A court of appeals ruled that a business that contracted with a security company for guard services was not contractually liable to indemnify the security company for the costs of defending a lawsuit brought by a security guard for an incident occurring on the business' premises.
Catholic Charities Health and Human Services (CCHHS) contracted with Tenable Protective Services Inc. for security services. Tenable provided a security guard and Tenable employee, James Karl, to CCHHS. CCHHS also hired William Singleton independently to provide security on its premises.
On July 28, 2003, an incident ensued between Karl and Singleton. Karl became suspicious of Singleton and asked him to leave the premises. When Singleton did not leave, Karl escorted Singleton off of the premises. Singleton sued Tenable, alleging Karl used excessive force in removing Singleton, causing him injuries.
Tenable sued CCHHS to defend the suit and indemnity the costs of the suit pursuant to the contract between Tenable and CCHHS, which provided that CCHHS would indemnify Tenable for acts arising from Tenable's performance of the contract. The trial court found that, although CCHHS was liable for indemnity, it was not liable until Tenable exhausted its $1 million liability insurance policy. Tenable appealed.
The court of appeals stated that the contract between Tenable and CCHHS clearly stated that CCHHS was not liable until Tenable exhausted it's $1 million insurance policy. The court affirmed the decision of the trial court, dismissing Tenable's case.
This case illustrates the general rule that security companies entering into contracts with businesses to provide security services are held to the plain language of the contract. Security companies and businesses should exercise caution when signing contracts with one another to ensure that they understand what obligations they have under the agreements.
Source: Security Law Newsletter, 06/01/2006
Copyright Â© 2006 by Strafford Publications, Inc. http://www.straffordpub.com/ All rights reserved. Storage, reproduction or transmission by any means is prohibited except pursuant to a valid license agreement.