Virginia Code Sec. 11-4.1 makes indemnification provisions in construction contracts that are so broad as to indemnify the indemnitee from its own negligence unenforceable. Of course, this begs the question as to what language of indemnification provisions make them unenforceable.
A case from the City of Chesapeake Virginia Circuit Court examined this question. In Wasa Props., LLC v. Chesapeake Bay Contrs., Inc., 103 Va. Cir 423 [unfortunately I can’t find a copy to which to link], Wasa Properties (“Wasa”) hired Chesapeake Bay Contractors (“CBC”) to perform utility work at Lake Thrasher in the Tidewater area of Virginia. Wasa then alleged that CBC breached the contract and caused over $400,000 in damages due to incorrectly installed water lines. Wasa used the following indemnification language as the basis for its suit:
To the fullest extent permitted by law, the Contractor shall indemnify and hold harmless the Owner and his agents and employees from and against all claims, damages, losses, and expenses, including but not limited to attorney’s fees arising out of or resulting from the performance of the Work.
CBC sought to dismiss the suit because the provisions stated above required CBC to indemnify Wasa for its own negligence.
The Court disagreed stating that, based on the totality of the contract, the definition of the Work under the contract, and the fact that CBC was the party to perform the Work, the provision did not expressly require indemnification for Wasa’s negligence in violation of Va. Code Sec. 11-4.1. The Court further stated that the circumstances of the claim for indemnification were not relevant to the analysis in light of the language of the contract. In short, the claim for indemnification could proceed.
My takeaways from this case are twofold. The first is that the contract is king here in Virginia. The unambiguous language of a contract will almost always trump other circumstances surrounding your contract claim or defense. The second is that it is likely that the “To the fullest extent permitted by law” language was part of the analysis. This language arguably limited the breadth of the provision.
Finally, and as I often do here at Musings, I recommend the advice of an experienced Virginia construction attorney when analyzing potential contract language and legal strategies relating to your project and potential claims and defenses.
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