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7th Circuit: New indemnity provision does not release employer from liability

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An employer will have to pay $4.23 million after the 7th Circuit Court of Appeals was unconvinced by the employer’s argument that language in a later contract superseded that of an earlier contract.

The 7th Circuit affirmed the judgment of the U.S. District Court of the Northern District of Indiana, Fort Wayne Division, against Davis H. Elliot Co., Inc. in Mobile Tool International, Inc., and MTI Insulated Products, Inc., v. Davis H. Elliot Company, Inc., 12-2673.

Elliot, a Virginia-based company, leased bucket trucks form TECO, Inc., an Indiana corporation. Under terms of the lease contract, Elliot agreed to release, indemnify and hold TECO harmless from liability, loss, damage, expense, causes of actions, suits, claims or judgments arising from injury to an individual or damage to property.

When Mobile Tool International, Inc., acquired several assets from TECO, it began sending out a form invoice to Elliot each month. The invoice contains a separate indemnification clause that required Elliot to instruct all persons on the proper use and maintenance of the trucks, and that Mobile shall not be liable for any losses, costs, forfeiture or damages resulting from Elliot’s failure to provide instruction.

In June 2000, Samuel Large, an employee of Elliot, was injured while using the bucket truck. Large sued TECO and Mobile for negligent design and manufacture, product liability, and breach of express and implied warranties.

In April 2004, Mobile filed a third-party complaint against Elliot, requesting that Elliot be required to provide defense and indemnification to Mobile under the terms of the lease.

The Indiana District Court agreed with Mobile and held Elliot was required to defend and indemnify Mobile according to terms of the lease.

On appeal, Elliot argued the District Court erred in concluding that the lease, as opposed to the later invoice, controlled, requiring Elliot to defend and indemnify Mobile. Elliot asserted that the invoice superseded the terms of the lease, thus eliminating Elliot’s duty to defend and indemnify.

The 7th Circuit described Elliot’s arguments as “unconvincing.”

Comparing the invoice’s indemnity provision with the lease’s provision, the 7th Circuit agreed with the District Court that the language in the invoice did not supersede the language in the lease.

 “We find that these two provisions actually harmonize very well with one another, as opposed to conflicting,” Judge J.P. Stadtmueller wrote for the court. “The original Lease set forth a broad duty to defend and indemnify in situations arising primarily from use and operation of the bucket truck; the Invoice expanded that duty further to situations before use and operation – namely training and maintenance. On the plain language of these provisions, we must conclude that they do not conflict with one another.”
 

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  • Wrong Link
    The link in the article appears to be to a different case - United States v. Michael Brock.

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  3. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

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