NES Rentals Holdings, Incorpor v. Steine Cold Storage, Incorpora
714 F.3d 449
7th Cir.2013Background
- Steine Cold Storage, Inc. rented a 40-foot boom lift from NES Rentals for Wal‑Mart site work in Gas City, Indiana.
- Humberto Menendez, a Steine employee, was fatally injured operating the lift; the incident followed a September 2006 maintenance check.
- NES demanded indemnification from Steine for NES’s potential liability in Menendez’s death; Steine refused.
- The Rental Agreement’s indemnity clause on the reverse side states broad indemnity but includes an exception for NES’s sole negligence.
- Indiana law permits indemnification for the other’s negligence only if the clause clearly and unequivocally so provides; the district court granted Steine summary judgment.
- This appeal concerns whether the clause explicitly obligates Steine to indemnify NES for NES’s own negligence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the indemnity clause explicitly covers NES’s own negligence | NES argues the exception, read with the broad coverage, makes NES’s own negligence indemnified | Steine contends the clause is not explicit enough to cover NES’s own negligence | No; clause not explicit to cover NES’s own negligence |
| Whether the clause’s 'except where sole NES negligence' renders exposure explicit | NES relies on the exception to show explicit coverage | Steine argues exception is not explicit enough to bind for NES’s own negligence | Not explicit; does not meet the clear and unequivocal standard |
| What governing Indiana law standard applies to indemnity for the indemnitee’s own negligence | NES asserts broad indemnity under the clause should apply | Steine emphasizes the need for explicit language | Indiana requires explicit, unequivocal language; not met here |
Key Cases Cited
- Moore Heating & Plumbing, Inc. v. Huber, Hunt & Nichols, 583 N.E.2d 142 (Ind. Ct. App. 1991) (indemnity for indemnitee’s own negligence must be explicit)
- GKN Co. v. Starnes Trucking, Inc., 798 N.E.2d 548 (Ind. Ct. App. 2003) (clear language required to cover indemnitee’s own negligence)
- New York Central Railroad Co. v. Northern Indiana Public Service Co., 221 N.E.2d 442 (Ind. Ct. App. 1966) (indemnity clause with sole-negligence exception not addressing issue here)
- Vernon Fire and Casualty Ins. Co. v. Graham, 336 N.E.2d 829 (Ind. Ct. App. 1975) (insufficient explicitness for indemnity of indemnitee’s own negligence)
- Center Township of Porter County v. City of Valparaiso, 420 N.E.2d 1272 (Ind. Ct. App. 1981) (explicit indemnity for indemnitee’s negligence discussed)
- Ft. Wayne Cablevision v. Indiana & Mich. Electric Co., 443 N.E.2d 863 (Ind. Ct. App. 1983) (policy of disfavor toward indemnity for the other’s negligence)
- Indiana State Highway Comm’n v. Thomas, 346 N.E.2d 252 (Ind. Ct. App. 1976) (disfavor toward broad indemnity for sole negligence absent explicit terms)
- Treat v. Tom Kelley Buick Pontiac GMC, Inc., 646 F.3d 487 (7th Cir. 2011) (tends to look to recent Indiana authority for diversity conclusions)