ELR Citation: ELR 21446
No(s). 93-2634 (5th Cir. Aug 15, 1994)

The court holds that the possible personal liability of a company's officer and director under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not bar the officer/director's claim against the company's successor for indemnification under the predecessor's bylaws. Applying Texas law, the court first holds that the bylaws' indemnity clause is unambiguous and its construction is, therefore, a question of law. Relying on Texas case law, the court holds that indemnity is not triggered solely by the underlying pleadings reciting that an individual is being sued as an officer or director. Therefore, the absence of a recitation in the U.S. complaint that the officer/director was being sued because he was an officer and director of the predecessor corporation is not fatal to his indemnification claim. The court next holds that CERCLA personal liability per se does not preclude indemnification, because if the company's officers or directors were not subject to personal liability for acts or omissions arising out of their corporate positions, there would be little reason for the indemnity clause. The court also holds that the bylaws' prohibition on indemnification that is against public policy does not bar indemnification of the officer/director, because indemnification does not relieve the officer/director of his liability to the government. The court holds, however, that more factual inquiry into the relationship of the officer/director's CERCLA liability and his status as an officer and director is required, and the court remands the case to the district court.

Counsel for Plaintiff
John White
Winstead, Sechrest & Minick
910 Travis St., Ste. 1600, Houston TX 77002
(713) 650-2722

Counsel for Defendant
Kent Hanson
4704 Harlan St., Ste. 420, Denver CO 80212
(303) 433-8527

Before POLITZ, Chief Judge, and DUHE and BARKSDALE, Circuit Judges.