Commercial contract indemnity dispute: Tite Water Energy, LLC v. Wild Willy’s Welding LLC

In Tite Water Energy, LLC  v. Wild Willy’s Welding LLC (“Tite v. WWW”), the Texas Court of Appeals (the “TCA”) considered the scope of an indemnity provision included as part of a Master Service and Supply Agreement (the “MSSA”) between Tite Water Energy, LLC (“Tite”) and Devon Energy Corporation (“Devon”).  Such clauses are set forth in a wide variety of commercial legal agreements entered into in the ordinary course of business.     

Under the MSSA’s indemnity clause, Tite was required to indemnify and defend Devon as well as members of Devon’s “Company Group”, which included Devon’s “agents” and “consultants”. If Wild Willy’s Welding LLC (“WWW”) was an agent and consultant of Devon, Tite was required to indemnify WWW “from and against all claims, loses, damages, suits, and liabilities of every kind and character for ‘injuries to or illness or death of member of Contractor Group.’” 

A trial was conducted as to the scope of the MSSA’s indemnity provision. In its verdict, the jury found that WWW was an “agent” and “consultant” of Devon. Consequently, Tite was required to indemnify WWW under the MSSA.  

Tite subsequently appealed the unfavorable trial verdict. In Tite v. WWW, the TCA, however, ruled that such verdict was supported by legally sufficient evidence, holding:

Tite Water does not argue that the trial court’s definitions of ‘agent’ and ‘consultant’ included in Jury Question 1 are incorrect statements of the law or inconsistent with the term’s plain and ordinary meaning. Nor does Tite Water argue the definitions are ‘confusing and misleading’ . . . We disagree.

Tite v. WWW can be reviewed in its entirety at Tite Water Energy, LLC v. Wild Willy’s Welding, LLC, 01‑22‑00158-CV (Tex. App. Feb. 27, 2024).  

Are the indemnity provisions included in your business’s commercial contracts unclear or ambiguous? Is it time for their scope to be reviewed, re-thought, revised or otherwise rebooted? If so, contact Castle Garden Law for an introductory conversation.