Subcontractors generally rent equipment they need for particular jobs. A painting and waterproofing company did just that when it needed a 20-foot scissor lift. And as is customary in the industry, the back of the equipment rental agreement contained a broad indemnity provision. This one stated:
Lessee shall indemnify and hold Lessor harmless from any claims of third parties for loss, injury and damage to their persons and property arising out of Lessee’s possession, use, maintenance or return of equipment, including legal costs incurred in defense of such claims.
When a temporary employee of the painting company fell off the lift, he filed suit naming the rental company. He argued that his injuries were the result of the rental company’s failure to properly maintain its equipment. He didn’t sue the painter which had leased the equipment; however, the rental company did sue the painter, relying on the contractual indemnification quoted above.
The court looked closely at this provision. It found no clear language stating that the painting company was agreeing to indemnify and release the rental company for the rental company’s own negligence – something which courts have held is absolutely necessary to enforce an indemnity for one’s own wrongful conduct. The language here just wasn’t clear or specific enough for the rental company to pass liability to the painter, especially when there was some question as to the rental company’s own negligence in maintaining the equipment.
It happens more often than you might suspect. A friend...