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Blanchfill v. Better Builds Inc.5/19/1999
affirm on the first assignment of error, we affirm on the remaining assignments as well. See ___ Or App ___ (slip op at 7-8).
Affirmed.
DE MUNIZ, P. J., Dissenting.
It may be that my quarrel here is less with the majority itself than with Southern Pac. Co. v. Layman, 173 Or 275, 145 P2d 295 (1944), Cook v. Southern Pac. Transp. Co., 50 Or App 547, 623 P2d 1125, rev den 291 Or 1 (1981), and the related authority on which the majority relies. The notion that contractual hold harmless and indemnity provisions are not inherently enforceable according to their terms may be an attractive one in a case like Layman, where the protagonists were a railroad and a farmer who got proportionately little benefit from the contract binding him to indemnify the railroad for its own negligence. However, in a case such as this, where parties with equal bargaining power use such a provision to allocate the risk of liability in a mutually desired commercial arrangement, that notion may reflect a wholly unjustifiable expansion of the appropriate judicial role in an action to enforce a contract.
Moreover, the apparent premise of the Layman-Cook approach is that hold harmless and indemnity provisions tend to be worded broadly and to encompass after-the-fact, liability-producing events that the parties did not anticipate at the time of contracting. Although that premise is correct, it does not support a general rule of non-enforcement. Such provisions are worded broadly because breadth is their intended purpose. The sine qua non of a general risk-allocation provision is to cover future contingencies generally and to encompass events that cannot be foreseen in all of their specifics at the time the contracts are negotiated.
Even given the Layman-Cook rationale, however, I do not agree with the majority's Conclusion here. The majority states:
"Better Builds and CGF were both small and relatively unsophisticated companies. * * * The parties did not discuss apportionment of risk, much less specifically negotiate the indemnity provision. Rather, that provision was merely included in a preprinted form that Better Builds provided." Or App at (slip opinion at 17-18).
Although I agree with the majority's factual recitations in that statement and elsewhere, I disagree with the implication that the majority appears to find in the facts. In contrast, what I find significant is that Better Builds and CGF had equal bargaining power; that they used a preprinted lease agreement form that was prepared by Stevens-Ness and not by either party; and, as the majority notes earlier in its opinion, the parties did not discuss the terms of the form lease agreement at all. They did not single out the hold harmless provision for inattention. See Or App at (slip opinion at 2). The situation here differs from the one in Cook, 50 Or App at 556, where we construed the "form contract prepared by" the railroad against it. In Cook, there was a radical disparity in bargaining power, and the form contract was actually prepared by the party with the greater power. In this case, neither of those factors is present. Further, the fact that the parties did not specifically discuss the hold harmless provision here lends no greater support to the inference that they did not intend what it says than that the lease agreement, as a whole, was unintended. The parties did not talk about any of its terms. I find nothing in Layman or Cook that requires us to presume, as the majority effectively does, that parties with equal bargaining power did not intend to include a term that appears in their written contract simply because they did not single it out for oral negotiation.
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