Opinion
No. 01-08-00812-CV
Opinion issued April 22, 2010.
On Appeal from the 212th District Court Galveston County, Texas, Trial Court Cause No. 06CV1063A.
Panel consists of Justices JENNINGS, HANKS, and BLAND.
MEMORANDUM OPINION
Appellant, Apache Industrial Painting ("Apache"), brings this appeal to complain of the trial court's summary judgment in favor of Gulf Copper Manufacturing Corporation ("Gulf"). Apache complains that the trial court erred by granting summary judgment in Gulf's favor because the Master Services Agreement signed between Apache and Nabors Drilling USA ("Nabors") (the "Apache/Nabors MSA") does not require Apache to indemnify Gulf. Instead, Apache contends the MSA Gulf signed with Nabors (the "Nabors/Gulf MSA") requires Gulf to indemnify Apache. Apache asks that we reverse the trial court's rendering summary judgment in favor of Gulf and render judgment in its favor.
We reverse the trial court's summary judgment in favor of Gulf and render partial judgment in favor of Apache, holding that neither Apache nor Gulf is entitled to indemnity from the other.
BACKGROUND
Apache and Gulf were both subcontractors performing repairs on a jack-up drilling rig owned by Nabors Drilling USA while the rig was in Gulf's shipyard. This appeal arises out of a personal injury lawsuit filed by an employee of Apache, Steve Brokmann, against Nabors and Gulf. Brokmann's lawsuit alleged that both Nabors and Gulf were negligent.
Nabors and Gulf filed cross-claims for indemnity against Apache, based on the MSAs Apache and Gulf signed with Nabors. In its cross-claim against Apache, Gulf alleged that the Apache/Nabors MSA requires that Apache assume the defense and indemnity of Gulf in the Brokmann lawsuit. In the alternative, Gulf alleged that other agreements between Apache and Nabors require Apache to indemnify Gulf. Gulf therefore sought a declaration as to the required indemnity and brought a breach of contract claim against Apache based upon its failure to indemnify and defend Gulf and its failure to name Gulf as an additional insured on its insurance policies.
Apache answered Gulf's cross-claim by generally denying the allegations and asserting that the accident was caused solely by an employee of Gulf. Apache also argued that the Apache/Nabors MSA was superseded by other agreements between Apache and Nabors, and that the indemnity obligations in the Apache/Nabors MSA were not sufficiently conspicuous. In addition, Apache counterclaimed against Gulf, asserting that, if Apache was required to indemnify Nabors, Gulf was then required to indemnify Apache under the terms of the Gulf/Nabors MSA. Apache sought a declaration that it was not required to indemnify either Nabors or Gulf, or alternatively, that Gulf was obliged to indemnify Apache for any sums it paid Nabors. Apache also sought its attorney's fees.
Nabors and Gulf filed a motion for summary judgment on their claims against Apache. The joint motion sought summary judgment on their claims against Apache for breach of contract based upon Apache's failure to provide indemnity and defense for Nabors and Gulf in the underlying personal injury lawsuit. Additionally, Nabors and Gulf alleged that Apache committed a breach of contract by failing to procure insurance covering the claims at issue and by failing to list Nabors and Gulf as additional insured on such a policy.
Apache filed cross-motions for summary judgment on its contention that it was not required to indemnify either Gulf or Nabors, and sought summary judgment in its favor on its indemnity claim against Gulf. Gulf's reply to Apache's cross-motions for summary judgment asserted that the trial court should render judgment in Gulf's favor because Apache was not entitled to indemnity under the Gulf/Nabors MSA.
The trial court granted Nabors' and Gulf's joint motion for summary judgment against Apache and denied Apache's motions for summary judgment against Gulf and Nabors. The trial court also ordered Apache to pay the attorney's fees incurred by Nabors and Gulf in the indemnity lawsuit and the costs of the settlements they reached in the Brokmann lawsuit.
This appeal followed. Apache originally appealed the summary judgment in favor of Nabors as well as that in favor of Gulf, but it subsequently settled with Nabors. Accordingly, Apache and Nabors sought to dismiss those claims from this appeal, sever the portion of the appeal against Nabors and remand it to the trial court for entry of a final judgment in accordance with the settlement. That relief was granted on November 13, 2009. This opinion is therefore limited to the resolution of Apache's remaining issues on appeal as they relate to the trial court's summary judgment in favor of Gulf.
ANALYSIS
On appeal, Apache complains that the trial court erred by granting summary judgment in favor of Gulf and by not granting Apache's motion for summary judgment against Gulf. Although Apache raises four issues, these can be distilled down to two contentions: (1) the court erred by granting summary judgment on Gulf's claims against Apache because Gulf was not entitled to indemnification under the Apache/Nabors MSA; and (2) the trial court erred by failing to grant summary judgment in Apache's favor on Apache's indemnity claim against Gulf because Apache is a member of the "Nabors Group" under the Gulf/Nabors MSA and the accident in question was alleged to have resulted from the negligence of a Gulf employee.
A. Standard of Review
We review the district court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is proper when there are no disputed issues of material fact and the movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). In deciding whether there is a disputed material fact issue precluding summary judgment, we take as true proof favorable to the non-movant, and we indulge every reasonable inference and resolve any doubt in favor of the non-movant. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). Where, as here, the parties file cross-motions for summary judgment on overlapping issues, and the trial court grants one motion and denies the other, we should review the summary-judgment evidence supporting both motions and "render the judgment that the trial court should have rendered." FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); see Tex. Mun. Power Agency v. Pub. Util. Comm'n of Tex., 253 S.W.3d 184, 192, 199 (Tex. 2007) (citing rule for review of grant of summary judgment and reviewing denied cross-motion for summary judgment under same standard).
B. The Indemnity Agreements
The Apache/Nabors MSA and the Gulf/Nabors MSA are substantially similar documents, relating to the work each performed on the jack-up rig and differing only in the names of the contractors and the dates signed. They state, in relevant part:
The Apache/Nabors MSA is dated October 13, 2004. After executing the MSA with Apache, Nabors also issued a Purchase Order to Apache for painting services covering the period in which Brokmann was injured. The Purchase Order contained its own terms and conditions. Apache originally contended that its indemnification obligation in the Apache/Nabors MSA had been superseded by the Purchase Order. In its motion for summary judgment and response to Apache's motion, Gulf contended that the Purchase Order does not modify the Apache/Nabors MSA. On appeal, Apache apparently agrees. Our analysis therefore focuses upon the language of the MSAs Apache and Gulf signed with Nabors.
This MASTER SERVICE AGREEMENT ("Agreement") is made and entered . . . by and between NABORS CORPORATE SERVICES, INC., a corporation organized and existing under the laws of the state of Delaware, as agent for Nabors Industries, Inc. and its subsidiaries (collectively, "Nabors"), and [Apache Industrial Painting or Gulf Copper Manufacturing Corp.] ("Contractor") . . .
. . . .
4. INDEPENDENT CONTRACTOR RELATIONSHIP
a. Contractor is and shall be at all times an independent contractor. Contractor shall have the right to control the manner in which the Work is performed.
b. Neither Contractor nor anyone employed by Contractor shall be deemed for any purpose to be an employee, agent, servant or representative of Nabors . . .
c. Nabors shall have no power or authority to direct, supervise or control Contractor with respect to the means, manner, or method of performance of the Work or services performed or rendered hereunder and Contractor, in the exercise of his independent employment and as an independent contractor, shall select the means, manner and method of performance thereof . . .
. . . .
9. INSURANCE
. . . .
a. The Nabors Group shall be named as additional insureds in each of Contractor's policies, except Worker's Compensation.
. . . .
RISK ALLOCATION AND INDEMNITY
a. For purposes of this Agreement, the "Nabors Group" shall be comprised of the directors, officers, employees, servants, agents, representatives and invitees of Nabors and its parent, subsidiary and affiliate companies and the directors, officers, employees, servants, agents, representatives and invitees of contractors (other than Contractor) hired by Nabors and of the operator and its joint owners for whom Nabors is working.
b. For purposes of this Article, the "Contractor Group" shall be comprised of the directors, officers, employees, servants, agents, representatives and invitees of the Contractor and its affiliate companies and the directors, officers, employees, servants, agents, representatives and invitees of other contractors hired by Contractor.
C. CONTRACTOR SHALL BE LIABLE FOR, AND HEREBY RELEASES, ALL CLAIMS AGAINST NABORS GROUP WITH RESPECT TO ALL LOSSES, COSTS, DAMAGES, EXPENSES AND LEGAL FEES WHICH CONTRACTOR MAY SUFFER, SUSTAIN, PAY OR INCUR DIRECTLY OR INDIRECTLY ARISING FROM OR ON ACCOUNT OF BODILY INJURY TO OR DEATH OF ANY PERSONS IN THE CONTRACTOR GROUP ARISING OUT OF OR RELATING TO THE AGREEMENT OR ANY CONTRACT. IN ADDITION, CONTRACTOR SHALL DEFEND AND INDEMNIFY NABORS GROUP AGAINST ALL ACTIONS, PROCEEDINGS, CLAIMS, DEMANDS, LOSSES, COSTS, DAMAGES, EXPENSES AND LEGAL FEES WHATSOEVER WHICH MAY BE BROUGHT AGAINST NABORS GROUP OR WHICH NABORS GROUP MAY SUSTAIN, PAY, OR INCUR, DIRECTLY OR INDIRECTLY ON ACCOUNT OF (1) BODILY INJURY TO OR DEATH OF ANY PERSON IN THE CONTRACTOR GROUP, OR LOSS OF OR DAMAGE TO ANY PROPERTY OWNED BY A MEMBER OF THE CONTRACTOR GROUP OR (2) BODILY INJURY OR DEATH OF ANY PERSON OR LOSS OF OR DAMAGE TO ANY PROPERTY RESULTING FROM ANY NEGLIGENT ACT OR WILLFUL MISCONDUCT OF ANY PERSON WITHIN THE CONTRACTOR GROUP.
d. EXCEPT AS OTHERWISE SPECIFIED HEREIN, THE LIABILITY, RELEASE AND INDEMNITY PROVISIONS CONTAINED IN THIS AGREEMENT SHALL APPLY NOTWITHSTANDING ANY BREACH OR ALLEGED BREACH OF THIS AGREEMENT OR ANY CONTRACT AND SHALL BE WITHOUT REGARD TO CAUSE OR CAUSES, INCLUDING, WITHOUT LIMITATION PRE-EXISTING DEFECTS IN EQUIPMENT OR MATERIALS, THE NEGLIGENCE, WHETHER SOLE, CONCURRENT, ACTIVE, PASSIVE, PRIMARY OR SECONDARY OF EITHER PARTY OR ANY OTHER PERSON INCLUDING WITHOUT LIMITATION THE PARTY OR PERSON BEING RELEASED OR INDEMNIFIED, OR OTHERWISE, STRICT LIABILITY OR THE UNSEAWORTHINESS OF ANY VESSEL INGRESS AND EGRESS, LOADING AND UNLOADING.
. . . .
h. THE INDEMNITY OBLIGATIONS CONTAINED IN THIS AGREEMENT OR ANY CONTRACT WITH RESPECT TO THE INJURY TO OR DEATH OF ANY PERSON IN THE CONTRACTOR GROUP OR DAMAGE TO OR LOSS OF PROPERTY OF ANY MEMBER OF THE CONTRACTOR GROUP SHALL BE SUPPORTED BY LIABILITY INSURANCE COVERAGE IN THE AMOUNTS SET FORTH IN ARTICLE 9 ABOVE.C. Is Gulf a member of the "Nabors Group" under the Apache/Nabors MSA, entitling it to indemnity from Apache and to be named as an additional insured on Apache's insurance policies?
Apache first contends that the court erred by granting summary judgment on Gulf's breach of contract claims against Apache because Gulf was not a member of the "Nabors Group" under the Apache/Nabors MSA.
Under the terms of the Apache/Nabors MSA, if Gulf is not a member of "Nabors Group," then Apache does not owe it an indemnity obligation, nor was it required to name Gulf as an additional insured on its insurance policies. Alternatively, Apache argues that Gulf's motion for summary judgment on its breach of contract claim for failure to name Gulf as an additional insured must fail because there is no evidence in the record that Apache did, in fact, fail to so name it.
"Nabors Group" is defined in the Apache/Nabors MSA as the "the directors, officers, employees, servants, agents, representatives and invitees of Nabors and its parent, subsidiary and affiliate companies" and "the directors, officers, employees, servants, agents, representatives and invitees of contractors (other than [Apache]) hired by Nabors. . . ." Apache/Nabors MSA Paragraph 10a. By its plain language, the "Nabors Group" specifically includes the employees of Nabors' contractors, but it does not include the contractors themselves. Gulf seeks to avoid this limitation by claiming it is an "invitee" of Nabors. Apache counters that Gulf cannot, as a matter of law, be an "invitee" aboard a vessel undergoing repairs inside its own shipyard.
Jack-up rigs are "vessels" within the meaning of admiralty law. Jones v. Francis Drilling Fluids, Ltd., 613 F. Supp. 2d 858, 863 n. 2 (S.D. Tex. 2009) (citing Demette v. Falcon Drilling Co., 280 F.3d 492, 498 n. 18 (5th Cir. 2002)).
In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983); Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). To achieve this objective, courts should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Id. No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument. Id.; Myers v. Gulf Coast Minerals Mgmt. Corp., 361 S.W.2d 193, 196 (Tex. 1962). "We construe contracts `from a utilitarian standpoint bearing in mind the particular business activity sought to be served' and `will avoid when possible and proper a construction which is unreasonable, inequitable, and oppressive.'" Frost Nat'l Bank v. L F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987)). Further, "all writings that pertain to the same transaction will be considered together, even if they were executed at different times and do not expressly refer to one another." DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex. 1999).
If a written instrument can be given a certain or definite legal meaning or interpretation, then it is not ambiguous, and the court will construe the contract as a matter of law. Coker, 650 S.W.2d at 393. The interpretation of an unambiguous contract is a question of law, which we review de novo. See MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999). Ambiguity does not arise simply because the parties advance conflicting interpretations of the contract; rather, for an ambiguity to exist, both interpretations must be reasonable. Lopez v. Munoz, Hockema Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000).
In interpreting a contract, we must presume that the parties thereto intended every clause to have some effect; therefore, we consider each part of the document with every other part of the document so that the effect and meaning of one part on any other part may be determined. See Birnbaum v. Swepi LP, 48 S.W.3d 254, 257 (Tex. App.-San Antonio 2001, pet. denied). Moreover, we give terms their plain, ordinary, and generally accepted meaning unless the instrument shows that the parties used such terms in a technical or different sense. Id. Finally, we enforce an unambiguous agreement as written. Id. We are not permitted to rewrite an agreement to mean something it did not. Id. We cannot change the contract simply because we or one of the parties comes to dislike its provisions or thinks that something else is needed in it. Id. Parties to a contract are masters of their own choices and are entitled to select what terms and provisions to include in or omit from a contract. Id.
Gulf argues that it is an "invitee" under the Apache/Nabors MSA, and thus part of the "Nabors Group" in the Apache/Nabors MSA and therefore entitled to indemnity from Apache. The MSA that Apache signed with Nabors for work performed on Nabors' jack-up rig clearly defined Apache's relationship to Nabors as a "Contractor," and created clear vertical indemnity obligations flowing between Apache and Nabors. Similarly, the MSA that Gulf signed with Nabors regarding Gulf's work on Nabors' rig also defined Gulf as a "Contractor" and created a vertical indemnity obligation between Gulf and Nabors. Gulf now seeks to ignore its own contractual and indemnity relationship with Nabors, to gain the benefits of Nabors' contractual and indemnity relationship with Apache. To allow this result would essentially require us to ignore the fact of Gulf's clear MSA with Nabors and the structure of its indemnity relationship with Nabors. In light of the requirements that we are to read separate contracts governing the same "transaction" together, and that we are to construe contracts "`from a utilitarian standpoint bearing in mind the particular business activity sought to be served' and `avoid when possible and proper a construction which is unreasonable, inequitable, and oppressive,'" we decline to reach the result urged by Gulf. DeWitt County Elec. Coop., 1 S.W.3d at 102; Frost Nat'l Bank, 165 S.W.3d at 312.
Accordingly, we hold that the trial court erred in granting summary judgment on Gulf's behalf. We sustain Apache's first issue and reverse the trial court's grant of summary judgment in Gulf's favor on Gulf's breach of contract claims against Apache.
D. Is Apache entitled to indemnity from Gulf?
Like Gulf, Apache attempts to bring itself within the narrow definition of "Nabors Group" in the Gulf/Nabors MSA by arguing that it was an "invitee" of Nabors at the time of Brokmann's injury and that it is therefore part of the "Nabors Group" and entitled to indemnity from Gulf. Based on this argument, Apache contends that the trial court erred by denying its motion for summary judgment for indemnity from Gulf for its losses arising from the Brokmann lawsuit.
As we noted above, however, the MSA that Apache signed with Nabors defined Apache's role as a "Contractor" and created an indemnity relationship with Nabors. Accordingly, we decline to allow Apache to define itself as an "invitee" of Nabors under the Gulf/Nabors MSA and insert itself into the Gulf/Nabors indemnification arrangement. We overrule Apache's second issue and hold that the trial court did not err by denying Apache's motion for summary judgment on the grounds that it was entitled to indemnity from Gulf.
CONCLUSION
Based upon the contracts and the record before us, neither Apache nor Gulf is entitled to contractual indemnity from the other. We sustain Apache's first issue in part, reversing the trial court's granting summary judgment in favor of Gulf and rendering judgment in favor of Apache on the Gulf's breach of contract claims against it. We overrule Apache's second issue and affirm the trial court's denial of Apache's motion for summary judgment against Gulf.