Holguin v. Fulco Oil Services L.L.C.

2010 NMCA 91, 2010 NMCA 091, 149 N.M. 98
CourtNew Mexico Court of Appeals
DecidedJuly 19, 2010
Docket29,149; Docket 32,603
StatusPublished
Cited by14 cases

This text of 2010 NMCA 91 (Holguin v. Fulco Oil Services L.L.C.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Holguin v. Fulco Oil Services L.L.C., 2010 NMCA 91, 2010 NMCA 091, 149 N.M. 98 (N.M. Ct. App. 2010).

Opinion

OPINION

VANZI, Judge.

{1} At issue in this appeal is the scope and interpretation of New Mexico’s oilfield and construction anti-indemnity statutes. Appellant appeals the district court’s grant of summary judgment in favor of Appellees. The district court held that the indemnity clauses in the service contracts between Appellant and Appellees whereby Appellees agreed to indemnify Appellant against all claims, even where the claim was based in part on the negligence of the Appellant, were in violation of New Mexico’s oilfield and construction anti-indemnity statutes and were, therefore, void as against public policy. We reverse in part and affirm in part.

BACKGROUND

{2} The following facts are not in dispute. Appellant, Southern Union Gas Services, Ltd. (Southern Union) owns and operates a gas processing facility in Lea County, New Mexico. Appellees, Fulco Oil Services, L.L.C., 3-K Oil and Gas Services, L.L.C., and Ruth Elkins, d/b/a Projects, Etc. (collectively, the Contractors) were hired by Southern Union as subcontractors to perform work at Southern Union’s processing plant. Each Contractor entered into a “Service Contract” with Southern Union that detailed the terms of their agreement.

{3} Each Service Contract contains an indemnity clause whereby the Contractors agreed to indemnify Southern Union

against all claims, damages, losses, liens, causes of action, suits, judgments!,] and expenses, including attorney fees ... of any person ... arising out of, caused by or resulting from the performance of the work ... caused in whole or in part by any act or omission, including negligence, of the contractor ... even if it is caused in part by the negligence or omission of any indemnitee.

{4} Southern Union’s processing plant receives gas from a number of separate gas wells through a series of pipelines. At the plant, the gas is run through a pressurized system called a “slug catcher” that removes condensate and other particulates from the gas. The slug catcher requires periodic cleaning in order to maintain its functionality. Danny Holguin, an employee of one of the Contractors, brought a personal injury lawsuit against Southern Union and two of the Contractors, alleging that he sustained injuries at Southern Union’s processing plant in an accident that occurred during the cleaning of the slug catcher. Mr. Holguin’s suit ultimately settled and is not a part of this appeal.

{5} In response to Mr. Holguin’s suit, Southern Union filed claims against the Contractors pursuant to the indemnity clauses in the Service Contracts, seeking indemnity from the Contractors on Mr. Holguin’s claims against Southern Union. The Contractors filed separate motions for summary judgment, arguing that the indemnity clauses were void and unenforceable under New Mexico anti-indemnity statutes NMSA 1978, Section 56-7-1 (2005) (the construction anti-indemnity statute) and NMSA 1978, Section 56-7-2 (2003) (the oilfield anti-indemnity statute). The district court granted summary judgment in favor of the Contractors, holding that the indemnity clauses were void and unenforceable under both statutes and that to rule otherwise would be against the public policy of New Mexico.

{6} Southern Union appeals the district court’s decision arguing that neither anti-indemnity statute applies to the circumstances of this case because neither the Service Contracts nor the work being performed at the time of the accident fall within the scope of the statutes. Alternatively, Southern Union argues that if the statutes do apply, Southern Union is still free to seek indemnification against the negligence of the Contractors and, therefore, the relative percentages of negligence of the Contractors and Southern Union must be determined by an appropriate fact finder. We address each of Southern Union’s arguments in turn.

DISCUSSION

I. Standard of Review

{7} “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law.” Self v. United Parcel Serv., Inc., 1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. “On appeal from the grant of summary judgment, we ordinarily review the whole record in the light most favorable to the party opposing summary judgment to determine if there is any evidence that places a genuine issue of material fact in dispute.” City of Albuquerque v. BPLW Architects & Eng’rs, Inc., 2009-NMCA-081, ¶ 7, 146 N.M. 717, 213 P.3d 1146. However, in a case “where a pure question of law is at issue, we will not review a grant of summary judgment in the light most favorable to the party opposing the motion!,]” but rather, we will apply a de novo standard of review that favors neither party. Rutherford v. Chaves County, 2003-NMSC-010, ¶ 8, 133 N.M. 756, 69 P.3d 1199.

11. Construction of Anti-Indemnity Statutes

{8} Southern Union argues that the anti-indemnity statutes should be strictly construed. In support of its argument, Southern Union relies on several out-of-state cases that hold that anti-indemnity statutes must be strictly construed because such statutes restrict the freedom of contract. Additionally, citing Wilschinsky v. Medina, 108 N.M. 511, 516, 775 P.2d 713, 718 (1989), for the principle that strict statutory construction must be applied to acts passed in derogation of the common law, Southern Union asserts that because freedom of contract is a common law doctrine and the anti-indemnity statutes restrict that doctrine, the anti-indemnity statutes should be strictly construed to effect the least change in the common law.

{9} This Court has previously had the opportunity to address the enforceability of indemnity provisions in a contract, as well as the concomitant relationship between the public policy favoring freedom of contract and the public policy embodied in New Mexico’s anti-indemnity statutes. Piña v. Gruy Petroleum Mgmt. Co., 2006-NMCA-063, ¶ 13, 139 N.M. 619, 136 P.3d 1029. In Pifia, our discussion was limited to the oilfield anti-indemnity statute, id. ¶ 1, however, our reasoning in that case applies equally well to both of the anti-indemnity statutes at issue in the present case because both statutes contain similar exceptions to the policy favoring freedom of contract.

{10} We have observed that the public policy embodied in both the oilfield and construction anti-indemnity statutes is to promote safety in uniquely hazardous work place environments. See Guitard v. Gulf Oil Co., 100 N.M. 358, 361-62, 670 P.2d 969, 972-73 (Ct.App.1983) (noting that the public policy behind the oilfield anti-indemnity statute is to promote public safety by not allowing the operator of a well or mine to delegate to subcontractors the duty to ensure that the well or mine is safe); City of Albuquerque, 2009-NMCA-081, ¶ 19, 146 N.M. 717, 213 P.3d 1146 (stating that the purpose of the construction anti-indemnity statute is to promote “safety in construction projects by holding each party to the contract accountable for injuries caused by its own negligence”).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

First Mercury Insurance v. Cincinnati Insurance
882 F.3d 1289 (Tenth Circuit, 2018)
Kreutzer v. Aldo Leopold High School
New Mexico Court of Appeals, 2017
State ex rel. Collier v. New Mexico Livestock Board
2014 NMCA 010 (New Mexico Court of Appeals, 2013)
Wagner v. Oliva (In re Vaughan Co. Realtors)
500 B.R. 778 (D. New Mexico, 2013)
State of N.M. ex rel. v. N.M. Livestock Board
New Mexico Court of Appeals, 2013
State ex rel. Collier v. N.M. Livestock Bd.
2014 NMCA 10 (New Mexico Court of Appeals, 2013)
Safeway, Inc. v. Rooter 2000 Plumbing & Drain SSS
2013 NMCA 021 (New Mexico Court of Appeals, 2013)
Windham v. L.C.I.2, Inc.
2012 NMCA 1 (New Mexico Court of Appeals, 2011)
Holguin v. FULCO OIL SERVS., LLC
245 P.3d 42 (New Mexico Court of Appeals, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
2010 NMCA 91, 2010 NMCA 091, 149 N.M. 98, Counsel Stack Legal Research, https://law.counselstack.com/opinion/holguin-v-fulco-oil-services-llc-nmctapp-2010.