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Producers Rice Mill, Inc. v. Rice Hull Speciality Products, Inc.

Court of Appeals of Arkansas, Division III

April 12, 2017

PRODUCERS RICE MILL, INC. APPELLANT
v.
RICE HULL SPECIALITY PRODUCTS, INC. APPELLEE

         APPEAL FROM THE ARKANSAS COUNTY CIRCUIT COURT, NORTHERN DISTRICT [NO. 01SCV-15-070ND] HONORABLE DAVID G. HENRY, JUDGE

          Franden Farris Quillin Goodnight & Roberts, by: Jason Goodnight, for appellant.

          Williams & Anderson PLC, by: David M. Powell and Alec Gaines, for appellee.

          RITA W. GRUBER, Chief Judge

         Appellant, Producers Rice Mill, Inc., brings this appeal from an order granting Rice Hull Specialty Products, Inc.'s, motion for summary judgment and dismissing appellant's petition for declaratory judgment regarding the parties' rights and obligations pursuant to an indemnity agreement. The circuit court found that the indemnity agreement did not apply to the factual situation before it and dismissed appellant's petition. We hold that there were genuine issues of material fact to be decided regarding appellee's obligation to indemnify appellant under the circumstances presented and regarding appellee's breach of its duty to add appellant as an additional insured to its general-liability insurance policy. Accordingly, we reverse the circuit court's order and remand for further proceedings.

         Appellee, Rice Hull Specialty Products, Inc., is in the business of brokering sales of rice hulls, a rice byproduct, from various sources in the Southeastern United States. In July 2009, appellee and appellant, a rice-farmer cooperative, entered into an indemnity agreement in connection with brokerage services that were to be provided by appellee to appellant. The record has not been developed to detail the exact nature of the brokerage services forming the basis of the indemnity agreement. No testimony, affidavit, or written documentation explains the parties' obligations or duties in connection with their brokerage relationship.

         The Indemnity Agreement, executed by the parties on July 24, 2009, provides in pertinent part as follows:

WHEREAS, Producers has engaged Independent Contractor [Rice Hull] to perform certain services for Producers as an Independent Contractor;
WHEREAS, Producers is only willing to engage Independent Contractor for such purposes provided Independent Contractor agrees to indemnify Producers as provided herein; and
WHEREAS, Independent Contractor has agreed to indemnify Producers upon the terms set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto intending to be legally bound, AGREE AS FOLLOWS:
1. INDEMNITY. For and in consideration of the engagement of Independent Contractor by Producers to perform certain services for Producers as an independent contractor, Independent Contractor agrees to indemnify, defend and hold harmless Producers and its officers, directors, employees and agents (collectively, the "Indemnitees") from and against any and all suits, claims, causes of action, damages, losses, liabilities, obligations, costs or expenses (including reasonable attorney's fees) incurred by or asserted against any of the Indemnitees, directly or indirectly arising out of, relating to, or otherwise resulting in whole or in part from (a) any of the services or other activities performed for or on behalf of Producers by Independent Contractor or any officer, director, employee, agent, subcontractor, or affiliate of Independent Contractor, including, without limitation, any negligent or intentional act or omission by Independent Contractor or any officer, director, employee, agent, subcontractor, or affiliate of Independent Contractor in connection with such services or activities or (b) any breach of this agreement by Independent Contractor.
2. INSURANCE. Independent Contractor represents and warrants to Producers that Independent Contractor has and will maintain workers compensation insurance as required by law and general public liability and property damage insurance, with respect to the services and activities to be performed for Producers, in customary form with sound and reputable insurance companies . . . . Independent Contractor agrees to name Producers as an additional insured under their general liability policy and have the additional insured status reflected on the certificate of insurance.

         The parties' dispute arose out of an accident that occurred on appellant's property in Greenville, Mississippi, on September 3, 2011. Sometime before the incident occurred, Abe Q Mills Trucking, Inc. (Abe Q), a shipping and freight company that occasionally purchased rice hulls, contacted appellee to purchase rice hulls. Although the precise nature of the contractual relationships between Abe Q, appellee, and appellant is not clear from the record, appellee appears to have "brokered" the sale of rice hulls from appellant to Abe Q. Isiah Moore, an employee of Abe Q, was sent to pick up the rice hulls; he was loading the rice hulls onto his truck at appellant's Greenville facility when ...


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