The Supreme Court of Virginia has broadly interpreted a contractual indemnity provision, ruling that it required that a security company defend and indemnify a power plant's owner in a personal injury lawsuit filed against it by a security company employee.
The Case
Jennifer Brandenburg, an employee of Securitas Security Services USA, Inc., allegedly slipped and fell at Dominion Nuclear Connecticut, Inc.'s power plant in Waterford, Connecticut. Ms. Brandenburg was performing security services at the plant pursuant to a service contract between Dominion and Securitas.
In a Connecticut court, she filed a personal injury suit against Dominion alleging negligence. Dominion responded to the complaint by denying its negligence and asserting that Ms. Brandenburg was "comparatively responsible and/or at fault for the accident."
Dominion also sent a letter to Securitas demanding that Securitas defend and indemnify Dominion against any liability that Dominion may have to Ms. Brandenburg.
After Securitas refused the demand, Dominion sued Securitas in Virginia pursuant to the forum-selection clause of the service contract, alleging a breach of its indemnity provision.
Dominion moved for partial summary judgment, arguing that the plain meaning of the indemnity provision required Securitas to defend Dominion and, depending on the outcome, to indemnify Dominion for any ultimate liability.
Securitas filed a cross-motion for summary judgment, contending that the provision could not apply to the Brandenburg complaint because it did not allege that Dominion was liable to any extent for the negligence of Securitas or its employees.
The trial court agreed with Securitas and dismissed Dominion's suit, and the dispute reached the Virginia Supreme Court.
There, Dominion argued that the trial court had failed to enforce the broad language of the indemnity provision, which applied to "any and all claims, demands, lawsuits, or other proceedings brought or threatened by any party, including but not limited to an Indemnitee, [Securitas], . . . and [employees of Securitas] . . . in any manner arising out of or in connection with . . , personal injury or death." For this broad provision to apply, Dominion contended, there was only one textual requirement: The duty to defend and indemnify applied only "[t]o the extent" that a claim arose "from the negligence, gross negligence, or willful misconduct" of Securitas or its employees.
Thus, Dominion contended, Securitas' duties existed whether Dominion was negligent or not, so long as the claim arose in part or to any extent from the negligence, gross negligence, or willful misconduct of Securitas or its employees.
Moreover, Dominion asserted, the second sentence of the indemnity provision bolstered that conclusion because it demonstrated that claims arising out of Dominion's conduct were within the risks covered by the first sentence and that claims arising out of Dominion's ordinary negligence remained within the scope of covered risks. Otherwise, according to Dominion, the exclusion for Dominion's gross negligence or willful misconduct in the second sentence would be unnecessary.
The Securitas-Dominion Contract
The contract between Securitas and Dominion stated:
To the extent arising from the negligence, gross negligence, or willful misconduct of [Securitas] . . . or [employees of Securitas], [Securitas] agrees to indemnify, defend, and hold harmless [Dominion], [Dominion's] Affiliates (defined below), and each of their respective directors, officers, employees, contractors, and agents (each an "Indemnitee") from and against any and all claims, demands, lawsuits, or other proceedings brought or threatened by any party, including but not limited to an Indemnitee, [Securitas], . . . and [employees of Securitas] (each, a "Claim"), and to pay all of each Indemnitee's costs in connection with any Claim, including but not limited to, any judgment, amounts paid in settlement, fines, penalties, forfeitures, and expenses (including reasonable attorneys' fees through final appeal), whether at law, in equity, or administrative in nature, in any manner arising out of or in connection with: (a) this Agreement; (b) [Securitas's] breach of this Agreement; (c) personal injury or death; (d) property damage; or (e) violation of law. [Securitas] will not be liable under this Indemnity Article for any injuries, deaths, or damage to the extent that they are caused by an Indemnitee's gross negligence or willful misconduct.
The Virginia Supreme Court's Decision
The court agreed with Dominion's interpretation of the indemnity provision and ruled that the Brandenburg complaint fell within its scope.
In its decision, the court explained that Ms. Brandenburg's personal injury allegations against Dominion constituted a claim within the scope of the first sentence of the indemnity provision and did not implicate the "gross negligence or willful misconduct" exclusion set forth in the second sentence.
In the court's view, the complaint satisfied the "[t]o the extent" qualification of the first sentence because Dominion responded to the complaint with the assertion that Ms. Brandenburg was comparatively at fault for the accident. The court added that Ms. Brandenburg's personal injury suit implicated her negligence as a Securitas employee and, therefore, triggered Securitas' duty to defend
The court rejected Securitas' contention that the phrase "[t]o the extent" functioned as a proportional limitation on its duty to defend or indemnify Dominion. Because Dominion was the only defendant in the Connecticut litigation, the only judgment award entered in that case would be against Dominion, and the entire amount awarded would represent Dominion's negligence. Therefore, the court concluded, the trial court had also erred in not concluding that "Securitas's indemnity obligation, should it be established, must be for the entire amount of Dominion's liability."

