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Ken Petroleum Corporation v. Questor Drilling Corporation6/29/2000
s to waive their subrogation rights only with regard to Ken Petroleum's agreement to indemnify Questor for the death of or injury to Ken Petroleum employees and certain others. The drilling contract does not require Ken Petroleum to cause its insurers to waive subrogation rights when they pay amounts that Questor should have paid under its agreement to indemnify Ken Petroleum. If Ken Petroleum is not contractually obligated to Questor to enforce a waiver of subrogation, Questor cannot insist that Ken Petroleum assert a waiver of subrogation when Ken Petroleum and the Underwriters both agree that the Underwriters stepped into Ken Petroleum's shoes by paying $450,000 to settle the Hemphill litigation. Questor is not subject to conflicting claims from Ken Petroleum and its insurers. Questor owes indemnity obligations to Ken Petroleum, its subrogees, or both, if the indemnity agreement is enforceable under the TOAIA. There is no dispute between Ken Petroleum and the Underwriters about how they will divide the amounts owed by Questor under the indemnity agreement.
Finally, Questor points to the "Conditions" section in Ken Petroleum's policy with its underwriters, which provides under the heading "SUBROGATION":
The company hereby agrees to waive such rights of recovery against any principal provided such waiver has been included in a written contract executed by the named assured and the claim for damages arises out of specific operations performed for such principal by or on behalf of the named assured.
For the reasons just discussed, Questor is not entitled to rely on this provision when Ken Petroleum and its underwriters have no dispute between themselves as to subrogation rights and Questor does not have a contractual right to insist that Ken Petroleum cause its insurers to waive indemnity rights. The trial court erred in granting summary judgment for Questor and Phibro with regard to the Underwriters' claims.
VI.
As already indicated, Ken Petroleum sued not only Questor, but its parent company Phibro. The claims against Phibro are based on the certificate of insurance that it sent to Ken Petroleum prior to the execution of the Duson #1 contract. The court of appeals did not reach these claims because it concluded that the mutual indemnity agreements were void and unenforceable. For the reasons considered above, the court of appeals erred in rendering judgment that the agreement was void. We accordingly remand the summary judgment issues regarding Phibro's liability under the certificate of insurance to the court of appeals for further disposition in light of our holdings.
VII.
Thus far, we have considered the issues Ken Petroleum has raised in this Court. Questor and Phibro also filed a conditional petition for review regarding Ken Petroleum's DTPA claim. Ken Petroleum maintains that if Questor's indemnity obligation is void, there has been a DTPA violation. The trial court disagreed and granted summary judgment for Questor and Phibro foreclosing both the contractual indemnity and the DTPA claims. The court of appeals reversed the trial court's summary judgment as to the DTPA claim. See 976 S.W.2d at 289-90.
Questor's and Phibro's motion for summary on the DTPA claim was based on two grounds: (1) that, like Crawford v. Ace Sign, Inc., 917 S.W.2d 12 (Tex. 1996), this is in essence a breach of contract case for which there is no DTPA cause of action, and (2) that there was no intentional misrepresentation. The court of appeals recognized that a breach of contract would not generally constitute a violation of the DTPA, citing Crawford Sign, 917 S.W.2d at 14. See 976 S.W.2d at 289. But the court reasoned that since th
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