NO. 07-08-0140-CV IN THE COURT OF APPEA LS FOR THE SEV ENTH DISTRICT OF TEXAS

AT AMAR ILLO PANELC AUGUST 13, 2009

_________

_________

_________

___ SM IT H SE RV IC ES , ab us in es s u ni t o f S MIT H IN TE RN AT ION AL , I NC ., f/ k/aS MIT H CO ., Appell ant

v. GR IN NE LLC OR PO RATI ON , Appell ee

_________

_________

_________

______ FROM THE 121 DISTRICTCOURT OF YOAKUM COUNTY; ST NO. 8108; HON. KELLY G. MOORE, PRESIDING

_________

_________

_________

______ Opinion

_________

_________

_________

______ Before QUINN, C .J., and HAN COCK an d PIRTLE , JJ. Smith Services, a busin ess unit of Smith International , Inc., f/k/a Smith Co . (Smith) appeals from two orders. The first is a final summary judgment de nying i t recovery again st Grinnell C orporation (Grinnell). The second is an order granting Grinne ll’s motion to strike Smith’s secon d amended petition. We co nsider only the former since our resol ution of it isd is po si ti veo f t hi s a pp ea l. A nd , u po n co ns id er in g it , w e af fi rm th e jud gm en t.S c o tt o rig in a ll y s u e d S ta r T o o l C o . w h ic h w a s b o u g h t b y S m it h ’s p a re n t co m p a n y i n 2 0 0 1

. 1 2 Background Timothy Scott wa s e mployed by Gray Wireli ne at a carbon dioxideinjection well in Yo ak um C ou nty. Wh il e Scott wa s working , ame ta l sw ed ge/h am me r u ni on ca me a pa rt resulting i n his injury. A p ortion of the tool was made by Grinnell . Smith h ad acqui red the item for use by its e mployees. One of those emplo yees, Cipria no Al mager, had exchanged th e Sm it h sw ed ge/h am me r u ni on w it h an ot he r own ed b y G ra y W irel in e. Allegi ng a products liab ility cl aim, Scott sued Smith t o redress his injuries caused by the sw edge/hammer. Thetwo l itigants even tually settled their d ispute, but before it was 1 dismissed, Smith sued Grinnel l for both statutory and common law indemnity. B y way of countercl ai m, Gri nn el l so ug hti nd em ni ty fro m S mi th

. Co mp et in g mo ti on s f or su mma ry judgment were file d and, a fter a hearing, the trial court granted that of Grinnell but denied th ato f S mi th

. A Sel ler Unde r Chapter 82 The statutory inde mnity provision underlying Smith’s claim is that found in Chapter 82 of the Texas Civil Practice and Re medies Co de. Pe r that chapter, a manufacturer must indemnify an d hold harmless a “selle r” against lo ss arising out of a products liab ility actio n except for any loss caused by the selle r’s negli gence, intentio nal miscon duct, or other act
or o mi ss io n. T EX
. C IV
. P RAC
. & R EM
. C ODE A NN
. §82.002(a) (Vernon 2005). Furthermore, a “selle r” is defined as on e “who is enga ged in the busi ness of di stributing or otherwi se placing, for any commercial p urpose, in the stream of commerce for use or consumption
a prod uct or

a nycom po ne ntp art th ereo f.” Id. §82.001(3). According to Grinnell, Smith fellA lm a g e r t e s ti fi e d th a t R o b b in s , a G ra y W ire li n e e m p lo y e e , u s e d h is s w e d g e /h a m m e r u n io n to s e t a 2 pl ug i n t he w el l bor e, and w hen A l m age r soug ht i t back, R obb i ns t ol d A l m age r t o t ak e R ob bi ns’ s w e d g e / h a m m e r un i o n a n d t h e y w o u l d “be e v e n
. ” 3 outside the scope of the provision since it was not a “sel ler.” Nor was Smith a n inno cent “re ta il er i n th e ch ai n of

d is tri bu ti on ” fo r pu rp os eso f co mmo n la w in de mn ity, accordi ng to Gri nn el l. According to the Sup reme Court, the leg islature in te nded that Chapter 82 p rovide in de mn ity f

or a ll w host an d in th e po si ti on o f are ta il er
. New T ex. Auto A uction Se rvs., L.P.
v. DeHer

na ndez, 249 S.W.3d 4 00, 405 (Tex. 200 8). This may bew hy it h as said that the te rm “se ll er ,” un de r § 82 .0 01 (3 ), co nn ot es on e “w hoco mme rci al lyd is tri bu te s ap ro du ct. ” SSP Partnersv. Gladstrong Invs. Corp. , 2 75S .W. 3d 4 44 , 4 49 (T ex . 2 00 8) ; accord, USX Corp. v. Sal

inas , 818 S .W.2d 473, 489 (Tex. Ap p.–San A ntonio 19 91, writ den ied) (involving common law indemnity an d noting that indemnity se rves to protect inno cent retailers and “member[s] of the marketing chain” that act “m erely[ as] a conduit for the defective product”). Given the foregoi ng definition and the Supreme Cou rt’s interpretation of it, we must conclude, a s a matter of law, that Smith was not a “seller” un der the evi dence of re co rd

. Th atS mi th w asi n th e bu si ne sso f p roviding serv ic estoo il co mp an ie s i n th e fo rm of maintainin g and repairing wells was undi sputed. Si milarly unco ntested was the eviden ce that Almager was a reverse un it o perator for Smith. He di d not sel l swed ge/hammer units. Nor did we find that part of his job ort he bus ine ss of Smith consisted of trading or conveying such tools. Moreover, the “exchan ge” of tools was characterized as merely a “ca su al ” a ct b etwe en men wo rki ng on a w el l. Thi s sc en ar iofai lsto e vi nc e e ffo rt byS mi th 2W e ex pr ess no opi ni on o n whet herSm i t h c oul d ha ve been ent i t l ed t o i ndem ni t y und erany ot her 3 th e o ry s in c e th e tw o a d d re s s e d w e re th e tw o p le d b y S m it h a n d i n v o lv e d i n th e m o ti o n fo r s u m m a ry j u d g m e n t. 4 to “commercially di stribute” the tools i n question . Nor would i t per mi t one t o reasonabl y infer that Smith’s “business” incl uded distributing or pl acing the h ammer into the stream of commerce. Rather, the it em was acquired for u se by the company to pe rform services others hired i t to do. Simply p ut, it arrived i n the h and s of a Gray Wireline e mployee th ro ug h a ca su al , n on -co mme rci al swap
. Co m m onL aw

In de m nity As for common law ind emnity, we note that t he type expressly invoke d by Smith was that accorded to an inn ocent retailer. The latt er st at us connotes one in volved i n the bu si ne sso f p as si ng o r m ar ke ti ng th e prod uct to ot he rs. See Crane Carrier Co. v. B ostrom Se at in g, In c., 89 S.W .3 d 1 53 , 15 6 (T ex . A pp .– Co rp usC hr is ti 2 00 2) , rev’d on other groun ds, 140 S.W.3d 6 81 (Tex. 200 4) (stating that one must act as a mere innocent conduit for the prod uct torec ei vei nd em ni ty) ; USX Corp. v. Salinas , supra. Ha ving previ ously de termined that nothing of record woul d permit one to reaso nably i nfer that Smith ma rketed or participated i n the cha in of marketing the swedge/hamm er un ion to others, it cannot be af fo rd ed co mmo n la w in de mn ity a s a n in no ce ntre ta il er
. 3 In sum, we co nclude that Grinnell was entitle d to summary judgment as a matter of law o n Smith’s indemnity cl aim s. Therefore, the issues of Smith are overruled, and the
su mma ry jud gm en t i n fa vo r o f G ri nn el l isa ffi rme d.
Brian Quin n Chie f Justice