Kelly-Springfield Tire Co. v. Mobil Oil Corp.

• Decision Date: 10 June 1975
• Docket Number: No. 47037,KELLY-SPRINGFIELD,No. 1,47037,1
• Citation: 551 P.2d 671
• Parties: TIRE COMPANY, Appellant, v. MOBIL OIL CORPORATION and R. L. DeYong, d/b/a R. L. DeYong, Distributor, Appellees
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Page 671

551 P.2d 671

KELLY-SPRINGFIELD TIRE COMPANY, Appellant, v. MOBIL OIL CORPORATION and R. L. DeYong, d/b/a R. L. DeYong Distributor, Appellees.

No. 47037.

Court of Appeals of Oklahoma, Division No. 1.

June 10, 1975.

Corrected on Denial of Rehearing Sept. 2, 1975.

Certiorari Denied March 2, 1976.

Released for Publication by Order of Court of Appeals March 4, 1976.

Ralph W. Newcombe, Lawton and Watts, Looney, Nichols, Johnson & Hayes, by Robert D. Looney, Oklahoma City, for appellant.

Crowe, Dunlevy, Thweatt, Swinford, Johnson & Burdick, by Jack R. Durland, Jr., Oklahoma City, for appellee Mobil Oil Corp.

Russell G. Jones, Lawton, for appellee R. L. DeYong, d/b/a R. L. DeYong, Distributor.

ROMANG, Presiding Judge:

Billy H. Roberts sustained personal injuries when a new 'Mobil' tire exploded on a car wheel that he was balancing. He brought this suit against the manufacturer of the tire, Kelly-Springfield Tire Company; against the company for which the tire was manufactured under its own brand name, Mobil Oil Company; and against the local distributor of the 'Mobil' tires, R. L. DeYong d/b/a DeYong Distributor. Reference hereinafter will be made to said defendants by the names of Kelly, Mobil, and DeYong.

On the date set for trial, March 26, 1973, plaintiff settled his claims against the defendants for the sum of $30,000.00. Kelly paid $15,000.00 and was given a full release by plaintiff. Judgment was taken by plaintiff against Mobil and DeYong for the sum of $15,000.00, which was paid by Mobil.

On November 6, 1973, this cause came on for hearing upon the cross-claim of Kelly against Mobil, the cross-claim of Mobil against Kelly, and the cross-claim of DeYong against Kelly. The Journal Entry of Judgment reads in part as follows:

'5. The injuries to the Plaintiff were caused by the negligent manufacturing of the tire by the Defendant Kelly-Springfield Tire Company.

'6. That the Defendant Mobil Oil Corporation should recover on its Cross-Claim from the Defendant Kelly-Springfield Tire Company in the sum of $15,000.00.

'7. That on the filing of Plaintiff's Second Amended Petition, an additional separate and distinct act of negligence was alleged as to Defendant Mobil Oil Corporation, whereupon an apparent conflict arose between said Defendants, and Mobil Oil Corporation employed attorneys to represent its interest, and by reason thereof Mobil's prayer for attorneys' fees for service to date of trial on March 26, 1973, in the amount of $5,951.81, is denied.

'8. The Defendant Kelly-Springfield Tire Company did not at any time furnish representation for Defendant R. L. DeYong d/b/a R. L. DeYong, Distributor, although DeYong was a third-party beneficiary under the contract between Kelly-Springfield Tire Company and Mobil Oil Corporation. No allegation of separate negligence was ever made against the Defendant R. L. DeYong d/b/a R. L. DeYong, Distributor.

'9. That the Defendant R. L. DeYong d/b/a R. L. DeYong, Distributor, employed attorneys at an expense of $1,110.00, which the court finds to be a reasonable amount, and R. L. DeYong is awarded judgment on his Cross-Claim against Kelly-Springfield Tire Company in the amount of $1,110.00.

'10. That by reason of the above, Defendant Kelly-Springfield Tire Company's Cross-Claim against Mobil Oil Corporation is hereby denied.

'11. That the Defendants Mobil Oil Corporation and R. L. DeYong d/b/a R. L. DeYong, Distributor were required to employ attorneys to represent them in their respective Cross-Claims against the Defendant Kelly-Springfield Tire Company. The Defendants Mobil Oil Corporation and R. L. DeYong d/b/a DeYong, Distributor, are entitled to recovery of reasonable and necessary attorneys' fees for the services of their attorneys from March 27, 1973, to the date of this Judgment. That the Court shall determine the amount of reasonable attorneys' fees to be awarded to each party at a separate hearing to be scheduled by the Court at a later date.'

Kelly has appealed and filed a Petition in Error.

Mobil has appealed and filed a Cross-Petition in Error.

The indemnity agreement between Kelly and Mobil was contained in a letter dated May 15, 1964. It is upon its terms that the outcome of this appeal depends. The agreement reads in pertinent part:

'All tire products delivered hereunder will be warranted to be free from defects in workmanship and material.

'Seller agrees to indemnity Buyer and save it and/or its agents, servants, employees and reseller purchasers harmless from every claim, demand, loss, expense, cost, damage or injury, including attorneys' fees and/or settlement approved by Seller, which may arise or be asserted based upon a claim of injury or damage of any kind to any person or property, real or personal, sustained by any individual, firm, partnership, corporation or other legal entity claimed to have been caused by, resulting from, arising out of, or attributable to defective workmanship or material incorporated in any product sold to Buyer hereunder. Seller further agrees, and it is a condition of the foregoing obligation to indemnity, that the Seller shall have the opportunity and right, if it so elects, at its own cost, expense and risk to defend any and all actions, suits and other legal proceedings that may be brought or instituted upon any such claim or demand, and to pay or satisfy any judgment based upon any such claim or demand that may be rendered against the Buyer in any such action, suit or legal proceeding.'

Kelly contends that unless it was guilty of negligence there is no indemnity under the terms of said indemnity agreement, and that there is no proof of negligence on its part.

We here repeat the controlling part of said indemnity agreement with the parties indicated in brackets:

'Seller (Kelly) agrees to indemnify Buyer (Mobil) and save it and/or its . . . reseller purchasers (DeYong) harmless from every claim, demand, loss, expense, cost, damage or injury, including attorneys' fees and/or settlement approved by Seller (Kelly), which may arise or be asserted based upon a claim of injury . . . of any kind to any person . . . claimed to have been caused by, resulting from, arising out of, or attributable to defective workmanship or material incorporated in any product sold to Buyer (Mobil) hereunder.'

At no place in the indemnity agreement do we find that Kelly must be proven guilty of negligence, but instead it says that Kelly will save Mobil and DeYong harmless from every claim or injury, including attorneys' fees, which may arise or be asserted, based upon a claim of injury, claimed to have been caused by or attributable to defective workmanship or material.

Plaintiff Roberts alleged in his original petition that the tire 'was defective and unreasonably dangerous and was unsafe and unfit for the use for which it was intended ....