Opinion ID: 891638
Heading Depth: 3
Heading Rank: 6

Heading: Cases and Statutes in Other Jurisdictions

Text: {33} Although it is not critical to our decision, we note that many other jurisdictions have interpreted analogous statutes to encompass indemnity clauses in construction equipment rental agreements. 3 Philip L. Bruner & Patrick J. O'Connor, Jr., Bruner and O'Connor on Construction Law § 10:79 (2002) (Many courts have decided that equipment leases fall within the scope of these anti-indemnity laws. Equipment leases are often captured by the scope of these laws by virtue of the language that indemnity agreements `in connection with or collateral to' a construction contract are barred. (footnote omitted)). {34} For instance, Aetna Casualty & Surety Co. v. Marion Equipment Co., 894 P.2d 664 (Alaska 1995), addressed the impact of an Alaska anti-indemnity statute on an indemnity clause contained in a lease agreement for a construction hoist. Alaska's statute stated that an agreement contained in, collateral to, or affecting a construction contract that purports to indemnify the promisee against liability [for its own negligence or misconduct] is against public policy and is void and unenforceable. Id. at 666; see also Alaska Stat. § 45.45.900 (1975). The Supreme Court of Alaska, persuaded by the body of authority, coupled with the [lease] language, held that the equipment lease fell within the scope of its anti-indemnity statute. Aetna, 894 P.2d at 667. {35} Aetna noted that at least eighteen other states have enacted statutes identical or similar to AS 45.45.900, and the weight of authority from the jurisdictions that have considered this question indicates that the statute does govern such leases. Id. at 666 (footnote omitted). A number of the cases surveyed in Aetna are instructive on the issue before this Court. In Calkins v. Lorain Division of Koehring Co., 26 Wash.App. 206, 613 P.2d 143 (1980), a contractor leased a crane to dismantle a chemical plant. After an employee of the contractor was injured and sued the rental company, the company invoked an indemnity clause in the rental agreement to have the contractor assume the company's liability for the defective condition of the leased crane. Id. at 144. The court struck the indemnity clause as violative of the policy expressed by Washington's anti-indemnity statute. Id. The court also expressed concern about the potential impact of indemnification clauses in equipment rental agreements on the public policies embodied in workers' compensation statutes, to avoid imposing tort liability on employers who provide workers' compensation coverage for their employees, policies which would be frustrated by permitting indemnification clauses in construction equipment rental agreements. Id. at 145. {36} Several cases relied on by Aetna turned on whether the piece of equipment rented was intended or expected to be used in construction activities. See, e.g., American Pecco Corp. v. Concrete Bldg. Sys. Co., 392 F.Supp. 789, 793 (N.D.Ill.1975) (The crane was designed to be used in construction activities. Central cannot logically claim it was unaware of the use to which the crane would be put, when the crane was in fact put to a designed use.); Folkers v. Drott Mfg. Co., 152 Ill.App.3d 58, 105 Ill.Dec. 263, 504 N.E.2d 132, 137 (1987) (striking the indemnity clause because the rental contract provided that the rental would be for use in construction operations). {37} United correctly notes that many other state courts have chosen not to interpret their anti-indemnity statutes as applicable to equipment rentals. Most of those cases are distinguishable in that the opinions emphasized that the contracting parties did not contemplate the equipment was to be used in a construction project. See McMunn, 791 F.2d at 93 (holding that the Illinois construction anti-indemnity statute did not extend to a rental contract for a bobcat loader because the equipment was not clearly intended for construction use and because bobcat loaders are most commonly used for purposes unrelated to the statute's scope); Palmour v. Gray Ins. Co., 731 So.2d 911, 913-14 (La.Ct. App.1999) (holding that the Louisiana statute prohibiting anti-indemnification agreements pertaining to wells and mines did not invalidate an indemnity clause in a crane rental contract where the crane was rented for use in some unnamed purpose); Reliance Ins. Co. v. Chevron U.S.A. Inc., 713 P.2d 766, 767-68 (Wyo.1986) (refusing to extend Wyoming's oilfield anti-indemnity statute to the lease of caterpillar tractors for digging holding pits for waste water and oil created by a fire at an oil facility). {38} Other cases are distinguishable as a matter of law because they interpret more narrowly written statutes. See, e.g., Eagle Pacific Ins. Co. v. Quintanilla, 923 So.2d 266, 268, 270 (Miss.Ct.App.2006) (construing a Mississippi statute that requires the contract be for construction, not simply relating to construction). {39} It is clear that some courts in states with anti-indemnity statutes have chosen to construe the protections of their statutes in a more restrictive manner. See, e.g., Pritts v. J.I. Case Co., 108 Mich.App. 22, 310 N.W.2d 261, 267 (1981) (Although it could be argued that the instant lease was `relative to' construction because the lift truck would be used in construction, we refuse to extend the statute that far.). We decline to interpret our own anti-indemnity statutes so narrowly, in light of our analysis of the New Mexico statutory language and its underlying policies. We interpret Section 56-7-1 as prohibiting indemnification clauses in agreements for the rental of equipment designed or intended to be used in construction activities, which meet the statutory definitional standard of agreements relating to construction. In doing so, we are confident that we honor the New Mexico Legislature's purposes, policies, and language.