Jerry L. Hamblin and Ricochet Energy, Inc. v. Thomas A. Lamont
433 S.W.3d 51
Tex. App.2013Background
- Hamblin and Lamont formed Ricochet Energy, Inc. with 50/50 ownership and directors; in 2006 Lamont sought to separate.
- Two separation agreements were negotiated: the Letter Agreement and the Master Agreement, with Lamont selling Ricochet shares to Hamblin while retaining an interest in certain leases and undeveloped prospects.
- The Master Agreement included broad indemnity provisions for Lamont against liabilities arising from Ricochet's operations, and stated the indemnity should be construed broadly.
- Vaquillas Energy and JOB Energy sued Lamont in 2008 for misappropriation, trade secret misappropriation, tortious interference, and related claims; the jury found Lamont liable for misappropriation and interference.
- Lamont demanded indemnity from Hamblin and Ricochet per the Master Agreement; the trial court granted partial summary judgment requiring indemnification for the Vaquillas judgment and fees; the appeal followed, with the appellate court reversing and rendering for Hamblin and Ricochet.
- The majority analyzed express negligence doctrine and public policy to determine whether the indemnity provisions cover Lamont’s intentional tort liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are indemnity provisions enforceable for the indemnitee’s own intentional torts? | Lamont claims indemnity should cover his liabilities arising from Ricochet’s operations. | Hamblin and Ricochet argue express negligence/public policy restrict indemnity for intentional torts. | Indemnity for intentional torts not enforced absent explicit language. |
| Does public policy bar indemnity for intentional torts in this contract? | Public policy should allow broad contractual indemnities including intentional acts. | Public policy prohibits shifting liability for intentional torts to indemnitors. | Public policy precludes indemnity for Lamont’s intentional tort liability absent explicit terms. |
| Does broad indemnity language suffice despite the express negligence doctrine? | The Master Agreement intended broad indemnity to cover all liabilities. | Express negligence doctrine requires explicit intent to indemnify for own negligence or intentional torts. | No; explicit language is required to indemnify for own negligence/intentional torts. |
Key Cases Cited
- Ethyl Corp. v. Daniel Construction Co., 725 S.W.2d 705 (Tex. 1987) (express negligence doctrine governs indemnity for own negligence)
- Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505 (Tex. 1993) (exculpatory indemnities require express language; extraordinary shifting of risk)
- Atlantic Richfield Co. v. Petroleum Personnel, Inc., 768 S.W.2d 724 (Tex. 1989) (language for indemnity—some cases discuss scope of indemnity)
- Enserch Corp. v. Parker, 794 S.W.2d 2 (Tex. 1990) (conspicuousness/expressness in indemnity language)
- Green Int’l Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997) (public policy considerations in indemnity for intentional acts)
- Solis v. Evins, 951 S.W.2d 44 (Tex. App. Corpus Christi 1997) (public policy and indemnity for intentional conduct discussed)
- Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452 (Tex. App.-Austin 2004) (elements of misappropriation; indemnity context discussed)