Daniels v. Int'l Paper Co.
245 So. 3d 180
La. Ct. App.2017Background
- IP and L & R entered a Master Wood Purchase and Service Agreement requiring L & R to (1) name IP as an additional insured on CGL/auto policies and (2) defend and indemnify IP for claims arising from L & R’s operations, including for IP negligence.
- L & R subcontracted hauling to Daniels; Daniels was injured on IP’s catwalk at IP’s Louisiana mill after delivering woodchips and sued IP alleging premises liability under La. Civ. Code arts. 2315, 2317, and 2317.1.
- IP filed a third-party demand against L & R (and L & R’s insurer, Security) asserting contractual defense, indemnity, and additional-insured claims; L & R moved for summary judgment.
- Trial court (applying Louisiana law) granted L & R summary judgment, finding the indemnity did not cover IP’s premises liability and that the injury did not arise from L & R’s performance; IP appealed.
- On appeal, the court reviewed choice-of-law, construed the indemnity, addressed whether the injury "arose out of" L & R’s performance, considered whether the agreement was an adhesion contract, and evaluated applicability of La. R.S. 9:2780.1.
Issues
| Issue | IP's Argument | L & R's Argument | Held |
|---|---|---|---|
| Governing law | Louisiana should apply (forum contacts, performance in LA) | Texas law governs because agreement selects law of state where timber was harvested | Louisiana law applies (choice clause not effectively selecting a single state; LA has strong contacts) |
| Scope of indemnity — coverage of IP premises liability / negligence | Indemnity clause expressly covers claims “whether or not caused…in whole or in part by the negligence of Buyer,” so it covers IP’s alleged negligence under arts. 2317/2317.1 | Indemnity should not extend to IP’s premises liability; ambiguous language precludes indemnifying indemnitee’s negligence | Indemnity unambiguously covers IP’s negligence; trial court erred to the contrary (Perkins principle applied) |
| Causation — did injury "arise out of" L & R’s performance | Daniels was on site to deliver L & R’s wood; injury is tied to performance, so indemnity applies | L & R’s contractual performance was complete before weighing/scaling; injury resulted from IP’s acts, not L & R’s performance | Injury arose out of L & R’s performance (employee would not have been present but for delivery); trial court erred denying this connection |
| Contract of adhesion (enforceability) | Agreement negotiated between sophisticated commercial parties; IP relied on terms | L & R argues adhesion: form drafted by IP, small print, unequal bargaining power, no meaningful consent | Genuine factual issue exists whether the indemnity clause is adhesive and vitiates consent; summary judgment inappropriate on this ground |
| Applicability of La. R.S. 9:2780.1 (statutory bar on indemnifying indemnitee negligence in motor carrier contracts) | Statute inapplicable because contract not a motor-carrier exemption for timber? | L & R argued statute voids indemnity/insurance provisions | Statute does not void the agreement here because woodchips qualify as "timber"/"agricultural products" under La. R.S. 9:3306; 9:2780.1 thus inapplicable |
Key Cases Cited
- Perkins v. Rubicon, Inc., 563 So.2d 258 (La. 1990) (indemnity to cover indemnitee’s negligence must be expressed unequivocally)
- Soverign Ins. Co. v. Texas Pipe Line Co., 488 So.2d 982 (La. 1986) (presumption against indemnifying indemnitee’s negligence unless clear intent)
- Berry v. Orleans Parish Sch. Bd., 830 So.2d 283 (La. 2002) (Louisiana public policy disfavors indemnifying a party solely responsible for causation)
- Burmaster v. Plaquemines Parish Gov’t, 982 So.2d 795 (La. 2008) (La. Civ. Code art. 2317 claims are treated as negligence after statutory change)
- Aguillard v. Auction Mgmt. Corp., 908 So.2d 1 (La. 2005) (contract-of-adhesion analysis focuses on whether non-drafting party truly consented)
- Samaha v. Rau, 977 So.2d 880 (La. 2008) (standard for appellate review of summary judgment)