NO. 07-08-0140-CV

IN THE COURT OF APPEALS

FOR THE SEVENTH DISTRICT OF TEXAS

AT AMARILLO

PANEL C

AUGUST 13, 2009

______________________________

SMITH SERVICES, a business unit of SMITH INTERNATIONAL, INC.,

 f/k/a SMITH CO., 

Appellant

v.

GRINNELL CORPORATION, 

Appellee

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FROM THE 121 DISTRICT COURT OF YOAKUM COUNTY; ST

NO. 8108; HON. KELLY G. MOORE, PRESIDING

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Opinion

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Before QUINN, C.J., and HANCOCK and PIRTLE, JJ.

Smith Services, a business unit of Smith International, Inc., f/k/a Smith Co. (Smith)

appeals from two orders. The first is a final summary judgment denying it recovery against

Grinnell Corporation (Grinnell). The second is an order granting Grinnell’s motion to strike

Smith’s second amended petition. We consider only the former since our resolution of it

is dispositive of this appeal. And, upon considering it, we affirm the judgment. 
Scott originally sued Star Tool Co. which was bought by Smith’s parent company in 2001. 

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Background

Timothy Scott was employed by Gray Wireline at a carbon dioxide injection well in

Yoakum County. While Scott was working, a metal swedge/hammer union came apart

resulting in his injury. A portion of the tool was made by Grinnell. Smith had acquired the

item for use by its employees. One of those employees, Cipriano Almager, had exchanged

the Smith swedge/hammer union with another owned by Gray Wireline. 

Alleging a products liability claim, Scott sued Smith to redress his injuries caused

by the swedge/hammer. The two litigants eventually settled their dispute, but before it was 1

dismissed, Smith sued Grinnell for both statutory and common law indemnity. By way of

counterclaim, Grinnell sought indemnity from Smith. Competing motions for summary

judgment were filed and, after a hearing, the trial court granted that of Grinnell but denied

that of Smith. 

A Seller Under Chapter 82

The statutory indemnity provision underlying Smith’s claim is that found in Chapter

82 of the Texas Civil Practice and Remedies Code. Per that chapter, a manufacturer must

indemnify and hold harmless a “seller” against loss arising out of a products liability action

except for any loss caused by the seller’s negligence, intentional misconduct, or other act

or omission. TEX. CIV. PRAC. & REM. CODE ANN. §82.002(a) (Vernon 2005). Furthermore,

a “seller” is defined as one “who is engaged in the business of distributing or otherwise

placing, for any commercial purpose, in the stream of commerce for use or consumption

a product or any component part thereof.” Id. §82.001(3). According to Grinnell, Smith fell
Almager testified that Robbins, a Gray Wireline employee, used his swedge/hammer union to set a 2

plug in the well bore, and when Almager sought it back, Robbins told Almager to take Robbins’

swedge/hammer union and they would “be even.” 

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outside the scope of the provision since it was not a “seller.” Nor was Smith an innocent

“retailer in the chain of distribution” for purposes of common law indemnity, according to

Grinnell. 

According to the Supreme Court, the legislature intended that Chapter 82 provide

indemnity for all who stand in the position of a retailer. New Tex. Auto Auction Servs., L.P.

v. De Hernandez, 249 S.W.3d 400, 405 (Tex. 2008). This may be why it has said that the

term “seller,” under §82.001(3), connotes one “who commercially distributes a product.”

SSP Partners v. Gladstrong Invs. Corp., 275 S.W.3d 444, 449 (Tex. 2008); accord, USX

Corp. v. Salinas, 818 S.W.2d 473, 489 (Tex. App.–San Antonio 1991, writ denied)

(involving common law indemnity and noting that indemnity serves to protect innocent

retailers and “member[s] of the marketing chain” that act “merely [as] a conduit for the

defective product”). Given the foregoing definition and the Supreme Court’s interpretation

of it, we must conclude, as a matter of law, that Smith was not a “seller” under the evidence

of record. 

That Smith was in the business of providing services to oil companies in the form

of maintaining and repairing wells was undisputed. Similarly uncontested was the evidence

that Almager was a reverse unit operator for Smith. He did not sell swedge/hammer units.

Nor did we find that part of his job or the business of Smith consisted of trading or

conveying such tools. Moreover, the “exchange” of tools was characterized as merely a

“casual” act between men working on a well. This scenario fails to evince effort by Smith 2
We express no opinion on whether Smith could have been entitled to indemnity under any other 3

theory since the two addressed were the two pled by Smith and involved in the motion for summary judgment.

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to “commercially distribute” the tools in question. Nor would it permit one to reasonably

infer that Smith’s “business” included distributing or placing the hammer into the stream of

commerce. Rather, the item was acquired for use by the company to perform services

others hired it to do. Simply put, it arrived in the hands of a Gray Wireline employee

through a casual, non-commercial swap. 

Common Law Indemnity

As for common law indemnity, we note that the type expressly invoked by Smith was

that accorded to an innocent retailer. The latter status connotes one involved in the

business of passing or marketing the product to others. See Crane Carrier Co. v. Bostrom

Seating, Inc., 89 S.W.3d 153, 156 (Tex. App.–Corpus Christi 2002), rev’d on other grounds,

140 S.W.3d 681 (Tex. 2004) (stating that one must act as a mere innocent conduit for the

product to receive indemnity); USX Corp. v. Salinas, supra. Having previously determined

that nothing of record would permit one to reasonably infer that Smith marketed or

participated in the chain of marketing the swedge/hammer union to others, it cannot be

afforded common law indemnity as an innocent retailer. 

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In sum, we conclude that Grinnell was entitled to summary judgment as a matter of

law on Smith’s indemnity claims. Therefore, the issues of Smith are overruled, and the

summary judgment in favor of Grinnell is affirmed.

Brian Quinn 

 Chief Justice