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Calling All Landowners, Property managers, and Snow Removal Contractors! Critical Changes in Colorado Indemnity Law for Snow Removal Work

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There is a new change afoot in Colorado law directly impacting anyone involved in the property maintenance, commercial real estate management, snow removal, or general liability insurance industries.  More specifically, Senate Bill 62 (the “Snow Removal Service Liability Limitation Act”), passed and signed by Governor Hickenlooper, has now been codified at C.R.S. § 13-21-129. It is important to note that this statute applies to all snow/ice removal contracts entered into on or after August 8, 2018. 

In light of this new law, certain provisions of snow removal agreements are now against public policy and void as a matter of law.  The statute applies to snow removal contracts that require one party to indemnify, hold harmless, or defend the other party in a liability suit.  Pertinent language from the statute includes the following:

A provision, clause, covenant, or agreement that is part of or in connection with a snow removal and ice control services contract is against public policy and void if it does any of the following in the instance where the service provider is prohibited, by express contract terms or in writing, from mitigating a specific snow, ice, or other mixed precipitation event or risk:

Requires, or has the effect of requiring, a service provider to indemnify a service receiver for damages resulting from the acts or omissions of the service receiver or the service receiver's agents or employees.

Subsequent provisions of the statute contain substantially similar language that (a) voids contract provisions that contain such a requirement; and (b) applies the statute bi-directionally between the contractor and landowner, such that neither one may require the other to indemnify, hold harmless, or defend it.

The X factor in this new statute is that it applies to snow/ice removal contracts “where the service provider is prohibited, by express contract terms or in writing, from mitigating a specific snow, ice, or other mixed precipitation event or risk.”  The purposes of a snow removal agreement is to require a party to mitigate snow rather than limiting its ability to do so. 

It is unclear how courts will apply this language but at least two possibilities exist.  First, the law may apply to contracts that require a vendor to plow or shovel some areas, but not others.  For example, the contractor must clear the parking/driving areas, but is expressly precluded from clearing the adjacent sidewalks.  It is also unclear whether the statute will be applied to all claims concerning a property, including those relating to an area where the contractor clearly does have an express duty to clear snow, or if it will only be applied to claims originating from the areas where the contractor is expressly precluded from working.  While the latter would be preferable for landowners and property managers, it would be disadvantageous for contractors.  Unfortunately, as written the statute appears ambiguous on this front and could be argued either way.

The second possibility is that courts will apply the statute to void defense/indemnity provisions in contracts that contain triggers for service – which most snow removal contracts do.  For example, if a contract said the vendor must clear snow upon 2” of accumulation, and was not permitted to do so under any other conditions without authorization from the landowner (another common provision), a court may hold that the contract prohibits the vendor “from mitigating a specific snow, ice, or other mixed precipitation event or risk,” and that the statute therefore voids any defense/indemnity provision contained in the contract.  It is also possible that a court could interpret the statute to mean that, in order to create an effective defense/indemnity provision, the contract must allow the vendor to remove snow at the vendor’s own discretion.  As of now, however, the manner in which the statute will be applied is unclear.

To insurance carriers and landscapers (who often perform snow removal in their off-season), this law may sound a little bit like déjà vu.  Eleven years ago, Colorado enacted a similar law related to contractual indemnity provisions applicable to residential construction defect lawsuits.  In the construction defect context, litigants continued to allocate liability pro rata amongst themselves through Colorado’s comparative fault statute, and it is likely the same situation will play out in future personal injury lawsuits originating from wintertime slip and fall claims.  However, litigants will likely attempt use the Snow Removal Service Liability Limitation Act to justify rejecting tenders of defense, likely leading to an increased number of cross-claims among defending parties in such cases.

For this reason, landowners, property managers, and snow removal contractors should seek legal counsel before entering into such agreements.  Companies and persons exposed to the effects of the statute should carefully consider avoiding any contractual language that may cause them to be caught in the net the statute casts, and they should understand that the indemnity provisions they are bargaining/paying for could be voided, leaving them “holding the bag” for a much larger share of any liability than initially anticipated.

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