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COA: Express Contract Provisions on Indemnity Control Where Parties Were Found Liable On Different Grounds

By Sean E. Andrussier

Today in Charlotte Motor Speedway v. Tindall Corp. the Court of Appeals (COA) held that indemnification provisions in a construction contract prevented Speedway from recovering anything from Tindall on an "implied-in-law" theory of indemnification. This case arose out of the 2000 collapse of a pedestrian walkway that went from the Charlotte Motor Speedway to its parking lot. Tindall constructed the walkway for Speedway. After the collapse, pedestrians sued Speedway and Tindall for damages. The pedestrian cases were consolidated, and Tindall was found liable for negligent construction of the walkway. Speedway was found liable only for a breach of a contract with the NC DOT, of which the pedestrians were third party beneficiaries. Once the pedestrian cases were consolidated and resolved, Speedway sought indemnification from Tindall.

Speedway argued that it was entitled to indemnity implied-in-law, because its liability was derived from Tindall's negligent walkway construction. Tindall argued that the indemnification provision in the construction agreement limited its liability to Speedway because the contract provided that Speedway would only be indemnified for injuries that occurred in the course of the walkway construction. The COA held that Speedway could not circumvent the express contract provisions when its liability in the pedestrian litigation was only in contract and not in tort (and therefore not derivative of Tindall's). Thus, Speedway was not be entitled to indemnity for Tindall's negligence when it had not been adjudicated to have tort liability itself.

Full post as published by North Carolina Appellate Blog on February 03, 2009 (boomark / email).