Industrial Specialists, LLC v. Blanchard Refining Company LLC and Marathon Petroleum Company LP

CourtCourt of Appeals of Texas
DecidedDecember 23, 2025
Docket01-23-00704-CV
StatusPublished

This text of Industrial Specialists, LLC v. Blanchard Refining Company LLC and Marathon Petroleum Company LP (Industrial Specialists, LLC v. Blanchard Refining Company LLC and Marathon Petroleum Company LP) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Industrial Specialists, LLC v. Blanchard Refining Company LLC and Marathon Petroleum Company LP, (Tex. Ct. App. 2025).

Opinion

Opinion issued December 23, 2025

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-23-00704-CV ——————————— INDUSTRIAL SPECIALISTS, LLC, Appellant V. BLANCHARD REFINING COMPANY LLC AND MARATHON PETROLEUM COMPANY LP, Appellees

On Appeal from the 212th District Court Galveston County, Texas Trial Court Case No. 17-CV-1242

OPINION

The crux of this case boils down to a straightforward question: Can an

indemnitee under a contractual indemnity agreement—who is sued with other

defendants for negligence—settle all of the plaintiffs’ negligence claims and then recover from its indemnitor the portion of the settlement attributable to the other

defendants under a comparative indemnity scheme?

The answer to that question is yes, with one caveat. The indemnitee may do

so provided that the parties’ indemnity agreement complies with the express

negligence doctrine and expressly provides for such comparative indemnity.

Because we conclude that the indemnity provision here does not expressly

provide for comparative indemnity, it fails to satisfy the express negligence doctrine

and is therefore unenforceable as a matter of law under these circumstances.

We reverse and render.

Background

Blanchard Refining Company LLC owns and operates the Galveston Bay

Refinery in Texas City. Industrial Specialists, LLC is a large industrial contractor

who provides specialty services to the oil and gas industry. Blanchard and Industrial

executed a five-year Major Service Contract that called for Industrial to provide

turnaround services at Blanchard’s refinery. The parties’ contract contains the

following indemnity provision in Article 13.1:

CONTRACTOR AGREES TO . . . INDEMNIFY . . . COMPANY [AND] ITS AFFILIATED COMPANIES . . . FROM AND AGAINST ALL LOSSES, DAMAGES . . . AND OTHER LIABILITIES . . . BECAUSE OF . . . BODILY INJURY, INCLUDING DEATH . . . WHICH OCCUR . . . IN CONNECTION WITH PERFORMANCE OF THE WORK CONTEMPLATED HEREUNDER . . . EXCEPT TO THE EXTENT THE LIABILITY, LOSS OR DAMAGE IS

2 ATTRIBUTABLE TO AND CAUSED BY THE NEGLIGENCE OF COMPANY . . . . (Emphasis added). “Contractor” is defined as Industrial, and “Company” is defined

as Blanchard and “any affiliates of” Blanchard, which includes Marathon Petroleum

Company LP.1

Three years into the five-year contract, a fire occurred in a regenerator vessel

at the refinery, injuring fifteen Industrial employees and one employee of another

contractor, Certified Safety, Inc. One Industrial employee ultimately died from his

injuries. In four separate lawsuits, the injured employees (the personal-injury

plaintiffs) asserted negligence claims against Marathon and its other contractors.2

All the personal-injury plaintiffs’ suits were transferred for multi-district pretrial

1 “Affiliates” is defined as “another company or other legal entity that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the specified company or other legal entity.” Blanchard is a wholly-owned subsidiary of Blanchard Holdings Company LLC, which is, in turn, a wholly-owned subsidiary of Marathon Petroleum Company LP. Blanchard and Marathon are both parties to this appeal. We refer to them collectively as Marathon. 2 The other contractors sued were Certified Safety, Inc., Innovative Ventilation Systems, Inc., and AltairStrickland, Inc.

3 proceedings.3 Industrial was not named as a defendant,4 but was designated as a

responsible third party.5

Marathon demanded a defense and indemnity from Industrial pursuant to the

indemnity provision in the parties’ contract. Industrial rejected the demand.

Marathon and the other contractors collectively settled all the personal-injury

plaintiffs’ claims against them for $104 million (the Settlement). Marathon and the

other contractors also settled all claims amongst themselves, including Marathon’s

indemnity claims against the contractors. According to the settlement agreements

between Marathon and the other contractors, Marathon would pay $86 million of the

$104 million Settlement to the plaintiffs.6

3 See In re Blanchard Ref. Galveston Bay Refinery FCCU3 Fire Litig., Cause No. 16- MDL-0001, in the 56th Judicial District Court of Galveston County, Texas (i.e., the Underlying Lawsuit). 4 Section 408.001(a) of the Texas Labor Code precluded Industrial’s employees from suing their employer. See TEX. LAB. CODE § 408.001(a). It is unclear from the record why Certified Safety’s employee chose not to sue Industrial. 5 See TEX. CIV. PRAC. & REM. CODE § 33.004. 6 The other settling contractors contributed to the settlement as follows: (1) Altair – $2 million; (2) Innovative – $11 million; and (3) Certified Safety – $5 million. There is a dispute among the parties whether Altair, through its parent company EMCOR, provided Marathon an additional $16 million in connection with the settlement, in the form of a 3% rebate on future work provided by EMCOR to Marathon. 4 Industrial did not participate in the Settlement with the plaintiffs. And each

of the personal-injury plaintiff’s settlement agreements contains the following (or

similar) language:

The Parties further agree that the releases contemplated in this Agreement do not encompass or include any claims that any Party has or may have against Industrial Services LLC (“ISI”), Brand Energy & Infrastructure Services, Inc. (“Brand”) or their respective parents, subsidiaries, affiliates, successors, and assigns. Neither ISI nor Brand is a party or third-party beneficiary to this Agreement. Marathon then filed this breach of contract suit against Industrial, seeking to

enforce their indemnity agreement and to recover much of what it paid in the

Settlement to the underlying personal-injury plaintiffs. Because construction of the

indemnity provision in Article 13.1 of their contract is a threshold legal question,

both Marathon and Industrial moved for competing summary judgments. The trial

court denied both summary judgment motions.7

7 Industrial requested permission from the trial court to file a permissive appeal from the trial court’s denial of its motion for summary judgment. In granting Industrial leave to file a permissive appeal, the trial court withdrew its previous order denying summary judgment and issued an amended order. The amended order denied Industrial’s summary-judgment motion and made the following substantive ruling:

The March 14, 2013 Major Service Contract between [Industrial] and Plaintiff Blanchard Refining Company LLC does not prohibit Plaintiffs Blanchard and Marathon Petroleum Company LP from seeking indemnity from [Industrial] for personal-injury settlement payments Plaintiffs made, to the extent those payments were attributable to or caused by the negligence of parties other than Plaintiffs.

5 Before trial, at the request of the parties and after extensive briefing, the trial

court issued the following legal rulings under Texas Rule of Civil Procedure 166(g):

1. The “express negligence rule,” as announced in Ethyl Corp. v. Daniel Const. Co., 725 S.W.2d 705 (Tex. 1987), does not render unenforceable the indemnity agreement in the Major Services Contract between Marathon and [Industrial].

2. The rule set forth in Beech Aircraft Corp. v. Jenkins, 739 S.W.2d 19 (Tex.

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Industrial Specialists, LLC v. Blanchard Refining Company LLC and Marathon Petroleum Company LP, Counsel Stack Legal Research, https://law.counselstack.com/opinion/industrial-specialists-llc-v-blanchard-refining-company-llc-and-marathon-texapp-2025.