Court Opinion

ID: 4249933
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:22:06.476789+00
Date Added: 2024-06-11T14:44:11.061605
License: Public Domain

IN THE SUPREME COURT OF IOWA

                             No. 06–1018

                          Filed March 6, 2009

WELLS DAIRY, INC.,

      Appellant,

vs.

AMERICAN INDUSTRIAL REFRIGERATION,
INC., and REFRIGERATION VALVES and
SYSTEMS CORPORATION,

      Appellees.

      Appeal from the Iowa District Court for Plymouth County,

James D. Scott, Judge.

      Party appeals summary judgment denying its implied contractual

and equitable indemnity claims. AFFIRMED IN PART, REVERSED IN

PART, AND REMANDED.

      Juli Wilson Marshall, Mary Rose Alexander, Thomas J. Heiden,
Andre M. Geverola, and Matthew J. Johnson of Latham & Watkins, LLP,

Chicago, Illinois, Richard H. Moeller of Berenstein, Moore, Berenstein,

Heffernan & Moeller, L.L.P., Sioux City, and Bruce E. Johnson of Cutler

Law Firm, P.C., West Des Moines, for appellant.

      Matthew T. Early of Rawlings, Neiland, Probasco, Killinger,

Ellwanger, Jacobs & Mohrhauser, LLP, Sioux City, and Michael D.

Hutchens, Jenneane L. Jansen, and Jennifer E. Ampulski of Meagher &
                                 2

Geer, PLLP, Minneapolis, Minnesota, for appellee American Industrial

Refrigeration, Inc.

      John D. Mayne and Missy J. Denton of Bikakis, Mayne, Arenson &

Hindman, Sioux City, and Lindsay G. Arthur and Christopher D.

Newkirk of Arthur, Chapman, Kettering, Smetak & Pikala, P.A.,

Minneapolis, Minnesota, for appellee Refrigeration Valves and Systems
Corporation.
                                    3

APPEL, Justice.

      In this case, we peer into the abyss of indemnity law. Specifically,

we must decide whether the district court properly granted summary

judgment in favor of American Industrial Refrigeration, Inc. (AIR) and

Refrigeration Valves & Systems Corp. (RVS) in an indemnification action

brought by Wells Dairy, Inc. following a fire and explosion at one of its

plants. The explosion and subsequent fire allegedly prevented Wells from
completing performance of its contract with Pillsbury Co., Inc. to produce

ice cream. The district court granted AIR and RVS summary judgment

on Wells’ indemnification actions. For the reasons expressed below, we

affirm in part, reverse in part, and remand for further proceedings.

      I. Factual and Procedural History.

      A. Nature of Underlying Litigation.      On or about January 28,

1999, Wells and Pillsbury entered into a contract whereby Wells agreed

to manufacture at its facility in Le Mars, Iowa certain Häagen-Dazs

frozen dessert products marketed by Pillsbury.     The contractual terms

included minimum levels of production by Wells over a fixed term. The

contract provided that Wells could manufacture Häagen-Dazs only at its

South Ice Cream Plant unless Wells obtained Pillsbury’s written consent.
      Two months after the contract was signed, an explosion and fire

occurred at the South Ice Cream Plant. The explosion resulted from the

catastrophic failure of a check valve in a pipeline of the ammonia

refrigeration system. The failure of the check valve caused thousands of

pounds of liquid ammonia to spill onto the floor of the plant.         An

electrical charge subsequently caused the explosion and resulting fires.

The explosion and fires extensively damaged the South Ice Cream Plant

and resulted in an immediate and complete shutdown of the facility.
                                     4

      In August 2002 Pillsbury filed an action in district court against

Wells for breach of contract and negligence. Thereafter, Wells filed the

instant third-party action against AIR and RVS seeking indemnification

and   contribution   for   any   damages   owed   to   Pillsbury.   In   the

indemnification action, Wells asserted that the explosion and fire were

caused by a defective refrigeration system that AIR and RVS installed,

designed, and sold to Wells. After discovery, AIR and RVS filed motions
for summary judgment against Wells.

      B. Relationship between Wells and AIR. The undisputed facts

show that in 1991 Wells hired AIR to design and install a multi-million

dollar refrigeration system at the South Ice Cream Plant.           The bid

documents submitted by AIR and accepted by Wells called for AIR to

supply a “total systems engineering and turnkey proposal,” including

ammonia refrigeration. In its proposal, AIR stated that its system would

be code-compliant, would be made with the “highest quality material and

workmanship available,” and would include numerous safety controls.

      The contract between Wells and AIR also contained several service

provisions. Among other things, the contract provided that AIR would

supply the services of one control system designer for the maximum of
one hundred and eighty hours, one field technician for a maximum of

one hundred and eighty hours, and “include[ ] services of King Gauge

Field Service personnel to review installation, calibrate tank level

controls, and provide training services.” When a problem arose with the

refrigeration unit, Wells employees would “give them [AIR] a call on the

phone and say, hey, we have an issue or whatever it was.” In addition,

AIR conducted at least two training sessions at Wells on the safe

operation of the system in 1994 and 1996.
                                     5

      C. Relationship between Wells and RVS. The undisputed facts

show that RVS is a supplier of vessels, piping, and components for

ammonia refrigeration systems.     RVS supplied much of the equipment

for the south plant refrigeration system, including the selection of the

pressure vessels, piping, various valves, and, specifically, the check valve

that catastrophically failed.

      The parties dispute whether RVS had a contractual relationship
with Wells. RVS contends it merely sold goods to AIR and shipped them

to Wells. In blueprints and engineering specifications prepared by RVS,

the client is described as “AIR/Well’s South Plant.” Wells alternatively

asserts that a contractual relationship existed between it and RVS.

      D. District Court Ruling.      The district court granted AIR’s and

RVS’s motions for summary judgment.        The district court found there

was no express agreement to indemnify between the parties. The district

court further held that no implied duty to indemnify arose from the

series of finite agreements between AIR/RVS and Wells.

      The district court also granted Wells’ motion for summary

judgment on the underlying claim brought by Pillsbury. Such a ruling

rendered Wells’ indemnification claim moot.      This court, however, has
reversed the district court’s grant of summary judgment in the

underlying action. See Pillsbury Co. v. Wells Dairy, Inc., 752 N.W.2d 430

(Iowa 2008). As a result, Wells’ indemnification claims against AIR and

RVS remain live rounds on the battlefield awaiting our disposition.

      II. Standard of Review.

      We review the district court’s ruling on a motion for summary

judgment for correction of errors at law.     Buechel v. Five Star Quality

Care, Inc., 745 N.W.2d 732, 735 (Iowa 2008).        Summary judgment is

proper if the entire record before the court shows that there is no
                                      6

genuine issue of material fact and the moving party is entitled to

judgment as a matter of law. Phillips v. Covenant Clinic, 625 N.W.2d 714,

717 (Iowa 2001).       Every legitimate inference that can reasonably be

deduced from the evidence should be afforded the party resisting the

motion for summary judgment, and a fact question is generated if

reasonable minds can differ on how the issue should be resolved. Id. at

718.
       III. Discussion.

       A. Analytical     Framework.       Indemnification   is   a   form   of

restitution. Iowa Elec. Light & Power Co. v. Gen. Elec. Co., 352 N.W.2d
231, 236 (Iowa 1984). Indemnity shifts the entire liability or blame from

one legally responsible party to another.     Federated Mut. Implement &

Hardware Ins. Co. v. Dunkelberger, 172 N.W.2d 137, 142 (Iowa 1969),

superseded by statute, 1971 Iowa Acts ch. 131, § 94, as recognized in

Ayers v. Straight, 422 N.W.2d 643, 646 (Iowa 1988).         Indemnity is, in

short, a redistribution of risk. Nicholas P. Alexander, Developments in

Indemnity Law: Express, Implied Contractual, Tort-Based & Statutory, 79
Mass. L. Rev. 50, 51 (1994).

       The nomenclature used by courts for implied indemnity claims can
be confusing and is not always used with precision. When an implied

obligation to indemnify arises from an existing contractual relationship,

it is often said to involve an implied-in-fact obligation, or implied

contractual indemnity.       See E. Eugene Davis, Indemnity Between

Negligent Tortfeasors: A Proposed Rationale, 37 Iowa L. Rev. 517, 538

(1952); Dale B. Furnish, Distributing Tort Liability:        Contribution &

Indemnity in Iowa, 52 Iowa L. Rev. 31, 35 (1966). When indemnity arises

outside of a contractual setting, it is often referred to as an obligation

implied-in-law, or equitable indemnity.     Id.   Sometimes, however, the
                                    7

term implied indemnity is used to include both implied contractual

indemnity and equitable indemnity, which can lead to considerable

confusion. See generally 17 Vista Fee Assocs. v. Teachers Ins. & Annuity

Ass’n of Am., 693 N.Y.S.2d 554 (App. Div. 1999).

      For the purposes of clarity in this opinion, we refer to implied

contractual indemnity as including indemnity claims (other than express

indemnity) arising out of contractual relations.       We use the term
equitable indemnity to refer to distinctly different indemnity claims which

arise from the noncontractual legal relationships between the indemnitor

and the indemnitee.

      1. Implied contractual indemnity. It has been widely accepted for

decades that indemnity may, in some instances, arise from a contractual

relationship even if the parties did not expressly include an indemnity

clause in the contract. Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp.,

350 U.S. 124, 133, 76 S. Ct. 232, 237, 100 L. Ed. 133, 141 (1956),

superseded by statute as stated in Edmonds v. Compagnie Generale

Transatlantique, 443 U.S. 256, 262, 99 S. Ct. 2753, 2757, 61 L. Ed. 2d
521, 528 (1979).    The standard for implying a contractual indemnity

obligation, however, is generally quite high. As stated by the New York
Court of Appeals, in order for a court to imply a contractual right to

indemnification, there must be an “unmistakable intent” to indemnify.

Hogeland v. Sibley, Lindsay & Curr Co., 366 N.E.2d 263, 266 (N.Y. 1977).

      Under Iowa law, we have couched our implied contractual

indemnity doctrine in terms of an “independent duty,” stating that an

implied contractual duty to indemnify may arise from a contractual

relationship that lacks an express obligation to indemnify where there

are “independent duties” in the contract to justify the implication.

McNally & Nimergood v. Neumann-Kiewit Constructors, Inc., 648 N.W.2d
8

564, 573 (Iowa 2002); Iowa Elec., 352 N.W.2d at 236.                 Such

“independent duties” arise in the context of implied contractual

indemnity when the contract implies “a mutual intent to indemnify for

liability or loss resulting from a breach of the duty.”     McNally, 648

N.W.2d at 573. In other words, we have found an implied contractual

duty to indemnify where the circumstances require that a party to an

agreement “ought to act as if he had made such a promise, even though
nobody actually thought of it or used words to express it.”      Woodruff

Constr. Co. v. Barrick Roofers, Inc., 406 N.W.2d 783, 785 (Iowa 1987).

      It is not necessary that a party seeking indemnity under a theory

of implied contractual indemnity be blameless in connection with the

incident.    In Iowa Power & Light Co. v. Abild Construction Co., an

employer company who was negligent toward its own employee was still

able to recover on an implied contractual indemnity theory where the

indemnitor breached its contractual obligation to notify the employer of

construction activity around power lines.      259 Iowa 314, 338, 144
N.W.2d 303, 317 (1966).       The question in an implied contractual

indemnity case, therefore, is whether a duty arising from the contract

has been violated and, if so, what damages flow directly from breach of
that duty.

      While recognizing that implied contractual indemnity can arise in

special circumstances, our cases clearly demonstrate that implied

contractual indemnity does not arise from plain vanilla contracts. For

example, implied contractual indemnity is generally not found in

ordinary purchase agreements.      Johnson v. Interstate Power Co., 481
N.W.2d 310, 319 (Iowa 1992). Similarly, contracts involving the sale of

services that give rise only to a general duty of care do not give rise to

implied contractual indemnity. Merryman v. Iowa Beef Processors, Inc.,
                                     9

978 F.2d 443, 445 (8th Cir. 1992); Cochran v. Gehrke Constr., 235 F.

Supp. 2d 991, 1003–04 (N.D. Iowa 2002); Roger W. Stone & Jeffrey A.

Stone, Indemnity in Iowa Construction Law, 54 Drake L. Rev. 125, 147

(2005) (noting only contractual duties of a specific and defined nature

give rise to implied contractual indemnity). Something beyond a routine

service contract triggering only general duties of care or a sale-and-

purchase contract is required to support an implied contractual
indemnity claim.

       2. Equitable indemnity. When equitable indemnity is involved, the

intention of the parties to indemnify, unlike the case of implied

contractual indemnity, is not relevant.        Instead, the law imposes

indemnity due to the relationship of the parties and the underlying loss

regardless of intention. Equitable indemnity arises from noncontractual

obligations.     See Davis, 37 Iowa L. Rev. at 538 (noting implied-at-law

indemnity does not really involve a contract at all). It is a murky doctrine

based on notions of fairness and justice.

       A classic branch of equitable indemnity is based upon vicarious

liability.     In the vicarious liability cases, the relationship of the

indemnitor and the indemnitee is such that fairness and justice requires
that the party primarily responsible for the underlying injury should bear

the liability.    Vicarious liability is commonly used in cases involving

respondeat superior, principals and agents, employers and employees, or

other similar relationships.      We have adopted indemnity based on

vicarious liability in Iowa. Rozmajzl v. Northland Greyhound Lines, 242
Iowa 1135, 1143, 49 N.W.2d 501, 506 (1951).

       Another traditional branch of equitable indemnity has been utilized

by courts in the context of joint tortfeasors where there is a great

disparity in fault.    Often expressed as involving a distinction between
                                    10

active and passive negligence, this tort-based doctrine was designed as a

rule to avoid the harshness of the contributory negligence doctrine before

the era of comparative fault.     See Francis H. Bohlen, Contribution &

Indemnity between Tortfeasors, 21 Cornell L. Rev. 552, 554 (1936).

While we adopted indemnity based on active-passive negligence decades

ago, we abandoned this branch of equitable indemnity in light of the

enactment of Iowa’s Comparative Fault Act.         Britt-Tech Corp. v. Am.
Magnetic Corp., 487 N.W.2d 671, 673 n.1 (Iowa 1992); Am. Trust & Sav.

Bank v. United States Fidelity & Guar. Co., 439 N.W.2d 188, 190 (Iowa

1989).

      Some courts have embraced a third branch of equitable indemnity

based upon an “independent duty” between the indemnitor and the

indemnitee.    See generally Andrew Kull, The Source of Liability in

Indemnity & Contribution, 36 Loy. L.A. L. Rev. 927, 932–35 (2003).

Although using vocabulary similar to that used in implied contractual

indemnity, the theory is markedly different.       In equitable indemnity

based on “independent duties,” there is no effort to determine whether

the parties would have agreed to indemnity had they addressed the

issue. Instead, the question is whether there is some duty between the
indemnitor and the indemnitee sufficient to impose indemnity on the

indemnitor as a matter of law. Id. at 933.

      Because “independent duty” equitable indemnity cases do not

require common liability, they are not, at their core, based upon unjust

enrichment. Id. Rather, independent duty equitable indemnity cases are

based on notions of fairness based on the nature of the relationship

between the indemnitor and the indemnitee and the underlying cause of

the injury or damage claimed by the first-party plaintiff. Id.
                                      11

      What constitutes an “independent duty” for purposes of equitable

indemnity is not always clear. However, a number of cases have held

that a breach of duty by licensed engineering professionals toward their

clients is sufficient to support indemnification.    Peters v. Mindell, 620
A.2d 1268, 1271–72 (Vt. 1992). In these cases, indemnification is not

based upon a contractual relationship, but rather upon a tort involving a

special relationship between the licensed professional and a client.
      Most of the indemnity cases in Iowa dealing with “independent

duties” are cases involving implied contractual indemnity. See McNally,

648 N.W.2d at 573. We have, however, recognized equitable indemnity

based on an independent duty. Hansen v. Anderson, Wilmarth & Van Der

Maaten, 630 N.W.2d 818, 826 (Iowa 2001).            We have not had the

opportunity to develop this branch of equitable indemnity in great detail.

      Some courts have gone beyond the “independent duty” doctrine

and decided to impose liability based on “simple fairness.” Kull, 36 Loy.

L.A. L. Rev. at 939 (citing City of New York v. Lead Indus. Ass’n, 644
N.Y.S.2d 919, 921 (App. Div. 1996), and McDermott v. City of New York,

406 N.E.2d 460, 462 (N.Y. 1980)).          The merits of an approach to

indemnity    based   upon   “simple    fairness”   have   been   subject   to
considerable academic debate. Id. at 941 n.30 (comparing Peter Linzer,

Rough Justice:   A Theory of Restitution & Reliance, Contracts & Torts,

2001 Wis. L. Rev. 695, with Emily Sherwin, Restitution & Equity:           An

Analysis of the Principle of Unjust Enrichment, 79 Tex. L. Rev. 2083

(2001)).   Application of equitable indemnity based solely on notions of

simple fairness could cover a lot of legal territory.     We have criticized

equitable indemnity based solely on fairness, citing the need for stability

in the law. Woodruff, 406 N.W.2d at 785–86.
                                             12

         B. Indemnification Claim against AIR.

         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

         1Wells   makes no claim of indemnity based upon express contract.
                                           13

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

       2AIR   asserts that equitable indemnity is inapplicable here due to the operation of
the force majeure clause in the underlying contract between Wells and Pillsbury.
Specifically, AIR asserts that either Wells is at fault for the explosion and thus not
entitled to equitable indemnity or it is not at fault, in which case Wells would not be
liable to Pillsbury for any breach under the force majeure clause. AIR, however, has
failed to assert any legal authority on the proper interpretation of the force majeure
clause. As such, this court deems the issue not properly raised on this appeal. See
Iowa R. App. P. 6.903(2)(g)(3).
                                    14

specific and defined.   Sommer v. Fed. Signal Corp., 593 N.E.2d 1365,

1369 (N.Y. 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
                                    15

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., 444 N.W.2d 305, 311 (Neb. 1989);

Cen. Wash. Refrigeration, Inc. v. Barbee, 946 P.2d 760, 763 (Wash. 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
                                       16

summary judgment on the equitable indemnity claim based upon an

alleged breach of U.C.C. warranties.

      C. Indemnity Claims against RVS.

      1.    Issue preservation.   RVS argues that Wells did not properly

preserve the issue of independent duty in this case. RVS claims that the

first time Wells raised the issue of an independent duty to indemnify was

in its opposition to RVS’s motion for summary judgment. RVS argues
that a careful reading of the Wells’ cross-petition against RVS does not

reveal even a hint of the theories espoused in its opposition to summary

judgment.

      We reject RVS’s preservation claim.         We continue to rely upon

notice pleading in Iowa. As such, it is not necessary to raise a specific

theory of liability, but only to state the basis in broad, general terms.

Iowa R. Civ. P. 1.402(2)(a). The parties may utilize ordinary discovery

techniques to determine the basis of the underlying claim. Cemen Tech,

Inc. v. Three D Indus., L.L.C., 753 N.W.2d 1, 12 (Iowa 2008).

      2. Implied contractual indemnity. Wells asserts that engineering

specifications, blueprints, and sales invoices collectively amount to a

contractual agreement between it and RVS. Wells claims that pursuant
to this contractual relationship, RVS had a duty to provide safety

features for the component parts it supplied to AIR and had a duty to

inspect its work and recommend necessary repairs and modifications.

From these contractual obligations, Wells argues that an implied

contractual duty to indemnify arises.

      RVS responds that it at no time had a contractual relationship

with Wells. RVS further asserts that even if a contractual relationship

existed,   the   relationship   only   amounted    to   a   sale-and-purchase

agreement that did not give rise to indemnity obligations.
                                    17

        We agree with RVS.    A contract requires offer, acceptance, and

sufficiently definite terms to be enforced.   While we have held that a

series of documents may give rise to a contractual relationship, Horsfield

Construction, Inc. v. Dubuque County, Iowa, 653 N.W.2d 563, 570 (Iowa

2002), we find that under the undisputed facts, RVS and Wells did not

have a contractual relationship under the series of documents presented

here.
        The blueprints that are said to be part of the contract here are

simply that, blueprints. There is nothing in them that suggests an offer,

acceptance, or legal duty between RVS and Wells.             Crum Elbow

Sportsmen’s Ass’n v. Whelan, 73 N.Y.S.2d 531, 532–33 (Sup. Ct. 1947)

(holding blueprints and a check do not amount to binding contract for

sale of land).

        Similarly, the sales invoices document a series of purchases

between RVS and AIR, not between RVS and Wells.            Each of these

invoices states that RVS sold the items to AIR for shipment to Wells. The

fact that the merchandise was shipped to Wells is not evidence of a

contractual relationship between Wells and RVS. There can be no basis

for implied indemnity based on independent contractual duties where
there is no underlying contract between the parties.

        Moreover, even if there were a contract, there is no basis for

implied contractual indemnity. The documents reflect at most purchase

orders.    There is no contractual language or contractual duty that

demands that an indemnification obligation be implied for such purchase

orders. Johnson, 481 N.W.2d at 320.

        3. Equitable indemnity based on professional duties. Wells asserts

that RVS had noncontractual independent duties sufficient to give rise to

equitable indemnity. Specifically, Wells claims that it was RVS’s client
                                            18

and that, as a result, RVS had a duty to perform its work to the standard

of the engineering profession and to provide a refrigeration system that

was fit for ordinary use and/or intended use.

       RVS does not challenge the assertion that it had an engineering

relationship with Wells.3         Based on our holding on the identical issue

with respect to AIR, we conclude that RVS is not entitled to summary

judgment on the equitable indemnity claim based upon an alleged breach

of professional duties.

       4.     Equitable indemnity based on U.C.C. warranties.                   We have

already determined that there is no contractual relationship between

RVS and Wells.          This lack of privity is dispositive of the equitable

indemnity claim against RVS based upon U.C.C. warranties.

       This court has, of course, eliminated the privity requirement in

products liability cases raising a breach-of-implied-warranty claim. State

Farm Mut. Auto. Ins. Co. v. Anderson-Weber, Inc., 252 Iowa 1289, 1301,

110 N.W.2d 449, 456 (1961).               Nevertheless, the claims that may be

brought by a remote purchaser are limited.

       While we have held that a nonprivity purchaser may recover “direct

economic loss” for breaches of implied warranties under the U.C.C., we

have repeatedly held that a remote purchaser of goods cannot recover

“consequential economic loss” from a vendor under an equitable

indemnity theory. Kolarik v. Cory Int’l Corp., 721 N.W.2d 159, 163 n.3

(Iowa 2006); Beyond the Garden Gate, Inc. v. Northstar Freeze-Dry Mfg.,

       3The  fact that Wells and RVS are not in privity does not necessarily mean that
RVS owes no professional duties toward Wells. For example, in John T. Jones
Construction Co. v. Hoot General Construction, 543 F. Supp. 2d 982, 1009 (S.D. Iowa
2008), a federal district court sitting in diversity held that under Iowa law, the duties of
a professional extended to those who would foreseeably rely on the engineer’s services.
Because RVS in this appeal does not challenge the assertion that it owes a duty to
Wells, we do not need to confront the issue in this appeal.
                                     19

Inc., 526 N.W.2d 305, 309 (Iowa 1995).         Direct economic loss is the

difference between the value of goods as warranted and the value of

goods actually delivered, while consequential economic losses includes

all losses caused by the defective product. Id.

      In this case, the recovery which Wells seeks—indemnity for the

contractual claims of Pillsbury—is a consequential economic loss.          As

such, the loss would not be recoverable in a direct breach of warranty
action under the U.C.C. due to Wells’ lack of privity with RVS. It would

be illogical for indemnity based upon independent duties established by

implied U.C.C. warranties to provide greater substantive relief than

would be available in a direct action under the U.C.C. Therefore, RVS is

entitled to summary judgment on the equitable indemnity claim based

upon U.C.C. warranties.

      IV. Conclusion.

      For the above reasons, we conclude that AIR and RVS are entitled

to summary judgment on Wells’ claim for implied contractual indemnity.

On the question of equitable indemnity, however, we hold that AIR and

RVS are not entitled to summary judgment on the claims of equitable

indemnification based upon the independent duties of professional
engineers.    With respect to equitable indemnity based on U.C.C.

warranties, we conclude RVS is entitled to summary judgment, but AIR

is not. As a result, the district court is affirmed in part, reversed in part,

and the case is remanded to the district court for further proceedings.

      AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

      All justices concur except Hecht and Baker, JJ., who take no part.