Court Dismisses Cross Claims Against Utility Based on Construction Anti-Indemnity Statute

When a plane crashed and several passengers and crew died or were injured, their representatives sued several defendants, including a nearby plant owner, Milliken & Company (“Plant Owner”), based on claims that transmission lines on Plant Owner’s property were too close to the runways, were too high, and encroached on the airport easements.  Plant Owner cross claimed against utility owner, Georgia Power Company (“Utility”).  Plant Owner’s claim was based on an easement it granted to Utility, which required Utility to indemnify it for any claims arising out of Utility’s construction or maintenance of the transmission lines.

In defense, Utility argued that the easement’s indemnity provision violated Georgia’s construction anti-indemnity statute.

Read more about the anti-indemnity statute here.

To fall within the statute, an indemnity provision must (i) relate to construction, maintenance, or repair of certain property and (ii) require indemnification for a party’s sole negligence.  As noted by the court, Georgia courts interpret the anti-indemnity statute broader than other states.  Consistent with prior rulings, the court found that the easement’s indemnity provision fell within the confines of the anti-indemnity statute.

The Court clearly interpreted the second prong broadly, as it found that the easement’s indemnity provision also required indemnification in the event of Plant Owner’s sole negligence.  The easement provision read as follows:

[Utility], it successors or assigns shall hold [Plant Owner] . . . harmless from any damages to property or persons (including death), or both, which result from [Utility’s] construction, operation or maintenance of its facilities on said easement areas herein granted.

Based on this clause, and the allegations of Plant Owner’s cross claim, the court held that the clause required Utility to indemnify Plant Owner in the event of Plant Owner’s sole negligence.

Since both prongs were implicated, the court held the easement’s indemnity provision violated the anti-indemnity statute.  Accordingly, the court granted summary judgment to dismiss Plant Owner’s indemnity cross claim against Utility.