IN THE SUPREME COURT OF TEXAS
`444444444444
`NO. 11-0425
`444444444444
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`PETROLEUM SOLUTIONS, INC., PETITIONER,
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`v.
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`BILL HEAD D/B/A BILL HEAD ENTERPRISES AND TITEFLEX, INC., RESPONDENTS
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`4444444444444444444444444444444444444444444444444444
`ON PETITION FOR REVIEW FROM THE
`COURT OF APPEALS FOR THE THIRTEENTH DISTRICT OF TEXAS
`4444444444444444444444444444444444444444444444444444
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`Argued December 4, 2012
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`JUSTICE LEHRMANN delivered the opinion of the Court, in which CHIEF JUSTICE HECHT,
`JUSTICE GREEN, JUSTICE JOHNSON, JUSTICE WILLETT, JUSTICE GUZMAN, JUSTICE DEVINE, and
`JUSTICE BROWN joined, and in Parts I and II of which JUSTICE BOYD joined.
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`JUSTICE BOYD delivered an opinion dissenting in part.
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`We deny the motions for rehearing of Bill Head d/b/a Bill Head Enterprises and Petroleum
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`Solutions, Inc. We withdraw our opinion of July 11, 2014, and substitute the following in its place.
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`Bill Head, doing business as Bill Head Enterprises (Head), hired Petroleum Solutions, Inc.
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`to manufacture and install an underground fuel system. Following a large diesel leak, Head sued
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`Petroleum Solutions for its resulting damages, and the trial court rendered judgment on the jury’s
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`verdict in Head’s favor. The trial court also rendered judgment in favor of third-party defendant
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`Titeflex, Inc., the alleged manufacturer of a component part incorporated into the fuel system, on
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`Titeflex’s counterclaim against Petroleum Solutions for statutory indemnity. The court of appeals
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`affirmed the judgment. Petroleum Solutions presents two principal issues for our review. First,
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`Petroleum Solutions challenges the trial court’s issuance of spoliation sanctions against it, which
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`included submitting a spoliation instruction to the jury and striking Petroleum Solutions’ statute-of-
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`limitations and statutory-indemnity defenses. Second, Petroleum Solutions complains that Titeflex’s
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`statutory-indemnity claim fails as a matter of law.
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`We hold that the trial court abused its discretion by charging the jury with a spoliation
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`instruction and striking Petroleum Solutions’ defenses because those sanctions do not conform to
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`the standards set forth in our recent decision in Brookshire Brothers, Ltd. v. Aldridge, 438 S.W.3d
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`9 (Tex. 2014). Because the trial court’s abuse of discretion was harmful with respect to the claims
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`between Head and Petroleum Solutions, we reverse the court of appeals’ judgment as to Head’s
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`claims and remand to the trial court for further proceedings between those parties. However, we
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`agree with the trial court and the court of appeals that Titeflex was entitled to statutory indemnity
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`from Petroleum Solutions and hold that any spoliation error with respect to the indemnity claim was
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`harmless. Therefore, we affirm the court of appeals’ judgment as to Titeflex’s indemnity claim.
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`I. Factual and Procedural Background
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`Head owns and operates the Silver Spur Truck Stop in Pharr, Texas. Head contracted with
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`Petroleum Solutions to install a diesel-fuel storage system that included pipes necessary to transport
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`the fuel from the tanks to the station’s fuel pumps. The parties agree that flex connectors—parts of
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`the piping system—were components of the new fuel system. However, they disagree about who
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`manufactured the connectors that Petroleum Solutions used in the system.
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`2
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`After installing the fuel system, Petroleum Solutions recommended installing an automatic
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`tank-gauging system to detect any fuel releases. Head agreed, and Petroleum Solutions completed
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`the system’s installation in October 1999. Shortly after both the fuel and gauging systems were
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`installed, Head began to experience problems, mainly with the gauging system, and requested
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`maintenance and repair work from Petroleum Solutions on numerous occasions. In November 2001,
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`Head contacted Petroleum Solutions about fluctuations in the fuel inventory data from the gauging
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`system. Petroleum Solutions investigated and discovered that a major diesel-fuel release had
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`occurred. The Texas Natural Resource Conservation Commission (now the Texas Commission on
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`Environmental Quality) recorded a recovery of approximately 20,000 gallons of diesel fuel from the
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`surrounding ground.
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`Petroleum Solutions workers immediately notified Head and Petroleum Solutions’ president,
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`Mark Barron, about the leak, and Barron traveled to the Silver Spur to help determine the cause.
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`After testing, Petroleum Solutions concluded that the leak originated in the piping that ran from the
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`tanks to the fuel dispensers. Barron subsequently informed the Silver Spur’s general manager,
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`Robert Carpenter, that the source of the leak was a faulty flex connector located under “Dispenser
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`Number 4.” Barron showed Carpenter the allegedly faulty connector and asked if Petroleum
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`Solutions could retain it for safekeeping and possible testing. Carpenter agreed to Barron’s request.
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`That was the last time Carpenter or Head saw the flex connector. Petroleum Solutions would later
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`say that Titeflex had manufactured the flex connector, but photos of the connector did not reveal the
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`manufacturer, and Petroleum Solutions was unable to produce records showing that Titeflex was the
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`manufacturer.
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`3
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`Petroleum Solutions reported the incident to its liability insurer, which engaged attorney
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`Elizabeth Neally to represent Petroleum Solutions. In February 2002, Barron gave the flex connector
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`to Neally, who sent it to metallurgist David Hendrix for evaluation along with instructions not to
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`perform destructive testing. Hendrix performed an unspecified analysis on the component, then
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`processed it into inventory for storage at WH Laboratories. In April 2002, Neally sent Hendrix a
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`letter inquiring about his review and inspection of the flex connector, and Hendrix responded with
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`an invoice for his professional engineering services, which included photographing the flex
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`connector, four hours of professional time, and one hour of laboratory time. Petroleum Solutions
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`did not contact Hendrix again or otherwise inquire about the connector until March 2006, shortly
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`after Head filed suit. By that time, the storage facility at WH Laboratories had been demolished, and
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`certain contents of the building had been discarded or destroyed in conjunction with the building’s
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`demolition. Howard Heinsohn, the lab’s manager, testified at a deposition that he orally advised
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`Hendrix that the building would be torn down and its contents destroyed, and that Hendrix retrieved
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`some items and told Heinsohn he could throw out the rest. However, nothing in the record suggests
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`Petroleum Solutions was informed that WH Laboratories would be torn down or even knew that the
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`connector was being stored there.
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`Beginning in December 2001, Head withheld payments from Petroleum Solutions, which it
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`blamed for causing the leak. In May 2002, Head’s attorney wrote a letter to Petroleum Solutions
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`threatening suit. While the letter requested that Petroleum Solutions contact Head to resolve their
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`dispute amicably, the letter did not request production of the flex connector. Head eventually filed
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`suit against Petroleum Solutions on February 13, 2006, asserting claims for breach of the warranty
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`4
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`of fitness, breach of the implied warranty of good and workmanlike services, and negligence. 1
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`Because the lawsuit was filed more than four years after the leak was discovered, Head also pleaded
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`the discovery-rule and fraudulent-concealment exceptions to the statute of limitations. Petroleum
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`Solutions answered, asserting limitations and other affirmative defenses. It also alleged that Titeflex
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`had manufactured the missing flex connector that caused the leak.
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`Petroleum Solutions then filed a third-party petition against Titeflex, claiming indemnity and
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`contribution based on a products-liability theory. Head followed in Petroleum Solutions’ footsteps
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`and amended its petition to assert a strict products-liability claim directly against Titeflex. The
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`amended petition attributed the leak and the resulting damages to several deficiencies, including: a
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`failure of the line leak detector and gauging system; the faulty flex connector, which was “part of the
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`[fuel] system” and which Titeflex allegedly sold to Petroleum Solutions; and Petroleum Solutions’
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`failure to properly install or repair the fuel and gauging systems.
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`Titeflex moved for summary judgment on both Petroleum Solutions’ and Head’s claims,
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`urging that no evidence showed that a Titeflex-manufactured connector was used in the Silver Spur’s
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`fuel system. The trial court ultimately denied Titeflex’s motion. Petroleum Solutions also twice
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`moved for summary judgment on limitations grounds, but the trial court denied both motions.
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`Petroleum Solutions then designated an expert to opine that the damages resulting from the leak were
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`attributable to the flex connector, but the expert failed to attend three noticed depositions and was
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`de-designated by Petroleum Solutions on the eve of trial.
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`1
` Head’s sixth amended petition is the live pleading in this action. In accordance with that pleading, the claims
`submitted to the jury included negligence, negligent undertaking, breach of contract, fraud, breach of implied warranty
`of good and workmanlike services, and breach of fiduciary duty.
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`5
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`In January 2008, Titeflex moved for sanctions against Petroleum Solutions. Titeflex claimed
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`that Petroleum Solutions spoliated evidence by failing to produce the allegedly faulty flex connector
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`and sought a jury instruction to that effect. Head then nonsuited its claims against Titeflex and also
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`moved for sanctions against Petroleum Solutions. Head argued that Petroleum Solutions
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`intentionally destroyed crucial evidence and requested that the trial court consider a broad range of
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`sanctions, including striking Petroleum Solutions’ pleadings. Petroleum Solutions responded to the
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`sanctions motions with an affidavit from Neally and the deposition testimony of Hendrix and
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`Heinsohn. Petroleum Solutions argued that it did not deliberately destroy any evidence, had not
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`engaged in culpable or negligent conduct with respect to the flex connector, and did not have a duty
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`to preserve the flex connector once the limitations period had expired.
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`While the sanctions motions were pending, Titeflex filed a counterclaim against Petroleum
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`Solutions, claiming it owed Titeflex a statutory duty of indemnity under Texas Civil Practice and
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`Remedies Code chapter 82. Eventually, unable to produce the allegedly faulty flex connector or,
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`after three failed attempts, an expert for deposition to state that a faulty flex connector caused the
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`leak, Petroleum Solutions nonsuited its third-party claims against Titeflex shortly before trial.
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`Titeflex’s indemnity counterclaim remained pending. Head’s live petition at the time of trial alleged
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`that Petroleum Solutions had misrepresented that the flex connector caused Head’s damages, and
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`that those damages were caused by defects in the systems that Petroleum Solutions manufactured
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`as well as by Petroleum Solutions’ failure to properly install, maintain, and repair the systems.
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`At a pretrial hearing on Titeflex’s and Head’s motions for sanctions, the trial court struck
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`Petroleum Solutions’ affirmative defenses, including its statute-of-limitations and statutory-
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`6
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`indemnity defenses, and ruled that a spoliation instruction would be given to the jury. Head’s and
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`Titeflex’s claims against Petroleum Solutions then proceeded to trial. At trial, Head urged that
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`Petroleum Solutions had repeatedly misrepresented the cause of the leak. Head offered expert
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`testimony that Petroleum Solutions’ improper installation of a union at a shear valve, not the flex
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`connector, caused the leak. The jury charge included the following spoliation instruction:
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`You, the jury, are instructed that Petroleum Solutions, Inc. destroyed, lost, or
`failed to produce to this Court material evidence that by law should have been
`produced as evidence for your deliberations. You are further instructed you may, but
`are not required to, presume this evidence is unfavorable to Petroleum Solutions, Inc.
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`The jury found in Head’s favor and awarded Head nearly $1.2 million. As to Titeflex’s statutory-
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`indemnity claim, the jury found that Petroleum Solutions was a manufacturer, that Titeflex was a
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`seller, and that Titeflex incurred reasonable attorney’s fees and expenses of $450,853.62. The trial
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`court rendered judgment on the jury’s verdict, and Petroleum Solutions appealed.
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`The court of appeals, with one justice dissenting, affirmed the trial court’s judgment except
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`as to the amount of prejudgment interest. ___ S.W.3d ___, ___. The court concluded that the
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`sanctions order was not an abuse of discretion because Petroleum Solutions’ failure to preserve the
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`flex connector significantly prejudiced Head and Titeflex, and Petroleum Solutions’ repeated
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`attempts to minimize its fault amounted to bad faith deserving of severe sanctions. Id. at ___. The
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`court of appeals also concluded that Petroleum Solutions’ arguments regarding the statute of
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`limitations were not relevant, that there was legally and factually sufficient evidence supporting the
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`verdict on Head’s claims, and that Titeflex was entitled to statutory indemnity from Petroleum
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`Solutions. Id. at ___, ___. The dissenting justice took issue with the trial court’s failure to articulate
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`any connection between Petroleum Solutions’ inability to produce the flex connector and the striking
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`of Petroleum Solutions’ statute-of-limitations defense. Id. at ___ (Vela, J., dissenting). The dissent
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`would have remanded the case for a new trial in which Petroleum Solutions could assert its defenses.
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`Id. at ___.
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`II. The Trial Court’s Sanctions
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`Petroleum Solutions challenges the trial court’s imposition of spoliation sanctions and, more
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`specifically, the court’s submission of a spoliation jury instruction and striking of Petroleum
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`Solutions’ affirmative defenses, including its limitations defense. Petroleum Solutions contends that
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`the trial court imposed death-penalty sanctions that violate the test set forth in TransAmerican
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`Natural Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991). Applying the standard for spoliation
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`sanctions we recently adopted in Brookshire Brothers, 438 S.W.3d at 20–26, we hold that the trial
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`court abused its discretion and remand for a new trial.2
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`In Brookshire Brothers, we adopted a framework governing the imposition of remedies for
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`evidence spoliation. We explained that whether a party spoliated evidence and whether a particular
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`remedy is appropriate are questions of law for the trial court. Id. at 20. Because the trial court bears
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`this responsibility, evidence of the circumstances surrounding alleged spoliation is generally
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`inadmissible at trial, as such evidence is largely irrelevant to the merits and unfairly prejudicial to
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`the spoliating party. Id. at 26. We further held in Brookshire Brothers that, to find that spoliation
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`2
` Petroleum Solutions contends it is entitled to rendition of judgment on grounds that the evidence was legally
`insufficient to support the jury’s findings in Head’s favor on its claims for negligence, fraud, breach of fiduciary duty,
`breach of contract, and breach of warranty. Because Petroleum Solutions failed to challenge the sufficiency of the
`evidence supporting the jury’s finding in Head’s favor on its negligent undertaking claim, which provides an independent
`basis to support the trial court’s judgment, we need not address this issue.
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`8
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`occurred, the trial court must make affirmative determinations as to two elements. First, the party
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`who failed to produce evidence must have had a duty to preserve the evidence. Id. at 20. “[S]uch
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`a duty arises only when a party knows or reasonably should know that there is a substantial chance
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`that a claim will be filed and that evidence in its possession or control will be material and relevant
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`to that claim.” Id. (citation and internal quotation marks omitted). Second, the nonproducing party
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`must have breached its duty to reasonably preserve material and relevant evidence. Id. A party
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`cannot breach its duty without at least acting negligently. Id. at 20–21 & n.8.
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`Upon finding that spoliation occurred, the trial court must exercise its discretion in imposing
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`a remedy. In determining what remedy, if any, is appropriate, the court should weigh the spoliating
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`party’s culpability and the prejudice to the nonspoliating party. Id. at 21. Prejudice is evaluated
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`based on the spoliated evidence’s relevancy to key issues in the case, whether the evidence would
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`have been harmful to the spoliating party’s case (or, conversely, helpful to the nonspoliating party’s
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`case), and whether the spoliated evidence was cumulative of other competent evidence that may be
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`used in its stead. Id. at 21–22 (citing Trevino v. Ortega, 969 S.W.2d 950, 958 (Tex. 1998) (Baker,
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`J., concurring)).
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`While the trial court’s discretion to remedy an act of spoliation is broad, it is not limitless.
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`We review a trial court’s imposition of sanctions under an abuse of discretion standard. Cire v.
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`Cummings, 134 S.W.3d 835, 838 (Tex. 2004). Texas Rule of Civil Procedure 215.2 allows a trial
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`court to impose “just” sanctions for discovery abuse. TEX. R. CIV. P. 215.2. As we reaffirmed in
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`Brookshire Brothers, courts generally follow a two-part test in determining whether a particular
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`sanction for discovery abuse is just. 438 S.W.3d at 21 (citing TransAmerican, 811 S.W.2d at 917).
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`9
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`First, a direct relationship must exist between the offensive conduct, the offender, and the sanction
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`imposed. See id.; Spohn Hosp. v. Mayer, 104 S.W.3d 878, 882 (Tex. 2003) (per curiam). To meet
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`this requirement, a sanction must be directed against the wrongful conduct and toward remedying
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`the prejudice suffered by the innocent party. TransAmerican, 811 S.W.2d at 917. Second, a sanction
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`must not be excessive, which means it should be no more severe than necessary to satisfy its
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`legitimate purpose. Id. This prong requires the trial court to consider the availability of lesser
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`sanctions and, “in all but the most exceptional cases, actually test the lesser sanctions.” Cire, 134
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`S.W.3d at 841.
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`In Brookshire Brothers, we also articulated more specific restrictions on a trial court’s
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`discretion to issue a spoliation instruction to the jury. We held that a trial court may submit a
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`spoliation instruction only if it finds (1) the spoliating party acted with intent to conceal discoverable
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`evidence, or (2) the spoliating party acted negligently and caused the nonspoliating party to be
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`irreparably deprived of any meaningful ability to present a claim or defense. 438 S.W.3d at 23–26.
`3
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`We noted in imposing this strict limitation that a spoliation instruction “can, in some sense, be
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`tantamount to a death-penalty sanction,” in that such an instruction can remove the focus of the trial
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`from the merits of the case and redirect it to the alleged conduct that gave rise to the sanctions. Id.
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`at 23. It follows, and we hold today, that in the context of remedying spoliation, the restrictions
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`articulated in Brookshire Brothers with regard to spoliation instructions also limit a trial court’s
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`3
` Generally, we have stated that, consistent with due process considerations, discovery sanctions that “are so
`severe as to preclude presentation of the merits of [a claim or defense] should not be assessed absent a party’s flagrant
`bad faith or counsel’s callous disregard for the responsibilities of discovery.” TransAmerican, 811 S.W.2d at 918;
`Spohn, 104 S.W.3d at 883. Similar reasoning underlies the limitations we placed on spoliation sanctions in Brookshire
`Brothers.
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`10
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`discretion to issue other remedies akin to death-penalty sanctions, such as striking a party’s claims
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`or defenses.
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`In this case, we need not and do not decide whether Petroleum Solutions spoliated evidence.
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`We hold that, assuming it did, the trial court’s sanctions were an abuse of discretion because no
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`proof exists that Petroleum Solutions intentionally concealed evidence or that Petroleum Solutions’
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`spoliation irreparably deprived Head and Titeflex of any meaningful ability to present their claims.
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`First, no evidence shows that Petroleum Solutions acted with intent to conceal the flex connector,4
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`as nothing in the record suggests that Petroleum Solutions was ever informed that the facility where
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`the connector was being stored would be destroyed. To the contrary, the record shows the following
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`undisputed facts: (1) Barron took a component from the Silver Spur with the express consent of the
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`manager, Carpenter; (2) Barron gave the component to independent counsel, Neally; (3) Neally
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`engaged the services of a metallurgist, Hendrix; (4) Hendrix took possession of the component and
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`performed non-destructive testing; (5) Hendrix placed the component in a warehouse for storage;
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`(6) the warehouse was torn down; (7) Petroleum Solutions was not told the warehouse was being
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`torn down; (8) Head did not request that Petroleum Solutions produce the connector before the
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`warehouse was demolished or at any time before filing suit; and (9) Petroleum Solutions asked
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`Hendrix to return the connector when Head filed suit, but neither the warehouse staff nor Hendrix
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`could find it. In sum, no evidence demonstrates that Petroleum Solutions intentionally lost or
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`destroyed the connector.
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`4
` Only Head maintains that Petroleum Solutions acted intentionally. Titeflex notes in its briefing that it “has
`never contended that misplacement of the flex connector was deliberate or intentional.”
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`11
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`Further, no evidence shows that the missing connector irreparably deprived Head and Titeflex
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`of any meaningful ability to present their claims. At trial, Head’s theory of Petroleum Solutions’
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`liability was unrelated to the flex connector; Head successfully urged that Petroleum Solutions’
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`improper installation of a union at a shear valve, not the flex connector, caused the leak. This fact,
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`in conjunction with the fact that Head never requested access to the connector before filing suit,5
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`confirms that the missing flex connector did not irreparably hinder Head’s presentation of its claims.
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`And as discussed further below, the missing flex connector did not hinder Titeflex’s ability to
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`present its indemnity claim.
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`In sum, the trial court abused its discretion in charging the jury with a spoliation instruction
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`and striking Petroleum Solutions’ affirmative defenses because those sanctions do not comply with
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`the procedural and substantive standards set forth in Brookshire Brothers. The harm of such
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`sanctions, which foreclose (or at least severely impede) a party from presenting the merits of its
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`claims or defenses, is typically patent and is compounded by improper presentation of evidence and
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`argument to the jury on the spoliation issue. See Brookshire Bros., 438 S.W.3d at 29; Wal-Mart
`6
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`Stores, Inc. v. Johnson, 106 S.W.3d 718, 724 (Tex. 2003). Accordingly, we reverse the court of
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`appeals’ judgment and remand the case to the trial court for further proceedings between Petroleum
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`5
` To the extent Head argues that Petroleum Solutions misrepresented the cause of the leak so as to prevent Head
`from filing suit within the limitations period, this argument will be relevant to the evaluation of Petroleum Solutions’
`statute-of-limitations defense on remand.
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`6
` We leave to the trial court’s discretion the extent to which evidence of the missing connector is relevant to
`whether Head’s claims are barred by limitations.
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`12
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`Solutions and Head consistent with this opinion. As discussed below, however, the unique
`7
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`circumstances of Titeflex’s indemnity claim render harmless any spoliation error as it relates to that
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`claim.
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`III. Titeflex’s Statutory-Indemnity Claim
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`Finally, we address whether Titeflex, a component-product manufacturer and seller, is
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`entitled to indemnity from Petroleum Solutions, a finished-product manufacturer, under Texas Civil
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`Practice and Remedies Code section 82.002, a provision of the Texas Products Liability Act. As
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`described above, Head sued Petroleum Solutions and Titeflex under a products-liability theory,
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`Petroleum Solutions filed third-party claims against Titeflex for contribution and indemnity, and
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`Titeflex filed a counterclaim against Petroleum Solutions for statutory indemnity under section
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`82.002. Although both Head and Petroleum Solutions nonsuited their claims against Titeflex, the
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`parties proceeded to trial on Titeflex’s indemnity counterclaim. The jury awarded Titeflex
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`approximately $450,000 in attorney’s fees and expenses, and the trial court rendered judgment on
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`that verdict. The court of appeals affirmed.
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`A. Duty to Indemnify Between Finished-Product Manufacturers and Component-Product
`Manufacturers
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`Section 82.002 requires the manufacturer of an allegedly defective product to indemnify an
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`innocent seller for any loss arising out of a products-liability action. TEX. CIV. PRAC. & REM. CODE
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`7
` Petroleum Solutions contends that we should render judgment on its statute-of-limitations defense. As noted
`above, the trial court twice denied Petroleum Solutions summary judgment on this defense. Because the trial court struck
`the defense before trial, even if the court did so erroneously, it would be improper to render judgment for Petroleum
`Solutions on limitations grounds on appeal of the final judgment. See Ackermann v. Vordenbaum, 403 S.W.2d 362, 365
`(Tex. 1966) (refusing to review order denying summary judgment on appeal from final judgment).
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`13
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`§ 82.002(a); see also Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 867 (Tex.
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`1999). The Act describes a manufacturer’s duty to indemnify as follows:
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`A manufacturer shall indemnify and hold harmless a seller against loss arising out of
`a products liability action, except for any loss caused by the seller’s negligence,
`intentional misconduct, or other act or omission, such as negligently modifying or
`altering the product, for which the seller is independently liable.
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`TEX. CIV. PRAC. & REM. CODE § 82.002(a). The term “loss” is defined to include “court costs and
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`other reasonable expenses, reasonable attorney fees, and any reasonable damages.” Id. § 82.002(b).
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`The Act broadly defines “products liability action,” “seller,” and “manufacturer”:
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`“Products liability action” means any action against a manufacturer or seller for
`recovery of damages arising out of personal injury, death, or property damage
`allegedly caused by a defective product . . . .
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`“Seller” means a person who is engaged in the business of distributing or otherwise
`placing, for any commercial purpose, in the stream of commerce for use or
`consumption a product or any component part thereof.
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`“Manufacturer” means a person who is a designer, formulator, constructor, rebuilder,
`fabricator, producer, compounder, processor, or assembler of any product or any
`component part thereof and who places the product or any component part thereof
`in the stream of commerce.
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`Id. § 82.001(2)–(4). Under these definitions, “all manufacturers are also sellers, but not all sellers
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`are manufacturers.” Gen. Motors Corp. v. Hudiburg Chevrolet, Inc., 199 S.W.3d 249, 256 (Tex.
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`2006) (Hudiburg). And, with one exception not relevant here, nothing in the Act precludes one
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`person from being both a manufacturer and a seller of the same product or component. See id.
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`Titeflex contends that Petroleum Solutions owes it a duty to indemnify under section 82.002
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`because the fuel system is a product, Petroleum Solutions is the manufacturer of that product, and
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`14
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`Titeflex is the innocent seller of a component part allegedly used in Petroleum Solutions’ defective
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`finished product. In light of our analysis of the indemnity statute in Hudiburg, we agree.
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`In Hudiburg, a truck driver was injured and the driver of another vehicle was killed when the
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`truck, which had been assembled by attaching a service body to a cab chassis, split apart during a
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`collision. Id. at 252. A personal-injury and wrongful-death suit followed against both the chassis
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`manufacturer and Hudiburg, the dealer who had sold the truck and arranged for it to be assembled.
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`Id. In that suit, which eventually settled, the plaintiffs alleged that the vehicle, including its fuel
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`system, was unreasonably dangerous. Id. Hudiburg then brought a statutory-indemnity action
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`against the manufacturers of the cab chassis (GM) and the service body (Rawson-Koenig), the
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`“component products” of the truck. Id.
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`Clarifying the framework governing a manufacturer’s duty to indemnify under the Act, we
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`reaffirmed that the duty is triggered by the injured claimant’s pleadings. Id. at 256. Specifically, the
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`duty is triggered by allegations of a defect in the manufacturer–indemnitor’s product and is not
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`dependent on an adjudication of the indemnitor’s liability. Id. By contrast, section 82.002(a)’s
`8
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`exception to the duty to indemnify for loss caused by the seller is triggered not by the pleadings, but
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`by an affirmative finding that the seller–indemnitee is independently liable. Meritor Auto., Inc. v.
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`Ruan Leasing Co., 44 S.W.3d 86, 91 (Tex. 2001) (“[I]t is the manufacturer’s ‘duty to indemnify’ that
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`applies regardless of outcome, . . . [b]ut for the Manufacturers to implicate section 82.008(a)’s
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`exception to that duty, it must be established that seller’s conduct ‘caused’ the loss.”).
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`8
` Under the common law, however, an indemnitor’s liability for the product defect must be adjudicated or
`admitted. Hudiburg, 199 S.W.3d at 255.
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`Further elaborating on the statutory-indemnity framework in the context of claims involving
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`both a finished-product manufacturer and seller as well as the manufacturer and seller of a
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`component part incorporated into that finished product, we held:
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`Under the statute, and disregarding the exception in section 82.002(d), the
`manufacturer of a component product alleged by a claimant to be defective has a duty
`to indemnify an innocent seller/manufacturer of a finished product which
`incorporates the component from loss arising out of a products liability action related
`to the alleged defect, but the manufacturer of an allegedly defective finished product
`has a duty to indemnify the innocent seller/manufacturer of a component product for
`the same loss.
` If neither the component-product manufacturer nor the
`finished-product manufacturer is innocent, depending not on allegations but on proof,
`both indemnity claims under the statute will fail. If both are innocent, again
`depending on proof, the indemnity claims offset each other.
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`Hudiburg, 199 S.W.3d at 256–57 (emphasis added). In other words, depending on the alleged
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`product defect or defects, an injured claimant’s pleadings may trigger a duty to indemnify on the part
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`of the finished-product manufacturer, the component-product manufacturer, or both. See id. If
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`competing duties to indemnify are triggered, the ultimate success of those claims will depend on
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`what the evidence shows as to the fault of the indemnitee sellers. See id.
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`In light of the claimant’s allegations in Hudiburg that the component product manufactured
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`by GM—the chassis—was defective, we held that GM owed Hudiburg a duty to indemnify for losses
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`related to the personal-injury suit, to the extent Hudiburg was not independently liable. Id. at 262.
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`We also noted that, consistent with the statutory framework, “GM would be entitled to statutory
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`9
` Rawson-Koenig, on the other hand, did not owe Hudiburg a duty to indemnify because the claimant’s
`pleadings, which alleged only that the vehicle as a whole and the fuel system in particular were defective, could not fairly
`be read to allege a defect in the service body, which was the component product Rawson-Koenig manufactured.
`Hudiburg, 199 S.W.3d at 257–58; see also Meritor Auto., Inc., 44 S.W.3d at 91.
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`indemnity from Hudiburg—although GM has not sought indemnity—for losses related to allegations
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`of defects unrelated to the chassis, if GM was not independently liable for such losses.” Id.
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`Applying Hudiburg to the case at hand, we hold that Petroleum Solutions owed Titeflex a
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`statutory duty of indemnity. Head initially sued only Petroleum Solutions for damages resulting
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`from the fuel leak, alleging the leak was caused by both a defective flex connector as well as a
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`“faulty” line leak detector and leak-detection system. Shortly after Petroleum Solutions brought
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`third-party claims against Tite