By Jerry Carter.  The Nevada Supreme Court recently decided a significant contract case against a general contractor that sought indemnity from its subcontractor.  The case is United Rentals Highway Technologies, Inc. v. Wells Cargo, Inc., 128 Nev. Adv. Op. 59 (December 6, 2012) (“United Rentals“).

A general contractor, Wells Cargo, Inc. (“Wells Cargo”), hired United Rentals Highway Technologies, Inc. (“United Rentals”) to perform traffic control on a road improvement project.  In the subcontract agreement, which was drafted by Wells Cargo, United Rentals agreed to indemnify, defend and hold Wells Cargo harmless from and against all claims pertaining or allegedly pertaining to the performance of the subcontract and involving personal injury “to the extent caused in whole or in part by the negligent acts or omissions or other fault of the Subcontractor.”

During construction, a motorcyclist named Kodera claimed she sustained serious injuries when she hit an unmarked bump in the road and lost control of her motorcycle.  When the motorcyclist sued Wells Cargo and United Rentals, Wells Cargo demanded that United Rentals indemnify and defend Wells Cargo.  Wells Cargo’s demand went unheeded.  Subsequently, Wells Cargo paid its insurance policy limits of $1,000,000 to settle the motorcyclist’s claim against Wells Cargo.  Wells Cargo continued to seek reimbursement from United Rentals for its legal fees and settlement payment.  United Rentals elected to go to trial.  The jury determined that United Rentals was negligent but did not cause the motorcyclist’s injuries.  Nevertheless, Wells Cargo obtained a judgment of indemnity and defense costs against United Rentals based upon the jury finding that United Rentals was negligent.

On appeal, the Nevada Supreme Court reversed Wells Cargo’s judgment against United  Rentals.  Strictly construing the contractual indemnification clause, the Court adopted the holding of other courts that have concluded “that limiting a duty to indemnify ‘to the extent’ that an injury is ‘caused’ by the indemnitor requires a determination of the indemnitor’s degree of fault and invokes the duty only to the extent that the indemnitor is negligent.”  Thus, the Nevada Supreme Court rejected any duty by United Rentals to indemnify, stating:

“[T]he ‘to the extent caused’ language in an indemnification clause must be strictly construed as limiting an indemnitor’s liability to cover the indemnitee’s losses only to the extent the injuries were caused by the indemnitor.  As such, we conclude that this contract’s indemnification provision limits United Rentals’ duty to indemnify  only to the extent that United Rentals caused Kodera’s accident.  Since the jury found that united Rentals’ negligence was not the proximate cause of Kodera’s accident, and thus it was zero percent liable for negligence, we conclude that Wells Cargo was entitled to zero indemnification.  Thus, the district court erred in determining that United Rentals was required to indemnify Wells Cargo for any portion of the $1,000,000 settlement.”

The Nevada Supreme Court reached a similar result with respect to the asserted duty to defend.  The Court stated:

Here, there is no clear and explicit language in the contract which directs United Rentals to defend Wells Cargo in claims where its own negligence is asserted.  When the contractual language that does exist is strictly construed, United rentals’ duty to defend Wells Cargo is limited ‘to the extent’ that United Rentals’ ‘caused’ Kodera’s accident.  thus, because the jury found that United rentals’ negligence was not the proximate cause of Kodera’s accident, United Rentals did not have a duty to defend Wells Cargo.”

A contractor facing a claim for personal injury or property damage needs a defense from the moment a claim is made.  Under the holding of United Rentals, it will be difficult, if not impossible, for a contractor to obtain a defense from a co-defendant until after the trial has occurred and the parties’ relative liability has been determined.  In view of the high costs of taking a tort claim to trial, such a defense is likely to be too little too late.  As a practical matter, the best way for a contractor to obtain protection against liability for personal injury or property damage is to purchase its own liability insurance and then provide prompt notice to the insurer when a claim is made.  Even being named as an additional insured on another party’s liability insurance policy is some times not enough to secure an appropriate defense.

81 Responses

  1. I must thank you for the efforts you have put in writing this blog. I really hope to check out the same high-grade content by you later on as well. In fact, your creative writing abilities has inspired me to get my own blog now 😉

  2. I recently tried CBD gummies in requital for the opening unceasingly a once and I forced to say, I’m impressed with the results. I felt more nonchalant What do CBD gummies do for you? and at affluence, and my dread was significantly reduced. The gummies tasted colossal and were comfortable to consume. I’ll definitely be using them again and would propound them to anyone looking representing a logical in the works to alleviate bring into prominence and anxiety.

  3. สมาชิกสามารถฝาก – ถอนกับเราได้ตลอด รวดเร็วและมั่นคง จนนักพนันหลายต่อหลายคนเลือกที่จะใช้บริการกับเราเว็บ แทงบอลออนไลน์ ที่ดีที่สุด

  4. Xoilac Tv Trực Tiếp Bóng Đá vtv1 chuyen dong 24hĐội tuyển futsal Việt Nam đã được một trận đấu đồng ý được trước phe đối lập đầy mức độ mạnh Lebanon. Kết trái Bà Rịa-Vũng Tàu vs Bình Phước ngày hôm nay 18h00 ngày 5/5, Hạng nhất nước ta.

  5. I wanted to thank you for this very good read!! I certainly enjoyed every little bit of it. I have got you bookmarked to look at new things you post…

  6. Hi there! Would you mind if I share your blog with my facebook group?There’s a lot of folks that I think would really enjoy your content.Please let me know. Cheers

  7. Thanks for sharing such a good opinion, article is fastidious, thatswhy i have read it entirely

  8. I quite like looking through a post that can make men and women think. Also, thank you for allowing me to comment.

  9. Heya! I’m at work browsing your blog from my new apple iphone!Just wanted to say I love reading through your blog and look forward to allyour posts! Carry on the superb work!

  10. I do consider all of the ideas you’ve introduced for your post. They are really convincing and will definitely work. Still, the posts are too short for beginners. May you please extend them a little from next time? Thanks for the post.

  11. Aw, this was a really nice post. In idea I would like to put in writing like this additionally – taking time and precise effort to make an excellent article… however what can I say… I procrastinate alot and by no means seem to get one thing done.

  12. Have you ever heard of second life (sl for short). It is basically a game where you can do anything you want. Second life is literally my second life (pun intended lol). If you want to see more you can see these second life articles and blogs

  13. Xoilac Tv Trực Tiếp Bóng Đá vao ibet.weebly.comĐội tuyển futsal nước Việt Nam đã được một trận đấu đồng ý được trước đối thủ đầy mức độ mạnh Lebanon. Kết quả Bà Rịa-Vũng Tàu vs Bình Phước hôm nay 18h00 ngày 5/5, Hạng nhất nước ta.

Leave a Reply

Your email address will not be published.