Opinion ID: 1689483
Heading Depth: 1
Heading Rank: 5

Heading: Implied Contractual Indemnification.

Text: McNally further claims there is an implied contract for indemnity based on the duties imposed on Neumann in the lease and rental agreements to maintain the crane in good condition and to notify McNally in the event the crane is not in good condition. McNally asserts the breach of these contractual duties by Neumann forms a basis for indemnification for the settlement amount paid to Lawson in this case. Like other contracts, a contract for indemnification can be expressed or implied. It can be implied when the parties have entered into a contract that imposes an independent duty that implies a mutual intent to indemnify for liability or loss resulting from a breach of the duty. See Johnson v. Interstate Power Co., 481 N.W.2d 310, 319-20 (Iowa 1992); Woodruff Constr. Co. v. Barrick Roofers, Inc., 406 N.W.2d 783, 785 (Iowa 1987). Thus, we have held that a service contract or a sale and purchase contract alone is insufficient to imply indemnification for a loss. Johnson, 481 N.W.2d at 321; Woodruff Constr. Co., 406 N.W.2d at 787. However, the imposition of certain duties within a service or sales contract may imply an obligation for indemnification of a loss, such as the duty to inspect, perform necessary repairs, or install necessary safety devices. See Johnson, 481 N.W.2d at 319. In this case, both the lease agreement and the rental agreement imposed independent duties on Neumann to maintain the crane in good condition, and the rental agreement additionally required Neumann to notify McNally of any damage to the crane. Considering the nature of the agreement, these are the types of duties that we have recognized can give rise to an implied obligation to indemnify for a loss. See id. Notwithstanding, even if indemnification is implied by virtue of an independent duty imposed on Neumann under the lease or rental agreement, the terms of the implied agreement for indemnification would not include indemnification for the indemnitee's own negligence, such as a defect in the crane. Consistent with the rule of construction for expressed contracts, there can be no indemnification based on the indemnitee's own negligence absent a clear intent. See Herter, 492 N.W.2d at 674. Instead, implied indemnification only involves liability based on the breach of an independent duty by the indemnitor. See Johnson, 481 N.W.2d at 319; Woodruff Constr. Co., 406 N.W.2d at 785-86. The indemnity that is implied is indemnity for the loss or liability incurred by one party to the contract as a result of the other party's breach of a particular duty under the contract. Thus, a claim for indemnification based on a defect in the crane would be, like the express contract claim in this case, outside the scope of a claim for implied indemnification. It is unrelated to the breach of a duty by the indemnitee and does not express a clear intent to indemnify the indemnitee based on the imposition of liability for its own negligence.