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Federal Insurance Co. v. Gulf Insurance Co.3/8/2005
City Power & Light Co. v. Federal Const. Corp., 351 S.W.2d 741, 745 (Mo. 1961)). That intention must be expressed in clear and unequivocable terms. Nusbaum, 100 S.W.3d at 105. Here the indemnity clause clearly and unequivocally requires Sachs to indemnify Aqualon, unless the loss or liability was caused by Aqualon's sole negligence.
b. Enforceability
Federal makes two arguments against enforceability, neither of which has merit.
(1) No Prior Judicial Determination of Fault
Federal first argues that whether or not the indemnity language was valid, the enforceability of the indemnity clause could not be determined in the summary judgment action because a fact-finder in the underlying case never apportioned fault, citing Travelers, 93 Cal.App. 4th at 1157-58. The California appellate court in Travelers based its decision in part on the fact that no judicial determination of active or intentional negligence had been made, so no right to indemnity had been established. Id. No other jurisdiction to consider this issue has held that summary judgment is precluded in the absence of a judicial determination of fault. In St. Paul, 365 F.3d at 274, the U.S. Court of Appeals for the Fourth Circuit held that the trial court could determine on a motion for summary judgment that the settled liability in the underlying litigation did not arise from "fraud, gross negligence, or willful conduct." See also American Indem., 335 F.3d at 441-42, distinguishing Travelers on this issue because it was based on principles of California law not followed in Texas.
Further, Travelers has been distinguished in its own jurisdiction so that it does not apply when the issue is sole fault. In Hartford, the court pointed out that indemnity in Travelers was based on a finding of no active or intentional negligence, an issue that had not been litigated by the parties. 123 Cal.App. 4th at 301. In contrast, in Hartford, the indemnitee was entitled to indemnity unless the indemnitee was solely at fault. Id. at 282. Hartford held that the questions of sole fault and the insured's right to indemnity can be determined as matters of law on a motion for summary judgment between the insurers. Id. at 301-03. Thus, even in California, the holding in Travelers that the indemnity agreement is not enforceable in the absence of a prior judicial determination of fault does not apply when the indemnity provision turns on sole fault and sole fault can be determined as a matter of law.
Hartford refutes Federal's argument that the indemnity agreement between Sachs and Aqualon is irrelevant to this case because there was no judicial determination of fault. The indemnity agreement in the contract provides that Sachs is required to hold Aqualon harmless for all loss "but excluding claims caused by the sole act or omission . . . of indemnit es." The indemnity agreement in the purchase order provides that Sachs is liable "except to the extent such claim may be caused solely by the negligent act or omission of [Aqualon]." In this case, Sachs was required to indemnify Aqualon unless Aqualon was solely at fault. Although sole negligence is ordinarily a question of fact, it "'may be determined as a matter of law, however, when the evidence is so clear and undisputed that reasonable persons could not disagree.'" Id. at 301 (quoting Rossmoor, 13 Cal.3d at 629).
Whether the undisputed facts showed that Aqualon was or was not solely at fault is an issue that the trial court could decide on a motion for summary judgment in this case.
(2) Waiver
Federal also argues that Aqualon waived its right to indemnification from Sachs by agreeing in the parties' Settlement Agr
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