Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc.
106 S.W.3d 118 | Texas Court of Appeals, 1st District (Houston) | 2003
What This Case Means for Subcontractors
Tesoro hired Nabors to drill an oil well that blew out, causing damage. Nabors settled a lawsuit and demanded Tesoro indemnify them under their drilling contract. Tesoro argued the indemnity didn't apply because Nabors was grossly negligent. The court ruled that Tesoro must pay because Nabors proved the accident wasn't gross negligence—only allegations don't count, actual facts do. This matters to subcontractors because indemnity clauses are enforceable even when accidents happen, unless you can prove the other party was grossly negligent or willfully wrong.
Key Takeaways
- •Indemnity agreements are enforceable in Texas even when accidents occur, unless the indemnitee (person being indemnified) was grossly negligent or willfully misconduct—simple negligence doesn't get you out of paying.
- •To escape an indemnity obligation, you must prove all elements of gross negligence with actual facts and evidence, not just make allegations or raise questions about what happened.
- •As a subcontractor, understand that broad indemnity clauses flow down from prime contracts and you'll likely be required to indemnify the project owner for most accidents unless you can prove they were reckless or intentional.
Facts, however, not allegations, determine an indemnitor's duty to indemnify.
Frequently Asked Question
If I sign an indemnity clause and an accident happens on the job, can I avoid paying if the other party was careless?
No, not unless you prove they were grossly negligent or acted intentionally wrong. Regular carelessness (negligence) doesn't get you out of indemnity. You must present actual evidence and facts showing gross negligence—just raising questions or making accusations isn't enough to escape your indemnity obligation.
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