Weeks Marine, Inc. v. Standard Concrete Products, Inc. 12-20610, (5th Cir. 12/6/2013).

John Johnson Jr., a construction worker, was allegedly injured when he fell while working on a reconditioning project on the I-10 Mississippi River Bridge.  Johnson filed suit in Alabama state court against several entities, including Standard Concrete, his employer, and Weeks Marine, the general contractor on the project.  After being served with Johnson’s complaint, Weeks Marine made demand for defense and indemnification from Standard Concrete based on a contract between the two companies.  Standard Concrete responded that it was not obligated to defend and indemnify Weeks Marine under the contract.  Weeks Marine then brought an action for declaratory relief in the United States District Court for the Southern District of Texas.  After cross-motions for summary judgment were filed, the district court ruled that Standard Concrete had no duty to defend or indemnify under the contract and dismissed the action.

On appeal, the Fifth Circuit determined that the contract in question consisted of two separate documents, the Purchase Order and the Additional Terms and Conditions.  The Purchase Order required Standard Concrete to manufacture pre-cast concrete fenders and also required Standard Concrete to “save harmless and indemnify Buyer [Weeks Marine] from and against all clams, suits (including counsel fees and other expenses).”  However, the Additional Terms and Conditions limited the indemnification to “actual damages relating to workmanship of Seller’s (Standard Concrete) product.”

The Fifth Circuit determined that the steel modules were not Standard Concrete’s product.  According to Johnson’s complaint, the steel modules were designed and manufactured by companies other than Standard Concrete.  From the standpoint of Standard Concrete, the steel modules were only components used to make its product, which were the pre-cast concrete fenders. Therefore, Standard Concrete might have been liable for any defects in the concrete fenders, but not for defects in the steel modules which were used by Standard Concrete in making the fenders. Having narrowly defined Standard Concrete’s product, the court concluded that the indemnity agreement did not require Standard Concrete to defend Weeks Marine in the underlying state court action.

Author:  John Tarlton