Opinion ID: 2001797
Heading Depth: 3
Heading Rank: 1

Heading: Pole and Wire Agreement as Contract of Absolute Liability

Text: Bell's Estate argues East River's Agreement was functionally a contract of insurance: [East River] further agrees to release, indemnify and save harmless the Railroad, its successors and assigns, from and against all loss, damages, claims, demands, actions, causes of action, costs and expenses of every character which may result from any injury to or death of any person whomsoever, ... when such injury, death, loss or damage is caused or contributed to by, or arises out of the existence of said wires, or the construction, installation, maintenance, condition, use or presence of the same upon said railroad premises, or the transmission of electric current by means of said wires. Accordingly, the Estate moved for a directed verdict on liability. The trial court denied the motion and when the Estate read this clause to the jury during closing arguments, the court sustained East River's objection. No explanation for the trial court's decision can be found in the record. To counter the Estate's argument that the power line constituted a trespass, however, East River offered and the court admitted the entire Agreement into evidence. While acknowledging the Agreement was a license to run power lines across Bell's property, the Estate contends the Agreement should also have been considered for its reciprocal legal import, as a contract making East River legally responsible for Bell's death. The Estate urges us to adopt the reasoning in Seymour v. Chicago & Northwestern Ry. Co., 255 Iowa 780, 124 N.W.2d 157, 162 (1963), interpreting similar language as here. In that case a railroad gave a license allowing a paving company to maintain facilities on the railroad's right-of-way. In a suit brought by an injured third person who collided with a train, the railroad sought to enforce the license agreement requiring the paving company to pay the injured person's damages. The Iowa Supreme Court stated: It is not seriously contended that the [railroad] did not have the right to make the agreement, even to the point of holding the [paving company] liable if the operation of the railroad caused or contributed thereto. Id. at 160. The Seymour court held the licensee contractually liable inasmuch as the agreement constituted an absolute promise to pay. As it may apply to our case, two circumstances distinguish Seymour: (1) There, the railroad was not negligent, and if it were, (2) the license agreement specifically stated the paving company would still be liable even if the operation of the railroad caused or contributed to the loss. The necessity of specific language to contractually shift negligence liability is illustrated in the next case. In Chicago & N.W. Transp. Co. v. V & R Sawmill, 501 F.Supp. 278 (D.S.D.1980), a nearly identical license agreement was at issue. There, Judge Bogue acknowledged: The general rule, which has been adopted in South Dakota and elsewhere in the Eighth Circuit, holds that to relieve a party of the consequences of its own negligence the language of the agreement must be clear and unequivocal. Becker v. Black & Veatch Consulting Engineers, 509 F.2d 42 (8th Cir.1974); Associated Engineers, Inc. v. Job, 370 F.2d 633 (8th Cir.1966); Bartak v. Bell-Gallyardt & Wells, Inc., 473 F.Supp. 737 (D.S.D.1979), rev'd on other grounds, 629 F.2d 523 (8th Cir.1980); Schull Construction Co. v. Koenig, 80 S.D. 224, 121 N.W.2d 559, 562 (1963). There is a split of authority on the question of whether the term negligence must actually appear in the agreement in order to relieve a party of the consequences of its own negligence. (Citations omitted.) Id. at 281. Interpreting the licensing agreement in question, the court found the phrase, even though the operation of the Railway Company's railroad may have caused or contributed thereto sufficiently clear to establish an intent to provide a railway with indemnity for its own negligence. Here, the Agreement instead provides East River will be responsible for damages resulting in death to any person whomsoever when such death is caused or contributed to by, or arises out of the existence of said wires.... This clause, the Estate argues, is expansive enough to cloak Bell's own negligence. The language is indeed broad, but it does not unequivocally relieve Bell (as the Railroad's successor) of his own negligence. It makes no mention of negligence on the part of the railroad and is silent in coping with instances of loss caused or contributed to by the railroad. Moreover, with the jury having found Bell assumed the risk, no language in the Agreement explicitly allows recompense to persons who knowingly decide to undertake the risk of injury or death. Bell's Estate cannot hold East River contractually liable for Bell's death.