## Facts

- Maxim Crane Works, L.P. rented a crane and provided an operator, Steven Gorski, to Tilbury Constructors for a California construction project.
- The parties used Maxim’s standard-form rental contract, which selected Pennsylvania law and contained an indemnity/defense provision.
- Gorski was injured at the California jobsite and sued both Tilbury and Maxim for personal injury in California state court.
- Maxim tendered its defense and indemnity to Tilbury under the contract; Tilbury refused.
- Maxim sued Tilbury seeking declaratory relief that Tilbury owed a duty to defend and indemnify Maxim in the underlying action.

## Issues

1. Whether the contract’s Pennsylvania choice-of-law clause should be enforced, or instead displaced because applying Pennsylvania law would contravene a fundamental California public policy related to workplace injuries to California employees.
2. If Pennsylvania law applies, whether the contract required Tilbury to defend and indemnify Maxim against claims brought by Maxim’s employee arising from crane operations.

## Decision

- The Court of Appeal affirmed the judgment for Tilbury.
- The court enforced the Pennsylvania choice-of-law clause because Pennsylvania had a sufficient relationship/reasonable basis and enforcing it did not violate a fundamental California public policy.
- Applying Pennsylvania law, the court held Tilbury owed no duty to defend or indemnify Maxim for Gorski’s claims under the contract as construed under Pennsylvania rules.

## Legal Principles

- California generally enforces contractual choice-of-law provisions if the selected state has a substantial relationship to the parties/transaction or there is a reasonable basis for the selection.
- A choice-of-law clause will not be enforced only if applying the chosen law conflicts with a fundamental California policy and California has a materially greater interest in the determination than the chosen state.
- California’s policy favoring compensation for California workers injured in California is principally directed to the worker’s remedies; it does not automatically invalidate a foreign-law clause governing indemnity allocation between commercial defendants when the worker’s direct rights and remedies remain available.
- Under Pennsylvania law, indemnity obligations—particularly any duty to cover another’s negligence or claims by the indemnitee’s own employees—are strictly construed and must be clearly expressed.

## Conclusion

The court enforced the parties’ Pennsylvania choice-of-law clause and, under Pennsylvania’s strict construction of indemnity agreements, concluded the contractor had no contractual duty to defend or indemnify the crane lessor against the lessor’s employee’s California injury claims.


Maxim Crane Works, L.P. v. Tilbury Constructors, 208 Cal. App. 4th 286 (Cal. Ct. App. 2012)