2020 Ohio 6816
Ohio2020Background
- TQL (freight broker) contracted with JK&R (motor carrier) under a broker‑carrier agreement that included a cargo‑liability clause and an express indemnification clause requiring JK&R to indemnify and hold TQL and customers harmless for cargo loss, subject to a negligence carve‑out.
- While transporting apples for TQL’s customer Contél Fresh, JK&R’s trailer caught fire and the cargo was destroyed; Contél submitted a claim and TQL offset the loss against amounts due to Contél.
- TQL sought reimbursement from JK&R under the contract for the cargo loss (and a smaller brokerage‑services claim); JK&R paid partially by offsetting invoices, and TQL asserted a remaining balance.
- The trial court granted summary judgment to JK&R on TQL’s cargo‑loss indemnity claim after applying the Globe Indemn. Co. factors for voluntary settlements, finding TQL had not shown legal liability to the claimant.
- The Twelfth District affirmed, holding Globe’s three requirements (notice, legal liability, fair/reasonable settlement) govern even where a written indemnity exists.
- The Ohio Supreme Court reversed and remanded: it held Globe’s requirements do not apply when the parties’ contract clearly evidences an intent to abrogate those common‑law prerequisites; because the lower courts did not analyze whether the parties intended to abrogate Globe, the case is remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Globe Indemn. Co. common‑law requirements apply when parties have an express contractual indemnity | Globe does not apply; the written indemnity controls and must be enforced as written | Globe applies; an indemnitee who settles without the indemnitor must satisfy Globe’s factors | Court: Globe factors do not apply if the contract clearly shows parties intended to abrogate them; remanded for trial court to determine intent |
| Whether TQL was entitled to contractual indemnity for its voluntary settlement with Contél | TQL says contract obligates JK&R to indemnify for cargo loss (including voluntary settlements) | JK&R says TQL voluntarily settled and failed Globe’s requirements, so not entitled | Court declined to resolve merits; remanded for trial court to first assess whether contract abrogates Globe and then apply contract terms |
Key Cases Cited
- Globe Indemn. Co. v. Schmitt, 142 Ohio St. 595 (Ohio 1944) (articulated three common‑law requirements for indemnity after a voluntary settlement)
- New York Cent. R. Co. v. Linamen, 171 Ohio St. 87 (Ohio 1960) (applied Globe factors in post‑settlement indemnity dispute)
- Worth v. Huntington Bancshares, Inc., 43 Ohio St.3d 192 (Ohio 1989) (contractual indemnity interpreted to allow attorney‑fee recovery without conditioning on success)
- Glaspell v. Ohio Edison Co., 29 Ohio St.3d 44 (Ohio 1987) (contract language can clearly allow indemnification for indemnitee’s own negligence)
- Nottingdale Homeowners’ Assn., Inc. v. Darby, 33 Ohio St.3d 32 (Ohio 1987) (parties have a fundamental right to contract freely and have their bargains enforced)
- Paul Cheatham I.R.A. v. Huntington Natl. Bank, 157 Ohio St.3d 358 (Ohio 2019) (parties may abrogate common law by contract but intent to do so must be clear)
- Kelly v. Medical Life Ins. Co., 31 Ohio St.3d 130 (Ohio 1987) (contractual intent is presumed to reside in the language the parties chose)