CHARLESTON — The West Virginia Intermediate Court of Appeals granted partial summary judgment for several counterclaims in a case involving a chlorine gas leak that caused injuries.
The appellate court also remanded the case back to the lower court for further proceedings consistent with the court's opinion, according to a decision authored by Chief Judge Thomas Scarr.
Attorneys for IPI and Matthew Joseph Taylor said that while they felt Scarr and the court "got it absolutely right," they declined to further comment on the case.
Attorneys for the respondents did not return requests for comment.
IPI and Taylor appealed a Sept. 12, 2022, order from Marshall Circuit Court concerning their counterclaims for indemnity and breach of contract against respondents Eagle Natrium and Axiall Corporation.
The circuit court granted the respondents' motion for partial summary judgment on the counterclaims, citing Pennsylvania law to support its decision that the indemnity provisions in the parties' contract applied to claims brought by petitioners related to a chlorine gas leak at the respondents' chemical plant.
The summary judgment is affirmed in part, vacated in part, and the matter is remanded for further proceedings, Scarr writes in the decision.
IPI is a contracting company based in West Virginia, providing industrial services such as painting and power washing. Taylor is IPI's president and is actively involved in the company's projects.
Eagle Natrium owns and operates a chemical plant where a chlorine leak occurred, and Axiall is the parent company of Eagle Natrium. Prior to the incident, the parties had a longstanding commercial relationship.
The incident in question took place on Aug. 27, 2016, when IPI and Taylor were working at the respondents' chemical plant, performing painting and power washing services on a chemical storage tank. Unrelated to IPI's work, the respondents were loading chlorine gas into a railcar for transport.
The railcar had a history of defects, and when filled with chlorine gas, it ruptured, releasing toxic gas into the plant. Taylor and IPI employees were exposed to the gas, resulting in personal injuries to Taylor and damage to IPI's equipment.
At the time of the incident, IPI's work was governed by two indemnity provisions: one in an Agreement for On-Site Services (AOS) signed in 2007 and another in the General Terms and Conditions incorporated into each Purchase Order (PO).
Following the incident, IPI and Taylor filed a complaint against Axiall and Eagle Natrium, alleging personal injury and property damage. The respondents counterclaimed, alleging IPI's failure to indemnify them for the chlorine releases. On May 23, 2022, respondents filed a motion for partial summary judgment on their counterclaim related to indemnity for the August 2016 railcar release.
The circuit court granted the motion, stating that the AOS's choice of law provision made Pennsylvania law applicable to the interpretation of the indemnification provisions.
The court found that IPI had agreed to indemnify the respondents for claims arising from the services provided, except in cases of sole negligence or willful misconduct on the respondents' part.
Scarr wrote that the appeals court affirmed the lower court insofar as it determined that IPI was subject to binding and enforceable indemnity agreements, that such agreements were governed by Pennsylvania law, and that the indemnity language of the AOS was sufficiently clear and unequivocal to permit indemnification for at least some degree of negligence on the part of the respondents.
"However, we vacate and remand this case so that the lower court may more adequately consider and develop its ruling on the scope of the applicable indemnity provision, in particular the nexus required for indemnification and its application to the facts of this case," Scarr wrote. "If the court decides that the indemnity provisions do not apply because there is an insufficient nexus between the work being performed by IPI and the injuries and losses which resulted from the chlorine leak, then it need not address whether there were genuine issues of material fact pertaining to sole negligence, gross negligence or willful misconduct."
Scarr wrote that if the lower court does address the factual issues, it should take into account the ability to authenticate documents without affidavits; the effect, if any, of the comparative fault statute; and the burden of proof.
West Virginia Intermediate Court of Appeals case number 22-ICA-164
