Goodyear Tire & Rubber Co. v. Jefferson Const. Co.

• Court: Texas Supreme Court
• Writing for the Court: DENTON
• Citation: Goodyear Tire & Rubber Co. v. Jefferson Const. Co., 565 S.W.2d 916 (Tex. 1978)
• Decision Date: 26 April 1978
• Docket Number: No. B-6929,B-6929
• Parties: GOODYEAR TIRE AND RUBBER COMPANY, Petitioner, v. JEFFERSON CONSTRUCTION COMPANY, Respondent.

Page 916

565 S.W.2d 916

GOODYEAR TIRE AND RUBBER COMPANY, Petitioner, v. JEFFERSON CONSTRUCTION COMPANY, Respondent.

No. B-6929.

Supreme Court of Texas.

April 26, 1978.

Rehearing Denied June 14, 1978.

Strong, Pipkin, Nelson, Parker & Powers, William B. Coffey, Jr., Beaumont, for petitioner.

Weller, Wheelus & Green, Kyle Wheelus, Jr., Beaumont, for respondent.

DENTON, Justice.

This is a third party action on a contract of indemnity brought by Goodyear Tire and Rubber Company against Jefferson Construction Company. At issue is whether fair notice was given of the existence of an indemnity clause in a contract between the parties, and whether the indemnity provision was clear and unequivocal in its terms. After a nonjury trial, the trial court rendered judgment granting the requested indemnity. The court of civil appeals reversed and rendered judgment denying indemnity. 552 S.W.2d 596. We hold that Goodyear was entitled to indemnity under the contract, and accordingly reverse the judgment of the court of civil appeals and affirm that of the trial court.

Jose Negrete was employed by Jefferson Construction Company (Jefferson) and was working on the premises of Goodyear Tire and Rubber Company (Goodyear) on December 8, 1972, when he sustained injuries during the course of his employment. Negrete received workmen's compensation benefits and then filed suit for damages against Goodyear, alleging that his injuries resulted from Goodyear's sole negligence. Goodyear filed this cross action against Jefferson for contractual indemnity, settled the claim with Negrete, and amended its pleadings to recover the amount of the settlement from Jefferson.

Jefferson had done maintenance work at the Goodyear plant since 1961 pursuant to monthly purchase orders sent by Goodyear to Jefferson. These orders were printed forms, designed primarily for the purchase of goods. It is undisputed that the purchase orders served as the contract between the parties, although they were often not received by Jefferson until after the specified work had already commenced. Two identical pages of the form were generally used every month. In large red print on the front of each page in question here, the form says "Important Notice To Seller" and states that the purchase order is made expressly subject to the terms and conditions on the reverse side. On the front of the first page of the form, Goodyear had typed items specifying the price basis for the work to be done in December, 1972. On the front of the second page were several typed paragraphs, the last of which required Jefferson to carry a certain amount of liability insurance "with respect to the 'hold harmless' provisions of the terms and conditions of this purchase order." The back of each page is headed "Terms and Conditions" and contains 21 numbered paragraphs in fine print. Paragraph 13, is the "hold harmless" section, and provides in part:

(13) To the extent that this Purchase Order calls for work to be performed upon property owned or controlled by Purchaser (Goodyear), it is agreed that . . .

(d) Seller (Jefferson) will indemnify, save harmless and defend Purchaser from all liability for loss, damage or injury to person or property in any manner arising out of or incident to the performance of this Purchase Order . . .

(f) To the extent that this Purchase Order provides that Seller will indemnify, save harmless and defend Purchaser from liability, claims, demands or suits, it is the intention of Seller that such indemnity shall apply whether or not the liability, claims, demands or suits arise from the negligence of Purchaser.

(Emphasis added). The evidence showed that of the 115 monthly purchase orders Goodyear had sent to Jefferson prior to December, 1972, only the last eight contained paragraph 13(f). Paragraph 13(d) or a similar "save harmless" provision appeared in all of the purchase orders admitted into evidence, dating back to the form used in 1962.

After suit was brought by Negrete against Goodyear for its sole negligence, Goodyear contended that Jefferson had agreed to indemnify it against the consequences of Goodyear's own negligence. Jefferson, on the other hand, asserted that the indemnity clause in the applicable purchase order was not binding on it for two reasons: (1) The obligation to indemnify Goodyear from the consequences of its own negligence was not expressed in clear and unequivocal terms. (2) No fair notice of the indemnity clause was given because it was obscurely located in fine print on the back of the form and was recently included in the form without warning from Goodyear. The trial court rendered judgment granting indemnity to Goodyear. The trial was to the court, but no findings of fact or conclusions of law were requested or filed.

The court of civil appeals passed on only the latter of Jefferson's two contentions stated above. It held that Jefferson was not given fair notice of the existence of the indemnity provision because it was hidden in fine print on the back of the form and because the paragraph was inserted by Goodyear without negotiation, warning, notice, or knowledge. The court of civil appeals therefore reversed and rendered judgment that Goodyear take nothing.

Goodyear now asserts that the court below erred because there is evidence in the record to support the trial court's implied findings of fair notice and actual knowledge of the existence of the indemnity provision. It is clear that where no findings of fact or conclusions of law are requested or filed, the trial court's judgment implies all necessary fact findings in support of the judgment. Buchanan v. Byrd, 519 S.W.2d 841 (Tex.1975); Renfro Drug Co. v. Lewis, 149 Tex. 507, 235 S.W.2d 609 (1950). In reviewing the record to determine if any evidence supports the judgment and concomitant implied findings, it is proper to consider only the evidence favorable to the issue and to disregard all evidence or inferences to the contrary. Renfro Drug Co. v. Lewis, supra. Of course, a fact finding may not be inferred if no evidence supports it. Warren Petroleum Corp. v. Martin, 153 Tex. 465, 271 S.W.2d 410 (1954).

The first question presented is whether Jefferson had actual notice or knowledge of the existence of the indemnity provision. Goodyear contends that there is some evidence to support the trial court's implied finding of actual notice and that therefore the judgment of the trial court cannot be disturbed. Notice is generally a question of fact and can be decided as a matter of law only when there is no room for reasonable minds to differ. O'Ferral v. Coolidge, 149 Tex. 61, 228 S.W.2d 146 (1950).

The evidence showed that Jefferson rendered maintenance services to Goodyear on a continuing basis and work was often done before the actual purchase order was received by Jefferson. Both parties agreed, however, that each purchase order was a written confirmation of their agreement and constituted their contract. Both the president and vice-president of Jefferson testified that they were aware of the existence of contract provisions on the reverse side of each purchase order. The vice-president, Mr. Hawkins, testified that he had probably read some of the provisions on the back side of the form, but he could not say which parts he had read, if any. Mr. Henson, the president of Jefferson, also testified that he had...