COURT FINDS AN INSURER MUST INDEMNIFY A GENERAL CONTRACTOR FOR THE INJURIES OF AN INDEPENDENT CONTRACTOR

Late this past Friday evening, the Dallas Court of Appeals affirmed a trial court’s decision that an insurer owed  a  duty  to  indemnify  a  general  contractor  for  a  judgment  in  an  underlying  bodily  injury lawsuit.  Bacilio Zapata (“Zapata”) suffered severe bodily injuries while preforming tree cutting services for Andregg Contracting, Inc, and he obtained a favorable verdict in the underlying suit.  Andregg sought indemnity from its insurer, Mid-Continent Casualty Company (“Mid-Continent”).  Mid-Continent filed a declaratory judgment seeking a determination that it did not owe a duty to indemnify the general contractor because Zapata was an employee of the general contractor and therefore excluded under the CGL policy.

 The case was tried to the bench.  The trial court found that Zapata was an independent contractor rather than an employee and concluded that Mid-Continent owed a duty to indemnify the general contractor for the judgment in the underlying suit.

 On appeal in Mid-Continent Casualty Company v. Andregg Contracting, Inc. and Bacilio Zapata, No. 05-11-00637-CV (Tex. App.—Dallas, November 9, 2012), the appeals court considered the arguments of the parties and affirmed the trial court’s finding that the general contractor did not exercise the necessary degree of control over Zapata to establish employee status.  The Court noted that the general contractor used subcontractors for 100% of its work, and Zapata was hired for a short-term project to help the general contractor clean up two excavation sites.  Mid-Continent argued that Zapata was injured while performing the  specific  task  of  tree  cutting—a  task  for  which  the  general  contractor  had  greater  control  over Zapata.  The Court rejected Mid-Continent’s argument that a determination of worker’s status (independent contractor or employee) is subject to individual analysis for each isolated task.  Accordingly, the Court of Appeals affirmed the trial court’s judgment that Mid-Continent had a duty to indemnify Andregg.