Court Opinion

ID: 9581592
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:16:32.541605+00
Date Added: 2024-06-11T13:37:06.631875
License: Public Domain

Beasley, Judge,
dissenting.
The issue is the effect of an indemnification provision in a contract for services for the operation of a retail service station and food mart. It is placed before us procedurally as follows.
After a hearing on the cross-motions for summary judgment and consideration of the evidence, the court granted Texaco’s motion for summary judgment with regard to its crossclaim for contractual indemnity against Myers and denied Myers’ cross-motion for summary judgment. The order stated that inasmuch as the court was rendering its decision on Texaco’s crossclaim for contractual indemnity, the court was not ruling on that portion of Texaco’s motion for summary judgment with regard to its breach of contract crossclaim nor upon Myers’ defense of waiver of the insurance procurement provision.
*300Myers’ appeal is a threefold challenge: The indemnification provision, Paragraph 9, itself is unenforceable by virtue of its failure to satisfy the Texas “express negligence doctrine.” The indemnification provision construed together with the insurance provision, Paragraphs 9 and 10 together, does not satisfy the Texas “express negligence doctrine” and indemnification for negligence is therefore unenforceable. The indemnity provision is likewise unavailable to Texaco to recover its attorney fees and costs.
No issue “is raised on appeal” in regard to the court’s not ruling on the breach of contract portion of the crossclaim and so none should be addressed. OCGA § 5-6-34 (d); Westwind Corp. v. Washington Fed. Savings &c. Assn., 195 Ga. App. 411 (1) (393 SE2d 479) (1990).
1. The contract expressly provides and the parties agree that Texas law should be applied in assessing any contractual indemnity.
The Supreme Court of Texas, in following its trend toward a more strict construction of indemnity contracts, has adopted an “express negligence doctrine,” which provides that when parties to a contract seek indemnification of the indemnitee from the consequences of its negligence such an intention must be “specifically stated within the four corners of the contract.” Ethyl Corp. v. Daniel Constr. Co., 725 SW2d 705, 708 [2] (Tex. 1987). Such a view is consistent with Georgia public policy which “is reluctant to cast the burden of negligent actions upon those who are not actually at fault. Thus ‘(i)t is well established in Georgia that contractual indemnities do not extend to losses caused by an indemnitee’s own negligence unless the contract expressly states that the negligence of the indemnitee is covered. (Cits.)’ [Cits.] ‘ “The words of the contract will be scrutinized closely to discover whether such an intent is actually revealed in them and every presumption is against such intention. In the absence of explicit language to the contrary, [Georgia] courts will not interpret an indemnity agreement as a promise by the indemnitor to save the indemnitee harmless on account of the latter’s own negligence.” (Cits.)’ [Cits.] . . . ‘Georgia courts never imply an agreement to indemnify another for one’s own negligence in the absence of express language. (Cits.)’ ” Allstate Ins. Co. v. City of Atlanta, 202 Ga. App. 692, 693 (415 SE2d 308) (1992). The provision in Allstate was similarly sweeping (“any and all claims”) and was insufficient to impose liability for indemnity because it was not specific, express, or explicit. There is thus no impediment to applying Texas law.
2. The indemnity provision of Paragraph 9, on its own, does not satisfy the Texas express negligence test. The relevant language is virtually identical to an agreement examined in Singleton v. Crown Central Petroleum Corp., 729 SW2d 690 (Tex. 1987). In unfavorably comparing the Singleton agreement to one in Gulf Oil v. Ford, Bacon & *301Davis, Texas, 782 SW2d 28, 30 [1] (Tex. App. — Beaumont 1989), the Texas Court of Appeals in Beaumont stated: “The agreement in Singleton failed to meet the express negligence test, because it contained no direct language stating the parties intended that the contractor would indemnify owner for the consequences of the owner’s own negligence. Rather, it could, at best, only be inferred that such was the parties’ intent because the language stated that the only accidents for which indemnity will not apply are those arising out of the owner’s sole negligence.” Such is the infirmity of the indemnity provision in the case at bar. See also Linden-Alimak, Inc. v. McDonald, 745 SW2d 82 (Tex. App. — Fort Worth 1988); Gulf Coast Masonry v. Owens-Illinois, 739 SW2d 239 (Tex. 1987). Compare Boyd v. Amoco Production Co., 786 SW2d 528 (Tex. App. — Eastland 1990); Atlantic Richfield v. Petro. Personnel, 768 SW2d 724 (Tex. 1989); Adams Resources &c. Corp. v. Resource Drilling, 761 SW2d 63 (Tex. App. — Houston (14th Dist.) 1988). The point is that the omnibus language is not sufficient to cover joint negligence. Under Texas law, a blanket provision which excludes indemnity only for the sole negligence of indemnitee does not cover joint negligence, as here, because it does not expressly say so. “Direct language” is mandatory.
3. The indemnity provision of Paragraph 9 combined with the insurance procurement provision of Paragraph 10 still does not satisfy the express negligence requirement.
The Texas Court of Appeals in Dallas considered and rejected an analogous situation in Adams v. Spring Valley Constr. Co., 728 SW2d 412 (Tex. App. — Dallas 1987). Compare Klepac v. Champlin Petroleum Co., 842 F2d 746 (5th Cir. 1988), in which the issue of whether or not the indemnity language satisfied the Texas express negligence doctrine was not squarely addressed. In Adams, the court was asked to construe indemnity language in a subcontract in conjunction with language from a certificate of insurance procured in conjunction with the subcontract to find an express intent that the subcontractor was to indemnify the contractor against liability due to the contractor’s negligence. Although the certificate of insurance was physically a separate document from the subcontract, the court assumed arguendo that the certificate was a condition of the subcontract and within its four corners. Even considering the combined language, it was an inadequate statement of assumed negligence indemnity for the indemnitee.
The combined language at issue here fails because at most the sought indemnity for joint negligence can only be inferred from the additional language of the insurance procurement provision. Implication and inference cannot transform omission into an express or explicit statement of intent, or as Gulf Oil says, “direct language,” to indemnify the indemnitee against its own concurrent negligence. The *302trial court erred in ruling that the contract provisions were sufficient.
Decided July 16, 1992
Reconsideration denied July 31, 1992
Lane, O’Brien, Caswell & Taylor, Richard L. Ormand, Russell T. Bryant, for appellants.
Fortson & White, Michael J. Rust, Matthew G. Moffett, for appellee.
4. Nor was Texaco entitled to summary judgment on the question of its indemnification for attorney fees and costs.
In Construction Inv. &c. v. Dresser Ind., 776 SW2d 790 (Tex. App. — Houston (1st Dist.) 1989), the Texas Court of Appeals in Houston (1st Dist.) addressed the issue of whether or not an indemnity contract, which did not meet the express negligence test, could obligate the indemnitor to pay the indemnitee’s attorney fees for successfully defending a negligence claim by an employee of the indemnitor’s subcontractor. The court concluded that it could, citing, inter alia, two federal court decisions applying Texas law and holding that “an indemnitee may recover costs where it was not found negligent, even though the contract did not meet the express negligence standard.” Id. at 792. The decision in Dresser rests in part on the fact that the indemnitee was not found to be negligent on the underlying tort claim. In this case, not only was indemnitee Texaco found to be negligent but to a much greater degree than joint tortfeasor/indemnitor Myers.
Furthermore, in Dresser, unlike the case at bar, the provision regarding defense costs was “so specific, lengthy, and repeated” that it was more properly characterized as a “ ‘separate item of indemnification.’ ” See Dresser, supra at 793.
The provision in this case for indemnification of defense costs, including reasonable attorney fees and expenses, is more closely akin to that in Monsanto Co. v. Owens-Corning Fiberglas, 764 SW2d 293 (Tex. App. — Houston (1st Dist.) 1988). As noted in Dresser, “the indemnity provision in Monsanto was approximately 12 words in length” and did “not compare with the specific, lengthy indemnity clause” in Dresser.
The unelaborated mention of indemnification of defense costs in the short indemnity provision at bar cannot reasonably be found separate and distinct from any attempt at indemnification for negligence, under the Dresser rationale.
The judgment for Texaco should be reversed.