By: Duncan S.B. No. 530
97S0361/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to indemnity provisions in certain agreements for services
1-2 relating to real property.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Title 6, Civil Practice and Remedies Code, is
1-5 amended by adding Chapter 145 to read as follows:
1-6 CHAPTER 145. INDEMNITY PROVISIONS IN CERTAIN
1-7 AGREEMENTS RELATING TO REAL PROPERTY
1-8 Sec. 145.001. DEFINITIONS. In this chapter:
1-9 (1) "Loss" includes any part of a loss arising from a
1-10 suit or other claim, including:
1-11 (A) the costs of defense of the suit or claim;
1-12 and
1-13 (B) any damages or other loss or liability
1-14 arising with respect to the suit or claim.
1-15 (2) "Real property" includes an improvement to real
1-16 property.
1-17 (3) "Real property services" means any services
1-18 provided in connection with the construction, maintenance, or
1-19 repair of real property, including:
1-20 (A) design services;
1-21 (B) building services;
1-22 (C) services to rework, remodel, repair, or
1-23 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) providing other goods, materials, or
3-1 services furnished in connection with the services.
3-2 Sec. 145.003. AGREEMENT VOID AND UNENFORCEABLE. A real
3-3 property services indemnity agreement is void and unenforceable to
3-4 the extent the agreement purports to indemnify a person against
3-5 loss related to or arising out of:
3-6 (1) the sole negligence of:
3-7 (A) the person;
3-8 (B) an agent or employee of the person; or
3-9 (C) a person who is directly responsible to a
3-10 person described by Paragraph (A), other than the person who is
3-11 obligated to make the indemnification;
3-12 (2) the gross negligence or wilful misconduct of any
3-13 person described by Subdivision (1); or
3-14 (3) a fine, penalty, or administrative or other action
3-15 assessed by a governmental entity directly against the person who
3-16 is to be indemnified under the agreement.
3-17 Sec. 145.004. LIMITED INDEMNIFICATION PERMITTED. (a) A
3-18 real property services indemnity agreement may indemnify a person
3-19 only for:
3-20 (1) a loss, whether based on contract, tort, statute,
3-21 or otherwise, related to or arising out of an act or omission of
3-22 the person obligated to make the indemnification or an agent or
3-23 contractor of the person; or
3-24 (2) subject to Sections 145.003 and 145.005, a loss
3-25 that:
4-1 (A) is associated with bodily injury to or death
4-2 of an employee or agent of the person obligated to make the
4-3 indemnification or of a contractor of the person obligated to make
4-4 the indemnification; and
4-5 (B) relates to or arises out of an act or
4-6 omission of the person to be indemnified.
4-7 (b) In a real property services indemnity agreement
4-8 authorized under Subsection (a)(1), the liability of a person for
4-9 indemnity may not exceed the percentage of responsibility for the
4-10 harm caused by the person. In this subsection, "percentage of
4-11 responsibility" has the meaning assigned by Section 33.011.
4-12 (c) This section does not require a person to assume a
4-13 liability or obligation described by Subsection (a).
4-14 Sec. 145.005. INSURANCE LIMITATIONS. (a) Liability for
4-15 indemnity under a real property services indemnity agreement
4-16 authorized under Section 145.004(a)(2) may not exceed the lesser
4-17 of:
4-18 (1) the amount of liability insurance that is
4-19 available for purchase by the person obligated to make the
4-20 indemnification, subject to this section, regardless of whether
4-21 insurance is actually obtained; or
4-22 (2) the coverage and dollar limits of insurance,
4-23 including qualified self-insurance acceptable to the person to be
4-24 indemnified under the agreement, that the person obligated to make
4-25 the indemnification has agreed to provide under the agreement.
5-1 (b) A real property services indemnity agreement that
5-2 requires a liability insurance policy held by the person obligated
5-3 to make the indemnification to name the person to be indemnified as
5-4 an additional insured may not require coverage for liability other
5-5 than the liability assumed under the agreement. This subsection
5-6 applies without regard to whether the person to be indemnified is
5-7 named in the policy by endorsement or otherwise.
5-8 (c) A policy provision or agreement described by Subsection
5-9 (b), or a different policy provision or endorsement intended to
5-10 accomplish the same purpose, that imposes obligations on the
5-11 insurer that are greater than the indemnity obligations authorized
5-12 by this chapter is void and unenforceable.
5-13 (d) A provision in a real property services indemnity
5-14 agreement that requires a person to provide insurance coverage is
5-15 void and unenforceable to the extent that the required coverage
5-16 exceeds the limitations of this section.
5-17 Sec. 145.006. EFFECT ON INSURANCE CONTRACT. Except as
5-18 provided by Section 145.005, this chapter does not affect the
5-19 applicability, validity, or enforceability of an insurance
5-20 contract.
5-21 Sec. 145.007. WAIVER PROHIBITED. The provisions of this
5-22 chapter may not be waived by contract or otherwise.
5-23 Sec. 145.008. APPLICATION OF CHAPTER. This chapter does not
5-24 apply to indemnity provisions in mineral agreements governed by
5-25 Chapter 127.
6-1 SECTION 2. This Act takes effect September 1, 1997.
6-2 SECTION 3. Chapter 145, Civil Practice and Remedies Code, as
6-3 added by this Act, applies only to a real property services
6-4 indemnity agreement entered into on or after the effective date of
6-5 this Act. A real property services indemnity agreement entered
6-6 into before the effective date of this Act is governed by the law
6-7 as it existed immediately before the effective date of this Act,
6-8 and that law is continued in effect for that purpose.
6-9 SECTION 4. The importance of this legislation and the
6-10 crowded condition of the calendars in both houses create an
6-11 emergency and an imperative public necessity that the
6-12 constitutional rule requiring bills to be read on three several
6-13 days in each house be suspended, and this rule is hereby suspended.