Beerman v. Alloyd Asbestos Abatement , 100 Ohio App. 3d 270 ( 1995 )

In my view, public policy does not clearly preclude an owner from obtaining indemnification from an asbestos removal company when the latter's breach of a contract with the owner proximately causes the imposition of a civil penalty against the owner. Because the marketplace is traditionally the preferred arena for finding the most economically efficient way in which to accomplish an objective, I would not restrict the parties' freedom to contract in the absence of a clear public policy basis for doing so.

Tug Ocean Prince, Inc. v. United States (S.D.N.Y.1977),436 F. Supp. 907, involved the Clean Water Act, which I concede to be analogous to the Clean Air Act. In that case, the trial court elected to remand the cause to the United States Coast Guard for consideration of the mitigation of an owner's liability because of diminished culpability, rather than to impose indemnification against the operator who caused the spill. The trial court seems to have held that indemnification was not provided for by the Clean Water Act, rather than that indemnification as a matter of express or implied contract would violate public policy.

In United States v. Tex-Tow, Inc. (C.A.7, 1978),589 F.2d 1310, 1314-1315, the court expressly disclaimed making any decision with respect to an owner's indemnification by a third party. The court merely held that an owner is strictly liable for the civil penalty, even though the violation may have been caused by an independent actor.

The public's interest in safe, effective removal of asbestos from buildings containing it is best served by allowing companies specializing in asbestos removal to compete freely in the marketplace, to assure owners, as part of that competition, that they can safely and effectively accomplish the removal of asbestos, and to back up that assurance with an agreement to indemnify the owner for any liability which it may incur as a result of the job's not being properly done. Preventing indemnification restricts freedom of contract, and, in my view, interferes with the ability of the marketplace to establish and to identify those companies that can safely and effectively remove asbestos from older buildings.

It is true that the availability of indemnification as a possible offset to an owner's liability for a civil penalty will have a tendency to reduce the owner's incentive once he has found an asbestos removal company in good financial standing. But, by the same token, the ability of the asbestos removal company to offer indemnification to the owner will enhance the incentive of the asbestos removal company to do a good job, and it is in the best position to ensure that the asbestos is removed safely and effectively. I find no clear public policy in favor of restricting the ability of a company like Alloyd to offer the owner of a building indemnification for any liability to which the owner may be exposed as a result of the job of asbestos removal being improperly performed.

I would reverse the summary judgment in favor of Alloyd, and remand this cause for a trial on both the issue of Alloyd's liability for indemnification of the civil penalty imposed against Beerman, and the issue of Alloyd's liability for the attorney fees incurred by Beerman in defense of the action against it for the civil penalty. In my view, a reasonable jury might find both components of liability to have been reasonably foreseeable as consequential damages as a result of Alloyd's alleged breach of contract.