Subcontractor Not On Hook For Faulty LP Detector Following Fatality According To Fifth Circuit

The Fifth Circuit recently decided an insurance-coverage dispute involving a contractor with the Federal Emergency Management Agency in the aftermath of Hurricanes Rita and Katrina and one of that contractor’s subcontractor hired to haul and install FEMA trailers.  As part of the contractor-subcontractor agreement, the sub agreed to indemnify the contractor for any injuries arising directly or indirectly out of the parties’ contract itself or out of the sub’s acts or omissions.  After a flash fire occurred in one of the trailers that resulted in a fatality caused by the failure of the trailer’s liquid-propane detector to alarm the inhabitants, and resulting litigation, the insurance carrier of the subcontractor sued the contractor’s insurance carrier seeking reimbursement for its settlement costs on the grounds that the sub was not responsible for any of the injuries.  The Fifth Circuit determined that the sub was not required, as part of its contract with the contractor, to test the liquid-propane detector, and concluded that the contractor did not in fact direct the sub to do so with respect to the particular trailer in which the fire occurred.  The sub’s “work” under the contract was unrelated to the detectors, and the sub’s general obligation “to build quality into the work” did not include an obligation to ensure that the detectors functioned properly.  There was no evidence that the sub was at fault for the injury or did any act that was in any way connected to such injury.  The Fifth Circuit elected not to release the opinion for publication.