Court Opinion

ID: 9522134
Source: CourtListenerOpinion
Date Created: 2023-08-07 02:18:22.433503+00
Date Added: 2024-06-11T13:02:19.737326
License: Public Domain

Reiber, C.J.,
¶ 16. dissenting. The exceedingly broad language of the indemnity provision in the parties’ contract did not plainly and unambiguously express the parties’ intent to have Vermont Swim Association (VSA) — a mere permittee hosting a two-day meet in a limited area of a city park — assume liability for injuries to anybody associated with the meet in all areas of the park for the City of Rutland’s own negligence with respect to its nondelegable duty to maintain the park in a safe condition. For this reason, I would apply the rule we adopted in Tateosian v. State and reverse the superior court’s grant of summary judgment in favor of the City. 2007 VT 136, 183 Vt. 57, 945 A.2d 833.
¶ 17. We recently adopted “the general rule that an indemnity clause covers the sole negligence of the indemnitee only where it clearly expresses that intent.” Id. ¶23; see Hollingsworth v. Chrysler Corp., 208 A.2d 61, 64 (Del. Super. Ct. 1965) (“Courts in nearly all jurisdictions which have faced this problem have applied the general rule that the indemnitor is not to be viewed as an insurer and have indicated that the indemnitee will not be protected against the consequences of his own negligence unless the agreement clearly and unequivocally requires it.”). At least part of the rationale for this rule is that parties should expressly agree upon any departure from two fundamental tort principles: “(1) a party that causes loss should be held responsible for the damage therefrom, and (2) holding the responsible party liable serves as an incentive to prevent future occurrences of similar harm.” Hamelin v. Simpson Paper (Vt.) Co., 167 Vt. 17, 22, 702 A.2d 86, 90 (1997) (Gibson, J., dissenting) (citing W. Keeton, et al., Prosser and Keeton on the Law of Torts § 4, at 22, 25 (5th ed. 1984)).
¶ 18. In Tateosian, a contractor promised to indemnify and defend the State against claims “arising as a result of” the contractor’s performance of the contract, which required the *117contractor to supply and install metal covers on state snowplow trucks. 2007 VT 136, ¶ 2. We held that this indemnity provision did not require the contractor to defend the State with respect to a lawsuit claiming that the State’s negligence and the manufacturer’s design defect caused a cover to fly off a snowplow truck and crash through the windshield of the plaintiffs’ car. Id. ¶23. We concluded that, if interpreted to include a claim based on the State’s negligence, the language of the indemnity provision would be “extremely broad and vague” to the point of violating the principle that language accepting responsibility for another’s negligence must be plain and unambiguous. Id. ¶ 17.
¶ 19. In adopting this “universally accepted” principle, id., we quoted extensively from Batson-Cook Co. v. Industrial Steel Erectors, where the court held that broad but vague language assuming liability for incidents that “could arise out of, or result from, or be sustained, in connection with the performance of the work” was helpful in determining the areas in which an indemnity clause could be applied but not in establishing its application based on the legal or physical cause of the injury. 257 F.2d 410, 413 (5th Cir. 1958). In short, an indemnity provision must specifically and unambiguously express the parties’ intent to make the idemnitor responsible for bodily injury or property damage caused by the indemnitee’s negligence. Id. at 412; see, e.g., Davis Constructors & Eng’rs, Inc. v. Hartford Accident & Indem. Co., 308 F. Supp. 792, 794-95 (M.D. Ala. 1968) (holding that nonnegligent subcontractor was required to indemnify negligent contractor where contract provision stated that subcontractor would indemnify contractor for injuries “arising out of the work undertaken by the sub-contractor . . . whether or not due in whole or part to .. . omissions done or permitted by the contractor”); cf. Thompson v. Hi Tech Motor Sports, Inc., 2008 VT 15, ¶ 17, 183 Vt. 218, 945 A.2d 368 (explaining that “most effective way for parties to express an intention to release one party from liability flowing from that party’s own negligence is. to provide explicitly that claims based in negligence are included in the release.” (quotation omitted)).
¶ 20. The indemnity provision here does not satisfy this rigorous standard we adopted in Tateosian. The language in the provision is exceedingly broad and vague, particularly with respect to causation and when examined in the context of the circumstances of the contract. The provision states that permittee (VSA) must *118indemnify and defend the City of Rutland and two businesses — the Midway Diner and Bowlerama — that are located outside of the park but apparently provide additional parking, as well as all of their officers, employees, and agents
from all claims for bodily injury or property damage arising from or out of the presence of Permittee, including its employees, agents, representatives, guests and others present because of the event or Permittee’s activities in or about Whites Park, including the entrances, lobbies and exits thereof, the sidewalks, streets and approaches adjoining the property or any portion of the property used by Permittee or any of the above stated.
A broad reading of the provision would require VSA to indemnify and defend the City and the specified businesses with respect to any bodily injury or property damage arising out of the presence of anyone “in or about” the park or businesses because of the swim meet, even if the injury or property damage were to occur on the sidewalks, streets and approaches to the pool, the park, or the businesses.
¶ 21. The provision contains no statement as to causation and in particular no express statement of the parties’ intent to require VSA to indemnify and defend the City for the City’s own negligence, as required in Tateosian. Hence, as in Batson-Cook, while the broad language of the provision may generally identify the provision’s areas of application, it does not clarify the provision’s applicability with respect to the parties’ relative liability depending on the legal or physical causes of any injury resulting from the limited nature and scope of the permitted use of the property. Under the circumstances, construing the vague language of the provision so broadly as to cover the City’s nondelegable duty to maintain its park in a safe condition violates our holding in Tateosian.
¶ 22. The majority attempts to distinguish Tateosian on grounds that the language in the instant indemnification provision is even more broad than the one in Tateosian. But, as we held in Tateosian, it is the very breadth of the provision that counsels against applying it to specific situations involving the indemnitee’s negligence — absent language expressly stating the parties’ intent to require the indemnitor to indemnify and defend the indemnitee in such situations. 2007 VT 136, ¶ 17.
*119¶ 23. I realize that “[t]he issue in Vermont is not whether commercial parties may allocate liability among themselves,” but rather “under what circumstances the agreement has to expressly disclose that fact.” Stamp Tech, Inc. v. Lydall/Thermal Acoustical, Inc., 2009 VT 91, ¶ 22, 186 Vt. 369, 987 A.2d 292. In my view, the circumstances of this case warrant application of the general rule requiring that the parties expressly state their intent to have the idemnitor (VSA) indemnify and defend the idemnitee (the City of Rutland) for bodily injury or property damage resulting from the indemnitee’s own negligence.
¶ 24. I first note that VSA is not a commercial entity but rather a volunteer, nonprofit organization that administers the championship meet for summer swim teams in Vermont and awards scholarships to Vermont high school senior swimmers. More importantly, while the parties’ contract allowed VSA and its guests — like other members of the general public — to use the parking lot and other areas of Whites Park, as well as the parking lots in nearby businesses, in essence it granted VSA a permit for exclusive use of only Whites Pool for a limited duration of time each day for two days to hold a swim meet. The primary contractual clause addressing use of the park facilities granted “Permittee the use of ‘Whites Pool’ to conduct activities related to the Vermont Swimming Association Championship which shall mean the use of the pool, pool deck, seating area, Colorado timing system, and locker rooms.” Thus, although the contract allowed VSA to set up a concession stand outside the pool area, the pool area itself was the only place where VSA was permitted exclusive use to hold its meet over the two-day period. Indeed, the contractual provision dealing with consideration for use of the pool states that VSA agrees to pay the City $6,000 for the rental of “Whites Pool.”
¶ 25. In the context of the City granting a nonprofit association a permit for exclusive use of a city park pool to hold a swim meet over two days, we should apply the general rule that, absent specific language stating such intent, the parties did not intend the broad and vague language of their indemnity clause to require VSA to assume all liability for the City’s negligence in all areas in and about Whites Park for any injury to anyone connected to the event. In such circumstances, the City must make explicit its intent to require VSA to indemnify and defend the City for its own negligence with regard to its nondelegable duty to maintain its park in a safe condition.
*120¶ 26. Other provisions of the contract demonstrate that the parties knew how to be explicit about responsibility for each other’s negligence or willful conduct. For example, in the indemnification clause, the parties agreed that VSA itself would not have a cause of action against the City for its permitted uses of the park, except when the injury or property damage resulted from the City’s willful acts. The agreement also includes a provision that makes VSA liable for all damages to Whites Pool “arising out of Permittee’s use of the facility, except for damage caused by the negligence of Rutland Recreation & Parks Department.” If the majority is correct that the broad language in the indemnification clause presumes VSA’s duty to indemnify the City for its own negligence, then the above-quoted damages provision is mere surplusage and a nullity. Indeed, one can only wonder why the parties would require the City to assume liability for damages resulting from its own negligence in the pool area, but not in other areas of the park outside the exclusive permitted area. In short, the parties knew how to be explicit when establishing liability for each other’s negligence but did not do so with respect to the circumstances here. This is another reason why the general rule should be applied here.
¶ 27. The majority states,, however, that if we do not construe the indemnification provision to cover all claims for injuries caused by the City’s own negligence, the provision would have no meaning. Cf. Furlon v. Haystack Mountain Ski Area, Inc., 136 Vt 266, 268-69, 388 A.2d 403, 405 (1978) (stating that indemnity clause in that case would be rendered “a nullity” if we were to apply general rule that indemnity provisions should not protect indemnitees from their own negligence unless parties expressly state that intent in provision). I disagree. In Furlon, a contract between a Swiss ski-lift manufacturer and a Vermont ski resort that purchased the lift required the resort to assume all legal responsibility for any injury resulting from erection or operation of the lift. After an injured resort employee sued the manufacturer for negligent design and obtained a default judgment, we held that the employee could execute the judgment against the ski resort pursuant to the contract between the resort and the manufacturer. Id. at 270, 388 A.2d at 405. We concluded that the parties could not have intended that the indemnity clause required indemnification only for injuries caused by the resort’s negligence, and not for those caused by the manufacturer’s negligence, *121because the manufacturer owed no duty with respect to a negligent act or omission committed by the resort. Id. at 268-69, 388 A.2d at 405. We noted that if the parties had intended to make the ski resort liable only for its own conduct, “there would have been no reason to include the subject clause.” Id. at 269, 388 A.2d at 405.
¶ 28. The situation here is not comparable. Unlike the Swiss ski-lift manufacturer in Furlon, in this case the indemnitee (the City) granted VSA a permit for exclusive use of part of its park for a limited period of time, but, in doing so, did not absolve itself of its duty to maintain the park in a safe condition even during the two-day swim meet. Even if we were to hold that the indemnification provision does not apply to protect the City from liability for its own negligence concerning the area of the park outside of the pool that is the subject of this lawsuit, the provision would not be “a nullity” because it protected the City from liability for injuries or property damage resulting from accidents on its property not caused by the City’s negligence.
¶29. Moreover, the indemnification clause required VSA not only to indemnify, but also to defend, the City in the event that an accident not involving the City’s negligence resulted in a lawsuit against the City. For this reason alone, the clause was not a nullity even if we assume that indemnity for the City’s own negligence was not required. In fact, the practical difficulties associated with the majority’s decision requiring VSA to defend against a lawsuit grounded on the City’s negligence — for example, obtaining records from the employees of the negligent party — is one of the reasons that courts have required parties to explicitly state their intent to require the indemnitor to assume the burden of defending a lawsuit grounded on the indemnitee’s negligence. For the same reason, general liability insurance policies include cooperation clauses in indemnity agreements with insureds.
¶ 30. The majority states that this case is more like Hamelin than Tateosian. I agree that Hamelin, a 3-2 decision, is parallel to this case in some ways, but I do not agree that it should be controlling in light of our later decision in Tateosian, which should apply here. Unlike this case, Hamelin involved a contract between two commercial parties. The parties’ contract required one business to provide security services at the other business’s paper facility. The contract required the security company to assume all *122risk of bodily injury and property damage “resulting from or arising out of or in any manner connected with [the security company’s] operations.” Hamelin, 167 Vt. at 19, 702 A.2d at 88 (quotation marks omitted). A security guard on his regular rounds who was injured when he fell through a wooden staircase at the facility claimed that his injury resulted from negligent inspection and maintenance by the indemnitee. We ultimately held that the parties’ contract made the security company liable for the damages resulting from the accident. Id. at 20, 702 A.2d at 88. We concluded that Furlon controlled the case, in part because the case involved an arm’s-length business deal between corporate parties. Id. at 21, 702 A.2d at 89.
¶ 31. But unlike the instant case, in Hamelin the accident occurred while the security company was conducting its regular “operations” in an area of the premises in which it had a contractual duty with the indemnitee to conduct those operations. This case, in contrast, is a limited agreement for use of the property and concerns an accident outside the area in which the contract gave VSA the exclusive right to use the City’s facility. Here, given all of the circumstances, we should apply the general, universally accepted rule that indemnity for another’s negligence will not be presumed absent explicit language to that effect.