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after the 7th Circuit Court of Appeals was unconvinced by the employer’s argument that language in a later contract superseded that of an earlier contract.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 Elliot asserted that the invoice superseded the terms of the lease, thus eliminating Elliot’s duty to defend and indemnify.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.”


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

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  1. Especially I would like to see all the republican voting patriotic good ole boys to stop and understand that the wars they have been volunteering for all along (especially the past decade at least) have not been for God & Jesus etc no far from it unless you think George Washington's face on the US dollar is god (and we know many do). When I saw the movie about Chris Kyle, I thought wow how many Hoosiers are just like this guy, out there taking orders to do the nasty on the designated bad guys, sometimes bleeding and dying, sometimes just serving and coming home to defend a system that really just views them as reliable cannon fodder. Maybe if the Christians of the red states would stop volunteering for the imperial legions and begin collecting welfare instead of working their butts off, there would be a change in attitude from the haughty professorial overlords that tell us when democracy is allowed and when it isn't. To come home from guarding the borders of the sandbox just to hear if they want the government to protect this country's borders then they are racists and bigots. Well maybe the professorial overlords should gird their own loins for war and fight their own battles in the sandbox. We can see what kind of system this really is from lawsuits like this and we can understand who it really serves. NOT US.... I mean what are all you Hoosiers waving the flag for, the right of the president to start wars of aggression to benefit the Saudis, the right of gay marriage, the right for illegal immigrants to invade our country, and the right of the ACLU to sue over displays of Baby Jesus? The right of the 1 percenters to get richer, the right of zombie banks to use taxpayer money to stay out of bankruptcy? The right of Congress to start a pissing match that could end in WWIII in Ukraine? None of that crud benefits us. We should be like the Amish. You don't have to go far from this farcical lawsuit to find the wise ones, they're in the buggies in the streets not far away....

  2. Moreover, we all know that the well heeled ACLU has a litigation strategy of outspending their adversaries. And, with the help of the legal system well trained in secularism, on top of the genuinely and admittedly secular 1st amendment, they have the strategic high ground. Maybe Christians should begin like the Amish to withdraw their services from the state and the public and become themselves a "people who shall dwell alone" and foster their own kind and let the other individuals and money interests fight it out endlessly in court. I mean, if "the people" don't see how little the state serves their interests, putting Mammon first at nearly every turn, then maybe it is time they wake up and smell the coffee. Maybe all the displays of religiosity by American poohbahs on down the decades have been a mask of piety that concealed their own materialistic inclinations. I know a lot of patriotic Christians don't like that notion but I entertain it more and more all the time.

  3. If I were a judge (and I am not just a humble citizen) I would be inclined to make a finding that there was no real controversy and dismiss them. Do we allow a lawsuit every time someone's feelings are hurt now? It's preposterous. The 1st amendment has become a sword in the hands of those who actually want to suppress religious liberty according to their own backers' conception of how it will serve their own private interests. The state has a duty of impartiality to all citizens to spend its judicial resources wisely and flush these idiotic suits over Nativity Scenes down the toilet where they belong... however as Christians we should welcome them as they are the very sort of persecution that separates the sheep from the wolves.

  4. What about the single mothers trying to protect their children from mentally abusive grandparents who hide who they truly are behind mounds and years of medication and have mentally abused their own children to the point of one being in jail and the other was on drugs. What about trying to keep those children from being subjected to the same abuse they were as a child? I can understand in the instance about the parent losing their right and the grandparent having raised the child previously! But not all circumstances grant this being OKAY! some of us parents are trying to protect our children and yes it is our God given right to make those decisions for our children as adults!! This is not just black and white and I will fight every ounce of this to get denied

  5. Mr Smith the theory of Christian persecution in Indiana has been run by the Indiana Supreme Court and soundly rejected there is no such thing according to those who rule over us. it is a thought crime to think otherwise.