Farmers Insurance Exchange v. RNK, Inc.
2011 U.S. App. LEXIS 1255
| 1st Cir. | 2011Background
- RNK and Ripple entered a 1999 agreement for Ripple to locate equipment at RNK and RNK to assign numbers to Ripple’s lines.
- Paragraph 3 makes Ripple indemnify RNK for claims “associated with” Ripple’s equipment; RNK bears no liability for Ripple’s equipment.
- Paragraph 10 requires Ripple to indemnify RNK for claims arising from Ripple’s “conduct,” including marketing and content.
- The NYPSC Regulatory Order required blockable numbers for chat lines to protect minors; RNK allegedly violated it.
- Jane Doe filed a 2005 suit (Doe Lawsuit) in SDNY alleging RNK’s noncompliance with the Regulatory Order caused her injuries; NYPSC later issued a show-cause order.
- The district court granted summary judgment for farmers and Ripple, holding no indemnity obligation under the Agreement; RNK appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the indemnity provisions require Ripple to indemnify RNK for Doe’s claims? | RNK asserts paragraphs 3 and 10 cover Doe’s claims. | Ripple/Farmers contend provisions do not cover Doe’s claims. | No; plain text does not extend to Doe’s claims. |
| Do paragraphs 3 and 10 unambiguously require indemnity for Doe’s claims? | RNK contends broad coverage via “equipment”/“content.” | Appellees argue plain terms are limited. | Not ambiguous; plain terms do not require indemnity. |
| Is the contract ambiguous or is interpretation a matter of law? | Ambiguity should be evaluated to favor RNK. | Language is unambiguous; no factual dispute to resolve. | Massachusetts contract interpretation is a question of law; terms are unambiguous. |
| Does Massachusetts law govern interpretation of the Agreement, and does it affect outcome? | Massachusetts law governs contract interpretation. | Same; no party argues otherwise. | MA law governs; contract terms unambiguously do not require indemnity. |
Key Cases Cited
- Bank v. International Business Machines Corp., 145 F.3d 420 (1st Cir. 1998) (ambiguous contract term review; plenary authority over interpretation)
- Nicolaci v. Anapol, 387 F.3d 21 (1st Cir. 2004) (indemnity contracts fairly construed; plain meaning rule)
- Fairfield 274-278 Clarendon Trust v. Dwek, 970 F.2d 990 (1st Cir. 1992) (contract interpretation; aim to ascertain party intent)
- Den Norske Bank AS v. First Nat'l Bank of Boston, 75 F.3d 49 (1st Cir. 1996) (contract interpretation under MA law; ambiguity standards)
- Seaco Ins. Co. v. Barbosa, 435 Mass. 772 (Mass. 2002) (ambiguity and meaning under Massachusetts law)