Munger, Tolles & Olson attorney Jeremy A. Lawrence published an article in Law360 on April 21, 2017 about a California Court of Appeal ruling that highlights the need for parties to clearly address the issue of proportionate fault in indemnity clauses.
Mr. Lawrence wrote the article on the heels of the court’s ruling in Oltmans Construction Co. v. Bayside Interiors, Inc., which found that the use of “to the extent” in an indemnity clause provided clear guidance on how to divide responsibility for damages.
Although the case settled while the appeal was pending, the court published its decision as important guidance for the bench and bar.
Underscoring the significance of Oltmans, Mr. Lawrence discusses the uneven history of decisions, citing two cases where the indemnitor and the indemnitee jointly caused losses and resulted in different decisions despite similar contract language.
According to Mr. Lawrence, Oltmans serves as a reminder that parties should clearly state how to assign fault when both the indemnitee and the indemnitor cause damages, and he offers suggestions for how parties might address these scenarios with clear language in indemnity clauses.
Mr. Lawrence is a litigator whose representations have included disputes regarding coverage under insurance policies and indemnity contracts. He has written and presented on numerous topics relating to insurance law, including the duty to defend, bad faith, and Directors and Officers insurance.