Jacobs Engr. Group v. ConAgra Foods
301 Neb. 38
| Neb. | 2018Background
- ConAgra contracted with Jacobs for engineering services; their agreement contained reciprocal indemnity clauses requiring each party to indemnify the other for claims caused by that party’s negligence or negligence of others under its control.
- A 2009 commissioning of a new water heater at ConAgra’s Garner, NC plant resulted in an explosion that killed 3 employees and injured many; investigations attributed hazardous conditions and supervisory failures to ConAgra and found Jacobs performed no work that contributed to the accident.
- Dozens of suits were filed against Jacobs; Jacobs settled the claims for a total of $108.9 million after ConAgra refused contractual indemnity. One underlying case (Brockington) had a jury verdict later settled by Jacobs for $20 million (Jacobs sought $17.7M representing first verdict plus interest).
- Jacobs sued ConAgra in Nebraska for breach of the indemnity provision; the district court held a 4‑week trial, the jury found ConAgra 70% liable (ESA 30%), found Jacobs not negligent, found Jacobs’ settlements objectively reasonable, and awarded Jacobs the settlement amounts.
- ConAgra appealed, raising (inter alia) that Jacobs lacked standing as the real party in interest (arguing insurers may have been fully subrogated), that workers’ compensation immunity barred recovery for employee claims, that ConAgra’s conduct did not cause Jacobs’ settlement losses, and that damages (particularly Brockington) were excessive.
Issues
| Issue | Plaintiff's Argument (Jacobs) | Defendant's Argument (ConAgra) | Held |
|---|---|---|---|
| Standing / real party in interest | Jacobs is the indemnitee and has incurred losses and therefore has standing to sue for breach of the indemnity clause | Jacobs is a subrogee; insurers may have fully paid/been subrogated so Jacobs lacks standing | Jacobs had standing. Pleadings + ConAgra admissions established Jacobs incurred damages; posttrial evidence (policies, deductibles) supported factual finding that Jacobs paid part of settlements. |
| Workers’ compensation immunity | The contract expressly indemnifies Jacobs for claims caused by ConAgra and does not reserve NWCA immunity | Employer immunity under NWCA prevents indemnity for employee claims absent explicit waiver | NWCA did not bar ConAgra’s contractual indemnity. Contract read as whole shows ConAgra agreed to indemnify employee claims caused by ConAgra; precedent permits enforcement of express indemnity absent contractual language preserving immunity. |
| Breach / causation (proximate cause, control, intervening cause) | ConAgra’s supervisory failures and control over ESA/Puff/Roberson proximately caused the explosion and resulting settlements; Poppe’s acts were foreseeable/connected | Poppe’s final act (removing cap) was an independent efficient intervening cause; ESA/Poppe were not under ConAgra’s control | Jury verdict sustained. Evidence supported that ConAgra had control (supervision, authority, opportunity to prevent), and Poppe’s act did not break the causal chain as a matter of law; efficient-intervening-cause instruction unnecessary. |
| Damages / remittitur (Brockington amount) | Settlements were objectively reasonable; expert testimony supported figures | Brockington award/component ($17.7M) was arbitrary and unsupported | Denied remittitur. Expert 10‑factor analysis and evidence supported objective reasonableness; jury verdict not contrary to all reason. |
Key Cases Cited
- Countryside Co-op v. Harry A. Koch Co., 280 Neb. 795 (2010) (standing/real‑party and related jurisdictional principles)
- Jelinek v. Nebraska Nat. Gas Co., 196 Neb. 488 (1976) (insurer subrogation can displace insured as real party where insured is fully satisfied)
- Krause v. State Farm Mut. Auto. Ins. Co., 184 Neb. 588 (1969) (insured retains right of action when insurer only partially indemnifies)
- Union Pacific R.R. Co. v. Kaiser Ag. Chem. Co., 229 Neb. 160 (1988) (NWCA does not preclude third‑party enforcement of express indemnity by an employer)
- Oddo v. Speedway Scaffold Co., 233 Neb. 1 (1989) (contractual indemnity can overcome workers’ compensation immunity when agreement imposes duty)
- Harsh Int’l v. Monfort Indus., 266 Neb. 82 (2003) (distinguishing express contractual indemnity from implied indemnity and limitations of relief under NWCA)
- Dutton‑Lainson Co. v. Continental Ins. Co., 279 Neb. 365 (2010) (standards for reviewing damages and remittitur)