Weeks Marine, Inc. v. Standard Concrete Products, Inc.
2013 U.S. App. LEXIS 24352
5th Cir.2013Background
- Weeks Marine hired Standard Concrete to manufacture pre-cast fender modules under Purchase Order 161845 and Additional Terms.
- Purchase Order required Weeks Marine to provide inserts and Standard Concrete to install lift hardware; standard indemnity appears in Paragraph 10, with limits in Paragraph 4 and nullity in Paragraph 6.
- Johnson sued in Alabama state court alleging injury from a fall while disassembling a corner module used in the project; the module was designed by others and not necessarily a Standard Concrete product.
- Weeks Marine sought defense and indemnification from Standard Concrete; Standard Concrete refused, prompting federal declaratory relief and cross-motions for summary judgment.
- District court adopted the magistrate’s Report denying defense/indemnity; the court held the indemnity provision did not cover the underlying suit due to the workmanship limitation.
- On appeal, the Fifth Circuit applied Texas law and the eight-corners rule, concluding Standard Concrete had no duty to defend and no duty to indemnify based on the workmanship limitation and scope of the product.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Standard Concrete owes a duty to defend Weeks Marine. | Weeks Marine argues indemnity includes defense for all claims under Paragraph 10 unmodified by Additional Terms. | Standard Concrete argues the Additional Terms limit indemnification to damages related to workmanship; thus no defense duty for Johnson’s claims. | No duty to defend; limitations in Additional Terms control. |
| Whether Johnson’s alleged injuries fall within the workmanship-related indemnity. | Weeks Marine contends the steel forms and related work fall within Standard Concrete’s product defects. | Johnson’s claims relate to construction/assembly rather than workmanship of Standard Concrete’s product; the steel forms are not Standard Concrete’s final product. | Claims not within workmanship-based indemnity; no indemnity obligation. |
| Whether Standard Concrete has any indemnity obligation at all for the underlying action. | If any indemnity could apply, it should cover liability arising from the underlying suit. | Because Johnson’s injuries arise from non-workmanship aspects and the product at issue is not Standard Concrete’s product, indemnity never attaches. | Indemnity not triggered; no coverage under the agreement. |
Key Cases Cited
- U.S. Industries, Inc. v. Aetna Cas. & Sur. Co., 690 F.2d 459 (5th Cir. 1982) (workmanship defect separate from construction negligence; product distinction)
- GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305 (Tex. 2006) (eight-corners rule; indemnity analysis based on pleadings)
- Gilbane Bldg. Co. v. Admiral Ins. Co., 664 F.3d 589 (5th Cir. 2011) (duty to defend governed by eighth-corners; use pleadings to determine coverage)
- Guar. Nat’l Ins. Co. v. Azrock Indus. Inc., 211 F.3d 239 (5th Cir. 2000) (indemnity triggered by actual underlying liability facts)
- D.R. Horton-Texas, Ltd. v. Markel Int’l Ins. Co., 300 S.W.3d 740 (Tex. 2009) (distinct and independent duties to defend and indemnify)
- Fresh Coat, Inc. v. K-2, Inc., 318 S.W.3d 893 (Tex. 2010) (definition of product in context of indemnity and stream of commerce)