Court Opinion

ID: 9524127
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:50:10.966893+00
Date Added: 2024-06-11T13:01:12.638661
License: Public Domain

ANDERSON, Justice
(concurring specialty)-
I concur in the result reached by the majority, but write separately because I do not find, as the majority does, that the “purport [of Attachment B] is quite clear.” Ambiguity exists when the language of a written document, by itself, is reasonably susceptible to more than one meaning. Trondson v. Janikula, 458 N.W.2d 679, 681 (Minn.1990); Lamb Plumbing & Heating Co. v. KrausAnderson, Inc., 296 N.W.2d 859, 862 (Minn.1980). As is evidenced by the fact that the parties to this action have placed different interpretations on the effect of Attachment B, and two lower courts have come to conclusions regarding Attachment B’s effect which are contrary to the one reached by the majority today, the purport of paragraph 7 of the Standard Subcontract Agreement between Kraus-Anderson and Imperial as modified by Attachment B is at best ambiguous.
Perhaps the better of the alternative readings of this contract is the majority’s. However, I disagree with the majority’s statement that paragraph 7 is an “indemnity provision which is saved from invalidity only by its requirement that the indemnitor’s contractually assumed liability be insured.” While the majority acknowledges that there is a difference between an indemnity agreement and an agreement to procure and maintain insurance, the majority maintains in the same breath that “the two are almost invariably linked.” In my view, the statutory scheme enacted by the legislature in Chapter 337 relating to building and construction contracts, and supported by this *925court in Holmes v. Watson-Forsberg, 488 N.W.2d 473 (Minn.1992), supports the ability of the parties to contract to “provide specific insurance coverage for the benefit of others.” Minn.Stat. § 337.05, subd. 1 (1994).
' The legislature has declared that agreements to indemnify for negligence beyond one’s own are unenforceable. Minn.Stat. § 337.02 (1994). But, in section 337.05, the legislature specifically provided that the un-enforeeability of an agreement to indemnify for negligence beyond one’s own does not affect the validity of an agreement to provide specific insurance. Rather than indemnity agreements and agreements to provide specific insurance being “invariably linked,” these agreements, while appearing in the same document, are treated by the legislature in vastly different ways. Agreements to indemnify beyond one’s own negligence are disfavored, that is, rendered unenforceable. Agreements to provide specific insurance are favored, and are enforceable. Minn.Stat. § 337.05. In fact, the legislature also provided that if a promisor agrees to provide specific insurance, even for negligence beyond his own, and does not do so, then as to a claim which arises within the scope of the specified insurance, the promisor must indemnify the promisee to the extent of the promised insurance. Minn.Stat. § 337.05, subd. 2. By supporting agreements to provide insurance for the negligence of another, the legislature has acknowledged the public interest in providing adequate compensation for construction-related injuries and has acknowledged the practical need for the allocation of risk in the performance of construction contracts. However, in so doing, the legislature has required that such agreements to provide insurance be specific.
The parties to this contract agreed that Imperial would “obtain, maintain and pay for such general liability insurance coverage and endorsements as will insure the provisions of this paragraph.” Such agreements are favored and we have articulated the policy underlying the protection of contracts to provide insurance, stating that:
the legislature both anticipated and approved a long-standing practice in the construction industry by which the parties to a subcontract could agree that one party would purchase insurance that would protect “others” involved in the performance of the construction project. Such a risk allocation method is a practical response to problems inherent in the performance of a subcontract and, in instances where the risk of loss is one directly related to and arising out of the work performed under the subcontract, the parties are free to place the risk of loss upon an insurer by requiring one of the parties to insure against that risk.
Holmes, 488 N.W.2d at 475.
As I previously stated, the agreement to provide insurance between Kraus-Anderson and Imperial is at best ambiguous. It is susceptible to more than one reasonable interpretation. The majority rewrites this contract in a way that has written out the inherent ambiguity in the contract language. In my view, the reason that the agreement to provide insurance does not include the negligence of Kraus-Anderson in this instance is that the parties failed to adhere to section 337.05’s requirement of specificity. They failed to agree that Imperial would “provide specific insurance.”