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The County was developing a project that would (yech) irrigate orange groves with treated wastewater. The construction contract required the Contractor to indemnify the County and the Engineer for losses due to personal injury caused by the Contractor or its Subcontractors. A worker for a sub-subcontractor was injured, and sued the Contractor and the Engineer. The case against the Contractor was dismissed, and the Engineer settled with the worker.
Here's where it gets complicated. The Engineer sued the Contractor under the indemnification clause in the construction contract. The Contractor argued that the indemnity provision was unenforceable, citing a Florida law requiring indemnity provisions in construction contracts to have either specific consideration for the indemnity, or a monetary limit (Section 725.06). The Contractor's (creative) reasoning was that because the County, not the Engineer had paid the consideration for the indemnity provision, the Engineer had not paid specific consideration for the indemnity, and therefore could not enforce the provision.
The appellate court disagreed, ruling in favor of the Engineer. The court held that because the Engineer was a third party beneficiary to the construction contract, it could enforce the indemnity provision even though the Engineer did not itself pay for the indemnity.
Moral: You can run, but you can't hide. Camp, Dresser & McKee, Inc. v. Paul N. Howard Co., 721 So.2d 1254 (Fla. 5DCA 1998). |
