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Sub Owed No Indemnity Where Contractor?s Specs Led IT Astray

Monday, October 04, 2010 03:43 am


Indemnity -- Negligence

Raytheon Engineers & Constr., Inc. v. Sargent Electric Co., 2010 Ind. App. LEXIS 1451 (August 6, 2010) An electrical sub who was just following instructions did not breach its duty of care or owe the contractor indemnification for $25 million in damages.

Contractor Raytheon Engineers and Constructors, Inc. (Raytheon) hired subcontractor Sargent Electric Company (Sargent) for electrical installation on a project to construct a coke battery plant owned by Inland Steel Company (Inland Steel). The subcontract, in part, required Sargent to configure and install four 225 kVA requisitioned transformers. After Sargent had completed its work, one of the four transformers caused a blast furnace to lose power and spill molten steel onto the property, costing Inland Steel more than $25 million. The owner filed suit against Raytheon, who then sought indemnity from Sargent.

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