Bill not drafted by TLC or Senate E&E.
Line and page numbers may not match official copy.
By Holzheauser H.B. No. 961
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to indemnity provisions in certain agreements for services
1-3 relating to real property.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 6, Civil Practice and Remedies Code, is
1-6 amended by adding Chapter 145 to read as follows:
1-7 CHAPTER 145. INDEMNITY PROVISIONS IN CERTAIN
1-8 AGREEMENTS RELATING TO REAL PROPERTY
1-9 Sec. 145.001. DEFINITIONS. In this chapter:
1-10 (1) "Loss" includes any part of a loss arising from a
1-11 suit or other claim, including:
1-12 (A) the costs of defense of the suit or claim;
1-13 and
1-14 (B) any damages or other loss or liability
1-15 arising with respect to the suit or claim.
1-16 (2) "Real property" includes an improvement to real
1-17 property.
1-18 (3) "Real property services" means any services
1-19 provided in connection with the construction, maintenance, or
1-20 repair of real property, including:
1-21 (A) design services;
1-22 (B) building services;
1-23 (C) services to rework, remodel, repair, or
1-24 improve the real property;
2-1 (D) testing services;
2-2 (E) services to treat the real property;
2-3 (F) services relating to purchasing goods or
2-4 materials for the real property; and
2-5 (G) cleaning services.
2-6 (4) "Real property services contract" means an
2-7 agreement to which this chapter applies under Section 145.002.
2-8 (5) "Real property services indemnity agreement" means
2-9 a written or oral agreement contained in, collateral to, or
2-10 affecting a real property services contract in which a party agrees
2-11 to indemnify another party for a loss.
2-12 Sec. 145.002. SCOPE OF CHAPTER. This chapter applies only
2-13 to:
2-14 (1) a written or oral agreement or understanding
2-15 concerning the provision of real property services; or
2-16 (2) a written or oral agreement or understanding under
2-17 which a person will perform:
2-18 (A) a part of real property services that are to
2-19 be performed; or
2-20 (B) an act collateral to those services,
2-21 including:
2-22 (i) providing or renting equipment;
2-23 (ii) providing incidental transportation;
2-24 or
2-25 (iii) other goods, materials, or services
2-26 furnished in connection with the services.
2-27 Sec. 145.003. AGREEMENT VOID AND UNENFORCEABLE. A real
2-28 property services indemnity agreement is void and unenforceable to
2-29 the extent the agreement purports to indemnify a person against
2-30 loss related to or arising out of:
3-1 (1) the sole negligence of:
3-2 (A) the person;
3-3 (B) an agent or employee of the person; or
3-4 (C) a person who is directly responsible to a
3-5 person described by Paragraph (A), other than the person who is
3-6 obligated to make the indemnification;
3-7 (2) the gross negligence or willful misconduct of any
3-8 person described by Subdivision (1); or
3-9 (3) a fine, penalty, or administrative or other action
3-10 assessed by a governmental entity directly against the person who
3-11 is to be indemnified under the agreement.
3-12 Sec. 145.004. LIMITED INDEMNIFICATION PERMITTED. (a) A
3-13 real property services indemnity agreement may indemnify a person
3-14 only for:
3-15 (1) a loss, whether based on contract, tort, statute
3-16 or otherwise, related to or arising out of an act or omission of
3-17 the person obligated to make the indemnification or an agent or
3-18 contractor of the person; or
3-19 (2) subject to Section 145.003 and Section 145.005, a
3-20 loss that:
3-21 (A) is associated with bodily injury to or death
3-22 of an employee or agent of the person obligated to make the
3-23 indemnification or of a contractor of the person obligated to make
3-24 the indemnification; and
3-25 (B) relates to or arises out of an act or
3-26 omission of the person to be indemnified.
3-27 (b) In a real property services indemnity agreement
3-28 authorized under Subsection (a)(1) the liability of a person for
3-29 indemnity may not exceed the percentage of responsibility for the
3-30 harm caused by the person. In this subsection "percentage of
4-1 responsibility" has the meaning assigned by Section 33.011.
4-2 (c) This section does not require a person to assume a
4-3 liability or obligation described by Subsection (a).
4-4 Sec. 145.005. INSURANCE LIMITATIONS. (a) Liability for
4-5 indemnity under a real property services indemnity agreement
4-6 authorized under Section 145.004(a)(2) may not exceed the lesser
4-7 of:
4-8 (1) the amount of liability insurance that is
4-9 available for purchase by the person obligated to make the
4-10 indemnification, subject to this section, regardless of whether
4-11 insurance is actually obtained; or
4-12 (2) the coverage and dollar limits of insurance,
4-13 including qualified self-insurance acceptable to the person to be
4-14 indemnified under the agreement, that the person obligated to make
4-15 the indemnification has agreed to provide under the agreement.
4-16 (b) A real property services indemnity agreement that
4-17 requires a liability insurance policy held by the person obligated
4-18 to make the indemnification to name the person to be indemnified as
4-19 an additional insured may not require coverage for liability other
4-20 than the liability assumed under the agreement. This subsection
4-21 applies without regard to whether the person to be indemnified is
4-22 named in the policy by endorsement or otherwise.
4-23 (c) A policy provision or agreement described by Subsection
4-24 (b), or a different policy provision or endorsement intended to
4-25 accomplish the same purpose, that imposes obligations on the
4-26 insurer that are greater than the indemnity obligations authorized
4-27 by this chapter is void and unenforceable.
4-28 (d) A provision in a real property services indemnity
4-29 agreement that requires a person to provide insurance coverage is
4-30 void and unenforceable to the extent that the required coverage
5-1 exceeds the limitations of this section.
5-2 Sec. 145.006. EFFECT ON INSURANCE CONTRACT. Except as
5-3 provided by Section 145.005, this chapter does not affect the
5-4 applicability, validity, or enforceability of an insurance
5-5 contract.
5-6 Sec. 145.007. WAIVER PROHIBITED. The provisions of this
5-7 chapter may not be waived by contract or otherwise.
5-8 SECTION 2. This Act takes effect September 1, 1997.
5-9 SECTION 3. Chapter 145, Civil Practice and Remedies Code, as
5-10 added by this Act, applies only to a real property services
5-11 indemnity agreement entered into on or after the effective date of
5-12 this Act. A real property services indemnity agreement entered
5-13 into before the effective date of this Act is governed by the law
5-14 as it exists immediately before the effective date of this Act, and
5-15 that law is continued in effect for that purpose.
5-16 SECTION 4. The importance of this legislation and the
5-17 crowded condition of the calendars in both houses create an
5-18 emergency and an imperative public necessity that the
5-19 constitutional rule requiring bills to be read on three several
5-20 days in each house be suspended, and this rule is hereby suspended.