Indemnification Clause Indiana Law: L.H. Controls, Inc. v. Custom Conveyor, Inc., 974 N.E.2d 1031 (Ind. Ct. App. 2012)
An Indiana appellate court reversed the judgment of a trial court which had ruled in favor of a conveyor contractor. While it was an electrical subcontractor that initially brought an action against a conveyor contractor, the contractor filed multiple cross-claims against the subcontractor which resulted in trial court granting the contractor more than a $1.4 million judgment for lost profits and attorney’s fees.
In L.H. Controls, Inc. v. Custom Conveyor, Inc., 974 N.E.2d 1031 (Ind. Ct. App. 2012), Honda contracted with Custom Conveyor, Incorporated (“CCI”) to install conveyor systems for a new factory Honda constructed. Subsequently, CCI subcontracted some of the project to L.H. Controls, Inc. (“LH”), including computer programming and electrical control boxes for some conveyor lines. Soon after, problems and delays arose, which lead to LH falling behind its schedule in completion. This caused Honda to withhold progress payments to CCI. While it took three months longer to install the conveyor system, this did not cause a delay in the ultimate opening of the Honda factory.