A company whose employee died while using rented equipment did not explicitly accept liability in its rental agreement for the outside company's alleged negligence, an appeals court ruled Monday.

According to the 7th U.S. Circuit Court of Appeals' ruling in NES Rentals Holdings Inc. et al. v. Steine Cold Storage Inc., Humberto Menendez died after a 2006 accident in Gas City, Ind., from injuries he suffered while operating a 40-foot boom lift that his employer, Plymouth, Minn.-based Steine Cold Storage Inc., had rented from Chicago-based NES Rentals Holdings Inc.

Steine was a subcontractor for the installation of thermal units at a Wal-Mart Stores Inc. store that was under construction.

Mr. Menendez's family filed a wrongful death lawsuit against various parties, including NES, in federal court, alleging each of the defendants were negligent and contributed to Mr. Menendez's death. The family did not sue Steine.

The rental agreement stated that Steine agreed to hold NES harmless against “any and all claims … for any and all bodily injury, property damage, or any other damages or loss,” according to court documents.

NES filed a separate suit against Steine, alleging the cold storage company had a duty under the rental agreement to indemnify NES for the family's negligence claims.

%%BREAK%%

However, a three-judge appeals court panel on Monday affirmed the lower court's ruling in Steine's favor.

“Indiana appellate courts have ruled that a party may be obligated by contract to indemnify another for the other's own negligence only if the party 'knowingly and willingly' agrees to this indemnification, and a contract will only be held to provide indemnification for the other's own negligence if 'it is so stated in clear and unequivocal terms,'” which the Chicago-based appeals court said was not the case in this suit.

“We think the Supreme Court of Indiana would agree with the district court that the rental agreement does not explicitly provide, 'in clear and unequivocal terms' that Steine must indemnify NES for NES' own negligence, and so Steine has no obligation to do so,” the panel ruled unanimously.