Opinion ID: 2461938
Heading Depth: 1
Heading Rank: 6

Heading: Interpretation of the indemnity clause

Text: Typically, [contractual indemnity is where, pursuant to a contractual provision, two parties agree that one party will reimburse the other party for liability resulting from the former's work. Medallion Dev. v. Converse Consultants, 113 Nev. 27, 33, 930 P.2d 115, 119 (1997), superseded by statute on other grounds as stated in Doctors Company v. Vincent, 120 Nev. 644, 654, 98 P.3d 681, 688 (2004). When the duty to indemnify arises from contractual language, it generally is not subject to equitable considerations; rather, it is enforced in accordance with the terms of the contracting parties' agreement. Prince v. Pacific Gas & Elec. Co., 45 Cal.4th 1151, 90 Cal.Rptr.3d 732, 202 P.3d 1115, 1120 (2009). And since Nevada has not adopted an anti-indemnity statute, [6] parties have great freedom in allocating indemnification responsibilities between one another. Id. The interpretation of an indemnity clause within a contract is a question of law, which this court will review de novo. Jacobs Constructors v. NPS Energy Services, 264 F.3d 365, 371 (3d Cir.2001); see also Anvui, LLC v. G.L. Dragon, LLC. 123 Nev. 212, 215, 163 P.3d 405, 407 (2007). In our recent decision in George L. Brown Insurance v. Star Insurance Co., 126 Nev. ___, ___, 237 P.3d 92, 97 (2010), we adopted the rule that, while the parties are free to contractually agree to indemnify another for its own negligence, an express or explicit reference to the indemnitee's own negligence is required. Therefore, `contracts purporting to indemnify a party against its own negligence will only be enforced if they clearly express such an intent and a general provision indemnifying the indemnitee against any and all claims, standing alone, is not sufficient.' Id. (quoting Camp. Dresser & McKee v. Paul N. Howard, 853 So.2d 1072, 1077 (Fla.Dist.Ct.App.2003) (internal citations omitted)). In adopting this rule, we held that it provides clarity and fairness to the parties involved and allows the wrongdoer [to] face[ ] the consequences of his or her actions rather than having those consequences fall on an innocent party. Id. We repeated our approval of the express negligence doctrine which requires `the intent of the parties [to] be specifically stated within the four corners of the contract.' Id. (quoting Lehmann v. Har-Con Corp., 76 S.W.3d 555, 560 (Tex.App.2002)). After strictly construing the indemnity clause in that case, we concluded that the clause was not explicit enough to require the indemnitee to indemnify the indemnitor for its own negligence. Id. Here, Plaster argues that the agreement's scope was intended to indemnify Plaster for its own negligence so long as Plaster was contributively, not solely, negligent. Plaster explains that because the agreement expressly excludes indemnification for its sole negligence, the parties intended that Plaster would be indemnified for its contributory negligence. Therefore, according to Plaster, once it demonstrated that it was not solely negligent in causing the defects, the indemnification agreement was triggered. The district court agreed and determined that Plaster only needed to demonstrate that it was not solely negligent in order to invoke the indemnity clause and thus granted Plaster's motion for judgment as a matter of law. We disagree and conclude that because the indemnity clause is not explicit about whether Reyburn is required to indemnify Plaster even if Reyburn is not negligent, and as to whether the scope of the agreement includes indemnity for Plaster's contributory negligence, the clause necessarily covers only Reyburn's negligence. According to the indemnity clause at issue here, Plaster must be indemnified for any and all liabilities that aris[e] directly or indirectly out of Reyburn's obligations under the subcontract. [7] Consistent with our holding in Brown, we determine that this phrasing does not unequivocally condition Reyburn's duty to indemnify Plaster upon anything other than Reyburn's actions, and it does not explicitly state that Reyburn has to indemnify Plaster for Plaster's own negligence. Because the clause at issue here is not explicit, and because we must strictly construe the indemnity clause's language, id. at ___, 237 P.3d at 97, we conclude that there must be a showing of negligence on Reyburn's part prior to triggering Reyburn's duty to indemnify Plaster. Otherwise, Reyburn's duty to indemnify could arise from another subcontractor's obligation or scope of work, which should trigger that subcontractor's duty to indemnify, if any, not Reyburn's. Moreover, the indemnity clause does not contain a clear and unequivocal statement of the parties' intent for Reyburn to indemnify Plaster for Plaster's own negligence. [8] Indeed, the clause is notably silent on that subject. Contributory negligence is merely a derivative of negligence, and the distinction between the two forms of negligence does not change our holding that indemnification for any form of the indemnitee's own negligence must be explicitly and unequivocally expressed in the contract. Thus, we conclude that because the indemnity clause does not expressly or explicitly state that Reyburn would indemnify Plaster for Plaster's contributory negligence, Reyburn is required to indemnify Plaster only for liability or damages that can be attributed to Reyburn's negligence. Having determined that not only must Reyburn be partially negligent to trigger the indemnity provision, but also that the indemnity provision covers only Reyburn's negligent acts, we now turn our attention to the district court's conclusion that Reyburn was at least partially negligent when it granted judgment as a matter of law against Reyburn based on its findings that Stuart Reyburn made a judicial admission of liability. [9]