Opinion ID: 1919035
Heading Depth: 1
Heading Rank: 4

Heading: Indemnification Claim against AIR.

Text: 1. Implied contractual indemnity. Wells asserts that it is entitled to implied contractual indemnity from AIR. [1] Wells cites two features of the contract as support. First, Wells asserts that contractual indemnity is implied as a result of AIR's contractual duty over time to inspect and perform necessary repairs to the refrigeration system. Second, Wells claims indemnity is implied due to AIR's contractual duty to provide safety devices. For the reasons expressed below, we conclude that AIR is entitled to summary judgment on the implied contractual indemnity claim. The undisputed facts show that AIR agreed to provide Wells with refrigeration equipment and services. Some of the services were provided after the installation of the equipment. At no time, however, did AIR assume an ongoing duty to maintain the equipment or to ensure its safe operation. A contract to provide maintenance services or training as needed does not give rise to an implied contractual obligation to indemnify if the equipment, which is under the day-to-day control of the purchaser, fails to perform. Merryman, 978 F.2d at 445. Nothing in McNally is to the contrary. In McNally, the crane which caused the accident was under the exclusive control of the contractor who had leased it. McNally, 648 N.W.2d at 568. As a result, independent duties to maintain the crane in good condition and notify the owner of any damage to the crane were implicitly imposed in the contract. Id. at 573. Here, the equipment was not within the exclusive control of AIR, but was under the control of Wells. There is no basis in the contractual relationship of the parties to imply that, had they thought about it, they would have thrust an indemnity obligation onto AIR. Woodruff, 406 N.W.2d at 785. We also hold that a contractual obligation to provide equipment that meets certain safety standards does not give rise to an implied indemnity obligation in the event of subsequent malfunction. Such a promise is merely a promise to provide equipment with certain characteristics. Johnson, 481 N.W.2d at 319-20. It does not provide independent duties sufficient to support implied contractual indemnity similar to those contained in McNally. 2. Equitable indemnity based on professional duties. [2] The first argument advanced by Wells in support of its equitable indemnity claim is that because its contract with AIR involved the provision of professional engineering services, AIR has an independent duty sufficient to support an equitable indemnity claim. We agree. Claims of professional negligence are independent of underlying contractual obligations. City of Mounds View v. Walijarvi, 263 N.W.2d 420, 423 (Minn. 1978). In Cochran, the federal district court refused to recognize equitable indemnity under Iowa law in a case that involved nothing more than the general duty that every member of society owes to every other memberthe duty not to harm through tortious acts. Cochran, 235 F.Supp.2d at 1002. The duties of a professional engineer, however, are not the same as general duties owed to everyone by everybody, but are more specific and defined. Sommer v. Fed. Signal Corp., 79 N.Y.2d 540, 583 N.Y.S.2d 957, 593 N.E.2d 1365, 1369 (1992) (finding professional obligations involve more than generalized duty of care). We also agree with Wells that it is not necessary that the proposed indemnitor be liable to the first-party plaintiff in order to establish a claim for indemnity based on an independent duty. The requirement of common liability was a rule that applied in the context of the now abandoned active-passive negligence branch of equitable indemnity. It does not apply in the context of equitable indemnity based on independent duties. Hansen, 630 N.W.2d at 823; see also Cochran, 235 F.Supp.2d at 998-99 (finding under Iowa law, only active-passive branch of equitable indemnity requires common liability); Stone & Stone, 54 Drake L.Rev. at 129 (noting indemnity does not require common liability and is permitted where there is an agreement, relationship, or duty between the indemnitor and the indemnitee). In light of the summary judgment record and the issues raised on appeal, there are triable issues regarding whether AIR engaged in acts of professional negligence and whether the acts of negligence caused the underlying explosion. Any liability to Wells, of course, is contingent upon Wells being liable to Pillsbury on the underlying contract. The record reveals a proverbial battle of experts on these issues. As a result, AIR is not entitled to summary judgment on the equitable indemnity claim based on an alleged breach of professional duties. 3. Equitable indemnity based upon U.C.C. warranties. Wells argues that implied warranties of fitness for ordinary use and fitness for a particular purpose under the U.C.C. give rise to independent duties sufficient to support a claim of indemnity. These implied warranties arise by operation of law in connection with the sale of goods. See Iowa Code §§ 554.2314, .2315. In support, Wells cites the case of Peters v. Lyons, 168 N.W.2d 759 (Iowa 1969). In Peters, a dog owner specifically sought a chain capable of constraining her large dog. Peters, 168 N.W.2d at 761. When told of the size of the dog, the seller told the purchaser that the chain was the best we've got, that ought to do it. Id. The chain ultimately failed to hold the dog, who attacked a third party. Id. The victim sued the dog owner under a statute imposing strict liability for dog bites. Id. The insurer of the dog owner sought indemnity from the seller. Id. We held that the owner's insurer was entitled to indemnity. Id. at 767. In reaching this conclusion, we cited the implied warranty of fitness and merchantability made by the seller under the U.C.C. in upholding the owner's indemnity claim. Id. at 763-66. There is a raging controversy in the law regarding whether implied U.C.C. warranties give rise to an independent duty in equitable indemnity actions. The majority of courts have held that the U.C.C. warranty provisions support such claims. See, e.g., City of Willmar v. Short-Elliott-Hendrickson, Inc., 512 N.W.2d 872, 874 (Minn. 1994); City of Wood River v. Geer-Melkus Constr. Co., 233 Neb. 179, 444 N.W.2d 305, 311 (1989); Cen. Wash. Refrigeration, Inc. v. Barbee, 133 Wash.2d 509, 946 P.2d 760, 763 (1997) (en banc). There is a minority view, which asserts that a breach of an implied warranty under the U.C.C. is nothing more than a simple breach of contract. See Superior, Inc. v. Behlen Mfg. Co., 738 N.W.2d 19, 26 (N.D.2007); Perry v. Pioneer Wholesale Supply Co., 681 P.2d 214, 219 (Utah 1984). Based on stare decisis, however, we decline to disturb the approach announced in Peters. As a result, AIR is not entitled to summary judgment on the equitable indemnity claim based upon an alleged breach of U.C.C. warranties.