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<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><B><SPAN=20
style=3D"FONT-SIZE: 18pt">IN THE SUPREME COURT OF TEXAS</SPAN></B></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#=
9552;&#9552;&#9552;&#9552;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: small-caps">No. 05-0202</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: =
small-caps">&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#955=
2;&#9552;&#9552;&#9552;</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: small-caps"></SPAN>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-SIZE: 14.5pt; FONT-VARIANT: small-caps">Energy Service =
Company of=20
Bowie, Inc., Petitioner,</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: small-caps"></SPAN>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-SIZE: 9.5pt; FONT-VARIANT: small-caps">v.</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: small-caps"></SPAN>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-SIZE: 14.5pt; FONT-VARIANT: small-caps">Superior Snubbing =
Services,=20
Inc., Respondent</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: small-caps"></SPAN>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: =
small-caps">&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#955=
2;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&=
#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#95=
52;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;=
&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9=
552;&#9552;</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: small-caps">On Petition for Review from =
the</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" align=3Dcenter><SPAN=20
style=3D"FONT-VARIANT: small-caps">Court of Appeals for the Second =
District of=20
Texas</SPAN></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center"=20
align=3Dcenter>&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#=
9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#955=
2;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&=
#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#95=
52;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;&#9552;=
&#9552;&#9552;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter><B>Argued December 1,=20
2005</B></P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: center" =
align=3Dcenter>&nbsp;</P>
<P class=3DMsoNormal=20
style=3D"TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
<SPAN style=3D"FONT-VARIANT: small-caps">Justice Hecht</SPAN> delivered =
the=20
opinion of the Court, in which <SPAN style=3D"FONT-VARIANT: =
small-caps">Chief=20
Justice Jefferson, Justice Brister, Justice Medina</SPAN>, and <SPAN=20
style=3D"FONT-VARIANT: small-caps">Justice Lang</SPAN><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn1"=20
name=3D_ftnref1><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[1]</SPAN></SPAN></SPAN></A>=20
joined.</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: justify">&nbsp;</P>
<P class=3DMsoNormal=20
style=3D"TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
<SPAN style=3D"FONT-VARIANT: small-caps">Justice Johnson</SPAN> filed a =
dissenting=20
opinion, in which <SPAN style=3D"FONT-VARIANT: small-caps">Justice =
Wainwright,=20
Justice Green</SPAN><SPAN style=3D"TEXT-TRANSFORM: uppercase">,</SPAN> =
and <SPAN=20
style=3D"FONT-VARIANT: small-caps">Justice Willett</SPAN> joined.</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: justify">&nbsp;</P>
<P class=3DMsoNormal=20
style=3D"TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
<SPAN style=3D"FONT-VARIANT: small-caps">Justice O=92Neill</SPAN> took =
no part in=20
the decision of the case.</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: justify">&nbsp;</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: justify">&nbsp;</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
Since 1963, the Texas Workers=92 Compensation Act has provided that a =
subscribing=20
employer is not liable to indemnify others against an employee=92s =
personal injury=20
claim unless it agreed to do so in writing before the injury occurred. =
Until the=20
Act was overhauled in 1989, it referred to the required agreement as one =

=93executed by the subscriber=94.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn2"=20
name=3D_ftnref2><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[2]</SPAN></SPAN></SPAN></A>=20
The new Act referred instead to an agreement =93executed . . . with the =
third=20
party=94 seeking indemnity.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn3"=20
name=3D_ftnref3><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[3]</SPAN></SPAN></SPAN></A>=20
The issue in this case is whether this change was substantive. More=20
particularly, the question is: under section 417.004 of the Texas Labor =
Code,=20
may a subscribing employer=92s written agreement to indemnify a person =
and that=20
person=92s contractors be enforced by one of those contractors even =
though the=20
agreement was not executed by that contractor? The trial court answered =
yes, but=20
the court of appeals disagreed.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn4"=20
name=3D_ftnref4><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[4]</SPAN></SPAN></SPAN></A>=20
We agree with the trial court.</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
Petitioner Energy Service Company of Bowie, Inc. and respondent Superior =

Snubbing Services, Inc. both provided oilfield services to Mitchell =
Energy=20
Corporation. In 1996, Superior and Mitchell signed an industry-standard =
=93Master=20
Service Agreement=94, which provided in part that they would indemnify =
each other=20
and each other=92s contractors against their respective employees=92 =
personal injury=20
claims arising out of work performed under the Agreement or at the =
jobsite, even=20
if the indemnitee was at fault.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn5"=20
name=3D_ftnref5><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[5]</SPAN></SPAN></SPAN></A>=20
Energy and Mitchell had signed a similar agreement in 1991, containing =
the=20
identical provision. Each party agreed to support its obligation with =
liability=20
insurance<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn6"=20
name=3D_ftnref6><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[6]</SPAN></SPAN></SPAN></A>=20
so that to the extent of coverage obtained the indemnification =
obligations would=20
not be voided by the Texas Oilfield Anti-Indemnity Act.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn7"=20
name=3D_ftnref7><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[7]</SPAN></SPAN></SPAN></A>=20
Superior and Energy did not have a mutual indemnification agreement =
between=20
themselves, nor was either a party to the other=92s agreement with =
Mitchell, but=20
each was covered, as a Mitchell contractor, by the terms of the =
other=92s=20
agreement with Mitchell. Thus, Energy agreed to indemnify Mitchell and =
its=20
contractors, one of which was Superior, against claims by Energy =
employees, and=20
Superior agreed to indemnify Mitchell and its contractors, one of which =
was=20
Energy, against claims by Superior employees.</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
Superior=92s employee, Daryll Faulk, sued Mitchell and Energy for =
injuries he=20
suffered in 2000 while working at a Mitchell wellsite where Superior and =
Energy=20
were both performing services for Mitchell. Mitchell and Energy settled =
with=20
Faulk and then sued Superior for indemnity. The trial court severed =
Mitchell=92s=20
claims from Energy=92s. Superior, a subscribing employer, contended that =
Energy=92s=20
claim was barred by section 417.004 of the Labor Code.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn8"=20
name=3D_ftnref8><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[8]</SPAN></SPAN></SPAN></A>=20
The trial court disagreed and granted summary judgment for Energy for =
the=20
$330,135.37 in attorney fees and expenses it incurred in the Faulk =
suit.</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
The court of appeals reversed and rendered judgment for Superior. It =
noted that=20
before the Workers=92 Compensation Act was completely revised in 1989, =
the=20
predecessor provision to section 417.004 stated that a subscribing =
employer=20
could not be liable to indemnify a person against an employee=92s =
personal injury=20
claim =93in the absence of a written agreement expressly assuming such =
liability,=20
<I>executed by the subscriber</I> prior to such injury or death.=94<A =
title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn9"=20
name=3D_ftnref9><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[9]</SPAN></SPAN></SPAN></A>=20
The court of appeals determined, and Superior acknowledges in its brief, =
that=20
the statute did not require that the employer=92s agreement be executed =
by the=20
person claiming indemnity;<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn10"=20
name=3D_ftnref10><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[10]</SPAN></SPAN></SPAN></A>=20
the claimant was entitled to indemnity if it was covered by the =
agreement as an=20
intended beneficiary, such as a contractor of the signatory. But =
according to=20
the court of appeals, a 1989 change in the provision, carried forward =
into=20
section 417.004, the current law, precludes liability =93unless the =
employer=20
<I>executed</I>, before the injury or death occurred, a written =
agreement=20
<I>with the third party</I> to assume the liability.=94<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn11"=20
name=3D_ftnref11><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[11]</SPAN></SPAN></SPAN></A>=20
The court concluded, in effect, that since Superior=92s indemnification =
agreement=20
with Mitchell was not executed <I>by</I> Energy, it was not executed =
<I>with</I>=20
Energy, and therefore Superior could not be liable to indemnify =
Energy.<A=20
title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn12"=20
name=3D_ftnref12><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[12]</SPAN></SPAN></SPAN></A></P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
We granted Energy=92s petition for review to determine whether the =
Legislature=20
intended, as part of its 1989 overhaul of the Workers=92 Compensation =
Act, to make=20
a substantive change in the 26-year-old provision that is now section =
417.004.<A=20
title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn13"=20
name=3D_ftnref13><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[13]</SPAN></SPAN></SPAN></A>=20
That overhaul, enormously controversial, was not completed until =
December 1989,=20
in the second called session of the 71st Legislature, after efforts to =
revise=20
the Act during the regular session and the first special session had =
failed.<A=20
title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn14"=20
name=3D_ftnref14><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[14]</SPAN></SPAN></SPAN></A>=20
But the controversy did not extend to the provision that is now section =
417.004.=20
Nothing in the lengthy history of the revision process indicates that =
the=20
Legislature had any reason to change the substance of that provision.<A =
title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn15"=20
name=3D_ftnref15><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[15]</SPAN></SPAN></SPAN></A></P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
The common law allows parties to contract for the benefit of others =97 =
in effect,=20
<I>with</I> others =97 if they do so explicitly, and when they do, the =
beneficiary=20
can enforce the promisor=92s obligation in his favor as if he were =
himself a=20
party.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn16"=20
name=3D_ftnref16><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[16]</SPAN></SPAN></SPAN></A>=20
The pre-1989 predecessor to section 417.004 was consistent with that =
rule,=20
allowing indemnification agreements to benefit a party=92s non-signatory =

contractors, but the present section, as construed by the court of =
appeals, is=20
not. Of course, statutes can modify common law rules, but before we =
construe one=20
to do so, we must look carefully to be sure that was what the =
Legislature=20
intended.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn17"=20
name=3D_ftnref17><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[17]</SPAN></SPAN></SPAN></A></P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
The Legislature has directed that =93[i]n interpreting a statute, a =
court shall=20
diligently attempt to ascertain legislative intent and shall consider at =
all=20
times the old law, the evil, and the remedy.=94<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn18"=20
name=3D_ftnref18><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[18]</SPAN></SPAN></SPAN></A>=20
Superior has not pointed to anything suggesting that allowing =
indemnification=20
agreements to cover persons working with the contracting parties was =
perceived=20
to be an =93evil=94 before the 1989 amendment. Superior argues that a =
contractor=20
working in the oil field should not be economically pressured into =
surrendering=20
its statutory immunity from liability for indemnity of an employee=92s =
personal=20
injury claims, but the Texas Oilfield Anti-Indemnity Act, enacted in =
1973,=20
limits that liability,<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn19"=20
name=3D_ftnref19><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[19]</SPAN></SPAN></SPAN></A>=20
and nothing suggests that the Legislature thought those limits should be =

modified by amending the Workers=92 Compensation Act in 1989. Superior =
concedes=20
that restricting such agreements to the parties themselves simply makes =
the=20
protections such agreements afford much harder and costlier to obtain,=20
especially in a work setting like the oilfield, where many contractors =
may come=20
and go on a project over a long period of time. Trying to be sure that =
everyone=20
working at a wellsite has a signed agreement may well be impractical. =
Superior=20
also concedes that the continued widespread use after 1989 of standard =
mutual=20
indemnification agreements like those in this case strongly suggests =
that the=20
industry does not consider the practice an =93evil=94 to be remedied. =
Indeed, the=20
parties tell us that no one even appears to have noticed the 1989 change =
in=20
language until this case.</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
Absent any identifiable reason for a substantive change to have been =
made in the=20
statutory provision, or any extra-textual indication that one was =
intended, or=20
any resulting change in industry practice, we think the most reasonable=20
construction of section 417.004 is the same as its pre-1989 =
predecessors. In=20
these circumstances, we think that when the Legislature required that a=20
subscribing employer contract =93with the third party=94 seeking =
indemnity, it=20
considered that an agreement intending to cover third party =
beneficiaries was an=20
agreement with the beneficiaries. The issue for us, of course, is not =
whether=20
this is good policy, but whether it is what the Legislature intended by =
the 1989=20
amendments. We think it was.</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
This is not a situation like the one in <I>Fleming Foods of Texas, Inc. =
v.=20
Rylander</I>, where the statutory text admitted of but one meaning, =
however=20
doubtful it was that the Legislature intended it.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn20"=20
name=3D_ftnref20><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[20]</SPAN></SPAN></SPAN></A>=20
In that case, the prior law allowed a person to claim a refund of sales =
taxes=20
only if he had paid the taxes =93directly to the State=94.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn21"=20
name=3D_ftnref21><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[21]</SPAN></SPAN></SPAN></A>=20
The recodified law omitted the quoted phrase, thus ostensibly allowing a =
refund=20
claim by any taxpayer, even if taxes were made through an =
intermediary.<A=20
title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn22"=20
name=3D_ftnref22><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[22]</SPAN></SPAN></SPAN></A>=20
Consistently, the statute defined =93taxpayer=94 as =93a person liable =
for a tax=94.<A=20
title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn23"=20
name=3D_ftnref23><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[23]</SPAN></SPAN></SPAN></A>=20
Fleming Foods claimed a refund of taxes it had paid, but through a =
vendor, not=20
directly to the State.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn24"=20
name=3D_ftnref24><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[24]</SPAN></SPAN></SPAN></A>=20
Although the Legislature expressly provided that the recodification was=20
nonsubstantive, we held that the plain language of the recodified law =
could not=20
admit the limitation of the prior law.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn25"=20
name=3D_ftnref25><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[25]</SPAN></SPAN></SPAN></A>=20
The revised text gave no indication that the limitation of the prior law =
might=20
still apply, and a person reading the new statute, unaware of its =
history, could=20
not reasonably know of the limitation.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn26"=20
name=3D_ftnref26><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[26]</SPAN></SPAN></SPAN></A>=20
The statute in this case, unlike that one, is not so clear. An agreement =

<I>with</I> a third party does not necessarily exclude a third party =
beneficiary=20
not identified expressly by name. Indeed, under the common law, an =
indemnity=20
agreement could ordinarily include an obligation by the promisor to an =
unnamed=20
third party beneficiary. The text of section 417.004 would not <A=20
name=3D"QuickMark 1"></A>indicate to an ordinary reader that the third =
party was=20
required to sign the agreement.</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
The dissent argues that construing the 1989 amendment to mean the same =
thing as=20
the prior law deprives the added phrase, =93with the third party=94, of =
any meaning.=20
But that argument assumes that the Legislature intended the added phrase =
to mean=20
something different than existing law, when there is simply no =
indication that=20
it did. In fact, the words =93third party=94 were inserted throughout =
the 1989=20
version to serve as a shorthand substitute for the multiple word =
descriptions =97=20
=93a person other than the subscriber=94 and =93such other person=94 =97 =
used throughout=20
the pre-1989 version. The dissent also argues that because the =
Legislature did=20
not expressly include third party beneficiaries, it must have intended =
to=20
exclude them. But as we have already explained, the Legislature was =
charged with=20
the knowledge that the common law would ordinarily include third party=20
beneficiaries, and thus it had no reason to reiterate what was already =
the=20
law.</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
The dissent acknowledges that to restrict mutual indemnity obligations =
to=20
signatories denies them the freedom to contract for the benefit of their =

contractors, but argues that this is necessary to =93protect[] them from =
economic=20
pressures=94.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn27"=20
name=3D_ftnref27><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[27]</SPAN></SPAN></SPAN></A>=20
Since 1973, however, that protection has been provided, to the extent =
the=20
Legislature has determined it should be in any setting, by the Texas =
Oilfield=20
Anti-Indemnity Act.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn28"=20
name=3D_ftnref28><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[28]</SPAN></SPAN></SPAN></A>=20
That Act expressly contemplates that parties will =93agree to indemnify =
each other=20
and each other=92s contractors and their employees=94 and voids only =
certain=20
indemnities not supported by liability insurance.<A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn29"=20
name=3D_ftnref29><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[29]</SPAN></SPAN></SPAN></A>=20
The dissent argues that the 1989 amendments to section 417.004 further =
restrict=20
the use of mutual indemnification agreements, but nothing in the =
language or=20
history of the amendments suggests that such a restriction was intended. =
To the=20
contrary, amicus curiae Texas Oil and Gas Association has explained the=20
significant policy and practical considerations favoring the use of such =

agreements:</P>
<P class=3DMsoNormal style=3D"TEXT-ALIGN: justify">&nbsp;</P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0.5in 0pt; TEXT-ALIGN: =
justify"><SPAN=20
class=3DSingleSpace>[T]ens of thousands of agreements have been entered =
into by=20
which each party (as =93indemnitor=94) agrees to indemnify the other =
party=20
(=93indemnitee=94) and the indemnitee=92s contractors for claims arising =
from injuries=20
to the indemnitor=92s employees, regardless of fault. In other words, . =
. . each=20
party in the oilfield takes care of its own =93slice of the risk=94 =
(claims by its=20
own employees against the other party and its contractors or =
subcontractors as=20
third party beneficiaries). In return, the indemnitor and the =
indemnitor=92s=20
contractors or subcontractors receive a reciprocal indemnity from the =
indemnitee=20
as third party beneficiaries (for claims by the indemnitee=92s =
employees). This=20
approach to risk allocation provides a level of certainty to all of the =
parties=20
regarding liability exposure because each company is able to train its =
own=20
employees as to safe oilfield practices, manage its performance of the =
work,=20
obtain insurance, and attempt to control the scope of its liability =
arising out=20
of what is usually a common workplace. Liability insurers have also =
written=20
insurance coverage to accommodate such a risk allocation approach =
inasmuch as=20
policies typically provide contractual liability coverage for indemnity=20
obligations to third parties.</SPAN><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftn30"=20
name=3D_ftnref30><SPAN class=3DMsoFootnoteReference><SPAN=20
class=3DMsoFootnoteReference><SPAN=20
style=3D"FONT-SIZE: 12pt; FONT-FAMILY: 'Times New =
Roman'">[30]</SPAN></SPAN></SPAN></A></P>
<P class=3DMsoNormal style=3D"MARGIN: 0in 0.5in 0pt; TEXT-ALIGN: =
justify">&nbsp;</P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: =
justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbs=
p;=20
Finally, the dissent argues that section 417.004 cannot be construed =
solely in=20
the light of practices in the oil field. While we agree that the =
provision=20
applies to indemnification agreements in other settings, nothing before =
us=20
remotely suggests that other applications of the statute require a =
different=20
construction.</P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 200%; TEXT-ALIGN: center"=20
align=3Dcenter><B>* * *</B></P>
<P class=3DMsoNormal=20
style=3D"LINE-HEIGHT: =
200%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; =

Accordingly, the judgment of the court of appeals is reversed, and the =
case is=20
remanded to the trial court for rendition of judgment in accordance with =
this=20
opinion.</P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 200%">&nbsp;</P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: =
3in">__________________________</P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 3in"><SPAN =
class=3DSingleSpace>Nathan L.=20
Hecht</SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 3in"><SPAN=20
class=3DSingleSpace>Justice</SPAN></P>
<P class=3DMsoNormal style=3D"MARGIN-LEFT: 3in">&nbsp;</P>
<P class=3DMsoNormal style=3D"LINE-HEIGHT: 200%">Opinion delivered: =
August 24,=20
2007</P></DIV>
<DIV><BR clear=3Dall>
<HR align=3Dleft width=3D"33%" SIZE=3D1>

<DIV id=3Dftn1>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref1"=20
name=3D_ftn1><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[1]</SPAN></SUP></SUP></A>=20
Hon. Douglas S. Lang, Justice, Court of Appeals for the Fifth District =
of Texas=20
at Dallas, sitting by commission of Hon. Rick Perry, Governor of Texas, =
pursuant=20
to Section 22.005 of the Texas Government Code.</P></DIV>
<DIV id=3Dftn2>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref2"=20
name=3D_ftn2><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[2]</SPAN></SUP></SUP></A>=20
Act of May 20, 1963, 58th Leg., R.S., ch. 437, =A7 1, 1963 Tex. Gen. =
Laws 1132=20
formerly <SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Rev. Civ. Stat.=20
Ann.</SPAN> art. 8306, =A7 3, amended by Act of May 5, 1983, 68th Leg., =
R.S., ch.=20
131, =A7 1, 1983 Tex. Gen. Laws 613, 614, formerly <SPAN=20
style=3D"TEXT-TRANSFORM: uppercase">Tex. Rev. Civ. Stat. Ann.</SPAN> =
art. 8306, =A7=20
3(d) (=93If an action for damages on account of injury to or death of an =
employee=20
of a subscriber is brought by such employee, or by the representatives =
or=20
beneficiaries of such deceased employee, or by the association for the =
joint use=20
and benefit or itself and such employee or such representative or =
beneficiaries,=20
against a person other than the subscriber, as provided in Section 6a, =
Article=20
8307, Revised Civil Statutes of Texas, 1925, and if such action results =
in a=20
judgment against such other person, or results in a settlement by such =
other=20
person, the subscriber, his agent, servant or employee, shall have no =
liability=20
to reimburse or hold such other person harmless on such judgment or =
settlement,=20
nor shall the subscriber, his agent, servant or employee, have any tort =
or=20
contract liability for damages to such other person because of such =
judgment or=20
settlement, in the absence of a written agreement expressly assuming =
such=20
liability, executed by the subscriber prior to such injury or=20
death.=94).</P></DIV>
<DIV id=3Dftn3>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref3"=20
name=3D_ftn3><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[3]</SPAN></SUP></SUP></A>=20
Act of Dec. 12, 1989, 71st Leg., 2d C.S., ch. 1, =A7 4.04, 1989 Tex. =
Gen. Laws 1,=20
32-33, formerly <SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Rev. Civ. =
Stat.=20
Ann.</SPAN> art. 8308-4.04 (=93If an action for damages is brought by an =
injured=20
employee, the legal beneficiary of a deceased employee, or an insurance =
carrier=20
against a third party liable to pay damages for the injury or death as =
provided=20
by Section 4.05 of this Act and the action results in a judgment against =
the=20
third party or a settlement by the third party, the employer is not =
liable to=20
the third party for any reimbursement or damages based on the judgment =
or=20
settlement unless the employer executed, before the injury or death =
occurred, a=20
written agreement with the third party to assume the liability.=94), =
amended by=20
Act of May 12, 1993, 73rd Leg., R.S., ch. 269, =A7 1, 1993 Tex. Gen. =
Laws 987,=20
1235, now <SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Lab. =
Code</SPAN> =A7=20
417.004 (=93In an action for damages brought by an injured employee, a =
legal=20
beneficiary, or an insurance carrier against a third party liable to pay =
damages=20
for the injury or death under this chapter that results in a judgment =
against=20
the third party or a settlement by the third party, the employer is not =
liable=20
to the third party for reimbursement or damages based on the judgment or =

settlement unless the employer executed, before the injury or death =
occurred, a=20
written agreement with the third party to assume the =
liability.=94).</P></DIV>
<DIV id=3Dftn4>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref4"=20
name=3D_ftn4><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[4]</SPAN></SUP></SUP></A>=20
158 S.W.3d 112 (Tex. App.=97Fort Worth 2005).</P></DIV>
<DIV id=3Dftn5>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref5"=20
name=3D_ftn5><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[5]</SPAN></SUP></SUP></A>=20
Paragraph 7(b) of the =93Master Service Agreement=94 provided: =
=93Contractor=20
[Superior] shall protect, defend, indemnify and hold Company [Mitchell], =
its=20
employees, partners, agents, representatives, invitees, contractors and =
their=20
employees (hereinafter =93Company=92s group=94) harmless from and =
against all claims,=20
demands, causes of action, suits or other litigation of every kind and =
character=20
for injury to or illness or death of and for all damage to, loss or =
destruction=20
of property of Contractor, its employees, partners, agents, =
representatives,=20
invitees, contractors, subcontractors and their employees (hereinafter=20
=93Contractor=92s group=94) which is incident to, arising out of, within =
the scope of,=20
or in connection with the work to be performed, services to be rendered =
or=20
materials to be furnished by Contractor=92s group under this Agreement, =
or=20
occurring on the worksite(s), regardless of how, when or where such =
injury,=20
illness, death, damage, loss or destruction occurs; including the sole =
or=20
concurrent NEGLIGENCE or FAULT of Company or Company=92s group . . . and =

regardless of whether contractual liability for indemnity or LIABILITY =
WITHOUT=20
FAULT (including claims arising from premises or worksite liability) is =
sought=20
to be imposed on Company=92s group.&nbsp; Likewise Company shall =
protect, defend,=20
indemnify and hold Contractor=92s group harmless from and against all =
claims,=20
demands, causes of action, suits or other litigation of every kind and =
character=20
for injury to or illness or death of and for all damage to, loss or =
destruction=20
of property of Company=92s group which is incident to, arising out of, =
within the=20
scope of, or in connection with the work to be performed, services to be =

rendered or materials to be furnished by Company=92s group under this =
Agreement or=20
occurring on the worksite(s) regardless of how, when or where such =
injury,=20
illness, death, damage, loss or destruction occurs; including the sole =
or=20
concurrent NEGLIGENCE or FAULT of Contractor=92s group . . . and =
regardless of=20
whether contractual liability for indemnity or LIABILITY WITHOUT FAULT=20
(including claims arising from premises or worksite liability) is sought =
to be=20
imposed on Contractor=92s group.&nbsp; Contractor and Company =
specifically intend=20
that the foregoing obligation to protect, defend, indemnify and hold the =
other=20
harmless shall cover but not be limited to and shall apply even in the =
event of=20
(i) the NEGLIGENCE, whether sole, comparative, contributory or =
concurrent, of=20
Company=92s group or Contractor=92s group; (ii) any obligation of either =
party=20
arising from contractual liability for indemnity or LIABILITY WITHOUT =
FAULT=20
(including claims arising from premises or worksite liability); and =
(iii) the=20
sole, comparative, contributory, concurrent, NEGLIGENCE or contractual =
liability=20
for indemnity or LIABILITY WITHOUT FAULT (including claims arising from =
premises=20
or worksite liability) of any third party.=94</P></DIV>
<DIV id=3Dftn6>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref6"=20
name=3D_ftn6><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[6]</SPAN></SUP></SUP></A>=20
For example, paragraph 7(c)of the Superior-Mitchell agreement provided: =
=93This=20
indemnity shall be supported by the liability insurance coverage herein =
required=20
to be furnished by Contractor or such greater amount of insurance (or=20
self-insurance) as Contractor in fact carries.&nbsp; Provided, however, =
if the=20
work to be performed hereunder subjects this Agreement to [the Texas =
Oilfield=20
Anti-Indemnity Act], Company agrees to provide insurance or self =
insurance in an=20
equal amount to that provided by Contractor in support of the mutual =
indemnities=20
contained herein.=94</P></DIV>
<DIV id=3Dftn7>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref7"=20
name=3D_ftn7><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[7]</SPAN></SUP></SUP></A>=20
Act of May 21, 1973, 63rd Leg., R.S., ch. 646, 1973 Tex. Gen. Laws 1767, =

formerly <SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Rev. Civ. Stat.=20
Ann.</SPAN> art. 2212b, =A7=A7 3, 4(a), now, with intervening =
amendments, <SPAN=20
style=3D"TEXT-TRANSFORM: uppercase">Tex. Civ. Prac. &amp; Rem. =
Code</SPAN> =A7=A7=20
127.001-.007.</P></DIV>
<DIV id=3Dftn8>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref8"=20
name=3D_ftn8><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[8]</SPAN></SUP></SUP></A>=20
<I>Supra</I> note 3.</P></DIV>
<DIV id=3Dftn9>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref9"=20
name=3D_ftn9><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[9]</SPAN></SUP></SUP></A>=20
158 S.W.3d at 114-115; <I>see</I> <I>supra</I> note 2 (emphasis=20
added).</P></DIV>
<DIV id=3Dftn10>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref10"=20
name=3D_ftn10><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[10]</SPAN></SUP></SUP></A>=20
158 S.W.3d at 115; Brief for Respondent 14.</P></DIV>
<DIV id=3Dftn11>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref11"=20
name=3D_ftn11><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[11]</SPAN></SUP></SUP></A>=20
<I>Supra</I> note 3 (emphasis added).</P></DIV>
<DIV id=3Dftn12>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref12"=20
name=3D_ftn12><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[12]</SPAN></SUP></SUP></A>=20
158 S.W.3d at 115-116.</P></DIV>
<DIV id=3Dftn13>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref13"=20
name=3D_ftn13><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[13]</SPAN></SUP></SUP></A>=20
49 Tex. Sup. Ct. J. 7 (Oct. 14, 2005).</P></DIV>
<DIV id=3Dftn14>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref14"=20
name=3D_ftn14><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[14]</SPAN></SUP></SUP></A>=20
<I>See</I> <I>generally Texas Workers=92 Comp. Comm=92n v. Garcia</I>, =
893 S.W.2d=20
504 (Tex. 1995).</P></DIV>
<DIV id=3Dftn15>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref15"=20
name=3D_ftn15><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[15]</SPAN></SUP></SUP></A>=20
As originally introduced in the regular session of the 71st Legislature, =
the=20
bill to replace the Workers=92 Compensation Act did not carry forward =
the=20
provision regarding indemnification agreements in the prior law; the =
bill was=20
silent on the subject.&nbsp; Tex. H.B. 1, 71st Leg., R.S. (1989).&nbsp; =
But the=20
House added the language that is now section 417.004 by floor amendment =
without=20
objection, <SPAN style=3D"TEXT-TRANSFORM: uppercase">H.J. of =
Tex.</SPAN>, 71st=20
Leg., R.S. 466 (1989), and it was included in all bills to replace the =
Act=20
introduced in the first and second called sessions, Tex. H.B. 1, 71st =
Leg., 1st=20
C.S. (1989); Tex. S.B. 1, 71st Leg., 1st C.S. (1989); Tex. H.B. 4, 71st =
Leg., 2d=20
C.S. (1989); Tex. S.B. 2, 71st Leg., 2d C,S. (1989); Tex. S.B. 9, 71st =
Leg., 2d=20
C.S. (1989); Tex. S.B. 18, 71st Leg., 2d C.S. (1989), including the =
Senate bill=20
that was ultimately enacted, Tex. S.B. 1, 71st Leg., 2d C.S., 1989 Tex. =
Gen.=20
Laws 1.&nbsp; During the regular session, after the addition of the =
present text=20
on the House floor, a Senate subcommittee staff member stated at a =
hearing that=20
=93[t]he third party liability, uh, that, that covers the next several =
sections =97=20
and for the most part that is, uh, current law.&nbsp; The one of the big =

differences from the current law is the disposition of the attorney=92s=20
fees.=94&nbsp; <I>Hearing on Senate Committee Substitute to Tex. H.B. 1 =
Before the=20
Committee of the Whole Senate, Subcommittee on Workers=92 =
Compensation</I>, 71st=20
Leg., R.S., Tape 1 at 21 (April 19, 1989) (transcript available from =
Senate=20
Staff Services Office).&nbsp; In the first called session, a House =
committee=20
bill analysis stated that the section regarding indemnification =
=93[p]rovides that=20
an employer is not liable to a third party for reimbursement or damages =
based on=20
a judgment or settlement against the third party for a work-related =
injury=20
unless the employer has agreed to assume such liability, <I>as provided =
in the=20
current law</I>.=94&nbsp; <SPAN style=3D"TEXT-TRANSFORM: =
uppercase">House Comm. on=20
Business and Commerce, Bill Analysis</SPAN>, Tex. H.B. 1, at 10, 71st =
Leg., 1st=20
C.S. (June 20, 1989) (emphasis added).&nbsp; In the second called =
session, when=20
the legislation finally passed, a House committee bill analysis noted no =

difference between the indemnity section and prior law, <SPAN=20
style=3D"TEXT-TRANSFORM: uppercase">House Comm. on Business and =
Commerce, Bill=20
Analysis</SPAN>, Tex. S.B. 1, at 3, 71st Leg., 2d C.S. (Nov. 27, 1989), =
and the=20
conference committee report stated simply that the section =93[p]rovides =
that an=20
employer is not liable to a third party unless there is a prior written=20
agreement to that effect=94, <SPAN style=3D"TEXT-TRANSFORM: =
uppercase">Conference=20
Comm. Report</SPAN>, Tex. S.B. 1, at 9, 71st Leg., 2d C.S. (Dec. 12,=20
1989).&nbsp; The legislative history contains no other pertinent =
references to=20
the provision.</P></DIV>
<DIV id=3Dftn16>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref16"=20
name=3D_ftn16><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[16]</SPAN></SUP></SUP></A>=20
<I>E.g.</I> <I>Stine v. Stewart</I>, 80 S.W.3d 586, 589 (Tex. 2002) (per =

curiam); <I>MCI Telecomms. Corp. v. Texas Utils. Elec. Co.</I>, 995 =
S.W.2d 647,=20
651 (Tex. 1999); <I>see generally</I> <SPAN=20
style=3D"TEXT-TRANSFORM: uppercase">Restatement (Second) of =
Contracts</SPAN> =A7 304=20
(1981) (=93A promise in a contract creates a duty in the promisor to any =
intended=20
beneficiary to perform the promise, and the intended beneficiary may =
enforce the=20
duty.=94).</P></DIV>
<DIV id=3Dftn17>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref17"=20
name=3D_ftn17><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[17]</SPAN></SUP></SUP></A>=20
<I>Cash Am. Int=92l, Inc. v. Bennett</I>, 35 S.W.3d 12, 16 (Tex. 2000) =
(=93A statute=20
that deprives a person of a common-law right will not be extended beyond =
its=20
plain meaning or applied to cases not clearly within its purview.&nbsp;=20
Abrogating common-law claims is disfavored and requires a clear =
repugnance=20
between the common law and statutory causes of action.=94 (internal =
quotations and=20
citation omitted)); <I>Satterfield v. Satterfield</I>, 448 S.W.2d 456, =
459 (Tex.=20
1969) (=93While Texas follows the rule that statutes in derogation of =
the common=20
law are not to be strictly construed, it is recognized that if a statute =
creates=20
a liability unknown to the common law, or deprives a person of a common =
law=20
right, the statute will be strictly construed in the sense that it will =
not be=20
extended beyond its plain meaning or applied to cases not clearly within =
its=20
purview.=94).</P></DIV>
<DIV id=3Dftn18>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref18"=20
name=3D_ftn18><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[18]</SPAN></SUP></SUP></A>=20
<SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Gov=92t Code</SPAN> =A7=20
312.005.</P></DIV>
<DIV id=3Dftn19>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref19"=20
name=3D_ftn19><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[19]</SPAN></SUP></SUP></A>=20
Generally, the Texas Oilfield Anti-Indemnity Act voids certain =
agreements to=20
indemnify against liability for which the indemnitee or contractors =
responsible=20
to him are at fault unless the agreement is supported by =
insurance.&nbsp;=20
Liability for a mutual indemnity obligation is limited to the amount of =
coverage=20
each indemnitor has agreed to obtain, and a unilateral obligation is =
limited to=20
$500,000.&nbsp; <SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Civ. =
Prac. &amp;=20
Rem. Code</SPAN> =A7=A7 127.003, .005.</P></DIV>
<DIV id=3Dftn20>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref20"=20
name=3D_ftn20><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[20]</SPAN></SUP></SUP></A>=20
6 S.W.3d 278, 283-284 (Tex. 1999).</P></DIV>
<DIV id=3Dftn21>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref21"=20
name=3D_ftn21><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[21]</SPAN></SUP></SUP></A>=20
<I>Id.</I> at 281.</P></DIV>
<DIV id=3Dftn22>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref22"=20
name=3D_ftn22><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[22]</SPAN></SUP></SUP></A>=20
<I>Id</I>.</P></DIV>
<DIV id=3Dftn23>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref23"=20
name=3D_ftn23><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[23]</SPAN></SUP></SUP></A>=20
<I>Id.</I></P></DIV>
<DIV id=3Dftn24>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref24"=20
name=3D_ftn24><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[24]</SPAN></SUP></SUP></A>=20
<I>Id</I>. at 280.</P></DIV>
<DIV id=3Dftn25>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref25"=20
name=3D_ftn25><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[25]</SPAN></SUP></SUP></A>=20
<I>Id</I>. at 281, 283-284.</P></DIV>
<DIV id=3Dftn26>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref26"=20
name=3D_ftn26><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[26]</SPAN></SUP></SUP></A>=20
<I>Id</I>. at 283-284.</P></DIV>
<DIV id=3Dftn27>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref27"=20
name=3D_ftn27><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[27]</SPAN></SUP></SUP></A>=20
<I>Post</I> at ___.</P></DIV>
<DIV id=3Dftn28>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref28"=20
name=3D_ftn28><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[28]</SPAN></SUP></SUP></A>=20
<SPAN style=3D"TEXT-TRANSFORM: uppercase">Tex. Civ. Prac. &amp; Rem. =
Code</SPAN>=20
=A7=A7 127.001-.007.</P></DIV>
<DIV id=3Dftn29>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref29"=20
name=3D_ftn29><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[29]</SPAN></SUP></SUP></A>=20
<I>Id.</I> =A7=A7 127.001(3), .005.</P></DIV>
<DIV id=3Dftn30>
<P class=3DMsoFootnoteText style=3D"MARGIN-TOP: 6pt"><A title=3D""=20
href=3D"http://www.supreme.courts.state.tx.us/historical/2007/aug/050202.=
htm#_ftnref30"=20
name=3D_ftn30><SUP><SUP><SPAN=20
style=3D"FONT-SIZE: 10pt; FONT-FAMILY: 'Times New =
Roman'">[30]</SPAN></SUP></SUP></A>=20
Brief for Texas Oil &amp; Gas Ass=92n as Amicus Curiae Supporting =
Petitioners=20
7-8.</P></DIV></DIV></BODY></HTML>
