US Court of Appeals Affirms Indemnification in Wrongful Death Lawsuit in Rented Boom Lift Case

Humberto Menendez was working for Steine Cold Storage, Inc., which was a subcontractor for the installation of thermo units at a Wal-Mart store under construction in Indiana. Steine rented a boom lift from NES Rentals. 

NES Rentals delivered the lift to the construction site on Aug. 23, 2006. The Steine foreman on site signed a 1-page, double-sided, rental agreement that was given to him by NES Rentals.

A paragraph including an indemnification clause was posted on the backside of the rental agreement. The indemnification clause stated that Steine indemnified NES against any claims arising out of negligence as to the use of the rented boom lift. 

The boom lift was used by Steine for several months. A maintenance check was completed on Sept. 27, 2006 by NES. But on Nov. 20, 2006, Menendez was operating the lift when he was killed. His family filed a wrongful-death lawsuit against NES and Wal-Mart, alleging that his death was caused by their negligence.

After the suit was filed, NES demanded that Steine indemnify any assets.Steine refused and NES filed a suit against Steine in November 2010. The parties filed cross-motions for summary judgment and the magistrate judge decided in favor of Steine. NES took this appeal to the U.S. Court of Appeals for the Seventh Circuit in Chicago.

NES argued that the rental agreement included an indemnification provision and that the provision required Steine to indemnify NES for claims made against it, including that brought by the Menendez family. The court indicated that Indiana law controlled.  Indiana law allows parties to enter into indemnification clauses even when the clause permits a party to indemnify the other for their own negligence.

However, Indiana has strictly construed indemnification clauses where negligence is abated making it a harsh burden.  Moore Heating & Plumbing, Inc. v. Huber, Hunt & Nichols.

Indiana courts have ruled that a party may be an obligated in a contract for indemnification only if the party knowingly and willingly agreed to that indemnification and the clause was stated clearly and unequivocally.

In reviewing the rental agreement signed by Steine’s foreman, the court found that the language was not clear and unequivocal as to whether Steine agreed to indemnify NES for acts caused by NES’ own negligence.

Instead, the court held that the rental agreement  specified only that Steine must indemnify NES for negligence generally.The contract did not meet the harsher requirements of Indiana law, which  required explicit reference to indemnification of negligence.  The district court’s order in favor of Steine was affirmed. 

NES Rentals Holdings, Inc. v. Steine Cold Storage, Inc., No. 12-1401 (April 8, 2013).

Kreisman Law Offices has been handling wrongful death cases, construction accident cases and worker injury cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Schaumburg, Rolling Meadows, Evanston, Glenview, Park Ridge, Forest Park, Norridge, Oak Lawn, Chicago (Englewood), Matteson, Chicago (Woodlawn), Chicago (Washington Park), Riverdale, Calumet Park, Blue Island, Robbins and Elmwood Park, Ill.

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