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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after the 7th Circuit Court of Appeals was unconvinced by the employer’s argument that language in a later contract superseded that of an earlier contract.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 Elliot asserted that the invoice superseded the terms of the lease, thus eliminating Elliot’s duty to defend and indemnify.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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  1. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  2. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

  3. I will agree with that as soon as law schools stop lying to prospective students about salaries and employment opportunities in the legal profession. There is no defense to the fraudulent numbers first year salaries they post to mislead people into going to law school.

  4. The sad thing is that no fish were thrown overboard The "greenhorn" who had never fished before those 5 days was interrogated for over 4 hours by 5 officers until his statement was illicited, "I don't want to go to prison....." The truth is that these fish were measured frozen off shore and thawed on shore. The FWC (state) officer did not know fish shrink, so the only reason that these fish could be bigger was a swap. There is no difference between a 19 1/2 fish or 19 3/4 fish, short fish is short fish, the ticket was written. In addition the FWC officer testified at trial, he does not measure fish in accordance with federal law. There was a document prepared by the FWC expert that said yes, fish shrink and if these had been measured correctly they averaged over 20 inches (offshore frozen). This was a smoke and mirror prosecution.

  5. I love this, Dave! Many congrats to you! We've come a long way from studying for the bar together! :)

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