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Click here for the full text of this decision FACTS:Several plaintiffs in Louisiana sued Reddy Ice for injuries sustained when a Reddy plant leaked ammonia into the air. Reddy, a Nevada corporations with its principal place of business in Texas, was covered by a general commercial liability policy issued by Travelers Lloyds Ins., a commercial excess liability policy issued by Gulf Insurance, and a pollution liability select insurance policy issued by American International Specialty Lines Insurance. The Travelers and Gulf policies were subject to pollution exclusion clauses. Travelers asked for a declaration that it did not owe a duty to defend Reddy, and Gulf intervened for a similar declaration. Neither insurance policy contained a choice of law provisions. All parties agree, however, that if Texas law is used to interpret the pollution exclusion clause, Travelers and Gulf have no duty to defend or indemnify Reddy in the Louisiana lawsuits. If Louisiana substantive law is used to interpret the clause, a fact issue exists as to whether the clause will exclude coverage for the personal injury claims. The trial court granted the insurance companies’ motion for summary judgment, finding Texas law applied and finding, therefore, no duty to defend. Reddy appeals. HOLDING:Affirmed. The court starts by looking at Insurance Code Art. 21.42, which the insurers say dictate the application of Texas law here. The provision says that insurance contracts payable to “any citizen or inhabitant” of Texas with any Texas insurer shall be held to be a contract formed under Texas law. Thus, the provision applies to an insurance contract when: 1. the insurance proceeds are payable to a Texas citizen or inhabitant; 2. the policy is issued by an insurer doing business in Texas; and 3. the policy is issued in the course of the insurer’s business in Texas. The only issue disputed here is whether Reddy is a citizen or inhabitant of Texas. The court says it’s a matter of first impression for Texas courts whether, under the statute, a corporation’s principal place of business can be considered the place where it inhabits (as Reddy is a Nevada-based business with its principal place of business in Texas). The court notes the well-established general principle that a corporation is an inhabitant only of the state where it is incorporated, although it may be authorized to conduct its business in other states and may in fact reside in more than one place. An exception to this general principal, though, is when a state’s law requires a foreign corporation to become domesticated in order to transaction business in that state. The court finds that no exception applies to the general principle, noting that Art. 21.42 is not a jurisdiction or a venue statute, and that Texas does not require a corporation to become domesticated before doing business. “Although it has a principle place of business in Texas, Reddy Ice is a foreign corporation to Texas. As a foreign corporation operating in Texas, Reddy Ice is subject to general jurisdiction in the state, but we are hesitant to find that Texas law should govern automatically any contract it enters with an insurer doing business in Texas absent an express legislative directive in the statute. . . . Accordingly, we adopt the interpretation supported by the plain meaning of the statute and hold the unambiguous language of Article 21.42 restricts a corporation’s inhabitancy to its place of incorporation. Because Reddy Ice is incorporated in Nevada, it cannot be considered an inhabitant of Texas for purposes of Article 21.42.” The court follows the directive of Restatement (Second) Conflicts of law �6 to assess which state has the most significant relationship with the dispute, Louisiana or Texas. The general considerations under this section include: 1. the needs of the interstate and international systems; 2. the relevant policies of the forum; 3. the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue; 4. the protection of justified expectations; 5. the basic policies underlying the particular field of law; 6. certainty, predictability and uniformity of result; and 7. ease in the determination and application of the law to be applied. The contract-specific considerations include: 1. the place of contracting; 2. the place of negotiation; 3. the place of performance; 4. the location of the subject matter of the contract; and 5. the domicile, residence, nationality, place of incorporation, and place of business of the parties. Because the policies at issue here provide nationwide liability coverage, the place of contracting, the place of negotiation, and the domicile, residence, nationality, place of incorporation, and place of business of the parties become the primary factors to determine which law applies. Applying these factors here, the court finds that the application of Texas law to the insurance contract was proper. “Travelers is a Texas corporation with its principal place of business in Texas. Gulf is a Connecticut corporation with its principal place of business in New York. The contracts were negotiated in Texas. The Travelers policy was issued from Travelers’ Texas office through a Texas broker to the first-named insured, Packaged Ice, at its principal place of business in Houston, Texas. The Gulf policy was issued to Packaged Ice in Texas in the course of Gulf’s Texas business. The premiums were to be paid in Texas by the first-named insured, a Texas corporation. Notices of cancellation and of occurrences triggering potential coverage were to be submitted in Texas. Texas was, by all accounts, the center of the relationship between the insurers and Reddy Ice. Texas has a strong interest in the outcome of an insurance coverage dispute that involves a Texas insurer, an insurer doing business in Texas, and their contractual relationship with their insured, a company principally operating in Texas. Louisiana has little interest in whether any settlements or judgments are paid by Reddy Ice, or instead, by its insurers or in regulating the scope of a pollution exclusion clause contained in an insurance policy issued in Texas.” OPINION:: Yates, J.; Yates, Anderson and Hudson, JJ.

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