Contracts — indemnification clauses

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Wisconsin Court of Appeals

Civil

Contracts — indemnification clauses

This appeal concerns a construction project on the University of Wisconsin-Madison campus and unexpectedly heavy rainfall in 2008. Terra Engineering & Construction Corp., the general contractor for the project, subcontracted with Henshue Construction, Inc., to excavate, backfill, and perform other tasks associated with an underground system of steam pits and piping that heats certain facilities on the campus. Heavy rains that occurred during construction flooded a section of excavation which, in turn, caused water to flow into and damage part of the steam system. A jury trial was held to resolve questions relating to Terra’s and Henshue’s respective liability for the damage and to resolve breach of contract claims. Terra appeals. Henshue’s insurer, General Casualty, co-appeals.

On appeal, Terra argues that the circuit court erred by failing to properly apply, to the jury verdicts, an indemnification clause in the Terra/Henshue subcontract that, Terra contends, required Henshue to indemnify Terra for the full cost of repairs for the flood damage. Terra also argues that Henshue failed to present any credible evidence that Henshue suffered any damages by Terra’s draw-down on a letter of credit Henshue had secured through Anchor Bank.

General Casualty argues on appeal that the flood damage is not covered under Henshue’s insurance policy because that damage was not the result of an “occurrence,” or, alternatively, because the damage fell within one of the policy’s exclusions. General Casualty also argues that the circuit court erroneously required General Casualty to indemnify Henshue for more than the amount that the jury awarded, and that the circuit court misused its discretion in awarding statutory costs in favor of Henshue and against General Casualty. ¶4 As to Terra’s appeal, we reverse the decision of the circuit court regarding indemnification and affirm as to the jury’s award to Henshue. As to General Casualty’s appeal, we affirm the decision of the circuit court. Not recommended for publication in the official reports.

2012AP1038 Henshue Construction Inc. v. Terra Engineering & Construction Corp. et al.

Dist IV, Dane County, Genovese, J., Lundsten, P.J.

Attorneys: For Appellant: Bradbury, Philip J., Madison; Halloin, Scott R., Milwaukee; Murdock, Andrea L., Milwaukee; For Respondent: Cahill, Brian G., Milwaukee; Hanan, Beth E., Milwaukee; Turek, David J., Milwaukee; Christenson, Teirney, Milwaukee