Payne & Keller, Inc. v. P.P.G. Industries, Inc.
| Decision Date | 20 June 1990 |
| Docket Number | No. C-8711,C-8711 |
| Citation | 793 S.W.2d 956 |
| Parties | PAYNE & KELLER, INC., Petitioner, v. P.P.G. INDUSTRIES, INC., Respondent. |
| Court | Texas Supreme Court |
At issue is whether a sole negligence exception in an indemnity contract is triggered when the indemnitee's negligence is the only negligence found to have been a proximate cause of the occurrence in question. Respondent P.P.G. Industries, Inc. filed a third-party indemnity claim against petitioner Payne & Keller, Inc. The trial court denied P.P.G. such indemnity, but the court of appeals reversed that judgment. We reverse the judgment of the court of appeals and affirm that of the trial court.
Pursuant to its contract for maintenance work at P.P.G.'s chemical plant, Payne & Keller had its foreman Daniel Leitten working near a pipe carrying the lethal chemical phosgene. Leitten was killed when he bumped the valve on the phosgene line and the chemical sprayed out onto him. In response to a negligence action by Leitten's wife and parents against it, P.P.G. filed a third-party claim against Payne & Keller, based on the indemnity provisions of the parties' contract. Trial was to a jury, which found that P.P.G. was negligent in permitting Leitten to work on the job in question at an unsafe time, in failing to issue a safe work permit to Leitten, and in failing to tell Leitten to stop the job he was doing at the time he was observed working in the area of the quick release valve. The jury found proximate cause as to each of the above particulars. The jury found further that Leitten was negligent in "tying in without a safe work permit," but that this negligence was not a proximate cause of the accident. No other jury questions as to Payne & Keller's negligence were submitted. The trial court awarded the plaintiffs $2,171,000 from P.P.G., and held that P.P.G. was not entitled to indemnity from Payne & Keller. P.P.G. and the plaintiffs settled and P.P.G.'s appeal was severed as to them, leaving only the indemnity issue on appeal.
By its terms, the Payne & Keller/P.P.G. contract required Payne & Keller to indemnify P.P.G. for work-related claims "arising out of ... the acts or omissions ... of [Payne & Keller] or its ... employees ... in the performance of the work ... irrespective of whether [P.P.G.] was concurrently negligent ... but excepting where the injury or death ... was caused by the sole negligence of [P.P.G.]." The trial court rendered judgment that P.P.G. take nothing, stating that there was "no finding that there was concurrent negligence that was a proximate cause of the occurrence." The court of appeals reversed and rendered, holding simply that a finding of proximate cause is not a prerequisite to liability for indemnity.
In Ethyl Corp. v. Daniel Construction Co., 725 S.W.2d 705 (Tex.1987), this court held that parties seeking to indemnify an indemnitee from the consequences of its own negligence must express that intent in specific terms within the four corners of the contract. In Ethyl we held an indemnity contract between a construction project owner and a contractor to be unenforceable because it did not specifically state that the contractor would indemnify the owner for the owner's own negligence.
Since Ethyl this court has ruled on the enforceability of indemnity provisions on three occasions. In Singleton v. Crown Central Petroleum Corp., 729 S.W.2d 690 (Tex.1987) and Gulf Coast Masonry, Inc. v. Owens-Illinois, Inc., 739 S.W.2d 239 (Tex.1987), this court held that indemnity agreements failed to satisfy the express negligence rule because the agreements did not specifically state that the indemnitor was obligated to indemnify the indemnitee for the indemnitee's own negligence.
In Atlantic Richfield Co. v. Petroleum Personnel, Inc., 768 S.W.2d 724 (Tex.1989), this court held that the indemnity provision satisfied the requirements of the express negligence rule. The contract specified that Petroleum Personnel (PPI) would indemnify Atlantic Richfield (ARCO) for all claims arising out of PPI's work, "including but not limited to any negligent act or omission of [ARCO]...." While the language of the indemnity provision did not differentiate between degrees of negligence, the aforementioned language was sufficient to define the parties' intent.
The indemnity agreement in the instant case expressly provides for Payne & Keller to indemnify P.P.G. even if...
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