Court of Appeals of Texas, Dallas.

TRI-STATE INSURANCE COMPANY, Appellant,

v.

ROGERS-O’BRIEN CONSTRUCTION COMPANY and Don Ellsworth Electric, Inc., Appellees.

No. 05-95-01639-CV.

|

Filed April 30, 1997.

Before Justices OVARD, MALONEY and WRIGHT.

OPINION

OVARD, Justice.

*1 Appellant Tri-State Insurance Company (Tri-State) appeals a summary judgment in favor of appellees Rogers-O’Brien Construction Company (Rogers-O’Brien) and Don Ellsworth Electric, Inc. (Ellsworth) in Tri-State’s suit for declaratory judgment involving interpretation of an insurance policy and a subcontract indemnity agreement. In seven points of error, Tri-State contends the trial court erred in granting Ellsworth’s and RogersO’Brien’s motions for summary judgment and in denying Tri-State’s motion for summary judgment. The determinative issue is whether the subcontract provision expressly provided that Ellsworth would indemnify Rogers-O’Brien for Rogers-O’Brien’s own negligence. Because we conclude it did not, we reverse the trial court’s judgment and render judgment in favor of Tri-State.

BACKGROUND

Rogers-O’Brien was the general contractor on a construction project. Ellsworth was a sub-contractor hired to do a portion of the electrical work. One of Ellsworth’s employees, Paul Nelson, was injured on the job and sued Rogers-O’Brien and Ellsworth. Ellsworth had no workers’ compensation insurance at the time. Rogers-O’Brien demanded a defense and indemnity from Ellsworth based on an indemnity provision in the subcontract between Rogers-O’Brien and Ellsworth. Ellsworth notified its insurer, Tri-State, of the lawsuit. Tri-State filed this declaratory judgment action seeking a declaration that the claims asserted in the Nelson lawsuit are not within the coverage provisions of Tri-State’s policy.

The parties filed cross-motions for summary judgment on the issues of whether Ellsworth complied with the Tri-State policy’s notice provision and whether the indemnity agreement between Ellsworth and Rogers-O’Brien satisfied the prerequisites to coverage by Tri-State under Ellsworth’s policy. The trial court granted Rogers-O’Brien’s and Ellsworth’s motions and denied Tri-State’s motion.

POLICY AND SUBCONTRACT PROVISIONS

The Tri-State policy includes a provision that states the insurance does not apply to bodily injury to “[a]n employee of the insured arising out of and in the course of employment by the insured.” Nevertheless, the policy includes an exception that provides the injury to employee exclusion does not apply to liability assumed by the insured under an “insured contract.” The term “insured contract” is defined in the policy as:

That part of any other contract or agreement pertaining to your business under which you assume the tort liablity of another to pay damages because of “bodily injury” or “property damage” to a third person or organization, if the contract or agreement is made prior to the “bodily injury” or “property damage.” Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

The subcontract between Ellsworth and Rogers-O’Brien contains the following indemnity provision:

To the fullest extent permitted by law, [Ellsworth] shall defend, indemnify and hold harmless … [Rogers-O’Brien] … from and against all claims, damages, losses and expenses, including but not limited to attorney’s fees, arising out of or resulting from the performance of [Ellsworth’s] work under the subcontract, provided that any such claim, damage, loss or expense is attributable to bodily injury, sickness, disease, or death, or to injury to or destruction of tangible property (other than the work itself) including the loss of use resulting therefrom, to the extent caused in whole or in part by any negligent act or omission of [Ellsworth] or anyone directly or indirectly employed by him or anyone for whose acts he may be liable, regardless of whether it is caused in part by the negligence of … [Rogers-O’Brien].

THE PARTIES’ CONTENTIONS

*2 In its first and second points of error, Tri-State contends that the trial court erred in granting summary judgment in favor of Rogers-O’Brien and Ellsworth and in denying Tri-State’s motion for summary judgment. In its third point of error, Tri-State argues that the policy’s injury to employee exclusion negates coverage. While the exclusion contains an exception which allows coverage for liability assumed under an “insured contract,” Tri-State asserts the subcontract does not meet the policy’s definition of “insured contract.” Tri-State concedes that if Ellsworth agreed to indemnify Rogers-O’Brien for Rogers-O’Brien’s negligence, the exception to the injury to employee exclusion would apply, and Tri-State would be required to pay under the policy. Tri-State maintains, however, that the indemnity agreement does not meet the “express negligence doctrine,” the requirement that the agreement expressly state the parties’ intention that Ellsworth indemnify Rogers-O’Brien for Rogers-O’Brien’s negligence. Therefore, Tri-State argues, the subcontract does not require Ellsworth to indemnify Rogers-O’Brien for Rogers-O’Brien’s own negligence, the subcontract does not meet the policy’s definition of “insured contract,” the policy’s injury to employee exclusion applies, and there is no coverage under the Tri-State policy.

Rogers-O’Brien and Ellsworth contend that the indenmity agreement satisfies the express negligence doctrine as a matter of law. They argue that the agreement expressly states that Rogers-O’Brien would be protected even for the consequences of Rogers-O’Brien’s own negligence. They further argue that once the parties’ intent to protect the indemnitee from its own negligence, regardless of degree, has been expressly stated, the agreement is enforceable under the express negligence doctrine.

APPLICABLE LAW

a. Declaratory Judgment

We review declaratory judgments under the same standards as other judgments and decrees. City of Galveston v. Giles, 902 S.W.2d 167, 170 (Tex.App.-Houston [1st Dist.] 1995, no writ). We look to the procedure used to resolve the issue at trial to determine the standard of review on appeal. Id. In the review of a declaratory judgment, if reversal is warranted, we render the judgment the trial court should have rendered, unless a remand is necessary for further proceedings. Id. at 172.

b. Summary Judgment

To obtain a summary judgment, the movant has the burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). Where both parties move for summary judgment, each party must carry his own burden of establishing a right to judgment. Neither can prevail solely because the other party failed to discharge his burden. Guynes v. Galveston County, 861 S.W.2d 861, 862 (Tex.1993). As both parties were movants below, we must indulge all reasonable inferences and resolve all doubts in favor of the losing party. Bossin v. Towber, 894 S.W.2d 25, 29 (Tex.App.-Houston [14th Dist.] 1994, writ denied).

*3 Summary judgment for a defendant is proper when the summary judgment evidence conclusively negates at least one factual element of each theory pleaded by the plaintiff or conclusively establishes all the elements of the defendant’s affirmative defense. Threadgill v. Farmers Ins. Exch., 912 S.W.2d 264, 266 (Tex.App.-Dallas 1995, no writ).

When the order granting summary judgment does not specify the particular grounds the trial court sustained, on appeal, the summary judgment opponent must defeat each summary judgment ground argued by the movant. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989). Otherwise, an appellate court must uphold the summary judgment on any ground that is supported by the evidence and pleadings. Id. We must rule on all issues presented, including the propriety of the order overruling the losing party’s motion for summary judgment. Bossin, 894 S.W.2d at 29.

c. Contract Law

General contract rules of construction control the interpretation of insurance policies. Glover v. National Ins. Underwriters, 545 S.W.2d 755, 761 (Tex.1977). If a written document is worded so that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and the court should construe the contract as a matter of law. County of Maverick v. Texas Ass’n of Counties Workers’ Compensation SelfInsurance Fund, 852 S.W.2d 700, 705 (Tex.App.-San Antonio 1993, no writ). Mere disagreement over the meaning of a provision in the contract does not make it ambiguous. Id. Whether a contract is ambiguous is a question of law for the court to decide. Id.

Before a court will require one party to indemnify another under a contract between the two, the contract must meet the “express negligence doctrine.” Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex.1987). That doctrine provides that a party seeking indemnity from the consequences of its own negligence must express that intent in specific terms within the four corners of the contract. Id.

DISCUSSION

The parties agree that coverage under the policy depends on whether or not Ellsworth assumed the tort liability of Rogers-O’Brien by virtue of the indemnity provisions contained within the subcontract between Rogers-O’Brien and Ellsworth. If the subcontract meets the express negligence doctrine set out in Ethyl, then Ellsworth is liable for Rogers-O’Brien’s negligent acts, the subcontract is an “insured contract” within the meaning of the policy, the injury to employee exclusion is inapplicable, and the Tri-State policy provides coverage.

Although their position is not clearly stated, apparently, Rogers-O’Brien and Ellsworth are asserting that the phrase “regardless of whether it is caused in part by the negligence of” Rogers-O’Brien means that Ellsworth agreed to indemnify Rogers-O’Brien for claims for injuries caused in part, but not solely, by Rogers-O’Brien’s negligence and that the expressly stated intent to protect Rogers-O’Brien in such situations satisfies the express negligence doctrine.

*4 In support of their argument, Rogers-O’Brien and Ellsworth rely on Permian Corp. v. Union Texas Petroleum Corp., 770 S.W.2d 928 (Tex.App.-El Paso 1989, no writ). They contend that the language in the indemnity agreement at issue there, which was found to satisfy the express negligence test, is substantively the same as the agreement at issue here. In Permian, the indemnitor agreed to indemnify the indemnitee for injuries arising from the indemnitor’s work “whether the same is caused or contributed to by the negligence of [the indemnitee].” Id. at 929 (emphasis original).

Additionally, Rogers-O’Brien and Ellsworth rely on Enserch Corp. v. Parker, 794 S.W.2d 2 (Tex.1990). The pertinent portion of the agreement in Enserch provides that the indemnitor assumes responsibility for claims arising out of injuries sustained in connection with the indemnitor’s performance of its contract “regardless of whether such claims or actions are founded in whole or in part upon alleged negligence of [indemnitee].” Id. at 6-7 (emphasis original). The Enserch court found this language met the express negligence test.

The indemnity agreements in Permian and Enserch are distinguishable from the Rogers-O’Brien/Ellsworth indemnity agreement. In Permian and Enserch, the indemnitor agreed to indemnify the indemnitee if the injury was caused entirely by the indemnitee’s negligence and if the injury was caused partially by the indemnitee’s negligence.

Rogers-O’Brien and Ellsworth rely on the phrase “caused in part” by Rogers-O’Brien’s negligence to satisfy the express negligence doctrine. However, their reliance is misplaced. We agree that if the subcontract indemnity agreement was to indemnify Rogers-O’Brien when the injury is caused in part by Rogers-O’Brien’s negligence it would meet the requirements of the express negligence doctrine. However, the Rogers-O’Brien/Ellsworth indemnity agreement does not provide for indemnification of Rogers-O’Brien for its own negligence. That agreement provides that Ellsworth will indemnify Rogers-O’Brien for injuries resulting from performance of Ellsworth’s work under the contract, to the extent caused in whole or in part by Ellsworth’s negligence, without taking into account whether the injury is caused in part by Rogers-O’Brien’s negligence. Simply stated, the parties agreed that Ellsworth was responsible for its own negligence. Whether the injuries were caused in part by Rogers-O’Brien’s negligence does not expressly alter the indemnification agreement.

Tri-State directs our attention to Adams v. Spring Valley Construction Co., 728 S.W.2d 412 (Tex.App.-Dallas 1987, writ ref’d n.r.e.). The pertinent language in the agreement at issue in Adams provided that the subcontractor would indemnify the contractor for all liability resulting from injury “resulting and arising out of the operations of the Subcontractor.” Id. at 413 (emphasis original). This Court held that language did not expressly state that the subcontractor would indemnify the contractor against liability caused by the contractor’s own negligence. Then, assuming that an accompanying certificate of insurance was a part of the subcontract, we considered whether, together, the two documents indicated an intent for the subcontractor to indemnify the contractor for its negligence. The pertinent language in the certificate of insurance provided that the subcontractor shall indemnify the contractor against all claims for bodily injury arising out of the performance of the subcontractor’s work, caused in whole or in part by the subcontractor’s negligence “regardless of whether it is caused in part by a party indemnified hereunder.” Id. (emphasis added). Rogers-O’Brien and Ellsworth argue that Adams is inapplicable here because the word “negligence” is absent from the indemnity agreement in that case, while the word “negligence” is present in the indemnity agreement in this case. We do not believe this is a pertinent distinction.

*5 Ethyl requires the parties to specifically state their intent in the contract. The Adams indemnity agreement simply says the subcontractor will indemnify the contractor for liability arising out of the subcontractor’s work. It does not specify any cause or source of injury, negligence or any other. The certificate of insurance provided for indemnification of the contractor by the subcontractor if the injury is caused in whole or in part by the subcontractor’s negligence, even if caused in part by the contractor. As Rogers-O’Brien and Ellsworth point out, the Adams agreement fails to refer to the contractor’s negligence. But, more importantly, while the agreement holds the subcontractor responsible for the subcontractor’s negligence, it fails to state that the subcontractor would indemnify the contractor for the contractor’s acts, negligent or otherwise. That is, of course, the essence of the express negligence doctrine.

As in Adams, the disputed indemnification clause here does not meet the express negligence doctrine. Neither is the indemnification clause ambiguous. Ellsworth never agreed to indemnify Rogers-O’Brien for Rogers-O’Brien’s negligence. When the parties used the limiting language “to the extent caused in whole or in part by any negligent act or omission of [Ellsworth],” they left no doubt as to their intention to indemnify Rogers-O’Brien against only Ellsworth’s negligent acts. The expression “to the extent” means specifically that Rogers-O’Brien should be indemnified in an amount equivalent to the proportion Ellsworth’s negligent acts bear to the whole of the acts or omissions that caused Nelson’s injuries. The phrase “to the extent caused” suggests a comparative negligence construction under which each party is accountable “to the extent” their negligence contributes to the injury. The remaining language, “regardless of whether it is caused in part by the negligence of [Rogers-O’Brien]” does not unequivocally indicate the specific intent that Ellsworth would indemnify Rogers-O’Brien for Rogers-O’Brien’s negligence. See Glendale Constr. Servs., Inc. v. Accurate Air Sys., Inc., 902 S.W.2d 536, 538-39 (Tex.App.-Houston [1st Dist.] 1995, writ denied) (op. on reh’g). By adding a phrase explaining that whether the injury is also caused in part by Rogers-O’Brien’s negligence would not be taken into account, the parties clarified their intent that Ellsworth would indemnify Rogers-O’Brien for Ellsworth’s negligence.

We conclude that the indemnity provision in the Rogers-O’Brien/Ellsworth subcontract does not meet the express negligence doctrine. Consequently, the subcontract is not an “insured contract” within the meaning of the Tri-State policy. The injury to employee exclusion applies and the Tri-State policy does not provide coverage for the claims asserted by Nelson in the underlying suit. Accordingly, the trial court erred in granting Rogers-O’Brien’s and Ellsworth’s motions for summary judgment and in denying Tri-State’s motion for summary judgment. We sustain Tri-State’s first, second, and third points of error. Due to our disposition of these points of error, we do not need to address Tri-State’s remaining points which address the appellees’ alternative ground for summary judgment. See Tex.R.App.P. 90(a); Carr, 776 S.W.2d at 569. We reverse the trial court’s judgment and render judgment in favor of Tri-State that the Tri-State policy provides no coverage for the claims asserted in the Nelson lawsuit.