Court Opinion

ID: 6104644
Source: CourtListenerOpinion
Date Created: 2022-01-19 19:00:23.24965+00
Date Added: 2024-06-11T08:53:45.243690
License: Public Domain

Case: 20-30364    Document: 00516171755         Page: 1    Date Filed: 01/19/2022

           United States Court of Appeals
                for the Fifth Circuit                              United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                                                   January 19, 2022
                                 No. 20-30364
                                                                     Lyle W. Cayce
                                                                          Clerk

   O'Brien's Response Management, L.L.C.;
   National Response Corporation,

                                                          Plaintiffs—Appellees,

                                     versus

   BP Exploration & Production, Incorporated;
   BP America Production Company,

                                Defendants/Third Party Plaintiffs—Appellants,

                                     versus

   Navigators Insurance Company,

                                              Third Party Defendant—Appellee.

                 Appeal from the United States District Court
                    for the Eastern District of Louisiana
                          USDC No. 2:19-CV-1418

   Before Jones, Clement, and Graves, Circuit Judges.
   Edith H. Jones, Circuit Judge:
         This latest installment of litigation spilling out of the Deepwater
   Horizon offshore explosion and fire centers on who should pay for personal
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                                         No. 20-30364

   injury claims brought by employees of two companies hired by BP
   Exploration & Production Inc. and BP America Production Company
   (“BP”) to clean up the oil spill. Specifically, BP claims to be an “additional
   insured” under two policies obtained by O’Brien’s Response Management,
   L.L.C. (“O’Brien’s”). BP also seeks indemnification by O’Brien’s and/or
   National Response Corporation (“NRC,” together “Responders”) under its
   contract with each plaintiff.
           The issues here require interpretation of BP’s contracts with each of
   the Responders and the related insurance policies in light of sometimes
   sparse case law. Ultimately, we conclude that BP was an additional insured
   up to the minimum amount required by its contract with O’Brien’s; the two
   insurance policies maintained by O’Brien’s cannot be combined to satisfy the
   minimum amount; O’Brien’s is not required to indemnify BP because BP
   materially breached its indemnification provision with respect to the Back-
   End Litigation Option (“BELO”) claims brought by O’Brien’s employees;
   and a claim-by-claim analysis is required to determine the materiality of any
   breach regarding the remaining indemnity claims against both O’Brien’s and
   NRC. Thus, we AFFIRM in part, REVERSE in part, and REMAND for
   further proceedings. 1
                                   I. BACKGROUND
           BP retained the Responders for nearly $2 billion to assist with clean-
   up efforts in the aftermath of the April 2010 Deepwater Horizon oil spill. BP
   and O’Brien’s executed a Bridge Agreement in 2010 that incorporated, with
   modifications, a Master Consulting Services Contract they originally entered

           1
              We do not reach any potentially applicable exclusions, such as the “oil rig
   exclusion” mentioned by Navigators in its briefing, that were not ruled on by the district
   court in the first instance.

                                               2
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   into in 2004 (the “BP-O’Brien’s Contract”). BP also entered into an
   Agreement for the Provision of Response Resources with NRC in 2003 (the
   BP-NRC Agreement). The relevant provisions are described below.
           The Responders and their respective subcontractors employed
   thousands of workers as part of their clean-up efforts. Thousands among
   these workers then filed personal injury lawsuits against BP, which were
   consolidated with the multidistrict litigation (“MDL”) arising from the
   disaster. 2 The district court organized the MDL cases into various “pleading
   bundles.” Relevant here, the B3 bundle included “all claims for personal
   injury and/or medical monitoring for exposure or other injury occurring after
   the explosion and fire of April 20, 2010.” On the court’s instruction, the
   Plaintiffs’ Steering Committee (“PSC”) filed a B3 Master Complaint in
   December 2010 that plaintiffs could join by filing a short form joinder. In
   April 2012, BP settled the B3 claims (“Medical Settlement”) with the PSC
   and a defined settlement class. The opt-out deadline closed in October 2012.
   Importantly, the Medical Settlement created a new type of claim for latent
   injuries—the BELO claims—so long as settlement class members followed
   certain procedures. BP calls these claims “creature[s] of the Medical
   Settlement.” Although BP emphasizes that the Responders were aware of
   the settlement before the district court approved it in January 2013, BP does
   not dispute that neither O’Brien’s nor NRC had control over the
   negotiations, nor did either approve the settlement. 3

           2
             After the district court granted the Responders’ motion to lift the MDL stay in
   2019, it deconsolidated the case “for organizational purposes[.]”
           3
             In its brief, BP points to a letter from the Responders to the district court that
   demonstrates the Responders were aware of the settlement and that they were not involved
   in its negotiation. It states the latter conclusion directly: “The Clean-Up Responder
   Defendants are not involved in the ongoing settlement negotiations.”

                                                3
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           After the settlement, plaintiffs could bring two relevant types of
   claims: (1) opt-out B3 claims if they did not participate in the settlement, and
   (2) BELO claims if they were class members who alleged latent injuries and
   followed the approved process per the Medical Settlement. 4
           In March 2017, BP notified O’Brien’s about a BELO suit filed by an
   O’Brien’s employee and sought indemnification under their Contract for the
   first time. BP subsequently sought indemnification for approximately 1,800
   BELO claims by O’Brien’s employees and 200 such claims by NRC
   employees, as well as a smaller number of opt-out B3 claims against each
   Responder. The Responders refused to indemnify BP under their respective
   contracts. Instead, they sued for a declaration that they need not indemnify
   BP for any BELO or opt-out B3 claims. BP counterclaimed for breach of
   contract, a declaration in favor of its indemnification rights, and unjust
   enrichment.
           O’Brien’s is a named insured on two pertinent policies: (1) a Primary
   Bumbershoot Liability policy issued by Navigators Insurance Company (the
   “Primary Bumbershoot” policy) 5 providing marine umbrella insurance with
   an aggregate limit of $10,000,000; and (2) an Excess Bumbershoot Liability
   policy (the “First Excess Bumbershoot” policy) issued by Navigators and
   other insurers, which incorporates the Primary Bumbershoot’s policy terms
   and provides excess coverage up to $90,000,000.

           4
             To count as a BELO claim the condition must have been diagnosed after April 16,
   2012. Thus, a condition that manifested before the settlement and was later diagnosed
   might still qualify as a BELO claim.
           5
            “A ‘bumbershoot,’ the English term for umbrella, is a marine insurance policy
   covering multiple liability coverages in excess of one or more different underlying policies,
   comparable to the commercial liability umbrella covering liabilities on land.” 15 Couch
   on Insurance § 220:32 & n.29 (2021) (citation omitted).

                                                4
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          O’Brien’s also maintained marine general liability coverage under a
   policy issued by Starr Indemnity & Liability Company (“Starr policy”) and
   a contractor’s operations and professional services environmental insurance
   (“COPS”) policy that covered liabilities excluded by the Starr policy. Both
   policies had coverage limits of $1 million per occurrence and $2 million in
   aggregate and have been exhausted.
          In June 2019, O’Brien’s notified BP that it was an additional insured
   under the Primary and First Excess Bumbershoot policies. Navigators,
   however, refused BP’s demands for coverage, prompting BP to amend its
   counterclaim against the Responders and file a third-party claim against
   Navigators on its bumbershoot policies.
          Navigators, BP, and O’Brien’s and NRC filed cross-motions for
   judgment on the pleadings. The district court ruled against BP on each issue,
   concluding that (1) BP was not an additional insured under the relevant
   insurance policies; (2) O’Brien’s was not required to indemnify BP because
   BP violated the consent-to-settle, notice, and control-of-defense provisions
   of the BP-O’Brien’s Contract; and (3) NRC was not required to indemnify
   BP under their contract because NRC “had no liability under ‘Responder
   Immunity Law.’” The district court also determined that O’Brien’s did not
   breach its contractual obligation to acquire insurance coverage for BP. BP
   timely appealed.
                               II. DISCUSSION
         This court reviews Rule 12(c) judgments on the pleadings de novo. See
   Garza v. Escobar, 972 F.3d 721, 727 (5th Cir. 2020) (citations omitted). We
   accept well-pleaded facts as true and construe them in the light most
   favorable to the non-moving party. Edionwe v. Bailey, 860 F.3d 287, 291 (5th

                                         5
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   Cir. 2017) (citation omitted). The parties agree that Texas law applies. 6 As
   already stated, this appeal turns on whether BP is an additional insured under
   the Primary and First Excess Bumbershoot policies and on the interpretation
   of the indemnification provisions of BP’s separate contracts with O’Brien’s
   and NRC. We address the issues in turn.
                           A. Additional Insured Status
          BP seeks coverage as an “additional insured” under the Primary and
   Excess Bumbershoot policies covering O’Brien’s.               Under Texas law,
   “[i]nsurance policies are controlled by rules of interpretation and
   construction which are applicable to contracts generally.” Richards v. State
   Farm Lloyd’s, 597 S.W.3d 492, 497 (Tex. 2020) (internal quotation marks
   and citation omitted). Further, to construe contracts, Texas courts “give
   terms their plain, ordinary and generally accepted meaning . . . . [and] will
   enforce the unambiguous document as written.” Heritage Res., Inc. v.
   NationsBank, 939 S.W.2d 118, 121 (Tex. 1996) (citations omitted). Although
   insurance coverage analysis “necessarily begins with the four corners of the
   policies[,] . . . .” the Texas Supreme Court holds that “insurance policies can
   incorporate limitations on coverages encompassed in extrinsic documents by
   reference to those documents.” In re Deepwater Horizon, 470 S.W.3d 452,
   460 (Tex. 2015) (citations omitted). If a policy “directs [Texas courts]
   elsewhere, [they] will refer to an incorporated document to the extent
   required by the policy[,]” but they “do not consider coverage limitations in
   underlying transactional documents[]” unless required by the policy. Id.

          6
            Navigators reserved the right to contest the Texas choice-of-law provision,
   contending the BP-O’Brien’s Contract was amended post-loss, but decided to accept
   Texas law here because it did not identify any conflict-of-law issues.

                                            6
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           In a provision similar to one involved in Deepwater Horizon, the
   Primary Bumbershoot policy defined an “assured” to include “any person,
   organization, trustee or estate to whom the Named Assured is obligated by
   virtue of a written contract or agreement to provide insurance as is afforded
   by this policy[.]” Compare In re Deepwater Horizon, 470 S.W.3d at 457. And
   the First Excess Bumbershoot policy was subject to the primary policy’s
   terms, definitions, exclusions, and conditions. BP is thus an additional
   insured under the two bumbershoot policies to the extent required by the BP-
   O’Brien’s Contract.
           The BP-O’Brien’s Contract confirms BP’s status with regard to at
   least some of O’Brien’s insurance coverage.                  Section 12.01, entitled
   “Insurance,” required O’Brien’s to maintain four types of policies, 7
   including:
           12.01.03     Comprehensive General Liability Insurance,
           including contractual liability coverage, with minimum limits
           of US$2,000,000 per occurrence.
   Section 12.02 established BP’s additional insured status as to the CGL
   coverage and marine extension thereof:
           Except for Workers’ Compensation Insurance set forth in
           Section 12.01.01, all policies shall name [BP entities] as
           additional insureds. In addition, all of the policies listed above,
           without exception, shall be endorsed to waive subrogation
           against the [BP entities] . . . . Additionally, if [O’Brien’s] shall
           perform any Services hereunder on navigable waters then each
           of the policies listed in 12.01.02 [Employer’s Liability] and
           12.01.03 [Comprehensive General Liability] above shall be
           endorsed to cover marine operations.

           7
             Workers’ compensation, employer’s liability, and automobile liability insurance
   are the additional required coverages.

                                              7
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          Navigators challenges BP’s claim to be an additional insured on the
   bumbershoot policies for two primary reasons.             First, Navigators
   distinguishes its bumbershoot policies from the CGL coverage referenced in
   Section 12.01.03 and argues that O’Brien’s fulfilled its contractual
   obligations by naming BP as an additional assured on its Starr and COPS
   policies that provided GCL-type coverage. Second, once O’Brien’s fulfilled
   its obligations with respect to CGL coverage, Navigators insists that its
   bumbershoot policies did not provide additional assured coverage to BP.
   Alternatively, Navigators argues that if BP is entitled to additional assured
   coverage under its bumbershoot policies, then that coverage is limited to the
   $2,000,000 minimum required by Section 12.01.03. Navigators’ first two
   arguments do not withstand analysis, but the coverage amount argument
   must be closely examined.
          1. CGL Coverage
         To begin, Navigators concedes that the Starr policy provides
   “standard primary CGL [i]nsurance, modified slightly to cover marine
   operations.” It also agrees that BP is an additional assured under the Starr
   and COPS policies, and that its Primary Bumbershoot policy provides excess
   coverage that “expressly includes the Starr Policy and the COPS policy by
   name.” Finally, Navigators describes the First Excess Bumbershoot policy
   as “follow-form” of its primary policy. To state these facts is to conclude
   that the bumbershoot policies afford CGL-type coverage as described in the
   BP-O’Brien’s Contract.
          Navigators resists the obvious, emphasizing general differences
   between CGL and bumbershoot policies writ large. General distinctions are
   unpersuasive here. Undoubtedly, bumbershoot policies can differ from
   standard CGL policies. See Robert T. Lemon II, Allocation of Marine Risks:
   An Overview of the Marine Insurance Package, 81 Tul. L. Rev. 1467, 1492

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   (2007) (citation omitted) (recognizing that a “CGL policy is not a marine
   policy and is not intended to cover risks[]”). But the specific coverage
   overlap of Navigators’ bumbershoot policies with the Starr policy (which was
   modified to cover marine operations, after all), together with the
   bumbershoot policies’ direct reference to the Starr and COPS policies,
   refutes any meaningful distinction here. Therefore, the specific coverage
   provided by the policies is the relevant inquiry. 8 The bumbershoot policies
   provide CGL-type coverage, so they are best understood as CGL policies
   under the BP-O’Brien’s Contract, and BP is an additional assured.
           Navigators also asserts that the BP-O’Brien’s Contract limits BP’s
   assured status to “primary CGL insurance, not bumbershoot, umbrella or
   excess insurance.” But the word “primary” is nowhere in the text of the
   Contract, which requires only that O’Brien’s “maintain” CGL insurance
   with a certain minimum limit. 9

           8
             At one point in this litigation, O’Brien’s and BP considered the term CGL as used
   in the agreement to encompass the Primary Bumbershoot policy. In opposing motions for
   judgment on the pleadings, the Responders stated that “BP was automatically named as an
   additional insured on the [Primary Bumbershoot policy], which provides CGL insurance.”
   And in their answer to BP’s amended counterclaims, the Responders recognized that “[i]n
   June 2019, O’Brien’s notified BP that BP is an additional insured under the [Primary
   Bumbershoot policy] . . . .” Although the Responders now take “no position” on the
   insurance issue “because it does not concern them,” their prior clear understanding of the
   Primary Bumbershoot policy supports our conclusion that Navigators’ policies provide
   CGL-type coverage. See Harris v Rowe, 593 S.W.2d 303, 306 (Tex. 1979) (recognizing that
   “[c]ourts rightfully assume that parties to a contract are in the best position to know what
   was intended by the language employed[,]” and “should adopt the construction of the
   instrument as placed upon it by the parties unless there is clear language in the instrument
   indicating an intention to the contrary” (citations omitted)).
           9
             To be sure, some contracts include separate provisions requiring CGL insurance
   and also excess coverage. See, e.g., Ironshore Specialty Ins. Co. v. Aspen Underwriting, Ltd.,
   788 F.3d 456, 458 (5th Cir. 2015) (requiring CGL insurance and excess liability insurance
   above the CGL policy in distinct subsections). None of the cases cited by Navigators,

                                                 9
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          2. Contractual Minimum Coverage
          The next question is how much coverage BP is entitled to as an
   additional assured on the bumbershoot policies. BP contends it is entitled to
   the full $100,000,000 under these policies notwithstanding that
   Section 12.01.03 required O’Brien’s to purchase CGL with “minimum
   limits” of $2 million per occurrence.
          In re Deepwater Horizon provides the analytical framework, and
   previous decisions of this court supply a key to the outcome. The In re
   Deepwater Horizon court looked first at the insurance policy, whose language,
   substantially similar to that before us, defined an additional insured as any
   entity to whom the named insured was “obliged by oral or written Insured
   Contract . . . to provide insurance such as afforded by [the] Policy.”
   470 S.W.3d at 457 (internal quotations omitted and alterations in original).
   The court then inspected the parties’ contract to determine the extent of
   coverage.
          Because the Primary Bumbershoot policy creates an “obligation” that
   mirrors the obligation in In re Deepwater Horizon, we move to the terms of the
   BP-O’Brien’s Contract referenced by the Primary Bumbershoot policy. BP
   focuses on language in Section 12.02, which states that “[e]xcept for
   Workers’ Compensation Insurance set forth in Section 12.01.01, all policies
   shall name [the BP entities] as additional insureds.” “All policies,” it
   contends, means all policies procured by O’Brien’s. But the very next
   sentence in Section 12.02 references “all of the policies listed above” when
   dealing with waiver of subrogation. And the logical inference from both
   sentences together is that in excluding Workers’ Compensation Insurance,

   however, concludes that excess coverage mirroring a primary CGL policy does not
   constitute CGL coverage. And we see no need to draw that conclusion today.

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   Section 12.02 cross-references “all” of the policies in Section 12.01.01 and
   nothing more. BP itself concedes that “all policies” does not literally mean
   “all,” because in context, the phrase “plainly refers to all insurance policies
   providing the types of ‘insurance coverage’ listed in the previous section,
   except for Workers’ Compensation Insurance.” BP fails to explain how the
   CGL’s minimum coverage limits are not included in the “all policies”
   language of Section 12.02.
           The BP-O’Brien’s Contract contraindicates extending BP’s
   additional assured status to the maximum coverage voluntarily purchased by
   O’Brien’s. Our precedent strongly reinforces that conclusion. In the wake
   of In re Deepwater Horizon, this court made an Erie guess in Ironshore Specialty
   Ins. Co. v. Aspen Underwriting, Ltd. that an additional assured was covered
   only to the minimum obliged by the parties’ contract and not the maximum
   obtained by the named insured. 10 788 F.3d 456, 461-63 (5th Cir. 2015). To
   be sure, the BP-O’Brien’s Contract specifies CGL coverage with $2 million
   “minimum limits,” whereas the policy in Ironshore referenced only
   “$5 million.” Id. at 458. But that is still a limit, and the parties agreed in
   Ironshore that $5 million was the maximum required by the master service
   agreement there. Id. at 459. 11

           10
             The policy in Ironshore covered “any person or entity to whom [the insured was]
   obliged by a written ‘Insured Contract . . . .’” 788 F.3d at 458. The court reasoned that
   because a similar provision was sufficient “in Deepwater Horizon to incorporate the Drilling
   Contract’s limitation on coverage[,] . . . . [t]he nearly identical language in [the
   contractor’s] policies . . . compel[led] the same result.” Id. at 463.
           11
              The parties also dispute the commercial context of the BP-O’Brien’s Contract.
   But their arguments amount to a draw. BP claims the “all policies” clause was intended to
   “hitch[]” BP’s wagon to O’Brien’s full coverage because O’Brien’s managed the cleanup
   work and “had every incentive to obtain adequate CGL insurance for itself.” But
   Navigators points out that BP did not take this approach with its NRC contract, and argues
   that it was equally reasonable for BP to require certain minimum coverage from O’Brien’s.
   In short, the commercial context is not decisive here. Cf. Kachina Pipeline Co., Inc. v. Lillis,

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           This court’s decision in Musgrove v. Southland Corp. also rejects BP’s
   proffered interpretation. 12 898 F.2d 1041 (5th Cir. 1990). A key issue in
   Musgrove was whether a party was an additional insured on an excess policy
   covering losses greater than $1,000,000.                  Id. at 1043-44.         Like the
   bumbershoot policies here, an excess policy in Musgrove limited coverage for
   additional insureds to those whom the named insured was “obligated by
   virtue of a written contract.” Id. at 1043. The relevant contract required
   primary CGL insurance “of not less than $1 million per occurrence.” Id.
   The court rejected drop-down coverage by the excess policy, however,
   because of its express limitation to losses exceeding $1 million. It also
   disregarded an additional assured provision that would have required “[a]ll
   insurance coverages carried by Contractor, whether or not required
   hereby, . . .” to also “extend to and protect Company . . . to the full amount
   of such coverage, but not less than” $1,000,000 in CGL insurance. Id.
   (emphasis and alterations in original). The panel rejected application of this
   language, inter alia, 13 because the insured “was not contractually obligated to

   471 S.W.3d 445, 450 (Tex. 2015) (permitting consideration of “facts and circumstances
   surrounding a contract, . . .” but recognizing that “extrinsic evidence can be considered
   only to interpret an ambiguous writing, not to create ambiguity.” (citations omitted)).
           12
              Although Musgrove arose under Louisiana law, a panel of this court favorably
   cited the decision while applying Texas law. See Forest Oil Corp. v. Strata Energy, Inc.,
   929 F.2d 1039, 1045 (5th Cir. 1991) (citing Musgrove v. Southland Corp., 898 F.2d 1041, 1043
   (5th Cir. 1990)). Forest Oil construed one policy to the “full extent of its . . . coverage[]”
   because it lacked language that would provide coverage “only to the extent that [the
   insured] was contractually required to provide such insurance[,]” but construed another
   policy, which did express such language, as limited to the amount required by an underlying
   contract. Id. at 1044-45.
           13
              Principally, this language appeared in a contractor’s manual attached to the
   contract, and the manual stated that the parties’ contract “prevails in any conflict.”
   Musgrove, 898 F.2d at 1043-44. Alternatively, the panel held, the manual’s language gave
   the insured the prerogative, but not a duty, to purchase excess insurance on the other
   party’s behalf. Id. at 1044.

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   obtain excess liability coverage for [the other party.]” Id. at 1044 (citation
   omitted).
           As in this case, the insurance policy in Musgrove only covered
   additional insureds as “obligated” by an insured’s written contract. Id. at
   1043. Further, the contract required CGL coverage “of not less than” a
   certain amount. Id. And this court enforced the policy as a limit on excess
   coverage notwithstanding additional insured language that, if applicable,
   would have required the company to be named “on all of the above
   insurance[.]” Id. at 1043-44. 14
           BP relies heavily on a Georgia state court’s interpretation of a similar
   additional insured clause, which it describes as the only authority that
   construed the “all policies” language at issue in this appeal. See Ins. Co. of
   Pa. v. APAC-Se., Inc., 677 S.E.2d 734 (Ga. Ct. App. 2009). APAC is
   unpersuasive for several reasons. First, as we have explained, this court
   favors requiring insurance companies to cover only the minimum amount
   obliged by an underlying referenced contract when the policy contains similar
   language to the bumbershoot policies at issue here. That legal context
   influences our interpretation. Cf. 8 Couch on Insurance § 112:31
   (2021) (recognizing that “[t]he phrase ‘additional insured’ is affected by

           14
              We recognize that, under Texas law, when two reasonable interpretations of an
   insurance policy exist the one favoring coverage should be preferred. Evanston Ins. Co. v.
   Legacy of Life, Inc., 370 S.W.3d 377, 380 (Tex. 2012) (citation omitted). This rule applies
   even where a policy incorporates another agreement by reference. Aubris Res. LP v. St. Paul
   Fire & Marine Ins. Co., 566 F.3d 483, 489 n.3 (5th Cir. 2009) (seeing “no reason why the
   special rules of insurance policy interpretation should not apply where, as here, the
   insurance policy’s additional insured endorsement incorporates section 10.2 by
   reference[]”). Nevertheless, in light of Ironshore, Forest Oil, and Musgrove, and the BP-
   O’Brien’s Contract itself, we find just one reasonable interpretation. See In re Deepwater
   Horizon, 470 S.W.3d 452, 464 (Tex. 2015) (“Disagreement about a policy’s meaning does
   not create an ambiguity if there is only one reasonable interpretation.”).

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   many sources:       (1) definitions contained in the policy, (2) statutory
   definitions, and (3) case law that has applied the phrase to various fact
   patterns[]”).
          Second, the additional insured clause in APAC distinguished between
   “all policies” and “required insurance,” and the court characterized the
   latter term as “setting forth other duties placed upon [the named insured]
   relating to insurance procurement.” 677 S.E.2d at 739. No such distinction
   exists in the additional insured clause here. BP nonetheless emphasizes the
   phrase “required insurance coverage” in Section 11.07 of the BP-O’Brien’s
   Contract, a separate provision requiring insurance coverage of the parties’
   mutual indemnity duties. BP would compare that language with the “all
   policies” language in Section 12.02. The comparison does not work; in
   APAC, the court’s interpretation relied on the fact that “all policies” and
   “required insurance” were “two different terms in short sequence within the
   same paragraph.” 15 Id.
          Finally, the APAC court held a narrow interpretation of “all policies”
   unlikely because it “would undermine [the named insured’s] ability to ensure
   that it meets its contractual obligation . . . .” to provide indemnification. Id.
   But, as just noted, that same concern is not present in the BP-O’Brien’s
   Contract, which separately requires coverage for the parties’ indemnity
   obligations and states that indemnity and insurance provisions are
   independent of each other.

          15
              Additionally, Articles 11 and 12 are completely different from the APAC
   provision. Section 11.07 used “required insurance coverage” to emphasize that the
   parties’ Article 11 “indemnity obligations” are “independent of” the Article 12
   “insurance requirements.” Thus, the “all policies” language in Section 12.02 was
   intended to ensure BP was named an additional insured on the policies procured by
   O’Brien’s to satisfy its coverage obligations set forth in Section 12.01.03.

                                          14
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           We conclude that the BP-O’Brien’s Contract, read in full, adopts the
   $2 million minimum CGL coverage as the maximum required to be furnished
   by each party for the benefit of the other and that Navigators’ bumbershoot
   policies incorporated the limit of the contractual obligation.
           3. The Starr and COPS Policies Do Not Satisfy the Minimum
           Although the district court correctly concluded that BP was only an
   additional insured with respect to the $2,000,000 obligated by the BP-
   O’Brien’s Contract, it erred in concluding that amount was fully satisfied by
   the Starr and COPS policies (each bearing $1,000,000 coverage limits per
   occurrence). 16 BP is entitled to $2 million of coverage.
           The facts speak for themselves. The Starr policy provides CGL-type
   coverage but excludes pollution and professional liability coverage. The
   COPS policy fills that gap by covering pollution and professional liability.
   The two policies cover different sets of risks and each affords a single
   $1,000,000 layer of complementary CGL-type coverage per occurrence.
   Allowing Navigators, as it urges, to count the policies together would create
   an absurd result. A party could obtain primary CGL coverage, subject it to
   numerous exclusions, obtain separate policies covering only those
   exclusions, add the total together, and thus circumvent contractual minimum
   amount requirements. 17 We conclude, instead, that the Starr and COPS
   policies cannot be combined to meet the minimum CGL coverage

           16
             According to Navigators, the fact that the Starr and COPS policies are exhausted
   has no bearing on whether they count toward the minimum CGL coverage required by the
   BP-O’Brien’s Contract. BP does not dispute this point and thus concedes it.
           17
             The parties also dispute whether the COPS policy’s claims-made coverage for
   professional liability conflicts with the BP-O’Brien’s Contract’s requirement that
   minimum coverage limits be “per occurrence.” While this may provide another reason
   not to consider the COPS policy a separate CGL policy for purposes of complying with the
   minimum $2,000,000 coverage requirement, we need not reach it.

                                              15
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                                      No. 20-30364

   requirement. Together, they only constitute $1,000,000 of the $2,000,000
   required by the BP-O’Brien’s Contract because they are mutually reinforcing
   policies designed to satisfy the same obligation by filling in each other’s gaps.
                         B. Indemnification Obligations
          Notwithstanding the contractual mutual indemnity obligations
   between the Responders and BP, the district court concluded that BP was not
   entitled to indemnification under either contract for any of the claims.
   Regarding O’Brien’s, the district court concluded BP violated the BP-
   O’Brien’s Contract’s notice, consent-to-settle, and control-of-defense
   prerequisites to indemnification. With respect to NRC, it concluded that no
   indemnification obligations arose under the contract with respect to any
   claims because NRC was immune pursuant to applicable federal responder
   immunity laws. We discuss each contract in turn.
          1. BP-O’Brien’s Contract BELO claims
          Article 11 of the BP-O’Brien’s Contract holds each party to mutual
   indemnity obligations with regard to injuries to persons within their control.
   Section 11.02 states that this duty is “[s]ubject to the other provisions of this
   Article 11[.]” Section 11.04 then articulates notice, control-of-defense, and
   consent-to-settle requirements for indemnification:
          Contractor or Company as the case may be shall promptly give
          to the other party notice in writing of any claim made or proceedings
          commenced for which Contractor or Company claims to be
          entitled to indemnification under this contract. Such notice
          shall state with as much detail as is reasonably practicable the
          facts and circumstances giving rise to the claim and shall be
          given as soon as possible after the party seeking indemnity
          hereunder . . . becomes aware of such claim or proceeding.
          The [indemnitor] . . . shall confer with the indemnitee
          concerning the defense of any such claim or proceedings but,
          subject to the remainder of this Section 11.04, the indemnitor or

                                           16
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                                         No. 20-30364

           its insurer shall retain control of the conduct of such defense,
           including, but not limited to, the selection and management of
           counsel. Notwithstanding the foregoing, however, neither party
           shall effect settlement or compromise of any claim or proceeding
           without having obtained the prior written consent of the other party,
           which shall not be unreasonably withheld . . . . The indemnitee
           may, upon written notice to the indemnitor and at the
           indemnitee’s sole cost and expense, select its own counsel to
           participate in and be present for the defense of any such claim
           or proceeding, provided such counsel shall not take any action in
           the course of such claim or proceeding to prejudice the defense of such
           claim or proceeding.
   (emphasis added).
           The district court correctly concluded that BP materially breached the
   BP-O’Brien’s Contract regarding the BELO claims. 18 Those are the claims
   that BP agreed with the PSC to litigate, if plaintiffs followed certain
   procedures for claims that arose following the Medical Settlement. Invoking
   a prior material breach to justify non-performance is an affirmative defense
   on which O’Brien’s bears the burden of proof. See Tony Gullo Motors I, L.P.

           18
              Contrary to O’Brien’s’ position, the “subject to” preface to Section 11.02 is not
   best read as turning the subsequent notice, consent-to-settle, and control-of-defense
   provisions regarding indemnity into conditions precedent, whose non-fulfillment would
   void the indemnity obligation. In Cedyco Corp. v. PetroQuest Energy, LLC, this court
   observed that “Texas does not generally favor reading conditions precedent into
   contracts, . . . .” before finding such a condition although in a much different context.
   497 F.3d 485, 488–89 (5th Cir. 2007) (citation omitted). The general rule holds that
   “language in a contract is not construed to create a condition precedent if another reading
   of that language is possible.” Marathon E.G. Holding, Ltd. v. CMS Enters. Co., 597 F.3d
   311, 321-22 (5th Cir. 2010) (citations omitted); see also Foreca v. GRD Development Co.,
   758 S.W.2d 744, 745–46 (Tex. 1988) (concluding that “‘subject to legal documentation’
   language is not conclusive on intent to contract[]” in rejecting the argument that such a
   phrase “constitutes an uncomplied with condition precedent[]” (citation omitted)). The
   remainder of the indemnity obligation is sufficiently open-ended to preclude a condition
   precedent.

                                               17
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   v. Chapa, 212 S.W.3d 299, 314 (Tex. 2006). “A fundamental principle of
   contract law is that when one party to a contract commits a material breach
   of that contract, the other party is discharged or excused from any obligation
   to perform.” Hernandez v.Gulf Grp. Lloyds, 875 S.W.2d 691, 692 (Tex. 1994)
   (citations omitted). “By contrast, when a party commits a nonmaterial
   breach, the other party is not excused from future performance but may sue
   for the damages caused by the breach.” Bartush–Schnitzius Foods Co. v.
   Cimco Refrigeration, Inc., 518 S.W.3d 432, 436 (Tex. 2017) (per curiam)
   (internal quotation marks and citation omitted).
          Texas courts consider the following five factors when determining
   whether a breach is material:
          1) the extent to which the injured party will be deprived of the
          benefit which he reasonably expected;
          2) the extent to which the injured party can be adequately
          compensated for the part of that benefit of which he will be
          deprived;
          3) the extent to which the party failing to perform or to offer to
          perform will suffer forfeiture;
          4) the likelihood that the party failing to perform or to offer to
          perform will cure his failure, taking account of the
          circumstances including any reasonable assurances; and
          5) the extent to which the behavior of the party failing to
          perform or to offer to perform comports with standards of good
          faith and fair dealing.

   Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 199
   (Tex. 2004) (quoting Restatement (Second) of Contracts § 241

                                         18
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                                         No. 20-30364

   (1981)); see In re Dall. Roadster, Ltd., 846 F.3d 112, 127–29 (5th Cir. 2017)
   (recognizing and applying the Restatement factors). 19
           By entering the Medical Settlement without O’Brien’s consent, BP
   breached the control-of-defense and consent-to-settle provisions of the
   indemnity clause. The consent-to-settle provision states that “neither party
   shall effect settlement or compromise of any claim or proceeding” without
   obtaining written consent of the other party. BP failed to include O’Brien’s
   in the negotiation over BELO claims, and it preemptively agreed to deprive
   the defense of such later-accruing claims of certain defenses while also
   extending the limitations period to four years. 20
           BP attempts to avoid any finding of breach by emphasizing that it was
   only obliged to notify O’Brien’s, according to their Contract, once there were
   actual “claim[s] made” or “proceedings commenced.” Conversely, it was
   not required to obtain O’Brien’s consent for the Medical Settlement because
   the BELO claims arose afterwards (and the settlement only resolved B3
   claims for which BP does not seek indemnification).
           Though chronologically accurate, these arguments are unconvincing.
   The consent-to-settle provision states that “[n]otwithstanding the foregoing,
   however, neither party shall effect settlement or compromise of any claim or
   proceeding . . .” without obtaining written consent of the other party. The
   lexical range of the word compromise includes “a concession to something

           19
              The Mustang Pipeline court also noted the Restatement’s two additional
   “circumstances [having to do with delayed performance] that are significant in determining
   when a party’s duties are discharged under a contract due to the other party’s material
   breach[,]” but neither is relevant here. Mustang Pipeline Co., Inc., Inc.,134 S.W.3d at 199.
           20
              Other “compromising” aspects of the Medical Settlement included no cap on
   compensatory damages, disallowing defenses like claim splitting and laches, and not
   requiring proof of elements like exposure to contaminants.

                                               19
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   derogatory or prejudicial.”                Compromise, Merriam                 Webster
   Dictionary, https://merriam-webster.com/dictionary/compromise
   (last visited Nov. 17, 2021).              Nothing in this provision excludes
   compromising future claims, as the Medical Settlement did in significant part.
   Further, “notwithstanding the foregoing” disclaims reference to prior
   language in the same provision that might support limiting O’Brien’s right to
   consent to settle only then-existing claims or proceedings. Finally, the term
   “any” is one of enlargement and not limitation. The Medical Settlement
   unambiguously compromised the defense of BELO claims in some respects;
   BP therefore breached the consent-to-settle provision with respect to the
   BELO claims. 21
           Finally, the breach was material according to the Mustang Pipeline
   factors. 22 Again, the Medical Settlement undisputedly compromised the
   defense of BELO claims though it also benefited O’Brien’s (e.g., by including
   it as a released party). BP nonetheless argues that O’Brien’s is not prejudiced
   for all BELO claims. For example, a claim brought within the standard

           21
               We also conclude that BP breached the notice requirement. Although BP was
   required to give notice for “any claim made or proceedings commenced,” the fact that
   BELO claims were not in existence at the time of the settlement did not obviate BP’s
   obligations in this unique circumstance. As BP concedes, BELO claims are “creature[s] of
   the Medical Settlement.” Any awkwardness about how notice regarding “future” claims
   works as a practical matter (and as a matter of contractual interpretation) rests squarely on
   the ingenuity of the settlement terms. At bottom, BP’s argument attempts to evade the
   commonsense purpose of the notice and control-of-defense clauses: to enable the party
   footing the bill to know of, control, and resolve relevant claims before they are settled or
   otherwise compromised. BP should have notified O’Brien’s that it would seek
   indemnification for newly created BELO claims during the negotiation that settled the
   initial B3 claims and that spawned the BELO claims.
           22
              O’Brien’s was entirely deprived of its ability to control the settlement under the
   first Mustang Pipeline factor; it would be difficult for BP to compensate O’Brien’s under
   the second factor given the unknowability of the “but for” world; and BP cannot cure its
   failure under the fourth factor.

                                                20
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   statute of limitations would not benefit from the settlement’s extended
   limitations period, and a claim that does not benefit from claim-splitting
   would not be prejudiced by the settlement’s waiver of that issue. True
   enough, but O’Brien’s is still prejudiced because it did not negotiate and
   structure the settlement itself, as was its right under the consent-to-settle
   provision. BP went it alone and created a new class of claims—all BELO
   claims—that were a “creature of” its global settlement. Requiring O’Brien’s
   to independently litigate whether the defense of a given BELO claim was
   prejudiced by the terms of the Medical Settlement would require inquiry into
   the “but for” world of whatever settlement O’Brien’s might have reached if
   given the chance. 23 BP’s strategy defeated the underlying purpose of the
   indemnity provisions: to ensure the indemnitor knew about a claim, led the
   defense, and agreed to all settlements or any compromise of the claims.
   Because BP’s breach was material, O’Brien’s is not required to indemnify
   the BELO claims.
           2. BP-O’Brien’s Contract Opt-Out B3 Claims
           We disagree, however, with the district court’s conclusion that BP
   materially breached the notice and control-of-defense provisions of the BP-
   O’Brien’s indemnity agreement for opt-out B3 claims at this stage. Opt-out
   B3 claims are those that were not settled by the Medical Settlement and
   therefore remained for individual plaintiffs to litigate against BP. The district
   court’s reasoning rested almost entirely on the length of time—over six
   years—between the opt-out deadline and the tendering of claims to
   O’Brien’s. Contrary to the court’s reasoning, it is far from clear that BP

           23
              See Berkley Reg’l Ins. v. Phila. Indem. Ins., 690 F.3d 342, 351 (5th Cir. 2012)
   (finding prejudice in a late-notice case in the insurance context even though “we cannot
   fully know what effect, if any, [a party’s] participation would have had on [the mediation]
   process”).

                                               21
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                                         No. 20-30364

   breached the notice provision for all of the opt-out B3 claims, and even less
   obvious that any such breach was material.
           Although BP had a list of 1,638 valid opt-outs by the deadline
   prescribed by the Medical Settlement, it needed employer information to
   tender the claims to O’Brien’s. The district court provided minimal support
   for concluding that this “information was almost certainly available to BP for
   all of these workers.” 24 Although the short form joinders that plaintiffs could
   file to join the B3 Master Complaint required employer information, the
   district court recognized “there [was] no guarantee that all cleanup workers
   would have filed a short form joinder or filled out the employer information.”
   No party seems to dispute that at least some of the plaintiffs either omitted or
   erroneously provided their employer information on the short form joinder.
   Yet, such information was essential to connecting the claimants with BP’s
   contractors for purposes like investigation and assessing indemnity duties.
   Resolving the question of BP’s breach requires separate inquiry as to what
   information BP possessed about each claim, what notice was reasonable
   under the circumstances, and whether BP could have provided notice to
   O’Brien’s for that claim. 25
           Accordingly, we cannot conclude that opt-out B3 claims were
   materially compromised by the purported delay in notice.                      O’Brien’s

           24
             The district court generally referenced databases that BP could have utilized. BP
   disputes this point, and O’Brien’s does not engage on this factual issue in its briefing.
           25
              To be clear, BP’s post hoc argument that the claims were “in no shape to be
   litigated[]” has no mooring in the text of the BP-O’Brien’s Contract. Its obligation under
   the Contract was only to “promptly give to the other party notice in writing of any claim
   made or proceedings commenced for which [BP] claim[ed] to be entitled to
   indemnification . . . .” And the notice was required to “state with as much detail as [was]
   reasonably practicable the facts and circumstances giving rise to the claim and [had to] be
   given as soon as possible after [BP] bec[ame] aware of such claim or proceeding.” This did
   not create a right for BP to organize the litigation before giving notice.

                                               22
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                                         No. 20-30364

   concedes that “these claims and proceedings were initially stayed against BP
   and then further sorted out by [Pretrial Order] 63 and 66 . . . .” And, as the
   district court recognized, this multi-faceted litigation has implicated
   numerous claims, including B3 claims that “were asserted directly against
   the Responders.” Whether O’Brien’s was prejudiced, pursuant to Texas
   law, with respect to a given claim due to delayed notice is a fact-bound
   question.     See Bartush-Schnitzius, 518 S.W.3d at 436 (recognizing that,
   “[g]enerally, materiality is an issue to be determined by the trier of facts[]”
   (internal quotation marks and citation omitted)). Developing the factual
   record is a task for the district court in the first instance.
           3. Claims Relating to the BP-NRC Agreement
           In relevant part, the NRC-BP Agreement requires NRC to indemnify
   BP only to the extent a claim is “caused by the gross negligence or willful
   misconduct of [NRC],” and for which NRC was not entitled to the
   protection of “Responder Immunity Law.” 26 This Agreement lacks notice,
   control-of-defense, or consent-to-settle provisions.
           Under the circumstances presented here, the opt-out B3 and BELO
   claims implicating the BP-NRC Agreement must be evaluated on a claim-by-
   claim basis. We agree with BP that the district court erred by relying on its
   2016 orders to conclude that “under no circumstances is BP entitled to
   indemnity from NRC.” The fact that one set of B3 plaintiffs failed to raise a
   genuine issue regarding whether NRC had disobeyed federal instructions
   does not mean no plaintiff ever will. 27 NRC appears to recognize as much,

           26
           BP and NRC seem to agree that the immunity question turns on the extent to
   which NRC was acting “pursuant to the authorization and direction of the federal
   government.”
           27
              The 2016 orders referenced by the district court focused only on certain B3
   claims directed against the clean-up defendants (including the Responders here), not those

                                              23
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   arguing in large part that “BP has yet to identify any actual case” that would
   fall within the contract’s indemnification provisions. NRC acknowledges
   that if such a case ever materialized “the most that would follow from BP’s
   argument is that it remains able to argue for a different result under those
   peculiar facts[.]” We agree—BP should be able to make such an argument
   under appropriate facts. Thus, we conclude that whether a given claim falls
   within the BP-NRC Agreement’s indemnification provision is a claim-
   specific, factual inquiry best resolved by the district court in the first instance.
           Alternatively, the district court indicated in a footnote that “the
   Medical Settlement similarly prejudiced NRC, voiding NRC’s duty to
   indemnify BP against the BELO claims.”                    But because the BP-NRC
   Agreement did not contain notice, control-of-defense, or consent-to-settle
   provisions, it is unclear whether NRC’s indemnification obligations precisely
   track the material breach analysis under the BP-O’Brien’s Contract. The
   single case cited by the district court, arising under Louisiana law, is factually
   far-afield from the one before us. Hiern v. St. Paul-Mercury Indem. Co.,
   262 F.2d 526, 528–29 (5th Cir. 1959) (involving allegations that an
   indemnitee’s “failure to act, after promising it would do so, permitted [a] co-
   indemnitor to dispose of misappropriated assets while [the indemnitee] was

   directed against BP. See generally In re Oil Spill by the Oil Rig “Deepwater Horizon” in the
   Gulf of Mexico, MDL No. 2179, ECF No. 21406, 2016 WL 4091416 (E.D. La. Aug. 2, 2016)
   [hereinafter “August Order”]; In re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf
   of Mexico, MDL No. 2179, ECF No. 15853, 2016 WL 614690 (E.D. La. Feb. 16, 2016).
            In fact, the August Order illustrates how a responder might fail to establish a
   “derivative immunity defense,” and thus at least potentially fall within the relevant
   indemnity clause here. August Order, 2016 WL 4091416, at *9 (finding a “genuine dispute
   as to a material fact as to whether [a responder] complied with an applicable and relevant
   federal regulation or directive during the response[]” based on allegations that the
   responder “supplied [a plaintiff] with no [personal protective equipment],” as required by
   the Occupational Safety and Health Administration’s Hazardous Waste and Emergency
   Response Standard).

                                               24
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                                         No. 20-30364

   making repeated representations that it was doing and would be [doing]
   everything possible to secure these assets . . .”). The district court must
   carefully reassess the BELO claims under the BP-NRC Agreement pursuant
   to Texas law.
                                   III. CONCLUSION
           For the foregoing reasons, we AFFIRM the judgment as follows:
   (1) BP is an additional insured under the relevant policies only to the extent
   required to meet the BP-O’Brien’s Contract’s $2,000,000 CGL insurance
   requirement; and (2) BP materially breached the indemnity provisions under
   the BP-O’Brien’s Contract with respect to BELO claims, excusing O’Brien’s
   from performing its indemnification obligations under the contract for those
   claims.
           We REVERSE the judgment as follows: (1) The Starr and COPS
   policies cannot be combined to satisfy the BP-O’Brien’s Contract’s
   $2,000,000 CGL insurance requirement; together they constitute
   $1,000,000 in CGL-type coverage; (2) Determining whether BP materially
   breached its obligations under the BP-O’Brien’s Contract with respect to
   opt-out B3 claims requires factual development on a claim-by-claim basis;
   (3) Similarly, the district court must evaluate NRC’s indemnification
   obligations for opt-out B3 and BELO claims under the BP-NRC Agreement
   on a claim-by-claim basis.
           This case is REMANDED to the district court for further
   proceedings consistent with this opinion. 28
           AFFIRMED IN PART, REVERSED IN PART, and REMANDED.

           28
            These holdings should not be read to limit the ability of the parties to raise on
   remand other arguments not at issue in this appeal.

                                              25
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                                     No. 20-30364

   James E. Graves, Jr., Circuit Judge, dissenting in part:
          I respectfully dissent from Section II.B.2 of the majority opinion.
   Because I conclude BP materially breached the BP-O’Brien’s indemnity
   agreement for opt-out B3 claims based on the record before us, I disagree with
   the majority’s contention that those claims require factual development. In
   my view, O’Brien’s is not required to indemnify BP on any claims because
   BP failed to give reasonably practicable prompt notice to O’Brien’s. I would
   therefore affirm the district court on this issue as well.
          BP’s failure to tender any of the opt-out B3 claims before March 2019
   materially breached the notice provision of the BP-O’Brien’s indemnity
   agreement. The notice provision required BP to provide as much detail as
   reasonably practicable under the facts and circumstances. At the time of the
   Medical Settlement in November 2012, BP knew that some of the 1,638 opt-
   out B3 claims were from O’Brien’s employees. Because BP wanted
   indemnity from O’Brien’s, it should have immediately tendered the claims
   with known employer information. And for the claims without known
   employer information BP should have tendered the entire list of opt-outs to
   O’Brien’s. Then O’Brien’s would have had an opportunity to determine
   which opt-out claims were made by its employees.
          BP simply argues that it did not tender the claims because they were
   “in no shape to be litigated.” But the notice provision says nothing about
   claims being in shape to be litigated. The notice provision directs notice be
   given with as much detail as reasonably practicable. Whether BP determined
   some of the opt-outs belonged to O’Brien’s in November 2012, or sometime
   after, is of no consequence.
          So, in my view, remand on this issue is unnecessary. The district court
   would be tasked with individual inquiries on each of the approximately 400
   opt-out B3 claims as to whether BP had employer information for those

                                          26
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                                    No. 20-30364

   claims at the time of the Medical Settlement, and if not, when did it have that
   information. But that information makes no difference because BP certainly
   breached as to the claims with employer information, and there is no reason
   it took BP nearly seven years to discover O’Brien’s was the employer for the
   claims without employer information.
          It is clear BP breached the notice provision for the claims in which BP
   had the employer information from the complaints or short form joinder and
   O’Brien’s was in fact identified as the employer. The fact that some of the
   B3 claims were negotiated in the Medical Settlement and some were opt-outs
   does not change the duty to notify O’Brien’s as soon as the claims were
   known to belong to O’Brien’s. Insofar as BP had the employer information
   that identified O’Brien’s for some of the opt-out claims, I would affirm the
   district court’s determination that BP breached the BP-O’Brien’s indemnity
   agreement on those claims.
          As for the claims in which there was no employer information, remand
   to determine when BP knew the claims belonged to O’Brien’s would likely
   not result in a finding that BP did not breach the notice provision. Although
   I do not necessarily agree with the district court’s factual contention that BP
   had readily available databases with employer information, I find it difficult
   to conclude there is any circumstance that would have taken BP nearly seven
   years to obtain the necessary employer information (if it was not readily
   available). BP of course disputes that it had employer information readily
   available, but even so, BP does not state what steps it took to obtain employer
   information (or that it could reasonably take seven years to do so). Because
   BP had knowledge that at least some of the opt-out B3 claims belonged to
   O’Brien’s, BP should have then been aware that some of the claims without
   employer information belonged to O’Brien’s as well, and attempted to obtain
   employer information within a reasonable time. Cf. Ridglea Est. Condo. Ass’n
   v. Lexington Ins. Co., 415 F.3d 474, 477 (5th Cir. 2005) (concluding party

                                         27
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                                    No. 20-30364

   should have been aware of likelihood of damage due to presence of other
   damage and stating the party should have inspected within a reasonable time
   to provide reasonable notice of damage).
          BP strangely argues O’Brien’s should have known which opt-outs
   belonged to it because O’Brien’s was a party to the MDL and had access to
   the list of opt-outs. But that argument ignores the fact that BP didn’t notify
   O’Brien’s it would seek indemnity of any B3 claims. Certainly O’Brien’s
   would know which claims were brought by its own employees. That,
   however, does not negate the important point here—BP did not notify
   O’Brien’s that it would seek indemnity of those claims. O’Brien’s knowledge
   of which opt-out B3 claims were from its own employees is just that. It does
   not also give O’Brien’s notice that BP would seek indemnity on those claims.
          BP’s argument also emphasizes my qualm with what is reasonably
   practicable notice. If O’Brien’s could have “unquestionably” determined in
   2012 which of the opt-out B3 claims were brought by its own employees, and
   BP was going to seek indemnity for any claims that belonged to O’Brien’s,
   why didn’t BP notify O’Brien’s at that time? It would have been reasonably
   practicable in November 2012 for BP to inform O’Brien’s that “if any of
   these opt-out B3 claims are from your employees, we want indemnity.”
   O’Brien’s would have then known immediately which claims were brought
   by its own employees (and BP would want indemnification for) and could
   have shared that information with BP. Instead of acknowledging this simple
   and reasonable step it could have taken, BP now contends it acted well within
   the indemnity agreement’s terms by sitting on its hands for nearly seven
   years before saying a word about these opt-out B3 claims to O’Brien’s.
          Not only did BP breach the notice provision, that breach was material.
   Most of the Mustang Pipeline factors weigh in favor of concluding BP’s breach
   material. Specifically, O’Brien’s was deprived of its benefit of the bargain (to

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   receive prompt notice), BP cannot compensate O’Brien’s for that
   deprivation, BP cannot cure its breach after so much time has passed, and it
   does not appear that BP acted in good faith.
          O’Brien’s was deprived of its right to investigate the opt-out B3 claims
   from at the latest, November 2012 until March 2019 when they were
   tendered. Notice requirements afford rights like the right to join in the
   investigation, to settle a case or claim, and to interpose and control the
   defense. See Berkeley Reg’l Ins. Co. v. Phila. Indem. Ins. Co., 690 F.3d 342, 348
   (5th Cir. 2012). O’Brien’s had no notice BP would seek indemnity of these
   claims and in the interim conducted no investigation while under the
   impression that these claims would not be tendered. BP’s only argument on
   this is that it is “implausible” to think O’Brien’s would investigate these
   claims while they were stayed or sorted. For the same reasons the majority
   declines to enter the “but-for” world, I see no need to here. There is no way
   to know whether O’Brien’s would have actually investigated those claims.
   Regardless, for nearly seven years, O’Brien’s was deprived of the
   opportunity to make a choice on investigating the claims it would ultimately
   be asked to pay
          I also note that opt-out B3 claims were part of the B3 class. BP
   attempted to settle those claims through the Medical Settlement. BP
   negotiated with class counsel and reached the terms of the Medical
   Settlement. And when the opt-out B3 plaintiffs received notice of the
   Medical Settlement, they determined they would rather pursue their own
   claims than agree to the present terms. As a practical matter, the terms of the
   settlement, which O’Brien’s had no participation in, certainly affected opt-
   out decisions. So up until those opt-out B3 plaintiffs actually opted-out, BP
   controlled the defense, organized the settlement class, and established the
   procedure for dealing with opt-outs. All without notifying or allowing
   O’Brien’s to participate. Through this lens, it is obvious that BP’s breach

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   was material and BP failed to act in good faith. 1 The harm created by BP
   excluding O’Brien’s from the early part of the litigation of these claims is not
   erased simply because they ultimately opted out. We cannot know what effect
   O’Brien’s participation in the settlement would have had.
           When a plaintiff opts out of a class action settlement, it is necessarily
   a derivative of the settlement terms. Because O’Brien’s was not notified
   before or during the Medical Settlement that BP was going to seek indemnity
   of any B3 claims or the potential opt-outs, O’Brien’s was excluded from the
   settlement negotiations, lacked the control of the defense, and had no input
   on the process for handling those potential opt-outs. BP’s breach was
   material on the opt-out B3 claims to the same extent it was on the BELO
   claims.
           BP shut out O’Brien’s throughout the entirety of the litigation of these
   opt-out B3 claims. For BP to seek indemnity from O’Brien’s after years of
   facing these claims, knowing some belonged to O’Brien’s, and having the
   ability to connect the others to O’Brien’s, is absurd. The district court
   concluded the length of time from the time BP had a list of the opt-outs in
   November 2012, until the first opt-out B3 claim was tendered in March 2019,
   was prejudicial to O’Brien’s. I see no error in this reasoning. Remand is thus
   unnecessary.
           Because BP’s delayed notifying O’Brien’s of the opt-out B3 claims for
   nearly seven years, I would conclude BP materially breached the BP-
   O’Brien’s indemnity agreement. Contrary to the majority, I would affirm the

           1
            Notably, BP does not seek indemnification for the B3 claims settled in the Medical
   Settlement. Nor does it seem likely that BP would be able avoid a material breach on those
   claims settled under the consent-to-settle or notice provisions.

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   district court on this issue and hold O’Brien’s is not required to indemnify
   BP on any claims.

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