Opinion ID: 2609567
Heading Depth: 1
Heading Rank: 1

Heading: The Indemnity Agreement was valid and enforceable.

Text: Defendants' principal assignment of error is that the trial court erred in holding that the indemnity provision of the lease was valid and enforceable. The lease includes the following provisions: Lessee shall save and hold Lessor harmless from, and hereby indemnifies Lessor against liability    for or on account of any    injury to persons    that may result by reason of any condition or present or future lack of repair of the Leased Premises    or in any manner whatsoever growing out of the past, present or future condition or use of the Leased Premises    including any attorney's fees and costs. The lease also provided that: During the lease term, Lessee shall, at its own expense maintain in full force and effect a policy or policies of comprehensive liability insurance,    that will insure Lessee against liability for injury to persons    occurring in or about the premises. The liability under such insurance shall not be less than One Hundred Thousand Dollars ($100,000.00) for any one person injured or killed, not less than Three Hundred Thousand Dollars ($300,000.00) for any one accident,   . Defendants contend that the previous complaint by Katie M. Eck against Mr. Waggoner (the lessor) and Mr. Duffy (the lessee) alleges affirmative and active negligence on the part of Mr. Waggoner; that there was testimony in that case that he undertook to remove the carpeting and resurface the area in which Mrs. Eck fell, but that he failed to accomplish this before the fall of Mrs. Eck, and that this constituted active negligence by plaintiff Waggoner which invalidated the indemnity clause of the lease. Defendants also contend that as a general rule a contract of indemnity will not be construed to indemnify the indemnitee against losses resulting from his own negligence unless such an intention is expressed in clear and unequivocal terms (citing Southern Pac. Co. v. Layman, 173 Or. 275, 279-285, 145 P.2d 295 (1944), and So. Pac. Co. v. Morrison-Knudsen Co., 216 Or. 398, 407-420, 338 P.2d 665 (1959), among other cases); that indemnity contracts are usually intended to provide against loss caused by physical conditions that are under the indemnitor's control and over which the indemnitee has no control, and that this indemnity clause does not clearly and unequivocally provide that the plaintiff Waggoner (the indemnitee) shall be indemnified for his own negligence. In So. Pac. Co. v. Morrison-Knudsen Co., supra , this court held (at 408-410, 419, 338 P.2d 665) that in an action for indemnity based upon an indemnity agreement, as distinguished from an action for common law indemnity, the common law distinctions between active and passive negligence and between primary and secondary negligence, become inappropriate; that in such an action the intent of the parties presents the paramount problem; and that the indemnitee may legally contract for indemnity for a claim based in whole or in part on its own negligence, if not wanton or criminal in nature. To the same effect, see St. Paul Fire v. United States Nat. Bank, 251 Or. 377, 382-383, 446 P.2d 103 (1968). Upon examination of the indemnity provisions of this lease, as compared with the indemnity contract in So. Pac. Co. v. Morrison-Knudsen Co., supra, 216 Or. at 401, 417, 338 P.2d 665, we find that the intent is clearly expressed in sufficiently broad and comprehensive terms that plaintiff Waggoner was to be held harmless and indemnified from liability for all personal injuries resulting from any condition or lack of repair of the leased premises, regardless of whether or not such condition or lack of repair may have resulted from the active negligence of Mr. Waggoner. This intent is made even more clear by the further lease provision under which Mr. Duffy, as the lessee, agreed to maintain at his own expense an insurance policy to insure against liability for injury to persons occurring in or about the premises. This is not a case in which there was evidence of any great disparity between the parties in the financial sense or in which the scope and status of the privilege conferred upon Mr. Duffy as the indemnitor was so limited that the imposition of indemnity for the negligence of Mr. Waggoner under those circumstances would be an excessive price for the mere privilege returned, as in Southern Pac. Co. v. Layman, supra, 173 Or. at 283, 145 P.2d 295. Both Waggoner and Duffy are knowledgeable business men and were found by the trial court to be on equal footing at the time they entered into the indemnity contract. See So. Pac. Co. v. Morrison-Knudsen Co., supra, 216 Or. at 412-413, 338 P.2d 665, and Southern Pac. Co. v. Layman, supra, 173 Or. at 283, 145 P.2d 295. Even under the test of active and passive negligence, it appears from the record in the Eck case not only that Mr. Waggoner was guilty of negligence in the manner in which he undertook to repair the area where Mrs. Eck fell upon leaving the store, but that Mr. Duffy, as the lessee and operator of the grocery store, was also negligent in failing to properly warn customers upon leaving the store. Under these circumstances we hold that the trial court did not err in finding that the indemnity provisions of the lease were valid and enforceable and were intended to provide indemnity in this case. [2]