Acker & Whipple obtained a defense verdict for their construction company client in a breach of contract action alleging failure to defend and indemnify an oil refinery in which a pipeline and pressure release system was installed by the contractor in 1998. Following changes to the piping, pipe supports and valves, all occurring before 2005, the pressure relief system failed in 2005, discharging diesel oil onto an adjacent street and railroad tracks, causing bodily injury to a crew member of a passing railroad locomotive. The refinery tendered the defense and indemnity of the injury claim to the contractor on the basis that the accident arose out of the contractor’s work. The contractor declined to provide a defense and did not contribute to settlement of the underlying claim on the basis that the work had been altered. The oil company settled the claim and then sued the contractor for contractual and equitable indemnity, claiming that the accident arose out of or was related to the contractor’s work. The jury found that there was no breach of contract as the accident did not arise out of the defendant construction company’s work.
