Broadened Application of Anti-Indemnity Statute Furthers Public Policy Goal
June 9th, 2017
Recent Court of Appeals decision in Wilhelm Construction, Inc. and J.C. Ripberger Construction Corporation v. Secura Insurance, a Mutual Company and Davenport Masonry, Inc., (Ind. Ct. App., May 21, 2017) furthers policy goal of Indiana’s Anti- Indemnity Statute regarding liability arising out of a non-delegable duty.
A mason, Mark Rhone, sued the general contractor, Wilhelm, and subcontractor, Ripberger, after sustaining work related injuries on a construction project. Rhone was employed by the project’s sub-subcontractor, Davenport. Rhone alleged that Wilhelm and Ripberger breached their non-delegable duty to provide safe working conditions . Wilhelm and Ripberger sought indemnity based on a contractual provision between Ripberger and Davenport. The court held both the general and subcontractor undertook a non-delegable duty to provide safe working conditions, breached that duty, and were not entitled to indemnity from Davenport, because the indemnification provision was void under Indiana’s Anti-Indemnity Statute.
The Court of Appeals affirmed the decision of the lower court and considered the indemnification provision within the contract to be void and against public policy. Indiana’s Anti-Indemnity Statute aims to incentivize general contractors and subcontractors to establish and maintain safe working conditions by prohibiting negotiations that would inevitably shift the financial burden and liability between parties, resulting in increased carelessness on site.
The Court reasoned that honoring the indemnity provision in the Ripberger-Davenport contract would transform Wilhelm’s and Ripberger’s non-delegable duty into a delegable duty, which would undermine the sole purpose of the statute. The Court broadened the application of the Anti-Indemnity Statue from its previous holding in Moore Heating & Plumbing, Inc. v. Huber, Hunt & Nichols, 583 N.E.2d 142 (Ind. Ct. App. 1991), and held that the Statute applies to indemnity provisions purporting to indemnify the contractors for the negligence of the contractor’s agents and independent contractors who are directly responsible to the promise.
Ultimately, the Court of Appeals affirmed the trial court’s entry of summary judgment on behalf of Davenport and its insurer, Secura.