                IN THE SUPREME COURT OF IOWA
                           No. 116 / 04-1986

                          Filed April 20, 2007

ALLIANT ENERGY-INTERSTATE POWER
AND LIGHT COMPANY, INTERSTATE
POWER AND LIGHT COMPANY, INTERSTATE
POWER AND LIGHT COMPANY, f/k/a
IES UTILITIES, INC., and/or ALLIANT ENERGY
CORPORATION,

      Appellees,

vs.

BO DUCKETT, a/k/a MARY DUCKETT,
f/k/a MARY E. JEAMBEY,

      Appellant.
________________________________________________________________________
      Appeal from the Iowa District Court for Story County, Dale E.

Ruigh, Judge.



      Appeal from summary judgment on a claim for indemnification.

REVERSED AND REMANDED.


      Merrill C. Swartz and John B. Grier of Cartwright, Druker &

Ryden, Marshalltown, for appellant.



      David R. Schlee and Truman K. Eldridge, Jr., of Schlee, Huber,

McMullen & Krause, P.C., Kansas City, Missouri, and Stephen J. Powell

and Jim D. DeKoster of Swisher & Cohrt, P.L.C., Waterloo, for appellees.
                                          2

CADY, Justice.

        In this appeal, we must construe a natural gas utility’s tariff that

provides for indemnity.       The district court granted summary judgment

for the utility, and awarded it indemnity from the customer. We reverse

and remand.

        I.     Background Facts and Proceedings.

        Alex Saunders died from a natural gas explosion that occurred in

his apartment on April 9, 2001. The apartment was located in Ames,

and was part of a three-plex unit created from an old two-story single-

family dwelling. Bo Duckett (Duckett) purchased the apartment building

in 1984, and maintained it until the time of the explosion.                  Duckett

generally performed the light-duty maintenance on the building, but

contracted out most of the electrical, plumbing and furnace work. One

contractor was Ames Heating and Cooling, which inspected and

maintained the wall furnace in Alex Saunders’s living room. The furnace

received natural gas through a connector pipe, which served as the

connection between the furnace and the home’s natural gas distribution

pipe.    The explosion was the result of a natural gas leak from the

connector pipe, but the specific reason for its failure remains unknown.

The connector pipe was manufactured and installed some thirty-six

years earlier. Alliant Energy Corporation (Alliant) 1 supplied natural gas

to the multi-family residence, but did not design, manufacture, sell,

supply or otherwise handle the connector responsible for the leak.




        1Alliant  is the parent company of another named defendant, Interstate Power &
Light Company. As the trial court and parties have done throughout these proceedings,
we will refer to both companies as Alliant. Alliant, of course, was also formerly known
as IES Utilities.
                                         3

        In July of 2002, the Estate of Saunders (Saunders) sued Alliant for

Alex Saunders’s death.        The theories of liability included negligence

(relying on the doctrine of res ipsa loquitor), and breach of express and

implied warranty. Alliant denied the claims in its answer. Alliant also

filed   a   cross-claim   against    Duckett,    alleging   it   was   entitled   to

indemnification or contribution from Duckett if it paid a claim to

Saunders for any amount. Saunders then amended the petition to assert

claims against Alliant, Duckett, and Ames Heating and Cooling for

wrongful death under theories of negligence, breach of contract, breaches

of express and implied warranties, and loss of spousal consortium.

Alliant answered the amended petition and expressly denied any liability,

but sought indemnity from Duckett if it was in fact deemed liable to

Saunders for any amount.            Duckett also filed answers to Saunders’

petition and Alliant’s cross-claim, and denied liability, claiming the

decedent and other defendants were at fault.

        The case never went to trial. Saunders settled the claims against

Alliant, Duckett, and Ames Heating and Cooling for $325,000. 2 Alliant’s

cross-claim against Duckett, however, survived. 3           Thereafter, Duckett

and Alliant filed motions for summary judgment regarding the cross-

claim. Alliant ultimately relied on section 5.12 of a tariff filed with the

Iowa Utilities Board (IUB) to support its claim for indemnity from

Duckett.     In her first motion for summary judgment, Duckett claimed

Alliant’s settlement was based solely on its own fault, and the tariff did

not specifically allow Alliant to be indemnified for its own fault. Alliant’s


        2Duckettsettled for $25,000 and Alliant and Ames Heating and Cooling settled
for $150,000 each.

      3The Settlement Agreement with Alliant specifically reserved the claim of

indemnification against Duckett.
                                       4

motion for summary judgment alleged there was no genuine issue of

material fact and that it was entitled to judgment as a matter of law.

Duckett filed a second motion for summary judgment and argued Alliant

had no right to indemnity because Alliant must prove it was liable to

Saunders and it had failed to do so.

      Based on the record, the district court denied Duckett’s motions

for summary judgment, and granted judgment for Alliant. The district

court interpreted the tariff to entitle Alliant to indemnification regardless

of who was at fault. The district court noted there was no genuine claim

that Alliant was at fault for the explosion because “the existing record

contains no evidence of Alliant’s negligence or fault in causing the

April 9, 2001, explosion and resulting damages.” The district court also

held the settlement was reasonable.

      Duckett then filed an Iowa Rule of Civil Procedure 1.904(2) motion

and a motion to dismiss.       She argued the district court lacked the

authority to hear the case, and reiterated that Alliant had to prove it was

liable because it could not be indemnified if it was not at fault.       The

district court denied the motions.

      On appeal, Duckett claims the district court erroneously granted

Alliant’s motion for summary judgment because Iowa law and public

policy considerations forbid indemnification in this case, and even if

indemnification is allowed under the terms of the tariff, Alliant cannot be

indemnified because Alliant did not prove it was liable to Saunders.

Duckett additionally argues that if Alliant did not have to prove it was

liable, then we should remand the case to the district court to allow her

to prove that Alliant was liable to Saunders. Finally, Duckett claims the

district court should have granted her motion to dismiss because the
                                     5

IUB, not the district court, had jurisdiction and authority over the

indemnity claim.

      II.      Standard of Review.

      A district court’s entry of summary judgment is reviewed for the

correction of errors at law. Kistler v. City of Perry, 719 N.W.2d 804, 805

(Iowa 2006) (citing Campbell v. Delbridge, 670 N.W.2d 108, 110 (Iowa

2003)).      “Summary judgment is appropriate only when there are no

genuine issues of material fact, and the moving party is entitled to

judgment as a matter of law.” Id. Our review of a district court’s ruling

on a motion to dismiss is also for errors at law. Ritz v. Wapello County

Bd. of Supervisors, 595 N.W.2d 786, 789 (Iowa 1999) (citing Iowa R. App.

P. 4; McCormick v. Meyer, 582 N.W.2d 141, 144 (Iowa 1998)).

“Ultimately, ‘our decision to overrule or sustain a motion to dismiss must

rest on legal grounds.’ ” Trobaugh v. Sondag, 668 N.W.2d 577, 580 (Iowa

2003) (quoting Haupt v. Miller, 514 N.W.2d 905, 907 (Iowa 1994)).

      III.     Duckett’s Jurisdictional Challenge.

      Alliant claims we need not address Duckett’s challenge to the

jurisdiction of the court to hear the cross-claim because Duckett waived

the challenge. We have stated previously:

             When a party claims a jurisdictional challenge has
      been waived, it is often necessary to determine whether the
      specific challenge to jurisdiction targets subject matter
      jurisdiction or jurisdiction of a particular case. Subject
      matter jurisdiction refers to the authority of the court to hear
      and determine the general class of cases to which the
      proceeding belongs. It cannot be conferred by consent,
      waiver, or estoppel. This is because parties to a lawsuit
      cannot establish jurisdiction where it has not been first
      conferred by the constitution or legislation. On the other
      hand, the failure to properly invoke the authority of the court
      in a particular case can be obviated by consent, waiver, or
      estoppel.
                                             6

Keokuk County v. H.B., 593 N.W.2d 118, 122 (Iowa 1999).                        Based on

Duckett’s arguments, it is difficult to determine whether her objection

“targets subject matter jurisdiction or jurisdiction of a particular case.” 4

In her motion to dismiss, 5 Duckett argued the IUB had “exclusive

jurisdiction” of Alliant’s cross-claim and a party could raise “subject

matter jurisdiction” at any time.             She also argued the IUB retained

“primary enforcement authority” of the matter.                   Accordingly, Duckett

argued the summary judgment against her should be void. 6 The district

court properly noted Duckett’s motion to dismiss referred to separate

jurisdictional concepts that are not identical.               In her appellate brief,

Duckett      still    refers    to     her       argument     as     one     based      on

“jurisdiction/authority.”

       Thus, we find it once again “helpful at this juncture to point out

the difference between a court’s subject matter jurisdiction and its

authority.” State v. Emery, 636 N.W.2d 116, 119 (Iowa 2001). “Subject

matter jurisdiction refers to ‘the authority of a court to hear and

determine cases of the general class to which the proceedings in question

belong, not merely the particular case then occupying the court’s

       4As   the sentence implies, “jurisdiction of a particular case” does not mean
subject matter jurisdiction. See Christie v. Rolscreen, 448 N.W.2d 447, 450 (Iowa 1989)
(“Sometimes we have referred to ‘lack of authority to hear the particular case’ as lack of
jurisdiction of the case.” (Citation omitted.)). Instead, jurisdiction of the case refers to
the court’s authority to hear the specific or particular case. See State v. Wiederien, 709
N.W.2d 538, 540 (Iowa 2006) (noting “ ‘lack of jurisdiction of the case[]’ occurs when the
court has subject matter jurisdiction but may not be able to act in a particular case for
some reason” (citing Christie, 448 N.W.2d at 450)).

       5Duckett  also filed a rule 1.904(2) motion that argued the district court lacked
jurisdiction/authority.

       6An  argument that a judgment is void is an argument based on lack of subject
matter jurisdiction, not authority. See In re Estate of Falck, 672 N.W.2d 785, 791 (Iowa
2003) (noting the lack of subject matter jurisdiction renders a judgment void and
subject to collateral attack, whereas lack of authority simply makes the judgment
voidable).
                                            7

attention.’ ”    Christie, 448 N.W.2d at 450 (emphasis added) (quoting

Wederath v. Brant, 287 N.W.2d 591, 594 (Iowa 1980)).                     “A court may

have subject matter jurisdiction but for one reason or another may not

be able to entertain a particular case. In such a situation we say the

court lacks authority to hear that particular case.” Emery, 636 N.W.2d

at 119.

       Importantly, “[a] court may lack authority to hear a particular case

‘where a party fails to follow the statutory procedures for invoking the

court’s authority.’ ” Id. (quoting Shrier v. State, 573 N.W.2d 242, 244–45

(Iowa 1997)).      Although Duckett argues in terms of jurisdiction and

authority, she ultimately argues Alliant failed to follow statutory

procedure because it was required to exhaust its administrative remedies

through the IUB.

       Regarding this specific issue we have said:

                It is well-established that a party must exhaust any
       available administrative remedies before seeking relief in the
       courts. The district court is deprived of jurisdiction of the
       case[ 7 ] if administrative remedies are not exhausted.

                ....

              Generally, the exhaustion-of-remedies requirement
       does not implicate subject matter jurisdiction.     This is
       because the exhaustion-of-remedy doctrine does not
       preclude judicial review, but merely defers it until the
       administrative agency has made a final decision.        Our
       legislature has given the district court subject matter
       jurisdiction to act in response to challenges to decisions
       made by administrative agencies, but requires this authority
       to be withheld until any available administrative remedies
       have been exhausted. Thus when a litigant requests judicial
       review before exhausting administrative remedies, the

       7This   reference to “jurisdiction of the case” is synonymous with a court’s
particular, as opposed to general, “authority.” “Jurisdiction of the case” does not mean
subject matter jurisdiction. See Christie, 448 N.W.2d at 450 (“Sometimes we have
referred to ‘lack of authority to hear the particular case’ as lack of jurisdiction of the
case.” (Citation omitted.)).
                                     8
      district court merely lacks authority to entertain a particular
      case. This is the type of challenge that can be waived.
Keokuk County, 593 N.W.2d at 122.            Thus, even if we interpreted

Duckett’s argument to encompass an objection to subject matter

jurisdiction, such jurisdiction is not at issue here.     Instead, the issue

before us is whether the court lacked the authority to hear the case. As

a result, the defect can be waived if not timely raised by an objection.

See Emery, 636 N.W.2d at 120 (“[A] defect in the court’s authority to hear

a particular case may be waived, whereas any defect in its subject matter

jurisdiction is not subject to waiver.” (citing State v. Mandicino, 509

N.W.2d 481, 482 (Iowa 1993))).

      Alliant argues Duckett failed to timely challenge the court’s

authority and therefore waived this defense. See 21 C.J.S. Courts § 85,

at 114 (2006) (“An objection that the court lacks jurisdiction of the

subject matter may be made at any time; generally, an objection to

jurisdiction on any other ground is waived if not made at the first

opportunity or seasonably. . . . An objection to jurisdiction based on any

ground other than lack of jurisdiction of the subject matter . . . is usually

waived by failure to raise the objection at the first opportunity, or in due

or seasonable time, or within the time prescribed by rule or statute.”); In

re Marriage of Ivins, 308 N.W.2d 75, 77 (Iowa 1981) (“It is true that

subject-matter jurisdiction cannot be waived or conferred by consent.

However, this is not true in the case of objections to personal

jurisdiction, such as involved here, which will be deemed waived unless

raised ‘at the first opportunity, or in due or reasonable time . . . .’ ”

(Citations omitted.)).   Duckett admits she did not raise her objection

when Alliant first filed its cross-claim with the district court. She insists,

however, the objection was raised as soon as practicable. She contends
                                             9

she did not know Alliant was relying on the indemnification provision in

the tariff for its cross-claim, and was not in a position to argue the cross-

claim should be heard by the IUB until she learned the tariff provision

was at issue. 8

       Duckett is correct Alliant’s cross-claim for contribution and

indemnity did not mention the tariff provision. Thus, when Duckett filed

her answer to Alliant’s cross-claim she may not have been responsible for

raising the issue of the court’s authority to hear the claim.                    However,

       8Importantly,   the “filed tariff doctrine” applied once the claim became one
involving a utility’s tariff provision. See Teleconnect v. U.S. W. Commc’ns, Inc., 508
N.W.2d 644, 647–48 (Iowa 1993). “Under th[is] doctrine, the relevant regulatory agency
retains primary enforcement authority over utility disputes in which, absent the tariff
scheme, contract or tort law would ordinarily govern.” Id. (citations omitted). In
addition, we have recognized:

       Virtually all authorities hold when authority is delegated to an
       administrative officer or body, such delegation within its terms and
       limitations is primary and exclusive unless a contrary intent is clearly
       manifested by the legislature. . . . [T]he provisions for appeal, first to the
       district court and then to this court, make it apparent the legislature
       intended the administrative remedy before the Commerce Commission
       should be first exhausted before resort could be had to the courts. Until
       the Commission has made its finding and has entered its order so that
       an appeal may be taken to the district court as provided in section
       490A.13, Code, the jurisdiction of the Commission is exclusive. In the
       case now before us this administrative remedy had not been exhausted
       and the district court was without jurisdiction to consider the
       controversy.
Elk Run Tel. Co. v. Gen. Tel. Co. of Iowa, 160 N.W.2d 311, 315 (Iowa 1968). The
Commerce Commission was the predecessor to the IUB. See Teleconnect, 508 N.W.2d
at 646. Thus, our case law and statutory law require the IUB to hear the dispute first,
and then allows the district court to review the decisions of the IUB. See Iowa Code §§
17A.19(1), 476.13; Teleconnect, 508 N.W.2d at 647; Elk Run, 160 N.W.2d at 315. As we
have already determined, the failure to follow this procedure divests the court of its
particular authority to hear the case. It does not create a situation where the district
court lacks subject matter jurisdiction.

         We additionally note the district court in this case, in ruling on Duckett’s motion
to dismiss, held the IUB did not have primary enforcement authority. It recognized the
filed tariff doctrine applied, but that in this case it did not provide the IUB with primary
enforcement authority because any remedy the IUB could provide would be inadequate.
We need not determine the propriety of this decision because we ultimately find Duckett
waived any jurisdictional argument.
                                           10

Duckett subsequently learned the tariff was at the heart of the cross-

claim, and failed to raise the issue until January 2004, more than a year

later.     Duckett even invoked the court’s authority to grant summary

judgment based on her claim the tariff did not permit Alliant to be

indemnified before she finally decided to challenge the court’s authority

to hear the cross-claim. In fact, Duckett did not raise the issue until

after the district court ruled on the summary judgment motions filed by

the parties. Based on these facts, it becomes clear that Duckett did not

timely raise her objection to the court’s authority. 9 Her failure to do so

results in waiver.

         IV.   Indemnification.

         Indemnification is a difficult subject, and the legal principles we

have developed in indemnification cases are not always easy to apply.

We have previously

         acknowledge[d] the complexity of the law of indemnification
         and the challenges that can confront judges and lawyers in
         its application to particular factual circumstances.
         Essentially, the historical complexity in this area of the law
         can be traced to the competing legal and equitable interests
         that give rise to the doctrine, as well as an array of public
         policy considerations.
McNally & Nimergood v. Neumann-Kiewit Constructors, Inc., 648 N.W.2d

564, 574 (Iowa 2002) (citations omitted). Nevertheless, the difficulties in

this area are often allayed by first determining the terms of the

indemnification agreement.           The agreement in each case ultimately

         9Itdoes not matter that Duckett made a rule 1.904(2) motion to enlarge or
amend the findings of the district court after its rulings on the motions for summary
judgment. This motion, which also asserted the court lacked jurisdiction/authority,
may have helped preserve the issue for appeal, but it does not mean Duckett made the
jurisdictional/authority argument during the summary judgment proceedings (and thus
“timely”). While a rule 1.904(2) motion presents a claim that a district court overlooked
an issue it now needs to rule on, that is not the case here where the district court could
not have overlooked this issue because the parties never brought it up until after the
summary judgment rulings.
                                     11

determines the rights of the parties because our legal principles

concerning indemnification are often qualified by the particular terms of

the agreement, or the tariff in this case.

      Therefore, we begin by considering the language of the utility tariff.

Section 5.12 of the tariff states:

      Customer shall indemnify, hold harmless and defend
      Company against all claims, demands, costs or expenses for
      injury to persons or loss or damage to property, in any
      manner directly or indirectly connected with, or growing out
      of the distribution or use of gas service by Customer at or on
      Customer’s side of the point of delivery.

We must interpret section 5.12 the same as any other contract for

indemnification. Although Alliant is correct that a tariff “has the force

and effect of law,” this does not mean it should be interpreted differently

than other contracts. Estate of Pearson v. Interstate Power & Light Co.,

700 N.W.2d 333, 342 (Iowa 2005).             The terms of a tariff essentially

replace private contracts, and “[w]e construe a tariff according to the

same rules as contracts.” Id. at 342–43. Therefore, the general rule that

indemnification provisions are subject to the same formation, validation,

and interpretation rules as other contracts is not altered because the
indemnity provision is part of a tariff. See McNally, 648 N.W.2d at 571

(“A contract for indemnification is generally subject to the same rules of

formation, validity and construction as other contracts.” (citing Evans v.

Howard R. Green Co., 231 N.W.2d 907, 916 (Iowa 1975))); Cochran v.

Gehrke, Inc., 293 F. Supp. 2d 986, 994 (N.D. Iowa 2003) (same).

      We have previously stated these rules in the context of a tariff as

follows:

      In construing a written contract, “the intent of the parties
      must control; and except in cases of ambiguity, this is
      determined by what the contract itself says.” We construe a
      contract in its entirety by considering all of its pertinent
                                         12
       provisions.      We assume no part of the contract is
       superfluous or of no effect and a construction giving
       meaning to all its clauses is preferred.          If a tariff is
       ambiguous, we strictly construe the language of a tariff
       against the drafter, the utility. A strict construction against
       a tariff's drafter is not justified when the construction would
       ignore a permissible and reasonable construction that
       conforms to the intentions of the framers of the tariff. Any
       ambiguity created by the incorporation of seemingly
       contradictory clauses must be resolved against the drafter of
       the contract.

             This rule of strict construction, however, does not
       apply if a strict construction of the tariff has the effect of
       discriminating based on price or service.
Estate of Pearson, 700 N.W.2d at 343–44 (citations omitted). In addition,

we have noted two questions must be answered when determining a

party’s right to indemnification: “ ‘(1) for whose negligent acts causing

damage is indemnity promised? and (2) what is the scope of the area in

which indemnity is available?’ ”       Modern Piping, Inc. v. Blackhawk

Automatic Sprinklers, Inc., 581 N.W.2d 616, 624 (Iowa 1998) (quoting

R.E.M. IV, Inc. v. Robert Fl. Ackermann & Assocs., Inc., 313 N.W.2d 431,

433 (Minn. 1981)); see Cochran, 293 F. Supp. 2d at 994 (asking these

questions).   Thus, we now apply our rules of construction to answer

these questions.

       Section 5.12 fails to specifically reference for whose negligent acts

indemnity is promised. In this regard, it is ambiguous and warrants a

strict construction against the utility. Estate of Pearson, 700 N.W.2d at

343.   It simply provides that the customer must indemnify the gas

company against claims for loss or damage connected with the use of the

gas service by the customer “at or on the customer’s side of the point of

delivery.” We refuse to find, as the district court did, that this language

permits indemnity regardless of who was negligent. Moreover, we find

section 5.12 only permits indemnity when the customer is at fault.
                                       13

         First, section 5.12 does not say, with any unambiguous terms or

any reasonable construction, that Alliant can be indemnified for its own

fault or when Duckett is not at fault. Alliant, in fact, conceded at oral

argument that section 5.12 did not permit indemnity for Alliant’s own

fault.    This construction is consistent with our requirement that an

indemnity agreement must clearly express an intention to indemnify the

indemnitee for its own negligence in order to give it that effect.         See

McNally, 648 N.W.2d at 571 (“[I]ndemnification contracts will not be

construed to permit an indemnitee to recover for its own negligence

unless the intention of the parties is clearly and unambiguously

expressed.”).

         Second, it could not have been the intention of the tariff for Alliant

to be indemnified by the customer when the customer was not at fault.

The tariff is an agreement between Alliant and the customer, and while it

protects Alliant from claims brought by third persons, see Estate of

Pearson, 700 N.W.2d at 344–45 (“[T]he intent of section 5.12 was to

protect [the indemnitee] from claims brought by third parties, not those

of the customer.”), we refuse to read it in such a way that could force a

faultless customer to indemnify a faultless indemnitee, see McNally, 648

N.W.2d at 571 (“The traditional reluctance of courts to allow the burden

of one who is negligent to be transferred to another who is not at fault,

especially where there is a disparity in bargaining power and economic

resources of the parties, can be traced to public policy considerations.

Thus, indemnification contracts claimed to contain these provisions are

construed more strictly than other contracts.” (Citation omitted.)).

Instead, the language of the tariff limits indemnity to when the

underlying claim is for damage connected with or growing out of the use
                                     14

of gas service by the customer.      This language supports the approach

that the actions of the customer must be a cause of the damage.

Moreover, sections 2.12, 2.24, and 4.06 of the tariff reveal that the

customer is made responsible to install and maintain the proper

equipment and apparatus to use the gas service on the customer’s side

of the point of delivery. These sections impose a duty on the customer to

properly maintain the pipes and apparatus in using the gas service on

the   customer’s   side   of   delivery,   and   the   tariff   then   imposes

indemnification involving damage claims connected with the failure of

the customer to properly perform its obligations under the tariff in using

the gas service. See Estate of Pearson, 700 N.W.2d at 343 (recognizing a

contract is construed in its entirety). Thus, we conclude section 5.12 of

the tariff only provides indemnity when the customer is negligent.

      We now consider the scope of indemnity in this case. Section 5.12

makes indemnity available when the loss or damage is at least indirectly

connected with the use or distribution of gas, and occurs at or on the

customer’s side of the point of delivery. The point of delivery is the outlet

of the company gas meter where the company delivers the natural gas.

There is nothing ambiguous about this language, nor about the

circumstances of this case.     The claims all stem from the natural gas

explosion that occurred on Duckett’s side of the point of delivery, which

no party disputes, and which are clearly encompassed by the scope of

the area in which indemnity is provided in section 5.12.

      Applying our rules of construction to section 5.12, we find it only

permits indemnification when the customer is negligent and when the

loss or damage occurs at or on the customer’s side of the point of
                                   15

delivery. Otherwise, Alliant has no claim for indemnity. We now address

the arguments of the parties as they relate to our construction of section

5.12.

        Duckett first argues Alliant’s indemnification claim must fail

because section 5.12 does not permit Alliant to be indemnified for its

own negligence. See McNally, 648 N.W.2d at 571. It maintains Alliant

has sought indemnification for its own negligence in this case because it

settled the underlying claim with Saunders based on claims of its own

negligence.

        We have adopted the general rule that an indemnification

agreement will not be construed to permit an indemnitee to recover for

its own negligence unless the indemnification agreement clearly provides

otherwise.    Id. at 572.    However, the application of this rule of

construction to this case is not in dispute. Both Duckett and Alliant, as

do we, agree the tariff does not permit the gas company to recover

indemnification for its own negligence.   Thus, the question is whether

Alliant is seeking indemnification from Duckett for its own negligence,

contrary to the terms of the tariff, because the claim by Saunders that

resulted in the loss to Alliant was based on allegations of Alliant’s own

negligence.

        Duckett argues the grounds for a claim for indemnification are

confined to the grounds or allegations asserted against the indemnitee in

the underlying action. Thus, Duckett argues that if the underlying claim

brought against an indemnitee is based on allegations of its own

negligence, as in this case, any subsequent claim for indemnification by

the indemnitee must necessarily be based on its own negligence.

Duckett primarily relies on our prior pronouncement in McNally:
                                     16
       When the underlying litigation settled by a potential
       indemnitee was limited to allegations of the indemnitee’s own
       negligence not covered under the indemnification agreement,
       there can be no claim for indemnity because the amount
       paid in the settlement could only have been the result of the
       indemnitee’s own noncovered negligence.
648 N.W.2d at 578.

       We recognize that allegations of liability against an indemnitee in a

claim brought by the injured party normally frame the grounds upon

which liability could be imposed against the indemnitee in the underlying

action.   Thus, we agree with Duckett that a settling indemnitee can

normally only establish its own liability to the injured party so as to

support a claim for indemnification within the context of the grounds for

liability alleged by the injured party in the underlying claim. However,

this limitation is only important in an indemnification claim when the

indemnification agreement limits indemnification to those circumstances

where the indemnitee must establish its own liability to the injured party

as an element of recovery.

       Generally, an indemnitee who has settled the underlying claim

must first establish it was liable to the injured party as an element of

recovering indemnification.       Ke-Wash Co. v. Stauffer Chem. Co., 177

N.W.2d 5, 11 (Iowa 1970).        This rule, however, does not apply if the

indemnification agreement does not require it. McNally, 648 N.W.2d at

575.      In   McNally,   we    referred   to   indemnification     under        these

circumstances as based on a “purely voluntary” loss.               Id.        When an

indemnification     agreement      permits      the   indemnitee         to    recover

indemnification independent of any underlying liability to the injured

party, then the allegations of liability by the injured party do not limit the

indemnitee’s     claim    for   indemnification.         Instead,        when      the

indemnification agreement permits indemnification for a loss incurred for
                                       17

reasons other than legal liability, or a “purely voluntary” loss, the

indemnitee is entitled to show as a part of the indemnification claim that

the loss incurred by settling the underlying claim brought by the injured

party was based on non-legal reasons, such as a business decision,

despite the allegations of its own legal liability.

      The indemnification claim brought in McNally failed not only

because the underlying claim by the injured party was limited to grounds

of   negligence   that   did    not    permit    indemnification   under   the

indemnification    agreement,    but    also    because   the   indemnification

agreement did not permit the indemnitee to obtain indemnification

without first establishing it was liable to the injured party. Id. at 576–78.

In other words, the indemnitee could not recover indemnification under

the agreement if the settlement was “purely voluntary,” or based on non-

legal reasons.    In that dual context, the settlement by the indemnitee

precluded indemnification.

      In this case, as in McNally, the indemnitee cannot recover

indemnification under the tariff if the settlement was based on the

negligence of the indemnitee.          However, unlike the indemnification

agreement in McNally, the indemnification tariff in this case does permit

indemnification based on a “purely voluntary” loss, or otherwise a

settlement based on reasons independent of the indemnitee’s liability.

      This approach is evident from the specific language of the tariff

that limits indemnification only when the injury or damage resulted from

the customer’s use of the gas service, together with the undisputed

proposition that the tariff does not permit the gas company to obtain

indemnification when its own negligence was a cause of the injury or

damage.     As a result of these two standards, the tariff necessarily
                                        18

contemplates that a “purely voluntary” payment will serve as the basis

for the loss that gives rise to a claim for indemnification, not a payment

based on the liability or negligence of the gas company. This approach

reveals an “intent to alter the rule against voluntary payments.” See id.

at 575. An indemnification tariff that never permits indemnification if

the gas company is at fault, conversely can only mean indemnification is

available when the gas company is not at fault.              Consequently, this

interpretation allows the gas company to settle a claim brought by the

injured party based on claims of its own negligence, then show in an

indemnification action that the loss or settlement by the gas company

was actually a “purely voluntary” loss based on the liability of the

customer, not its own negligence. 10

      Duckett has also argued that Alliant cannot be indemnified in this

case because Iowa law requires an indemnitee who has settled the

underlying claim to prove it was liable to the claimant prior to recovery,

and that Alliant has failed to do so.          Her argument is based on the

following principle we announced years ago:

      We hold except where there is an expressed agreement for
      indemnification providing otherwise as in Robert & Company
      Associates v. Pinkerton & Laws Co., 169 S.E.2d 360, 362–63,
      a party seeking to establish in an independent action a right
      of indemnity as a theory of recovery must plead and prove
      three basic elements: (1) it was liable to the injured party,
      (2) the settlement was reasonable and (3) the facts are such
      as to give rise to a duty on the part of the indemnitor to
      indemnify the indemnitee.

Ke-Wash, 177 N.W.2d at 11.              Yet, as we noted in Ke-Wash, the

requirement to prove liability is unnecessary when the terms of the


      10We    need not address Duckett’s argument that public policy considerations
forbid Alliant from recovering indemnity for its own negligence. The tariff does not
permit Alliant to do so, and Alliant was not seeking indemnity under such
circumstances.
                                    19

agreement provide otherwise. Id.; see also McNally, 648 N.W.2d at 574–

75 (recognizing the Ke-Wash requirements and the exception); Kaydon

Acquisition Corp. v. Custom Mfg., Inc., 317 F. Supp. 2d 896, 908–10 (N.D.

Iowa 2004) (discussing the “McNally & Nimergood exception”).       This is

exactly the case here. As we have determined, the tariff eliminates the

first Ke-Wash element. Any other interpretation would render the tariff

useless. A settling indemnitee could never recover if it had to prove its

liability to meet the requirements of our law, and yet also prove it was

not at fault to meet the requirements of the tariff. We will not construe

the tariff in such a manner as to nullify its provisions and impose an

impossible burden on the indemnitee. See Estate of Pearson, 700 N.W.2d

at 343–44 (recognizing that we will construe a contract to give it

meaning).

      This analysis and construction of the tariff disposes of both

arguments raised by Duckett in support of her claim that Alliant was not

entitled to summary judgment. As to the first argument, although the

tariff does not entitle the gas company to indemnification for its own

negligence, a gas company can under the tariff settle the underlying

lawsuit based on claims of its own negligence and then establish in the

indemnification action that the customer was in fact the negligent party.

As to the second argument by Duckett, the tariff reveals it does not follow

the traditional notion of treating indemnification as an obligation to

indemnify the indemnitee against liability of the indemnitee to another or

against a loss resulting from liability. See McNally, 648 N.W.2d at 570,

577. Consequently, the requirement to plead and prove its own liability

when the underlying claim for damages was settled without an
                                            20

adjudication of liability does not apply. See id. at 574–75; Ke-Wash, 177

N.W.2d at 11–12.

       Nevertheless, the district court erroneously held the tariff allowed

indemnity regardless of who was at fault.                     The tariff only allows

indemnity when Alliant is not at fault and the customer is at fault. It

was error for the district court to hold otherwise. Moreover, this error

was visited upon the summary judgment entered by the district court

because the court made no additional finding that the customer failed to

properly install or maintain the equipment, or was otherwise at fault, in

the use of the gas service. The district court only determined there was

no evidence Alliant was at fault, and it was undisputed the cause of the

damages occurred at a connector pipe on the customer’s side of the point

of delivery. 11     Without an additional determination that there is no

factual issue with respect to the customer’s fault in the installation,

maintenance, or care of the connector pipe, summary judgment was

improper. Thus, we remand the case in order for the court to make this

additional determination, and in light of its conclusion, reconsider the

propriety of summary judgment. 12
       In the end, the tariff does not disadvantage the customer but

merely gives the gas company greater power to settle a claim brought by

a person who has been injured from a natural gas explosion or some



       11Our law additionally requires that Alliant, as a settling party seeking

indemnification, prove the settlement was reasonable. See Ke-Wash, 177 N.W.2d at 11.
The district court concluded the reasonableness of Alliant’s settlement was undisputed.
Duckett makes no argument on appeal that the settlement was unreasonable.

       12The   district court permitted Alliant to seek further indemnification for
expenses or costs related to the litigation as a result of its ruling. The record is unclear
whether Alliant has done so. While we recognize such expenses or costs are included in
section 5.12, the recovery of them requires the same showing Alliant must make to
recover its actual settlement.
                                    21

other catastrophe due to the distribution and use of metered gas. The

tariff enables the gas company to pay a settlement to the injured person

even when its evidence shows the customer was at fault, and to then sue

the customer for indemnification by establishing that the customer was

the party at fault. The other elements of recovery under Ke-Wash are

applicable to protect the customer, and the customer will never be

responsible for indemnification without proof of its own fault. The tariff

ultimately permits the injured person to be removed from the litigation

and to allow the defendants to litigate the issue of liability between them.

      REVERSED AND REMANDED.

      All justices concur except Appel, J., who takes no part.
