2022 Ohio 3969
Ohio Ct. App.2022Background
- TQL (broker) contracted with motor carrier JK & R under a broker‑carrier agreement containing a broad cargo‑liability clause (Sec. 8/8(e)) and an unqualified indemnity in favor of TQL for "any and all claims or liability" arising from carrier performance (Sec. 10).
- A June 2016 load of apples transported by JK & R burned in transit; cargo was destroyed and Contél Fresh (TQL's customer) invoiced TQL for $86,240.
- TQL paid Contél Fresh by offsetting open invoices, received an assignment of Contél’s claims against JK & R, and sued JK & R for indemnification (plus lost brokerage fee). JK & R defended, arguing Globe common‑law requirements barred indemnity because TQL voluntarily paid when not legally obliged.
- Trial court and initial appellate panel applied Globe Indemn. Co. v. Schmitt (three common‑law requirements for indemnity after settlement) and ruled for JK & R because TQL failed to prove legal liability to Contél.
- Ohio Supreme Court held Globe does not apply if the parties clearly intended to abrogate it by contract and remanded to determine whether the broker‑carrier agreement so intended.
- On remand the trial court again ruled for JK & R and awarded attorney fees; the Twelfth District reversed, holding the agreement (read as a whole) evinces a clear intent to abrogate Globe and remanded for further proceedings; the attorney‑fees issue was rendered moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the broker‑carrier agreement evinces a clear intent to abrogate the Globe common‑law indemnity requirements | TQL: Secs. 8, 8(e), and 10 (broad cargo indemnity, carrier exclusively liable, TQL as single point of contact, right to offset) show intent to permit TQL to pay customers and obtain contractual indemnity | JK & R: Globe governs; TQL voluntarily paid while not legally liable, so Globe bars recovery absent legal liability | Court: Contract read as whole shows a clear intent to abrogate Globe; Sec.10’s unqualified duty to indemnify and the agreement’s structure support TQL’s right to contractual indemnity; summary judgment for JK & R reversed and case remanded |
| Whether the contract must expressly or talismanically reference Globe or expressly permit voluntary payments to abrogate Globe | TQL: no express phrase needed; broad indemnity language suffices (citing Worth & Glaspell) | JK & R: contract lacks explicit Globe abrogation; Globe still required | Court: Ohio Supreme Court permits implicit abrogation; explicit phrasing not required; the agreement’s language is sufficient to show clear intent to abrogate |
| Whether any contractual ambiguity must be strictly construed against TQL as drafter | TQL: trial court erred to invoke drafting‑against‑drafter rule absent identified ambiguity | JK & R: any doubt favors carrier | Held: Appellate court found the trial court’s drafting comment was surplusage; no specific ambiguity was identified and the argument lacked merit |
| Validity of trial court's attorney‑fee award to JK & R | TQL: fee award waived, insurer paid JK & R’s costs, JK & R not prevailing; award improper | JK & R: sought fees as prevailing party | Held: Moot—because reversal/remand on indemnity claim renders the fee issue unnecessary to resolve on appeal |
Key Cases Cited
- Globe Indemn. Co. v. Schmitt, 142 Ohio St. 595 (1944) (articulates three common‑law requirements for indemnification after an indemnitee settles a claim)
- Total Quality Logistics, L.L.C. v. JK & R Express, L.L.C., 164 Ohio St.3d 495 (2020) (Ohio Supreme Court: Globe requirements do not apply if contract clearly abrogates them; remanded to assess contractual intent)
- Wildcat Drilling, L.L.C. v. Discovery Oil & Gas, L.L.C., 164 Ohio St.3d 480 (2020) (same principle: remand to determine whether contract clearly abrogates Globe)
- Glaspell v. Ohio Edison Co., 29 Ohio St.3d 44 (1987) (broad indemnity language can abrogate common‑law limits even without talismanic wording)
- Worth v. Aetna Cas. & Sur. Co., 32 Ohio St.3d 238 (1987) (contractual indemnity should be enforced as written; courts will not read in unstated conditions such as success in litigation)