Will a Maine court make our counterparty indemnify us for our own negligence?
Only if the contract says so clearly and unequivocally on its face, and in the one Maine case where the clause was clear, it was enforced. Acadia Insurance Co. v. Buck Construction Co. states the rule, quoting Emery Waterhouse Co. v. Lea: "public policy does not favor agreements by one party to indemnify another party for its own negligence", and "[i]t is only where the contract on its face by its very terms clearly and unequivocally reflects a mutual intention on the part of the parties to provide indemnity for loss caused by negligence of the party to be indemnified that the liability for such damages will be fastened on the indemnitor". Doyle v. Bowdoin College applied the same disfavour to reject an indemnity reading of a document that used no indemnity language: "[i]n accordance with the generally prevailing judicial attitude which looks with disfavor upon contractual provisions purporting to require indemnification of a party for damage or injury caused by that party's own negligence, we agree with the presiding Justice that the document executed by Margaret Doyle was not an agreement of indemnity." The other side of the line is Lloyd v. Sugarloaf Mountain Corp., where the Court held "[t]he language of the indemnification clause is unambiguous. Lloyd is contractually bound to indemnify the parties defending for the expense they incurred", and affirmed judgment on the counterclaims: three justices would have vacated it as ambiguous.
The trap
Do not conflate an indemnity with a risk-allocation-to-insurers term. Acadia's actual holding is the opposite of the strict-construction rule the same paragraph recites: the Court enforced a contractual requirement to carry fire insurance as a waiver of the insurer's subrogation rights, warning that "Acadia confuses, however, indemnification agreements between two parties with waivers of subrogation on the part of a party's insurer" and explaining that "Levesque was not assuming Buck's liability, rather both parties were allocating the risk of liability for a loss to an insurer". It affirmed the summary judgment. So in Maine a "you shall carry insurance and we look only to that policy" clause gets a friendlier reception than a "you shall indemnify us for our own negligence" clause that says the same thing in indemnity words. The second trap is one of attribution, and it cuts against the way the rule is usually pleaded. The strict-construction sentence most often quoted from Lloyd v. Sugarloaf Mountain Corp. ("contracts indemnifying a party from the party's own negligence are strictly construed against the indemnitee") is from Calkins, J.'s dissent, joined by two other justices; it carried three votes of seven. The Court in that very case went the other way and enforced the clause. Nothing in the majority opinion states a strict-construction principle at all. Quote it as a dissent or not at all, and expect an opponent to point out that the four-justice majority enforced an indemnity for attorney fees on language the dissent thought ambiguous.
9 authorities
The words that state the rule
While public policy does not favor agreements by one party to indemnify another party for its own negligence, see Emery Waterhouse, 467 A.2d at 993 (stating such agreements are looked on with disfavor and “[i]t is only where the contract on its face by its very terms clearly and unequivocally reflects a mutual intention on the part of the parties to provide indemnity for loss caused by negligence of the party to be indemnified that the liability for such damages will be fastened on the indemnitor”)
The words that state the rule
Acadia confuses, however, indemnification agreements between two parties with waivers of subrogation on the part of a party’s insurer.
- case2000 ME 154Acadia Insurance Co. v. Buck Construction Co.me-medecided 2000read it at the source ↗
The words that state the rule
In other words, Levesque was not assuming Buck’s liability, rather both parties were allocating the risk of liability for a loss to an insurer.
- case2000 ME 154Acadia Insurance Co. v. Buck Construction Co.me-medecided 2000read it at the source ↗
The words that state the rule
The trial court did not err as a matter of law in either its determination that the construction contract was not ambiguous or its determination that the provision requiring Levesque to carry fire insurance operated as a waiver of Acadia’s subrogation rights. Furthermore, the court’s resolution of these questions is consistent, rather than at odds, with public policy regarding the allodation of risk by parties to a contract. Accordingly we affirm the summary judgment. The entry is: Judgment affirmed.
The words that state the rule
In accordance with the generally prevailing judicial attitude which looks with disfavor upon contractual provisions purporting to require indemnification of a party for damage or injury caused by that party’s own negligence, we agree with the presiding Justice that the document executed by Margaret Doyle was not an agreement of indemnity.
The words that state the rule
The entry is: Appeal denied. Judgment affirmed. McKUSICK, C. J., and DELAHANTY, J., did not sit.
The words that state the rule
CALKINS, J., with whom ALEXANDER and LEVY, JJ., join, dissenting. [¶ 15] Although I agree with the Court that the membership release, which is unambiguous and specifically refers to negligence, absolves Sugarloaf and NORBA of their own negligence, I write separately because I believe that we should vacate the summary judgment granted to Sugarloaf and NORBA on their counterclaims for indemnification. In my opinion, the indemnification clause, which is contained *6 in the entry release form, cannot support the judgment for attorney fees against Lloyd because it is unclear and ambiguous. [¶ 16] In my analysis, I start with the principle that contracts indemnifying a party from the party's own negligence are strictly construed against the indemnitee.
The words that state the rule
The language of the indemnification clause is unambiguous. Lloyd is contractually bound to indemnify the parties defending for the expense they incurred. The trial court appropriately enforced the contractual obligation assumed by Lloyd. The entry is: Judgment for NORBA and Sugarloaf on the complaint and the counterclaims are affirmed.
- case2000 ME 154Acadia Insurance Co. v. Buck Construction Co.me-medecided 2000read it at the source ↗
The words that state the rule
The prevailing authority supports the trial court’s legal conclusion that clauses in construction contracts imposing insurance procurement responsibility on owners operate as waivers of subrogation against builders even for damage *519 occasioned by the builders’ negligence, unless the contract provides otherwise.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.