Brown Sims Secures Major Summary Judgment Victory in Indemnity Dispute
In a significant win for our coverage group, the United States District Court for the Northern District of Texas, Dallas Division granted summary judgment in favor of our national contractor client, rejecting the owner/operator of a global chemical manufacturer’s attempt to shift liability related to a serious underlying chemical exposure claim which occurred during a facility turnaround.
Plaintiff, the global chemical manufacturer, argued our contractor client was contractually obligated to indemnify it for claims arising from an underlying workplace injury lawsuit, even though our client was not named as a defendant in that litigation and Plaintiff provided no pre-settlement tender to the client. Plaintiff contended that the service agreement imposed a broad indemnity obligation and Brown Sims’ client was the actual at fault party. Plaintiff sought over $10 million in damages and never reduced its demand under $8.4 million.
The Court disagreed with Plaintiff, holding that the indemnity clause failed to meet Texas’s “express negligence” standard and the services agreement expressly excluded indemnification for Plaintiff’s own negligence. The Court found that Plaintiff’s attempt to pursue indemnity post-settlement amounted to improper “satellite litigation” barred under Texas precedent.
In its ruling, the Court emphasized that indemnity provisions must clearly and unequivocally express an intent to cover claims arising from an indemnitee’s own negligence. Because the service agreement did not do so and the underlying action did not include any allegations that Brown Sims’ client was at fault, the Plaintiff’s contractual indemnity claim failed as a matter of law.
This decisive result protects contractors from bearing liability for an owner/operator’s settlement of negligence claims to only then tender and reaffirms long-standing Texas law limiting indemnification in such circumstances.
The client was represented by attorneys Robert Browning, Casey Armstrong, Chelsea Averill, Jason Clouser, and Andrew Tallegheny of Brown Sims, P.C.
