Obermayer Recovers All Costs for Facilities Management Client Against its Subcontractor

Tricia Swann, an attorney with Obermayer Rebmann Maxwell & Hippel LLP, recently won a victory in the Superior Court of Pennsylvania for her facilities management company client in an action against its snow removal subcontractor. The Court upheld an arbitration award directing the snow removal subcontractor to defend and indemnify the facilities management company and reimburse all of its costs of defense and those of its customer, a national retail chain, arising from a personal injury slip and fall claim. The Court Order also means that the subcontractor must pay all costs of litigation related to the facilities management company’s action to enforce the subcontractor’s contractual obligations.

This matter arose from a claim of an individual who alleged that she slipped and fell due to ice on the parking lot surface of a retail pharmacy, a customer of the facilities management company. At the arbitration, the subcontractor challenged the jurisdiction of the arbitration, and argued that its contract with the facilities management company was unenforceable and that the facilities management company had waived its right to pursue its claim for defense and indemnity for the underlying claim. The arbitrator denied all of these claims by the subcontractor and the Superior Court affirmed the arbitrator’s conclusions, noting that the “. . . [subcontractor] has failed to show that he actually lacked any ‘meaningful choice’ in accepting this agreement with [facilities management company] . . . the subcontract here explicitly states that [subcontractor] shall indemnify both [facilities management company] and its customers for all claims arising out of either [subcontractor’s], [facilities management company’s], or [customer’s] negligence . . . [the subcontract’s defense/indemnity language] does allow for [facilities management company] to recover all legal costs and fees associated with any claim or demand arising from the agreement . . . We agree with the trial court that ‘all legal costs, . . . necessarily include arbitration costs and fees.’” This recent win caused the subcontractor’s carrier to settle the underlying claim with no contribution from either the facilities management company or its customer.

Ms. Swann has won many arbitration awards and the related appeals for facilities management companies, recovering substantial amounts for her clients against their subcontractors engaged in snow/ ice management, janitorial services, floor care, floor installation, lot sweeping and landscaping. As another recent example, Ms. Swann recovered $325,000 for her facilities management company in an arbitration case (for both the settlement of a personal injury claim and the defense costs relating to that claim) based upon a defense/indemnity provision drafted by Ms. Swann and included in the subcontractor’s agreement with her client. Ms. Swann has recovered over 2.2 million dollars in liability claims related costs for this same facilities management company client, effectively eliminating exposure to and payments from the client’s liability carrier. Ms. Swann focuses on careful drafting of defense/indemnity provisions and the inclusion of arbitration clauses in the contracts she prepares for her facilities management clients, as part of comprehensive risk protection.

Ms. Swann and her colleague, Lars Lederer, concentrate their practice on the representation of facilities management companies and their customers in a wide variety of service industries within the commercial sector, with a focus on contract drafting with respect to insurance, defense/indemnity and claim resolution provisions. This approach has further benefitted their clients who often realize significantly lower liability insurance premiums and substantial reduction in exposure to liability.

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