498 S.W.3d 700
Tex. App.2016Background
- Blue Sky Right of Way, LLC (owned by Donald Mullins) orally subcontracted with Martinez R.O.W., LLC to perform ground work on a right-of-way tree-trimming project; no written contract existed between them.
- Martinez R.O.W. was a workers’ compensation subscriber and carried general liability insurance; it provided Blue Sky a Certificate of Liability Insurance before work began.
- An employee of Martinez (Bonifacio Gomez) was injured on the job and sued Mullins (and others); Mullins filed a third-party action against Martinez seeking indemnity for claims arising from the underlying suit.
- Martinez moved for summary judgment arguing section 417.004 of the Texas Labor Code requires a written indemnity agreement executed before the injury and that no such written agreement exists; the trial court granted summary judgment and severed the indemnity claim.
- Mullins/Blue Sky argued the certificate of insurance and policy language, payment for work, and a responsible-third-party designation raised fact issues or invoked a gross-negligence exception; the trial court denied post-judgment motions and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a certificate of insurance or the policy constitutes a written indemnity agreement under Tex. Lab. Code §417.004 | Certificate and policy provisions (contractual indemnity language) show Martinez agreed to indemnify Blue Sky/Mullins | Certificate merely verifies coverage and policy covers the insured (Martinez), not Blue Sky/Mullins; no written agreement naming Blue Sky/Mullins exists | Certificate and policy do not evidence a written indemnity agreement; summary judgment affirmed |
| Whether payments and written proof of work can satisfy the statute or an equity-based exception to the writing requirement | Evidence of performed work and payment demonstrates an agreement or equitable enforcement despite lack of writing | Chapter 417 contains no fraud-based exception; Legislature required a written agreement for employer indemnity | Court declines to read a common-law fraud exception into Chapter 417; no written agreement found |
| Whether a gross-negligence theory (or Fairfield precedent) allows implied indemnity against a subscribing employer | Gross negligence should allow contribution/indemnity even without a written agreement | Labor Code still requires a written indemnity agreement for indemnity against a subscriber; Fairfield is inapposite | Court rejects expanding liability via gross-negligence exception; statute controls |
| Whether designation as a "responsible third party" under Tex. Civ. Prac. & Rem. Code ch. 33 imposes indemnity or creates liability in a separate proceeding | Responsible third-party designation means Martinez can be liable for portion of damages and thus indemnify | Chapter 33 designation does not impose liability or create basis for indemnity in a different proceeding | Designation does not impose liability or create an indemnity duty; argument fails |
Key Cases Cited
- Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417 (Tex. 2000) (standard rules of contract construction apply to indemnity agreements)
- In re Lisa Laser USA, Inc., 310 S.W.3d 880 (Tex. 2010) (a written agreement may consist of multiple documents)
- Fairfield Ins. Co. v. Stephens Martin Paving, L.P., 246 S.W.3d 653 (Tex. 2008) (insurance may indemnify for punitive damages arising from gross negligence; court finds it inapplicable here)
- HCBeck, Ltd. v. Rice, 384 S.W.3d 349 (Tex. 2012) (workers’ compensation subscribers are generally shielded from common-law claims by employees)
- Wingfoot Enters. v. Alvarado, 111 S.W.3d 134 (Tex. 2003) (same principle regarding exclusivity of workers’ compensation remedies)