Texas Indemnity And Express Negligence

A recent Texas Court of Appeals decision (Tutle & Tutle Trucking v. EOG Resources, Inc., Waco Court of Appeals 2012) illustrates the importance of carefully drafting indemnity clauses in oil and gas Master Service Agreements. EOG had a Master Services Agreement with Tutle, a trucking company. Frac Source was a contractor of EOG's and had a separate MSA with EOG. Tutle's employee, Henderson, was injured, apparently in Texas, while assisting Frac Source in unloading sand from a Frac Source truck. Henderson sued Frac Source and Tutle for negligence, but never made a claim directly against EOG, claiming that Frac Source had modified or removed a safety device from its equipment, rendering such equipment unreasonably dangerous. Frac Source then made demand on EOG to defend and indemnify it under the EOG/Frac Source MSA. EOG, in turn, demanded indemnity from Tutle under the EOG/Tutle MSA.¹