No Defense and Indemnity Where MSA Failed “Express Negligence” Doctrine

In a recent contractual dispute case, Gulf Crane Services, Inc. v. Total Safety U.S., Inc., 2019 WL 4603753 (S.D. Tex. 8/22/19), Magistrate Judge Nancy Johnson of the Southern District of Texas, Houston Division found that the defendant did not owe defense and indemnity because the applicable master service agreement (“MSA”) failed the “express negligence” doctrine.

Gulf Crane Services, Inc. v. Total Safety U.S., Inc. – Background

In August 2019, Magistrate Judge Nancy Johnson of the Southern District of Texas, Houston Division, was asked to determine whether Total Safety U.S., Inc. owed contractual defense and indemnity to three other companies that had been sued for negligence in a personal injury suit. In order to do so, Judge Johnson was required to sort through the terms of two different master services agreements entered into 2005 and 2013, the impact of corporate mergers, and the facts of the underlying personal injury suit.

Magistrate Judge’s Findings

Judge Johnson first determined that the 2005 MSA was not superseded by the 2013 MSA because it was not entered into by the same parties and that both agreements were in effect at the time of the personnel basket transfer accident at issue in the personal injury suit. The Judge next determined that the work being performed at the time of the accident was pursuant to the 2005 agreement because it was requested only by verbal call out that was not followed by a written work order as would have been required by the 2013 agreement.

Judge Johnson ultimately concluded that Total Safety did not owe defense and indemnity because the 2005 agreement did not expressly provide for indemnification of the companies for their own negligence. Judge Johnson recommended that Total Safety’s pending summary judgment motion be granted and the claims for defense and indemnity be dismissed.

Plaintiff’s Appeal

The plaintiffs—the parties seeking defense and indemnity from Total Safety—subsequently filed an objection to the Magistrate Judge’s ruling. In September 2019, Senior U.S. District Judge Sim Lake adopted Judge Johnson’s Report and Recommendation. On October 24, 2019, the plaintiffs filed a notice of appeal to the Fifth Circuit.

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