Affirmed and Memorandum Opinion filed December 23, 2014.

In The

Fourteenth Court of Appeals

NO. 14-13-00734-CV

EP ENERGY E&P COMPANY, L.P. F/K/A EL PASO PRODUCTION, 

Appellant

V.

CUDD PRESSURE CONTROL, INC., Appellee

On Appeal from the 270th District Court

Harris County, Texas

Trial Court Cause No. 2013-000617

M E M O R A N D U M O P I N I O N

Appellant EP Energy E&P Company, L.P., sued appellee Cudd Pressure 

Control, Inc., for an alleged breach of a Rule 11 agreement entered into by the 

parties in a prior lawsuit. EP Energy contends that the trial court erred in granting 

summary judgment in favor of Cudd on EP Energy’s breach of contract claim. We 

affirm. 
2

FACTUAL AND PROCEDURAL BACKGROUND

The facts and procedural background leading up to this appeal are well 

established in prior opinions. See Sonat Exploration Co. v. Cudd Pressure Control,

Inc., 271 S.W.3d 228 (Tex. 2008); In re Lumbermens Mut. Cas. Co., 184 S.W.3d 

718 (Tex. 2006); Sonat Exploration Co. v. Cudd Pressure Control, Inc., 340 

S.W.3d 570 (Tex. App.—Texarkana 2011, no pet.); Cudd Pressure Control, Inc. v. 

Sonat Exploration Co., 202 S.W.3d 901 (Tex. App.—Texarkana 2006), aff’d, 271 

S.W.3d 228 (Tex. 2008). We recount only the facts and procedural background 

necessary to place the current dispute in context. 

In May 1998, Sonat Exploration Company1and Cudd signed a Master 

Service Agreement to carry out oilfield services for Sonat’s wells. The Master 

Service Agreement required the parties to indemnify each other for claims brought 

by each company’s employees and also required that Cudd name Sonat as an 

additional insured on its insurance policies. In October 1998, a blowout occurred at 

one of Sonat’s wells in Louisiana and killed seven workers, including four Cudd 

employees. Survivors of Cudd’s employees sued Sonat in Texas2and Cudd refused 

to indemnify Sonat. 

Sonat filed a cross-claim in Harrison County against Cudd for indemnity

based on the Master Service Agreement, which later was severed to create a standalone action. Sonat also filed a separate lawsuit against Cudd in Harrison County

for Cudd’s failure to name Sonat as an additional insured on its insurance policies.

 

1

Sonat, Inc., the parent company of Sonat Exploration Company, later merged with El 

Paso Energy Corporation in 1998 and was eventually renamed EP Energy E&P Company, L.P. 

This litigation was initiated by Sonat and is now being pursued by EP Energy, the same 

company. Any reference to Sonat is a reference to the appellant, EP Energy. 

2 Representatives of two Cudd employees sued Sonat in Harris County and 

representatives of a third Cudd employee sued Sonat in Harrison County. 
3

Sonat settled the underlying personal injury suits brought by the survivors of 

Cudd’s employees and pursued its indemnity suit against Cudd in Harrison 

County, in which “[o]ne of the issues presented was whether Texas or Louisiana 

law applied to the indemnity claim.” In re Lumbermens, 184 S.W.3d at 721. The 

parties contended that the issue was “potentially dispositive because under 

Louisiana statutory law the MSA’s indemnity provision was void, while under 

Texas law it was valid.” Id. The trial court granted partial summary judgment in 

favor of Sonat in the indemnity suit; it held that “Texas law applied and Sonat was 

entitled to indemnity for the damages it had paid to settle the Cudd employees’ 

lawsuits.” Id. “The case went to trial on damages only, and the jury returned a 

$20.7 million verdict in Sonat’s favor upon which the trial court rendered 

judgment” in conformity with the verdict. Id. 

Cudd appealed to the Texarkana Court of Appeals and the parties entered 

into a Rule 11 agreement. The Rule 11 agreement between Sonat and Cudd stated,

in relevant part, as follows:

In the [indemnity suit], Cudd will not appeal the trial court’s ruling 

that Texas law applies to the Master Service Agreement between 

Cudd and Sonat/El Paso and, in the event of remand, will not contend 

that any other state’s laws apply to the MSA (nor will it so advocate in 

any other lawsuit between Sonat and Cudd arising out of the October 

24, 1998 blowout); and

Sonat/El Paso agree to dismiss, with prejudice, all breach of contract 

claims against Cudd (except the failure to defend/indemnify claims 

currently pending in [the indemnity suit]), in all actions (including No. 

00-0775-1) and will not bring any such claims in the future against 

Cudd arising out of the October 24, 1998 blowout. 

Following the Rule 11 agreement, Cudd refrained from arguing the choice-of-law 

issue on appeal. Sonat dismissed its separate Harrison County lawsuit predicated 

on Cudd’s failure to name Sonat as an additional insured. 
4

Choice of law nonetheless was litigated on appeal because Cudd’s insurer, 

Lumbermens Mutual Casualty Company, intervened in the appeal and argued that 

Louisiana law applied to the Master Service Agreement. The Texas Supreme Court 

granted Lumbermens’ writ of mandamus and allowed the intervention, holding that 

Lumbermens could raise the choice-of-law issue through the doctrine of virtual 

representation. Id. at 729. At this point, only Lumbermens was advocating for 

Louisiana law while Cudd remained silent on the issue.

After Lumbermens intervened in the indemnity case on appeal, the 

Texarkana Court of Appeals reversed the trial court’s judgment in favor of Sonat

and held that Louisiana law applied to the Master Service Agreement. Cudd 

Pressure Control, Inc., 202 S.W.3d at 911. The Texas Supreme Court affirmed the 

holding that Louisiana law applied, and remanded to the district court in Harrison 

County “for further proceedings applying Louisiana law.” Sonat Exploration, 271 

S.W.3d at 238. In so doing, the Texas Supreme Court specifically referenced the 

Louisiana Oilfield Anti-Indemnity Act (“the Act”). Id. The parties agree that the 

Act, if applicable, makes the Master Service Agreement’s indemnity provision 

unenforceable. Id.; see La. Rev. Stat. § 9:2780. In determining whether to render

judgment in favor of Cudd on appeal or instead to remand for further trial court 

proceedings, the Texas Supreme Court stated that the Act would apply to foreclose 

Sonat’s indemnity claim only if Sonat was found to be negligent or strictly liable—

an issue that had not yet been determined. Sonat Exploration, 271 S.W.3d at 238. 

Accordingly, the supreme court remanded for further trial court proceedings. Id.

When the case was remanded to the district court in Harrison County, Cudd 

filed a motion for summary judgment arguing that the Act would render the Master 

Service Agreement’s indemnity provision unenforceable if Sonat was found to be 

at fault for the fatal blowout. 
5

Cudd then filed a third amended answer which included two new affirmative 

defenses. The first affirmative defense stated that “Cudd pleads the effects of the 

applicable oilfield anti-indemnity statute as determined by the Texas Supreme 

Court.” The second affirmative defense also cited Louisiana law. For the purposes 

of that lawsuit, Sonat filed a stipulation in the trial court that it did bear some fault 

relating to the well blowout. 

After this stipulation of fault, the district court in Harrison County applied 

the Act to the Master Service Agreement and granted Cudd’s motion for summary 

judgment. The Texarkana Court of Appeals affirmed the trial court’s judgment, 

holding that Cudd raised the Act as an affirmative defense and did not waive the 

defense. Sonat Exploration, 340 S.W.3d at 577. 

EP Energy then sued Cudd for breach of contract in Harris County. 

According to EP Energy’s allegations, Cudd breached its Rule 11 agreement to 

refrain from contending that “any other state’s laws apply to the MSA” when Cudd 

added affirmative defenses in its third amended answer in the Harrison County 

indemnity suit. Both parties moved for summary judgment. The trial court granted 

Cudd’s traditional motion for summary judgment and denied EP Energy’s crossmotion for summary judgment; in so doing, the trial court determined that Cudd 

had not breached the Rule 11 agreement. EP Energy now challenges this 

determination in the present appeal.

STANDARD OF REVIEW

We review a trial court’s grant of summary judgment de novo. NuStar 

Energy, L.P. v. Diamond Offshore Co., 402 S.W.3d 461, 465 (Tex. App.—Houston 

[14th Dist.] 2013, no pet.). The movant for a traditional summary judgment bears 

the burden of showing that there is no genuine issue of material fact and that it is 

entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c). When both sides 
6

move for summary judgment and the trial court grants one motion and denies the 

other, reviewing courts consider both sides’ summary judgment evidence, 

determine all questions presented, and render the judgment the trial court should 

have rendered. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London, 327 

S.W.3d 118, 124 (Tex. 2010).

ANALYSIS OF APPELLANT’S ISSUE

In its sole issue on appeal, EP Energy contends that the trial court erred in 

granting summary judgment in favor of Cudd and denying EP Energy’s crossmotion for summary judgment because Cudd’s litigation conduct breached the

Rule 11 agreement with respect to choice of law. 

A party may seek to enforce a Rule 11 agreement under contract law. 

ExxonMobil Corp. v. Valence Operating Co., 174 S.W.3d 303, 309 (Tex. App.—

Houston [1st Dist.] 2005, pet. denied). To prevail on a breach of contract claim, a 

party must show: (1) the existence of a valid contract; (2) that the plaintiff 

performed or tendered performance; (3) that the defendant breached the contract; 

and (4) that the plaintiff was damaged as a result of the breach. Frost Nat’l Bank v. 

Burge, 29 S.W.3d 580, 593 (Tex. App.—Houston [14th Dist.] 2000, no pet.). A 

breach of contract occurs when a party fails or refuses to do something he has 

promised to do. Mays v. Pierce, 203 S.W.3d 564, 575 (Tex. App.—Houston [14th 

Dist.] 2006, pet. denied).

It is undisputed that the parties entered into a valid Rule 11 agreement. Rule 

11 agreements are “contracts relating to litigation.” Trudy’s Tex. Star, Inc. v. City 

of Austin, 307 S.W.3d 894, 914 (Tex. App.—Austin 2010, no pet.). The parties 

signed this agreement and filed it with the district court in Harrison County. It is 

also undisputed that EP Energy performed under this agreement by dismissing its 

separate breach of contract suit against Cudd predicated on Cudd’s failure to name 
7

Sonat as an additional insured on Cudd’s insurance policies. Therefore, the only 

issues to be decided are whether Cudd breached the Rule 11 agreement, and if so, 

whether EP Energy was damaged as a result of the breach. For purposes of this 

appeal, we assume Cudd breached the Rule 11 agreement by pleading affirmative 

defenses referencing Louisiana law. 

To recover damages for a breach of contract, a plaintiff must show it

suffered a pecuniary loss as a result of the breach. S. Elec. Servs., Inc. v. City of 

Houston, 355 S.W.3d 319, 324 (Tex. App.—Houston [1st Dist.] 2011, pet. denied). 

Actual damages must be the “natural, probable, and foreseeable consequence of the 

defendant’s conduct.” Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 

1981). A plaintiff may not recover damages if they are remote, contingent, 

speculative, or conjectural. S. Elec. Servs., Inc., 355 S.W.3d at 324. Therefore, the 

lack of a causal connection between the breach of contract and damages will 

preclude recovery. Clearview Props., L.P. v. Prop. Tex. SC One Corp., 287 S.W.3d 

132, 139–40 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) (holding that 

plaintiff’s actions caused its damages, rather than the defendant’s actions). 

EP Energy asserts that it suffered damages in the amount of $20,719,166.74 

as a result of Cudd pleading the Act as an affirmative defense in the Harrison 

County suit. EP Energy alleges that by pleading the Act on remand, Cudd breached 

the express terms of the Rule 11 agreement. According to EP Energy, if Cudd did 

not plead the Act as an affirmative defense, then Cudd would have waived the 

defense and the court would have granted EP Energy’s summary judgment as a 

matter of law because its indemnity agreement with Cudd would have been 

enforceable. EP Energy argues that, as a result, it suffered damages of 

$20,719,166.74, the amount awarded by the jury in 2001 for Cudd’s failure to 

indemnify EP Energy. 
8

In response, Cudd argues that there is no causal connection between its 

alleged breach and EP Energy’s claimed damages because the Harrison County 

district court was obligated to apply the Act in accordance with the Texas Supreme 

Court’s decision in Sonat Exploration. Thus, according to Cudd, pleading the Act 

as an affirmative defense did not cause the district court in Harrison County to 

deny EP Energy’s motion for summary judgment. We agree with Cudd.

In granting Cudd’s motion for summary judgment in the indemnity suit, the 

Harrison County district court stated: “In said Remand the Texas Supreme Court 

directed this court to conduct ‘. . . [further] proceeding[s] applying Louisiana 

Law.’” The Louisiana law referenced in the Texas Supreme Court’s decision was 

the Act. See Sonat Exploration, 271 S.W.3d at 238. The Harrison County district 

court then applied the Act and concluded that the Master Service Agreement’s

indemnity provision was invalid because EP Energy stipulated to its own fault. The 

district court’s judgment expressly stated that it was applying the Act in 

accordance with the Texas Supreme Court’s decision in Sonat Exploration.

3

 

The Texas Supreme Court’s ruling on the application of the Act became the 

law of the case; therefore, the Harrison County district court was required to apply 

the Louisiana statute to the Master Service Agreement if it found EP Energy was at 

fault. The “law of the case” doctrine provides that questions of law decided on 

appeal to a court of last resort will govern the case throughout its subsequent 

 

3

It is also important to note that throughout all stages of this litigation, every court that 

has examined the choice-of-law issue was fully aware of the existence of the Rule 11 agreement. 

These courts have considered the choice-of-law issue raised by Lumbermens, despite knowing 

that the Rule 11 agreement prevented Cudd from pleading it on appeal or remand. See Sonat 

Exploration, 271 S.W.3d at 237 (“We understand Sonat’s complaint that it is unfair to let Cudd 

escape the burden of its Rule 11 agreement while Sonat cannot. . . . In some circumstances, such 

agreements are against public policy and unenforceable.”); In re Lumbermens, 184 S.W.3d at 

728 (allowing Lumbermens to raise the choice-of-law issue because the Rule 11 agreement may 

have allowed Cudd to “foist[] liability for uninsured claims onto its insurer”). 
9

stages. Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex. 1986). The law of the 

case doctrine only applies to questions of law and not questions of fact. Id. When 

the Texas Supreme Court remands a case and limits a subsequent trial to a 

particular issue, the trial court is restricted to a determination of that particular 

issue. Id. A reviewing court may not again decide any matter that was in effect 

disposed of on a former appeal or mandamus to that court. City of Dallas v. 

Cornerstone Bank, N.A., 879 S.W.2d 264, 268 (Tex. App.—Dallas 1994, no writ). 

EP Energy contends that the Texas Supreme Court mandated only that the 

district court in Harrison County apply Louisiana law, rather than the Act. 

Accordingly, EP Energy argues that if Cudd did not plead the Act as an affirmative 

defense, the district court would have not considered the Act, and would have held

that the indemnity provision of the Master Service Agreement was enforceable 

under Louisiana law. In response, Cudd asserts that under the law of the case

doctrine, the district court in Harrison County was required to apply the Act as 

raised by Lumbermens and mandated by the Texas Supreme Court, whether or not 

Cudd pleaded it as an affirmative defense. 

In interpreting the mandate of an appellate court, the court should look not 

only to the mandate itself, but also to the opinion of the court. Hudson, 711 S.W.2d 

at 630. In determining whether Louisiana or Texas law would apply to the Master 

Service Agreement, the Texas Supreme Court cited only one indemnity-related 

Louisiana law in its opinion, the Act. Sonat Exploration, 271 S.W.3d at 238; see 

also La. Rev. Stat. § 9:2780(B).

4

The court specifically held that the Act would 

only apply if EP Energy was negligent or strictly liable, a finding that had not been 

 

4

The Texarkana Court of Appeals also recognized that the Act was the only antiindemnity statute cited by the Texas Supreme Court. See Sonat Exploration, 340 S.W.3d at 577 

(“There can be no question that the only anti-indemnity statute referenced by the Texas Supreme 

Court is the LOAIA, La. Rev. Stat. 9:2780.”) (emphasis added). 
10

made at that point but that EP Energy later supplied by stipulation. Sonat 

Exploration, 271 S.W.3d at 238 (“[N]either the trial court nor the jury found Sonat 

negligent or strictly liable, and without such a finding the plain terms of 

Louisiana’s law do not appear to apply.”). The court then quoted the Act in its 

entirety and remanded the case for “further proceedings applying Louisiana law.” 

Id. Thus, the opinion reflects that the Act would invalidate the Master Service 

Agreement, but only if EP Energy was at fault. The court’s mandate stated that the 

case was “remanded to the trial court for further proceedings consistent with this 

Court’s opinion.”

When viewing both the opinion and the mandate, it is clear that the Texas 

Supreme Court remanded the case with instructions to apply the Act, not merely 

Louisiana law in general, if the trial court found that EP Energy was negligent or 

strictly liable. See Int’l Fid. Ins. Co. v. State, No. 14-98-00324-CR, 2000 WL 

729384, at *1 (Tex. App.—Houston [14th Dist.] June 8, 2000, pet. ref’d) (not 

designated for publication) (“The [law of the case] doctrine applies to implicit 

holdings, i.e., conclusions that are logically necessary implications of positions 

articulated by the court, as well as explicit ones.”). Although the court’s mandate 

did not explicitly direct the trial court to apply the Act, it is implicit from the 

court’s opinion. The only issue left to be determined by the district court upon 

remand was whether EP Energy was negligent or strictly liable. See Lifshutz v. 

Lifshutz, 199 S.W.3d 9, 20 (Tex. App.—San Antonio 2006, pet. denied) (holding 

that “the alter ego finding on remand was precluded by the law of the case and the 

scope of the remand”). The legal question of which law applied to the Master 

Service Agreement was fully litigated by the parties and determined by the Texas 

Supreme Court in Sonat Exploration. Thus, the law of the case doctrine prohibited 

re-litigation of this issue on remand, and the trial court did not have discretion to 
11

refuse to apply the Act once EP Energy stipulated to its fault. See Lee v. Downey, 

842 S.W.2d 646, 648 (Tex. 1992) (holding that the trial court abuses its discretion 

if it declines to follow the mandate of the Texas Supreme Court); City of Mission v. 

Cantu, 89 S.W.3d 795, 809 n.21 (Tex. App.—Corpus Christi 2002, no pet.) (“[W]e 

are bound to follow the expression of the law as stated by the Texas Supreme 

Court.”). 

Further, we recognize that the law of the case doctrine does not apply if (1) 

the earlier holding is clearly erroneous, or (2) the later stage of litigation presents 

different parties, different issues, or more fully developed facts. See Briscoe v. 

Goodmark Corp., 102 S.W.3d 714, 716−17 (Tex. 2003); see also Hudson, 711 

S.W.2d at 630. However, these exceptions do not apply here because no party 

asserts that the court’s holding in Sonat Exploration was erroneous, and the issue 

upon remand remained the same. See Hudson, 711 S.W.2d at 630 (“[T]he doctrine 

does not necessarily apply when either the issues or the facts presented at 

successive appeals are not substantially the same as those involved on the first 

trial.”). 

When the case was remanded to the district court in Harrison County, the 

parties remained the same, the issues remained the same, and the facts did not 

substantially change. Although Cudd amended its pleadings to add the Act as an 

affirmative defense, this did not substantially change the issue before the court 

because the Texas Supreme Court had already determined that the Master Service 

Agreement would be unenforceable under the Act if EP Energy was negligent or 

strictly liable. See id. (holding that when a party amends its pleadings, it may be 

that the issues or facts have sufficiently changed so that the law of the case no 

longer applies). Even if Cudd waived the Act as an affirmative defense, the law of 

the case provided that the district court was required to apply the Act if it found 
12

that EP Energy was negligent or strictly liable. Therefore, because the Texas 

Supreme Court mandated that the district court in Harrison County apply the Act, 

Cudd’s pleading the Act did not cause EP Energy to suffer damages of 

$20,719,166.74, the amount awarded by the jury in 2001 for Cudd’s failure to 

indemnify EP Energy. 

We also note that the policy behind the law of the case doctrine supports 

holding that the district court was required to apply the Act. The doctrine operates 

to narrow the issues in successive stages of litigation and to achieve uniformity of 

decisions and judicial economy. Id. The doctrine is based on public policy and is 

aimed at putting an end to litigation. Id.; Barrows v. Ezer, 624 S.W.2d 613, 617 

(Tex. Civ. App.—Houston [14th Dist.] 1981, no writ). In applying the Act, the 

district court stated that “this matter has arrived before the Court following a 

lengthy odyssey through the Texas Appellate Courts System; with the last stop and 

direction in the odyssey being a Remand to this Court from the Supreme Court of 

Texas.” Accepting EP Energy’s argument that the district court could apply 

anything other than the Act would frustrate the public policy behind the law of the 

case doctrine. 

EP Energy further argues that the law of the case doctrine should not apply 

because Cudd already had breached the Rule 11 agreement prior to the Texas 

Supreme Court’s decision in Sonat Exploration. EP Energy asserts that Cudd’s 

first amended answer was the active pleading before the Texas Supreme Court and 

it pleaded the Act as an affirmative defense. However, this argument was already 

addressed by the Texarkana Court of Appeals, which held that Cudd did not violate 

the Rule 11 agreement because “counsel scrupulously avoided even the barest 

mention of the choice-of-law issue.” Cudd Pressure Control, Inc., 202 S.W.3d at 

911. The court held that only Lumbermens raised the choice-of-law issue because 
13

the Texas Supreme Court allowed them to do so. Id. 

EP Energy also asserts that Cudd should be collaterally estopped from 

claiming that it did not breach the Rule 11 agreement. Collateral estoppel issues 

concern only whether (1) the facts sought to be litigated in the second action were 

fully and fairly litigated in the first action, and (2) those facts were essential to the 

judgment in the first action. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, 

Inc., 962 S.W.2d 507, 519 (Tex. 1998). However, we need not make this 

determination here because collateral estoppel applies to fact issues and choice of 

law is a question of law. See Jenkins v. Entergy Corp., 187 S.W.3d 785, 807 n.21 

(Tex. App.—Corpus Christi 2006, pet. denied). 

We overrule EP Energy’s issue regarding its breach of contract claim.

CONCLUSION

We hold that the trial court did not err by granting Cudd’s motion for 

summary judgment and denying EP Energy’s cross-motion, and we affirm the 

judgment of the trial court. 

/s/ Ken Wise

Justice

Panel consists of Justices Boyce, Busby, and Wise.