Oliver Communications Group, Inc. v. Schneider Electric Buildings Americas, Inc.

Court of Appeals of Texas·Decided November 2, 2018·No. 07-17-00396-CV·Published

Opinion

In The

Court of Appeals

Seventh District of Texas at Amarillo

No. 07-17-00396-CV

OLIVER COMMUNICATIONS GROUP, INC., APPELLANT V.

SCHNEIDER ELECTRIC BUILDINGS AMERICAS, INC., APPELLEE

On Appeal from the 96th District Court Tarrant County, Texas

Trial Court No. 096-276,107-14, Honorable R. H. Wallace, Jr., Presiding

November 2, 2018

MEMORANDUM OPINION

Before QUINN, C.J., and CAMPBELL and PARKER, JJ.

Oliver Communications Group, Inc. (Oliver) appeals from a final summary judgment. 1 It had been sued by Schneider Electric Buildings Americas, Inc. (Schneider) for indemnity per a subcontract executed between Oliver and Schneider (Subcontract). According to the record, Schneider contracted with the Delaware River Port Authority of Pennsylvania (Port Authority) to install security cameras on the Benjamin Franklin Bridge (Bridge Contract). A provision of the Bridge Contract allegedly obligated Schneider to indemnify Port Authority against certain claims. Schneider and Oliver executed the

1 Because this appeal was transferred from the Second Court of Appeals, we are obligated to apply its precedent when available in the event of a conflict between the precedents of that court and this Court. See TEX. R. APP. P. 41.3.

Subcontract to facilitate completion of Schneider’s agreement with Port Authority. In the Subcontract, Oliver also agreed to indemnify Schneider against certain claims.

Once performance under these contracts began, an employee of Oliver (i.e., Patrick Burness) slipped and fell on steps at the job site. Burness sued Port Authority, among others. Port Authority demanded indemnification from Schneider, and, in turn, Schneider demanded indemnification from Oliver. Oliver refused, while Schneider did not. Eventually, Burness settled his lawsuit, Schneider paid the settlement, and Schneider sued Oliver for indemnification upon the Subcontract. Thereafter, both litigants filed their respective motions for summary judgment. The trial court granted that of Schneider while denying Oliver’s. Thus, Schneider was awarded over $1.2 million against Oliver.

Oliver appealed, contending that the trial court erred in granting Schneider’s motion for summary judgment and denying its own. Though Oliver lay a number of issues and sub-issues before us, they primarily involve the existence of an agreement obligating it to indemnify Schneider, the enforceability of any such indemnity agreement, and whether Oliver was obligated to pay pre-judgment interest on attorney’s fees. We reverse and render.

Authority

We review traditional and no-evidence motions for summary judgment under the standards discussed by the Supreme Court in Dallas Morning News, Inc. v. Tatum, 554 S.W.3d 614 (Tex. 2018), and Lightning Oil Co. v. Anadarko E&P Onshore, LLP, 520 S.W.3d 39 (Tex. 2017). Those standards are applied here.

Next, Oliver and Schneider seem to agree that the rules of contract interpretation of both Pennsylvania and Texas control. Both sets of rules require us to interpret the

meaning of a contract by focusing on the intent of the parties as evinced by the words used in the instrument. See Mace v. Atl. Ref. & Mktg. Corp., 785 A.2d 491, 496 (Pa. 2001) (stating that a fundamental rule in construing a contract is to ascertain and give effect to the intent of the contracting parties and, when the words of a contract are clear and unambiguous, the meaning of the contract is ascertained from the contents of the agreement alone); URI, Inc. v. Kleberg Cty., 543 S.W.3d 755, 763–64 (Tex. 2018) (stating that our objective is to ascertain and effectuate the parties’ intent as expressed in the instrument and interpret contract language according to its plain, ordinary, and generally accepted meaning unless the instrument directs otherwise). Furthermore, the words are not construed in isolation but, rather, in context with the entirety of the agreement. URI, Inc., 543 S.W.3d at 764.

Next, it is argued here that Port Authority sought indemnity against its own negligence. That calls into play another rule of construction utilized in both Pennsylvania and Texas. Per its edict, an indemnity contract should not be construed so as to indemnify against the negligence of the indemnitee unless it is so expressed in unequivocal terms. Mace, 785 A.2d at 495; accord Fisk Elec. Co. v. Contractors & Assocs., Inc, 888 S.W.2d 813, 814–15 (Tex. 1994) (stating that indemnity provisions which do not clearly provide for indemnification for the indemnitee’s own negligence do not, as a matter of law, indemnify the indemnitee for its own negligence).

Texas authority also mandates that indemnity agreements are strictly construed in favor of the indemnitor. Yowell v. Granite Oper. Co., __S.W.3d__, __, 2018 Tex. App. LEXIS 5820, at *25 (Tex. App.—Amarillo July 26, 2018, pet. filed); Levco Constr., Inc. v. Whole Foods Mkt. Rocky Mountain/Sw. L.P., 549 S.W.3d 618, 648 (Tex. App.—Houston [1st Dist.] 2017, no pet.); Irvin v. Guarantee Co. of N. Am., No. 05-07-01230-CV, 2008

Tex. App. LEXIS 5865, at *9 (Tex. App.—Dallas Aug. 5, 2008, no pet.) (mem. op.); accord Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 707 (Tex. 1987) (stating that “[a]n examination of cases from this court reveals its trend toward more strict construction of indemnity contracts”). This rule requiring strict construction favoring the indemnitor bars the extension, by construction or implication, of the indemnitor’s duty beyond the precise terms of the agreement. Irvin, 2008 Tex. App. LEXIS 5865, at *9. This is not a rule of construction but, rather, a rule of substantive law that applies only after the parties’ intent has been ascertained through ordinary rules of construction. Id. at *9–10.

Issue One – Schneider’s Motion for Summary Judgment – Duty to Indemnify Oliver initially contends that it had no agreement to indemnify Schneider for indemnifying Port Authority. This was purportedly so because Oliver had no agreement with Port Authority, and though Schneider did, Schneider failed to prove that it “was contractually bound to indemnify [Port Authority] in connection with the underlying suit” of Burness. We sustain the issue.

The claims of indemnification here are founded upon contract. So, resolution of Oliver’s contentions necessarily entails linking Oliver to Port Authority. That is, Oliver must have agreed to indemnify Schneider for indemnifying Port Authority. Furthermore, both indemnity agreements somehow must have encompassed the claim urged by Burness against Port Authority. The burden to establish that link lay upon Schneider since it sought to impose liability upon Oliver via traditional motion for summary judgment. See Lightning Oil Co., 520 S.W.3d at 45 (stating that the movant in a traditional motion for summary judgment has the burden to prove its entitlement to judgment as a matter of law). Whether it satisfied that burden requires us to look at the various agreements executed by the litigants.

We begin with the agreements between Port Authority and Schneider. That relationship started with a “Request for Proposal” and culminated in a “Purchase Order.” The former consisted of multiple sections, including the “project description,” “proposal requirements,” and “general provisions.” Within the “general provisions” lay the indemnity clause obligating the “Design/Builder” to indemnify Port Authority against claims

arising out of or resulting from: (a) performance or non-performance of the Work;

(b) breach of any of the Design/Builder’s obligations under the Contract Documents, or (c) acts or omissions of the Design/Builder, its contractors, consultants, suppliers, or anyone directly or indirectly employed by any of them or anyone for whose acts they may be responsible, regardless of whether or not such claim, demand, cause of action, damage, liability, loss, or expense is caused in part by a party indemnified hereunder.

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Oliver Communications Group, Inc. v. Schneider Electric Buildings Americas, Inc., (Tex. Ct. App. 2018).

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