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Old Republic General Insurance Corp v. Martin Marietta Materials Inc.

United States District Court, N.D. Texas, Dallas Division

May 29, 2018

OLD REPUBLIC GENERAL INSURANCE CORP., as Subrogee of Prairie Link Contractors, LLC
v.
MARTIN MARIETTA MATERIALS, INC.

          MEMORANDUM OPINION AND ORDER

          KAREN GREN SCHOLER UNITED STATES DISTRICT JUDGE

         This Order addresses Defendant Martin Marietta Materials, Inc.'s ("Martin Marietta") motion for summary judgment [28] and Plaintiff Old Republic General Insurance Corp.'s ("Old Republic") partial motion for summary judgment [31]. For the reasons that follow, the Court denies the cross-motions for summary judgment.

         I. THE INDEMNIFICATION DISPUTE

         This indemnity action arises out of a personal injury lawsuit filed by Robin, Esther, and Antonello Ghio against Prairie Link Constructors, Inc. ("Prairie Link"), Martin Marietta, and others. The underlying suit was based on an automobile accident in which the Ghios' car collided with the rear of a truck stopped on the freeway in a construction zone. The Ghios alleged that Prairie Link, which is insured by Old Republic, negligently failed to properly manage its road construction project. Martin Marietta was brought into the lawsuit because Prairie Link contracted with that entity to supply and transport loads of aggregate material. The truck involved in the collision was hauling aggregate material pursuant to the contract between Prairie Link and Martin Marietta.

         Prairie Link and Martin Marietta entered into a Purchase Order pursuant to which Martin Marietta would supply aggregate materials to Prairie Link for use in the construction of a 10-mile portion of State Highway 161. Martin Marietta's scope of work included supplying transportation services to haul the aggregate materials from its quarry to the jobsite. The Purchase Order provided that the supplier of the transportation services was to be a certified DBE trucking company employed by Martin Marietta.

         The Purchase Order's Terms and Conditions contain an indemnity agreement, which includes a concurrent-negligence provision. Pursuant to that provision, Prairie Link demanded that Martin Marietta defend and indemnify it in the underlying suit. Martin Marietta refused on the basis that the indemnity agreement was unenforceable because it was not conspicuous. Old Republic, as Prairie Link's insurance carrier, defended Prairie Link in the underlying suit and ultimately paid to obtain a release of the Ghios' claims against Prairie Link. Old Republic then brought the instant lawsuit alleging that Martin Marietta breached the indemnity provision and seeking to recover attorney's fees and settlement monies it paid in the underlying suit.

         II. THE COURT DENIES SUMMARY JUDGMENT

         A. Summary Judgment Standard

         Courts "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In making this determination, courts must view all evidence and draw all reasonable inferences in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962). The moving party bears the initial burden of informing the court of the basis for its belief that there is no genuine issue for trial. Celotex Corp. v. Catretf, 477 U.S. 317, 323 (1986).

         When a party bears the burden of proof on an issue, that party "must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor." Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). When the nonmovant bears the burden of proof, the movant may demonstrate entitlement to summary judgment either by (1) submitting evidence that negates the existence of an essential element of the nonmovant's claim or affirmative defense, or (2) arguing that there is no evidence to support an essential element of the nonmovant's claim or affirmative defense. Celotex, 477 U.S. at 322-25. Once the movant has made this showing, the burden shifts to the nonmovant to establish that there is a genuine issue of material fact so that a reasonable jury might return a verdict in its favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). Moreover, "[c]onclusory allegations, speculation, and unsubstantiated assertions" will not suffice to satisfy the nonmovant's burden. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1429 (5th Cir. 1996) (en banc). Factual controversies are resolved in favor of the nonmoving party "'only when an actual controversy exists, that is, when both parties have submitted evidence of contradictory facts.'" Olabisiomotosho v. City of Hous., 185 F.3d 521, 525 (5th Cir. 1999) (quoting McCallum Highlands, Ltd. v. Washington Capital Bus, Inc., 66 F.3d 89, 92 (5th Cir. 1995)).

         B. The Court Denies Old Republic's Partial Motion for Summary Judgment

         Old Republic asks the Court to find as a matter of law that Martin Marietta had actual notice or knowledge of the indemnity agreement, it will have the burden of establishing actual knowledge at trial because actual knowledge is an affirmative defense. See Safeway, Inc. v. PDX, Inc., 676 Fed.Appx. 229, 237-38 (5th Cir. Jan. 19, 2017) (per curiam) (citing Reyes v. Storage & Processors, Inc., 86 S.W.3d 344, 350-51 (Tex. App.-Texarkana 2002), aff'd, 134 S.W.3d 190 (Tex. 2004)). Because Old Republic has not established "beyond peradventure" that Martin Marietta had actual knowledge of the extent of the indemnity provision, the Court denies its partial motion for summary judgment. Fontenot, 780 F.2d at i 194; see also Safeway, 676 Fed.Appx. at 238 (reiterating the requirement that "those on the hook for another party's negligence [must be] fully aware of the extent of that obligation; an understanding merely that there is some obligation is not a valid alternative" (citation omitted)).

         C. The Court Denies Martin Marietta's Motion for Summary Judgment

         Martin Marietta moved for summary judgment on three grounds: 1) the indemnity provision does not satisfy the fair notice requirements of Texas law; 2) the provision does not require Martin Marietta to indemnify Prairie ...


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