Although the rules for interpreting contractual indemnity and defense obligations appear to be relatively clear and straightforward, courts have struggled to apply them to often-carelessly drafted construction contracts in complex, multi-party disputes. Three California appellate and supreme court opinions that have analyzed contractual indemnity and defense provisions illustrate the confusion that courts can have when interpreting them in typical construction disputes. Although each of the three cases discussed below involve similar contract language, the courts do not appear to reach any consistent or predictable results.
In the first case discussed below, Regan Roofing v. Pacific Scene (1994), the appellate court applied the contractual indemnity and defense obligation very narrowly, reading a "fault requirement" into the obligations where no such express requirement was included in the contract language. Based in-part on this "implied" fault requirement, the court held that neither the duty indemnify nor the duty to defend, could be triggered until after the underlying case was resolved and a determination of the indemnitor's fault had been made. Thus, Regan Roofing is an example of the court reading unclear and poorly drafted indemnity and defense language more narrowly than it appears.
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