In Re: Indiana State Fair Litigation, Mid-America Sound Corporation v. Indiana State Fair Commission, Jill Polet
2016 Ind. LEXIS 65
| Ind. | 2016Background
- The Indiana State Fair Commission (Commission) contracted with Mid‑America Sound (Mid‑America) for concert equipment rentals over a decade; after each Fair Mid‑America submitted invoices and a signed claim voucher authorizing payment.
- On August 2011 a temporary roof supplied by Mid‑America collapsed, killing and injuring attendees; lawsuits followed naming Mid‑America and the Commission.
- In December 2011, while litigation was pending, Mid‑America submitted an invoice containing standard-form indemnity language on its reverse asserting the Commission would indemnify Mid‑America for claims “whether or not” caused by Mid‑America’s negligence.
- The Commission signed the voucher and paid the invoice. Mid‑America later sued the Commission seeking indemnification for losses arising from the August collapse.
- The trial court granted summary judgment to the Commission; the Court of Appeals reversed on factual issues. The Indiana Supreme Court granted transfer to decide whether the invoice’s indemnity language applied retroactively or could be implied from the parties’ course of dealing.
- The Supreme Court held the invoice did not clearly and unequivocally impose retroactive indemnity and, as a matter of law, a course of dealing cannot supply such an extraordinary obligation.
Issues
| Issue | Plaintiff's Argument (Mid‑America) | Defendant's Argument (Commission) | Held |
|---|---|---|---|
| Whether the invoice indemnity clause applies retroactively to the August 2011 collapse | The recurring practice of issuing and paying invoices containing identical indemnity language and signing vouchers created a standing agreement (course of dealing) that applied to the 2011 loss | The indemnity language does not expressly cover pre‑existing losses; retroactive indemnity must be clearly and unequivocally stated and cannot be inferred | Held for Commission: retroactive indemnity not established; course of dealing insufficient |
| Whether a party can be required to indemnify another for that other party’s own negligence absent explicit language | The recurring invoices demonstrate the Commission knowingly accepted the indemnity terms | Indemnity for another’s negligence is disfavored and requires clear, unambiguous language showing a knowing and willing agreement | Held for Commission: Indiana requires clear and unequivocal terms to indemnify for another’s negligence |
| Whether summary judgment was proper on contract interpretation here | Mid‑America argued factual issues about assent and course of dealing precluded summary judgment | Commission argued the legal principle requiring clear retroactive language resolves the dispute as a matter of law | Held for Commission: contract interpretation was a question of law suitable for summary judgment because no clear retroactive language exists |
| Whether a course of dealing can be used to infer extraordinary retroactive obligations | Mid‑America relied on long practice and claim‑voucher certifications to infer assent | Commission relied on precedent that extraordinary retroactive obligations cannot be implied from routine post‑loss paperwork | Held for Commission: course of dealing cannot be used to infer retroactive indemnity absent explicit terms |
Key Cases Cited
- Fresh Cut, Inc. v. Fazli, 650 N.E.2d 1126 (Ind. 1995) (parties may allocate risk by contract, including indemnification for one’s own negligence)
- Indianapolis Power & Light Co. v. Brad Snodgrass, Inc., 578 N.E.2d 669 (Ind. 1991) (indemnity for future acts of negligence is permissible under contract)
- Emmet Fertilizer & Grain Co. v. Chicago & N.W. Transp. Co., 852 F.2d 358 (8th Cir. 1988) (post‑loss indemnity in a later form did not obligate indemnification for precontract accidents)
- Gen. Housewares Corp. v. Nat’l Sur. Corp., 741 N.E.2d 408 (Ind. Ct. App. 2000) (known‑loss doctrine bars insurance for losses already occurring unless insurer expressly agreed otherwise)
- DaimlerChrysler Corp. v. Wesco Distribution, Inc., 760 N.W.2d 828 (Mich. Ct. App. 2008) (indemnity clause will not be construed to operate retrospectively absent express language)