Cambridge Integrated Services Group, Inc. v. Concentra Integrated Services, Inc.
697 F.3d 248
5th Cir.2012Background
- Cambridge and Concentra entered a Services Agreement in which Concentra agreed to defend and indemnify Cambridge for claims arising from Concentra's acts, and Cambridge similarly for Cambridge's acts.
- Paragraph 9.3(c) extends defense/indemnity to unclear allegations, to be clarified later, with reimbursement if Cambridge owes indemnity.
- In Gunderson, Focus and Concentra settled for $12 million; plaintiffs released Cambridge from Liability but not from Independent Liability.
- Focus Settlement defined Liability (indemnifiable) and excluded Independent Liability; paragraph 8.6 barred settlements with Cambridge without a Cambridge release of Concentra.
- Cambridge later settled Gunderson (Cambridge Settlement) preserving some claims against Concentra and seeking defense/indemnification for defense costs and settlements.
- The district court granted Concentra summary judgment, holding Focus Settlement satisfied both defense and indemnity obligations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Focus release satisfy indemnity obligations? | Cambridge: indemnity discharged by Focus release for Liability. | Concentra: release only covers Liability, not Independent Liability; indemnity discharged to Cambridge. | Indemnity satisfied; release covered Liability. |
| Was Concentra obligated to defend Cambridge after Focus Settlement? | Post-settlement claims were unclear; defense duty persisted until clarified. | Once Focus settled, no defense obligation beyond released claims. | Remains defense duty until conduct clarified; district court erred in granting summary judgment on defense. |
| What is the impact of the Cambridge Settlement release on Cambridge's claims? | Cambridge intended to release Concentra but reserved other rights. | Release narrowed and ambiguous; cannot conclusively include all claims. | Release ambiguity prevents affirming on release grounds; remand required on this issue. |
Key Cases Cited
- Lifecare Hosp., Inc. v. Health Plus of La., Inc., 418 F.3d 436 (5th Cir. 2005) (standard for evaluating contract interpretation and damages)
- Liberty Mut. Ins. Co. v. Pine Bluff Sand & Gravel Co., 89 F.3d 243 (5th Cir. 1996) (interpretation of indemnity and releases under contracts)
- Young v. Equifax Credit Info. Servs., Inc., 294 F.3d 631 (5th Cir. 2002) (contract interpretation and release construction; ambiguity must be resolved)
- Salve Regina Coll. v. Russell, 499 U.S. 225 (U.S. 1991) (rejects deference to district court on state-law issues)
- Bayou Steel Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 642 F.3d 506 (5th Cir. 2011) (releases and indemnity interpretation under contract law)
- Caremark, Inc. v. United States, 634 F.3d 808 (5th Cir. 2011) (summary judgment standards and de novo review)