Can a savings clause save an indemnification provision that would otherwise be void under M.G.L. c. 149, § 29C?

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The U.S. District Court for the District of Massachusetts addressed this issue in a recent order on a motion in limine in the case Lennar Northeast Properties, Inc. d/b/a Lenna Northeast Urban, and Lennar Hingham Holdings, LLC v. Barton Partners Architects Planners Inc., et. al.

In that case, the plaintiffs developed and owned a condominium and alleged that the defendants performed shoddy work on the condominium which cost the plaintiffs a significant amount of money to repair. One of the defendant subcontractors filed a motion in limine seeking an order precluding the plaintiffs from referring to or introducing into evidence at trial the indemnification language of the plaintiffs' contract with the defendant, on the grounds that the language at issue violated M.G.L. c. 149, § 29C.

M.G.L. c. 149, § 29C provides that "[a]ny provision for or in connection with a contract for construction...which requires a subcontractor to indemnify any party for injury to persons or damage to property not caused by the subcontractor or its employees, agents or subcontractors, shall be void." According to the defendant, because the indemnification provision of their contract required the defendant to indemnify the plaintiffs for damages "alleged to have been caused by" the defendant, rather than damages actually caused by the defendant, the provision violated § 29C and was, therefore, void. The plaintiffs, however, pointed to the provision's savings clauses, claiming that the savings clauses corrected any alleged over-breadth and make the provision valid and enforceable.

The District Court agreed that the indemnification agreement as drafted was inconsistent with § 29C, in that it both included indemnification language related to damages "alleged to have been caused by" the defendant, and also purported to require the defendant to indemnify the plaintiff for any damages caused by "any act or omission of the [the plaintiffs] or [the plaintiffs'] other subcontractors, sub-subcontractors, or suppliers or any of the employees, agents, invitees or any person acting by, through or under [the plaintiffs] or [the plaintiffs'] other subcontractors, sub-subcontractors, or suppliers' without regard to whether the defendant was the cause of the damages. As such, the provision included indemnification for injuries not caused by the defendant, which is proscribed by § 29C.

However, the Court cited to a line of cases where, due to the existence of savings clauses, the Court merely excised the offending portion of the indemnification provision to bring it into conformity with § 29C. Here, the Court found no reason to deviate from this line of cases, finding the parties' desire to save the indemnification provision was clearly evidenced by their decision to include in the indemnification section of their contract both the introductory phrase, "[t]o the fullest extent permitted by applicable law," and the following sentence:

"It is specifically agreed with respect to any legal limitations now or hereafter in effect and affecting the validity or enforceability of the indemnification obligation under this section, that such legal limitations are made a part of the indemnification obligation and shall operate to amend the indemnification obligation to the minimum extent necessary to bring the provision into conformity with the requirements of such limitations, and as so modified, the indemnification obligation shall continue in full force and effect, even after completion of the work or termination of this agreement."

As such, the Court determined it would excise any language from the indemnification provision that "require[s] [the defendant] to indemnify [the plaintiffs] for injury to persons or damage not caused by [the defendant] or its employees, agents, or subcontractors," and that the parties will be permitted to refer to the indemnification provision at trial, but the Court will provide a limiting instruction regarding the permissible scope of the defendant's indemnification obligations under § 29C and/or redact as appropriate for the jury.

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