199 Vt. 259
Vt.2015Background
- In 2001 Frontier (a utility) hired Navigant as a consultant to assist obtaining a certificate of public good (CPG) for a Richford substation upgrade; Frontier designed and selected an air-break switch (Switch 14E).
- Switch 14E was not fully installed or grounded when in 2006 Frontier-directed worker Michael Hemond opened it; an arc formed and Hemond suffered severe electrocution injuries.
- Plaintiffs sued Frontier and Navigant; plaintiffs later settled with all defendants except Frontier.
- Frontier filed a cross-claim seeking implied indemnity from Navigant; Navigant cross-claimed for express (contractual) indemnity based on a 1999 letter incorporating REED/Navigant terms and conditions and a 2001 scope letter.
- The trial court granted summary judgment for Navigant on both Frontier’s implied-indemnity claim and Navigant’s express-indemnity claim; Frontier appealed.
Issues
| Issue | Hemond/Frontier's Argument | Navigant's Argument | Held |
|---|---|---|---|
| Whether Frontier is entitled to implied indemnity from Navigant | Navigant’s PSB reliability advice made it primarily responsible for the dangerous condition (Switch 14E); equity requires shifting loss to Navigant | Frontier’s liability was direct (design/selection/installation/safety) and Frontier retained primary responsibility; Navigant was consultant only | No implied indemnity; Frontier failed to show Navigant primarily created the dangerous condition or that Frontier’s liability was merely vicarious |
| Whether the parties formed an express indemnity agreement covering Frontier’s claims | The 2001 scope letter controls and contains no indemnity; no evidence the 1999 terms applied to the Richford work | The 1999 letter (signed by both) incorporated NCI/REED standard terms and conditions (including indemnity) and the 2001 letter supplemented the 1999 contract | Yes—express indemnity found: the 1999 terms applied to the 2001 work and the indemnity language unambiguously covered indemnification (including indemnitee’s negligence) |
| Whether the indemnity clause is enforceable to cover the indemnitee’s sole negligence | Indemnity clause does not clearly state it covers sole negligence; ambiguous | Clause is broad, unambiguous, and formed at arm’s length—so it can cover indemnitee’s negligence | Enforceable; clause clearly expresses intent to cover injuries "whether attributable to ... negligence" |
| Whether factual disputes precluded summary judgment on implied or express indemnity | Fact disputes exist about Navigant’s responsibilities and whether the 1999 terms applied to 2001 work | Documentary evidence and affidavits establish the scope and incorporation; Frontier offered no admissible contradictory evidence | Summary judgment appropriate on both claims because no genuine material factual disputes supported Frontier’s indemnity theories |
Key Cases Cited
- White v. Quechee Lakes Landowners’ Ass’n, 742 A.2d 734 (Vt. 1999) (indemnity is an exception to the bar on contribution; requires equitable allocation)
- City of Burlington v. Arthur J. Gallagher & Co., 788 A.2d 18 (Vt. 2001) (distinguishes express and implied indemnity principles)
- Knisely v. Central Vermont Hospital, 769 A.2d 5 (Vt. 2000) (nondelegable duty to provide safe premises can defeat indemnity against contractor)
- Bardwell Motor Inn, Inc. v. Accavallo, 381 A.2d 1061 (Vt. 1977) (indemnity available where contractor’s work created the dangerous condition)
- Tateosian v. State, 945 A.2d 833 (Vt. 2007) (an indemnity clause covers indemnitee’s sole negligence only if language clearly expresses that intent)
- Southwick v. City of Rutland, 35 A.3d 113 (Vt. 2011) (enforcing unambiguous indemnity clauses in arm’s-length agreements)
- State v. Prison Health Servs., Inc., 88 A.3d 414 (Vt. 2013) (unambiguous indemnity provisions enforced between parties)
- Boston & M.R.R. v. Howard Hardware Co., 186 A.2d 184 (Vt. 1962) (specific contract terms control over general ones)