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Covert Chevrolet-Oldsmobile8/21/2001
Justice Morris
In this appeal following cross-motions for summary judgment, Covert Chevrolet-Oldsmobile, Inc. d/b/a Chevrolet-Oldsmobile-Buick-Pontiac-Geo, Inc. challenges the trial court's granting of summary judgment in favor of General Motors, Inc. Covert contends that, as a matter of law, it was entitled to indemnity from General Motors for fees and costs expended in defense of a lawsuit brought against both parties. We agree. Accordingly, we reverse the trial court's judgment and render judgment in favor of Covert.
Factual Background
Covert Chevrolet-Oldsmobile, Inc. is an authorized dealer of General Motors Pontiac vehicles pursuant to a Dealer Sales and Service Agreement between Covert and General Motors. As an authorized Pontiac dealer, Covert sold a new 1995 Pontiac Grand Prix to a woman named Judy Riley. In 1996, General Motors issued a product recall relating to certain component parts and radio wires located in the steering wheel of the Grand Prix. Riley brought the car to Covert's dealership for the necessary repairs. Covert performed the repairs as required.
Approximately three months later, Judy Riley's daughter, Jennifer, was driving the Grand Prix when she was involved in an accident that resulted in her death. The Rileys filed suit against Covert and General Motors alleging the airbags on both the driver's and passenger's side of the car improperly deployed causing Jennifer to lose control of the car. The specific allegations made against Covert were that the dealership had negligently performed the repairs necessitated by the recall. The petition also made general allegations against General Motors that were incorporated by reference into the claims against Covert.
The Dealer Sales and Service Agreement between Covert and General Motors included an indemnification provision stating that "General Motors will assume the defense of Dealer and indemnify Dealer against any judgment for monetary damages . . . in any lawsuit naming Dealer as a defendant relating to any Product that has not been altered when the lawsuit concerns . . . reach of the General Motors warranty related to the Product bodily injury or property damage claimed to have been caused solely by a defect in the design, manufacture, or assembly of a Product by General Motors (other than a defect which should have been detected by Dealer in a reasonable inspection of the Product)." The agreement goes on to state that the indemnification provision "shall not affect any right either party may have to seek indemnification or contribution under any other contract or by law and such rights are hereby expressly preserved." Covert sent a written request for indemnification to General Motors asking the company to indemnify the dealership with respect to any and all claims alleged in the Riley lawsuit including, but not limited to, indemnifying the dealership for defense costs and costs of court. General Motors denied the indemnification request, stating the claims made against Covert were independent of those made against General Motors and, therefore, Covert was independently liable. General Motors later offered to defend and indemnify Covert under a reservation of rights. Covert refused to accept General Motors's offer and filed cross claims against the company for indemnification.
The cross claims were severed from the original suit filed by the Rileys. The Rileys ultimately dismissed their claims against both Covert and General Motors, leaving only the indemnification issues to be resolved.
Both sides moved for summary judgment. Covert argued it was entitled to indemnification pursuant to the Texas Product Liability Act, the Texas Motor Veh
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