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Fresh Coat, Inc. v. K-2, Inc.

In this indemnity case the Texas Supreme Court examined a synthetic stucco manufacturer's duty to indemnify a contractor under Chapter 82 of the Texas Civil Practice and Remedies Code. The court concluded that under Chapter 82, synthetic stucco is a "product" and the contractor that installs it on a house is a "seller;" therefore, Chapter 82 applies. The court also concluded that the manufacturer's statutory obligation to indemnify the contractor covers a settlement payment made by the contractor to the homebuilder where the contractor may have been independently obligated by contract to indemnify the homebuilder. Texas Supreme Court, No. 08-0592, 08-23-2010

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Argued December 17, 2009

This indemnity case concerns products-liability litigation in the residential construction industry. Specifically, we examine a synthetic stucco manufacturer’s duty to indemnify a contractor under Chapter 82 of the Texas Civil Practice and Remedies Code. Two threshold questions are paramount: (1) Is synthetic stucco a “product”? and (2) Is the contractor that installs it on a house a “seller”? We answer yes to both, meaning Chapter 82 applies. We also conclude that the manufacturer’s statutory obligation to indemnify the contractor covers a settlement payment made by the contractor to the homebuilder where the contractor may have been independently obligated by contract to indemnify the homebuilder. We therefore affirm in part and reverse in part the court of appeals’ judgment, and render judgment for Fresh Coat, Inc. in accord with the trial court’s original judgment.

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