342 P.3d 987
Mont.2015Background
- 2000 highway paving near Ennis: State contracted Welles; Welles subcontracted paving/primer work to several Jensen entities.
- Jensen applied primer and blotter on Sept. 30; a storm that night emulsified the primer and oil splashed onto passing vehicles causing roughly $600,000 in damage.
- Vehicle owners sued the State; the State paid and was reimbursed by Welles under the general contract; the State sought indemnity from its insurer Liberty; Welles sought indemnity from Jensen under the subcontract.
- Both Welles and Jensen moved for summary judgment on Welles’s indemnity claim; district court denied Welles’s motion and later granted Jensen’s motion.
- Liberty moved to dismiss the State’s claim for failure to prosecute; district court granted dismissal in 2014. Both Welles and the State appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether subcontractor must be negligent for indemnity to apply | Welles: indemnity clause covers losses "on account of any act or omission" — no negligence/wrongdoing requirement | Jensen: clause requires indemnity only for foreseeable losses from negligent/wrongful conduct | Court: clause unambiguously covers losses caused by any act or omission; no negligence or foreseeability requirement; Welles entitled to summary judgment |
| Whether dismissal for failure to prosecute was proper | State: its delay (≈17 months) was not per se unreasonable in a complex, multi-party case and Liberty showed no actual prejudice | Liberty: State did nothing after 2010; warned and was dilatory; dismissal appropriate | Court: district court abused its discretion; no proof of actual prejudice, alternative sanctions available; State's claim against Liberty reinstated |
Key Cases Cited
- Fairbanks N. Star Borough v. Roen Design Ass’n, Inc., 727 P.2d 758 (Alaska 1986) (construing broad "act or omission" indemnity without requiring negligence)
- Cont’l Heller Corp. v. Amtech Mech. Servs., Inc., 53 Cal. App. 4th 500 (Cal. Ct. App. 1997) (broad indemnity for "any acts or omissions" not limited to negligence)
- Amazi v. Atlantic Richfield Co., 816 P.2d 431 (Mont. 1991) (example of contract that expressly limited indemnity to negligent acts)
- Hobble-Diamond Cattle Co. v. Triangle Irrigation Co., 899 P.2d 531 (Mont. 1995) (framework for evaluating dismissal for failure to prosecute)
- Doug Johns Real Estate, Inc. v. Banta, 805 P.2d 1301 (Mont. 1991) (scheduling the case for trial as an alternative sanction; guidance on dismissal factors)