Opinion ID: 1827161
Heading Depth: 1
Heading Rank: 6

Heading: Terms of Agreement

Text: Kaiser contends that its liability for indemnification or contribution exists only when Kaiser has negligently caused the loss covered in its agreement with Union Pacific. Liability for any loss, Kaiser argues, must be ascertained by application of principles governing liability for common-law negligence. Union Pacific counters that Kaiser has failed to recognize that Union Pacific's claim for relief was grounded on contract, not common law negligence. The doctrine of proximate cause, and the theory that an independent actor breaks the chain of causation, are irrelevant to a contractual action for relief. Brief for appellee at 7. An indemnity agreement is a contract to be construed according to the principles generally applied in construction or interpretation of other contracts. Peter Kiewit Sons Co. v. O'Keefe Elevator Co., Inc., 191 Neb. 50, 213 N.W.2d 731 (1974); First Trust Co. v. Airedale Ranch & Cattle Co., 136 Neb. 521, 286 N.W. 766 (1939). A court is not free to speculate about terms absent from a written contract. [Citation omitted.] Where the parties have clearly expressed an intent to accomplish a particular result, it is not the province of a court to rewrite a contract to reflect the court's view of a fair bargain. [Citations omitted.] On the other hand, a court will construe uncertain, indefinite, or ambiguous terms in a written contract. [Citations omitted.] In Denis v. Woodmen Acc. & Life Co., 214 Neb. 495, 498, 334 N.W.2d 463, 465 (1983), we stated that absence of articulation accounts for ambiguity and held that where a questioned clause in a written contract may be fairly interpreted in more than one way, there is ambiguity to be resolved by a court as a matter of law. When contractual language is ambiguous, a court will construe such language against the party preparing the contract.... [Citations omitted.] Craig v. Hastings State Bank, 221 Neb. 746, 750, 380 N.W.2d 618, 621 (1986). In the Union Pacific-Kaiser agreement prepared by the railroad, the obligation for complete indemnification is expressed in the terms any act or omission, while the obligation for partial indemnification or contribution is couched in language utilized in aspects of common-law negligence, namely, joint or concurring negligence of the parties. To activate the indemnity clause in the Union Pacific-Kaiser agreement, what is the nature of the omission required to render Kaiser liable for indemnification? Intentional omission? Negligent omission? Or any type of omission for any reason? Omission means apathy toward or neglect of duty ... something neglected or left undone. Webster's Third New International Dictionary, Unabridged 1574 (1981). As a verb, neglect means to fail to attend to sufficiently or properly: not give proper attention or care to ... to carelessly omit doing (something that should be done) either altogether or almost altogether: leave undone or unattended to through carelessness or by intention.... Id. at 1513. Consequently, an omission usually or generally involves a careless failure to perform some duty. Whatever duty is enjoined on Kaiser under the indemnity agreement, there is no standard specified in the agreement whereby one may determine the type of omission and occurrence of that omission which subject Kaiser to liability for indemnification or contribution. Concerning a document, construction includes the process of determining the correct sense, real meaning, or proper explanation of an ambiguous term, phrase, or provision in a written instrument. In re Estate of Walker, 224 Neb. 812, 402 N.W. 2d 251 (1987). Omission, as used in the indemnity clause of the Union Pacific-Kaiser agreement, is an uncertain, indefinite, or ambiguous term fairly interpreted in more than one way. To resolve such ambiguity arising from omission in the indemnity agreement in question, we construe omission to mean a neglect to perform what is required by the common law pertaining to negligence or, simply, a negligent failure regarding a duty. To warrant partial indemnification or contribution, the Union Pacific-Kaiser agreement expressly refers to negligence as the determinant, leaving no uncertainty or ambiguity concerning the applicable standard to determine whether the railroad is entitled to a recovery under the agreement. While Union Pacific tells us that its claim against Kaiser depends on contract law only, that is not what Union Pacific informed the trial court, when the railroad alleged that its losses were caused by the negligent acts or omissions of Kaiser, meticulously described Kaiser's negligent conduct, and condemned such conduct, since Kaiser knew, or should have known, in the exercise of ordinary care that Kaiser's condemned conduct created an unreasonable risk of harm to Blomenkamp, Kaiser's employee who was hurt in the accident. Speaking in euphemistic terms, we believe Union Pacific's theory on appeal is incongruous with its theory asserted at trial. The Supreme Court disposes of an appeal on the basis of the theory presented by the pleadings on which the case was tried. Holden v. Urban, 224 Neb. 472, 474, 398 N.W.2d 699, 701 (1987). See, also, Rahmig v. Mosley Machinery Co., 226 Neb. 423, 412 N.W.2d 56 (1987); Foltz v. Northwestern Bell Tel. Co., 221 Neb. 201, 376 N.W. 2d 301 (1985). Consequently, our construction of the indemnification clause or provision in the Union Pacific-Kaiser agreement is neither strained nor unreasonable. Union Pacific obviously used the same construction as we have regarding omission, because the railroad pleaded actionable negligence as the premise for indemnification from Kaiser. Although Union Pacific has tried to sidetrack us into disposing of this case on contractual provisions alone, the real question concerns Kaiser's conduct and negligence which make the indemnity provisions operative under the trackage agreement.