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Click here for the full text of this decision FACTS:OXY USA Inc. and Southwestern Energy Production Co. (SEPCO) entered into a seismic and exploration agreement in June 1997 for what was known as the Bour” project. Part of the agreement stated that each party would receive a license to the seismic data related to the project, and that the parties would mutually approve the selection of a contractor to process the data. Unbeknownst to OXY, SEPCO had already entered into a letter agreement with Skelly Exploration Co. to create a program for the Bour” project. OXY would retain a standard license under the agreement. Also unbeknownst to OXY, SEPCO had entered into an agreement with Seitel Data Limited, whereby SEPCO would purchase four nonexclusive licenses to the Bour” project seismic data. OXY and Skelly were each designated as recipients of a license. SEPCO’s parent company investigated SEPCO’s activities and realized at that time that OXY was unaware of the Skelly and Seitel agreements, and informed OXY of their existence. OXY said it would not proceed under the agreement it had with SEPCO unless Skelly was removed from the project. In response to OXY’s concerns that Skelly might sue if removed, SEPCO offered to indemnify OXY against any claims relating to the Bour” project. Thereafter, OXY, SEPCO and Seitel entered into a new agreement on the same project. OXY and SEPCO would retain two of the four licenses to the project’s seismic data, and they would agree on who should receive the other two. Because of OXY’s concerns over not designating Skelly as one of the license recipients, OXY and SEPCO entered into a Joint Prosecution and Indemnification Agreement. In between the signing of the second agreement with OXY and the signing of the indemnity agreement, SEPCO sued Skelly for RICO violations. Skelly filed a counterclaim for breach of contract, defamation and tortious interference with prospective economic gain. The parties settled in June 1999, and they executed a mutual release of claims relating to the Bour” project. The release, however, did not mention OXY. Skelly sued OXY for several business torts. Upon request, SEPCO agreed to defend and indemnify OXY under the indemnity agreement. Shortly before trial, however, SEPCO stated that it was not obligated to indemnify OXY. OXY nonetheless settled with Skelly for $2.5 million, plus a license to the seismic data. SEPCO contributed $400,000 and provided the license. OXY then sued SEPCO for breach of contract and fraudulent inducement. SEPCO filed a counterclaim for a declaration that the indemnity agreement did not apply, or that it was unenforceable. SEPCO added another counterclaim later for fraud, claiming that it had agreed to defend OXY before learning that OXY had already conveyed most of its interest in the Bour” project to Petro-Hunt, though OXY had reserved its rights under the indemnity agreement in the conveyance. The trial court granted SEPCO’s motion for summary judgment on the breach of contract claims and denied OXY’s summary judgment motion. OXY appeals. HOLDING:Reversed and rendered. The court addresses the trial court’s holding that the indemnity agreement was not enforceable. SEPCO contends the agreement did not satisfy fair-notice requirements. Alternatively, SEPCO argues that the agreement does not provide indemnity for intentional torts. Fair notice requirements apply to indemnity agreements when the effect is to relieve a party in advance of responsibility for its own negligence, the court confirms. On the other hand, SEPCO urges the court to extend the reach of “fair notice” to cover indemnity agreements that are used to shift liability for actions that have already occurred. The 13th Court of Appeals notes that the Texas Supreme Court has expressed concern that the former type of agreement will create an injustice if an indemnity provision is buried within a contract instead of being conspicuously noted. The Supreme Court’s concerns are not present in the type of agreement at issue here, the court holds. Here, the indemnity agreement was executed “by two major oil and gas companies with equal bargaining power after negotiations that specifically contemplated the adoption of an agreement releasing OXY from liability.” Both parties were fully aware of the risk-shifting nature of the agreement, and that it was limited in scope to liability arising from a specific series of transactions that had already occurred. Consequently, the court declines to extend the fair notice requirements to this kind of agreement. Next, the court addresses SEPCO’s argument that not all of Skelly’s claims against OXY arose from acts that occurred prior to the execution of the indemnity agreement. The contractual grant of a license in the Seitel Agreement (an agreement, unknown to OXY, SEPCO made with a seismic contractor providing, in part, that SEPCO would purchase four nonexclusive licenses to the Bour” project seismic data) was merely an intangible right, SEPCO argues, and could not be the basis of a conversion claim. The court disagrees, holding that Skelly’s claim for conversion against OXY arose on Oct. 16, 1997, when OXY, SEPCO and Seitel entered into the new Bour” project agreement. Because all claims against OXY arose, therefore, from actions occurring before the indemnification agreement was signed, the court again decides that the fair notice requirements do not apply. Additionally, the court finds that the indemnity agreement does cover intentional torts. The court and both parties agree that the agreement is unambiguous. The court further observes that the agreement neither incorporates nor excludes specific types of claims. Applying the maxim “expressio unius est exclusio alterius,” the court presumes that all claims were covered by the indemnity agreement, including intentional torts. The court then turns to public policy arguments raised by SEPCO. The court acknowledges that, while the Texas Supreme Court has noted that indemnity against one’s own intentional torts raises public policy concerns, the high court has not held that such indemnity agreements are prohibited. “We find the public policy argument of deterring misconduct by preventing a party from contracting away liability to be inapplicable in this case because the Indemnity Agreement is limited to actions that have already occurred. The public policy goal is especially inapplicable because the Indemnity Agreement acknowledges that part of the rationale underlying its adoption lies in the misconduct of the indemnitor. . . . Public policy would not be served by allowing SEPCO to induce OXY to forgo a breach of contract claim and renegotiate based upon a promise of indemnity, and then disavow that indemnity. OXY would not be exposed to any liability were it not for the initial misconduct of SEPCO.” The court next addresses OXY’s arguments that its claims were covered by the agreement. SEPCO contends that its initial agreement with Skelly was not a seismic agreement, but the court finds that the agreement does fall within the definition of “seismic agreement” mentioned (and prohibited) in SEPCO’s first agreement with OXY. Thus, Skelly’s claims against OXY based on rights stemming from the Skelly’s agreement with SEPCO are covered by the indemnity contract between SEPCO and OXY. Similarly, Skelly’s right to a license to the seismic data under the Seitel agreement is an “interest through or derived from SEPCO.” Skelly’s claims against OXY are based on rights stemming from the Seitel agreement are covered by the indemnity contract between SEPCO and OXY, as well. Finally, at the time OXY assigned its interests to Petro-Hunt � reserving its right to indemnity from SEPCO � all of the operative facts giving rise to the eventual suit against OXY had occurred. The right to indemnity is a right relating to those existing claims. OPINION:Federico G. Hinojosa, J.; Hinojosa, Yanez and Garza, JJ.

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