Sonat Exploration Co. v. Cudd Pressure Control, Inc.
This case involves a dispute over an indemnity agreement between Sonat Exploration Company (Sonat) and Cudd Pressure Control, Inc. (Cudd) following an oilfield explosion in Louisiana that killed four Cudd employees. Sonat sought indemnity from Cudd and coverage as an additional insured from Cudd's insurer, Lumbermens Mutual Casualty Company (Lumbermens), after settling claims for approximately $28 million. The core issue is which state's law, Texas or Louisiana, governs the Master Service Agreement's indemnity provisions, as they conflict on enforceability. The Supreme Court of Texas affirmed the court of appeals' decision to reverse the trial court's application of Texas law and remanded the case for further proceedings under Louisiana law, based on the parties' justified expectations inferred from their contract despite no explicit choice of law for Louisiana operations.