### I N THE UNI TED STATES COURT OF APPEALS FOR THE FI F TH CI RCUI T

No. 12-30230

IN RE: DEEPWATER HORIZON

-------------------------------------------------- RANGER INSURANCE, LIMITED, Plaintiff - Appellee
v. TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C.; TRANSOCEAN DEEPWATER, INCORPORATED; TRITON ASSET LEASING GMBH, Intervenor Plaintiffs - Appellees
v. BP P.L.C.; BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICAN PRODUCTION COMPANY; BP CORPORATION NORTH AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA, INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED; BP AMERICA, INCORPORATED; BP HOLDINGS NORTH AMERICA, LIMITED, Defendants - Intervenor Defendants - Appellants

-------------------------------------------------- CERTAIN UNDERWRITERS AT LLOYD’S LONDON, Plaintiff - Appellee U n i t e d S t a te s C o u r t o f A p p e al s

F i f t h C i rc u i t 

### F I L E D March 1, 2013 Ly l e W . Cay ce Clerk Case: 12-30230 Document: 00512161598 Page: 1 Date Filed: 03/01/2013No. 12-30230

TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED; TRANSOCEAN HOLDINGS, L.L.C.; TRANSOCEAN DEEPWATER, INCORPORATED; TRITON ASSET LEASING GMBH, Intervenor Plaintiffs - Appellees
v. BP P.L.C.; BP EXPLORATION & PRODUCTION, INCORPORATED; BP AMERICAN PRODUCTION COMPANY; BP CORPORATION NORTH AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA, INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED; BP AMERICA, INCORPORATED; BP HOLDINGS NORTH AMERICA, LIMITED, Defendants - Intervenor Defendants - Appellants

A ppeal from the United States District Court for the Eastern District of Louisiana

Before JOLLY, BENAVIDES, and HIGGINSON, Circuit Judges. E. GRADY JOLLY, Circuit Judge: This appeal presents only o ne o f the many disputes that have arisen and will arise f

rom t he explosion and sinking of Transocean’s D eepwater Horizon in April 2010. Today we address the obligations of Transocean’s p r i m a r y and excess-liability insurers to c over BP’s pollution-related l iabilities deriving from the ensuing oil spill in the Gulf of Mexico. A pplying T exas law, especially as clarified since the district court’s decision, we find that the umbrella insurance
p o l i c y

— n o t t he indemnity provision s o f T r a n s o c e a n ’ s a n d B P ’ s c o n t r a c t

— c o n t r o l s the extent to which BP is covered for its operations under the D rilling Contract. Because we find this policy imposes no relevant limitations upon t h e extent to which BP i s covered, we REVERSE the judgment of the district c ourt and

2 Case: 12-30230 Document: 00512161598 Page: 2 Date Filed: 03/01/2013No. 12-30230

REMAND the c ase for entry o f an appropriate judgment in accordance with this opinion. I. Transocean Holdings, Inc. (“Transocean”) owned the Deepwater Horizon ,
a semi-submersible, mobile offshore drilling u nit. In April 2010, the Deepwater Horizon sank into t h e G u l f of Mexico a fter burning for two days following an onboard explosion (“Incident” or “ Deepwater Horizon Incident”). At the time of the Incident, t he Deepwater Horizon was e ngaged i n explorato r y drilling activities at the Macondo Well under a Drilling Contract between the Appellant BP America Prod u c t i o n Company’s (together with its affiliates, “BP”) predecessor and Transocean’s predecessor. This Contract required Transocean to maintain c ertain minimum insurance coverages for the benefit of BP. The extent to which these p olicies covered BP’s pollution-related liabilities arising from the Deepwater Horizon Incident is the subject of this appeal. The Insurance Policies Transocean held insur a nce policies with a primary liability insurer, Ranger Insurance Ltd. (“Ranger”), as well as s everal excess liability insurers led by L ondon market syndicates (“Excess Insurers;” together with Ranger, “Insurers”). Transocean’s insurance policy w i t h Ranger p rovided at least $50 million of general liability c overage, and i t s poli c i e s w i t h the Excess Insurers formed f our layers of e x c ess c o v e r a g e directly above t he Ranger Policy that provided a t l e a st $700 m illion o f a d ditional general l iability c overage. The Ranger and Excess Policies contain materially identical provisions. 1 The Policy terms that are important to this c ase are “Insured” a nd “Insured C ontract.” The Policies define “Insured” as including the Named Insured, other parties, and

1 As the d is trict court noted ( and the Ins urers have not d is p uted ) , this s im ilarity allow s the court to treat all of the Ins urers as one for p urp os es of analys is in this cas e. 3 Case: 12-30230 Document: 00512161598 Page: 3 Date Filed: 03/01/2013No. 12-30230 (c) any person or entity t o whom the “Insured” is obliged by any oral o r written “Insured Contract” (including c ontracts which are i n agreement but have not been formally concluded in writing) entered into before any relevant “Occurrence”, to provide insurance such as is afforded by this Policy . . . . The Policies define “Insured Contract” as follows:

The w ords “Insured Contract”, whenever used in this Policy, shall mean any written or o ral contract or agreement entered into by t he “Insured” (including contracts which are in agreement but have not bee n formally c oncluded i n writing) and pertaining to business under w hich the “Insured”
assumes the tort liability of another p arty to pay for “Bodily Inju r y ” , “ P r o p e r t y D a m a g e ” , “Personal I njury” or “Advertising Injury” to a “T h i r d Party” or organization. Tort Liability
means a liability that would b e i m posed by law i n the absence of any contract or agreement. 2 The Drilling Contract T h e Drilling Contract defines BP’s and T ransocean’s o bligations to o n e another, separately identifying the liabilities each party assumes. A r t icle 20 of the Contract is a s ingular provision that imposes upon Transocean an insurance requirement:

20.1 INSURANCE W ithout limiting the indemnity obligations or liabilities of C O N TRACTOR [Transocean] or its insurer, at all times during t he term of this CONTRACT, CONT R A C T OR s hall mai n t a in i nsurance covering t he operations t o be performed under this CONTRACT a s s et f o r th in Exhibit C

. (Emphasis added.) E xhibit C to the Drilli n g C o n tract is titled “Insurance Requirements” a n d establishes the types and minimum level of coverage that

2 The Policies contain f urth e r p rovis ions ad d res s ing other ins ured s
. End ors em ent 1 p ro vid es a g eneral cond ition that ad d itional ins ured s are autom atically includ ed w here required by w ritten contract. Cond ition D

. 1 to Section I coverage lim its t he coverage of ad d iti o n a l i n s u red s : Trans ocean has the p rivilege to nam e ad d itional ins ured s only to the extent as is required und er contract or agreem ent. 4 Case: 12-30230 Document: 00512161598 Page: 4 Date Filed: 03/01/2013No. 12-30230

Transocean is obligated to maintain. T his Exhibit p rovides that Transocean

s h all carry all insurance at its own expense and that the policies “ shall b e

e n dorsed to provide that there will be no recourse against [BP] for payment o f premium.” Further, Exhibit C states:

[BP], its subsidiari e s and affiliated companies, coowners, and joint ventu rers, if any, and their employees, officers and a gents s hall be named a s additional insureds in each of [ Transocean’s] policies, except Workers’ C ompensation for liabilities ass u m e d by [ Transocean] under t he terms of this Contract

. (Emphasis added.) The Procedural History Following the Incident, BP notified the I nsurers of its Deepwater H orizon

related l o s s e s
. The Excess Insurers and Ranger each filed a o ne-count declaratory judgment action against BP. 3 The Insurers’ c o mplai n t s a re substantively identical—both request a declaration that the Insurers have “no additional-insured obligation to BP with respect to pollution c l aims against BP for oil emanating from BP’s well” as a result of the Deepwater Horizon Incident. The Insurers acknowledge that “the [D]rilling [C]ontract r e q u i r es additional insured p rotection in favor of certain BP entities.” Thus, all p arties concede that the Drilling C o n t r act is an “insured contract” under t h e policies a nd that the policies provide some insurance coverage to BP as an additional insured. The issue in contention is the scope of BP’s insurance coverage. In July 2011, BP moved for judgment on the pleadings, under Rule 12(c) of t h e F e d eral Rules o f Civil Procedure, against the Insurers. Relying upon

3 In February 2011, the Jud i c i a l P a n e l o n M u l t i d is trict Litigation trans f erred both cas es to the U nited States D is trict Court f or the Eas ter n D i s t r i c t of Louis iana f or coord inated p retrial p roceed ings w ith t h e o t h e r De e p w a ter H

ori zon - related litigation p end ing in that court. In M ar c h 2 0 1 1 , Trans ocean m oved f or leave to intervene in the cons olid ated actions , w hich
m otion the court granted

. 5 Case: 12-30230 Document: 00512161598 Page: 5 Date Filed: 03/01/2013No. 12-30230

T e xas and Fifth Circuit p recedent as developed in Evanston Ins. Co. v
. ATOFINA P

etrochems., Inc. , 2 5 6 S

. W.3d 660 (Tex. 2 008), and in Aubris Resources L P v. St. Paul Fire & Marine I ns. Co. , 566 F.3d 483 (5th Cir. 2009), BP argued ( 1) it w a s an “additional insured” under the i nsurance policies at issue and (2) the insurance policies alone—and n ot the i nd e m n i ties detailed in the Drilling Contract— g o v ern the scope of B P’s c overage rights as an “additional insured.” 4 The district court found ATOFINA a n d A u b ris a re distinguishable from t he case at hand and denied BP’s Rule 12(c) m otion in November 2011. In particular, the court read Transocean’s insurance obligation in Exhibit C to be to name BP a s an “additional insured[] in each o f [Transocean’s] policies

. . . for liabilities a ssumed by [Transocean] under the terms of the c ont r a c t

. ” That is, the d i strict court found BP’s proffered reading of this clause unreasonable, and read the clause as if there were a comma following the p hrase “except Workers’ Compensation ; ” t h i s r e a d i n g r e n d e r e d t h o s e three words their own discrete carve out from liability. Reasoning further that this interpret a t i on required Transocean to name BP as an insured only for liabilities Transocean explicitly assumed under the contract, the court then looked to Article 2 4 of the Drilling Contract to conclude that B P was not covered under Transocean’s policy for the polluti o n - r e l a t e d l i a b i l i t i e s deriving from the Deepwater Horizon Incident (as the spill originated below the surface of the water). 5

4 BP argues this m otion d id not require a d eterm ination of any rights or obligations of BP or Trans ocean to one another und er any p rovis ions of the D rilling Contract. We agree.

5 With res p ect to pollution- related liabilities , Article 24. 1 of the Contract p rovid es : CO N T R A C TO R [ Trans ocean] s hall as s um e f ull res pons ibility for and
s hall p rotect, releas e, d ef end , ind em nif

y, and hold CO MPAN Y [BP] and its joint ow ners harm les s f rom and agains t any los s , d am age, exp ens e, claim , f

ine, p enalty, d em and , o r l i ability for p ollution or contam ination , includ ing contro l a n d r e mo v a l t hereof , or iginating on o r a b o ve t he sur face of the land or w ate r , f rom s p ills , leak s , o r 6 Case: 12-30230 Document: 00512161598 Page: 6 Date Filed: 03/01/2013No. 12-30230

Following furth e r s u bmissions of the parties, the district court then entered a partial final judgment on the Insurers’ complaints under Rule 54(b). Effective March 1, 2012, the court held “ b y i t s terms, the Court’s Order and Reasons [on BP’s motion f or jud g m e nt on the pleadings] not only denied BP’s motion b ut also g ranted judgment on the p leadings against [ BP] and in favor of t he Plaintiff Insurers on the Plaintiff Insurers’ complaints.” 6 BP timel y appealed. I I. We review de novo a district court’ s g rant of judgment on the pleadings under Rule 12(c). United St a t e s v. Renda M arine, Inc. , 667 F.3d 651, 654 (5th Cir. 2012). The standard f or dismissal under Rule 1 2(c) is the same as that for dismissal u nder Rule 12(b)(6). Johnson v. Johnson , 385 F.3d 503, 529 ( 5th Cir. 2004). To survive a Rule 1 2(b)(6) motion, the plaintiff must plead f acts sufficient “to ‘state a claim to r elief that is plausible on its face.’” Ashcroft v. Iqbal , 556 U

. S

. 662, 678 ( 2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 5 4 4 , 5 7 0 (2007)).

d is charges o f fuels , lubricants , m otor oils , p ip e d op e, p aints , s olvents ,

ballas t, air em is sions , bilge s lud g e, garbage, or any other liquid or s olid
w hats oever in p os ses s ion and control of CO N TRACTO R

. . . . ( Em p has is ad ded

. ) Article 24. 2 then p rovid es :

CO M PAN Y [ BP] s hall as sum e f ull res p ons ibility for and shall p rotect, rele a s e , d ef

end , ind em nif

y, and hold CO N TRACTO R [ T rans ocean] harm l e s s f

r o m and agains t any los s , dam age, exp ens e, claim , f ine, p ena lty, d em and , or liability for pollution or contam ination , i n c l u d ing control and rem oval thereof , ar ising out of or conne cte d
w ith ope r ations unde r this C ON T R A CT h e r e unde r and not assum e d b y C O N TR A C TO R in A r ticle 2 4
. 1 ab ove
. . . . ( Em p has is ad ded

. )

6 In its brief , BP notes that this p artial f inal j ud gm ent w as entered in f av o r of the Ins urers “and Trans ocean” and argues that Trans ocean is not a p rop er p art y t o this ord er. BP’s Rule 12( c) m otion w as d irected only to the Ins urer’s com p laints and claim s

— not agains t Trans ocean. 7 Case: 12-30230 Document: 00512161598 Page: 7 Date Filed: 03/01/2013No. 12-30230

We similarly review issues of contract interpretation de novo
. One Beacon Ins. Co. v
. Crowley M

a r i n e S e r v s
. Inc. , 648 F.3d 258, 2 62 ( 5th Cir. 2011). The
p a r t i e s agree that Texas l aw governs interpretation of t he Policies, under t he Policies’ choice-of-law p rovisions. “Under Texas l a w, the s a m e general rules apply to the interpretation o f contracts and i n s u rance policies.” Aubris , 566 F.3d at 486 (citing Am. Mfrs. Mut. Ins. Co. v. Schaefer , 1 24 S.W.3d 154 , 1 5 7 ( T e x . 2003)). Courts should consider contracts “as a w hole,” affording “each part of the contract

. . . e f

f e c t

. ” F o rbau v. Aetna Life Ins. Co. , 876 S.W.2d 132, 133 (Tex. 1994). Discerning the parties’ true intent, as expressed in the language of the policy, is the c ourt’s primary conce r n
. K e l l ey-Coppedge, Inc. v. Highlands Ins. Co. , 98 0 S.W.2d 462, 464 (Tex. 1998). A nd the court may not adopt a construction that r enders any p ortion of a policy meaningless , u seless, or inexplicable. ATOFINA Petrochemicals, I nc. v. Cont’l Cas. C

o. , 185 S.W.3d 440, 444 (Tex. 2005). If an insurance cover a g e provision is susceptible to m ore than one reasonable interpretation, the court must interpret that provision in favor of the insured, so long a s that interpretation is reasonable. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co. , 8 11 S .W.2d 552, 555 (Tex. 1991). The court must do so e ven if the insurer’s interpretation i s more reasonable than the insured’s—“[i]n particular, exceptions or l i m itations on liability are strictly construed against the insurer and in favor o f the i nsured,” id. , and “[a]n intent to ex c l u d e c overage must be expressed in clear a nd unambiguous language.” ATOFINA , 2 56 S.W.3d at 6 68, 668 n.27 (citing Hudson E nergy C o. , 811 S.W.2d at 555); see also Certain Underwriters at Lloyds, London v. Law , 570 F.3d 574, 577 (5th Cir. 2009) (“If

. . . ambiguity is found, the contractual language will be ‘liberally’ construed in f avor of the insured.” ( citing B arnett v. Aetna Life Ins. Co. , 723 S.W.2d 663, 666 (Tex. 1987))).

8 Case: 12-30230 Document: 00512161598 Page: 8 Date Filed: 03/01/2013No. 12-30230 III. Under Texas l aw, to d is c ern “whether a commercial umbrella insurance policy that was p urchased to secure the insured’s indemnity obl i g a t i o n in a service contract with a third p arty also provides direct liability coverage for the third party,” we look t o t he “terms of the umbrella i nsurance p olicy itself,” instead of looking to t h e i n d e m n i t y a g r e ement in t he underlying service contract. ATOFIN

A , 2 5 6 S

. W

. 3d at 662, 664; see a lso Aubris , 566 F.3d a t 488-89. We apply this analysi s s o l ong as the indemnity agreement and the insurance
coverage provision are separate and independent. ATOFINA , 256 S.W.3d at 664 n.5 (citing Getty O il Co. v
. Ins. of N. Am. , 845 S.W.2d 794, 804 (Te x . 1 992); Aubris , 566 F.3d at 489. We examine each step of the analysis in turn. A. First, we a sk whether th e u mbrella policy between the Insurers and Transocean itself limits coverage for any addit i o n a l i nsureds, including BP. ATOFINA is instructive, as its facts significantly parallel the facts of t h e c a se

now before us. 256 S.W.3d 660. ATOFINA o wned an oil refinery at which it hired Triple S t o perform maintenance functions. I d. at 662. A T O F I N A and Triple S entered a services contract which stipulated t hat A TOFINA w as to be named an additional insured in each o f T riple S’s policies. Id. at 663. Specifically, this provision stated:

[ATO F INA], its parents, s ubsidiaries and affiliated companies, and their r espective employees, officers and agents s hall be named a s a dditional insured in e ach of [Trip l e S’s] policies, except W orkers’ Compensation; however, such extension of coverage shall not app l y with respect to any obligations for which [ATOFINA] has specifically agreed to indemnify [Triple S]. 7

7 Petitioner’s Br. on the M erits , Ev a nston I ns. Co. v. A TO FIN

A Petrochem i ca l s, I

n c
. , 2 56 S. W. 3d 660 (Tex. 2008) ( N o. 03- 0647) , 2004 WL 1047377, at *4. 9 Case: 12-30230 Document: 00512161598 Page: 9 Date Filed: 03/01/2013No. 12-30230

After a Triple S employee drowned while s ervicing the ATOFINA refinery, his estate sued ATOFINA and Triple S for wrongful death. Id. at 663. Triple S ’s insurer, Evanston, a nd A TOFINA disa g r e e d o v e r who was r equired to pay for the litigation; ATOFINA contended it was an additional i nsured and thus covered, while Evanston a rgued ATOFINA’s a greemen t t o i n d e m n i f y T riple S for ATOFINA’s sole negligence precluded coverage. Id. The Texas Su p r e me Court began by noting that ATOFINA sought

c overage from Evanston on the basis t hat it was Triple S’s ad d i t i o n a l insured—and had not sought indemnity directly from Triple S. Id. a t 6 6 3-64. The court next looked to Section III.B.6 of the policy, which defined w ho is an insured as A person or organization for whom you have agreed to

provide insurance as is a f forded by this p olicy; but that person or organization is an insured only with resp e ct to operations performed by you o r on your behalf, or facilities owned or used by you. Id. at 664. Because, by its own terms, this S ection covered ATOFINA “with respect to operations performed by” Triple S, the court found t h is Sect ion provided ATOFINA direct coverage even for its sole neglige n c e
. Id. at 667. Moreover, the court s t a ted t h a t “had t h e parties intended to insure ATOFINA for v icarious liability only, ‘language c learly embodying that intention was available.’” I

d. at 6 66 (citing McIntosh v. S cottsdale Ins. Co. , 992 F.2d 251, 255 (10th Cir. 1993)). This Court subsequently applied AT O F I NA ’s teachings in A ubris

. 566 F.3d 483. Again, this case involved a particularly analogous set of f acts: United hired J&R Valley to service its oilfields p ursuant t o a services c o n t r a c t t hat required J&R Valley to name United as a n a dditional insured in its commercial general l iability policy. I d. at 485. The agreement f urther contained a general indemnity provision requiring United to indemnify J&R Valley for causes of

10 Case: 12-30230 Document: 00512161598 Page: 10 Date Filed: 03/01/2013No. 12-30230

a c t i o n deriving from United’s own negligence. Id. at 485-86. The court noted that “[o]ur starting point is the insurance p olicy itself.” I d. at 4 87. This policy defined an additional insured as

Any p erson o r organization that you agree i n a w ritten contract for i nsurance to add a s an additional protected person u nder this agreement is also a protected person f or the following if that written contract f o r i n surance s pecifically re q u i r e s s u c h c o v e r a g e s f o r that person or organization[.] Id. (emphasis in original). Because this definit i o n referred to a “written contract for insurance,” the court then l ooked t o the a dditional insured provision in t he services agreement t o d e t ermine whether coverage was required. I d. That provision stated, in relevant part:

UNITED

. . . shall b e named as additional i nsureds in each o f [J&R Valley’s] policies, except W o r kers’ C o m p e n s a t i o n ; h o w e v e r , s u c h e x t e n s i o n o f coverage shall not a pply with re s p e ct to obliga tions f

or which UNITED has specifically agreed to indemnify [J&R Valley]

. Id. (emphasis in original). On the basis of this term, J&R Valley’s insurer argued the general indemnity provision of th e s ervices a greement prevented United from being covered. Id. The court d isagreed, stating, “[w] e t a k e from [ ATOFINA ] that in determining whether there is coverage, a c o u rt looks only to the additional insured provision itself; that indemnity i s a separate, and later arising, question from coverage.” Id. at 4 88. Again, the court noted that United s o ught c overage from J&R Valley’s insurer and n ot indemnity from J &R Valley itself—just as ATOFINA sought coverage f rom Evanston a nd not indemnity from Triple S. I d. at 489. The court held:

11 Case: 12-30230 Document: 00512161598 Page: 11 Date Filed: 03/01/2013No. 12-30230 [I]t is not material to the [ ATOFINA ] r ule whether t h e a d ditional insured provision is finally d e t e r m i n e d i n t h e policy or with the aid of the parties’ s e r vice contract. The separate indemnity provision is not applied to limit the s c o p e o f coverage. Indeed, on this point the T exas Supreme Court could not have been clearer:
We h a v e noted that where an additional insured provision is separate from and a dditional to an indemnity prov i sion, the s cope of the insurance requirement is not limited by the indemnity clause. Id. at 4 89 (quoting ATOFINA , 256 S.W.3d at 664 (citing Getty Oil C o
. v
. Ins. Co. of N. Am. , 845 S.W.2d 794, 804 (Tex. 1992))). Most recently, and subsequent to the district court’s rul i ng, the Texas Court of Appeals addressed this same question of coverage i n Pasadena Refining S y stem, Inc. v. M

cCraven , Nos. 1 4-10-00837-CV, 14-10-00860-CV, 2012 WL 1693697 (Tex. App. M ay 15, 2 012). The umbrella p olicy there provided a broad definition of “additional insured,” 8 and the services agreement required the

8 2012 WL 1693697, at *14- 15: Any p ers on or organization

. . . f o r w hom the nam ed ins ured

. . . has
s p ecif ically agreed by w ritten contract to procure bod ily injury

. . . ins urance, p rovid ed that:
a. This ins urance ap p lies only to the typ e of coverage w hic h is otherw is e p rovid ed by this p olicy and w hich the nam ed ins ured h a s a g r e ed to p rovid e by contract, but in no event s hall th e coverage e x ceed , in typ e or am ount, the coverage otherw is e p rovid ed by this p olicy; b. The am ount o f i n s u rance is lim ited to the minim um am ount
r e q u i r ed by s uch w ritten contract, or to the lim its of liabilit y p rovid ed by this p olicy, w hichever is low er; c. The ins urance ap p lies only w ith res p ect to liability aris ing out of the w ork d one by or on behalf of the nam ed ins ured und er such
w ritten contract; and d

. This ins urance s hall ap p ly as p rim ary ins urance w ith regard to the ad d itional ins ured f or w hom the nam ed ins ured has agreed by w ritten contract to provid e ins urance on a p rim ary bas is , and in s uch cas es , any other ins urance or s elf ins urance available to the ad d itional ins ured s hall be exces s to, and not contributory
w i t h , the ins urance af f ord ed by this policy to that ad d itiona l ins u r e d

. H ow ever, if the contract d oes not s p ecif ically require 12 Case: 12-30230 Document: 00512161598 Page: 12 Date Filed: 03/01/2013No. 12-30230 COMPANY be n a m e d as an additional insured in all such certificates, except insurance providing protection against worker’s or workmen’s compensation claims, to t h e e x tent o f the coverage required and only i n th e minimum a mount required b y c o ntract, and only with respect to lia b i l i t y arising out of work done by or o n behalf of the named insured, a nd only to the extent COMPANY is indemnified by CONTRACTOR u nder the terms of the contract. Id. a t *14. The i n s u r e r argued that this clause in the services agreement expressed the parties’ clear intent to li m i t additional insured coverage to the i ndemnities listed in t h at agreement. Id. a t *16. The court, however, applie d ATOFINA and Shell Chemical L.P. v. Discover Property & Casualty Insurance Co. , CIV. A. No. H-09-2583, 2010 WL 1338068 (S.D. T ex. M a r
. 2 9 , 2010), and concluded that only the policy could limit the scope of additional i nsured status. 2012 WL 1693697, at *15-16

. L o o king t o the “unambiguous [umbrella] policy, which neither contains a limitation on additional insured c o verage concerning indemnity under the [services] agreement nor incorporates a n y such limitation,” the court held the company was an a d ditional insured entitled to coverage as a matter of law. 2012 WL 1693697, at *14, *16-17. This case law makes clear to u s that only t he umbrella p o lic y i t s elf m ay establish l i m i t s u pon the extent to which an additional insured is covered in situations such as the one now before us. As an initial matter we note that here,

as in A TOFINA and Aubris , BP is not seeking indemnity from Transocean, but is seeking coverage from t he Insurers. T he umbrella policy in this c a se defines

an additional insured a s “any person or entity to whom the ‘Insured is obliged

that this ins urance be p rim ary, this ins urance s hal l b e e xces s over and not contributory w ith any other valid and collectible ins urance or s elf ins urance available t o t h e ad d itional ins ured
w hether s uch other ins urance or s elf ins urance is p rim ary, exces s , or contingent, or on any other bas is

.

13 Case: 12-30230 Document: 00512161598 Page: 13 Date Filed: 03/01/2013No. 12-30230

by any oral o r w r itten ‘Insurance Contract’

. . . to provide insurance s uch as is afforded by t his policy.” And it defines “Insurance C ontract” as “any written or oral c ontract o r a g r e e m e n t entered into by the ‘Insured’

. . . and pertaining to business under which the ‘ Insured’ assumes t he t o rt liability of another party to
pa y f o r ‘Bodily Injury’, ‘Property Damage’, ‘Personal Injury’ or ‘Advertising Injury’ to a ‘Third Party’ or organization.” This language is very similar to the language in the umbrella po l i cies i n ATOFINA , Aubris , and P asadena Refining —indeed, we can find no prin c i p led distinction b etween the policy language in these three cases and in the case now at hand. 9 Just as t he policies in these three earlier cases did not limit coverage, so here t he policy itself does not contain a n y limitation o n additional insured coverage nor i ncorporate any limits from the underlying Drilling Contract. The Insurers, however, argue that the additional insured provision in the Drilling Contract specifically limits BP’s s tatus as a n a dditional i nsured to circumstances involving those liabilities Transocean specifically assumes under the Contract. This argument is simply not persuasive given how T exas law has developed. The language to which t he Insurers cite for support is v irtually identical to the a dditional insured provision contained i n the s ervices agreement in ATOFINA ; additionally, it is very similar to the language in both A ubris and Pasadena Refining

. T o m a k e the parallels clear, we n ote a gain that the agreement in ATOFINA provided that

[ATOFINA], i ts parents, s ubsidiaries and affiliated companies, and their respective employees, officers and

9 The d is trict court dis tinguis hed the current cas e f rom A TO FIN

A by noting that the p olicy in that cas e, in def ining “ad d itional ins ured ,” d id not s p ecif ically ref

er to an und erlying
s ervices contract. This is a true, but ultim ately an unp ers uas ive d is tinction. Firs t, that p olicy d id i n c l u d e in its ad d itional ins ured d ef inition language ref

erencing entities “f

or w hom you have agreed to p rovid e ins urance as is af f ord ed by this policy. ” Second , th e policies in both A ubri s a nd Pa sa dena Ref ini ng s p ecif

ically ref

erence an und erlying contract requiring ins urance coverag e i n t h eir d ef initions of ad d itional ins ured s, yet in each of thes e cas es the
res p ective courts f

ound this ref

erence ins uf

f icient to cons titute a lim it on coverage. 14 Case: 12-30230 Document: 00512161598 Page: 14 Date Filed: 03/01/2013No. 12-30230 agents shall be named as a dditional insured in e ach of [Triple S ’ s ] policies, except W orkers’ Compensation; however, such extension of coverage shall n o t apply with respect to any obligations for which [ATOFINA] has specifically agreed to indemnify [Triple S]. And the Drilling Contract here requires:

[BP], its subsidiaries and a f filiated companies, coowners, and joint venturers, if a ny, and their employees, officers and agents shall b e name d as additional insureds in each of [Transocean’s] policies,
e x cept Workers’ Compensation for liabilities assum e d by [Transocean] under the terms of this Contract. While the parties ardently disagree a s to how this clau s e i n t h e Drilling Contract should be interpreted, we find, in t he light of ATOFINA , t h at we need not n o w decide this contentious issue. Even if the clause is construed as the Insurers desire, that is, even if it is understood to mean that BP is an additional insured under Transocean’s policies only for liabilities Transocean specifically assumed in the Drilling Contract, the o ut c ome is a clause materially i dentical to the a dditional insured provision in ATOFINA—and the Texas Supreme Court found t h a t t h i s clause was i nsufficient to limit coverage. Despite the services contract’s language, the AT OFINA court found the umbrella policy c o ntrolled
coverage. Accord i ngly, we find we are bound to l ook only to the policy itself to determine whether BP is covered i n t h e current case. Because the umbrella policy’s provision describing an additional insured is substantially similar to the pertinent policy provisions in ATOFINA , Aubris , a n d Pasadena Refining , we hold that there i s no relevant limitation to B P’s c o verage u n der the policy as an additional i ns u r e d , t h at i s, so long as the insurance provision and the indemnities c lauses in the Drilling Contract are separate and independent. See ATOFINA , 256 S.W.3d at 664 n.5, 670; Getty Oil , 845 S.W.2d at 804.

15 Case: 12-30230 Document: 00512161598 Page: 15 Date Filed: 03/01/2013No. 12-30230 B. And now that is the q uestion we m ust next resolve: Whether the Drilling Contract’s additional insured provision is separate from and additional to the indemnity provisions. Getty Oil , 845 S .W.2d at 804. Notably, in ATOFINA , Aubris , and Pasadena Refining , the resp ective courts found the additional insured provisi o n s w ere independent of the indemnity provisions. ATOFINA considered two cases in reaching this conclusion. First, it examined Fireman’s Fund v. Commercial Standard Ins. Co. , 490 S.W.2d 818 (Tex. 1972), in which the Texas S u preme Court held GM was n ot entitled to indemnity because the contract did not extend i ndemnity t o GM’s negligence. I n t h a t c a se, GM had contracted with Sam P. Wallace Co., Inc. (“Wallace”) to p e rform work on GM’s Arlington assembly plant, and, in t he contract, Wallace agreed to indemnify GM for any l osses arising from W allace’s o wn negligence and to obta i n l i a b ility insurance to satisfy that obligation

. Id. a t 820. The ATOFINA court distinguished that case by noting that in Fireman’ s F u n d , G M was not an additional insured under Wallace’s liability policy—while Wallace was required to obtain insurance to c over its l iabil i t i e s , it was not further required to name GM as an a d d i tional insured in those policies. 256 S.W.3d at 669-70. As described below, this same distinction applies to the case now before us. Second, the A TOFINA court l o o k e d t o Getty O il , 845 S.W.2d 794. Getty contracted with NL Industries to purchase chemicals, and the services contract included an indemnity provision as well as a b road ins u rance r equirement providing, in paragraph 1 , t h a t “ [a]ll insurance coverages carried by [NL], whether or not required hereby, shall extend to and protect [Getty.]” Id. at 797. The Getty Oil court found this contract was “significantly different f rom that in Fireman’s Fund .” Id. at 804. It reasoned that, while the i ndemnity provision in
paragr a p h s 3-4 of the relevant contract was supported by an insurance

16 Case: 12-30230 Document: 00512161598 Page: 16 Date Filed: 03/01/2013No. 12-30230

p r o v ision, this provision was “separate from a nd additional to t h e addition a l insured provision in paragraphs 1-2.” Id. The ATOFINA court applied the reasoning in these c ases to f ind t h a t, “[a]lthough the s e r v ice contract in this case does not i n clude an insurance requirement q uite as clear as the one in Getty , it is cle a r e n o u g h—it requires that ATOFINA ‘shall b e n a med as additional insured in each o f [ T r i ple S’s] policies.’” 256 S.W.3d at 6 70 (alteration in original). The court then concluded it was unmistakable that the agreement in this case to e xtend

direct insur e d s t atus to ATOFINA as an additional insured is separate and independent from ATOFINA’s agreement to f

orego contractual i n d e m nity for its own ne g l i g e n ce. We disapprove the view that this kind of additional insured require m e n t fails to e stablish a separate an d i ndependent obligation for insuring liability. Id. (emphasis in original). Accordingly, to render an additional insured provision separate from and additional to an indemnity p rovision, Texas l aw only requires the additional insured provision be a discrete requirement. As evidenced in Getty Oil and ATOFINA , it n eed n ot be an entirely separate provision of the contract, and its independent status is not altered merely by t he fact th a t the contract also includes a provision requiring the relevant party to obtain insurance to cover its liabilities under the contract. Here, as the Insurers note, o n e clause of Exhibit C (describing Transocean’s insurance obligations) requires T ransocean to obtain coverage for its contractual liabilities, 1 0 while another provision simply requires Transocean

1 0 See Exhibit C, ¶ 1. c: 1. T he ins urance requir e d t o b e carried by [ Trans ocean] und er this Contract is as f

ollow s :

. . . 17 Case: 12-30230 Document: 00512161598 Page: 17 Date Filed: 03/01/2013No. 12-30230

to name BP as an additional insured. 1 1 This setup is similar to the contract in Getty Oil , which imposed a requirement that NL obtain insurance for its contractual l iabilities i n paragraphs 3-4, w hile requiring Getty be named an additional insured in paragraphs 1-2. More o v e r , the additional insured provision here is nearly identical to t h e additional insured provision in ATOFINA

. Accordingly, we hold, under T exas case law, i t i s “ u n mistakable” that the p rovision in the Drilling Contract extending direct insured s tatus to BP is separate and independent from BP’s agre e m e n t t o forego contractual indemnity in various other circumstances. See ATOFINA , 256 S.W.3d at 670. IV. Texas law c ompels us to interpret insurance c o verage provisions in favor of the insured, so l o n g a s that interpretation is reasonable—and even if the i nsurer’s proffered i nterpretation denying coverage is more reasonable. Id. at 668, 668 n .27; Hudson Energy Co. , 811 S.W.2d at 555. T exas law further establishes that “‘ w h e r e an additional insured p rovision is s eparate from and additional to a n indemnity provision, the scope of the insurance requirement is not limited by the indemnity claims.’” Pasadena Refining , 2012 WL 1693697, at *17 ( quoting ATOFINA , 256 S.W.3d at 664 n.5); see also Aubris , 566 F.3d at 488- 89. Accordingly, we c oncl u d e : Because we find t he umbrella policies between the Insurers and Transocean do n ot i m p o s e any r elevant limitation upon the extent to which BP is an additional insured, and because the a dditional insured

c. Com p rehens ive G eneral Liability Ins urance, in c lu d ing contr actual liab ility insur ing the inde m nity agr e e m e nt as se t for th in the C ontr act and p rod ucts

- com p leted op erati o ns coverage w i t h a com bined s ingle lim it of not les s than $10, 000, 000 covering bod ily injury, s ick nes s , d eath and p rop erty d am age. ( Em p has is ad ded

. )

1 1 Exhibit C, ¶ 3: “[ BP]

. . . s hall be nam ed as ad d itional ins ured s in each of [ Trans ocean’s ] p olicies , excep t Work ers ’ Com p ens ation f or liabilities as s um ed by [ Tran socean] und er the term s of this Contract. ” 18 Case: 12-30230 Document: 00512161598 Page: 18 Date Filed: 03/01/2013No. 12-30230

p rovision in the Drilling Contract i s separate from and additional t o t h e indemnity provisio n s t h e r e i n, we find BP is entitled to coverage under each of Transocean’s policies as an additional insured as a matt e r of law. We reverse the j udgment of the district court and remand the case w ith instructions to enter the appropriate judgment consistent with this opinion. R EVERSED and REMANDED for entry of judgment.

19 Case: 12-30230 Document: 00512161598 Page: 19 Date Filed: 03/01/2013