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Click here for the full text of this decision FACTS:Energy Service Co. of Bowie Inc. and Superior Snubbing Services Inc. both provided oilfield services to Mitchell Energy Corp. In 1996, Superior and Mitchell signed an industry-standard “Master Service Agreement,” which provided in part that they would indemnify each other and each other’s contractors against their respective employees’ personal injury claims arising out of work performed under the agreement or at the jobsite, even if the indemnitee was at fault. Energy and Mitchell had signed a similar agreement in 1991 containing the identical provision. Each party agreed to support its obligation with liability insurance so that to the extent of coverage obtained, the indemnification obligations would not be voided by the Texas Oilfield Anti-Indemnity Act. Superior and Energy did not have a mutual indemnification agreement between themselves, nor was either a party to the other’s agreement with Mitchell, but each was covered, as a Mitchell contractor, by the terms of the other’s agreement with Mitchell. Thus, Energy agreed to indemnify Mitchell and its contractors, one of which was Superior, against claims by Energy employees, and Superior agreed to indemnify Mitchell and its contractors, one of which was Energy, against claims by Superior employees. Superior’s employee Daryll Faulk sued Mitchell and Energy for injuries he suffered in 2000 while working at a Mitchell wellsite where Superior and Energy were both performing services for Mitchell. Mitchell and Energy settled with Faulk and then sued Superior for indemnity. The trial court severed Mitchell’s claims from Energy’s. Superior, a subscribing employer, contended that Energy’s claim was barred by Texas Labor Code �417.004. The trial court disagreed and granted summary judgment for Energy for the $330,135.37 in attorneys’ fees and expenses it incurred in the Faulk suit. The 2nd Court of Appeals reversed and rendered judgment for Superior. It noted that before the Workers’ Compensation Act was completely revised in 1989, the predecessor provision to �417.004 stated that a subscribing employer could not be liable to indemnify a person against an employee’s personal injury claim “in the absence of a written agreement expressly assuming such liability, executed by the subscriber prior to such injury or death.” The 2nd Court determined, and Superior acknowledged in its brief, that the statute did not require that the employer’s agreement be executed by the person claiming indemnity; the claimant was entitled to indemnity if it was covered by the agreement as an intended beneficiary, such as a contractor of the signatory. But according to the 2nd Court, a 1989 change in the provision, carried forward into �417.004, the current law, precluded liability “unless the employer executed, before the injury or death occurred, a written agreement with the third party to assume the liability.” The court concluded, in effect, that since Superior’s indemnification agreement with Mitchell was not executed by Energy, it was not executed with Energy, and therefore Superior could not be liable to indemnify Energy. The Texas Supreme Court granted Energy’s petition for review to determine whether the Legislature intended, as part of its 1989 overhaul of the Workers’ Compensation Act, to make a substantive change in the 26-year-old provision that is now �417.004. HOLDING:Reversed and remanded. Nothing in the lengthy history of the revision process, the court stated, indicated that the Legislature had any reason to change the substance of �417.004. The common law, the court stated, allows parties to contract for the benefit of others if they do so explicitly. When they do, the beneficiary can enforce the promisor’s obligation in his favor as if he were himself a party. The pre-1989 predecessor to �417.004 was consistent with that rule, the court stated, by allowing indemnification agreements to benefit a party’s nonsignatory contractors. Absent any identifiable reason for a substantive change to have been made in the statutory provision, any extratextual indication that one was intended or any resulting change in industry practice, the court stated that “the most reasonable construction of section 417.004 is the same as its pre-1989 predecessors. The court continued: “In these circumstances, we think that when the Legislature required that a subscribing employer contract”with the third party’ seeking indemnity, it considered that an agreement intending to cover third party beneficiaries was an agreement with the beneficiaries. The issue for us, of course, is not whether this is good policy, but whether it is what the Legislature intended by the 1989 amendments. We think it was.” OPINION:Hecht, J., delivered the opinion of the court, in which Jefferson, C.J., Brister, Medina and Lang, JJ., joined. O’Neill, J., took no part in the decision of the case. DISSENT:Johnson, J., filed a dissenting opinion, in which Wainwright, Green and Willett, JJ., joined. “In my view, the Court’s construction of section 417.004: (1) does not comport with the literal, plain meaning of the statute; (2) dilutes subscribing employers’ immunity from common-law damages claims of the employers’ injured employees which is a key concept underlying the workers’ compensation statutes; and (3) does not square with one of the main reasons for the 1989 revision of the workers’ compensation statutes � reducing costs to subscribing employers. I would hold that language in Superior’s contract with Mitchell, which requires Superior to indemnify Energy, a nonsignatory to the contract, conflicts with section 417.004 and that, to the extent of the conflict, the contractual language is invalid. I would affirm the judgment of the court of appeals.”

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