Filed: July 6,
2018
Opinion by: Judge
Doug Nazarian
Holding: Separate
indemnification provisions in multiple documents that form a single agreement
between the parties are not in conflict with each other where one
indemnification provision provides a duty to defend but the other is
silent.
Facts: The Maryland-National Capital Park and
Planning Commission (the "Commission"), as part of Montgomery County, and URS
Corporation ("URS") entered into an agreement for URS to provide the Commission
with engineering services for the construction of the Rock Creek Hiker-Biker
Trail Bridge over Veirs Mill Road. The
agreement consisted of: (1) a basic ordering agreement between Montgomery
County and URS for transportation and engineering services to facilitate the
planning and design of various projects (the "BOA"); (2) a request for
proposal, extending the basic ordering agreement to include the Commission as a
party; (3) a task order issued by the Commission for the specific engineering
services; (4) a proposal from URS in response to the task order; (5) a contract
between the Commission and URS for the specific engineering services (the "Contract");
and (6) the Commission's procurement rules, regulations and laws. The BOA contained an indemnification
provision that, in addition to indemnification, obligated URS to defend
Montgomery County (including the Commission) in any action or suit arising out
of URS's "negligence, errors, acts or omissions" arising under the BOA. The Contract contained an indemnification
provision that did not expressly obligate URS to defend any such claims. The Contract also provided that, in the event
of a conflict among the documents comprising the agreement among the parties,
the Contract had precedence over the BOA.
Fort Myer Construction Corporation (the "Subcontractor") was
retained to assist in the construction of the bridge. The Subcontractor filed suit against the
Commission claiming damages and delays due to defects in URS's design. The Commission sent a letter to URS invoking URS's
duty-to-defend and indemnification obligations under the basic ordering
agreement. URS denied the Commission's demand and refused to defend or
indemnify the Commission. The Commission
filed suit against URS for breach of contract and sought indemnification and
contribution and URS countersued the Commission for failure to pay URS for work
performed under the Contract.
The court was also not persuaded by URS's argument that the BOA applied only to the pricing of goods and services because the Contract unambiguously and unqualifiedly stated that the BOA was incorporated into the Contract. The court found URS breached its agreement with the Commission by refusing to defend the Commission in the lawsuit brought by the Subcontractor, even though the suit was ultimately dismissed for a procedural error committed by the Subcontractor, because the duty to defend was triggered by the Subcontractor filing suit against the Commission regardless of the validity of the Subcontractor's claim.
This is an unreported opinion. See Md. Rule 1-104.
The full opinion is available in pdf.
