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March 13, 2026 Get Citation Alerts Download PDF Add Note

S&B Engineers & Constructors, Ltd. and Zurich American Insurance Company v. Scallon Controls, Inc.

Texas Supreme Court

• Citations: None known
• Docket Number: 24-0525
• Panel: Jane Nenninger Bland, Rebeca Aizpuru Huddle, Evan Andrew Young
• Judges: Young; Blacklock; Busby; Sullivan; Hawkins; Bland; Lehrmann; Devine; Huddle

• Disposition: The Court reverses the court of appeals' judgment and remands the case to the trial court.

• Opinion

• Authorities (21)

• Cited By (0)

• Summaries (0)

• Similar Cases (2.3K)

• PDF

Disposition

The Court reverses the court of appeals' judgment and remands the case to the trial court.

Lead Opinion

                        by [Evan Andrew Young](https://www.courtlistener.com/person/15418/evan-andrew-young/)

Supreme Court of Texas
══════════
No. 24-0525
══════════

S&B Engineers & Constructors, Ltd. and
Zurich American Insurance Company,
Petitioners,

v.

Scallon Controls, Inc.,
Respondent

═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Ninth District of Texas
═══════════════════════════════════════

Argued October 9, 2025

JUSTICE YOUNG delivered the opinion of the Court, in which Chief
Justice Blacklock, Justice Busby, Justice Sullivan, and Justice Hawkins
joined.

JUSTICE BLAND filed a dissenting opinion, in which Justice
Lehrmann, Justice Devine, and Justice Huddle joined.

After being injured in a terrible workplace accident, a group of
plaintiffs brought tort claims against Sunoco Logistics Partners Operations
GP, LLC and Sunoco Logistics Partners, LP (collectively “Sunoco”) and
S&B Engineers & Constructors, Ltd. S&B and Sunoco ultimately settled
the case. The settlement ended all litigation brought by the injured workers,
whose claims are thus not before us. According to S&B and Sunoco,
however, the injuries were caused not by their negligence but by that of
a subcontractor, Scallon Controls, Inc. They therefore invoked the
proportional-indemnification provision of their contract with Scallon.
Scallon contends that the voluntary settlement—to which it was not a
party—extinguished any possible indemnification rights. The court of
appeals agreed with Scallon and thus upheld the district court’s summary
judgment that rejected the indemnification claims.
The court of appeals relied heavily upon two decisions of this Court,
both rendered in 1987. We conclude that neither case applies. First, Beech
Aircraft Corp. v. Jinkins held that a settling defendant has no right to
contribution from a non-settling party under Texas statutory or common
law. 739 S.W.2d 19, 21–22 (Tex. 1987). Today’s case, however, implicates
a freely negotiated contractual indemnification agreement. No such
contract was at issue in Jinkins, which did not discuss contractual risk
allocation or even use the words “contract” or “indemnification.” Much
less did it hold—or even hint—that parties could not voluntarily allocate
risk by agreeing to proportional indemnification that could be determined
following a settlement.
Indeed, in the second case, Ethyl Corp. v. Daniel Construction Co.,
this Court expressly affirmed that “[p]arties may contract for comparative
indemnity so long as they comply with the express negligence doctrine set
out herein.” 725 S.W.2d 705, 708–09 (Tex. 1987) (emphasis added). Under
that doctrine, courts will not read a contract to require indemnification of
the indemnitee’s own negligence unless the contract mandates that result

2
“in specific terms.” Id. at 708. We later explained that a contract satisfies
Ethyl by disclaiming indemnification for a party’s own negligence because,
in that circumstance, “the express negligence doctrine does not apply” at
all. Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 424 (Tex. 2000).
The indemnification contract here, all agree, does not authorize S&B or
Sunoco to be indemnified for their own negligence.
We hold that neither Jinkins nor Ethyl nor any other legal principle
precludes S&B and Sunoco from invoking their contractual indemnity
rights. Whether they are entitled to any indemnification, however, presents
another question—one not before us today. On remand, they may obtain
proportional indemnification if and to the extent they carry their burdens
of establishing that the settlement was made in good faith for a reasonable
amount and that the liability is attributable to Scallon’s negligence in
whole or in part.
I
Sunoco hired S&B to design and install a safety system in its South
Texas refinery. S&B, in turn, hired Scallon to supply and program a fire-
suppression system. Scallon installed the system, encoding a failsafe mode
that would release a chemical fire suppressant if the system lost power. The
parties dispute whether S&B instructed Scallon to disengage this feature.
One morning in January 2015, the system briefly lost power while
another contractor’s employees were working on insulation atop tall
scaffolding in the refinery. The electricity lapse triggered the chemical fire
suppressant. In their haste to escape, seven workers fell.
The injured workers sued S&B and Sunoco, which in turn filed a
third-party suit against Scallon for breach of contract, breach of express

3
warranty, and enforcement of the indemnity provisions into which S&B
and Scallon had entered. In May 2019, after four years of litigation, the
workers settled with S&B and Sunoco.
No party disputes that the settlement fully resolved the workers’
claims. Under the settlement agreement, which made no mention of Scallon,
S&B paid $2,350,000, and its insurers paid $2,000,000 on its behalf. Sunoco’s
insurer, Zurich American Insurance Co., paid $400,000 of the settlement
amount. Sunoco nonsuited its claims against Scallon in December 2021,
and Zurich intervened the next day to assert claims for subrogation.
The case before us concerns only S&B and Zurich’s post-settlement
litigation efforts to obtain indemnification from Scallon. Underlying that
litigation is the contractual relationship among the parties, including a
purchase agreement for the fire-suppression system and a subcontract for
services on that system. Both contracts include indemnity provisions, but
the parties focus on the purchase agreement, which includes the following:
To the maximum extent permitted by applicable law,
[Scallon] shall defend, indemnify and hold harmless S&B,
and its affiliated companies, subsidiaries and clients from
and against any and all loss, damage, claim, suit, liability,
strict liability, product liability, judgment and expense
(including attorney’s fees and other costs of litigation) and
any fines, penalties and assessments, arising out of
(A) damage to or loss of property or (B) bodily injury, disease
or death to persons other than employees of [Scallon], its
agents or subcontractors resulting from or in connection
with the execution of this purchase order to the extent of
[Scallon]’s negligence or willful misconduct. In case of
comparative, concurrent and/or contributing negligence,
fault or strict liability of [Scallon] or [S&B], whether through
its employees and/or representatives, [Scallon]’s duty to
indemnify and hold harmless referred to in the previous
sentence shall be [Scallon]’s allocable share of comparative,

4
concurrent and/or contributing negligence, fault or strict
liability.
Based on this provision, S&B and Zurich sought indemnification
from Scallon; Scallon refused. In the post-settlement litigation, S&B and
Zurich claim that Scallon owed them its proportional share of the settlement
amount, equal to its share of liability for the accident. S&B and Scallon
filed cross-motions for summary judgment, and the trial court granted
Scallon’s. The court of appeals affirmed. It held that the express-negligence
doctrine barred S&B from recovering under a theory of indemnification;
the record could not support a contribution claim; and Zurich’s claims were
time-barred because it entered the litigation long after the underlying
tort claims’ limitations period had run. 716 S.W.3d 590, 608–11 (Tex. App.—
Beaumont 2024).
S&B and Zurich each sought this Court’s review of the court of
appeals’ judgment. We granted both petitions and now reverse. We first
address the indemnification issue that affects both parties and then turn
to the limitations issue that affects Zurich.
II
The court of appeals understood Jinkins to attribute S&B and
Sunoco’s settlement exclusively to their own negligence. That premise, if
correct, would preclude indemnification under Ethyl’s express-negligence
doctrine. Indeed, the contract itself would preclude indemnification because
in it S&B and Sunoco affirmatively disclaimed any right to indemnification
for their own negligence.
The premise, however, is mistaken. We first address why Jinkins
does not apply to contractual undertakings like the indemnification
provision here. We then explain why Ethyl is also inapplicable (or, said

5
differently, why the disclaimer satisfies it). Last, we address the
proceedings that will resume on remand.
A
All parties agree that the settlement resolved the injured
workers’ tort claims. The key dispute is whether S&B and Zurich may
ask a factfinder to allocate any portion of the settlement amount to
Scallon’s negligence, or whether, as the court of appeals and Scallon
contend, it covered only their own as a matter of law.
The latter view relies on our decision in Jinkins, which examined
“the contribution rights of a settling party under both statutory and
common law contribution schemes” when an alleged joint tortfeasor does
not participate in the settlement. 739 S.W.2d at 19. We acknowledged
“the general rule that a cause of action for damages for personal injuries
may be sold or assigned” but held that “a defendant can settle only his
proportionate share of a common liability and cannot preserve contribution
rights under either the common law or the comparative negligence statute
by attempting to settle the plaintiff’s entire claim.” Id. at 22.
Jinkins was open about its limited scope: common-law and statutory
avenues for a settling party to impose contribution obligations on a non-
settling party. We did not address or even mention a very different source
of legal authority: voluntarily formed contracts providing for indemnification.
In other words, public policy led the Court to refuse to find or create rights
of contribution in certain situations, but we said nothing to suggest that
parties could not create rights to indemnification if they deemed it in their
interest to do so.
Jinkins’s holding does not extend beyond the common-law and

6
statutory contexts it addressed. Proportional or comparative
indemnification by contractual agreement differs fundamentally from
common-law and statutory schemes for the basic reason that the parties
bargained for and agreed to it. By contrast, in Jinkins, one defendant
who lacked any contractual relationship with another defendant found
himself subject to a demand for compelled contribution. The law, we
said, should not allow “defendants responsible for the plaintiff’s injuries
a right to, in effect, buy the plaintiff’s claims and prosecute the other
jointly responsible parties.” Id. But in the context of contractual
indemnity, a defendant does not “buy” the plaintiff’s rights and use them
against other liable parties, as if it could profit from successfully
prosecuting the very claims that have been settled. Rather, the defendant
already has a contractual right to indemnification that it seeks to enforce
against the other liable parties. “Freedom of contract allows parties to
bargain for mutually agreeable terms and allocate risks as they see fit.”
Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 912 (Tex. 2007)
(emphasis added).
An indemnification suit following a settlement is no new innovation,
in any event. Our decision in Fireman’s Fund Insurance Co. v. Commercial
Standard Insurance Co., for example, outlines a system in which an
indemnitee first settles and then brings an indemnification suit to establish
actual liability, where he must show “that his settlement was reasonable,
prudent and in good faith under the circumstances.” 490 S.W.2d 818, 824
(Tex. 1972), overruled on other grounds by Ethyl, 725 S.W.2d at 708; see also,
e.g., Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 799 (Tex. 1992); Gulf,
Colo. & Santa Fe Ry. Co. v. McBride, 322 S.W.2d 492, 497 (Tex. 1958).

7
“Parties may contract for comparative indemnity,” Ethyl, 725
S.W.2d at 708–09, subject only to the express-negligence doctrine addressed
below in Part II.B. There are no other bespoke rules of construction for
contracts providing indemnity: “Courts must construe indemnity
agreements according to the normal rules of contract construction.”
Yowell v. Granite Operating Co., 620 S.W.3d 335, 353 (Tex. 2020); accord
Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 284
(Tex. 1998); Gulf Ins. Co., 22 S.W.3d at 423. Scallon voluntarily accepted
a contractual “duty to indemnify” S&B and Sunoco for Scallon’s “allocable
share of comparative, concurrent and/or contributing negligence.” Nothing
in the contract states that Scallon’s share is “allocable” only in a trial
involving the injured workers, as might be true if there were no
indemnification contract at all. Indeed, Scallon agreed to broadly indemnify
S&B and Sunoco for “any and all loss, damage, claim, suit, liability, [and]
strict liability,” among other things, if allocable to its own negligence.
This language encompasses settlements (and not just final judgments) at
least as much as in other cases decided by this Court in which settlement
established a legal responsibility to pay under an indemnity contract.
See, e.g., In re Ill. Nat’l Ins. Co., 685 S.W.3d 826, 840 (Tex. 2024); In re
Farmers Tex. County Mut. Ins. Co., 621 S.W.3d 261, 270 (Tex. 2021).
But when parties have not chosen to contract with each other
before such loss arises, statutes governing contribution and comparative
negligence are particularly important. Chapter 33, for example,
addresses comparative negligence in tort litigation but expressly
disclaims any desire to supersede contractual rights: “Nothing in this
chapter shall be construed to affect any rights of indemnity granted . . .

8
by contract . . . .” Tex. Civ. Prac. & Rem. Code § 33.017. To the contrary,
the legislature made clear that it gave preference to contractual
indemnification rights: “To the extent of any conflict between this
chapter and any right to indemnification granted by . . . contract . . . ,
those rights of indemnification shall prevail over the provisions of this
chapter.” Id. Chapter 33 invites parties to supplement its provisions.
As in other circumstances, “[p]arties are free, of course, to contract out
of statutory default rules.” Solar Applications Eng’g, Inc. v. T.A.
Operating Corp., 327 S.W.3d 104, 112 (Tex. 2010).
Unsurprisingly, given the foregoing, all parties agree that they
could by contract impose comparative indemnity. We hold that they have
done so, that Jinkins plays no role in the analysis, and that the settlement
does not automatically extinguish contractual indemnification rights.
B
The only unique interpretive principle applicable to indemnification
contracts as distinct from all others is Ethyl’s express-negligence doctrine.
That doctrine is not substantive. It allows a party to be indemnified for
its own negligence, as long as such an agreement “express[es] that intent
in specific terms.” Ethyl, 725 S.W.2d at 708. It is this doctrine that
formed the basis for the court of appeals’ holding that indemnification
is unavailable here. See 716 S.W.3d at 611.
Our rejection of the premise underlying that holding—that no
responsibility may be allocated to Scallon, a non-settling party—largely
disposes of this ground. But another aspect of the court of appeals’ decision
turned on its agreement with Scallon about the purchase agreement’s use
of the term “indemnify,” which the court understood to shift “the entire

9
burden of loss from one tortfeasor to another.” Id. (quoting B & B Auto
Supply, Sand Pit, & Trucking Co. v. Cent. Freight Lines, Inc., 603
S.W.2d 814, 816 (Tex. 1980)). That definition led the court to conclude
that indemnification would necessarily cover the negligence of S&B and
Sunoco, not just Scallon. The parties’ agreement, however, makes clear
that the indemnification is proportional, not entire. Neither Ethyl nor
any other case suggests that parties may not contract as they see fit to
adjust the bounds of their risk allocation. Ethyl’s only requirement is
that express and specific language is necessary before courts will read a
contract to indemnify a party for its own negligence.
The contract here does not state any intent for Scallon to indemnify
S&B or Sunoco for their negligence; rather, it disclaims that intent. It thus
satisfies Ethyl, which green-lights “comparative indemnity” contracts “so
long as they comply with the express negligence doctrine” that Ethyl
announced. 725 S.W.2d at 708–09. There are various ways to “comply,” of
course, but Gulf Insurance made clear that one was to render the express-
negligence doctrine inapplicable by affirmatively disclaiming any
entitlement to indemnification for one’s own negligence. 22 S.W.3d at 424.
The contract here avoids any express-negligence problem both
with its unambiguous disclaimer and by textually limiting Scallon’s
indemnification to only its own “allocable share” rather than seeking
some way to force it to bear the burden of S&B’s or Sunoco’s negligence.
There is nothing magical about the word “allocable.” Any linguistic
formulation is acceptable if the contract makes clear that it is for
proportional or comparative indemnification and avoids shifting liability
for the indemnitee’s negligence to the indemnitor (unless it satisfies Ethyl

10
in saying otherwise, of course). Although S&B and Zurich deny any
negligence on their part, they readily agree that the contract entitles them
to indemnification only if a factfinder allocates a share of responsibility
to Scallon for Scallon’s negligence.
As numerous amici wrote to us to confirm, contractual agreements
for proportional indemnification are commonplace in the circumstance
of this case: contractors and subcontractors working on shared projects.
Such contracts are enforceable so long as they comply with Ethyl. This
contract does, and the express-negligence doctrine accordingly poses no
obstacle to pursuing contractual indemnification.
C
Given the foregoing holdings, we remand the case to the trial court
to resolve the merits of the parties’ indemnification dispute. S&B and
Zurich are entitled to pursue indemnification, but we express no view as
to whether or to what extent they should prevail.
Settling before suing for indemnification may well bring certain
benefits—not least to the injured workers, who might still be without relief
today if their presence was essential before Scallon’s “allocable share” could
be determined. But as S&B and Zurich have acknowledged, settling before
suing also entails various consequences and risks, including that S&B and
Zurich may receive no indemnification at all.
For one thing, the posture of this case requires us to assume the
validity and applicability of the underlying contract and its indemnification
provision. If Scallon has preserved any arguments to the contrary,
however, our decision today does not foreclose it from raising them below.
But even when there is no doubt that a contract applies and provides

11
for proportional indemnification, settlement generates a series of burdens
for the settling party. First, we have always upheld the right to settle
and then sue, but to succeed, the settling party must establish that the
settlement was made in good faith and for a reasonable amount to
discharge the potential liability. See, e.g., Fireman’s Fund, 490 S.W.2d
at 823. Second, even if the settlement was wholly proper and for a
reasonable amount, the settling party bears the burden to show (using
this contract’s phrasing) the “allocable share” of the indemnitor’s
negligence. So if the settlement is deemed to have been unreasonably
high, for example, then the non-settling party will be responsible only
for its proportional share of the amount, if any, that would have been
reasonable. A settling party unable to establish that any amount of
negligence is attributable to the non-settling party cannot recover at all.
In other words, the contractual right to seek indemnification after
settlement comes with risks that create incentives to avoid bad
settlements. A defendant that believes itself to be only minimally liable
remains highly incentivized to negotiate a favorable settlement: it risks
not only a judgment-proof indemnitor, but also the possibility that a
factfinder will not be persuaded that the settlement amount was
reasonable or that the indemnitor’s proportional fault was as high as the
indemnitee claims, if present at all.
A trial of this sort would not constitute “satellite litigation” any
more here than in any other action seeking to enforce an indemnification
provision. At worst, the comparatively streamlined trial to enforce the
indemnity agreement would replace a far more complex trial, the focus
of which would primarily be on the underlying facts and circumstances

12
of the workers’ personal injuries and the extent of their damages. By
settling before bringing suit, indemnitees diminish the total litigation
burden on all parties. Injured plaintiffs in a case like this one can be
made whole without a protracted trial and appeal, even when a co-
defendant or indemnitor refuses to participate in settlement negotiations.
To the extent that a settlement replaces one complex trial with one
streamlined trial, it is more than consistent with Texas law’s longstanding
encouragement of settlement. See, e.g., Forest Oil Corp. v. McAllen, 268
S.W.3d 51, 56 (Tex. 2008); Schlumberger Tech. Corp. v. Swanson, 959
S.W.2d 171, 178 (Tex. 1997). Regardless, the very fact that the parties
have agreed in advance to an indemnification relationship represents a
contractual obligation that the courts must stand ready to enforce,
regardless of their views of the wisdom of the obligation itself.
We are confident that, on remand, the district court will ably,
expeditiously, and justly conduct proceedings to bring the litigation
springing from the January 2015 accident to a close.
III
Finally, the court of appeals erred in deeming Zurich’s claim
untimely. Parties have four years to bring claims arising from written
contracts and breach of warranty. Tex. Bus. & Com. Code § 2.725(a); PPG
Indus., Inc. v. JMB/Hou. Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 92
(Tex. 2004). Indemnity claims begin to run when “the indemnitee’s liability
becomes fixed and certain” through settlement or judgment. Noble Energy,
Inc. v. ConocoPhillips Co., 532 S.W.3d 771, 778 (Tex. 2017) (internal
quotation marks omitted). Zurich intervened to take Sunoco’s claim nearly
seven years after the accident, but less than three years after the

13
settlement made Sunoco’s liability fixed and certain. Zurich’s claim is
not time-barred.

---

The judgment of the court of appeals is reversed. The case is
remanded to the trial court for further proceedings.

Evan A. Young
Justice
OPINION DELIVERED: March 13, 2026

14

Dissent

                        by [Jane Nenninger Bland](https://www.courtlistener.com/person/8305/jane-nenninger-bland/)

Supreme Court of Texas
══════════
No. 24-0525
══════════

S&B Engineers & Constructors, Ltd. and
Zurich American Insurance Company,
Petitioners,

v.

Scallon Controls, Inc.,
Respondent

═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Ninth District of Texas
═══════════════════════════════════════

JUSTICE BLAND, joined by Justice Lehrmann, Justice Devine, and
Justice Huddle, dissenting.

We long have held that indemnity agreements requiring A to
indemnify B for B’s own negligence must do so in express terms. 1 We
also have long held that a settling party resolves only its share of
liability in a case involving joint tortfeasors. 2

1 See Ethyl Corp. v. Daniel Constr. Co., 725 S.W.2d 705, 708 (Tex. 1987).

2 See Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19, 21–22 (Tex. 1987).
This case is no more complicated than the plain language in two
agreements. The first is a proportionate indemnity clause, in which a
seller agreed to indemnify a buyer for the seller’s “allocable” negligence.
The second is a settlement agreement between the buyer and injured
individuals that releases the buyer but not the seller. The question is
whether the word “allocable” transforms the payment the buyer made
to settle its own negligence into the seller’s negligence. It does not.
Striving mightily to reach the opposite conclusion, the Court
trumpets the freedom of contract while eschewing this contract’s plain
text, careening through precedential guardrails erected forty years ago.
Worse, the Court creates a new species of trial, supposing its
case-within-a-case chimera will be more “streamlined” than the
ordinary personal injury negligence cases trial courts have managed for
years. In truth, manipulated party positions result in burdensome and
unfair trials, a lesson our Court learned at great cost during the 1980s
and 1990s but now has forgotten.
A proportionate indemnity clause is generally enforceable. But a
proportionate indemnity clause that does not grant a right to settle one’s
own negligence and pursue the indemnitor for that amount violates the
rule requiring express language before shifting liability for B’s own
negligence to A.
The trial court in this case properly granted summary judgment.
The court of appeals properly affirmed, holding that the agreement at
issue does not indemnify the buyer for the buyer’s settlement of the
buyer’s own negligence. As the Court reaches the opposite conclusion, I
respectfully dissent.

2
I
Scallon Controls, Inc. supplied a fire suppression system to S&B
Engineers & Constructors, Ltd. for installation at a refinery owned by
Sunoco Logistics Partners, L.P. The purchase order includes two
indemnity provisions. For claims by Scallon’s employees, agents, or
subcontractors, “[i]t is the express intent of the parties herein that
[Scallon] save harmless and indemnify S&B, and its affiliated
companies, subsidiaries and clients from S&B’s . . . concurrent,
contributory or sole negligence.” Thus, Scallon agreed to indemnify S&B
for S&B’s own negligence if a Scallon employee sued S&B.
For all “other claims,” however, Scallon indemnified S&B and its
clients only for “any and all loss . . . arising out of . . . bodily injury,
disease or death to persons other than employees of
[Scallon] . . . resulting from or in connection with the execution of this
purchase order to the extent of [Scallon’s] negligence or willful
misconduct.” In the event of “comparative, concurrent, and/or
contributing negligence,” Scallon thus agreed to proportionately
indemnify S&B for Scallon’s “allocable share” of negligence, not for
S&B’s negligence, when someone other than a Scallon employee sued
S&B.
In 2015, a power loss triggered the fire suppression system at the
Sunoco refinery, releasing a chemical called Purple K. Employees of a
Sunoco subcontractor working atop scaffolding fled and allegedly fell
and suffered injuries. Seven individuals—none Scallon employees—
sued Sunoco and S&B for negligence. The plaintiffs did not sue Scallon
or allege that Scallon was concurrently negligent with S&B. Nor did

3
S&B timely designate Scallon as a potential responsible third party.
S&B further did not timely disclose in discovery that Scallon’s
negligence contributed to the plaintiffs’ injuries. 3
Two years after the individual plaintiffs sued, S&B belatedly
attempted to add Scallon as a responsible third party, alleging that
Scallon had configured the fire suppression system incorrectly. The
individual plaintiffs successfully objected to this untimely pleading
because S&B had not disclosed Scallon’s existence until after the
plaintiffs’ statute of limitations had run. S&B then sued Scallon as a
contribution defendant under Texas Civil Practice and Remedies Code
section 33.016. Contrary to the Court’s assertion that S&B “den[ies] any
negligence,” 4 S&B concedes it had “certain liability” to the plaintiffs.
Shortly thereafter, S&B settled the plaintiffs’ personal injury
claims against it. The settlements, totaling $6.75 million, deny any
liability. The plaintiffs released S&B and Sunoco, and S&B and Sunoco
mutually released each other from any and all claims. 5 Scallon did not
participate in the settlement, and the settlement did not secure a release
from the individual plaintiffs as to any claims against Scallon.
After the settlement, S&B and Sunoco sought to realign the case,
casting themselves as the plaintiffs and Scallon as the defendant. As

3 The references to S&B in this opinion include Sunoco or its insurer

where relevant. Sunoco asserted similar claims and has since nonsuited its
claims against Scallon. Sunoco’s insurer intervened and joined S&B’s
arguments.
4 See ante at 11.

5 S&B directly contributed $2.35 million to the settlement; the rest came

from insurers of S&B and Sunoco.

4
plaintiffs, S&B and Sunoco sought contribution from Scallon for
“damages”—the money they paid to settle with the individual plaintiffs,
plus attorney’s fees and expenses associated with defending and settling
the case against them.
S&B and Scallon filed cross-motions for summary judgment. S&B
sought indemnification. Scallon invoked the express negligence rule,
contending that the parties’ indemnity provisions did not afford a
recovery because the settlement payment related to S&B’s negligence
and Scallon had indemnified S&B only for damages resulting from
Scallon’s negligence, not S&B’s own negligence. The trial court rendered
judgment in favor of Scallon.
The court of appeals affirmed. 6 Relying on this Court’s
established precedent, the court of appeals agreed with Scallon that
under the express negligence rule, “parties seeking to indemnify the
indemnitee from the consequences of its own negligence must express
that intent in specific terms [] within the four corners of the contract.” 7
The agreement between Scallon and S&B for claims brought by third
parties does not indemnify S&B for its own negligence. 8 Because the
individual plaintiffs sued S&B for S&B’s own negligence and made no
claim against Scallon, the court held that the express negligence rule
barred S&B’s claim for indemnity against Scallon. 9

6 716 S.W.3d 590, 612 (Tex. App.—Beaumont 2024).

7 Id. at 609 (alteration in original) (quoting Ethyl, 725 S.W.2d at 708).

8 Id. at 610.

9 Id. at 610–11.

5
II
Under the Court’s longstanding precedent, a party may settle
only its own proportionate share of liability. 10 Defendants responsible
for a plaintiff’s injuries may not “in effect, buy the plaintiff’s claims and
prosecute the other jointly responsible parties” because, as the Court
foresaw in Beech Aircraft Corp. v. Jinkins, “the settling defendant’s
unusual posture as surrogate plaintiff, co-defendant, and cross-plaintiff
will confuse a jury and possibly prejudice the remaining parties.” 11 This
rule, in place since 1987, limits the assignability of claims beyond the
settling tortfeasor. 12 The question presented to the Court in this case is
whether the proportionate indemnity clause in the purchase order
permits S&B to pursue Scallon for S&B’s settlement of the claims made
against S&B, not Scallon. It does not.
A
Understanding an indemnity agreement begins with its text.
After a long history of drafters seeking to impose total indemnity by
sleight of pen, this Court adopted the express negligence rule in Ethyl
Corp. v. Daniel Construction Co. 13 Decrying the “plethora of law suits to
construe” indemnification agreements drafted to be “just ambiguous
enough to conceal” their true liability-shifting purpose, we refused to

10 Jinkins, 739 S.W.2d at 21–22.

11 Id. at 22.

12 Id.; Int’l Proteins Corp. v. Ralston–Purina Co., 744 S.W.2d 932, 934

(Tex. 1988).
13 725 S.W.2d at 707–08.

6
finely parse future indemnity agreements. 14 Instead, “parties seeking to
indemnify the indemnitee from the consequences of its own negligence
must express that intent in specific terms . . . . within the four corners
of the contract.” 15
The parties’ post-Ethyl purchase agreement in this case precisely
demonstrates compliance with the express negligence rule. The first
paragraph of the indemnity clause does so: “It is the express intent of
the parties herein that [Scallon] save harmless and indemnify S&B, and
its affiliated companies, subsidiaries and clients from
S&B’s . . . concurrent, contributory or sole negligence.” Of course, this
part of the indemnity provision covers only those claims brought by
Scallon employees against S&B.
The indemnity provision covering claims made by anyone else—
such as the individual plaintiffs injured in this case—lacks any
expression indemnifying S&B for S&B’s own negligence. For all claims
other than those brought by Scallon employees, Scallon has no duty to
indemnify S&B for S&B’s own negligence. The first sentence instead
binds Scallon to indemnify S&B only for losses resulting from Scallon’s
negligence:
To the maximum extent permitted by applicable law,
[Scallon] shall defend, indemnify and hold harmless S&B
and its affiliated companies, subsidiaries and clients from
and against any and all loss, damage, claim, suit, liability,
strict liability, product liability, judgment and expense
(including attorney’s fees and other costs of litigation) and
any fines, penalties and assessments, arising out of

14 Id.

15 Id. at 708.

7
(A) damage to or loss of property or (B) bodily injury,
disease or death to persons other than employees of
[Scallon], its agents or subcontractors resulting from or in
connection with the execution of this purchase order to the
extent of [Scallon’s] negligence or willful misconduct.
If S&B is concurrently negligent, the second sentence limits Scallon’s
duty to indemnify S&B only to the loss “allocable” to Scallon:
In case of comparative, concurrent and/or contributing
negligence, fault or strict liability of [Scallon] or [S&B],
whether through its employees and/or representatives,
[Scallon’s] duty to indemnify and hold harmless referred to
in the previous sentence shall be [Scallon’s] allocable share
of comparative, concurrent and/or contributing negligence,
fault or strict liability.
Nowhere does Scallon grant S&B the right to settle claims made against
Scallon on Scallon’s behalf.
S&B cannot claim that the indemnity agreement granted S&B
authority to settle claims against Scallon—claims the plaintiffs never
asserted. Nor did S&B’s settlement agreement with the individual
plaintiffs purport to settle claims against Scallon. Instead, the
settlement resolves only claims against S&B and Sunoco.
S&B’s settlement of its own liability is not “loss . . . arising out
of . . . bodily injury . . . in connection with the execution of this purchase
order to the extent of [Scallon’s] negligence or willful misconduct,” for
which Scallon agreed to indemnify S&B. By its plain terms, the
underlying settlement releases S&B and Sunoco for their own liability.
Scallon is not mentioned in it. Even without the Jinkins rule that a party
may settle only its own negligence, this settlement is purely a payment
to settle S&B’s own negligence. S&B argues that it is entitled to a trial
on what percentage of its settlement is “allocable” to Scallon’s

8
negligence, but the answer as a matter of law is zero. Every dollar S&B
paid was to settle S&B’s negligence, not Scallon’s.
There is no substantive difference between a settlement by S&B
of the plaintiffs’ putative claims against Scallon—not permitted
anywhere in the purchase order—and implying that S&B settled
Scallon’s “allocable share” of the plaintiffs’ claims against S&B. Such a
reading operates as an assignment of the injured plaintiffs’ claims
against Scallon to S&B—claims those plaintiffs never asserted and for
which limitations has run. The indemnity in the parties’ purchase order
cannot be so stretched purely by implication.
B
Tellingly, the Court does not begin with the text of the indemnity
agreement.
Instead, the Court begins with what it views as the primary
impediment to endorsing its settle-and-sue scheme: Jinkins. The Court
faults Jinkins for not addressing or mentioning contractual indemnity.
In the Court’s telling, nothing in Jinkins “suggest[s] that parties could
not create rights to indemnification if they deemed it in their interest to
do so,” emphasizing that the parties “bargained for and agreed to”
indemnity. 16 Jinkins therefore “plays no role.” 17
Jinkins is not irrelevant: it is the background rule against which
these parties contracted. We must examine the contract language to
understand whether the parties “bargained for and agreed to” a

16 Ante at 7.

17 Ante at 9.

9
contribution scheme other than that provided at common law and by
statute. The contract, of course, is silent, other than the word “allocable.”
“Allocable” means that the loss is capable of being apportioned. 18
It does not mean that the parties endorsed any and all methods of
allocation—allocation according to augury or chance surely is excluded.
Instead, in the absence of terms to the contrary, we can infer that
“allocable” refers to the existing proportionate liability scheme in Civil
Practice and Remedies Code Chapter 33. 19 The Court is quick to point
out that Chapter 33 “expressly disclaims any desire to supersede
contractual rights.” 20 But where the parties have not contracted for a
particular scheme of allocation, no contractual right is superseded by
the statute.
S&B argues that the indemnity provision did not need to “spell
out” a right to settle a joint tortfeasor’s claims because under Fireman’s
Fund Insurance Co. v. Commercial Standard Insurance Co., 21 an

18 See Allocable, American Heritage Dictionary (5th ed. 2022) (“Capable

of being allocated”); Allocate, American Heritage Dictionary (5th ed. 2022)
(“2. To distribute according to a plan; allot”); Allocate, Black’s Law Dictionary
(12th ed. 2024) (“1. To distribute, allot, or apportion; to place a share or shares
by designation or specification.”).
19 See Tex. Civ. Prac. & Rem. Code §§ 33.001–.017.

20 Ante at 8. See Tex. Civ. Prac. & Rem. Code § 33.017 (“Nothing in this

chapter shall be construed to affect any rights of indemnity granted by any
statute, by contract, or by common law. To the extent of any conflict between
this chapter and any right to indemnification granted by statute, contract, or
common law, those rights of indemnification shall prevail over the provisions
of this chapter.”).
21 490 S.W.2d 818 (Tex. 1972).

10
indemnitee may settle and sue its indemnitor. 22 This ignores a crucial
distinction: in Fireman’s Fund the indemnitee had the indemnitor’s
consent to settle. 23 Moreover, in the insurance context, the insurer
indemnifies the insured for the insured’s own negligence, not
commingled negligence left to be untangled by a factfinder. 24 Absent the
parties’ express agreement to do so, our Court should not import
procedures that minimize litigation and hasten resolution in the
insurance context when they have the opposite effect in the
proportionate liability context. The Court agrees that Scallon is not an
insurer of S&B’s negligence. That is, however, the result of its decision
to permit S&B to “allocate” its settlement of the claims against it to
Scallon.

22 Id. at 824.

23 Id.; see also In re Farmers Tex. Cnty. Mut. Ins. Co., 621 S.W.3d 261,

271 (Tex. 2021) (permitting settlement to trigger indemnification where
insurer participated in the settlement).
24 See In re Ill. Nat’l Ins. Co., 685 S.W.3d 826, 838–40 (Tex. 2024)
(insurer’s duty to indemnify may be triggered by insured’s settlement with
third parties where policy terms require insurer to “pay on behalf of” the
insured “regardless of whether [the insured] ever actually pays out of its own
coffers first”). The same is true of the other total indemnification cases cited by
the Court. See Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794 (Tex. 1992);
Gulf, Colo. & Santa Fe Ry. Co v. McBride, 322 S.W.2d 492 (Tex. 1958). The
rule of these cases is that an indemnitor that refuses to defend a suit upon
presentment by the indemnitee waives its right to insist upon a judicial
determination of liability. Gulf, 322 S.W.2d at 495. The indemnitee may settle
with the plaintiff but must show that the settlement was made in good faith
for a reasonable and prudent amount. Id. at 496. What can be done as a matter
of law in a total indemnification case becomes a knotty question of fact in
proportionate indemnification.

11
S&B further argues that if it can prove Scallon’s negligence
contributed to the plaintiffs’ injuries, then some of the settlement
payment must be “allocable” to Scallon’s negligence. There is no
judgment, however, that the plaintiffs were made whole. The money
paid represents the settlement value to the plaintiffs, S&B, Sunoco, and
their insurers for claims among those entities and nothing else. It may
be informed by the plaintiffs’ damages, but the amount bears no legal or
mathematical relationship to the plaintiffs’ actual damages—and
certainly no judicial one. S&B’s argument ignores our rule that a party
settles claims only against itself by wrongly characterizing the
settlement as also settling claims against Scallon—again, claims the
plaintiffs never brought. 25
S&B and others like it are sophisticated parties, capable of
arranging their own allocation of risk. 26 It was S&B that (1) chose to
forgo naming Scallon as contributorily negligent, and (2) elected not to
enforce its bargained-for indemnity rights against Scallon. S&B could
have designated Scallon as a responsible third party at the proper time,
with the natural consequence of inducing Scallon to participate in
settlement negotiations. If the case proceeded to trial, Scallon would be
liable for its share of any joint and several liability the judgment
imposed against it and S&B.

25 See Jinkins, 739 S.W.2d at 21–22.

26 E.g., Waste Mgmt. of Tex., Inc. v. Stevenson, 622 S.W.3d 273, 286 (Tex.

2021) (“‘Texas strongly favors parties’ freedom of contract,’ under which parties
may ‘bargain for mutually agreeable terms and allocate risks as they see fit.’”
(quoting Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 912 (Tex.
2007))).

12
Having failed to designate Scallon as a responsible third party,
S&B nevertheless could have stood on its indemnity rights and
proceeded to trial and judgment with the individual plaintiffs and
Scallon as a contribution defendant. Instead, S&B elected to buy peace
at the cost of nullifying its indemnity rights, rights that did not
indemnify it for its own negligence. Its decision was a wholly rational
move by a sophisticated party—a party that prearranged for indemnity
for its own negligence in some cases (claims brought by Scallon
employees) and not in others like the one here. We need not rescue S&B
from its litigation strategy under the guise of contract interpretation.
The parties and amici tell us that the use of proportionate
indemnity clauses is relatively new. But our jurisprudence is old—and
clear. If a contract shifts the burden of B’s own negligence to A, it must
do so in express language. No settlement can convert B’s negligence into
A’s negligence. The express negligence rule bars reading the
proportionate indemnity provision in the parties’ agreement to permit a
post-settlement indemnity trial.
C
Even if the express negligence rule did not apply, our skepticism
of agreements that distort and prolong litigation favors rejecting S&B’s
novel approach. We do not allow parties to circumvent by contract that
forbidden by law. 27 Far from being “streamlined,” as the Court assures,

27 E.g., Trevino v. Turcotte, 564 S.W.2d 682, 690 (Tex. 1978) (holding

that persons estopped from contesting a will may not overcome the estoppel by
taking an assignment from others); DeSantis v. Wackenhut Corp., 793 S.W.2d
670, 684 (Tex. 1990) (holding unreasonable agreement not to compete

13
S&B’s trial for post-settlement indemnity claims bears the hallmarks of
skewed and prejudicial proceedings we have rejected.
The most notable example is our rejection of “Mary Carter”
agreements in Elbaor v. Smith. 28 Like here, a Mary Carter agreement
involves joint tortfeasors. 29 The plaintiff settles with one defendant in
exchange for the defendant’s cooperation against the non-settling
defendant. 30 The patient in Elbaor settled with three providers for a
fraction of her alleged damages. 31 The settling health care providers
agreed to participate in the patient’s trial against the non-settling
providers and would obtain reimbursement of their settlement out of her
eventual recovery. 32 Despite attempts to mitigate the harmful effects of
this posture, “odd conflicts of interest” arose during the trial. 33 For
example, the settling defendants’ attorneys asserted that the patient’s
damages were “devastating, astoundingly high, and astronomical.” 34

unenforceable); Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 559 (Tex.
2006) (holding termination fee in contract for legal services unenforceable).
28 845 S.W.2d 240 (Tex. 1992).

29 See id. at 247 (“A Mary Carter agreement exists, under our definition,

when the plaintiff enters into a settlement agreement with one defendant and
goes to trial against the remaining defendant(s).”).
30 Id.

31 See id. at 242 (listing the settlement amounts, which represented

about 20% of the total damages found by the jury).
32 Id.

33 Id. at 246.

34 Id.

14
These attorneys elicited information favorable to the patient and
abandoned their pleadings on contributory negligence. 35
A Mary Carter agreement “creates a tremendous incentive for the
settling defendant to ensure that the plaintiff succeeds in obtaining a
sizable recovery, and thus motivates the defendant to assist greatly in
the plaintiff’s presentation of the case.” 36 Although the agreements
secure partial settlement, “they nevertheless nearly always ensure a
trial against the non-settling defendant.” 37
After a period of experimentation with prophylactic measures—
and expressing regret at having delayed so long—our Court determined
that Mary Carter agreements are void as a matter of public policy. 38 We
set forth the reasons in Elbaor:
The agreements pressure the “settling” defendant to alter
the character of the suit by contributing discovery
material, peremptory challenges, trial tactics, supportive
witness examination, and jury influence to the plaintiff’s
cause. These procedural advantages distort the case
presented before a jury . . . .
Mary Carter agreements not only allow plaintiffs to buy
support for their case, they also motivate more culpable
defendants to “make a ‘good deal’ [and thus] end up paying
little or nothing in damages.” 39

35 Id.

36 Id. at 247.

37 Id. at 248.

38 Id. at 248–49.

39 Id. at 249 (final alteration in original) (internal citations omitted).

15
With its lopsided trials and protracted litigation, such an agreement “is
simply an unwise and champertous device that has failed to achieve its
intended purpose.” 40
A few years later, the Court called on Elbaor’s reasoning to reject
an assignment in State Farm Fire & Casualty Co. v. Gandy. 41 Gandy
promised never to collect against the defendant on an agreed $6 million
judgment she obtained in exchange for the defendant’s rights under his
homeowner’s insurance policy. 42 Like in Elbaor, we observed that the
agreement “confused and distorted” the parties’ positions. 43 The
settlement made evaluation of Gandy’s claims challenging: “It is difficult
enough to try to determine what [a plaintiff] would have recovered had
he gone to trial against [the defendant]; the determination is even more
difficult when [the defendant’s] opposing position must be reconstructed
and its merits assessed without [the defendant’s] cooperation.” 44 If the
parties proceed to trial, the difficulties in evaluating the plaintiff’s claim
disappear, as the “value has been fairly determined.” 45 We concluded
that: “In no event, however, is a judgment for plaintiff against
defendant, rendered without a fully adversarial trial, binding on

40 Id.

41 925 S.W.2d 696 (Tex. 1996).

42 Id. at 698.

43 Id. at 713.

44 Id.

45 Id. at 714.

16
defendant’s insurer or admissible as evidence of damages in an action
against defendant’s insurer by plaintiff as defendant’s assignee.” 46
The settlement in Gandy differs from the one here in that S&B
alleges the settlement is adversarial. 47 It is similar, however, in that the
settlement payment operates as a de facto assignment to S&B of the
individual plaintiffs’ claims against Scallon for Scallon’s “allocable
share” of S&B’s payment to the plaintiffs. Gandy forbids such an
assignment “rendered without a fully adversarial trial” insofar as it
purports to bind an indemnitor. 48 Yet the Court today permits such an
arrangement.
Had S&B timely named Scallon as a responsible third party,
Scallon and S&B would jointly share the incentive to attack evidence of
the plaintiffs’ damages and bring forth evidence of the plaintiffs’
contributory negligence. In the Court’s proposed post-settlement
indemnity trial, S&B is incentivized to support a high valuation of the
plaintiffs’ damages and has zero incentive to support any suggestion the
plaintiffs were negligent. To do so would minimize its claim and recovery

46 Id.

47 See Great Am. Ins. Co. v. Hamel, 525 S.W.3d 655, 666 (Tex. 2017)

(defining an adversarial settlement as one in which the party “bore an actual
risk of liability for the damages awarded or agreed upon, or had some other
meaningful incentive to ensure that the judgment or settlement accurately
reflects the plaintiff’s damages and thus the [party’s] covered liability loss”).
48 925 S.W.2d at 714.

17
against Scallon. Endorsing blatant reversals in position to maximize
financial gain undermines confidence in the justice system. 49
The “loss” of the settlement funds bears no relationship to the
individual plaintiffs’ damages. Yet S&B advances this figure as the
anchor that establishes damages in the post-settlement indemnity
trial—a figure we held inadmissible in Gandy. 50 S&B argues that it will
have to prove that its settlement of the claims against it was reasonable.
But a settlement may be reasonable for many reasons and yet outsized
compared to actual damages. S&B stripped Scallon of the opportunity to
have the plaintiffs’ damages allocable to Scallon’s negligence measured
in fact, by a neutral factfinder, in a judicial forum with properly aligned
parties.
The post-settlement trial thus denudes the settlement agreement
of its purpose. S&B did not buy peace; it merely substituted a difficult
case against sympathetic individual plaintiffs for a more dispassionate
case against a corporate co-defendant target. No judicial resources have
been spared, no burden on witnesses or jurors alleviated.
This Court ended Mary Carter agreements in 1992, and perhaps
few today clamoring for post-settlement indemnification trials have
experience defending a client in corrupt circumstances. But the
difficulties of that time are preserved in this Court’s opinions. We ought
not disregard those warnings out of confidence that sophisticated

49 Henry S. Miller Com. Co. v. Newsom, Terry & Newsom, LLP, 709

S.W.3d 562, 565 (Tex. 2024).
50 925 S.W.2d at 714.

18
parties can “manage” an abstract and skewed case better than the
jurists of an earlier generation.
Finally, we have some early warning that the case-within-a-case
trials will be as convoluted as feared. The Court claims that its
“streamlined” trials will replace “a far more complex trial, the focus of
which would primarily be on the underlying facts and circumstances of
the workers’ personal injuries and the extent of their damages.” 51 It is
unclear whether a settlement can be found to be reasonable without an
inspection of the “underlying facts and circumstances” of the personal
injury case. In another case pending in this Court, Blanchard Refining
Co. v. Industrial Specialists, LLC, 52 the indemnitor and indemnitee
proceeded to such a jury trial. Far from being “streamlined,” the trial
involved thirty depositions, hundreds of admitted exhibits, and ran for
seven days. While that case involves indemnity language different than
here, it is some presage that the cakewalk trials the Court envisions are
an illusion. In fact, “the result is worse than if the parties had not
settled.” 53
The proportionate indemnification clause in this contract is
ineffective to shift S&B’s settlement of its own liability to Scallon, but it
does not lack force. S&B could have ensured that Scallon was properly
joined or pursued a judgment allocating responsibility to Scallon for the
plaintiffs’ injuries. The parties could have agreed to indemnification of
their own negligence for all claims, not just those claims asserted by

51 Ante at 12–13.

52 No. 26-0118.

53 Gandy, 925 S.W.2d at 714.

19
their employees. These parties freely chose not to, instead limiting
indemnity to their own proportionate share of liability. In permitting a
claim to shift S&B’s settlement funds to Scallon, the Court rewrites the
agreement of sophisticated partes and permits a subterfuge assignment
to proceed to a wholly ephemeral trial. 54

---

The Court incorrectly imputes an agreement to claim losses
attributable to one’s own negligence into a proportionate indemnity
agreement that fails to cover such losses. Because the Court fails to
properly interpret the parties’ indemnity agreement, I respectfully
dissent.

Jane N. Bland
Justice

OPINION FILED: March 13, 2026

54I agree with the Court that Zurich’s intervention was timely;
however, as Sunoco’s subrogee, Zurich’s claims are barred for the same reasons
S&B’s claims are barred, and thus the denial of intervention is ultimately
harmless error.

20