US Lawns v. Cutting Edge Landscaping
311 Ga. App. 674
| Ga. Ct. App. | 2011Background
- U.S. Lawns contracted to provide landscaping to Bank of America in Macon and sub-contracted duties to Cutting Edge.
- Subcontract contained an indemnification clause indemnifying the contractor for claims arising from Subcontractor's performance.
- Gloria Freeman sued Bank of America, U.S. Lawns, and Cutting Edge for negligence in July 2005; U.S. Lawns failed to answer and defaulted in September 2007.
- U.S. Lawns moved to open the default in January 2008; the court denied the motion, finding no timely meritorious defense.
- U.S. Lawns settled with Freeman and Bank of America and Freeman dismissed with prejudice in March 2009.
- In September 2009, U.S. Lawns sought common law and contractual indemnification from Cutting Edge for the settlement and related fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the indemnity covers settlement when indemnitee had a meritorious defense but defaulted | Lawns had a meritorious defense and should recover indemnity. | Default and failure to assert defense bar indemnity. | Indemnity barred; default precludes recovery. |
| Whether contractual indemnity applies where liability arose from indemnitee's default | Contractual clause covers claims arising from performance, including default-related liability. | Liability from default does not arise out of Cutting Edge's performance. | Contractual indemnity denied; liability stemmed from indemnitee's default. |
Key Cases Cited
- Nguyen v. Lumbermens Mut. Cas. Co., 261 Ga. App. 553 (2003) (indemnity rights may arise by operation of law)
- Auto-Owners Ins. Co. v. Anderson, 252 Ga. App. 361 (2001) (settlement does not automatically bar indemnity absent defense loss)
- GAF Corp. v. Tolar Constr. Co., 246 Ga. 411 (1980) (defense available could defeat underlying action; failure to assert bars indemnity)
- City of Albany v. Pippin, 269 Ga. App. 22 (2004) (defense must be asserted to avoid indemnity bar)
- Foster v. Nix, 173 Ga. App. 720 (1985) (burden on indemnitee to prove available defense in underlying action)
- Townsend v. Lipman, 277 Ga. App. 326 (2006) (implied duty to notify and cooperate in defense)
- Fisher v. Toombs County Nursing Home, 223 Ga. App. 842 (1996) (implied notice duties in contract)
- Ellis v. Brookwood Park Venture, 161 Ga. App. 242 (1982) (implied duties related to contract performance)
- Emergency Professionals of Atlanta, P.C., 288 Ga. App. 473 (2007) (default and failure to assert defense bars indemnity)