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Click here for the full text of this decision FACTS:In this suit, a drilling company (Sonat Exploration Co.) sued an oil field contractor (Cudd Pressure Control Inc.) to obtain indemnity for money paid as a settlement by Sonat to the survivors of employees killed in an oil field accident in Louisiana. At trial, a jury decided that the millions of dollars paid by Sonat was not an unreasonable amount; that particular matter is not on appeal. Judgment was entered against Cudd in the amount of $20,719,166.74. Cudd appealed, contended that the trial court incorrectly applied the governing Texas statute on oil field indemnity agreements and that the evidence was inadequate to show: that mutuality of agreement existed; or to prove, as required by statute, the amount of insurance coverage for indemnity that Sonat itself had acquired. A critical issue below was the question of whether Texas or Louisiana law should apply to the action. The trial court decided that Texas law should apply. In a Rule 11 agreement, Cudd agreed not to raise that matter on appeal, in return for which Sonat agreed to nonsuit its pending breach-of-contract claim against Cudd. Cudd did not raise the issue in its brief, and Sonat nonsuited the claim. That chain of events caused a notable reaction and ultimately prompted the Texas Supreme Court to add a unique third ingredient to this mixture. Lumbermens Mutual Casualty Co., the company that is Cudd’s excess insurer, and not a party at the trial level, attempted to intervene in this case when it first arrived before the 6th Court of Appeals in mid-2003, based on the concept of “virtual representation.” The court refused to allow the intervention, and Lumbermens immediately sought mandamus relief from the Texas Supreme Court. The Texas Supreme Court held that both Lumbermens’ and Cudd’s ultimate aim to reverse the underlying judgment was the same and that the identity of interest on which the doctrine turned was to protect the funds that the underlying judgment put at risk. The court concluded that Lumbermens was entitled to appeal the trial court’s choice-of-law ruling under the doctrine of virtual representation. In Re: Lumbermens Mut. Cas. Co., 184 S.W.3d 718, 724 (Tex. 2006). The question remanded to the court of appeals is whether the law of Louisiana (where the well was located and where the accident occurred) should apply, or whether the law of Texas (where the survivors filed suit) would apply to the indemnity contract between the parties. The Master Service Agreement or its the attachments did not contain a choice of law provision. HOLDING:Reversed and remanded. The court found that the controlling case was Maxus Exploration v. Moran Bros., 817 S.W.2d 50 (Tex. 1991), in which the Texas Supreme Court reviewed the choice of law for an indemnity provision in a tort claim in a drilling accident. Applying the Maxus test to the facts of this case, the court found that because all of the services to be provided in furtherance of this particular job under the contract were rendered in Louisiana, Louisiana law should apply unless some other state has a more significant relationship to the issue, transaction and the parties. The court stated that Texas lacked a more significant relationship than Louisiana to the issue of indemnity or the transaction of the parties. Thus, the court concluded that the Maxus factors required the application of Louisiana law to the case. Examining the indemnity issue separately, the court concluded that the parties selected Louisiana law to apply to the indemnity issue for operations conducted in Louisiana. OPINION:Carter, J.; Morriss, C.J., and Ross and Carter, J.J.

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