Federal Court Adopts Narrow Reading of Virginia Construction Statute
July 10, 2015
In RSC Equip. Rental, Inc. v. The Cincinnati Ins. Co., the United States District Court for the Western District of Virginia adopted a narrow reading of a Virginia code section precluding any contracts “relating to” construction from requiring one party to indemnify another party for the indemnitee’s negligence. In this case, an equipment rental company rented a fork lift to a contractor for use on a construction project. After the employee of a subcontractor was injured by the forklift, the rental company was sued for negligence. The rental company then demanded the contractor indemnify the rental company pursuant to an indemnification clause in the parties’ contract. In response, the contractor argued that the indemnification clause was unenforceable pursuant to Va. Code § 11-4.1, which prohibits agreement in contracts “relating to” construction from requiring one party to indemnify another for claims related to the second party’s own negligence. The court ruled against the contractor and determined the rental agreement was not a contract related to construction within the meaning of the code section.