289 P.3d 221
Nev.2012Background
- Wells Cargo subcontracted United Rentals to provide traffic control on a Nevada road project.
- The indemnity clause required United Rentals to indemnify Wells Cargo to the extent caused by United Rentals’ negligent acts or fault.
- Kodera was injured on the project; she sued Wells Cargo, Howard Hughes, and United Rentals.
- Wells Cargo tendered defense to United Rentals; United Rentals allegedly did not respond; Wells Cargo sued for indemnity and defense.
- The district court required United Rentals to indemnify and defend unless Wells Cargo or Howard Hughes were solely negligent, and it approved defense costs and a $1,000,000 settlement against Kodera.
- A jury later found United Rentals negligent but not the proximate cause of Kodera’s accident, and United Rentals prevailed on the negligence claim at trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the phrase to the extent caused limit indemnity to United Rentals’ fault? | Wells Cargo: indemnity should cover Wells Cargo regardless of causation. | United Rentals: indemnity limited to damages United Rentals caused. | Indemnity limited to damages United Rentals caused. |
| Does the indemnity clause also limit the duty to defend to United Rentals’ causation? | Wells Cargo: defense obligation extends to claims arising from contract performance. | United Rentals: duty to defend limited to claims United Rentals caused. | Duty to defend limited to claims caused by United Rentals. |
| Can Wells Cargo recover the $1,000,000 settlement as indemnification given the jury found no proximate cause by United Rentals? | Wells Cargo: settlement enforceable under potential liability theory and defense duty. | United Rentals: no indemnity for Wells Cargo absent United Rentals’ causation. | No indemnity for Wells Cargo; district court erred in ordering payment. |
| Does adding Wells Cargo as an additional insured expand United Rentals’ indemnity/defense duties? | Wells Cargo: insurance provisions should broaden indemnity. | United Rentals: insurance provisions do not expand the contract’s express limits. | Insurance addition does not expand beyond the indemnity clause. |
| Were defense costs and attorney fees incorrectly awarded given the indemnity scope? | Wells Cargo: recover defense costs under duty to defend. | United Rentals: no defense cost recovery absent causation-based duty. | Fees and costs reversed to align with the causal-limited defense duty. |
Key Cases Cited
- Reyburn Lawn v. Plaster Development Co., 127 Nev. 331 (2011) (indemnity clause interpretation; strict construction; duty to defend.)
- Griffin v. Old Republic Ins. Co., 122 Nev. 479 (2006) (avoid expanding contractual obligations; enforce words as written.)
- Public Service Co. v. United Cable, 829 P.2d 1280 (Colo. 1992) (indemnity contracts hold harmless for own negligence require clear language.)
- Greer v. City of Philadelphia, 795 A.2d 376 (Pa. 2002) (to the extent caused; narrow form of indemnification; fault-based.)
- MT Builders v. Fisher Roofing, 197 P.3d 758 (Ariz. Ct. App. 2008) (to the extent caused interpreted as proportional fault.)
- Braegelmann v. Horizon Development Co., 371 N.W.2d 644 (Minn. Ct. App. 1985) (comparative negligence interpretation of to the extent caused.)