Maryland 2022 Regular Session

Maryland Senate Bill SB161 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3	3		EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
4	4		[Brackets] indicate matter deleted from existing law.
5		-	Underlining indicates amendments to bill.
6		-	Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7		-	amendment.
8	5		sb0161
9	6
10	7		SENATE BILL 161
11	8		D3 2lr0771
12	9		SB 189/21 – JPR (PRE–FILED) CF HB 79
13	10		By: Senator West
14	11		Requested: October 15, 2021
15	12		Introduced and read first time: January 12, 2022
16	13		Assigned to: Judicial Proceedings
17		-	Committee Report: Favorable with amendments
18		-	Senate action: Adopted
19		-	Read second time: February 17, 2022
20	14
21		-	~~CHAPTER ______~~
	15	+	A BILL ENTITLED
22	16
23	17		AN ACT concerning 1
24	18
25	19		Courts – Prohibited Indemnity and Defense Liability Agreements 2
26	20
27	21		FOR the purpose of prohibiting a provision in a contract with a design professional for 3
28	22		professional services that requires the design professional to indemnify or hold 4
29	23		harmless certain parties unless the design professional is at fault for causing the 5
30	24		loss, damage, or expense indemnified; prohibiting a provision in a contract with a 6
31	25		design professional for professional services that requires the design professional to 7
32	26		defend certain parties against liability or certain claims; and generally relating to 8
33	27		indemnity and defense liability agreements. 9
34	28
35	29		BY repealing and reenacting, with amendments, 10
36	30		Article – Courts and Judicial Proceedings 11
37	31		Section 5–401(a) 12
38	32		Annotated Code of Maryland 13
39	33		(2020 Replacement Volume and 2021 Supplement) 14
40	34
41	35		SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 15
42	36		That the Laws of Maryland read as follows: 16
43	37
44	38		Article – Courts and Judicial Proceedings 17
45	39
46	40		5–401. 18
47		-	2 SENATE BILL 161
	41	+
	42	+	(a) (1) (I) IN THIS SUBSECTION TH E FOLLOWING WORDS HA VE THE 19
	43	+	MEANINGS INDICATED . 20
	44	+
	45	+	(II) “DEFEND” MEANS TO PAY FOR DEF ENSE COSTS OR TO 21
	46	+	FURNISH COUNSEL AT T HE EXPENSE OF THE PR OMISOR FOR THE PURPO SE OF 22
	47	+	DEFENDING A PROMISEE OR THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 23 2 SENATE BILL 161
48	48
49	49
50		-	(a) (1) (I) IN THIS SUBSECTION TH E FOLLOWING WORDS HA VE THE 1
51		-	MEANINGS INDICATED . 2
	50	+	AGENTS, EMPLOYEES, OR INDEMNITEES AGAIN ST CLAIMS ALLEGED OR BROUGHT 1
	51	+	AGAINST THE PROMISEE OR THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 2
	52	+	AGENTS, EMPLOYEES, OR INDEMNITEES BY A THIRD PARTY IN ANY C OURT OR OTHER 3
	53	+	TRIBUNAL, INCLUDING FORM S OF ALTERNATIVE DIS PUTE RESOLUTION REQU IRED 4
	54	+	BY LAW OR CONTRACT , BEFORE THE COURT OR TRIBUNAL HAS REACHED A FINAL 5
	55	+	DETERMINATION OF FAU LT. 6
52	56
53		-	(II) “DEFEND” MEANS TO PAY FOR DEF ENSE COSTS OR TO 3
54		-	FURNISH COUNSEL AT T HE EXPENSE OF THE PR OMISOR FOR THE PURPO SE OF 4
55		-	DEFENDING A PROMISEE OR THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 5
56		-	AGENTS, EMPLOYEES, OR INDEMNITEES AGAIN ST CLAIMS ALLEGED OR BROUGHT 6
57		-	AGAINST THE PROMISEE OR THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 7
58		-	AGENTS, EMPLOYEES, OR INDEMNITEES BY A THIRD PARTY IN ANY C OURT OR OTHER 8
59		-	TRIBUNAL, INCLUDING FORMS OF A LTERNATIVE DISPUTE R ESOLUTION REQUIRED 9
60		-	BY LAW OR CONTRACT , BEFORE THE COURT OR TRIBUNAL HAS REACHED A FINAL 10
61		-	DETERMINATION OF FAU LT. 11
	57	+	(III) “DEFENSE COSTS ” MEANS REASONABLE FEE S OF 7
	58	+	ATTORNEYS AND EXPERT WITNESSES, COURT COSTS , AND RELATED EXPENSES 8
	59	+	ACTUALLY INCURRED BY A PARTY IN THE DEFEN SE OF A CLAIM OR AN ALLEGATION 9
	60	+	OF LIABILITY IN CONN ECTION WITH LITIGATI ON, ARBITRATION, OR ALTERNATIVE 10
	61	+	DISPUTE RESOLUTION PROCEE DINGS. 11
62	62
63		-	(III) “DEFENSE COSTS ” MEANS REASONABLE FEE S OF 12
64		-	ATTORNEYS AND EXPERT WITNESSES, COURT COSTS , AND RELATED EXPENSES 13
65		-	ACTUALLY INCURRED BY A PARTY IN THE DEFEN SE OF A CLAIM OR AN ALLEGATION 14
66		-	OF LIABILITY IN CONN ECTION WITH LITIGATI ON, ARBITRATION, OR ALTERNATIVE 15
67		-	DISPUTE RESOLUTION PROCEEDIN GS. 16
	63	+	(IV) “DERIVATIVE PARTIES ” MEANS A PARTY ’S 12
	64	+	SUBCONTRACTORS , AGENTS, EMPLOYEES, OR OTHER PERSONS FOR WHICH THE 13
	65	+	PARTY MAY BE LIABLE OR RESPONSIBLE AS A RESULT OF ANY STATUT ORY, TORT, OR 14
	66	+	CONTRACTUAL DUTY . 15
68	67
69		-	(IV) “DERIVATIVE PARTIES ” MEANS A PARTY ’S 17
70		-	SUBCONTRACTORS , AGENTS, EMPLOYEES, OR OTHER PERSONS FOR WHICH THE 18
71		-	PARTY MAY BE LIABLE OR RESPONSIBLE AS A RESULT OF ANY STATUT ORY, TORT, OR 19
72		-	CONTRACTUAL DUTY . 20
	68	+	(V) “DESIGN PROFESS IONAL” MEANS: 16
73	69
74		-	(V) “DESIGN PROFESSION AL” MEANS: 21
	70	+	1. A LICENSED ARCHITECT , AS DEFINED IN § 3–101 OF 17
	71	+	THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 18
75	72
76		-	1. A ~~LICENSED ARCHITECT~~ , AS DEFINED IN § ~~3–101 OF 22~~
77		-	THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 23
	73	+	2. A CERTIFIED INTERIOR D ESIGNER, AS DEFINED IN § 19
	74	+	8–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 20
78	75
79		-	2. A ~~CERTIFIED INTERIOR D ESIGNER~~, AS DEFINED IN ~~§ 24~~
80		-	8–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 25
	76	+	3. A LICENSED LANDSCAPE A RCHITECT, AS DEFINED IN 21
	77	+	§ 9–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 22
81	78
82		-	3. A ~~LICENSED LANDS CAPE ARCHITECT~~ , AS DEFINED IN 26
83		-	~~§ 9–101~~ OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; 27
	79	+	4. A PROFESSIONAL ENGINEE R, AS DEFINED IN § 14–101 23
	80	+	OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE; OR 24
84	81
85		-	4. A PROFESSIONAL ~~ENGINEE R~~, AS DEFINED IN § ~~14–101 28~~
86		-	OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE~~; OR 29~~
	82	+	5. A PROFESSIONAL LAND SU RVEYOR, AS DEFINED IN § 25
	83	+	15–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE. 26
87	84
88		-	5. A PROFESSIONAL LAND SU RVEYOR, AS DEFINED IN § 30
89		-	15–101 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE. 31
	85	+	(VI) “FAULT” MEANS: 27
90	86
91		-	~~(VI) “FAULT” MEANS:~~ 32
	87	+	1. A BREACH OF CONTRACT ; 28
92	88
93		-	1. A BREACH OF CONTRACT ; 33 SENATE BILL 161 3
	89	+	2. A NEGLIGENT, RECKLESS, OR INTENTIONAL ACT O R 29
	90	+	OMISSION CONSTITUTIN G A TORT; OR 30
	91	+
	92	+	3. A VIOLATION OF APPLICA BLE STATUTES OR 31 SENATE BILL 161 3
94	93
95	94
	95	+	REGULATIONS . 1
96	96
97		-	2. A NEGLIGENT, RECKLESS, OR INTENTIONAL ACT O R 1
98		-	OMISSION CONSTITUTIN G A TORT; OR 2
	97	+	(VII) “PROFESSIONAL SERVICES ” MEANS SERVICES OR WO RK 2
	98	+	THAT CONSTITUTE S THE PRACTICE OF A PR OFESSION REGULATED B Y, OR FOR 3
	99	+	WHICH LICENSURE IS R EQUIRED UNDER , TITLE 3, TITLE 8, TITLE 9, TITLE 14, OR 4
	100	+	TITLE 15 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE. 5
99	101
100		-	3. A VIOLATION OF APPLICA BLE STATUTES OR 3
101		-	REGULATIONS. 4
	102	+	(2) A PROVISION, covenant, promise, agreement, or understanding in, or 6
	103	+	in connection with or collateral to, a contract or agreement relating to architectural, 7
	104	+	engineering, inspecting, or surveying services, or the construction, alteration, repair, or 8
	105	+	maintenance of a building, structure, HIGHWAY, ROAD, appurtenance or appliance, 9
	106	+	including moving, demolition, and excavating connected with those services or that work, 10
	107	+	purporting to indemnify the promisee against liability for damages arising out of bodily 11
	108	+	injury to any person or damage to property caused by or resulting from the sole negligence 12
	109	+	of the promisee or indemnitee, or the agents or employees of the promisee or indemnitee, is 13
	110	+	against public policy and is void and unenforceable. 14
102	111
103		-	(VII) “PROFESSIONAL SERVICES ” MEANS SERVICES OR WO RK 5
104		-	THAT CONSTITUTES THE PRACTICE OF A PROFES SION REGULATED BY , OR FOR 6
105		-	WHICH LICENSURE IS R EQUIRED UNDER , TITLE 3, TITLE 8, TITLE 9, TITLE 14, OR 7
106		-	TITLE 15 OF THE BUSINESS OCCUPATIONS AND PROFESSIONS ARTICLE. 8
	112	+	[(2)] (3) A PROVISION, A covenant, a promise, an agreement, or an 15
	113	+	understanding in, or in connection with or collateral to, a contract or an agreement relating 16
	114	+	to architectural, engineering, inspecting, or surveying services, or the construction, 17
	115	+	alteration, repair, or maintenance of a building, a structure, A HIGHWAY, A ROAD, an 18
	116	+	appurtenance, or an appliance, including moving, demolition, and excavating connected 19
	117	+	with those services or that work, purporting to require the promisor or indemnitor to defend 20
	118	+	or pay the costs of defending the promisee or indemnitee against liability for damages 21
	119	+	arising out of bodily injury to any person or damage to property caused by or resulting from 22
	120	+	the sole negligence of the promisee or indemnitee, or the agents or employees of the 23
	121	+	promisee or indemnitee, is against public policy and is void and unenforceable. 24
107	122
108		-	(2) A PROVISION, covenant, promise, agreement, or understanding in, or 9
109		-	in connection with or collateral to, a contract or agreement relating to architectural, 10
110		-	engineering, inspecting, or surveying services, or the construction, alteration, repair, or 11
111		-	maintenance of a building, structure, HIGHWAY, ROAD, appurtenance or appliance, 12
112		-	including moving, demolition, and excavating connected with those services or that work, 13
113		-	purporting to indemnify the promisee against liability for damages arising out of bodily 14
114		-	injury to any person or damage to property caused by or resulting from the sole negligence 15
115		-	of the promisee or indemnitee, or the agents or employees of the promisee or indemnitee, is 16
116		-	against public policy and is void and unenforceable. 17
	123	+	(4) A PROVISION IN, OR IN CONNECTION WIT H A CONTRACT OR AN 25
	124	+	AGREEMENT WITH A DES IGN PROFESSIONAL FOR PROFESSIONAL SERVICE S 26
	125	+	PURPORTING TO REQUIR E THE DESIGN PROFESSIONAL TO INDEMNIFY OR HOLD 27
	126	+	HARMLESS THE PROMISE E, THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 28
	127	+	AGENTS, EMPLOYEES, OR INDEMNITEES , OR ANY OTHER PERSON AGAINST LOSS, 29
	128	+	DAMAGES, OR EXPENSES IS VOID AND UNENFORCEABLE UN LESS THE FAULT OF TH E 30
	129	+	DESIGN PROFESSI ONAL OR ITS DERIVATI VE PARTIES IS THE PR OXIMATE CAUSE OF 31
	130	+	THE LOSS, DAMAGE, OR EXPENSE INDEMNIFI ED. 32
117	131
118		-	[(2)] (3) A PROVISION, A covenant, a promise, an agreement, or an 18
119		-	understanding in, or in connection with or collateral to, a contract or an agreement relating 19
120		-	to architectural, engineering, inspecting, or surveying services, or the construction, 20
121		-	alteration, repair, or maintenance of a building, a structure, A HIGHWAY, A ROAD, an 21
122		-	appurtenance, or an appliance, including moving, demolition, and excavating connected 22
123		-	with those services or that work, purporting to require the promisor or indemnitor to defend 23
124		-	or pay the costs of defending the promisee or indemnitee against liability for damages 24
125		-	arising out of bodily injury to any person or damage to property caused by or resulting from 25
126		-	the sole negligence of the promisee or indemnitee, or the agents or employees of the 26
127		-	promisee or indemnitee, is against public policy and is void and unenforceable. 27
128		-
129		-	(4) A PROVISION IN, OR IN CONNECTION WIT H A CONTRACT OR AN 28
130		-	AGREEMENT WITH A DES IGN PROFESSIONAL FOR PROFESSIONAL SERVICE S 29
131		-	PURPORTING TO REQUIR E THE DESIGN PROFESS IONAL TO INDEMN IFY OR HOLD 30
132		-	HARMLESS THE PROMISE E, THE PROMISEE ’S INDEPENDENT CONTRA CTORS, 31
133		-	AGENTS, EMPLOYEES, OR INDEMNITEES , OR ANY OTHER PERSON AGAINST LOSS, 32
134		-	DAMAGES, OR EXPENSES IS VOID AND UNENFORCEABLE UN LESS THE FAULT OF TH E 33
135		-	DESIGN PROFESSIONAL OR ITS DERIVATIVE PA RTIES IS THE A PROXIMATE CAUSE OF 34
136		-	THE LOSS, DAMAGE, OR EXPENSE INDEMNIFI ED. 35
137		-
138		-	(5) A PROVISION IN, OR IN CONNECTION WIT H A CONTRACT OR AN 36
139		-	AGREEMENT WITH A DES IGN PROFESSIONAL FOR PROFESSIONAL SERVICE S 37
140		-	PURPORTING TO REQUIR E THE DESIGN PROFESS IONAL TO DEFEND A PROMISEE, 38 4 SENATE BILL 161
	132	+	(5) A PROVISION IN, OR IN CONNECTION WIT H A CONTRACT OR AN 33
	133	+	AGREEMENT WITH A DES IGN PROFESSIONAL FOR PROFESSIONAL SERVICE S 34
	134	+	PURPORTING TO REQUIR E THE DESIG N PROFESSIONAL TO DE FEND A PROMISEE , 35
	135	+	THE PROMISEE ’S INDEPENDENT CONTRA CTORS, AGENTS, EMPLOYEES, OR 36
	136	+	INDEMNITIE ES, OR ANY OTHER PERSON AGAINST LIABILITY OR CLAIMS FOR 37
	137	+	DAMAGES OR EXPENSES , INCLUDING ATTORNEY ’S FEES, ALLEGED TO BE CAUSED , IN 38
	138	+	WHOLE OR IN PART , BY THE PROFESSIONAL NEGLIGENCE OF THE DE SIGN 39
	139	+	PROFESSIONAL OR ITS DERIVATIVE PARTIES , WHETHER THE CLAIM IS ALLEGED OR 40 4 SENATE BILL 161
141	140
142	141
143		-	THE PROMISEE ’S INDEPENDENT CONTRA CTORS, AGENTS, EMPLOYEES, OR 1
144		-	INDEMNITIEES, OR ANY OTHER PERSON AGAINST LIABILITY OR CLAIMS FOR 2
145		-	DAMAGES OR EXPENSES , INCLUDING ATTORNEY ’S FEES, ALLEGED TO BE CAUSED , IN 3
146		-	WHOLE OR IN PART , BY THE PROFESSIONAL NEGLIGENCE OF THE DESIGN 4
147		-	PROFESSIONAL OR ITS DERIVATIVE PARTIES , WHETHER THE CLAIM IS ALLEGED OR 5
148		-	BROUGHT IN TORT OR C ONTRACT, IS AGAINST PUBLIC PO LICY AND IS VOID AND 6
149		-	UNENFORCEABLE . 7
	142	+	BROUGHT IN TORT OR C ONTRACT, IS AGAINST PUBLIC PO LICY AND IS VOID AND 1
	143	+	UNENFORCEABLE . 2
150	144
151		-	(6) THIS SUBSECTION MAY N OT BE INTERPRETED TO PROHIBIT AN 8
152		-	OTHERWISE ~~ENFORC EABLE~~ INDEMNITY OR ~~H OLD~~ HARMLESS ~~PROVISI ON IN~~ ANY 9
153		-	CONTRACT OR AGREEMEN T FROM INCLUDING REC OVERY OF REASONABLE 10
154		-	ATTORNEY’S FEES AND DEFENSE C OSTS ACTUALLY INCURR ED BY THE PROMISEE T O 11
155		-	DEFEND AGAINST THIRD –PARTY CLAIMS FOR DAM AGES, LOSSES, OR EXPENSES , 12
156		-	ALLEGED IN ANY COURT , TRIBUNAL, OR ALTERNATIVE DISPU TE RESOLUTION 13
157		-	PROCEDURE REQUIRED O F THE PROMISEE BY LA W OR BY CONTRACT , IN CASES 14
158		-	WHERE THE FAULT OF T HE PROMISOR OR ITS D ERIVATIVE PARTIES IS DETERMINED 15
159		-	TO BE THE PROXIMATE CAUSE OF THE ~~DEFENSE~~ COSTS TO BE ~~INDEMNIF IED~~. 16
	145	+	(6) THIS SUBSECTION MAY N OT BE INTERPRETED TO PROHIBIT AN 3
	146	+	OTHERWISE ENFORCEABL E INDEMNITY OR HOLD HARMLESS PROVISION I N ANY 4
	147	+	CONTRACT OR AGREEMEN T FROM INCLUDING REC OVERY OF REASONABLE 5
	148	+	ATTORNEY’S FEES AND DEFENSE C OSTS ACTUALLY INCURR ED BY THE PROMISEE T O 6
	149	+	DEFEND AGAINST THIRD –PARTY CLAIMS FOR DAM AGES, LOSSES, OR EXPENSES , 7
	150	+	ALLEGED IN ANY COURT , TRIBUNAL, OR ALTERNATIVE DISPU TE RESOLUTION 8
	151	+	PROCEDURE REQUIRED O F THE PROMISEE BY LA W OR BY CONTRACT , IN CASES 9
	152	+	WHERE THE FAULT OF T HE PROMISOR OR ITS D ERIVATIVE PARTIES IS DETERMINED 10
	153	+	TO BE THE PROXIMATE CAUSE OF THE D EFENSE COSTS TO BE I NDEMNIFIED. 11
160	154
161		-	[(3)] (7~~) (6~~) This subsection does not affect the validity of any insurance 17
162		-	contract, workers’ compensation, any general indemnity agreement required by a surety as 18
163		-	a condition of execution of a bond for a construction or other contract, or any other 19
164		-	agreement issued by an insurer. 20
	155	+	[(3)] (7) This subsection does not affect the validity of any insurance 12
	156	+	contract, workers’ compensation, any general indemnity agreement required by a surety as 13
	157	+	a condition of execution of a bond for a construction or other contract, or any other 14
	158	+	agreement issued by an insurer. 15
165	159
166		-	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 21
167		-	October 1, 2022. 22
	160	+	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 16
	161	+	October 1, 2022. 17
168	162
169	163
170		-
171		-
172		-	Approved:
173		-	________________________________________________________________________________
174		-	Governor.
175		-	________________________________________________________________________________
176		-	President of the Senate.
177		-	________________________________________________________________________________
178		-	Speaker of the House of Delegates.