24 Fla. L. Weekly Supp. 133a

Online Reference: FLWSUPP 2402IGLE

Torts — Negligence — Exculpatory clause in vendor agreement — Motion to dismiss vicarious liability claim brought by injured vendor against company whose independent contractor dropped crate onto vendor off of company-owned forklift — Indemnification clause in vendor’s contract, which company seeks to use as exculpatory clause, does not meet requirement that exculpatory clause clearly and unequivocally place ordinary and knowledgeable person on notice of what he is contracting away where clause is not labeled as exculpatory, waiver or release and body of clause does not purport to waive, release or discharge any claims by vendor against company — Further, clause only provides for indemnification against claim for personal injury or workers’ compensation benefits brought by employees of vendor, not vendor himself

ROBERTO IGLESIAS, and CARMEN IGLESIAS, his wife, Plaintiffs, v. CRANE WORLDWIDE LOGISTICS LLC, A foreign limited liability company, and JUAN DE DIOS, Defendants. Circuit Court, 11th Judicial Circuit, in and for Miami-Dade County. General Jurisdiction Division. Case No. 15-9998-CA-22. May 5, 2016. Michael A. Hanzman, Judge. Counsel: Keith Chasin, Miami. Charles Watkins, Miami.

ORDER ON CROSS-MOTIONS FOR

SUMMARY JUDGMENT RE: INDEMNIFICATION

 
I. Introduction

Defendant Crane Worldwide Logistics, LLC (“Defendant” or “Crane”) moves for Final Summary Judgment, insisting that Plaintiff’s claims are barred (albeit indirectly) by the terms of an indemnification clause contained within the “Vendor Agreement” entered into by the parties. Plaintiff Roberto Iglesias (“Plaintiff” or “Mr. Iglesias”) cross-moves, arguing that the “indemnification” provision relied upon by Crane does not “exculpate” it from liability as a matter of law. Because the Court finds that: (a) the indemnification provision is being used as — but does not meet the legal requirements of — an “exculpatory” clause; and (b) the provision of the indemnification clause relied upon by Crane does not clearly and unambiguously apply to claims brought by Mr. Iglesias himself, Defendant’s motion is DENIED, and Plaintiff’s cross-motion is GRANTED.1

 II. Facts 

Mr. Iglesias suffered severe injuries when a cargo crate weighing approximately 1600 pounds fell off a forklift and landed on him. The forklift was owned by Crane and was being operated by Juan de Dios Colinos, its “independent contractor.” Plaintiff alleges that de Dios Colinos attempted to lift the crate with an inappropriate forklift and safety equipment, and that Crane is vicariously liable for his negligence. 

As a condition to being retained by Crane to assist in moving this crate (and other cargo) Mr. Iglesias executed a “Vendor Agreement” which provided:

6. Indemnification: Vendor shall be responsible for and shall indemnify and save harmless CWW, it affiliated entities, and their employees and agents against any and all loss, claim, or damage, including reasonable attorneys’ fees and court costs arising out of or resulting from (i) the negligent or intentional acts or omissions of Vendor, its employees, agents or subcontractors (ii) Vendor or any of its employees, agents, or subcontractors failure to comply with applicable federal state or local laws, regulations, or orders. (iii) breach of any obligation of Vendor under this Agreement, and (iv) any claim for personal injury or worker’s compensation benefits of Vendor’s employees related to the provision of services or products hereunder (regardless of the cause or the negligence of CWW, its employees, agents or subcontractors).

Id. The agreement was prepared by Crane (identified as CWW) and Plaintiff executed it as the “Vendor.” Plaintiff is an individual laborer who has no “employees.”

According to Crane this indemnity provision requires that Mr. Iglesias indemnify and hold it harmless “for negligent or intentional acts or omissions of Vendor” (i.e., Mr. Iglesias), and since Mr. Iglesias’ negligence contributed to his injuries he will be required to “reimburse” (i.e., indemnify) Crane for the amount of any judgment he himself might receive, plus attorney’s fees and costs. For this reason, Crane maintains that Mr. Iglesias cannot possibly “recover” anything through this case, and it should therefore be disposed of as a matter of law. The Court disagrees.

III. Governing Law 

A “contract for indemnity is an agreement by which the promisor agrees to protect the promisee against loss or damages by reason of liability to a third party.” Dade County Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638 (Fla. 1999) [24 Fla. L. Weekly S71a. Sanislo v. Give Kids the World, Inc., 157 So. 3d 256 (Fla. 2015) [40 Fla. L. Weekly S79a] (indemnification agreements allocate the risk of liability for injuries to “an unknown third party”); Ivey Plants, Inc. v. FMC Corp., 282 So. 2d 205 (Fla. 4th DCA 1973) (“an indemnity contract undertakes to protect the promisee (indemnitee) against loss or damage through a liability. . . to a third person”). “An exculpatory clause, on the other hand, shifts the risk of injury and deprives one of the contracting parties of his or her right to recover damages suffered due to the negligent act of the other contracting party.” Sanislo, supra at 265, citing Ivey Plants, Inc. v. FMC Corp., 282 So. 2d 205 (Fla. 4th DCA 1973).

“Although there is a distinction in definition between an exculpatory clause and an indemnity clause in a contract, they both attempt to shift ultimate responsibility for negligent injury, and so are generally construed by the same principles of law.” O’Connell v. Walt Disney World Co., 413 So. 2d 444 (Fla. 5th DCA 1982). Exculpatory clauses, however, “are looked upon with disfavor” and enforceable only “where the intention to be relieved from liability was made clear and unequivocal and the wording was so clear and understandable that an ordinary and knowledgeable person will know what he or she is contracting away.” Sanislo, supra at 261; Gayon v. Bally’s Total Fitness Corp., 802 So. 2d 420 (Fla. 3d DCA 2001) [26 Fla. L. Weekly D2847b]. This is so because such clauses “relieve one party of the obligation to use due care and shift the risk of injury to the party who is probably least equipped to take the necessary precautions to avoid injury and bear the risk of loss.” Sanislo, supra at 260.

IV. Analysis 

Here, Crane does not face exposure to a “third party” at all. It’s “exposure” is to Mr. Iglesias, the other party to its “Vendor Agreement.” Crane is therefore attempting to use the “indemnification clause” not for purposes of seeking “indemnification” against “loss or damage by reason of liability to a third party,” Dade County School Board, supra, — but rather as an “exculpatory” clause relieving it from liability and depriving “one of the contracting parties [Mr. Iglesias] of his . . . right to recover damages suffered due to the negligent act of the other party [Crane].” Sansilo, supra at 265. And while it may be true, as the Sansilo court noted, that “indemnification agreements can sometimes produce the same result as an exculpatory provision by shifting responsibility for the payment of damages back to the injured party”, Id. at 265, citing O’Connell v. Walt Disney World Co., 413 So.2d 444, 446 (Fla. 5th DCA 1982), when an “indemnification” clause is being employed to deprive a contracting party of his right to recover damages suffered due to the negligence of the other contracting party, the wording of the agreement must again clearly and unequivocally place an ordinary person on notice of what he is “contracting away.” Sansilo, supra at 261.2 

Applying this well-settled standard, the “clause” at issue here fails miserably. First, paragraph 6 is not even labeled an “exculpatory,” “waiver” or “release” provision, unlike the clauses at issue in the cases Crane relies upon. See, e.g., Shaw v. Premier Health & Fitness Ctr., Inc., 937 So. 2d 1204 (Fla. 1st DCA 2006) [31 Fla. L. Weekly D2390a] (“[t]he waiver provision at issue here stated” that members (plaintiff) released and discharged defendant from liability and that member “understands that this is a waiver and release of liability”); Middleton v. Lomaskin, 266 So. 2d 678 (Fla. 3d DCA 1972) (“waiver of liability” clause expressly released and discharged landlord from any claims including those based upon its own negligent acts).3 Nor does the body of the clause purport to “waive,” “release” or “discharge” any claims Mr. Iglesias himself may have against Crane. To the contrary, claims Mr. Iglesias may himself possess in the event he were to be injured by Crane’s neglect are not addressed at all, and this clause therefore does not come close to clearly and unequivocally placing “an ordinary and knowledgeable person” on notice of “what he or she is contracting away.” Sansilo at 261. The bottom line is that while an exculpatory clause may operate to absolve a defendant from liability arising out of his own negligent acts, “such clauses are not favored by the courts” and will be enforced only when they clearly and plainly express an intent to release or discharge one contracting party from liability to the other, including liability for damage caused by its own conduct. Sansilo, supra; Applegate v. Cable Water Ski, L.C., 974 So. 2d 1112 (Fla. 5th DCA 2008) [33 Fla. L. Weekly D146a] This clause abjectly fails to do so.4 

 Aside from not even remotely placing Mr. Iglesias on notice of what he was supposedly “contracting away,” the portion of the indemnification clause relied upon by Crane also does not clearly and unequivocally indemnify it against loss resulting from acts of Mr. Iglesias’ himself.The “indemnification” clause is triggered under four specific circumstances:

i. The negligent or intentional acts or omissions of Vendor, its employees, agents or subcontractors; or

ii. Vendor or any of its employees, agents, or subcontractors failure to comply with applicable federal, state or local laws, regulations, or orders, or

iii. Breach of any obligation of Vendor under this Agreement, or

iv. Any claim for personal injury or worker’s compensation benefits of Vendor’s employees related to the provision of services or products hereunder (regardless of the cause or the negligence of CWW, its employees, agents or subcontractors).

See Vendor Agreement, ¶ 6 (emphasis added). Crane relies exclusively upon sub-clause (iv), and claims that it applies here because Mr. Iglesias is an “employee” of the Vendor (i.e., that he is an employee of himself).5 

 Contrary to Crane’s flawed reading of sub-clause (iv), the indemnification provision as well as other parts of the “Vendor Agremeent,” clearly and repeatedly draw a distinction between the Vendor [Mr. Iglesias] and “its employees.” For example, sub-clause (i) requires indemnity for any claim or loss resulting from the negligent or intentional acts or omissions of either the “Vendor,” or “its employees.” Sub-clause (ii) also compels indemnification if the “Vendor or any of its employees” fails to comply with applicable federal, state or local laws.6 In contrast, sub-clause (iv) only mandates indemnity against a claim for personal injury or worker’s compensation benefits brought by “Vendor’s employees.” Thus, a layperson of ordinary intelligence could easily — and reasonably — conclude that sub-clause (iv) — unlike sub-clauses (i) and (ii) — is implicated only if a third party “employee” asserts a claim — precisely what an indemnity provision is intended to protect against. See Sansilo at 261(a contract for indemnity protects against claims asserted by a third party); State Farm Fire & Cas. Co. v. Castillo, 829 So. 2d 242 (Fla. 3d DCA 2002) [27 Fla. L. Weekly D1845a] (court’s duty is to apply terms of agreement as they would be understood by the “man on the street”). That is exactly what sub-clause (iv) plainly states, and it is not the Court’s job to re-write it so as to expand its scope. Gulliver Sch., Inc. v. Snay, 137 So. 3d 1045 (Fla. 3d DCA 2014) [39 Fla. L. Weekly D457a] (‘[w]here contracts are clear and unambiguous, they should be construed as written, and the court can give them no other meaning”). And at the very least the clause is ambiguous on this point and must therefore be construed against Crane.

V. Conclusion 

As its drafter, Crane could easily have placed in the “Vendor Agreement” an “exculpatory” clause that clearly “released” and “discharged” it from any claims by Mr. Iglesias, including those arising out of Crane’s own negligence. See Shaw, supra. Mr. Iglesias would have then been put on notice of what he was “contracting away.” Sansilo, supra at p. 261. But for whatever reason Crane chose not to secure an “exculpatory” clause at all — let alone one that met the requirements of Florida law.

Nor did Crane draft its indemnity clause in a manner that clearly and unequivocally expressed an intent that it be indemnified against claims brought by Mr. Iglesias himself. It instead chose — for whatever reason — to draft the indemnity sub-clause relied upon here (i.e., sub-clause (iv)) so as to cover only claims asserted by a Vendor’s “employees” — not the Vendor, even though it is indemnified against claims by either in other sections of the same indemnification provision.

Had Crane wanted to insulate itself from claims by Mr. Iglesias it should have secured a plain and clear exculpatory agreement explicitly “releasing,” “waiving” and “discharging” any liability or — at the very least — an indemnification clause making it clear that Mr. Iglesias was required to hold it harmless against even suits brought by himself. Crane did neither, and this Court will not “re-write” its voluntary contract under the guise of judicial interpretation. It will apply the indemnification clause as plainly written. And as plainly written it does not provide any protection against the claims Mr. Iglesias asserts here.

Like most “hail Mary’s,” Crane’s last second pass falls incomplete. Its Motion for Summary Judgment is DENIED. And because the “indemnification” clause — as drafted by Crane — has no application to the claims asserted by Mr. Iglesias, Plaintiff’s Cross-Motion for Summary Judgment is GRANTED. __________________

1Crane’s indemnity claims are set forth in Counts I and II of its Counterclaim which it sought leave to file on April 11, 2016. Though the case was set for trial during the two week period commencing April 26, 2016, the Court granted Crane leave to file this “dispositive” claim it apparently “overlooked” during the first year this case was pending.

2Though in theory an indemnification agreement may be used to shift responsibility back to the injured party — thus providing the same result as an exculpatory clause — no case cited by the parties — or located by the Court — actually permitted this to occur. In O’Connell the court did say that “an indemnification clause attempts to shift the responsibility for the payment of damages to someone other than the negligent party (sometimes back to the injured party, thus producing the same result as an exculpatory provision)” — a statement repeated by our Supreme Court in Sansilo. But Sansilo and other cases routinely point out that indemnification clauses protect against exposure to “third parties,” and no case the Court is aware of has actually applied an “indemnification” clause to shift liability “back to” an injured plaintiff. In any event, the Court need not decide whether using an “indemnification” clause to “exculpate” a defendant from liability to the indemnitor himself is permissible because the clause at issue here does not meet any of the legal requirements of an “exculpatory” provision.

3Middleton has apparently been legislatively overruled. See Ivey Plants, Inc. v. FMC Corp., 282 So. 2d 205 (Fla. 4th DCA 1973) (“[i]t is interesting to note that with the enactment of the ‘Residential Landlord and Tenant Act’ in 1973, the legislature has declared exculpatory clauses to be void and unenforceable, seemingly overruling the decision in Middelton v. Lomaskin, supra. (See Section 83.47, Chapter 73-330, Laws of Florida)”).

4Because the Court finds that the clause here does not meet the disclosure requirements of Florida law, in that it fails to clearly specify what rights Mr. Iglesias was allegedly “contracting away,” it need not address Plaintiff’s argument that enforcement of a proper “exculpatory” clause under the circumstances of this case — involving a dangerous instrumentality — would contravene public policy. See, e.g., John’s Pass Seafood Co. v. Weber, 369 So. 2d 616 (Fla. 2d DCA 1979) (refusing to enforce exculpatory clause so as to release commercial lessor from liability for failure to comply with fire code); Susco Car Rental Sys. of Fla. v. Leonard, 112 So. 2d 832 (Fla. 1959) (liability of the owner of a “dangerous agency who permits it to be used by another” may not be extinguished by the “terms of a bailment”).

5The Court initially believed that Crane was also relying upon sub-section (i) of the indemnity clause which — unlike sub-section (iv) — is not followed by the modifier making it clear that the indemnity obligation is triggered “regardless of the cause or negligence of CWW, its employees, agents or sub-contractors.” But because CWW has now stipulated that it is relying only on sub-section (iv) — which is clearly followed by this “modifier” — the Court need not address whether the “modifier” also applies to the other three sub-clauses. The Court notes, however, that when a statute or contract sets forth alternative clauses disjunctively, and requires that such “alternatives” be treated separately, language following one disjunctive clause is generally considered inapplicable to the subject matter of the preceding alternative clauses. See Fortune Ins. Co. v. Dep’t of Ins., 664 So. 2d 312 (Fla. 1st DCA 1995) [20 Fla. L. Weekly D2678d]. Each sub-clause in the indemnification provision here imposes a separate and distinct indemnity obligation under four separate, distinct, and “alternative” (i.e., disjunctive) circumstances. Yet the modifier which provides that Crane will be indemnified against claims or loss caused by its own negligence follows only sub-clause number (iv) and, as a result, may not modify the other three disjunctive and alternate indemnity obligations.

6See also Vendor Agreement, ¶ 12 (repeatedly distinguishing Vendor from its employees).

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