Ken Petroleum Corp. v. Questor Drilling Corp.
976 S.W.2d 283 | Texas Court of Appeals, 13th District | 1998
What This Case Means for Subcontractors
Ken Petroleum hired Questor Drilling under a contract with broad indemnity language requiring Questor to cover all claims. When a dispute arose, the court ruled the indemnity clause was void because the parties never agreed in writing on equal insurance coverage amounts as required by Texas law. The case was sent back to trial on other claims. This matters because indemnity clauses—even if they look solid—can be unenforceable if insurance requirements aren't properly documented.
Key Takeaways
- •Indemnity clauses in Texas drilling contracts must be paired with a written agreement on equal liability insurance coverage amounts. Without this, the entire indemnity provision fails.
- •Use the IADC form contract carefully. Standard forms may contain indemnity language that violates the Texas Anti-Indemnity Act if insurance terms aren't explicitly agreed to in writing.
- •Document all insurance requirements in writing as a separate agreement or amendment. Don't rely on the indemnity clause alone—spell out coverage amounts, types, and who carries what.
Compliance with subsection 127.005(b) is a validity requirement.
Frequently Asked Question
Can I enforce an indemnity clause in my Texas drilling contract if we didn't agree on insurance coverage in writing?
No. Texas law requires that indemnity clauses be paired with a written agreement on equal liability insurance amounts. If you didn't document insurance terms in writing, the entire indemnity provision becomes unenforceable, even if the contract language looks strong. Always get insurance requirements in a separate written agreement.
Related Cases
Fitzgerald v. Advanced Spine Fixation Systems, Inc.
A manufacturer must indemnify an innocent seller for products liability litigation costs under Texas Civil Practice & Remedies Code § 82.002(a), even if the seller did not sell the particular defective product that injured the plaintiff, provided the seller qualifies as a 'seller' under the statute.
Green International, Inc. v. Solis
No-damages-for-delay clauses in construction contracts need not meet the conspicuousness requirement established in Dresser for exculpatory negligence clauses, and such clauses are enforceable to bar delay damages absent specific exceptions.
Associated Indemnity Corp. v. CAT Contracting, Inc.
A surety does not owe a common law duty of good faith to its principal, but good faith is a contractual condition precedent to indemnification, requiring proof of improper motive or willful ignorance rather than mere negligence.
Entergy Gulf States, Inc. v. Summers
A premises owner that contracts for work performance and provides workers' compensation insurance to contractors' employees qualifies as a statutory employer entitled to the exclusive remedy defense under the Texas Workers' Compensation Act.
Lee Lewis Construction, Inc. v. Harrison
A general contractor owes a duty of care to a subcontractor's employee for fall protection when it retains actual control over safety measures, and the evidence sufficiently supported findings of negligence and gross negligence.
Rory v. Continental Insurance
Unambiguous contractual limitations periods in insurance policies must be enforced as written unless they violate law or public policy; judicial assessments of reasonableness cannot override clear contract terms.