825 N.W.2d 872
N.D.2012Background
- KLJ contracted with the City to provide engineering services for a paving/sewer project; Haggart was hired as general contractor with a payment bond backed by St. Paul; SCI sued Haggart and KLJ-related parties for additional work and defects tied to KLJ’s design decisions; St. Paul asserted indemnity/reimbursement claims against the City and against KLJ and Haggart; the district court preserved KLJ’s and Haggart’s defense/indemnity claims and the City’s duty-to-defend against SCI/St. Paul; after trial, SCI failed to prove entitlement to additional compensation, but the City sought costs and indemnity costs from KLJ; the district court ordered KLJ to pay the City costs and fees, and KLJ appealed claiming no duty to defend under the indemnity agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether KLJ had a duty to defend the City under the indemnity agreement | City; KLJ’s duty arises from NDCC § 22-02-07(4) despite contract terms | KLJ; indemnity only covers liability from KLJ’s negligence and does not require defense | KLJ did not have a duty to defend under the indemnity provision |
| Whether NDCC § 22-02-07(4) applies to create a statutory duty to defend despite contrary contract terms | City; statute imposes defense duty even if contract limits indemnity | KLJ; contract expresses contrary intent and statute does not apply | Statutory defense duty does not apply due to contrary contractual intent |
| Whether res judicata precludes court from deciding KLJ’s duty to defend | City; issue not fully resolved by jury; district court may decide | KLJ; jury did not find negligence; issue already decided | District court was not barred by res judicata from deciding the duty to defend |
| Whether Bridston/“save harmless” language controls the duty to defend in non-insurance indemnity | KLJ; indemnity limited to liability and requires determination of negligence | Statutory duty to defend does not apply due to contrary contract language | |
| Whether KLJ is entitled to recover its costs as prevailing party or other post-trial relief | KLJ; sought prevailing-party costs; remand needed for discretion on costs | Remand to determine KLJ’s prevailing-party costs; City’s costs reversed |
Key Cases Cited
- Crawford v. Weather Shield Mfg. Inc., 44 Cal.4th 541 (Cal. 2008) (indemnity contracts generally impose a defense duty unless contract says otherwise; statutory rules may apply)
- Regan Roofing Co. v. Superior Court, 24 Cal.App.4th 419 (Cal. App. 1994) (duty to defend limited to matters embraced by indemnity; Regan later disapproved by Crawford)
- Crawford, 79 Cal.Rptr.3d 721, (Cal. Super. Ct. in Crawford) (Cal. 2008) (discussed in Crawford decision for broader defense duty under statute)
- Bridston v. Dover Corp., 352 N.W.2d 194 (N.D. 1984) (save harmless language construed as broader defense promise, but distinguishable by language limiting indemnity)
- Mills v. City of Grand Forks, 2012 ND 56, 813 N.W.2d 574 (N.D. 2012) (res judicata principles applied to post-judgment issues in ND)
- Olander Contracting Co. v. Gail Wachter Inv., 2002 ND 65, 643 N.W.2d 29 (N.D. 2002) (tests indemnity/defense interpretation in ND context)