Court Opinion

ID: 2964218
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Date Created: 2015-09-21 21:22:17.312105+00
Date Added: 2024-06-11T11:37:23.661974
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT
                                 ____________________

        Nos. 95-2051
             95-2207

                    CHARLES MACGLASHING AND SHARLENE MACGLASHING,

                                Plaintiffs, Appellees,

                                          v.

                           DUNLOP EQUIPMENT COMPANY, INC.,

                                 Defendant, Appellee.

                                 ____________________

                       RESTORATION PRESERVATION MASONRY, INC.,

                          Third-Party Defendant, Appellant.
                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Reginald C. Lindsay, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                                  Cyr, Circuit Judge,
                                       _____________
                      Coffin and Bownes, Senior Circuit Judges.
                                         _____________________
                                 ____________________

            Robert P. Powers, with whom Michael  R. Byrne, Andre A.  Sansoucy,
            ________________            _________________  __________________
        and  Melick  & Porter  were  on  brief  for  Restoration  Preservation
             ________________
        Masonry, Inc., appellant.
            Thomas G.  Hoffman, with whom Thomas  M. Greene,  Paul D. Hoffman,
            __________________            _________________   _______________
        Greene  &  Hoffman, P.C.  were on  brief  for Charles  MacGlashing and
        ________________________
        Sharlene  MacGlashing,  plaintiffs,  appellees  and  Dunlop  Equipment
        Company, Inc., defendant, appellee.
                                 ____________________

                                    July 25, 1996
                                 ____________________

                      BOWNES, Senior Circuit Judge.  This appeal concerns
                      BOWNES, Senior Circuit Judge.  
                              _____________________

            the  interpretation and enforceability  of an indemnification

            clause  in a  lease  between third-party  defendant-appellant

            Restoration Preservation Masonry, Inc. ("RPM") and defendant-

            appellee   Dunlop   Equipment   Company,   Inc.   ("Dunlop").

            Plaintiff-appellee  Charles MacGlashing  was injured  when an

            elevated  work platform  leased  by Dunlop  to RPM  collapsed

            while  he and another employee of RPM  were using it in their

            masonry  work.   MacGlashing and  his wife, residents  of New

            Hampshire, brought a diversity action in tort against Dunlop,

            a   Massachusetts  corporation,  in  the  district  court  of

            Massachusetts.     Dunlop  sued   RPM,  invoking  the   lease

            indemnification  clause.   Prior to  trial the  MacGlashings,

            with court approval, entered into a settlement agreement with

            Dunlop.  The issue  on  appeal is  whether the  MacGlashings,

            standing  in the shoes of  Dunlop, can collect  the amount of

            the settlement  from RPM under the  indemnification clause of

            the lease between RPM and Dunlop.  This issue was decided  in

            favor  of the  MacGlashings and  Dunlop by  summary judgment.

            There is no question that Massachusetts law applies.  

                      RPM maintains  that it has no  obligation under the

            lease agreement to indemnify  Dunlop for damages flowing from

            Charles  MacGlashing's  accident  because  Dunlop  materially

            breached  the agreement.  It also challenges the scope of the

                                         -2-
                                          2

            indemnification clause.  Discerning  no error in the district

            court's summary judgment analysis, we affirm.

                                          I.
                                          I.

                                      BACKGROUND
                                      BACKGROUND
                                      __________

                      Viewed  in the  light  most favorable  to RPM,  the

            nonmoving   party,  the  facts  are  as   follows.    RPM,  a

            Massachusetts-based corporation, employed Charles MacGlashing

            as  a  brick  mason until  September  2,  1993,  when he  was

            involved in  a work-related  accident at The  Longwood Towers

            located in  Brookline, Massachusetts.  In  1993, the Longwood

            Corporation  ("Longwood"),  owner  of  The   Longwood  Towers

            complex, commissioned RPM to conduct phase II of a renovation

            project at Longwood  Towers.   Like phase I,  which had  been

            completed  a year  earlier  by NER,  Inc.  ("NER"), phase  II

            involved removal  and replacement of  brick and stone  at the

            top of  three eight-story  buildings located in  the complex.

            RPM was formed by former employees of  NER.  Several of them,

            including RPM's  president Paul Haven, had worked on phase I.

            During  both phase I and II,  mobile, elevated work platforms

            fitted with eight-foot outrigger  devices, which extended off

            the  main platform  to expand  its width,  were utilized  for

            stone and brick removal and to make certain setback  portions

            of  the   buildings   accessible.     The   outriggers   were

            modifications to the original platform design. 

                                         -3-
                                          3

                      On September 2, 1993, MacGlashing  and a co-worker,

            James  Proctor,  were removing  a  piece  of  stone from  the

            parapets of Building B when the work platform they were using

            collapsed.   Both  men  fell  eight  stories to  the  ground.

            Proctor died  from the  injuries he sustained.   MacGlashing,

            who  was  thirty-nine at  the  time,  survived, but  suffered

            injuries that hospitalized  him for six  months and left  him

            partially  paralyzed and  in constant  pain.   These injuries

            included, inter alia, broken bones, internal and neurological
                      _____ ____

            damage,  a ruptured  aorta and  bladder, a  perforated colon,

            lung damage, and lacerations.  MacGlashing incurred more than

            $800,000.00 in medical fees  and expenses as a result  of the

            accident.   His  future medical costs  and net  economic loss

            have been  projected between $600,000.00 to  $1.1 million and

            $1.1 million  to $1.3 million,  respectively.  At  trial, the

            parties  agreed that  the platform  involved in  the accident

            collapsed  because it could not bear the weight placed on it,

            but disagreed about whether the platform had been defectively

            designed,   used  negligently,  or  negligently  modified  by

            Dunlop.   Dunlop, whose  business consists of  supplying work

            platforms for sale or  lease, provided the platforms employed

            in  both phase  I and  II of  the Longwood  Towers renovation

            project.   It  executed a  July 7,  1993, lease  agreement to

            provide four platforms with  RPM's president, Paul Haven, who

            had left NER to form RPM.  

                                         -4-
                                          4

                      The lease agreement executed between RPM and Dunlop

            was  a standard  form  contract and  contained the  following

            indemnification clause:

                        12.    THE LESSEE  HEREBY  ABSOLVES THE
                      LESSOR    OF   ANY    RESPONSIBILITY   OR
                      OBLIGATION  IN  THE  EVENT  OF  ACCIDENT,
                      REGARDLESS OF CAUSES OR CONSEQUENCES, AND
                      THAT   ANY   COSTS,   CLAIMS,  COURT   OR
                      ATTORNEY'S  FEES, OR  LIABILITY RESULTING
                      FROM  THE USE OF DESCRIBED EQUIPMENT WILL
                      BE INDEMNIFIED BY  THE LESSEE  REGARDLESS
                      AGAINST  WHOM  THE CLAIMANT  OR CLAIMANTS
                      INSTITUTE ACTION.

                                         II.
                                         II.

                                  PROCEEDINGS BELOW
                                  PROCEEDINGS BELOW
                                  _________________

                      The  MacGlashings  brought   a  federal   diversity

            jurisdiction suit,  see 28 U.S.C.    1332(a), against Dunlop,
                                ___

            seeking   recovery  on   theories   of  negligence,   product

            liability, and breach of warranty.   They charged Dunlop with

            negligence  in  the  design  and  modification  of  the  work

            platforms leased to RPM, negligence in failing to inspect the

            platforms and  repair defects  and damage, and  negligence in

            failing to  warn and instruct RPM employees in the use of the

            platform.    They  also  asserted that  Dunlop  breached  the

            implied warranty  that the work  platforms were  merchantable

            and fit  for  their intended  use.   The  MacGlashings  later

            amended  their complaint  to assert  claims  against Longwood

            under  Mass. Gen.  L. ch. 143,    51.   These  claims are not

            relevant to this appeal.  

                                         -5-
                                          5

                      Dunlop filed a  third-party complaint against  RPM,

            seeking  indemnification pursuant  to their  lease agreement.

            RPM   denied   any    indemnification   responsibility    and

            counterclaimed,  alleging that Dunlop materially breached the

            lease  agreement  by  providing  defective  and  unreasonably

            dangerous equipment.  

                      Each of the parties  filed summary judgment motions

            before  the magistrate  judge.   Dunlop and  the MacGlashings

            moved for summary judgment on Dunlop's third-party complaint.

            They   maintained  that,  under  the  indemnification  clause

            contained  in  the  lease  agreement, RPM  was  obligated  to

            indemnify Dunlop for any liability  resulting from the use of

            the  leased  equipment and  that  Dunlop  did not  materially

            breach its  obligations under that agreement.   RPM contested

            this joint  motion  and  filed  its own  motion  for  summary

            judgment on Dunlop's third-party  claims.  In both instances,

            it  contested  the  enforceability  of  the  lease  agreement

            executed  with   Dunlop,  claiming  that   Dunlop  materially

            breached   the  implied  warranties  of  merchantability  and

            fitness for  a particular purpose contained  in the agreement

            by  failing to  test the  load-bearing capacity  of the  work

            platforms  and outriggers  prior to delivery  of them  to the

            project site.

                      The case  was assigned to  a magistrate judge.   In

            her report  and recommendations,  she  first addressed  RPM's

                                         -6-
                                          6

            summary judgment  motion.  The magistrate  judge denied RPM's

            claim  that  the  lease  agreement it  executed  with  Dunlop

            included  an implied  warranty  of fitness  for a  particular

            purpose, under Mass.  Gen. L.  ch. 106,    2-315, but  agreed

            that  it contained  an implied  warranty  of merchantability,

            under Mass. Gen. L.  ch. 106,   2-314.  The  magistrate judge

            recommended that RPM's motion  for summary judgment be denied

            because  she  found  that  genuine issues  of  material  fact

            existed as to whether Dunlop breached its implied warranties.

                      Turning to the  joint motions for  summary judgment

            filed by  Dunlop and  the MacGlashings, the  magistrate judge

            concluded that the record, viewed in RPM's favor, precluded a

            dismissal with  prejudice, of RPM's counterclaim  for breach.

            She recommended, however,  that Dunlop and the  MacGlashings'

            joint motion  for  summary judgment  on Dunlop's  third-party

            complaint  be  allowed.   The  magistrate  judge found  that,

            barring a determination  that Dunlop materially  breached the

            lease agreement,  RPM was "obligated to  indemnify Dunlop for

            any liability resulting from Charles MacGlashing's use of the

            leased  equipment."   She  concluded  that "whether  Dunlop's

            conduct  amounted  to a  material  or serious  breach  of the

            contract"  was an issue  of fact for  the jury.   Each of the

            parties  filed timely  objections  to the  magistrate judge's

            report.  

                                         -7-
                                          7

                      The district court  issued an  order accepting,  in

            part, and  modifying, in part, the  Report and Recommendation

            of  the magistrate judge.  The district court agreed with the

            magistrate   judge's  determination  that  RPM's  motion  for

            summary judgment should be denied.  While it also agreed that

            summary judgment in favor of Dunlop and the  MacGlashings was

            appropriate  on Dunlop's  third-party  complaint,  the  court

            rejected   the  magistrate  judge's   conclusion  that  RPM's

            obligation  to  indemnify  Dunlop  for  damages arising  from

            Charles  MacGlashing's  injuries  could  be  relieved  by   a

            material  breach  by Dunlop.    The  court  held that,  under

            Massachusetts law,  a party's  breach of an  implied warranty

            was   insufficient   to    invalidate   a   broadly    worded

            indemnification clause.  

                      The district  court scheduled  a jury trial  on the

            various claims  asserted by  the parties.   Before the  trial

            date  arrived,  however,  the  MacGlashing's  entered  into a

            settlement  agreement with Dunlop, subject to court approval.

            The settlement contemplated satisfying the MacGlashings' suit

            for damages against Dunlop with a $750,000.00 cash payment --

            approximately 75 percent of  the insurance coverage available

            to  Dunlop through  its  insurer  --  and the  assignment  of

            Dunlop's claims against RPM and Longwood to the MacGlashings.

            Under the  agreement,  judgment  was  to enter  in  favor  of

            Charles  MacGlashing in  the amount  of $4,560,000.00  and in

                                         -8-
                                          8

            favor  of  Sharlene   MacGlashing  for   $300,000.00.     The

            MacGlashings agreed  to seek no further  recovery from Dunlop

            in the event they could not recover from RPM or Longwood. 

                      The  district  court held  a  hearing and  reviewed

            evidence  before approving  the settlement.   At  the hearing

            RPM's counsel stated, inter alia:
                                  __________

                         I  don't  believe  that  RPM  has  any
                      objection   to   the  structure   of  the
                      settlement     under      the     current
                      circumstances .  . .  I believe that  the
                      settlement  is  fair and  equitable under
                      these circumstances.

                      The district  court approved  the settlement.   The

            claims against Longwood were tried to a jury which returned a

            verdict  in favor of Longwood.   The district  court issued a

            final  judgment dismissing  the  action of  the  MacGlashings

            against  Longwood,  entering  judgment  against  Dunlop,  and

            ordering  that Charles MacGlashing  recover $4,651,739.23 and

            his wife,  $306,032.52 -- the  amount of the  settlement plus

            post-judgment interest  at the  rate  of 5.86%  -- from  RPM.

            This appeal followed.        

                                         III.
                                         III.

                                  STANDARD OF REVIEW
                                  STANDARD OF REVIEW
                                  __________________

                      We review  the district  court's  grant of  summary

            judgment  de novo  and review  the record  in the  light most
                      __ ____

            favorable to  the nonmoving party, drawing  all inferences in

            that  party's favor.  Den Norske Bank  AS v. First Nat'l Bank
                                  _______________________________________

            of Boston, 75 F.3d 49, 53  (1st Cir. 1996); EEOC v. Green, 76
            _________                                   _____________

                                         -9-
                                          9

            F.3d  19, 23 (1st Cir. 1996).   "Our review is limited to the

            record as it stood before  the district court at the  time of

            its  ruling."  J. Geils Band Employment Benefit Plan v. Smith
                           ______________________________________________

            Barney Shearson, Inc.,  76 F.3d 1245,  1250 (1st Cir.  1996).
            _____________________

            Summary judgment  is proper  "if the pleadings,  depositions,

            answers to interrogatories, and  admissions on file, together

            with  the affidavits, if any,  show that there  is no genuine

            issue as to any  material fact and that  the moving party  is

            entitled to  judgment as a matter  of law."  Fed.  R. Civ. P.

            56(c).

                      Allegations of a  factual dispute "will  not defeat

            an otherwise  properly supported motion for summary judgment;

            the requirement is that there be no genuine issue of material

            fact."  Morrissey v. Boston Five Cents Sav. Bank, 54 F.3d 27,
                    ________________________________________

            30 (1st  Cir. 1995)(quoting Anderson v.  Liberty Lobby, Inc.,
                                        ________________________________

            477  U.S. 242, 247-48 (1986)).  Material facts are those that

            have the potential to affect the outcome of a suit.  J. Geils
                                                                 ________

            Band, 76 F.3d at  1250-51.  Disputes  as to the existence  of
            ____

            material facts are genuine  if "'the evidence is such  that a

            reasonable  jury could  return  a verdict  for the  nonmoving

            party.'"   Morrissey, 54  F.3d at  30 (quoting  Anderson, 477
                       _________                            ________

            U.S. at 247-48).   We must affirm the district  court's grant

            of summary judgment "[i]f the  evidence [presented by RPM] is

            merely colorable,  or is  not significantly probative."   Id.
                                                                      ___

            We apply Massachusetts law.   

                                         -10-
                                          10

                                         IV.
                                         IV.

                                      DISCUSSION
                                      DISCUSSION
                                      __________

                      The  issue is  whether  the indemnification  clause

            contained in the lease agreement RPM executed with Dunlop  is

            enforceable and, if so,  whether its scope includes liability

            for damages stemming from  the injuries MacGlashing sustained

            as a  result of  the  accident.   RPM avers  that  it is  not

            obligated,  under  Massachusetts  law,  to pay  the  judgment

            awarded the  MacGlashings because Dunlop  materially breached

            the  lease  agreement,  relieving   RPM  of  the  promise  to

            indemnify  Dunlop  contained  in   the  agreement.    In  the

            alternative,  RPM  argues  that even  if  the indemnification

            clause  is valid, it should not be deemed responsible for the

            particular claims  advanced by the MacGlashings  because they

            fall outside the contemplated scope of the agreement.   

                      Appellees contest  both  of these  arguments.    We

            begin by addressing the enforceability of the lease agreement

            and  then turn to a discussion of its scope.

                       Enforceability of the Lease Agreement's
                       Enforceability of the Lease Agreement's
                       _______________________________________
                                Indemnification Clause
                                Indemnification Clause
                                ______________________

                      RPM   challenges   the   enforceability    of   the

            indemnification clause by attacking the validity of the lease

            agreement it executed with Dunlop.  See Kelly v. Dimeo, Inc.,
                                                ___ ____________________

            31 Mass. App. Ct. 626, 628 (1991)("Under Massachusetts law, a

            contract-based right to indemnification  exists only if there

            is a  binding contract  between indemnitor and  indemnitee in

                                         -11-
                                          11

            which such right is expressed or from which it  can be fairly

            implied."), review denied, 412 Mass. 1102 (1992).  RPM, using
                        ______ ______

            the Uniform Commercial Code as its launching pad, argues that

            the  indemnification clause  is unenforceable  because Dunlop

            materially  breached  implied warranties  of merchantability,

            see Mass. Gen. L. ch. 106,    2-314 (1990), and fitness for a
            ___

            particular purpose,  see  Mass.  Gen. L.  ch.  106,     2-315
                                 ___

            (1990),  by  providing  RPM  with work  platforms  that  were

            defective  and  unreasonably  dangerous.    RPM asserts  that

            because, under Massachusetts law, the MacGlashings would  not

            have  been entitled  to  any recovery  in  the absence  of  a

            finding that the work  platform Dunlop provided was defective

            or unreasonably  dangerous, Dunlop, ipso facto,  breached the
                                                __________

            implied  warranties  of  merchantability and  fitness  for  a

            particular purpose.  

                      RPM,  in effect, attempts to  use the tort claim of

            the MacGlashings against Dunlop as  a basis for its  argument

            that Dunlop breached its implied warranty of merchantability.

            But the contract between  RPM and Dunlop was for the lease of

            property.  RPM  cannot use  the indemnity clause  to turn  an

            economic contract into one based on tort concepts.

                      Massachusetts   law    plainly   forecloses   RPM's

            argument.   It adopts the  majority view which  draws a clear

            distinction  between tort  recovery  for physical  injury and

            contract recovery for  economic loss.   See Jacobs v.  Yamaha
                                                    ___ _________________

                                         -12-
                                          12

            Motor Corp., 420 Mass. 323, 329 n.5 (1995); Bay State-Spray &
            ___________                                 _________________

            Provincetown S.S., Inc. v. Caterpillar Tractor Co., 404 Mass.
            __________________________________________________

            103, 107  (1989); Colter v.  Barber-Greene Co., 403  Mass. 50
                              ____________________________

            (1988);  Correia v.  Firestone Tire &  Rubber Co.,  388 Mass.
                     ________________________________________

            342,  356 (1983); Marcil v.  John Deere Indus.  Equip. Co., 9
                              ________________________________________

            Mass. App. Ct. 625,  630 (1980); see also Canal Elec.  Co. v.
                                             ___ ____ ___________________

            Westinghouse Elec. Co.,  973 F.2d 988,  996 (1st Cir.  1992);
            ______________________

            Reibold v. Simon  Aerials, 859  F. Supp. 193,  198 (E.D.  Va.
            _________________________

            1994).   The rule  that the absence of  a showing of personal

            injury, or of  physical damage to  property belonging to  the

            contracting party  forecloses  recovery for  economic  losses

            stemming from  tort-based strict  liability or negligence  is

            well established  in Massachusetts.  Garweth  Corp. v. Boston
                                                 ________________________

            Edison  Co.,  415  Mass.  303,   305  (1993).    Attempts  to
            ___________

            circumvent this rule by  "[c]ouching the allegations in terms

            of breach of  contract" have been  rejected routinely.   See,
                                                                     ___

            e.g.,  FMR Corp.  v. Boston  Edison Co.,  415 Mass.  393, 394
            ____   ________________________________

            (1993).   We  cannot,  as RPM  urges,  regard the  difference

            between  tort and  contract-based claims  as  "irrelevant" in

            this  case.    RPM's  attempt  to  shift  the  obligation  to

            compensate the MacGlashings back  to Dunlop fails because RPM

            alleges no direct damage  or injury to itself.   The argument

            that  RPM  is  entitled  to   relief  from  the  contract  it

            negotiated with Dunlop hinges entirely on the physical injury

            its   employee,  Charles  MacGlashing,  sustained.    Compare
                                                                  _______

                                         -13-
                                          13

            Garweth,  415 Mass. at 307.  RPM  has not made the showing of
            _______

            injury or damage to itself as Massachusetts law requires.

                      Moreover, appellant  has not convinced  us that the

            alleged  breach   of  the   lease   agreement  rendered   the

            indemnification  clause  invalid, as  if  it  had never  been

            executed.   The  one-page contract  executed between  RPM and

            Dunlop  contains standard-form  language  and  clauses  which

            suggest  that the  indemnity provision  is separate  from the

            underlying  lease.  The face of the agreement sets out, inter
                                                                    _____

            alia, the  type and cost  of the equipment  to be leased,  as
            ____

            well  as guidelines  for its installation  and transportation

            around the site, and expressly  incorporates a July 21, 1993,

            handwritten note regarding delivery,  assembly, and pickup of

            the work platforms by Paul Haven, RPM's president.   

                      The   reverse  side   of  the   agreement  contains

            seventeen numbered paragraphs  that outline lease  conditions

            and  are clearly separated by spacing.  Two of these reverse-

            side  clauses concern responsibility for damages flowing from

            the use of equipment referred to in the lease agreement.  The

            first clause  provides that  RPM assumes  full responsibility

            under  the agreement  for  damages,  injuries, and  accidents

            caused by the use of Dunlop equipment and reads: 

                      3.   Lessee     assumes      the     full
                      responsibility for  damages, injuries and
                      accidents  resulting  to any  property or
                      persons,  caused  by  the  use   of  said
                      equipment  while in the possession of the
                      lessee, from the  time of arrival at  the

                                         -14-
                                          14

                      above  named location, during the term of
                      lease, and until equipment is returned to
                      lessor.

            The second  clause deals with  indemnification and is  one of

            six written in boldfaced type. It provides that RPM  absolves

            Dunlop of  any responsibility or  obligation in the  event of

            accidents  resulting from  the use  of the  leased equipment,

            regardless of cause or consequence and reads:

                      12.  THE   LESSEE  HEREBY   ABSOLVES  THE
                      LESSOR    OF   ANY    RESPONSIBILITY   OR
                      OBLIGATION  IN  THE  EVENT  OF  ACCIDENT,
                      REGARDLESS OF CAUSES OR CONSEQUENCES, AND
                      THAT   ANY   COSTS,   CLAIMS,  COURT   OR
                      ATTORNEY'S  FEES, OR  LIABILITY RESULTING
                      FROM THE USE OF DESCRIBED  EQUIPMENT WILL
                      BE INDEMNIFIED BY  THE LESSEE  REGARDLESS
                      AGAINST  WHOM  THE CLAIMANT  OR CLAIMANTS
                      INSTITUTE ACTION.

            The standard form equipment sign-off sheets Paul Haven signed

            on the 20th, 22nd, 23rd,  and 27th of July 1993, when  Dunlop

            delivered  the  work  platforms  to the  work  site,  contain

            similar  language.    They  provide  that  RPM  agrees  that:

            "Dunlop,  Inc.  is not  responsible  for any  damages  to the

            building, or any injuries or accidents resulting to people or

            property caused from the use or misuse of this equipment."

                      Based on our  reading of the lease and the sign-off

            sheets, we do not think RPM and Dunlop intended the covenants

            contained  in  the  lease agreement  and  the indemnification

            clause to be  dependent.   See Connolly  v. Haines-CE  Brook,
                                       ___ ______________________________

            Inc.,  277 Mass.  423,  427  (1931)("[W]hether covenants  are
            ____

            conditional is determined . . . by the  true intention of the

                                         -15-
                                          15

            parties as expressed by the language  of the contract."); see
                                                                      ___

            also 41  Am. Jur. 2d   17, at 358 (1995) ("Where the language
            ____

            of the indemnity contract is neither technical nor ambiguous,

            the  words  are  given  their legal,  natural,  and  ordinary

            meaning.").    Because the  right  of  action on  the  leased

            platforms accrues as soon as there is  a breach of its terms,

            -- i.e., failure to deliver the equipment in a timely fashion

            -- the right of action under the indemnity agreement does not

            accrue until Dunlop makes payment to a third party or suffers

            the loss addressed by the agreement.  See 41 Am. Jur. 2d   4,
                                                  ___

            at  349 (1995);  42 C.J.S.    2,  at 72-73  (1991); see  also
                                                                ___  ____

            Restatement (Second) of Contracts   379, comment a.  We agree

            with the  district court  that  the better  and more  logical

            approach  is  to  treat  the  indemnification  clause  as  an

            independent  provision of the lease.   See Chatlos Sys., Inc.
                                                   ___ __________________

            v.  Nat'l Cash Register Corp.,  635 F.2d 1081,  1085 (3d Cir.
            _____________________________

            1980).  

                      There is solid precedent  for our decision to treat

            the indemnification clause as a separate agreement unaffected

            by any breach of the lease contract.  See, e.g., Hill Constr.
                                                  ___  ____  ____________

            Corp. v.  American Airlines,  Inc., 996  F.2d 1315  (1st Cir.
            __________________________________

            1993)(carrier cargo liability  limitations survive breach  of

            the agreement to carry cargo);  County of Middlesex v. Gewvyn
                                            _____________________________

            Constr. Corp., 450 F.2d 53 (1st Cir. 1971), cert. denied, 405
            _____________                               _____ ______

            U.S.   955  (1972)   (arbitration  agreement   valid  despite

                                         -16-
                                          16

            construction contract breach).  The Supreme Judicial Court of

            Massachusetts addressed  the question of whether  breach of a

            contract undermines a consensual  allocation of risk in Canal
                                                                    _____

            Elec. Co. v. Westinghouse Elec. Corp., 406 Mass. 369  (1990).
            _____________________________________

            That case  involved electric  utility companies which  sought

            remedies for breach, under the UCC, for losses they allegedly

            incurred  as the result of  the failure of electric generator

            components  supplied  by  Westinghouse Electric  Corporation.

            They  sought to  be  relieved  of  the  limits  on  indirect,

            special, incidental, and consequential damages imposed by the

            selling policies  to which  they agreed.   Id.  at 371.   The
                                                       ___

            Supreme Judicial  Court held  that the liability  limitations

            were enforceable  even though Westinghouse's efforts  to cure

            the  problems  created  by   its  generator  components  were

            unsuccessful. Id. at 374-75.  
                          ___

                      This holding persuades us  that the course we adopt

            in this case would be  followed by the Massachusetts  courts.

            Under Massachusetts  law,  the  allocation  of  risk  through

            contractual  agreements neither conflicts with public policy,

            Canal Elec.,  406 Mass.  at 372; Minassian  v. Ogden  Suffolk
            ___________                      ____________________________

            Downs, Inc., 400 Mass. 490, 493 (1987), nor the Massachusetts
            ___________

            workers' compensation statute prohibition against an employee

            receiving direct compensation for work-related  injuries from

            its employer.  See Decker  v. Black and Decker Mfg.  Co., 389
                           ___ _____________________________________

            Mass. 35, 38 (1983); Whittle v. Pagani Bros. Constr. Co., 383
                                 ___________________________________

                                         -17-
                                          17

            Mass.  796, 800 (1981); see also Mass.  Gen. L. ch. 152,   23
                                    ___ ____

            (1988); Clarke v. Kentucky Fried Chicken of California, Inc.,
                   _____________________________________________________

            57  F.3d  21, 24  (1st  Cir.  1995)(describing provisions  of

            workers'  compensation  statute).  This  is  especially  true

            where,  as  in  this  case,  the  parties  to  the  agreement

            allocating risk are  "sophisticated business entities." Canal
                                                                    _____

            Elec.,  406  Mass. at  374;  Deerskin Trading  Post,  Inc. v.
            _____                        ________________________________

            Spencer Press, Inc., 398 Mass. 118, 123 (1986).
            ___________________

                      Risk  allocation  agreements   are  common  in  the

            construction   industry  and   are   widely-regarded   as   a

            "reasonable  accommodation" between  parties to  a commercial

            agreement.  See Canal Elec., 406 Mass. at 374; Jones v. Vappi
                        ___ ___________                    ______________

            Co., 28 Mass. App. Ct. 77 (1989); see also Debra A. Perelman,
            ___                               ___ ____

            Risk  Allocation  Through  Indemnity  Obligations  In Constr.
            _____________________________________________________________

            Contracts, 40 S.C. Law.  Rev. 989, 989-90 (1989).   They have
            _________

            the   advantage  of   allowing   owners,   contractors,   and

            subcontractors  to  shift  the  significant  and, oftentimes,

            unforeseeable risks inherent  in construction work.  Cf. Hill
                                                                 ___ ____

            Constr., 996 F.2d at 1317; Perelman, Risk Allocation, 40 S.C.
            _______                              _______________

            Law. Rev. at 989-90.   They also permit the  equipment needed

            to complete construction  jobs to be obtained  at lower rates

            because the lessors of such equipment can exclude the cost of

            insuring against accident-related damages from  the equipment

            price.  Cf. Hill  Constr., 966 F.2d at 1317.   In Shea v. Bay
                    ___ _____________                         ___________

            State  Gas  Co., 383  Mass.  218,  224  (1981),  the  Supreme
            _______________

                                         -18-
                                          18

            Judicial  Court  candidly   recognized  that   "realistically

            viewed, the  shift of liability is  a shift in  the burden of

            providing adequate insurance coverage."      

                      Nothing in the record suggests that Dunlop acted in

            bad faith,  see Mass.  Gen. L. ch.  106   1-203  (1990), Hill
                        ___                                          ____

            Constr., 996 F.2d at  1317, or unfairly seeks to bind  RPM to
            _______

            an  indemnity clause which was  hidden or buried  deep in the

            contract.  Compare Mobil Chemical Co. v.  Blount Bros. Corp.,
                       _______ _________________________________________

            809  F.2d 1175, 1182  (5th Cir. 1987).    Paragraph 12 shifts

            liability  to   RPM  in  clear   and  unmistakable  language.

            Additionally, the record makes it clear that RPM's president,

            Paul Haven, a man  with more than twenty years  of experience

            in the construction industry, knew or should have known about

            the risk  allocation provisions  contained in  the agreement.

            He negotiated the lease agreement and represented, in signing

            it   on RPM's behalf, that  he had "read and  agree[d] to all

            terms stated on  both sides of th[e]  form."  By Haven's  own

            acknowledgement  indemnity clauses  of the sort  contained in

            the Dunlop  lease agreement are standard  in the construction

            industry.   Cf.  Perelman, Risk Allocation, 40 S.C. Law. Rev.
                        ___            _______________

            at  989-90 (Indemnity  provisions  in construction  contracts

            should  be  interpreted by  "recognizing  the  intent of  the

            parties  entering  into  the  agreement.").   We,  therefore,

            conclude  that the  indemnity clause  contained in  the lease

            agreement RPM executed with Dunlop is enforceable.

                                         -19-
                                          19

                         Scope of the Indemnification Clause 
                         Scope of the Indemnification Clause 
                         ____________________________________
                               Under Massachusetts Law
                               Under Massachusetts Law
                               _______________________

                      In addition to attacking  the enforceability of the

            indemnity  clause, RPM attacks  its scope.   It  argues that,

            under  Massachusetts  law,   the  term  "use"  contained   in

            paragraph  12  of the  agreement  cannot be  read  to include

            liability  for claims brought on a theory of strict liability

            instead of negligence.  See  Hayes v. Douglas Dynamics, Inc.,
                                    ___  _______________________________

            8  F.3d 88, 88 n.1 (1st Cir. 1993) ("Under Massachusetts law,

            the   theory   of   breach   of  an   implied   warranty   of

            merchantability  is basically  the same  as strict  liability

            theory in tort."), cert. denied, 114 S. Ct. 2133 (1994).  
                               _____ ______

                      The  rule  that  indemnity  contracts  are   to  be

            strictly construed  against the indemnitee  no longer obtains

            in Massachusetts.  See Whittle, 383 Mass. at 797.  The modern
                               ___ _______

            rule  is that "'[c]ontracts of indemnity are to be fairly and

            reasonably construed  in order to ascertain  the intention of

            the  parties and  to  effectuate  the  purpose sought  to  be

            accomplished.'"   Shea, 383 Mass.  at 222 (quoting  New York,
                              ____                              _________

            N.H.  & H.R.  Co. v.  Walworth Co.,  340 Mass.  1, 3  (1959).
            __________________________________

            Courts are expected to give effect to the parties' intentions

            at  the time  of the  agreement and  to give  them reasonable

            meaning.  Id.; see also Cohen v. Steve's Franchise Co., Inc.,
                      ___  ___ ____ ____________________________________

            927 F.2d 26, 28 (1st Cir. 1991); Polaroid, 416 Mass. at  694;
                                             ________

            Speers  v. H.P.  Hood, Inc.,  22 Mass.  App. Ct.  598 (1986),
            ___________________________

            review denied, 398 Mass. 1105 (1986).  
            ______ ______

                                         -20-
                                          20

                      We  are not  impressed by  RPM's argument  that the

            indemnity  clause's failure to  specifically refer  to strict

            liability  claims omits such claims from its scope.  That the

            clause  also fails to mention  claims brought on  a theory of

            negligence   undermines   the   force   of   RPM's   argument

            significantly  because  there  is   little  support  for  the

            contention  that  the omission  of  a  specific reference  to

            negligence  invalidates an  indemnity clause.   Massachusetts

            cases such as Shea, 383 Mass.  219-20, "teac[h] that . . . an
                          ____

            indemnity provision may be  read to cover situations  of [an]

            indemnitee's   negligence  although  there   is  no  explicit

            statement  to that effect."   Speers, 22 Mass.  App. Ct. 598,
                                          ______

            601.  Where  the language  is broad and  the parties'  intent

            relatively  clear, responsibility  for a  risk not  expressly

            mentioned in the indemnity clause may be properly placed with

            the indemnitor.  Cf.  Shea, 383 Mass. at 224-25.
                             ___  ____

                      We have little doubt that the language contained in

            the  indemnity clause  is  broad enough  to encompass  claims

            brought on a theory of either negligence or strict liability.

            First, we  do  not agree  with  RPM that  private  agreements

            allocating the risk  of strict liability for  tort damages in

            the circumstances presented here  thwart public policy.  Such

            agreements are reasonable accommodations in  the construction

            industry  context.     Second,  the   language  contained  in

            paragraph  12 of the lease  agreement is broad and expansive.

                                         -21-
                                          21

            It absolves Dunlop for  "any responsibility or obligation" in

            the   event  of   an  accident,   "regardless  of   cause  or

            consequences," stemming from the use of its equipment.  

                      Similar  language  has  been  found  sufficient  to

            encompass indemnification  obligations on claims brought on a

            theory of strict liability.   See Beloit Power Sys.,  Inc. v.
                                          ___ ___________________________

            Hess Oil Virgin Islands  Corp., 757 F.2d 1427, 1428  (3d Cir.
            ______________________________

            1985) ("agrees to indemnify and hold harmless seller from all

            claims  by third  parties which  extend beyond  the foregoing

            limitations  on seller's  liability");  Midland Ins.  Co.  v.
                                                    _____________________

            Delta Lines, Inc., 530 F. Supp. 190 (1982)("all loss lessor .
            _________________

            . . may sustain  or suffer because  of . . .  the use of  the

            equipment."); Mid-America  Sprayers, Inc.  v. U.S.  Fire Ins.
                          _______________________________________________

            Co., 8  Kan. App. 2d  451, 454 (1983)("any  responsibility or
            ___

            obligation  .  .  .  resulting  from  the  use  of  described

            equipment");  see also  Berry v.  V. Ponte  & Sons,  166 N.J.
                          ___ ____  __________________________

            Super. 513, 517, cert. denied, 81 N.J.  271 (1979).  In Cohen
                             ____________                           _____

            v. Steve's Franchise  Co., Inc.,  927 F.2d 26,  29 (1st  Cir.
            _______________________________

            1991), we  interpreted a  franchise agreement executed  under

            Massachusetts  law and held that the language contained in an

            indemnity clause was broad enough to cover both negligent and

            nonnegligent  business  decisions.   The clause  required the

            franchisor  to indemnify  Steve's  Ice Cream,  Inc. "for  any

            liability  arising 'by  reason  of an  act  or omission  with

                                         -22-
                                          22

            respect to the business or operation of the STEVE'S ICE CREAM

            STORE . . . .'"  Id. at 29.  
                             ___

                      In  Polaroid Corp.  v.  Rollins Envtl.  Serv. (NJ),
                          _______________________________________________

            Inc., 416  Mass. 684 (1993), the Supreme  Judicial Court held
            ____

            that  an  indemnity  clause  encompassed  claims  for  strict

            liability, even though it did not explicitly provide  for it.

            Polaroid involved an indemnity  clause for liability and loss
            ________

            "for release or a substantial threat of  release of hazardous

            substances."  Id. at 686.  The plaintiffs  in the case sought
                          ___

            a  determination that  the  hazardous waste  transporter with

            whom    they   executed   the    contracts   containing   the

            indemnification clauses, Rollins Environmental Services (NJ),

            Inc., was obligated to  indemnify them against claims arising

            from  a spill  at a  hazardous waste  storage facility.   The

            language contained  in the indemnity clause  read in relevant

            part:  "You  hereby  agree  to indemnify  and  save  Polaroid

            harmless from  all liability  and loss arising  from services

            performed by  you or your employees hereunder . . . ."  After

            concluding  that the  private indemnity  agreements  were not

            prohibited  by CERCLA, 42 U.S.C.   9607(e)(1), the court held

            that the  clause was broad  enough to cover  strict liability

            for hazardous waste damage imposed under CERCLA.  In reaching

            this  conclusion, the  court found  that strict  liability in

            tort for  ultrahazardous activities existed  in Massachusetts

            at the  time the  parties entered  into their agreements  and

                                         -23-
                                          23

            that  there was no outward  manifestation on the  part of the

            indemnitor to  limit its  obligations under the  agreement to

            negligence. 

                      Moreover,  paragraph 14  of the lease  convinces us

            that the  parties intended  the indemnity agreement  to cover

            all  liability  whether  grounded  in  negligence  or  strict

            liability.   Paragraph  14 provides,  in relevant  part, "Our

            insurance [Dunlop's]  does not  cover the equipment  while in

            your possession [RPM's]."  It can be reasonably inferred from

            this that the  parties intended RPM  to procure insurance  to

            cover  the burden it assumed under the indemnity clause.  Cf.
                                                                      ___

            Speers, 22 Mass. App. Ct. at 601; see also Cohen, 927 F.2d at
            ______                            ___ ____ _____

            29.   That RPM  carried  $5 million  in liability  insurance,

            whereas  Dunlop   carried  only  $1  million   supports  this

            contention.   See  Midland  Insurance, 530  F.  Supp. at  194
                          ___  __________________

            (broad  language  of  agreement  and  existence of  increased

            insurance is evidence of obligation to indemnify).   RPM gave

            no indication  that it  intended to indemnify  for negligence

            liability  only.    See  Polaroid,  416 Mass.  at  694  ("[A]
                                ___  ________

            contracting party's objective intention  dictates and a party

            is bound by its outward manifestations to the other party.").

            RPM cannot escape its obligations under the indemnity clause.

              

                      RPM's contention  that the indemnity  clause is not

            conspicuous   and  cannot   shift  liability   for  defective

                                         -24-
                                          24

            equipment does not deserve  extended comment.  The  clause is

            printed  in  capital  letters.     Its  language  is  neither

            ambiguous nor confusing.  The president of RPM testified that

            he read  it and understood it.   At oral argument counsel for

            RPM agreed that the lease was not a contract of adhesion.

                      We  end our analysis by noting  that at the hearing

            on  the  proposed  settlement between  the  MacGlashings  and

            Dunlop, counsel  for RPM expressly approved  the structure of

            the settlement and stated that it was fair and equitable.

                                          V.
                                          V.

                      The judgments of  the district court  are affirmed.
                      The judgments of  the district court  are affirmed.
                      ___________________________________________________

            There will be added to  the judgment amounts of $4,651,739.23
            There will be added to  the judgment amounts of $4,651,739.23
            _____________________________________________________________

            and $306,032.52 such additional  post-judgment interest as is
            and $306,032.52 such additional  post-judgment interest as is
            _____________________________________________________________

            due.
            due.
            ____

                      Costs on appeal awarded to appellees.
                      Costs on appeal awarded to appellees.
                      _____________________________________

                                         -25-
                                          25