Superior Snubbing Services, Inc. v. Energy Service Company of Bowie, Inc.

158 S.W.3d 112, 165 Oil & Gas Rep. 832, 2005 Tex. App. LEXIS 886, 2005 WL 250219
CourtCourt of Appeals of Texas
DecidedFebruary 3, 2005
Docket02-04-00131-CV
StatusPublished
Cited by2 cases

This text of 158 S.W.3d 112 (Superior Snubbing Services, Inc. v. Energy Service Company of Bowie, Inc.) 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
Superior Snubbing Services, Inc. v. Energy Service Company of Bowie, Inc., 158 S.W.3d 112, 165 Oil & Gas Rep. 832, 2005 Tex. App. LEXIS 886, 2005 WL 250219 (Tex. Ct. App. 2005).

Opinion

OPINION

BOB McCOY, Justice.

I.Introduction

Superior Snubbing Services, Inc. (“Superior”) appeals from the trial court’s grant of a summary judgment in favor of Energy Service Company of Bowie, Inc. (“Energy”). We will reverse and remand.

II.Factual Background

On December 12, 1996, Mitchell Energy Corporation 1 (“Mitchell”) entered into a Master Service Agreement contract with Superior for certain work to be performed by Superior for Mitchell. Paragraph seven of the contract states that the “contractor,” Superior, will indemnify the “company,” Mitchell, and its contractors, which include Energy, for claims of injury to Superior’s employees in connection with the work to be performed under the contract. On March 8, 2000, one of Superior’s employees, Daryll Faulk (“Faulk”), sustained an injury in the course of his employment while performing services under the contract. Superior was a subscriber under the Workers’ Compensation Act at the time of the injury. Subsequently, Faulk sued Energy and others for his injuries, resulting in a settlement between Faulk, Energy, and Mitchell. Energy and Mitchell then filed suit against Superior seeking indemnity under the contract for the amount of the defense of the suit and the settlement of Faulk’s claims. In answering the suit, Superior asserted that Energy’s claims were barred by the exclusive remedy provisions of the Texas Labor Code and that the contract was unenforceable under the Texas Oilfield Anti-Indemnity Act. The trial court granted summary judgment for Energy against Superior on the contractual indemnity issue and rendered a judgment that was severed from the Mitchell suit, resulting in this appeal.

In two issues, Superior complains that the trial court erred in granting Energy summary judgment because (1) Energy’s indemnity claims are barred under the exclusive remedy provisions of section 417.004 of the Texas Labor Code 2 and (2) the contract is unenforceable under the Texas Oilfield Anti-Indemnity Act. 3

III.Law and Application to Facts

A. Statutory Construction

Section 417.004 of the Texas Labor Code provides,

In an action for damages brought by an injured employee ... against a third party liable to pay damages for the inju *114 ry ... under this chapter that results in a ... settlement by the third party, the employer is not hable to the third party for reimbursement or damages based on the ... settlement unless the employer executed, before the injury or death occurred, a written agreement with the third party to assume the liability.

Tex. Lab.Code ANN. § 417.004 (emphasis supplied).

In its first point, Superior argues that it did not execute a “written agreement with the third party [Energy] to assume the liability.” Rather, Superior contends it entered into a contract with Mitchell, and therefore Energy cannot claim indemnity against Superior due to the prohibition contained in section 417.004 of the labor code. While it is undisputed there is no written contract between Superior and Energy, Energy responds that because it is a third party beneficiary under the contract between Superior and MitcheU, it is entitled to step into the shoes of Mitchell and enforce the contract, thereby transforming the agreement into a “written agreement with the third party [Energy] to assume the liability.”

There is no spotted dog or white horse 4 case on point interpreting the specific language of section 417.004 regarding the meaning of “the third party.”

B. Standard of Review

In reviewing a traditional motion for summary judgment, the reviewing court must resolve every doubt and indulge every reasonable inference in the nonmov-ant’s favor. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). All evidence favorable to the nonmovant will be taken as true. Tex. Commerce Bank, N.A. v. Grizzle, 96 S.W.3d 240, 252 (Tex.2002). Determining the proper construction of a statute and the propriety of a ruling on a motion for summary judgment are both questions of law. Berry v. State Farm Mut. Auto. Ins. Co., 9 S.W.3d 884, 890 (Tex.App.-Austin 2000, no pet.) (citing Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex. 1989)). Statutory interpretation presents a question of law subject to de novo review. Conseco Fin. Servicing Co. v. J & J Mobile Homes, Inc., 120 S.W.3d 878, 883 (Tex.App.-Fort Worth 2003, pet. denied). When the undisputed facts and the applicable law permit but one lawful decision, the appellate court is called on to insure that the proper decision is reached. Eli Lilly & Co. v. Marshall, 850 S.W.2d 155, 157 (Tex.1993).

C. Statutory History

As is often the case, a review of the historical development of this statute is helpful in ascertaining its meaning. Turning back the pages of time some forty years, we learn that in 1963 Texas’s workers’ compensation statute was amended to read, in pertinent part,

If an action for damages on account of injury to or death of an employee of a subscriber is brought by such employee ... against a person other than the subscriber ... and if such action results ... in a settlement by such other per *115 son, the subscriber ... shall have no liability to reimburse or hold such other person harmless on such ... settlement ... in the absence of a written agreement expressly assuming such liability, executed by the subscriber prior to such injury or death.

Act of May 20, 1968, 58th Leg., R.S., ch. 487, § 3, 1963 Tex. Gen. Laws 1132 (repealed 1989) (emphasis supplied). In Ear land v. Gulf, Colorado & Santa Fe Railway Company, 411 S.W.2d 591, 593 (Tex. App.-Beaumont 1967, no writ), the court explained the purposes and effect of this amendment:

This section was amended in 1963 ... to provide that the subscriber under the Compensation Act would have no liability to reimburse or hold harmless a third person against whom a judgment had been obtained by an employee, in the absence of a written agreement expressly assuming such liability.

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158 S.W.3d 112, 165 Oil & Gas Rep. 832, 2005 Tex. App. LEXIS 886, 2005 WL 250219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/superior-snubbing-services-inc-v-energy-service-company-of-bowie-inc-texapp-2005.