In anticipation having the case argued before the Minnesota Supreme Court, ASA-Minnesota and ASA’s national headquarters filed a joint friend-of-the-court brief brief calling for a reversal of the appellate ruling on the grounds that the exception cited to justify the ECI/Bolduc contract establishes the broad-form “no fault” liability that the state anti-indemnity statute was enacted to prevent.

The brief also cites that the language of the ECI/Bolduc clause, which expressly limits liability to an “act or omission” of Bolduc, is consistent with previous state Supreme Court rulings against indemnifying subcontractors.

Stai notes that the presence of many of Minnesota’s leading construction litigation firms on both sides of the appeal to the state Supreme Court proves the case’s importance, increasing the likelihood that the case will be heard.

But if the appeal is denied, the case goes back to the trial court for a finding as to whether Bolduc damaged the pipeline.

“If the trial court finds that Bolduc did not actually damage the pipeline, that may affect whether it must indemnify ECI,” he says.

Leading Insurance Litigators Take Sides

Stai notes that most of Minnesota’s leading insurance litigation firms are involved on both sides of the state Supreme Court appeal.

In the meantime, he advises all subcontractors to be aware of indemnification laws in state where they perform work, and make sure their insurance coverage matches the requirements.

“If the subcontractor doesn’t have coverage or the policy doesn’t cover exceptions, the subcontractor could be in violation of contract,” he says.

Schmaltz likewise advises subcontractors to clarify contract provisions with their insurance carriers and attorneys, rather than assuming it’s all “standard” language.

Citing his association’s brief, he adds that while subcontractors are experts in their trades, “they’re not lawyers, who themselves find indemnity clauses confusing. So why should the courts expect us to understand them?”