Court rules against Menard on roofing company’s lawsuit for payment

The Indiana Court of Appeals ordered summary judgment entered in favor of a roofing services company on claims of breach of contract against Menard Inc., finding Menard was unable to establish a dispute of material fact as to its right to withhold payment.

Menard hired North American Roofing Services Inc. in 2007 to build a roof on its new store in Princeton. After heavy rains, the partially constructed building collapsed and fell on two workers, injuring them and resulting in lawsuits. The contract between NARSI and Menard contained an indemnity clause. Article 9, Section E outlined under what circumstances Menard may decline to pay NARSI for its work.

NARSI completed the roofing job, and the store opened for business. Menard refused to pay NARSI, claiming that NARSI was contractually obligated to indemnify it against liabilities resulting from the roof collapse. NARSI filed a mechanic’s lien against the store and later filed suit to foreclose upon the lien. NARSI amended its complaint to add a claim of breach of contract.

Menard and NARSI entered into settlement agreements with the injured workers. NARSI’s case remained active, to which Menard raised affirmative defenses based on the contract’s indemnification clause and Section E. It claimed those allowed it to withhold NARSI’s payment.

The trial court denied NARSI’s motion for partial summary judgment on the breach of contract claim and held that the claim to foreclose upon the mechanic’s lien must fail. Judgment was entered in favor of Menard.

In North American Roofing Services, Inc. v. Menard, Inc., 26A01-1303-PL-125, the COA found Menard failed to set forth any facts that establish a genuine dispute as to whether Menard is excused from paying NARSI under the contract due to the indemnification clause.

“Giving Section E’s unambiguous language a plain and ordinary reading, it does not justify withholding payment from NARSI once third party claims have been resolved, absent the application of some other contractual provision such as the indemnification clause. We have already determined that Menard has failed to establish a dispute of material fact as to whether the indemnification clause applies,” Senior Judge John Sharpnack wrote.

“In order to defeat NARSI’s motion for partial summary judgment, Menard was obligated to rebut NARSI’s prima facie case for breach of contract by establishing a dispute of material fact as to its right to withhold payment. We have determined that Menard did not establish such a dispute.”

The case was ordered to move forward to resolve NARSI’s claim to foreclose upon the mechanic’s lien.