U.S. Court of Appeals for the First Circuit
In Farmers Ins. Exchange v. RNK, Inc., ___F.3d ____, 2011 WL 183969 (1st Cir. (Mass.) January 21, 2011), the First Circuit Court of Appeals held that a telephone equipment provider is not required to indemnify a phone company for damages arising from the phone company’s failure to adequately block minors from chat lines.
Farmers Insurance Exchange sought a declaratory judgment against its insured, Ripple Communications, Inc. and RNK, Inc. d/b/a RNK Telecom, that Farmers had no duty to indemnify RNK for damages in an underlying action. Ripple, a provider of conferencing lines, and RNK, a telephone company, had entered into a contract calling for Ripple to install certain electronic equipment at RNK’s premises to provide conferencing services, including chat lines, to RNK’s customers. For Ripple’s chat lines to function, a call traveled over RNK’s network and through Ripple’s proprietary hardware and software. The contract required Ripple to indemnify and hold RNK harmless from and against all damage claims “associated with any equipment” of Ripple.
In the underlying action, Jane Doe, a minor acting through her adoptive father, John Doe, sued RNK alleging that it violated New York law by not assigning blockable telephone numbers to chat lines and that, as a result, Jane Doe was improperly able to gain access to a chat line through which she met several individuals whom ultimately sexually assaulted her (the Doe litigation).
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