In Moore v. Zurich American Insurance Co. (2017AP781), the Court of Appeals District I, interpreting Ohio law, held that one corporation had no duty to defend and indemnify another corporation under their contract.
Konecranes, Inc. and Badger Alloys, Inc. entered into a contract for Konecranes to perform heavy equipment lifting for sand foundry Badger. A Konecranes employee was injured during the course of the work and filed an action against Konecranes. Konecranes tendered the claim to Badger under their contract. Badger refused to indemnify.
Due to the contract’s choice of law provision, the appeals court interpreted Ohio law and ruled in favor of Badger. The court determined that the duty to defend must be express and is not implied in an indemnification provision. Since the contract between Badger and Konecranes did not contain an express duty to defend in the indemnification provision, Badger had no duty to defend.
Furthermore, Badger had no duty to indemnify Konecranes because Konecranes’s own negligence caused the injury. While Konecranes argued Badger had a duty to indemnify based on initial allegations in the employee’s complaint, the court determined that the duty to indemnify is contingent on the actual allocation of liability. Because a jury determined that Konecranes, not Badger, was negligent in the accident, Badger had no duty to indemnify.