Indiana High Court Rules State is Not Contractually Obligated to Indemnify Company in Concert Stage Collapse

During the Indiana state fair in 2011, seven people were killed and dozens were injured when the stage collapsed during a concert. In litigation that followed, the company that provided stage rigging took the position that the Indiana State Fair Commission was contractually obligated to indemnify the company for the company’s own negligence. The issue went to the trial court, the intermediate court, and now the high court, which recently ruled unanimously that the Commission is not required to indemnify the company.

The company argued that a decade-long course of conduct before the accident plus a form the Commission signed after the accident established that the Commission owed the company indemnification. For 10 years prior to the accident, the company and the Commission followed the same procedure. Before the fair each year, they would agree on equipment and prices. After the fair, the company would submit a blank form with invoices for the rentals. The form contained an indemnification provision that purported to release the company from any claims arising from the use of its equipment. The Commission would sign the form to authorize payment if it was correct. This procedure was followed after the accident as the Commission signed the form, even while victims’ lawsuits were pending.

In Indiana, like in many jurisdictions, indemnity for one’s own negligence is disfavored. Thus, if a party is going to be entitled to contractual indemnity for its own negligence, then the contract must contain clear and unequivocal language that that is what the parties intended. This is especially true when retroactive indemnity is sought, as here where the company sought indemnity based on a form that the Commission did not sign until after the accident. The high court, in ruling in favor of the Commission, held that the company’s form did not contain explicit language that it was to be retroactively indemnified for its own negligence. The court also held that an indemnity provision cannot be inferred in a course of dealing.

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