Cemex Constr. Materials Pac., LLC v. Ranchos Real Land Holdings, LLC

657 S.W.3d 694

CEMEX CONSTRUCTION MATERIALS PACIFIC, LLC, Appellant,

v.RANCHOS REAL LAND HOLDINGS, LLC, Appellee.

No. 08-20-00219-CV

Court of Appeals of Texas, El Paso.

September 30, 2022

ATTORNEY FOR APPELLANT: William Mennucci, Thompson, Coe, Cousins & Irons, L.L.P., 701 Brazos, Ste. 1500, Austin, TX 78701-3293.

ATTORNEYS FOR APPELLEE: Jeff H. Ray, Noemi V. Lopez, Ray, Pena & McChristian, P.C., 5822 Cromo, Suite 400, El Paso, TX 79912.

Before Rodriguez, C.J., Marion, C.J. (Ret.), and Palafox, J., Marion, C.J. (Ret.), sitting by assignment

OPINION

GINA M. PALAFOX, Justice

This is a breach of contract and indemnification case. Appellant CEMEX Construction Materials Pacific, LLC (CEMEX) appeals the trial court's summary judgment order in favor of Appellee Ranchos Real Holdings, LLC (Ranchos). We reverse and render judgment in favor of CEMEX.

I. BACKGROUND¹

In January of 2016, Johnny Borrego was driving with four passengers along a private road, informally known as Jobe Road, located in El Paso County. As Borrego approached a 90-degree turn in the road, he lost control of his vehicle. As a result, the vehicle left the roadway, crashed into a construction berm, and rolled onto its roof before coming to a full rest. Borrego and two of his passengers were killed and the other two passengers were seriously injured. Jobe Road is a privately-owned road situated on land owned by Ranchos and leased to CEMEX under a surface lease (the Surface Lease) that originated in 1996 between the parties’ predecessors.² In addition to the Surface Lease, CEMEX also holds an easement on two small portions of land adjacent to the land covered by the Surface Lease.

The two injured passengers and families of the decedents filed suit against CEMEX and Ranchos, among other defendants, for wrongful death and personal injuries, (the Borrego suit or Borrego case), alleging that Jobe Road posed an unreasonably dangerous condition such that it proximately caused the resulting crash.³ Specifically, the plaintiffs alleged that CEMEX and Ranchos were negligent and grossly negligent in failing to limit public access to Jobe Road; failing to provide appropriate signage and lighting on Jobe Road; and failing to erect barriers that might have mitigated the damages resulting from the crash. Ranchos cross-claimed against CEMEX for contractual indemnity, seeking attorney's fees and expenses incurred in defending the Borrego suit. Eventually, the Borrego plaintiffs nonsuited Ranchos from their suit. Soon afterwards, the trial court severed Ranchos’ indemnity claim against CEMEX and transferred the case into a new cause number.

The Borrego case ultimately proceeded to trial, where a jury returned a verdict for the plaintiffs and a final judgment was entered against CEMEX.

The Indemnity Action

In June of 2020, in the severed cause of action, Ranchos filed a traditional motion for summary judgment on its indemnity claim for its attorney's fees and litigation costs. Ranchos claimed it was entitled to indemnity from CEMEX under either of two separate and independent contractual provisions: first, under Paragraph 16 of the Surface Lease, and second, under Paragraph 12 of the easement agreement signed in 2007 (the Easement Agreement).

CEMEX responded to Ranchos motion for summary judgment, and also cross-motioned for summary judgment against Ranchos’ claim. In its cross-motion, CEMEX argued that collateral estoppel barred Ranchos from asserting indemnity based on the Surface Lease. Specifically, CEMEX pointed out that in 2019, a different court in El Paso County ruled against Ranchos on the same indemnity issue in a similarly situated case (the Ochoa case), which we discuss in more detail below. CEMEX further argued that Ranchos was not entitled to indemnity under the Easement Agreement for three reasons: (1) Ranchos did not seek indemnity under the Easement Agreement in its original cross-claim; (2) the crash did not occur in the area covered by the Easement Agreement; and (3) in the Borrego suit, Ranchos was defending against claims of not only negligence, but also gross negligence, the latter of which CEMEX argues were explicitly excluded from the indemnity provision in the Easement Agreement.

The trial court heard oral argument on the competing motions for summary judgment and ultimately granted Ranchos’ motion and denied CEMEX's motion. The order did not indicate whether the trial court relied upon the indemnity clause in the Surface Lease—which would have also required a determination that collateral estoppel did not bar Ranchos’ claim for indemnity—or whether it granted Ranchos’ motion based upon the Easement Agreement. The trial court entered a final judgment awarding Ranchos $226,733.65, plus costs of court and post-judgment interest. This appeal followed.

II. ISSUES ON APPEAL

CEMEX raises two issues on appeal. First whether collateral estoppel should bar Ranchos from raising its indemnity claim based on the Surface Lease, and if not, whether the indemnity agreement satisfies the express negligence doctrine. Second, whether Ranchos’ indemnity claim based on the Easement Agreement must fail because the underlying crash did not occur on the land covered by the easement.

We consider each issue in turn.

III. STANDARD OF REVIEW

We review traditional motions for summary judgment de novo. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005). To prevail, the movant must show there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c) ; Provident Life & Accident Ins. Co. v. Knott , 128 S.W.3d 211, 215-16 (Tex. 2003). If the movant satisfies this burden, the burden shifts to the nonmovant to provide evidence that raises a genuine issue of material fact, thus avoiding summary judgment. See Amedisys, Inc. v. Kingwood Home Health Care, LLC , 437 S.W.3d 507, 511 (Tex. 2014). When, as here, cross-motions for summary judgment are filed, we consider each motion and render the judgment the trial court should have reached. Coastal Liquids Transp., LP v. Harris Cty. Appraisal Dist. , 46 S.W.3d 880, 884 (Tex. 2001). When, also as here, "a trial court's order granting summary judgment does not specify the ground or grounds relied on for the ruling, summary judgment will be affirmed on appeal if any of the theories advanced are meritorious." Rogers v. Ricane Enters., Inc. , 772 S.W.2d 76, 79 (Tex. 1989).

IV. THE SURFACE LEASE AGREEMENT

In the first issue, CEMEX argues it is entitled to judgment as a matter of law on Ranchos’ indemnity claim based on collateral estoppel, and alternatively, that the indemnity clause does not comply with the express negligence doctrine. AntBr,10,13 Ranchos counters that collateral estoppel does not apply because the facts and issues of this case are different from the facts and issues of the prior case. It further argues that the express negligence doctrine is inapplicable; and alternatively, that the indemnity clause satisfies the express negligence doctrine.

A. Collateral Estoppel

1. Applicable Law

Collateral estoppel, also known as issue preclusion, "prevents relitigation of particular issues already resolved in a prior suit." Barr v. Resolution Tr. Corp. , 837 S.W.2d 627, 628 (Tex. 1992). The doctrine "serve[s] the vital functions of bringing litigation to an end, maintaining stability of court decisions, avoiding inconsistent results, and promoting judicial economy." Calabrian Corp. v. All. Specialty Chems., Inc. , 418 S.W.3d 154, 157-58 (Tex. App.—Houston [14th Dist.] 2013, no pet.). To successfully invoke the defense of collateral estoppel, a party "must establish that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action." Sysco Food Servs., Inc. v. Trapnell , 890 S.W.2d 796, 801 (Tex. 1994).

2. The Ochoa case

In responding to Ranchos’ summary judgment motion in the Borrego case, CEMEX attached the briefing and the summary judgment order relevant to Ranchos’ indemnity claim in the Ochoa case.⁴ These documents, along with the remainder of the record from the Borrego case, show, as a matter of law, that CEMEX established the three elements of its collateral estoppel defense, as it relates to Ranchos’ claim for indemnity under the Surface Lease.

The Ochoa case was another negligence and gross negligence case involving a motor-vehicle crash on Jobe Road. In that case, 18-year-old Destinee Ochoa was a passenger, riding home with three friends in a Jeep Wrangler. The group was traversing Jobe Road when the driver lost control of his vehicle, which left the pavement and rolled over before coming to a rest on its roof. Ochoa was killed in the crash, and her parents filed suit against the driver, as well as CEMEX and Ranchos. Like in this case, the Ochoas made claims of negligence and gross negligence against CEMEX and Ranchos, alleging they had actual and constructive knowledge of premises defects along Jobe Road that posed an unreasonable risk of harm to the public. As happened in this case, Ranchos filed a crossclaim for contractual indemnity against CEMEX, relying on the indemnity terms in Paragraph 16 of the Surface Lease. Like here, Ranchos’ indemnity crossclaim in Ochoa was severed into a new action. Importantly, however, unlike in this case, Ranchos eventually settled with the Ochoas before trial.⁵

In the separate action, Ranchos moved for summary judgment against CEMEX—as they did here—arguing that CEMEX owed Ranchos indemnity as a result of Paragraph 16 of the Surface Lease and CEMEX filed a cross-motion for summary judgment. In its cross-motion for summary judgment on Ranchos’ indemnity claim in the Ochoa case, CEMEX argued that the indemnity provision contained in Paragraph 16 of the Surface Lease did not obligate CEMEX to indemnify Ranchos for Ranchos’ own alleged negligence, because,...