Opinion Information Sheet

			

Snohomish County Pub. Transp. Benefit Area Corp. v. First Group America, Inc.

                                         No. 83795-3

       STEPHENS, J.         (dissenting) -- This case turns on whether the parties'

indemnity provision clearly and unequivocally required First Transit to indemnify 

against losses caused by Community Transit's negligence.  The majority holds it 

does, relying on decisions from other jurisdictions.  Whatever the rule may be in 

other jurisdictions, this court has held that indemnity provisions covering losses that 

result from the indemnitee's own negligence "are not favored and are to be clearly 

drawn and strictly construed, with any doubts therein to be settled in favor of the 

indemnitor."   Jones v. Strom Constr. Co., 84 Wn.2d 518, 520, 527 P.2d 1115 

(1974).  Our reluctance to find that parties intend to indemnify against losses caused 

by the indemnitee's negligence stems from our desire to "prevent injustice, and to 

insure that a contracting party has fair notice that a large and ruinous award can be 

assessed against it solely by reason of negligence attributable to the other 

contracting party."  McDowell v. Austin, 105 Wn.2d 48, 53, 710 P.2d 192 (1985)  

Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

(citing  Joe Adams & Son v. McCann Constr. Co., 475 S.W.2d 721, 722 (Tex. 

1971)). 

       Under Washington law, only "'clear and unequivocal'" language showing the 

parties' intent to cover losses resulting from the indemnitee's concurrent negligence 

will overcome this reluctance.  See McDowell, 105 Wn.2d at 52-53 (quoting 

Maurice T. Brunner, Annotation, Liability of Subcontractor Upon Bond or Other 
Agreement Indemnifying General Contractor Against Liability for Damage to 

Person or Property, 68 A.L.R.3d 7, 69 (1976)).  "[F]or an indemnitor to be found 

responsible for the indemnitee's own negligence," -- sole or concurrent -- "the 

agreement must be clearly spelled out."  Nw. Airlines v. Hughes Air Corp., 104 

Wn.2d 152, 158, 702 P.2d 1192 (1985).   

       Applying this standard, it is clear the indemnity provision at issue falls short 

of the unequivocal language Washington law requires.  Therefore, I respectfully 

dissent. 

                                         ANALYSIS

       The majority disregards this court's move toward a narrow interpretation of 

indemnity provisions based on the concerns articulated in McDowell.  This 

disregard is evidenced by the majority's citation to Cope v. J.K. Campbell & 

Associates, 71 Wn.2d 453, 429 P.2d 124 (1967), as supporting its conclusion that 

the parties here clearly and unequivocally intended to indemnify against losses 

caused by Community Transit's negligence.  Majority at 12 (citing Cope, 71 Wn.2d 

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Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

at 454).  Importantly, in cases after Cope we have moved away from our previous 

willingness to generously read indemnity provisions.          A brief sketch of this history 

illustrates why the majority's citation undercuts its view.

       Historically, courts identified "a clear and unequivocal intention to indemnify 

for indemnitee's own negligence by looking at the entire contract or at the all-

encompassing language of the indemnification clause."  Nw. Airlines, 104 Wn.2d at 

155.  For example, in Tucci & Sons, Inc. v. Madsen, Inc., 1 Wn. App. 1035, 467 

P.2d 386 (1970), overruled by Jones, 84 Wn.2d at 523), a subcontractor entered 

into an agreement to perform electrical services for the general contractor.  The 

agreement contained an indemnity provision that required the subcontractor 

(indemnitor) to reimburse the general contractor (indemnitee) for all losses "'arising 

out of, in connection with, or incident to'" the subcontractor's performance of the 

contract.  Tucci, 1 Wn. App. at 1036.  One of the subcontractor's workers was 

injured on the job as a result of the general contractor's negligence, and the worker 

sued the general contractor.  The general contractor tendered the defense of the 

action to the subcontractor under the indemnity provision.  The court concluded that 

based on the "'sweeping and all-embracing'" language of the indemnity provision, 

the losses resulting from the general contractor's own negligence were covered, 

even though they were not expressly mentioned in the indemnity provision.  Id. at 

1038.  The subcontractor was thus obligated to indemnify the general contractor for 

losses resulting from the general contractor's own negligence.  

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Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

       We later moved away from such an expansive reading of the broad terms of 

an indemnity clause.  In Jones, we interpreted an indemnity clause identical to the 

one analyzed in Tucci, which required the indemnitor to reimburse the indemnitee 

for all losses "'arising out of, in connection with, or incident to'" the indemnitor's 

performance of the contract.  Jones, 84 Wn.2d at 521.  Overruling Tucci, we 

concluded that the parties' intent to indemnify for the indemnitee's own negligence 

was not clear and unequivocal, despite the clause's broad and seemingly all-

inclusive language.  Id. at 521-23.  We did not purport to specify the language that 

would be necessary to demonstrate the parties' clear and unequivocal intent but 

merely noted that failing to mention the indemnitee's conduct at all in the indemnity 

clause fell short of providing the requisite clarity.  See id at 521-22.

       Following Jones, we have consistently required the parties' intent to cover 

losses caused by the indemnitee's own negligence to be manifest in the contractual 

language.  We have endorsed a stringent analysis that requires specific language 

showing an intent to indemnify for the indemnitee's own negligence.  Nw. Airlines, 

104 Wn.2d at 156.  This intention must be "clearly spelled out."              McDowell, 105 

Wn.2d at 54.  Our precedent demonstrates that "clear and unequivocal" means just 

what it says: the intent to indemnify for losses caused by the indemnitee's own 

negligence must be expressly and specifically stated in the indemnity provision.  

       Notwithstanding our stringent test, the majority finds this intent by 

insinuation.   Because the indemnity provision specifically excluded coverage for 

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Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

situations in which Community Transit's sole negligence caused the loss, the 

majority reasons it must have included circumstances in which the loss was caused 

by Community Transit's concurrent negligence.  Majority at 11. 

       This holding is contrary to our requirement that indemnification provisions be 

express and specific before we will find coverage for losses stemming from the 

indemnitee's negligence.  See McDowell, 105 Wn.2d at 54; Nw. Airlines, 104 

Wn.2d at 155-56, 158; Jones, 84 Wn.2d at 521-23.  Washington adheres to the 

view that a contract "cannot define what is included in an indemnity provision by 

stating what obligations are outside that indemnity agreement."  Quorum Health 

Res., LLC v. Maverick County Hosp. Dist., 308 F.3d 451, 462 (5th Cir. 2002); see 

also Atl. Richfield Co. v. Petroleum Pers., Inc., 768 S.W.2d 724, 725 (Tex. 1989) 

(contract indemnifying against all claims except those resulting from "the sole 

negligence of [the indemnitee]" did not cover indemnitee's concurrent negligence 

because "it specifically stated what was not to be indemnified" and it required the 

indemnitor "to deduce his full obligation from the sole negligence exception" (citing 

Singleton v. Crown Cent. Petroleum Corp., 729 S.W.2d 690 (Tex. 1987)).  The 

agreement between Community Transit and First Transit lacked the requisite clarity 

and specificity, and it therefore should not be construed to cover losses resulting 

from Community Transit's own negligence.

       In short, the majority would have us return to the old approach and apply the 

"clear and unequivocal" rule broadly.  Contrary to the majority's view, McDowell's 

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Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

isolated citation to Cope did not thrust us back to the pre-Jones era of construing 

indemnity provisions based on their broad and all-encompassing language.  Nor 

does "overwhelming authority" from other jurisdictions compel us to reverse the 

trend of our own precedent, especially because at least two of the jurisdictions the 

majority relies on have taken the same narrow approach that we have used.  See 

Leadership Hous. Sys. of Fla., Inc. v. T&S Elec., Inc., 384 So. 2d 733, 734 (Fla. 

Dist. Ct. App. 1980) (contract did not clearly cover indemnitee's concurrent 

negligence where it indemnified for all losses "'[e]xcept due to [indemnitee's] sole 

negligence'" (emphasis omitted)); Guy F. Atkinson Co. v. Schatz, 102 Cal. App. 3d 

351, 354, 358-59, 161 Cal. Rptr. 436 (1980) (contract did not clearly and explicitly 

cover indemnitee's concurrent negligence where it indemnified all losses "unless 

due solely to [indemnitee's] negligence"). 

       Indeed, this trend toward a narrower application of the "clear and 

unequivocal" rule highlights a common division in approaches among courts of 

various jurisdictions.  The rationale for adopting a narrow approach was articulated 

by the Texas Supreme Court when it shifted to a stricter version of the "clear and 

unequivocal" rule that it calls the "express negligence doctrine":

              As we have moved closer to the express negligence doctrine, the 
       scriveners of indemnity agreements have devised novel ways of writing 
       provisions which fail to expressly state the true intent of those provisions. 
       The intent of the scriveners is to indemnify the indemnitee for its 
       negligence, yet be just ambiguous enough to conceal that intent from the 
       indemnitor.  The result has been a plethora of law suits to construe those 
       ambiguous contracts.  We hold the better policy is to cut through the 
       ambiguity of those provisions and adopt the express negligence doctrine.

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Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 707-08 (Tex. 1987).  Although 

we have not adopted a different name for the "clear and unequivocal" rule, the 

definite trend of our precedent has been to narrowly apply the rule.  The fact that a 

contrary approach has been taken in other jurisdictions should not compel us to 

reverse this trend.  Instead, absent "'a clear showing that [our] established rule is 

incorrect and harmful,'" State v. Barber, 170 Wn.2d 854, 863, 248 P.3d 494 (2011)

(quoting In re Rights to Waters of Stranger Creek, 77 Wn.2d 649, 653, 466 P.2d 

508 (1970)), we should remain true to our precedent.

       As discussed above, this precedent requires a clear, specific, and explicit 

statement showing intent to cover an indemnitee's negligence.                    Because the 

provision here did not explicitly require indemnification in the event of Community 

Transit's concurrent negligence, it fell short of our requirements. 

       In the absence of clear and unequivocal language providing coverage for 

Community Transit's own negligence, the sole triggering condition under the 

parties' indemnity provision is First Transit's conduct.  Thus, for the indemnity 

provision to apply, the losses must have been either "'in connection with'" First 

Transit's work under the contract or "'caused or occasioned . . . by'" First Transit's 

presence in proximity to Community Transit's property.  Snohomish County Pub.

Transp. Benefit Area Corp. v. Firstgroup Am., Inc., noted at 152 Wn. App. 1021, 

2009 WL 3018749, at *5.

       Here, the "in connection with" clause and the "caused or occasioned by"

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Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

clause of the indemnity provision suggests that First Transit's conduct in 

proximately causing the accident can trigger the duty to indemnify.  In Jones, the 

indemnity provision granted coverage for losses "'arising out of,' 'in connection 

with,' 'or incident to' the [indemnitor's]  'performance' of [the contract]."                84 

Wn.2d at 521 (emphasis added).  We explained that under the plain language of the 

provision in that case, indemnity was not triggered unless there was an "act or 

omission" on the part of the indemnitor that contributed to the losses.  Id. at 521-22.  

And such an "act or omission," we noted, required more than the indemnitor's but-

for causal connection to the losses; the indemnitor's mere presence at the scene of 

the accident was not enough to trigger indemnity.  See id.  Likewise, our cases 

interpreting the phrases "caused by" and "occasioned by" indicate that losses are 

not caused or occasioned by a condition unless that condition is more than an 

indirect cause-in-fact of the losses.  See N. Pac. Ry. Co. v. Sunnyside Valley Irrig. 

Dist., 85 Wn.2d 920, 922-23, 540 P.2d 1387 (1975) (interpreting "occasioned by"); 

Dirk v. Amerco Mktg. Co. of Spokane, 88 Wn.2d 607, 610-11, 565 P.2d 90 (1977) 

(interpreting  "occasioned by");  Scruggs v. Jefferson County, 18 Wn. App. 240, 

244, 567 P.2d 257 (1977) (interpreting "caused by").  Accordingly, if the First 

Transit bus was not a proximate cause of the accident, the indemnity provision is not 

triggered. 

       Here, First Transit's presence at the scene was nothing more than a cause-in-

fact of the resulting losses.  Indeed, First Transit's contribution to the accident was a 

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Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

complete fortuity.  The proximate causes of the accident were the Honda vehicle 

and the Community Transit bus, both of which rear-ended the vehicles in front of 

them.  It may be the case that but for the First Transit bus's location in front of the 

Community Transit bus, the passengers'               injuries would not have occurred.  

However, the First Transit bus's fortuitous presence was not a proximate cause of 
the accident.1   It was at most an indirect cause-in-fact of any losses to Community 

Transit.  In short, the First Transit bus simply had the misfortune of being in the 

wrong place at the wrong time.  This chance involvement in the accident did not 

trigger First Transit's duty to indemnify Community Transit.

                                       CONCLUSION

       The concern we expressed in McDowell remains: we should read indemnity 

provisions with the goal of "prevent[ing]" the  "injustice" resulting from a broad 

application of the "clear and unequivocal" rule.          McDowell, 105 Wn.2d at 53.           I 

believe the majority errs in veering off the course we have charted since Jones and 

in following the contrary approach of other jurisdictions.  We should hew closely to 

our precedent and refuse to find intent to indemnify against losses resulting from an 

       1 At the Court of Appeals, First Transit suggested that "in connection with"
required not only proximate cause but also negligence on the part of the indemnitor.  Br. 
of Resp't at 13 n.3.  In other words, First Transit argued that Jones's "act or omission"
requirement is synonymous with negligence.  It is true that Jones's use of the phrase "act 
or omission" suggests some relationship to negligence.  See Jones, 84 Wn.2d at 520-22.  
But the touchstone of indemnity is causation, not negligence.  See, e.g., Cont'l Cas. Ins. 
Co. v. Mun. of Seattle, 66 Wn.2d 831, 835-36, 405 P.2d 581 (1965).  Parties can agree to 
pin indemnity to the indemnitor's nonnegligent actions that result in claims against the 
indemnitee.  Id.  Here, it does not matter whether "act or omission" requires negligence, 
however, because First Transit's conduct was merely a cause-in-fact of the losses, which 
itself falls short of an "act or omission" under Jones.  See Jones, 84 Wn.2d at 521-22.

                                              -9- 

Snohomish County Pub. Transp. Benefit Area Corp. v. Firstgroup Am., Inc., 83795-3
(Stephens, J. Dissent)

indemnitee's negligence unless such intent is specifically and explicitly stated in the 

parties' contract.  Here, it was not.  Thus, the indemnification provision does not 

encompass losses covered by Community Transit's concurrent negligence.  Finally, 

because First Transit was not a proximate cause of Community Transit's losses, the 

duty to indemnify was not otherwise triggered.  The trial court had it right when it 

granted summary judgment in First Transit's favor.  The Court of Appeals had it 

right when it affirmed. I would affirm the Court of Appeals. 

AUTHOR:
       Justice Debra L. Stephens

WE CONCUR:

       Justice Tom Chambers

       Justice Mary E. Fairhurst                        Richard B. Sanders, Justice Pro 
                                                        Tem.

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