Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ared-3_07-cv-00158/USCOURTS-ared-3_07-cv-00158-8/pdf.json

Nature of Suit Code: 360
Nature of Suit: Other Personal Injury
Cause of Action: 28:1441 Petition for Removal- Personal Injury

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Doc. No. 126.

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IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

JONESBORO DIVISION

TIM HENRY PLAINTIFF

v. 3:07CV00158 WRW

THE PREMCOR REFINING GROUP, INC. DEFENDANT

______________________________________________________________________________

THE PREMCOR REFINING GROUP, INC. THIRD-PARTY PLAINTIFF

v.

FLASH OIL COMPANY OF ARKANSAS, INC. THIRD-PARTY DEFENDANT

ORDER

Pending is Third-Party Defendant’s (“Flash Oil”) Motion to Clarify (Doc. No. 123).

Third-Party Plaintiff (“Premcor”) has responded.1

 Flash Oil’s Motion is GRANTED, in that the

Court interprets Paragraph 3 of the Carrier Responsibility Agreement below.

Flash Oil asks the Court to clarify the proper interpretation and application of the

indemnity clause of Paragraph 3 and to hold that Paragraph 3 does not require, as a matter of

law, Flash Oil to indemnify Premcor for Premcor’s own negligence.

Paragraph 3 reads:

(3) In consideration of the rights and privileges herein granted, User [Flash Oil]

hereby indemnifies Premcor and agrees to hold it harmless from and against any

and all claims, demands, causes of action, damages, suits, costs, losses or

expenses of any kind or character, including actual attorney’s fees, arising out of,

or in connection with, the exercise by User [Flash Oil] and Agents of the privileges

herein granted, unless caused by the sole negligence of Premcor.

Case 3:07-cv-00158-JMM Document 127 Filed 01/27/10 Page 1 of 4
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Doc. No. 124.

3

Id.

4

Id.

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249 Ark. 389, 391 (Ark 1970).

6

Id.

7

Id. at 394.

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Flash Oil asserts that “[p]utting aside for the moment the issue of Premcor’s ‘sole

negligence,’ the threshold issue is whether . . . Paragraph 3 requires Flash [Oil] to indemnify

Premcor for Premcor’s own negligence.”2 Flash Oil contends that the language of Paragraph 3 is

not clear and unequivocal enough, under Arkansas law, to obligate Flash Oil for Premcor’s own

negligence.3 Flash Oil’s argument centers around Paragraph 3 not including language that

“indemnification is required relative to other degrees of negligence.”4

In Pickens-Bond Construction Company v. North Little Rock Electric Co.,

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 the Arkansas

Supreme Court considered the following indemnity clause:

Party of the second part shall be responsible for his own work and every part thereof,

and all of the work of every description used in connection therewith. He shall

specifically and distinctly assume, and does assume, all risks of damage or injury

from whatever cause to property or persons used or employed on or in connection

with his work, and of all damage or injury from any cause to property wherever

located, resulting from any action or operation under this sub-contract or in

connection with his work, and undertake and promise to protect and defend the party

of the first part against all claims on account of any such damage or injury.6

The court found, based on the language “from whatever cause,” that the indemnity clause

covered all situations, unless that caused by the indemnitee’s own sole negligence.7 The Court

explained: 

Case 3:07-cv-00158-JMM Document 127 Filed 01/27/10 Page 2 of 4
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Id. at 401. While the court in Pickens discussed indemnity in the context of general

contractor and subcontractor, the theory is applicable in this case, as well.

9

319 Ark. 396 (1995).

10356 Ark. 324 (2004).

11Doc. No. 112.

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It is quite a different matter, however, where there was no negligence on the part of

the general contractor, or where his negligence is only a concurring cause. If we held

that the general contractor was not indemnified under this clause in those situations,

then the clause would be virtually meaningless.8

Under the indemnity clause in this case, Flash Oil agreed to indemnify Premcor “against

any and all claims, demands, causes of action, damages, suits, costs, losses or expenses of any

kind or character . . . arising out of, or in connection with, the exercise by User [Flash Oil]

and Agents of the privileges herein granted . . . . ” The language in this indemnity clause, like

the “from whatever cause” language in Pickens, unequivocally shows Flash Oil’s intention to

obligate itself, even for Premcor’s own negligence. Paragraph 3 here makes it clear that Flash

Oil is, however, not obligated if the claims, demands, causes of action, damages, suits, costs,

losses or expenses are caused by Premcor’s sole negligence.

Both Nabholz Construction Company v. Graham9 and Chevron U.S.A. Inc. v. Murphy

Exploration & Production Company10 -- cases on which Flash Oil relies heavily in support of its

argument that the indemnity agreement here is ambiguous -- cite Pickens.

A September 29, 2009, Order adopted Magistrate Judge Young’s partial report and

recommendations.11 Judge Young interpreted paragraph 3 to mean that “Flash [Oil] would not be

responsible for any indemnification if Premcor was solely negligent. However, if a claim arose

that was not wholly attributable to Premcor, the Agreement indicates that Flash [Oil] would be

Case 3:07-cv-00158-JMM Document 127 Filed 01/27/10 Page 3 of 4
12Doc. No. 101.

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responsible for total indemnification, including actual attorney fees.”12 I agree with this

interpretation.

IT IS SO ORDERED this 27th day of January, 2010.

 /s/Wm. R. Wilson, Jr.

UNITED STATES DISTRICT JUDGE

Case 3:07-cv-00158-JMM Document 127 Filed 01/27/10 Page 4 of 4