Texas: Settlement Agreements, Arbitration, Indemnification, and Summary Judgment

Originally published by Gene Roberts.

The Tenth Court of Appeals (Waco), in Capstone Building Corp. v. IES Commercial, Inc., reversed the trial court’s summary judgment in favor of IES.
This case is a severed part of a broader dispute relating to a housing complex at Sam Houston State University.* Capstone was the general contractor, and IES was the mechanical/HVAC/electrical subcontractor. Capstone and IES entered into a settlement agreement after IES filed a petition for arbitration alleging a payment dispute. The settlement agreement included a payment amount, a warranty that the sub’s subs had been paid, and that IES would indemnify Capstone from claims brought by subs or suppliers. Capstone released claims relating to HVAC warranty claims.
Several years later, SHSU sued ACC alleging construction defects, including alleged HVAC defects, according to the opinion. IES filed for summary judgment on Capstone’s claims against it, and the trial court granted the motion for summary judgment.
The Court of Appeals rejected IES’ argument that the s …

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