# Blanchard Ref. Co. v. Indus. Specialists, LLC Supreme Court of Texas, No. 26-0118 **Blanchard Ref. Co. v. Indus. Specialists, LLC, No. 26-0118 (Tex. Oct. 9, 2026). Holding: The Court did not decide whether Paragraph 13.1 satisfies the express negligence rule or any other indemnity question.** Practice areas: indemnity, contract interpretation ## Key issues - Without argument, the Court vacated a judgment holding a refinery's "except to the extent" indemnity clause unenforceable under the express negligence rule, and remanded for the court of appeals to apply the Court's later decision in S&B Engineers v. Scallon Controls. - The Court expressed no view on whether the clause satisfies the express negligence rule or on the other indemnity questions the parties raised. ## Factual History Blanchard Refining Company LLC and its affiliate Marathon Petroleum Company LP (together "Marathon") contracted with Industrial Specialists, LLC ("ISI") for maintenance and repair work during a refinery turnaround at the Galveston Bay Refinery in Texas City (Petition for Review (Petitioner), PDF pp. 13, 17). In Paragraph 13.1 of their contract, ISI agreed to indemnify Marathon against losses and liabilities from bodily injury connected to ISI's work, "except to the extent the liability, loss or damage is attributable to and caused by the negligence of" Marathon (Petition for Review (Petitioner), PDF pp. 17-18). A fire broke out while ISI crews were chipping refractory inside a regenerator vessel; ISI employees were burned or otherwise injured, one fatally, and they sued Marathon and other contractors but not ISI, which workers' compensation law shields from their suit (Petition for Review (Petitioner), PDF p. 18). ISI refused Marathon's request for defense and indemnity, and after mediation Marathon and the other defendants settled with all claimants, with Marathon paying $86,000,000, while ISI declined to take part (Petition for Review (Petitioner), PDF pp. 19, 21). ## Procedural History Marathon sued ISI for contractual indemnity, and the parties submitted the enforceability questions to the trial court (212th District Court, Galveston County) as pretrial legal issues under Rule 166(g); the court ruled that the express negligence rule and the *Beech Aircraft v. Jinkins* contribution rule did not defeat the indemnity and that the settlement was a covered "liability," "loss," or "damage" (Petition for Review (Petitioner), PDF pp. 13, 20). A jury then assigned responsibility for the fire: Marathon 38%, Innovative Ventilation 22%, AltairStrickland 18%, ISI 17%, and Certified Safety 5%, and the trial court rendered judgment for Marathon of $46,480,000, the settlement less Marathon's share, plus prejudgment interest, and attorney's fees (Petition for Review (Petitioner), PDF pp. 21-22). The First Court of Appeals (Houston) reversed, holding that the express negligence rule applies whenever concurrent negligence is alleged, regardless of language excepting indemnity to the extent of the indemnitee's own negligence, and that Paragraph 13.1 was not specific enough to satisfy it (Petition for Review (Petitioner), PDF p. 22). The vehicle is a petition for review. Marathon filed it on February 6, 2026; ISI responded on June 5, 2026, after the Court requested a response, and Marathon replied on June 22, 2026. The Court decided the petition without argument on October 9, 2026. ## Issues Presented Marathon's petition asks five questions (Petition for Review (Petitioner), PDF p. 16): 1. Whether the express negligence rule applies when the parties followed *Gulf Insurance v. Burns Motors* and drafted an indemnity clause that excludes indemnity to the extent of the indemnitee's own negligence. 2. If the rule applies, what language satisfies it. 3. Whether *Beech Aircraft v. Jinkins*, applied for decades only to contribution claims, should be extended to contractual indemnity between sophisticated commercial parties so that a settling indemnitee forfeits its right to indemnity. 4. How an indemnity suit under a valid comparative indemnity clause should be tried. 5. Whether indemnity for "all losses, damages . . . demands, claims, suits, and other liabilities" covers amounts paid in a good-faith, reasonable settlement. ISI asks the Court to deny review or affirm the take-nothing result on three independent grounds: the express negligence rule bars the claim, Marathon waived its breach-of-contract claim by obtaining no jury findings on it, and a voluntary settlement is not a covered "liability," "loss," or "damage" (Response to Petition (Respondent), PDF p. 10). ## Legal Arguments **Whether the express negligence rule applies, and what language satisfies it.** **Marathon (Petitioner):** The rule exists to stop indemnitees from slipping a shift of their own negligence into broad clauses, but here the parties followed the blueprint in *Gulf Insurance* and expressly contracted not to indemnify Marathon to the extent of its own negligence, so the rule should not apply; the court of appeals' contrary holding casts doubt on indemnity clauses throughout Texas (Petition for Review (Petitioner), PDF pp. 23-24, 25-26). **ISI (Respondent):** Under *Ethyl*, a party seeking indemnity for the consequences of its own concurrent negligence, even on a comparative basis, must say so in specific terms; Paragraph 13.1 says the opposite and never affirmatively provides that ISI will bear any share when Marathon was negligent, and the jury found Marathon the most culpable party (Response to Petition (Respondent), PDF pp. 2-3). *S&B Engineers* confirms this, because the clause enforced there both disclaimed indemnity for the indemnitee's negligence and limited the indemnitor to its "allocable share," while Paragraph 13.1 has "at the very most half" of that (Response to Petition (Respondent), PDF pp. 21-23). **Marathon (Reply):** *S&B Engineers* reaffirmed *Gulf Insurance*, said any linguistic formulation is acceptable that makes clear it is for proportional indemnification and avoids shifting the indemnitee's negligence, and treated "except to the extent" language as satisfying *Ethyl*; the phrase "to the extent" is inherently proportionate, and ISI's reading would impose magic words (Reply to Response (Petitioner), PDF pp. 7-11, 18-19). **Whether *Jinkins* bars indemnity after settlement, how to try the case, and whether a settlement is a covered loss.** **Marathon (Petitioner):** Policy does not support extending *Jinkins* to contractual indemnity, the trial court's three-step approach streamlined the case and should guide courts, and a reasonable settlement is a covered liability (Petition for Review (Petitioner), PDF pp. 24, 43-46). **ISI (Respondent):** The court of appeals never reached these questions, and *S&B Engineers* has now answered the *Jinkins* and trial-mechanics questions (Response to Petition (Respondent), PDF p. 28). Marathon replies that ISI concedes *S&B Engineers* forecloses its *Jinkins* argument, that guidance on trying a proportionate indemnity case is still needed, and that the settlement was a covered loss under *S&B Engineers* (Reply to Response (Petitioner), PDF pp. 19-21). **Amici:** The American Fuel & Petrochemical Manufacturers, the American Petroleum Institute, the National Association of Manufacturers, and the Texas Oil & Gas Association argued that the court of appeals broadened the express negligence rule, that *S&B Engineers* confirms the error, and that the Court should decide the case rather than grant, vacate, and remand in light of *S&B Engineers* (Amicus Curiae Brief received, PDF pp. 8, 16-17). ## Stated Reasons the Court Should Take the Case Marathon argued that the express negligence rule's application to comparative indemnity is unsettled, that the court of appeals reached a different conclusion from other courts, that parties need guidance on what language satisfies the rule, and that the *Jinkins* question was already before the Court in *S&B Engineers* and would recur (Petition for Review (Petitioner), PDF pp. 23-24, 30). ISI answered that the ruling is a narrow, clause-specific application of settled law that raises no issue of statewide importance, especially after *S&B Engineers* (Response to Petition (Respondent), PDF pp. 3-4, 23-24). ## Practice Area Tags indemnity, contract-interpretation ## Procedural Posture/Vehicle Petition for review from the First Court of Appeals (Houston), granted and decided without oral argument under Texas Rule of Appellate Procedure 59.1 on October 9, 2026. ## Amicus Involvement - [American Fuel & Petrochemical Manufacturers, et al.](https://search.txcourts.gov/SearchMedia.aspx?MediaVersionID=bc9195f6-a86b-4737-97e6-a9c3b00b18a6&coa=cossup&DT=BRIEFS&MediaID=ce43bc55-0425-4e04-825b-302efefc4b73) (four industry groups) support Marathon: the ruling doubts common "except to the extent" language; decide the case, do not remand. ## Holding The Court did not decide whether Paragraph 13.1 satisfies the express negligence rule or any other indemnity question. Because its decision in *S&B Engineers & Constructors v. Scallon Controls* came after the court of appeals ruled and may affect the dispute, it vacated the judgment and remanded so the court of appeals can decide that in the first instance (Opinion, PDF pp. 1-2). ## Standard of Review The per curiam opinion states no standard of review. ## Court's Reasoning The court of appeals' resolution of the case and the petition for review both came before the Court decided *S&B Engineers*, 734 S.W.3d 869 (Tex. 2026); the response and reply, filed afterward, show the parties agree it is relevant but "differ sharply" on how, each contending it supports its own position, and several amici addressed it at length (Opinion, PDF pp. 1-2). The court of appeals had neither that decision nor the parties' and amici's views on its effect (Opinion, PDF p. 2). The Court "generally prefers for the lower courts to address legal issues in the first instance," and, as in other cases where an intervening decision of the Court may affect the dispute, it remanded for the court of appeals to make that determination, expressing "no view as to the proper outcome" (Opinion, PDF p. 2). ## Disposition Without hearing oral argument, the Court granted the petition for review, vacated the court of appeals' judgment, and remanded the case to that court for further proceedings in light of *S&B Engineers*, citing Texas Rule of Appellate Procedure 59.1 (Opinion, PDF p. 2). ## Vote Breakdown Per curiam opinion (Opinion, PDF p. 1). --- Source: The SCOTX Report, https://scotxreport.com/cases/26-0118. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.