive that Budd, unlike the indemnitee in Hardy, has not been held liable in the underlying claim. See Napier, 571 S.W.2d 644. In Napier, the court of appeals found indemnity proper although there had been no judicial determination of liability where the contract provided indemnification for all 'liabilities, losses and expenses' incurred by the appellant, including all amounts paid by appellant 'in good faith under the belief that: (1) Surety was or might be liable therefore; (2) Such payments were necessary or advisable to protect any of Surety's right or to avoid or lessen Surety's liability or alleged liability.['] Napier, 571 S.W.2d at 645. Considering Napier in conjunction with Hardy leads to the conclusion that the contract between Barton and Budd allows-but does not require--a court to award attorney fees despite the absence of liability unless Budd was defending claims that arise out of its sole negligence, or wanton and willful misconduct. 56 Because Kentucky applies comparative negligence principles, Barton argues that by definition Thompson's claim was for Budd's sole negligence. Kentucky case law has not specifically interpreted the meaning of loss or damage caused by the sole negligence, or wanton and willful misconduct as an exception to an indemnification contract. Michigan courts, however, have construed a statute which bars indemnification for damages arising out of bodily injury to persons ... caused by or resulting from the sole negligence of the promisee or indemnitee. Burdo v. Ford Motor Co., 828 F.2d 380, 382 (6th Cir. 1987). In construing that statute, Michigan courts found that such language bars indemnity only where 'the bodily injury as a whole, results from the sole negligence of the indemnitee.' Id at 384 (citing Fischbach-Natkin v. Power Process Piping, 403 N.W.2d 569, 574 (Mich. Ct. App. 1987)). Thus, even where comparative negligence regimes exist, an indemnitee may recover under the indemnity agreement as long as it was not 100% responsible for the plaintiff's injuries. See generally Burdo, 828 F.2d 380; Paquin v. Harnischfeger Corp., 317 N.W.2d 279 (Mich. Ct. App. 1982). Although not binding, this interpretation is persuasive and imminently reasonable under Kentucky law. 57 Budd's attorney fee indemnity claims are remanded to the district court. The district court in its discretion may award Budd attorney fees based on its contract with Barton, unless the facts indicate that all of the injuries suffered by Thompson arose because of Budd's sole negligence, or wanton and willful misconduct.