Sonat Exploration Company v. Cudd Pressure Control, Inc.

CourtCourt of Appeals of Texas
DecidedMay 9, 2011
Docket06-10-00096-CV
StatusPublished

This text of Sonat Exploration Company v. Cudd Pressure Control, Inc. (Sonat Exploration Company v. Cudd Pressure Control, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sonat Exploration Company v. Cudd Pressure Control, Inc., (Tex. Ct. App. 2011).

Opinion

In The Court of Appeals Sixth Appellate District of Texas at Texarkana ______________________________

No. 06-10-00096-CV ______________________________

SONAT EXPLORATION COMPANY, Appellant

V.

CUDD PRESSURE CONTROL, INC., Appellee

On Appeal from the 71st Judicial District Court Harrison County, Texas Trial Court No. 99-0199-A

Before Morriss, C.J., Carter and Moseley, JJ. Opinion by Justice Carter OPINION

I. Background and Procedural Posture

After a lengthy journey through the appellate courts, this case has found its way back to our

Court. The facts of the underlying accident and indemnity dispute were summarized in the Texas

Supreme Court decision that remanded this matter to the trial court. Sonat Exploration Co. v.

Cudd Pressure Control, Inc., 271 S.W.3d 228 (Tex. 2008).

Sonat Exploration Company and Cudd Pressure Control, Inc., were parties to a Master

Service Agreement (MSA) that governed oil field services Cudd performed for Sonat. The

Contract required each company to indemnify the other for claims by their respective employees.

In October 1998, four Cudd employees, along with three other workers, were killed while working

on one of Sonat’s wells in Louisiana. When the families of the Cudd employees sued Sonat in

Texas, Cudd refused Sonat’s indemnity demand.

Sonat settled the wrongful death claims and sued Cudd for indemnity under the MSA.

The trial court ruled on cross-motions that the indemnity provision was enforceable under Texas

law. Because Cudd contested the reasonableness of the settlements, that issue went to trial. The

jury determined that Sonat’s reasonable damages were $20.7 million. That jury award, together

with stipulated attorney’s fees and judicial interest, was reflected in the 2001 judgment entered by

the trial court.

2 Cudd appealed the 2001 judgment. During the course of the appeal, Cudd and Sonat

entered into a Rule 11 agreement in October 2003 whereby Cudd ―will not appeal the trial court’s

ruling that Texas law applies to the Master Service Agreement . . . and, in the event of remand, will

not contend that any other state’s laws apply to the MSA . . . .‖ Also in accordance with the

agreement, Sonat would dismiss with prejudice a separate suit against Cudd alleging the breach of

an insurance procurement provision in the Contract.

While the Cudd/Sonat indemnity dispute was still on appeal here, Lumbermens Mutual

Casualty Company (Cudd’s excess liability carrier) filed a motion to intervene on appeal in order

to raise the choice of law issue. This Court denied Lumbermens’ motion to intervene. The

Texas Supreme Court permitted the intervention after Lumbermens filed a petition for writ of

mandamus ―to raise on appeal the choice-of-law issue its insured abandoned . . . .‖ In re

Lumbermens Mut. Cas. Co., 184 S.W.3d 718, 729 (Tex. 2006).

Lumbermens’ intervention raised the choice of law issue, but Cudd avoided raising the

issue as required by its Rule 11 agreement with Sonat. This Court then reversed the district

court’s judgment and held that Louisiana law applied to the MSA as urged by Lumbermens.

Cudd Pressure Control, Inc. v. Sonat Exploration Co., 202 S.W.3d 901, 910 (Tex.

App.—Texarkana 2006). The Texas Supreme Court affirmed this Court’s choice of law holding.

Sonat Exploration Co., 271 S.W.3d at 236. The Texas Supreme Court then remanded the

indemnity dispute to the trial court ―for further proceedings applying Louisiana law.‖ Id. at 238.

3 After remand, Cudd filed its second amended answer in May 2009. Sonat claims this

amended answer amounts to a withdrawal of Cudd’s earlier affirmative defense (filed prior to the

Rule 11 agreement) that ―Louisiana’s Oilfield Anti-Indemnity Statute bars Sonat’s Indemnity

claims.‖ According to Sonat, Cudd’s second amended answer makes no mention of ―that

affirmative defense under Louisiana law,‖1 and claims the legal significance of this amended

answer is central to this appeal.

After filing its second amended answer, Cudd filed a motion for summary judgment in July

2009, contending, among other things, that Sonat’s negligence in causing the oil field blowout

barred its indemnity claim under the LOAIA. In September 2009, Cudd filed its third amended

answer, which included this additional affirmative defense: ―Cudd pleads the effects of the

applicable oilfield anti-indemnity statute as determined by the Texas Supreme Court.‖ 2 In

October 2009, the trial court denied Cudd’s motion for summary judgment.3

1 In its first amended original answer, Cudd alleged, inter alia, the following affirmative defense: ―Louisiana’s Oilfield Anti-Indemnity Statute bars Sonat’s Indemnity claims.‖ In its second amended answer, filed after remand and Sonat’s stipulation of ―some fault‖ in causing the blowout, Cudd did not claim the Louisiana Oilfield Anti-Indemnity Act (LOAIA) barred Sonat’s claim in that precise language, but alleged a very similar affirmative defense: ―Sonat’s fault caused and/or contributed to the blowout and/or injuries and, thus, Sonat is precluded from seeking indemnity.‖ 2 Ostensibly, Cudd did not specifically name the LOAIA due to the Rule 11 agreement, in which Cudd pledged that on remand, it would not contend that the law of any state other than Texas applied to its contract with Sonat. 3 While there is no record of this hearing, the parties imply the trial court was concerned about fact issues relating to Sonat’s negligence.

4 Then, in January 2010, Lumbermens filed a petition in intervention which was stricken by

the trial court in April of that year.4 Shortly thereafter, on April 9, Sonat filed a stipulation with the

trial court resolving the issue of its negligence: ―For purposes of this civil action (Cause

No. 99-0199-1) and any associated appeals, Sonat stipulates that it bears some fault relating to the

blowout of the Well.‖ 5 Cudd renewed its motion for summary judgment in May 2010,

contending that in light of Sonat’s stipulation of ―some fault‖ relating to the well blowout, Cudd

was entitled to judgment as a matter of law because Sonat’s fault barred its indemnity claim under

the LOAIA. The motion specifically stated ―if Sonat had any fault whatsoever, the Louisiana

Oilfield Anti Indemnity Act (LOAIA), La. Rev. Stat. Ann. 9:2780, bars Sonat’s claim for

indemnity . . . .‖ Sonat filed a cross-motion for summary judgment on liability and damages.6

Lumbermens then filed a second petition in intervention along with its supplemental answer in

4 The clerk’s record does not reflect an order striking the intervention; however, we have been supplied the reporter’s record of the hearing on intervention reflecting the trial court’s ruling. In making its ruling, the trial court made the following comments:

But once it got returned to this trial court level, unless something popped pleading-wise from Cudd that basically threw them again into this position of being out there basically waiting on the train to run over them and everything, I’m not really seeing allowing Lumbermens in as an intervenor.

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