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Blanchfill v. Better Builds Inc.5/19/1999
Appeal from Circuit Court, Lane County.
Pierre Van Rysselberghe, Judge.
Argued and submitted October 9, 1998.
Affirmed.
De Muniz, P. J., Dissenting.
Defendant, Better Builds, Inc., appeals from a judgment on a third-party complaint for contractual indemnity against Cottage Grove Fitness, Inc. (CGF). Better Builds assigns error to the trial court's determination that it is not entitled to indemnity from CGF. Better Builds further asserts that, because it is entitled to indemnity, the trial court erred in entering a supplemental judgment for CGF on CGF's claims for contribution and contractual attorney fees against Better Builds. We conclude that the trial court correctly determined that broad "hold harmless" language in the parties' lease agreement did not entitle Better Builds to be indemnified for its own negligence and strict liability. Consequently, we affirm.
Viewed in the light most favorable to the prevailing party, CGF, the material facts are as follows: CGF, a fitness center located in Cottage Grove, opened in October 1993. Gregory Blanchfill, a chiropractor, was CGF's principal owner. Better Builds operates fitness centers in North Bend and Coquille and manufactures exercise equipment for its own use and for sale and lease to others. Better Builds' president, Byron Beebe, has been involved in the exercise equipment business since the mid-1980s.
In the spring of 1993, Beebe and Blanchfill, as principals for their companies, negotiated and orally agreed to the terms of a lease arrangement. Under that agreement, Better Builds was to manufacture and lease exercise equipment to CGF, with CGF making total lease payments of $28,702 over a term of 36 months, with a $100 buy-out at the end of the term. In November 1993, after Better Builds had manufactured and delivered some of the equipment to CGF, Beebe presented Blanchfill with a Stevens-Ness preprinted form lease agreement. That form agreement contained the following provision:
"The lessee * * * agrees to defend, at lessee's own expense, any and all actions brought against either or both of the parties hereto for damages to persons or property caused by the leased property or by its operation, and agrees to hold lessor [Better Builds] free and harmless of and from any and all claims and demands that may arise or be occasioned to any person or to any property by or through the use of the leased property during the term of this lease or any renewal hereof."
The lease further provided that CGF, as the lessee, would be responsible for "any and all repairs and * * * supply and pay for any and all parts and accessories needed to maintain" the equipment. Under the agreement, Better Builds, as lessor, retained the right to have "free access" to CGF's property during business hours for the "purpose of inspecting" or "watching its use and operation or of altering, repairing, improving or adding to it or determining the nature or extent of lessee's use * * *." Beebe and Blanchfill did not discuss the terms of the form lease agreement, including the "hold harmless" provision.
Among the machines that Better Builds designed, manufactured, and leased to CGF was a "45-Degree Lever Row" or "T-bar Rowing" machine. That machine, which came with no instructions for operation, was defectively designed in that the weighted metal T-bar or lever was to be placed on supporting pegs when the machine was not being used or the user was resting, but the pegs lacked safety flanges or "keepers" to prevent the heavy bar from slipping off the pegs. Several of CGF's members complained about the lever bar falling off the pegs and, after the bar fell while Bla
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