United Rentals Northwest, Inc. v. Yearout Mechanical, Inc.

2010 NMSC 030, 237 P.3d 728, 148 N.M. 426
CourtNew Mexico Supreme Court
DecidedJune 17, 2010
Docket31,860
StatusPublished
Cited by70 cases

This text of 2010 NMSC 030 (United Rentals Northwest, Inc. v. Yearout Mechanical, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United Rentals Northwest, Inc. v. Yearout Mechanical, Inc., 2010 NMSC 030, 237 P.3d 728, 148 N.M. 426 (N.M. 2010).

Opinion

OPINION

DANIELS, Chief Justice.

{1} The New Mexico Legislature has mandated that any indemnity clause in a construction contract that seeks to shift tort liability from one party to another “is void, unenforceable and against the public policy of the state.” NMSA 1978, § 56-7-l(A) (2005). In this ease, we answer a question that has been certified to us by the United States Court of Appeals for the Tenth Circuit: Is a contract for the rental of a scissor lift to be used in the construction of an aircraft hangar a “contract or agreement relating to construction, alteration, repair or maintenance of any real property,” and therefore a “construction contract” as defined in Section 56-7-l(E)? We hold that it is.

I. FACTUAL AND PROCEDURAL BACKGROUND

{2} In 2006, Yearout Mechanical, Inc., was a subcontractor installing duct work in the new Eclipse Aviation hangar at the Albuquerque International Sunport. To perform that work along the fifty-foot-high ceiling, Yearout rented a scissor lift on March 1 from an equipment rental company, United Rentals Northwest, Inc., which delivered the lift to the job site the same day.

{3} Under the terms of the rental contract, Yearout was not authorized to perform any repairs or maintenance on the scissor lift. The contract provided that “[sjhould the Equipment become unsafe, malfunction or require repair, Customer shall immediately cease using the Equipment and immediately notify United” and that “[i]f such condition is the result of normal operation, United will repair or replace the Equipment....” Year-out twice had to call United to the site to perform maintenance on the lift, once on March 28 and again on March 30.

{4} On April 1, two days after United’s last repair, two employees of Yearout, Anthony Magoffe and Camerino Michel Ramirez, boarded the aerial platform of the scissor lift in order to install new sections of duct work on the hangar ceiling. Routine inspections of the lift detected nothing that appeared to be abnormal before the men went aloft. After completing their tasks, Magoffe and Ramirez began their final descent when the scissor lift began rocking back and forth and then fell over sideways. In an effort to save himself, Magoffe grabbed onto a ceiling beam, but he was struck by the falling lift and fell headfirst to his death on the concrete floor nearly fifty feet below. Ramirez remained on the scissor lift’s platform during the fall but was ejected when the lift hit the ground. He died before he reached the hospital.

{5} The workers’ personal representatives brought wrongful death actions against both United and the manufacturer of the scissor lift, JLG Industries, Inc. United ultimately settled with the workers’ estates after several year’s of litigation. United then sued Yearout in federal court, arguing that Year-out should be required to reimburse United for its settlement of the workers’ suit, not because of any wrongdoing on Yearout’s part, but based instead on an “Indemnity/Hold Harmless” clause that was one of twenty-three “Additional Terms and Conditions” preprinted on the back side of United’s “Rental Out Contract” signed by Yearout when it rented the scissor lift:

3 INDEMN1TY/HOLD HARMLESS. TO THE FULLEST EXTENT PERMITTED BY LAW, CUSTOMER AGREES TO INDEMNIFY, DEFEND AND HOLD UNITED [RENTALS) HARMLESS PROM AND AGAINST ANY AND ALL LIABILITY, CLAIM, LOSS, DAMAGE OR COSTS (INCLUDING, BUT NOT LIMITED TO, ATTORNEYS’ FEES, LOSS OF PROFIT, BUSINESS INTERRUPTION OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES, DAMAGES RELATING TO BODILY INJURY, DAMAGES RELATING TO WRONGFUL DEATH) CAUSED BY OR IN ANY WAY ARISING OUT OF OR RELATED TO THE OPERATION, USE, MAINTENANCE, INSTRUCTION, POSSESSION, TRANSPORTATION, OWNERSHIP OR RENTAL OF THE EQUIPMENT, INCLUDING WHENEVER SUCH LIABILITY, CLAIM, LOSS, DAMAGE, OR COST IS FOUNDED, IN WHOLE OR IN PART, UPON ANY NEGLIGENT OR GROSSLY NEGLIGENT ACT OR OMISSION OF UNITED [RENTALS] OR THE PROVISION OF ANY ALLEGEDLY DEFECTIVE PRODUCT BY UNITED [RENTALS] THIS INDEMNITY PROVISION APPLIES TO ANY CLAIMS ASSERTED AGAINST UNITED [RENTALS] BASED UPON STRICT OR PRODUCT LIABILITY CAUSES OF ACTION OR BREACH OF WARRANTY

(approximate size of text in original).

{6} United argued that Yearout, by signing the rental contract, agreed to “indemnify, defend and hold United harmless from and against any and all liability ... relating to wrongful death” caused by (1) the operation “of the equipment, including ... [liability founded upon any] negligent act or omission of United,” (2) the provision of any “defective product by United,” or (3) any claims “based upon strict or product liability....” Yearout moved to dismiss the complaint on the ground that the indemnity clause was unenforceable under Section 56-7-1’s provisions invalidating indemnification clauses in contracts related to construction that would shift responsibility for wrongdoing from a culpable party to an innocent party. The United States District Court agreed that Section 56-7-1 encompassed rental contracts related to construction projects and granted Yearout’s motion to dismiss United’s claim. United appealed to the Tenth Circuit Court of Appeals, which submitted the issue to this Court, pursuant to the certification procedures of Rule 12-607 NMRA under NMSA 1978, Section 39-7-4 (1997).

II. DISCUSSION

A. Standard of Review

{7} This case presents a pure question of statutory interpretation. “The meaning of language used in a statute is a question of law that we review de novo.” Cooper v. Chevron U.S.A, Inc., 2002-NMSC-020, ¶ 16, 132 N.M. 382, 49 P.3d 61.

B. The Relevant Statutory Provisions

{8} The resolution of this case hinges on the interpretation and application of a statutory bar to indemnity clauses contained in “construction contracts”:

A provision in a construction contract that requires one party to the contract to indemnify, hold harmless, insure or defend the other party to the contract, including the other party’s employees or agents, against liability, claims, damages, losses or expenses, including attorney fees, arising out of bodily injury to persons or damage to property caused by or resulting from, in whole or in part, the negligence, act or omission of the indemnitee, its officers, employees or agents, is void, unenforceable and against the public policy of the state.

Section 56-7-l(A) (emphasis added). The Legislature has provided further guidance by defining the statutory term “construction contract”:

“[C]onstruction contract” means a public, private, foreign or domestic contract or agreement relating to construction, alteration, repair or maintenance of any real property in New Mexico and includes agreements for architectural services, demolition, design services, development, engineering services, excavation or other improvement to real property, including buildings, shafts, wells and structures, whether on, above or under real property.

Section 56-7-l(E) (emphasis added).

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Cite This Page — Counsel Stack

Bluebook (online)
2010 NMSC 030, 237 P.3d 728, 148 N.M. 426, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-rentals-northwest-inc-v-yearout-mechanical-inc-nm-2010.