Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. , 391 S.W.3d 240 ( 2012 )

IN THE
TENTH COURT OF APPEALS
No. 10-11-00062-CV
TUTLE & TUTLE TRUCKING, INC.,
Appellant
v.
EOG RESOURCES, INC.,
Appellee
From the 18th District Court
Johnson County, Texas
Trial Court No. C2010-0679
OPINION
In one issue, Appellant Tutle & Tutle Trucking, Inc. complains about a summary
judgment granted in favor of Appellee EOG Resources, Inc. In its summary-judgment
order, the trial court concluded that, based on language contained in a Master Services
Contract (MSC) between Tutle and EOG, Tutle owes duties to defend and indemnify
EOG and its contractor, Frac Source Services, Inc., in the underlying personal-injury
lawsuit. We will affirm.
I. BACKGROUND
This dispute arose after Archie Henderson, a Tutle employee, sued Tutle and
Frac Source to recover damages for injuries that he allegedly sustained on the job. 1
Henderson alleged:
On or about September 5, 2007, Plaintiff ARCHIE HENDERSON,
an employee of Defendant TUTLE & TUTLE, was, in the course and scope
of his employment, assisting FRAC SOURCE personal [sic] unloading
sand from a FRAC SOURCE “Sand King” to a truck. The Sand King being
used as [sic] the time of the incident was owned, operated, and controlled
by Defendant FRAC SOURCE. As Plaintiff was assisting with unloading
sand from the Sand King and as FRAC SOURCE personnel operated the
Sand King, Plaintiff HENDERSON was struck by a falling conveyor that
was part of the Sand King. This incident caused Plaintiff HENDERSON to
suffer severe and permanent head, shoulder, and back injuries. Upon
information and belief, Defendant FRAC SOURCE had modified or
removed a safety device from the Sand King, thus rendering the
equipment unreasonably dangerous. In addition, Defendant FRAC
SOURCE employees failed to properly utilize the Sand King conveyor’s
secondary safety system.
After learning that it was sued in the Henderson suit, Frac Source made a demand
on EOG to defend and indemnify it under a separate master service contract between
EOG and Frac Source. EOG then made a demand on Tutle for defense and indemnity
in the Henderson suit, even though Henderson did not sue EOG.
In asserting that Tutle has a duty to defend and indemnify it, EOG relied on
several provisions contained in the MSC. Those relevant provisions are:
6A. CONTRACTOR [Tutle] AGREES TO PROTECT, DEFEND,
INDEMNIFY AND HOLD COMPANY [EOG], ITS PARENT,
SUBSIDIARY AND AFFILIATED COMPANIES AND ITS AND THEIR
CO-LESSEES, PARTNERS, JOINT VENTURERS, CO-OWNERS, AGENTS,
1 In its summary-judgment motion, Tutle acknowledged that Henderson works for Tutle and that the
injuries were suffered while working on the project as an employee for Tutle, though the project was
supervised by EOG.
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 2
OFFICERS, DIRECTORS AND EMPLOYEES (HEREINAFTER
COLLECTIVELY REFERRED TO AS “COMPANY GROUP”) HARMLESS
FROM AND AGAINST ALL DAMAGE, LOSS, LIABILITY, CLAIMS,
DEMANDS AND CAUSES OF ACTION OF EVERY KIND AND
CHARACTER, INCLUDING COSTS OF LITIGATION, ATTORNEYS’
FEES AND REASONABLE EXPENSES IN CONNECTION THEREWITH,
WITHOUT LIMIT AND WITHOUT REGARD TO THE CAUSE OR
CAUSES THEREOF, INCLUDING BUT NOT LIMITED TO STRICT
LIABILITY OR THE UNSEAWORTHINESS OR UNAIRWORTHINESS
OF ANY VESSEL OR CRAFT, OR THE NEGLIGENCE OF ANY PARTY,
INCLUDING BUT NOT LIMITED TO THE SOLE OR CONCURRENT
NEGLIGENCE OF THE COMPANY GROUP, ARISING IN
CONNECTION HEREWITH IN FAVOR OF CONTRACTOR’S AGENTS,
INVITEES AND EMPLOYEES, AND CONTRACTOR’S
SUBCONTRACTORS AND THEIR AGENTS, INVITEES AND
EMPLOYEES ON ACCOUNT OF DAMAGE TO THEIR PROPERTY OR
ON ACCOUNT OF BODILY INJURY OR DEATH.
6B. COMPANY AGREES TO PROTECT, DEFEND, INDEMNIFY
AND HOLD CONTRACTOR, ITS AGENTS, OFFICERS, DIRECTORS
AND EMPLOYEES (HEREINAFTER COLLECTIVELY REFERRED TO AS
“CONTRACTOR GROUP”) HARMLESS FROM AND AGAINST ALL
DAMAGE, LOSS, LIABILITY, CLAIMS, DEMANDS AND CAUSES OF
ACTION OF EVERY KIND AND CHARACTER, INCLUDING COSTS OF
LITIGATION, ATTORNEYS’ FEES AND REASONABLE EXPENSES IN
CONNECTION THEREWITH, WITHOUT LIMIT AND WITHOUT
REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING BUT
NOT LIMITED TO STRICT LIABILITY OR THE UNSEAWORTHINESS
OR UNAIRWORTHINESS OF ANY VESSEL OR CRAFT, OR THE
NELIGENCE OF ANY PARTY, INCLUDING BUT NOT LIMITED TO
THE SOLE OR CONCURRENT NEGLIGENCE OF THE CONTRACTOR
GROUP, ARISING IN CONNECTION HEREWITH IN FAVOR OF
COMPANY’S AGENTS, INVITEES AND EMPLOYEES, COMPANY’S
CONTRACTORS (OTHER THAN CONTRACTOR) AND THEIR
AGENTS, INVITEES AND EMPLOYEES, AND SUCH CONTRACTORS’
SUBCONTRACTORS, OR THEIR AGENTS, INVITEES OR EMPLOYEES
ON ACCOUNT OF DAMAGE TO THEIR PROPERTY OR ON
ACCOUNT OF BODILY INJURY OR DEATH.
The language contained in paragraphs 6A and 6B of the MSC between EOG and
Tutle is set forth in all capital letters and in an apparently slightly larger font than the
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 3
rest of the contract. Another relevant provision of the MSC—paragraph 6E—was not
capitalized or differentiated using an apparently larger font. Paragraph 6E provides:
6E. The terms and provisions of this Paragraph 6 shall have no
application to claims or causes of action asserted against Company or
Contractor by reason of any agreement of indemnity with a person or
entity not a party to this Agreement in those instances where such
contractual indemnities are not related to or ancillary to the performance
of the work contemplated under the Agreement or are indemnities
uncommon to the industry. The terms and provisions of this Paragraph 6
shall expressly apply to claims or causes of action asserted against
Company or Contractor by reason of any agreement of indemnity with a
person or entity not a party to this Contract where such contractual
indemnities are related to or ancillary to the performance of the work
contemplated under the Agreement and or Company’s project and are
indemnities not uncommon in the industry.
When demanding that Tutle defend and indemnify it in the Henderson suit, EOG relied
on paragraphs 6A and 6E of the MSC.
After receiving EOG’s demands for defense and indemnity, Tutle filed a
declaratory-judgment action against EOG, Frac Source, and Tutle’s insurer, Carolina
Casualty Company, seeking a declaration that Tutle owed no defense or indemnity
obligation to EOG in the Henderson suit. In the alternative, Tutle sought a declaration
that Tutle’s insurance policy with Carolina covered any indemnity obligation that Tutle
owed to EOG as an “insured contract.” EOG counterclaimed for a declaratory
judgment that it was entitled to defense and indemnity from Tutle in the Henderson suit
based on the MSC and because Henderson was an employee of Tutle who was
furnishing services to EOG at the time of the accident. EOG also made a demand upon
Tutle for indemnity that EOG owes to Frac Source under the “pass through” provision
(paragraph 6E) of the MSC. In addition, EOG sought a declaration that Carolina owed a
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 4
duty to EOG as its primary liability policy as a matter of law.
EOG moved for partial summary judgment, arguing that: (1) Tutle breached its
contract with EOG; (2) Carolina had a contractual obligation to provide a defense and
indemnity to EOG and Frac Source with regard to the claims asserted in the Henderson
suit; (3) Tutle had a contractual obligation to provide a defense and indemnify EOG and
Frac Source with regard to the claims asserted in the Henderson suit; and (4) Tutle
and/or Carolina have a contractual obligation “to pay all costs, expenses, and
reasonable attorney’s fees incurred by or on behalf of EOG/Frac Source in the defense
of the Underlying Lawsuit from at least April 2, 2008 through the present date and for
all such future costs, expenses, and attorney’s fees.”
Tutle filed its own motion for summary judgment, asserting that, as a matter of
law, it owed no contractual duty to defend or indemnify Frac Source under the MSC
because the applicable provisions did not satisfy Texas law’s “fair-notice”
requirements—the express-negligence test and conspicuousness. Tutle also contended
that it did not owe a duty to defend or indemnify EOG under the MSC for obligations
that EOG owed to Frac Source in the Henderson suit.
The trial court denied Tutle’s motion and granted EOG’s motion. In granting
EOG’s motion, the trial court specifically declared that Tutle: (1) breached the MSC it
had with EOG; (2) has a contractual duty to defend and to indemnify EOG and Frac
Source in the underlying Henderson suit; and (3) owes EOG reimbursement for all
defense costs, expenses, and indemnity incurred in the Henderson suit. Thereafter, the
trial court granted EOG’s motion to sever all claims brought against EOG into a
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 5
separate cause number, and this appeal followed.
II. STANDARD OF REVIEW
We review the grant or denial of a traditional motion for summary judgment de
novo. See Creditwatch, Inc. v. Jackson, 157 S.W.3d 814, 816 n.7 (Tex. 2005). To be entitled
to summary judgment, the movant must demonstrate that no genuine issues of material
fact exist and that it is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c);
Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). When both parties move for
summary judgment and the trial court grants one motion and denies the other, we
review the summary-judgment evidence presented by both sides, determine all
questions presented, and render the judgment the trial court should have rendered.
Tex. Workers’ Compensation Comm’n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex.
2004).
III. THE FAIR-NOTICE DOCTRINE
In its sole issue, Tutle contends that the trial court erred in granting summary
judgment in favor of EOG because the provisions in the MSC that EOG relies on do not
meet the fair-notice requirements established by the Texas Supreme Court for
interpreting the validity and enforceability of a contractual-indemnity obligation. And,
because the MSC provisions allegedly do not meet the fair-notice requirements, Tutle
asserts that the trial court erred in concluding that Tutle breached the contract and owes
EOG and Frac Source duties to defend and indemnify them in the underlying Henderson
suit. EOG counters that the provisions meet the fair-notice requirements and that Tutle
judicially admitted that they did in the trial court.
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 6
Indemnity provisions are valid and enforceable if they satisfy two fair-notice
requirements. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993);
see Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex. 2003). One fair-notice
requirement, the express-negligence doctrine, requires that the intent of the parties be
specifically stated within the four corners of the document. Reyes, 134 S.W.3d at 192; see
Dresser, 853 S.W.2d at 508 (noting that, under express-negligence doctrine, a party’s
intent to be released from all liability caused by its own future negligence must be
expressed in unambiguous terms within contract’s four corners).
The other requirement, conspicuousness, requires that something appear on the
face of the contract to attract the attention of the person looking at it. Reyes, 134 S.W.3d
at 192. Language may satisfy the conspicuousness requirement by appearing in larger
type, contrasting colors, or otherwise calling attention to itself. Id. The purpose of the
conspicuousness requirement is to protect the buyer from surprise and an unknowing
waiver of his or her rights. Littlefield v. Schaefer, 955 S.W.2d 272, 275 (Tex. 1997).
Whether an agreement meets the conspicuousness requirement is a question of law.
Dresser, 853 S.W.2d at 509.
Indemnity agreements are construed under the normal rules of contract
construction. Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000). The
primary goal is to determine the parties’ intent. Id.
A. Conspicuousness
On appeal, Tutle complains that paragraph 6—the section of the MSC at issue in
this case—is not conspicuous as a matter of law. To analyze this complaint, we must
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 7
examine the entire MSC. It provides that Tutle was a contractor on EOG’s project.
Paragraphs 6A and 6B, as shown above, outline the parties’ duties to defend and
indemnify “AGAINST ALL DAMAGE, LOSS, LIABILITY, CLAIMS, DEMANDS AND
CAUSES OF ACTION OF EVERY KIND AND CHARACTER, INCLUDING COSTS OF
LITIGATION, ATTORNEYS’ FEES AND REASONABLE EXPENSES IN
CONNECTION THEREWITH . . . .” Compared to the remainder of the MSC, the
language in paragraphs 6A and 6B is capitalized and appears to be a larger font size.
Paragraph 6, however, contains three additional sections that further clarify the
indemnity provisions. In demanding that Tutle defend and indemnify EOG regarding
Frac Source’s alleged liability, EOG relies heavily on paragraph 6E. This paragraph is
not capitalized, and the font size is similar to the remainder of the MSC, though the
numbering for it—6E—and its location in the MSC indicate that its purpose is to clarify
the duties outlined in paragraph 6. Tutle admits that paragraphs 6A and 6B are
conspicuous, but it argues that paragraph 6E, the “pass through” provision, is not
conspicuous.2
Although the Business and Commerce Code defines “conspicuous” to include
language in which both the heading and text are in larger or contrasting type, it does
not require both the heading and the text to be in larger or contrasting type. See TEX.
BUS. & COMM. CODE ANN. § 1.201(10) (West 2009). Further, the Business and Commerce
Code specifically provides that a contractual provision is “conspicuous” if it is written,
2 EOG asserts that Tutle waived its conspicuousness argument with respect to paragraph 6E. We
disagree. A review of Tutle’s motion for summary judgment shows that Tutle argued that paragraph is
inconspicuous because the font is not bolded, capitalized, or otherwise written in such a way “that would
capture the attention of a reasonable person.”
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 8
displayed, or presented in such a way that a reasonable person ought to have noticed it.
See id. Case law echoes that statute. See Reyes, 134 S.W.3d at 192; Dresser, 853 S.W.2d at
509, 511; see also Sydlik v. REEIII, Inc., 195 S.W.3d 329, 332-33 (Tex. App.—Houston [14th
Dist.] 2006, no pet.).
We conclude that paragraph 6E is sufficiently conspicuous to provide fair notice.
The numbering for the “pass through” provision is capitalized and is different from
other provisions in the MSC. And, perhaps more importantly, the location of
paragraph 6E, being numerically linked to paragraphs 6A and 6B, is such that a
reasonable person ought to have noticed it. Paragraph 6E is not buried within the
contract or located away from paragraphs 6A and 6B, which establish the defense and
indemnification duties. In fact, paragraph 6E is on the same page as the last couple of
lines of paragraph 6B, which, as stated earlier, is written in all-capital letters and in
apparently slightly larger font. It is not the case that the complained-of language
appeared in small, light type on the back of a form and was surrounded by unrelated
terms. See, e.g., Dana Corp. v. Microtherm, Inc., No. 13-05-00281-CV, 2010 WL 196939, at
*6-7 (Tex. App.—Corpus Christi Jan. 21, 2010, pet. granted, judgm’t vacated w.r.m.)
(mem. op.) (concluding that liability-limiting provision was inconspicuous because
statement on front of document, “REFER TO REVERSE SIDE FOR TERMS AND
CONDITIONS OF SALE,” does not suggest liability-limiting provision was on reverse
side); Am. Home Shield Corp. v. Lahorgue, 201 S.W.3d 181, 185 (Tex. App.—Dallas 2006,
pet. denied) (concluding that indemnity provision was not conspicuous because it
appeared “on the back of the contract in a series of numbered, uniformly printed and
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 9
spaced paragraphs without headings or contrasting type”); Safway Scaffold Co. v. Safway
Steel Prod., Inc., 570 S.W.2d 225, 228 (Tex. Civ. App.—Houston [1st Dist.] 1978, writ ref’d
n.r.e.) (determining that indemnity provisions were not conspicuous because they were
located on back of document among series of numbered paragraphs without headings
or contrasting type and not specifically identified as indemnity provisions on front of
document); see also Enserch Corp. v. Parker, 794 S.W.2d 2, 9 (Tex. 1990) (concluding that
indemnity provision was sufficiently conspicuous to afford fair notice of its existence
when entire contract appeared on one page and language was on front side of contract,
not hidden under separate heading or surrounded by unrelated terms). Accordingly,
we reject Tutle’s assertion that paragraphs 6A-6E do not satisfy the conspicuousness
requirement.
B. The Express-Negligence Doctrine
Tutle also argues that paragraphs 6A and 6E fail to meet the express-negligence
test and thus do not obligate Tutle to indemnify EOG for EOG’s contractual obligation
to indemnify Frac Source. Specifically, Tutle asserts that paragraph 6E “is vague,
ambiguous, and if enforced, violates the express[-]negligence test where there is
nothing within [p]aragraph 6E that indicates that Frac Source is seeking to be
indemnified by Tutle from the consequences of its own negligence.” EOG counters that
the express-negligence doctrine does not apply when an indemnitee does not seek
indemnity for its own negligence and that the “pass through” indemnity provision in
paragraph 6E is neither vague nor ambiguous.
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 10
As stated earlier, the express-negligence test states that if a party intends to be
released from its own future negligence, it must express that intent in clear,
unambiguous terms within the four corners of the contract. Reyes, 134 S.W.3d at 192;
Sydlik, 195 S.W.3d at 333. The purpose of “the express[-]negligence rule is to require
scriveners to make it clear when the intent of the parties is to exculpate” a party for that
party’s own negligence. Quintana v. Crossfit Dallas, L.L.C., 347 S.W.3d 445, 450 (Tex.
App.—Dallas 2011, no pet.) (quoting Atl. Richfield Co. v. Petroleum Personnel, Inc., 768
S.W.2d 724, 726 (Tex. 1989)).
Several courts, however, have stated that the express-negligence doctrine does
not apply when an indemnitee, such as EOG here, does not seek indemnity for its own
negligence. See Paragon Gen. Contractors, Inc. v. Larco Constr., Inc., 227 S.W.3d 876, 889
(Tex. App.—Dallas 2007, no pet.) (citing MAN GHH Logistics GMBH v. Emscor, Inc., 858
S.W.2d 41, 43 (Tex. App.—Houston [14th Dist.] 1993, no writ)); Transcon. Gas Pipeline
Corp. v. Texaco, Inc., 35 S.W.3d 658, 669 (Tex. App.—Houston [1st Dist.] 2000, pet.
denied).3 In this case, EOG seeks indemnity from Tutle for Frac Source’s alleged
3In Transcontinental Gas Pipeline Corp. v. Texaco, Inc., the First Court of Appeals noted the following with
respect to the express-negligence doctrine:
Transco asks this Court to expand the express[-]negligence doctrine to cover any
indemnity provision that is ambiguous, despite the obvious refusal of our sister courts to
expand the doctrine. The Texas Supreme Court declined to extend the express[-
]negligence doctrine to an insurance-shifting provision. Getty Oil Co. v. Insurance Co. of N.
Am., 845 S.W.2d 794, 806 (Tex. 1992). More recently, the Texas Supreme Court held that
the express-negligence doctrine applies to releases that relieve a party of its own
negligence, but the court expressly limited its holding. Dresser Indust., Inc., 853 S.W.2d at
509. “It is important to note that our discussion … is limited solely to those types of
releases which relieve a party in advance of liability for its own negligence.” Id. at 507.
Furthermore, it is not extraordinary or unjust to shift the risk of economic damages
resulting from a breach of contract, particularly when both parties are experienced
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 11
negligence. Thus, EOG argues that the express-negligence doctrine does not apply in
this case.
Tutle responds that paragraph 6E constitutes an extraordinary transfer of risk to
which the express-negligence doctrine applies. See, e.g., Reyes, 134 S.W.3d at 193; Green
Int’l v. Solis, 951 S.W.2d 384, 386 (Tex. 1997) (“We held that such extraordinary risk-
shifting clauses must meet certain fair notice requirements.”). Both parties
acknowledge that there is scant Texas case law addressing the fair-notice requirements
as it relates to a “pass through” provision such as the one in this case. Nevertheless,
assuming that Tutle is correct, we do not believe that the language of the provision is
vague and ambiguous as to violate the express-negligence doctrine.
In arguing that paragraph 6E is neither vague nor ambiguous, EOG relies heavily
on EOG Resources, Inc. v. Badlands Power Fuels, L.L.C., 677 F. Supp. 2d 1143 (D. N.D.
2009). In this case, the North Dakota federal district court analyzed a “pass through”
identical to the one in this case. Id. at 1146. Also, the facts in Badland Power Fuels are
substantially similar.
EOG, the owner and operator of the Zacher Oil Well in Mountrail County, North
Dakota, entered into identical master service contracts with its contractors, Petroleum
Experience, B.O.S. Roustabout & Backhoe Service, Inc., and Badlands Power Fuels. Id.
at 1145. The federal court included the relevant language of the master service contracts
in its opinion, and the contracts are virtually identical to the MSC in this case. Id. at
contractors and familiar with industry customs regarding risk shifting. Green Int’l, Inc. v.
Solis, 951 S.W.2d 384, 387 (Tex. 1997).
35 S.W.3d 658, 669 (Tex. App.—Houston [1st Dist.] 2000, pet. denied) (internal footnotes omitted).
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 12
1145-46. EOG’s contractors were performing a flow-back operation on the Zacher Oil
Well. Id. at 1145. During this operation, a fire occurred and injured Badlands Power
Fuels employee Ted Seidler and employees of another contractor. Id. Seidler sued, and
Petroleum Experience and B.O.S. tendered their defenses and requested
indemnification from EOG. Id. at 1146-47. Similar to the case at hand, EOG tendered its
defense and request for indemnification to Badlands Power Fuels, the employer of the
injured employee, arguing that the “pass through” provision in the master service
contract (also paragraph 6E) required that Badlands Power Fuels defend and indemnify
EOG in the Seidler suit. Id. After applying Texas law, the federal court granted EOG’s
summary-judgment motion and held that “Badlands Power Fuels must also defend and
indemnify EOG under paragraph 6E of its master service contract from claims that
Petroleum Experience and BOS have made against EOG for the claims that Ted Seidler
has made against them.”4 Id. at 1155.
Thus, at least one court has approved the “pass through” provision at issue. See
id. Furthermore, we do not believe that the “pass through” indemnity provision of the
MSC was required to have the specificity that Tutle suggests or else run the risk of
being deemed vague and ambiguous. Tutle and EOG, both sophisticated business
entities, entered into a contract in which Tutle agreed to defend and indemnify EOG
under paragraph 6E, which required the duties of defense and indemnification with
4We recognize that the federal court in Badlands Power Fuels did not analyze the “pass through” provision
under the Texas fair-notice doctrine, but we are persuaded by the fact that the federal court, by granting
summary judgment in favor of EOG and concluding that Badlands Power Fuels has a duty to defend and
indemnify EOG under the “pass through” provision, implicitly concluded that the “pass through”
provision was not vague or ambiguous. See 677 F. Supp. 2d at 1155. Furthermore, the federal court’s
ruling indicates that such a “pass through” provision is not uncommon in the oil and gas industry. See id.
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 13
regard to non-parties to the MSC for claims or causes of action “related to or ancillary to
the performance of the work contemplated under the Agreement and[/]or Company’s
project and are indemnities not uncommon in the industry.” We conclude that the
language of paragraph 6E is neither vague nor ambiguous.
As a final argument, Tutle asserts that EOG did not tender sufficient evidence
demonstrating that the MSC is applicable to the facts of the Henderson suit. In
particular, Tutle contends that the record contains no evidence indicating that
Henderson was injured while “transporting dry bulk commodity,” as stated in the
MSC. For several reasons, we disagree with Tutle’s interpretation.
First, the MSC states in paragraph 1:
This Agreement shall control and govern all work performed by
Contractor for the Company, under subsequent verbal and/or regular
work orders, and any agreements or stipulations in any such work order,
delivery ticket, or other instrument used by Contractor not in conformity
with the terms and provisions hereof shall be null and void.
Tutle judicially admitted in its summary-judgment motion that Henderson was injured
while working for Tutle on EOG’s project.
Second, in making its argument that the MSC does not apply to Henderson’s
injuries, Tutle relies on the recital in the MSC stating that Tutle is in the business of
“transporting dry bulk commodity.” Texas courts have held that recitals in a contract
will not control the operative clauses thereof unless the latter are ambiguous. See City of
The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex. App.—Fort Worth 2008,
pet. dism’d); see also Beckham Res., Inc. v. Mantle Res., L.L.C., No. 13-09-00083-CV, 2010
WL 672880, at *9 (Tex. App.—Corpus Christi Feb. 25, 2010, pet. denied) (mem. op.).
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 14
Paragraph 1 is an operative clause describing the extent of the agreement, while the
provision relied upon by Tutle merely describes Tutle’s business and its intent to work
as an independent contractor for EOG from time to time. See, e.g., Enter. Leasing Co. v.
Barrios, 156 S.W.3d 547, 549 (Tex. 2004) (“Although we recognize that in certain cases,
courts may consider the title of a contract provision or section to interpret a contract,
‘the greater weight must be given to the operative contractual clauses of the
agreement.’”) (quoting Neece v. A.A.A. Realty Co., 159 Tex. 403, 322 S.W.2d 597, 600
(1959). Based on the record, we conclude that Henderson’s injuries are within the scope
of the MSC.
Based on the foregoing, we conclude that the trial court did not err in declaring
that the MSC covers the injuries sustained by Henderson. Furthermore, we hold that
the MSC satisfies the fair-notice doctrine. The trial court did not err in granting EOG’s
summary-judgment motion. Accordingly, we overrule Tutle’s sole issue and affirm the
judgment of the trial court.
REX D. DAVIS
Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
(Chief Justice Gray dissenting)
Affirmed
Opinion delivered and filed November 15, 2012
[CV06]
Tutle & Tutle Trucking, Inc. v. EOG Resources, Inc. Page 15