438 S.W.3d 638
Tex. App.2014Background
- Paradigm (PS Investments) challenged a trial-court grant of summary judgment for SIVCO on a statutory-indemnity claim.
- Valero hired Paradigm to repair FV 2803, which Paradigm subcontracted to SIVCO; CVS did the repair for a day and FV 2803 was returned to Valero.
- Valero sued Paradigm, SIVCO, and CVS for a fire allegedly caused by a failed locking pin; Valero’s cross-claims included products-liability theories.
- Valero settled with some defendants; Paradigm’s claim against SIVCO for indemnity remained and proceeded to cross-motions for summary judgment.
- The trial court granted SIVCO summary judgment on Paradigm’s claim, and the court denied Paradigm’s cross-motion; on appeal, the court reviews de novo whether indemnity applies under Tex. Civ. Prac. & Rem. Code §82.002.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SIVCO owed indemnity to Paradigm as a manufacturer | Paradigm asserts SIVCO is a manufacturer (rebuilder/assembler) and FV 2803 was in the stream of commerce. | SIVCO argues it did not manufacture or place FV 2803 in commerce and the claim is not a products-liability action. | No; FV 2803 did not enter the stream of commerce as required; SIVCO is not a manufacturer for indemnity purposes. |
| Whether Valero’s claim constitutes a products-liability action invoking §82.002 | Valero’s pleadings involve a defective product allegedly caused by service work, triggering indemnity. | Valero’s claims were for breach of service contract/warranty, not products liability. | Valero’s petition did not state a products-liability action under §82.001(2). |
| Whether Paradigm was a seller under §82.001(3) to trigger §82.002 | Paradigm was a seller by repair/rebuild of FV 2803 and thus entitled to indemnity. | Paradigm did not distribute or place FV 2803 into the stream of commerce; ownership remained with Valero during service. | Paradigm was not a seller; no indemnity under §82.002. |
| Whether FV 2803 entered the stream of commerce | FV 2803 was released into commerce through Paradigm’s or SIVCO’s service activities. | FV 2803 remained with Valero; it was not released to the consuming public for purchase. | FV 2803 was not released into the stream of commerce; §82.002 does not apply. |
Key Cases Cited
- Gen. Motors Corp. v. Hudiburg Chevrolet, Inc., 199 S.W.3d 249 (Tex. 2006) (indemnity framework and when to apply)
- Owens & Minor, Inc. v. Ansell Healthcare Prods., Inc., 251 S.W.3d 481 (Tex. 2008) (statutory indemnity duty distinct from common law)
- Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86 (Tex. 2001) (scope of a products-liability action and indemnity)
- New Tex. Auto Auction Servs., L.P. v. Gomez de Hernandez, 249 S.W.3d 400 (Tex. 2008) (definition of seller and policy aims of indemnity)
- SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444 (Tex. 2008) (manufacturer vs. seller delineation for indemnity)
- Armstrong Rubber Co. v. Urquidez, 570 S.W.2d 374 (Tex. 1978) (stream of commerce concept context)
- McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787 (Tex. 1967) (release to public as a factor for stream of commerce)