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Click here for the full text of this decision FACTS:Pursuant to a Detergents Toll Conversion Agreement (DTCA), Du Pont manufactured Shop Ligand, a chemical, at a facility in Mobile, Ala., using Shell’s raw materials and for Shell’s use. Under the DTCA, Shell retained ownership of the wastes and waste by-products from the Shop Ligand production process, referred to by the parties in the DTCA as the waste materials. Moreover, Shell designated the transporter and the disposal site of the waste materials and reimbursed Du Pont for transportation and disposal costs. Finally, Article 15 of the DTCA contained two indemnity provisions, which generally provided that Shell would “defend and indemnify Du Pont . . . against all Claims related to Waste Materials.” Du Pont shipped more than 12 million pounds of waste materials to an injection well in Bayou Sorrell, La. The injection well subsequently became the subject of multiple lawsuits ultimately consolidated into a class-action suit in federal district court. The plaintiffs and defendants eventually settled the underlying litigation. Thereafter, Shell sent Du Pont another letter stating that it intended to indemnify Du Pont only for shipments of waste materials. Shell asserted that the parties needed to “determine how to split out those costs solely related to the waste shipped from [the Mobile Facility] on [Shell's] behalf.” Shell requested that Du Pont submit its costs with supporting documentation, and, in December 2004, Du Pont sent Shell a letter breaking down its annual defense costs. Du Pont then requested that Shell pay 1. a percentage of defense costs that related to both waste materials and non-waste materials and 2. $31,000 in costs that solely related to waste materials for which Shell was “solely responsible.” Shell refused to pay any amounts other than the $31,000 in defense costs solely related to waste materials. Du Pont filed suit, asserting that Shell breached its duty to defend and indemnify it in the underlying litigation. In its final judgment, the trial court overruled Shell’s objections to Du Pont’s summary judgment evidence. However, after finding that there were no contested issues of material fact, the trial court denied Du Pont’s summary judgment motion “except as to $31,000 in damages,” and granted Shell summary judgment “as to defenses and denied as to claims for affirmative relief.” HOLDING:Reversed and rendered. The trial court erred in granting Shell’s summary judgment motion and denying Du Pont’s summary judgment motion, because Du Pont conclusively established that it incurred over $1 million in defense costs related to waste materials, Du Pont properly sought a percentage of these defense costs from Shell, and Shell owed Du Pont an allocated portion of defense costs in the amount of $498,212.60 (including $40,000 in allocable settlement costs). Further, Du Pont conclusively established that it is entitled to recover its fees and costs of $242,620 for prosecution of its indemnity claim. The plaintiffs in the underlying litigation alleged that they were harmed by commingled wastes shipped to the injection well by hundreds of defendants, including Du Pont. Du Pont was sued, in part, for its shipment of waste materials to the well. Thus, the plaintiffs’ claims against Du Pont, and the defense costs expended to defend Du Pont in regard to these claims, related to waste materials and triggered Shell’s indemnity obligations. While Shell appears to agree with this general proposition, it proposes a construction of the indemnity provisions that is contrary to the provisions’ plain terms, rendering Shell’s indemnity obligations, at least under these circumstances, virtually worthless. Shell sought, and effectively obtained, a summary judgment on the basis that it owed Du Pont indemnity only for defense costs solely related to waste materials. Yet, this qualifying terminology is nowhere in the indemnity agreement. Here, although Du Pont was sued both for the disposing of waste materials and non-waste materials into the well, it is undisputed that these wastes were commingled in the well and were alleged to have collectively harmed the plaintiffs. Du Pont presented undisputed evidence that there was a small amount of defense costs that could be segregated that did not relate to the waste materials (for which it did not seek to recover); a small amount of defense costs that could be segregated solely related to waste materials (for which it sought to fully recover); and a remaining pool of defense costs that Du Pont would have expended even if it had only been sued in regard to the waste materials (rendering the claims and the costs associated with defending these claims necessarily related to waste materials). Under the plain terms of the DTCA, Shell was not merely responsible for the minimal amount of defense costs solely related to waste materials. The court enforces the DTCA as written, rejects Shell’s assertion that it is liable only for defense costs in the amount of $31,000 solely related to waste materials, and holds that Shell was contractually required to indemnify Du Pont for defense costs expended in defense of the claims related to waste materials, even if those costs also benefited the defense of claims related to non-waste materials. Both parties cite the Texas Supreme Court’s 2006 decision in Tony Gullo Motors I, L.P. v. Chapa as controlling authority on the issue of segregation. Because the discrete legal services provided to Du Pont for which it seeks recovery advanced both Du Pont’s defense for claims related to waste materials as well as claims related to non-waste materials, Tony Gullo Motors supports Du Pont’s claims for recovery of the requested defense costs fees from Shell. OPINION:Jennings, J.; Nuchia, Jennings and Keyes, J.J.

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