Petroleum Solutions, Inc. v. Bill Head D/B/A Bill Head Enterprises and Titeflex, Inc.
454 S.W.3d 482
| Tex. | 2014Background
- Head hired Petroleum Solutions to install a diesel-fuel system at the Silver Spur Truck Stop; a large diesel leak occurred from the system and Head sued Petroleum Solutions for damages; the trial court entered a jury verdict in Head's favor and also awarded Titeflex statutory indemnity against Petroleum Solutions; sanctions for spoliation were imposed, affecting Petroleum Solutions' defenses; the appellate court affirmed the judgments, while the Supreme Court reversed in part on spoliation sanctions but affirmed indemnity for Titeflex; the Court remanded Head v. Petroleum Solutions for further proceedings consistent with its opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Spoliation sanctions proper under Brookshire Brothers framework | Head and Titeflex argued sanctions were improper; Petroleum Solutions contended sanctions were justified death-penalty sanctions. | Petroleum Solutions argued sanctions followed from spoliation and were proper to remedy prejudice under Brookshire Brothers. | Sanctions were abuse of discretion; remand for new trial between Head and Petroleum Solutions. |
| Petroleum Solutions' duty to indemnify Titeflex under section 82.002 | Head/Head’s pleadings triggered a duty to indemnify the component-seller against losses. | Petroleum Solutions argued indemnity scope should be limited to its own product; contested whether Titeflex's losses were indemnifiable. | Petroleum Solutions owed indemnity to Titeflex for losses arising out of the products-liability action to the extent Titeflex was not independently liable. |
| Whether the fuel system is a 'product' under chapter 82 | The system is a finished product with component parts and falls within the Act’s broad product definition. | Argued it is an improvement to real property and not a product, potentially excluding indemnity. | Fuel system qualifies as a product under chapter 82 notwithstanding its integration into real property. |
| Scope of indemnity in a finished-product/component-product case | Head alleged multiple defects; indemnity should cover losses related to the alleged defects in the finished product and component parts. | If a component’s defect is alleged, indemnity should not extend to losses arising from defects in other components. | Indemnity scope limited to losses related to the indemnitee's own product; in this case Petroleum Solutions indemnifies Titeflex for losses related to the finished product, not for defects in Titeflex's own component absent independent liability. |
| Remand vs. complete reversal regarding Titeflex indemnity | If spoliation sanctions are reversed, Titeflex's indemnity claim may need new trial. | Sanctions were harmless as to Titeflex; no new trial needed for indemnity issue. | Remand only as to Head vs. Petroleum Solutions; Titeflex indemnity defense remains intact and upheld. |
Key Cases Cited
- TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991) (standard for discovery sanctions and relation of remedy to conduct)
- Brookshire Brothers, Ltd. v. Aldridge, 438 S.W.3d 9 (Tex. 2014) (established spoliation framework and limits on sanctions)
- Cire v. Cummings, 134 S.W.3d 835 (Tex. 2004) (abuse-of-discretion review for sanctions; lesser sanctions)
- Spohn Hosp. v. Mayer, 104 S.W.3d 878 (Tex. 2003) (discovery abuse sanctions under Rule 215.2)
- Wal-Mart Stores, Inc. v. Johnson, 106 S.W.3d 718 (Tex. 2003) (discovery sanctions considerations; fair treatment of parties)
- Hudiburg Chevrolet, Inc. v. Gen. Motors Corp., 199 S.W.3d 249 (Tex. 2006) (duty to indemnify tied to pleadings; scope with component vs finished product)
- Owens & Minor, Inc. v. Ansell Healthcare Prods., Inc., 251 S.W.3d 481 (Tex. 2008) (scope of indemnity in multi-product cases; no indemnity for products not produced by the defendant)
- Fresh Coat, Inc. v. K-2, Inc., 318 S.W.3d 893 (Tex. 2010) (definition of product includes items incorporated into real property)
- Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86 (Tex. 2001) (definition of ‘seller’ and related indemnity concepts)
- Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864 (Tex. 1999) (duty to indemnify manufacturers of alleged defective products)
- Nissan Motor Co. v. Armstrong, 145 S.W.3d 131 (Tex. 2004) (evidence standards for expert testimony and defect causation)
- Mentor Auto. v. Mitylene, 44 S.W.3d 91 (Tex. 1991) (exception to indemnity requires independent liability finding)