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Service Merchandise Co. v. Hunter Fan Co.7/11/2005
third party complaint and counterclaimed against SM for indemnification and contribution for its own costs incurred in the federal case including defending the suit and paying the judgment and costs.
SM moved for summary judgment on its claim for indemnification from Hunter, and Hunter moved for partial summary judgment on that same issue. In denying SM's motion for summary judgment and in granting partial summary judgment to Hunter, the trial court determined that SM was not entitled to recover against Hunter under SM's theory of contractual indemnity. SM appeals.
1. SM contends that the trial court erred in denying its motion for summary judgment and by granting partial summary judgment to Hunter because the 1998 contract is "the operative contract" and it requires contractual indemnification for the pending allegations of negligence against SM. SM claims that "clear contractual language" requires Hunter to indemnify SM against Boss's "simple negligence claim (but not Plaintiff's gross negligence claims)." SM argues that the "previous generations of the 1998 Contract (1993 or 1995)" were terminated and "cannot have life breathed back into [them]." We disagree.
The controlling issues in this case depend on the interpretation and applicability of certain terms in the 1993 and 1998 purchase agreements. On appeal, this Court considers questions of law de novo, including issues of contract construction. "The construction of a contract is peculiarly well suited for disposition by summary judgment because, in the absence of an ambiguity in terms, it is a question of law for the court." "The cardinal rule of construction is to ascertain the intention of the parties." "The language which the parties have used will be looked to for the purpose of finding that intention, which . . . once ascertained will prevail over all other considerations, in determining the nature of the agreement." In addition, the words of a contract of indemnification must be construed strictly against the indemnitee. " nd every presumption is against such intention [to indemnify]." When an indemnity agreement is ambiguous, such ambiguity must be construed against the drafter; here, SM drafted the agreements. In reviewing a contract of indemnity, "Georgia courts never imply an agreement to indemnify another for one's own negligence in the absence of express language."
With these rules of construction in mind, we examine the purchase agreements executed by Hunter and SM as applied to certain undisputed facts - that Hunter shipped the air purifier at issue to SM and that Shirley purchased that air purifier from SM in September 1994. Plainly, at the time that Shirley bought the air purifier, the 1993 purchase agreement was the only contract in force. Paragraph 1 of the 1993 "Purchase Terms and Conditions-Hardline-Perpetual" Agreement stated:
1. Acceptance. Shipment of all or any part of the products ordered from Vendor "Products" shall constitute an express and binding acceptance by Vendor of all terms and conditions contained in this Agreement.
And, according to Paragraph 11:
11. Indemnify and Hold Harmless. Vendor agrees to protect, defend, hold harmless, and Indemnify Buyer from and against any and all claims, actions, lawsuits, liabilities, product recalls, losses, royalties, damages, or costs and expenses (including attorneys' fees): . . . (b) arising out of any actual or alleged death of or injury to any person or damage to any property or any other damage or loss by whomever suffered, resulting or claimed to result in whole or in part from any actual or alleged defect in Products, whether latent or patent, including actual or alleged improper or negligent man
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