Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc.

391 S.W.3d 240, 2012 WL 5695585, 2012 Tex. App. LEXIS 9543
Court of Appeals of Texas·Decided November 15, 2012·No. 10-11-00062-CV·Published·Cited by 2 cases

Opinions

OPINION

REX D. DAVIS, Justice.

In one issue, Appellant Tutle & Tutle Trucking, Inc. complains about a summary judgment granted in favor of Appellee EOG Resources, Inc. In its summary-judgment order, the trial court concluded that, based on language contained in a Master Services Contract (MSC) between Tutle and EOG, Tutle owes duties to defend and indemnify EOG and its contractor, Frac Source Services, Inc., in the underlying personal-injury lawsuit. We will affirm.

I. Background

This dispute arose after Archie Henderson, a Tutle employee, sued Tutle and Frac Source to recover damages for injuries that he allegedly sustained on the job.1 Henderson alleged:

On or about September 5, 2007, Plaintiff ARCHIE HENDERSON, an employee of Defendant TUTLE & TUTLE, was, in the course and scope of his employment, assisting FRAC SOURCE personal [sic] unloading sand from a FRAC SOURCE “Sand King” to a truck. The Sand King being used as [sic] the time of the incident was owned, operated, and controlled by Defendant FRAC SOURCE. As Plaintiff was assisting with unloading sand from the Sand King and as FRAC SOURCE personnel operated the Sand King, Plaintiff HENDERSON was struck by a falling conveyor that was part of the Sand King. This incident caused Plaintiff HENDERSON to suffer severe and permanent head, shoulder, and back injuries. Upon information and belief, Defendant FRAC SOURCE had modified or removed a safety device from the Sand King, thus rendering the equipment unreasonably dangerous. In addition, Defendant FRAC SOURCE employees failed to properly utilize the Sand King conveyor’s secondary safety system.

After learning that it was sued in the Henderson suit, Frac Source made a demand on EOG to defend and indemnify it under a separate master service contract between EOG and Frac Source. EOG then made a demand on Tutle for defense and indemnity in the Henderson suit, even though Henderson did not sue EOG.

In asserting that Tutle has a duty to defend and indemnify it, EOG relied on several provisions contained in the MSC. Those relevant provisions are:

[243]*2436A. CONTRACTOR [Tutle] AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD COMPANY [EOG], ITS PARENT, SUBSIDIARY AND AFFILIATED COMPANIES AND ITS AND THEIR CO-LESSEES, PARTNERS, JOINT VENTURERS, CO-OWNERS, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES (HEREINAFTER COLLECTIVELY REFERRED TO AS “COMPANY GROUP”) HARMLESS FROM AND AGAINST ALL DAMAGE, LOSS, LIABILITY, CLAIMS, DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER, INCLUDING COSTS OF LITIGATION, ATTORNEYS’ FEES AND REASONABLE EXPENSES IN CONNECTION THEREWITH, WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING BUT NOT LIMITED TO STRICT LIABILITY OR THE UNSEAWORTHINESS OR UNAIRWOR-THINESS OF ANY VESSEL OR CRAFT, OR THE NEGLIGENCE OF ANY PARTY, INCLUDING BUT NOT LIMITED TO THE SOLE OR CONCURRENT NEGLIGENCE OF THE COMPANY GROUP, ARISING IN CONNECTION HEREWITH IN FAVOR OF CONTRACTOR’S AGENTS, INVITEES AND EMPLOYEES, AND CONTRACTOR’S SUBCONTRACTORS AND THEIR AGENTS, INVITEES AND EMPLOYEES ON ACCOUNT OF DAMAGE TO THEIR PROPERTY OR ON ACCOUNT OF BODILY INJURY OR DEATH.
6B. COMPANY AGREES TO PROTECT, DEFEND, INDEMNIFY AND HOLD CONTRACTOR, ITS AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES (HEREINAFTER COLLECTIVELY REFERRED TO AS “CONTRACTOR GROUP”) HARMLESS FROM AND AGAINST ALL DAMAGE, LOSS, LIABILITY, CLAIMS, DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND CHARACTER, INCLUDING COSTS OF LITIGATION, ATTORNEYS’ FEES AND REASONABLE EXPENSES IN CONNECTION THEREWITH, WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING BUT NOT LIMITED TO STRICT LIABILITY OR THE UNSEAWORTHINESS OR UNAIRWOR-THINESS OF ANY VESSEL OR CRAFT, OR THE NEGLIGENCE OF ANY PARTY, INCLUDING BUT NOT LIMITED TO THE SOLE OR CONCURRENT NEGLIGENCE OF THE CONTRACTOR GROUP, ARISING IN CONNECTION HEREWITH IN FAVOR OF COMPANY’S AGENTS, INVITEES AND EMPLOYEES, COMPANY’S CONTRACTORS (OTHER THAN CONTRACTOR) AND THEIR AGENTS, INVITEES AND EMPLOYEES, AND SUCH CONTRACTORS’ SUBCONTRACTORS, OR THEIR AGENTS, INVITEES OR EMPLOYEES ON ACCOUNT OF DAMAGE TO THEIR PROPERTY OR ON ACCOUNT OF BODILY INJURY OR DEATH.

The language contained in paragraphs 6A and 6B of the MSC between EOG and Tutle is set forth in all capital letters and in an apparently slightly larger font than the rest of the contract. Another relevant provision of the MSC — paragraph 6E— was not capitalized or differentiated using an apparently larger font. Paragraph 6E provides:

6E. The terms and provisions of this Paragraph 6 shall have no application to claims or causes of action asserted against Company or Contractor by rea[244] son of any agreement of indemnity with a person or entity not a party to this Agreement in those instances where such contractual indemnities are not related to or ancillary to the performance of the work contemplated under the Agreement or are indemnities uncommon to the industry. The terms and provisions of this Paragraph 6 shall expressly apply to claims or causes of action asserted against Company or Contractor by reason of any agreement of indemnity with a person or entity not a party to this Contract where such contractual indemnities are related to or ancillary to the performance of the work contemplated under the Agreement and or Company’s project and are indemnities not uncommon in the industry.

When demanding that Tutle defend and indemnify it in the Henderson suit, EOG relied on paragraphs 6A and 6E of the MSC.

After receiving EOG’s demands for defense and indemnity, Tutle filed a declaratory-judgment action against EOG, Frac Source, and Tutle’s insurer, Carolina Casualty Company, seeking a declaration that Tutle owed no defense or indemnity obligation to EOG in the Henderson suit. In the alternative, Tutle sought a declaration that Tutle’s insurance policy with Carolina covered any indemnity obligation that Tu-tle owed to EOG as an “insured contract.” EOG counterclaimed for a declaratory judgment that it was entitled to defense and indemnity from Tutle in the Henderson suit based on the MSC and because Henderson was an employee of Tutle who was furnishing services to EOG at the time of the accident. EOG also made a demand upon Tutle for indemnity that EOG owes to Frac Source under the “pass through” provision (paragraph 6E) of the MSC. In addition, EOG sought a declaration that Carolina owed a duty to EOG as its primary liability policy as a matter of law.

EOG moved for partial summary judgment, arguing that: (1) Tutle breached its contract with EOG; (2) Carolina had a contractual obligation to provide a defense and indemnity to EOG and Frac Source with regard to the claims asserted in.the Henderson suit; (3) Tutle had a contractual obligation to provide a defense and indemnify EOG and Frac Source with regard to the claims asserted in the Henderson suit; and (4) Tutle and/or Carolina have a contractual obligation “to pay all costs, expenses, and reasonable attorney’s fees incurred by or on behalf of EOG/Frac Source in the defense of the Underlying Lawsuit from at least April 2, 2008 through the present date and for all such future costs, expenses, and attorney’s fees.”.

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Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc., 391 S.W.3d 240, 2012 WL 5695585, 2012 Tex. App. LEXIS 9543 (Tex. Ct. App. 2012).

391 S.W.3d 240 (Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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