Opinion ID: 2776071
Heading Depth: 3
Heading Rank: 1

Heading: Coverage for Kellogg’s Malfeasance

Text: Kellogg argues that Eby’s promise covers only claims involving Eby’s malfeasance, not Kellogg’s. But this is not what the clause says: It says that Eby will indemnify Kellogg for all claims arising “directly or indirectly” from Eby’s work. Thus, the indemnity clause covers claims involving Kellogg’s failure to comply with a duty created by something Eby had done. This clause fits our facts. Eby hit the methanol pipeline and caused the leak, and the pipeline owner claimed that Kellogg should have taken corrective action. Thus, the claims involved Kellogg’s wrongdoing, not Eby’s. But Kellogg allegedly incurred a duty only because Eby had caused a leak. Thus, the indemnity clause is broad enough to cover the pipeline 7 owner’s claims against Kellogg for Kellogg’s fault (failure to take corrective action). The resulting issue is the enforceability of that promise. The parties agree that enforceability is governed by Texas law, which restricts indemnity clauses through the “fair notice rule.”