Argued February 12, 2014.
Appeal from the United States District Court for the Eastern District of Wisconsin. No. 2:10-cv-01004-LA -- Lynn Adelman, Judge.
For ROBERT KRIEN, GERI KRIEN, Plaintiffs: Paul V. Gagliardi, Attorney, GAGLIARDI, NELSON & O'BRIEN, Salem, WI.
For ZURICH AMERICAN INSURANCE COMPANY, Plaintiff: Charles W. Kramer, Attorney, DEUTCH & WEISS, Fox Point, WI.
For HARSCO CORPORATION, Defendant - Appellant: Kenneth M. Gorenberg, Attorney, BARNES & THORNBURG LLP, Chicago, IL.
For RILEY CONSTRUCTION COMPANY, INCORPORATED, Defendant - Appellee: Paul J. Pytlik, Attorney, HILLS LEGAL GROUP, Waukesha, WI.
Before POSNER, FLAUM, and HAMILTON, Circuit Judges.
Posner, Circuit Judge.
Before us is an appeal in a personal injury suit brought by an employee of Riley Construction named Krien. Riley, the general contractor of a construction project in Wisconsin, had hired Harsco Corporation to supply scaffolding for the project. Krien, injured in a fall when a plank on a scaffold that he was standing on broke, sued Harsco. The parties settled his claim for $900,000. Even before the settlement, Harsco had filed a third-party complaint against Riley, seeking indemnification for any damages that Harsco might pay by way of judgment or settlement of Krien's suit, plus interest and attorneys' fees. On cross-motions by Riley and Harsco for summary judgment on the third-party claim (all that remained of the case originally brought by Krien), the district judge granted Riley's motion and denied Harsco's, precipitating this appeal. The basis of federal jurisdiction is diversity of citizenship. Wisconsin law governs the substantive issues.
Harsco's claim for indemnity is based on its contract with Riley. The suit turns on the terms of the contract.
In negotiating the contract, the parties started with a form contract of the Associated General Contractors of America, a trade association. See Tellepsen Builders, L.P. v. Kendall/Heaton Associates, Inc., 325 S.W.3d 692, 693 (Tex. App. 2010); cf. Fox Drywall & Plastering, Inc. v. Sioux Falls Construction Co., No. 12-4026-KES, 2012 WL 1457183, at *8-9 (D. S. Dak. Apr. 26, 2012). The form contract is very long--21 pages, mostly of fine print. Article 3, paragraph 3.25 (entitled " Use of Riley Construction's Equipment" ) provides that Harsco may use Riley's equipment only with Riley's " express written permission," and must " defend, indemnify and be liable to Riley Construction as provided in Article 9 for any loss or damage (including bodily injury or death) which may arise from" Harsco's use of Riley's equipment " except to the extent that such loss or damage is caused by the negligence of Riley Construction's employees operating Riley Construction's equipment." A mirror-image provision, paragraph 4.8 (" Use of [Harsco's] Equipment" ), provides that Riley and its employees may use Harsco equipment, including scaffolding, only with Harsco's " express written permission," and that if Riley or its employees " utilize any of [Harsco's] equipment, including... scaffolding...," Riley " shall defend, indemnify and be liable to [Harsco] as provided in Article 9 for any loss or damage (including bodily injury or death) which may arise from such use, except to the extent that such loss or damage is caused by the negligence of [Harsco's] employees operating [Harsco's] equipment."
But when we go to Article 9, to which both provisions that we've quoted from refer, we discover that the parties had crossed out its first paragraph (paragraph 9.1.1), which is entitled " Indemnity" and provides indemnity to Riley similar to the indemnity granted it by paragraph 3.25 but slightly broader: it excuses Harsco from having to indemnify Riley only if the loss or ...