Will this indemnity clause make the other side cover our own negligence?
In construction, not to the extent it covers the promisee's own negligence. GOL § 5-322.1(1), as quoted by the Court of Appeals in Itri, makes a covenant or promise in connection with a contract relative to the construction, alteration, repair or maintenance of a building, purporting to indemnify or hold harmless the promisee against liability for damage arising out of bodily injury to persons or damage to property contributed to, caused by or resulting from the negligence of the promisee, its agents or employees, or indemnitee, whether such negligence be in whole or in part, against public policy and void and unenforceable. The same subdivision's second sentence, as it stood at the time of the actions in Itri, provided that it 'shall not preclude a promisee requiring indemnification for damages arising out of bodily injury to persons or damage to property caused by or resulting from the negligence of a party other than the promisee, whether or not the promisee is partially negligent', which Itri reads as 'intended to allow indemnification agreements where the subcontractor, although not negligent, agrees to indemnify the general for the negligence of third parties'. Those are not the words in force now: Itri records that 'in 1993, the section was amended and "promisor" was substituted for the final "promisee" in this last sentence', which the legislative history treated as correcting a typographical error. Note also that the Court set subdivision (1) out with '* * *' elisions at two points, so the full statutory wording is not given. Where the agreement contemplates FULL rather than partial indemnification and the general contractor is 'actually found to have been negligent', the statute applies to the agreement in its entirety and makes 'no attempt to salvage' the part that would cover only the subcontractor's own negligence (Itri, which decided two appeals together, affirming in Itri and reversing in Stottlar). But the statute permits a partially negligent general contractor to enforce an indemnity that does not purport to indemnify it for its own negligence, and the words 'to the fullest extent permitted by law' contemplate partial indemnification limited to the indemnitor's own negligence (Brooks v. Judlau). Outside the statute, an agreement exculpating a party from the consequences of its own negligence is, with certain exceptions, enforceable but subject to close judicial scrutiny, one of those exceptions being that so far as such an agreement purports 'to grant exemption for liability for willful or grossly negligent acts' it has 'been viewed as wholly void': the drafter must make its terms unambiguous and understandable, and although a broadly worded clause allocating risk between sophisticated parties at arm's length is read less strictly, even then it must evince the unmistakable intent of the parties (Gross v. Sweet).
The trap
The New York drafting fix is the words 'to the fullest extent permitted by law': Brooks held that phrase limits rather than expands the promise, so a subcontractor's indemnity survives § 5-322.1 as a partial indemnity for its own negligence even though the general contractor was also at fault, while Itri voided agreements that shifted liability 'from any cause' or for all claims arising from the work once the general contractor was found negligent. Outside construction, Gross shows how strictly a release is read: a release a student had to sign to enroll in a parachute-jumping course did not bar his negligence suit, because it did not clearly say it covered the instructor's negligence: the 'Responsibility Release' waived 'any and all claims' for 'any personal injuries or property damage that I may sustain or which may arise out of my learning, practicing or actually jumping from an aircraft', and the Court held that it 'nowhere expresses any intention to exempt the defendant from liability for injury or property damages which may result from his failure to use due care either in his training methods or in his furnishing safe equipment'. The Gross majority also noted statutes voiding agreements exempting from negligence liability landlords (GOL § 5-321), caterers (§ 5-322), building service or maintenance contractors (§ 5-323), those who maintain garages or parking garages (§ 5-325), and pools, gymnasiums and places of public amusement or recreation (§ 5-326), but it listed them only to conclude that 'defendant's occupation does not fall within any of these classes either', and it named those sections without setting out their text. Gross also kept two points open that a reader should not read past: it did not reach whether the student-instructor relationship or the public interest would forbid enforcement, and it said that in any event the release could not bar the claim that the defendant was grossly negligent.
22 authorities
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.N.Y.decided 1997read it at the source ↗
The words that state the rule
That statute provides that: "[a] covenant, promise, agreement or understanding in, or in connection with * * * a contract or agreement relative to the construction, alteration, repair or maintenance of a building * * * purporting to indemnify or hold harmless the promisee against liability for damage arising out of bodily injury to persons or damage to property contributed to, caused by or resulting from the negligence of the promisee, his agents or employees, or indemnitee, whether such negligence be in whole or in part, is against public policy and is void and unenforceable.” (General Obligations Law § 5-322.1 [1].)
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.N.Y.decided 1997read it at the source ↗
The words that state the rule
We hold that, because the agreements in question contemplate full, rather than partial, indemnification, the agreements are unenforceable under General Obligations Law § 5-322.1 in the circumstances of these cases.
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.N.Y.decided 1997read it at the source ↗
The words that state the rule
The language, purpose and history of General Obligations Law § 5-322.1 support our determination that the agreements in both appeals are unenforceable since their full enforcement would result in the contractors being indemnified for their negligence.
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.N.Y.decided 1997read it at the source ↗
The words that state the rule
Section 5-322.1 makes no attempt to salvage that part of an indemnification contract that would require a subcontractor to indemnify a general for the subcontractor’s negligence only. We conclude that the statute applies to the indemnification agreements in their entirety where, as here, the general contractor /promisee is actually found to have been negligent.
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.N.Y.decided 1997read it at the source ↗
The words that state the rule
Accordingly, in Itri, the order of the Appellate Division should be affirmed, with costs, and in Stottlar , the order of the Appellate Division should'be reversed, with costs, and the judgment of Supreme Court reinstated.
The words that state the rule
We conclude that the statute does permit a partially negligent general contractor to seek contractual indemnification from its subcontractor so long as the indemnification provision does not purport to indemnify the general contractor for its own negligence.
The words that state the rule
That language contemplates partial indemnification and is intended to limit Thunderbird’s contractual indemnity obligation solely to Thunderbird’s own negligence.
The words that state the rule
The Subcontractor shall, to the fullest extent permitted by law, hold the Contractor and the Owner, their agents, employees and representatives harmless from any and all liability, costs, damages, attorneys’ fee, and expenses from any claims or causes of action of whatever nature arising from the Subcontractor’s work, including all claims relating to its subcontractors, suppliers or employees
The words that state the rule
Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, appellant Judlau’s third-party complaint against third-party defendant Thunderbird should be reinstated and this case remitted to Supreme Court for further proceedings in accordance with this opinion, and the certified question answered in the negative.
The words that state the rule
We begin with the proposition, too well settled to invoke any dispute, that the law frowns upon contracts intended to exculpate a party from the consequences of his own negligence and though, with certain exceptions, they are enforceable, such agreements are subject to close judicial scrutiny (Van Dyke Prods. v Eastman Kodak Co., 12 NY2d 301, 304 ; 4 Williston, Contracts [3d Jaeger ed], § 602A, pp 326, 332). To the extent that agreements purport to grant exemption for liability for willful or grossly negligent acts they have been viewed as wholly void
The words that state the rule
Not only does this stringent standard require that the drafter of such an agreement make its terms unambiguous, but it mandates that the terms be understandable as well.
The words that state the rule
In such cases, the law, reflecting the economic realities, will recognize an agreement to relieve one party from the consequences of his negligence on the strength of a broadly worded clause framed in less precise language than would normally be required, though even then it must evince the "unmistakable intent of the parties” (Kurek v Port Chester Housing Auth., 18 NY2d 450, 456 ). The case before us today obviously does not fit within this exception to the strict legal standard generally employed by the courts of this State under which exculpatory provisions drawn, in broad and sweeping language have not been given effect.
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.decided 1997read it at the source ↗
The words that state the rule
shall hold the first party [MNT] harmless from all liability * * * from claims for injuries or death from any cause while on or near the project * * * whether or not it is contended the first party contributed thereto in whole or in part
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.decided 1997read it at the source ↗
The words that state the rule
shall be indemnified and held harmless from any and all liability; action or claims (just or unjust), and from any and all resulting damages, expenses, costs or fees * * * made by any person * * * in connection with or resulting from the work or by reason of the operations performed on behalf of, or on the property of ginsburg development corp. by the named insured Subcontractor, his agents, servants or employees
The words that state the rule
Our holding that the phrase “to the fullest extent permitted by law” limits rather than expands a promisor’s indemnification obligation is supported by the holdings of other courts that have likewise held that such phrases create a partial indemnification obligation on behalf of the subcontractor promisor. 4 Recognizing that these precedents are not binding on us—and that there likewise are many decisions negating partial indemnification—we adopt the broader interpretation as the more sound. Indeed, there is no language within General Obliga *211 tions Law § 5-322.1 that prevents partial indemnification provisions such as the one currently before us from being enforced in a case where it is shown that both a general contractor and its subcontractor are joint tortfeasors.
The words that state the rule
Such an outcome would be contrary to the intent of General Obligations Law § 5-322.1 that payment of damages be made according to fault.
The words that state the rule
And, though we note that a recent statute renders void agreements purporting to exempt from liability for negligence those engaged in a variety of businesses that serve the public (e.g., landlords [General Obligations Law, § 5-321]; caterers [§ 5-322]; building service or maintenance contractors [§ 5-323]; those who maintain garages or parking garages [§ 5-325]; or pools, gymnasiums or places of public amusement or recreation [§ 5-326]), defendant’s occupation does not fall within any of these classes either.
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.N.Y.decided 1997read it at the source ↗
The words that state the rule
the second sentence of section 5-322.1 (1), which at the time of these actions, provided that: *796 "[t]his subdivision shall not preclude a promisee requiring indemnification for damages arising out of bodily injury to persons or damage to property caused by or resulting from the negligence of a party other than the promisee, whether or not the promisee is partially negligent.” This portion of the statute was intended to allow indemnification agreements where the subcontractor, although not negligent, agrees to indemnify the general for the negligence of third parties. In 1993, the section was amended and "promisor” was substituted for the final "promisee” in this last sentence.
- case89 N.Y.2d 786Itri Brick & Concrete Corp. v. Aetna Casualty & Surety Co.N.Y.decided 1997read it at the source ↗
The words that state the rule
Moreover, whether or not section 5-322.1 would allow enforcement of a "partial indemnification” agreement is irrelevant here; the agreements in these cases explicitly provided for complete indemnification and there were findings that the general contractor was negligent. The question whether a negligent contractor /promisee could enforce an indemnification agreement, notwithstanding section 5-322.1, so long as the agreement did not purport to indemnify the contractor for its own negligence is not before us.
The words that state the rule
We hold that, in the circumstances of this case, a release *105 signed by the plaintiff as a precondition for his enrollment in defendant’s parachute jumping course does not bar him from suing for personal injuries he allegedly incurred as a result of defendant’s negligence.
The words that state the rule
In its entirety, it reads: "I, the undersigned, hereby, and by these covenants, do waive any and all claims that I, my heirs, and/or assignees may have against Nathaniel Sweet, the Stormville Parachute Center, the Jumpmaster and the Pilot who shall operate the aircraft when used for the purpose of parachute jumping for any personal injuries or property damage that I may sustain or which may arise out of my learning, practicing or actually jumping from an aircraft. I also assume full responsibility for any damage that I may do or cause while participating in this sport”.
The words that state the rule
Specifically, the release nowhere expresses any intention to exempt the defendant from liability for injury or property damages which may result from his failure to use due care either in his training methods or in his furnishing safe equipment.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.