In Re: Deepwater Horizon ( 2013 )


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  •       Case: 12-30230          Document: 00512161598         Page: 1   Date Filed: 03/01/2013
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    March 1, 2013
    No. 12-30230                   Lyle W. Cayce
    Clerk
    IN RE: DEEPWATER HORIZON
    --------------------------------------------------
    RANGER INSURANCE, LIMITED,
    Plaintiff - Appellee
    v.
    TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED;
    TRANSOCEAN HOLDINGS, L.L.C.; TRANSOCEAN DEEPWATER,
    INCORPORATED; TRITON ASSET LEASING GMBH,
    Intervenor Plaintiffs - Appellees
    v.
    BP P.L.C.; BP EXPLORATION & PRODUCTION, INCORPORATED; BP
    AMERICAN PRODUCTION COMPANY; BP CORPORATION NORTH
    AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA,
    INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED;
    BP AMERICA, INCORPORATED; BP HOLDINGS NORTH AMERICA,
    LIMITED,
    Defendants - Intervenor Defendants - Appellants
    --------------------------------------------------
    CERTAIN UNDERWRITERS AT LLOYD’S LONDON,
    Plaintiff - Appellee
    Case: 12-30230    Document: 00512161598      Page: 2   Date Filed: 03/01/2013
    No. 12-30230
    TRANSOCEAN OFFSHORE DEEPWATER DRILLING, INCORPORATED;
    TRANSOCEAN HOLDINGS, L.L.C.; TRANSOCEAN DEEPWATER,
    INCORPORATED; TRITON ASSET LEASING GMBH,
    Intervenor Plaintiffs - Appellees
    v.
    BP P.L.C.; BP EXPLORATION & PRODUCTION, INCORPORATED; BP
    AMERICAN PRODUCTION COMPANY; BP CORPORATION NORTH
    AMERICA, INCORPORATED; BP COMPANY NORTH AMERICA,
    INCORPORATED; BP PRODUCTS NORTH AMERICA, INCORPORATED;
    BP AMERICA, INCORPORATED; BP HOLDINGS NORTH AMERICA,
    LIMITED,
    Defendants - Intervenor Defendants - Appellants
    Appeal from the United States District Court
    for the Eastern District of Louisiana
    Before JOLLY, BENAVIDES, and HIGGINSON, Circuit Judges.
    E. GRADY JOLLY, Circuit Judge:
    This appeal presents only one of the many disputes that have arisen and
    will arise from the explosion and sinking of Transocean’s Deepwater Horizon in
    April 2010. Today we address the obligations of Transocean’s primary and
    excess-liability insurers to cover BP’s pollution-related liabilities deriving from
    the ensuing oil spill in the Gulf of Mexico. Applying Texas law, especially as
    clarified since the district court’s decision, we find that the umbrella insurance
    policy—not the indemnity provisions of Transocean’s and BP’s contract—controls
    the extent to which BP is covered for its operations under the Drilling Contract.
    Because we find this policy imposes no relevant limitations upon the extent to
    which BP is covered, we REVERSE the judgment of the district court and
    2
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    No. 12-30230
    REMAND the case for entry of an appropriate judgment in accordance with this
    opinion.
    I.
    Transocean Holdings, Inc. (“Transocean”) owned the Deepwater Horizon,
    a semi-submersible, mobile offshore drilling unit. In April 2010, the Deepwater
    Horizon sank into the Gulf of Mexico after burning for two days following an
    onboard explosion (“Incident” or “Deepwater Horizon Incident”). At the time of
    the Incident, the Deepwater Horizon was engaged in exploratory drilling
    activities at the Macondo Well under a Drilling Contract between the Appellant
    BP America Production Company’s (together with its affiliates, “BP”)
    predecessor and Transocean’s predecessor. This Contract required Transocean
    to maintain certain minimum insurance coverages for the benefit of BP. The
    extent to which these policies covered BP’s pollution-related liabilities arising
    from the Deepwater Horizon Incident is the subject of this appeal.
    The Insurance Policies
    Transocean held insurance policies with a primary liability insurer,
    Ranger Insurance Ltd. (“Ranger”), as well as several excess liability insurers led
    by London market syndicates (“Excess Insurers;” together with Ranger,
    “Insurers”). Transocean’s insurance policy with Ranger provided at least $50
    million of general liability coverage, and its policies with the Excess Insurers
    formed four layers of excess coverage directly above the Ranger Policy that
    provided at least $700 million of additional general liability coverage. The
    Ranger and Excess Policies contain materially identical provisions.1 The Policy
    terms that are important to this case are “Insured” and “Insured Contract.” The
    Policies define “Insured” as including the Named Insured, other parties, and
    1
    As the district court noted (and the Insurers have not disputed), this similarity allows
    the court to treat all of the Insurers as one for purposes of analysis in this case.
    3
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    No. 12-30230
    (c) any person or entity to whom the “Insured” is obliged by
    any oral or written “Insured Contract” (including contracts
    which are in agreement but have not been formally concluded
    in writing) entered into before any relevant “Occurrence”, to
    provide insurance such as is afforded by this Policy . . . .
    The Policies define “Insured Contract” as follows:
    The words “Insured Contract”, whenever used in this Policy,
    shall mean any written or oral contract or agreement entered
    into by the “Insured” (including contracts which are in
    agreement but have not been formally concluded in writing)
    and pertaining to business under which the “Insured”
    assumes the tort liability of another party to pay for “Bodily
    Injury”, “Property Damage”, “Personal Injury” or “Advertising
    Injury” to a “Third Party” or organization. Tort Liability
    means a liability that would be imposed by law in the absence
    of any contract or agreement.2
    The Drilling Contract
    The Drilling Contract defines BP’s and Transocean’s obligations to one
    another, separately identifying the liabilities each party assumes. Article 20 of
    the Contract is a singular provision that imposes upon Transocean an insurance
    requirement:
    20.1 INSURANCE
    Without limiting the indemnity obligations or liabilities of
    CONTRACTOR [Transocean] or its insurer, at all times
    during the term of this CONTRACT, CONTRACTOR shall
    maintain insurance covering the operations to be
    performed under this CONTRACT as set forth in
    Exhibit C.
    (Emphasis added.) Exhibit C to the Drilling Contract is titled “Insurance
    Requirements” and establishes the types and minimum level of coverage that
    2
    The Policies contain further provisions addressing other insureds. Endorsement 1
    provides a general condition that additional insureds are automatically included where
    required by written contract. Condition D.1 to Section I coverage limits the coverage of
    additional insureds: Transocean has the privilege to name additional insureds only to the
    extent as is required under contract or agreement.
    4
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    No. 12-30230
    Transocean is obligated to maintain. This Exhibit provides that Transocean
    shall carry all insurance at its own expense and that the policies “shall be
    endorsed to provide that there will be no recourse against [BP] for payment of
    premium.” Further, Exhibit C states:
    [BP], its subsidiaries and affiliated companies, co-
    owners, and joint venturers, if any, and their
    employees, officers and agents shall be named as
    additional insureds in each of [Transocean’s]
    policies, except Workers’ Compensation for
    liabilities assumed by [Transocean] under the
    terms of this Contract.
    (Emphasis added.)
    The Procedural History
    Following the Incident, BP notified the Insurers of its Deepwater Horizon-
    related losses.      The Excess Insurers and Ranger each filed a one-count
    declaratory judgment action against BP.3                 The Insurers’ complaints are
    substantively identical—both request a declaration that the Insurers have “no
    additional-insured obligation to BP with respect to pollution claims against BP
    for oil emanating from BP’s well” as a result of the Deepwater Horizon Incident.
    The Insurers acknowledge that “the [D]rilling [C]ontract requires additional
    insured protection in favor of certain BP entities.” Thus, all parties concede that
    the Drilling Contract is an “insured contract” under the policies and that the
    policies provide some insurance coverage to BP as an additional insured. The
    issue in contention is the scope of BP’s insurance coverage.
    In July 2011, BP moved for judgment on the pleadings, under Rule 12(c)
    of the Federal Rules of Civil Procedure, against the Insurers. Relying upon
    3
    In February 2011, the Judicial Panel on Multidistrict Litigation transferred both cases
    to the United States District Court for the Eastern District of Louisiana for coordinated
    pretrial proceedings with the other Deepwater Horizon-related litigation pending in that court.
    In March 2011, Transocean moved for leave to intervene in the consolidated actions, which
    motion the court granted.
    5
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    Texas and Fifth Circuit precedent as developed in Evanston Ins. Co. v.
    ATOFINA Petrochems., Inc., 
    256 S.W.3d 660
     (Tex. 2008), and in Aubris
    Resources LP v. St. Paul Fire & Marine Ins. Co., 
    566 F.3d 483
     (5th Cir. 2009), BP
    argued (1) it was an “additional insured” under the insurance policies at issue
    and (2) the insurance policies alone—and not the indemnities detailed in the
    Drilling Contract—govern the scope of BP’s coverage rights as an “additional
    insured.”4
    The district court found ATOFINA and Aubris are distinguishable from
    the case at hand and denied BP’s Rule 12(c) motion in November 2011. In
    particular, the court read Transocean’s insurance obligation in Exhibit C to be
    to name BP as an “additional insured[] in each of [Transocean’s] policies . . . for
    liabilities assumed by [Transocean] under the terms of the contract.” That is,
    the district court found BP’s proffered reading of this clause unreasonable, and
    read the clause as if there were a comma following the phrase “except Workers’
    Compensation;” this reading rendered those three words their own discrete carve
    out from liability.          Reasoning further that this interpretation required
    Transocean to name BP as an insured only for liabilities Transocean explicitly
    assumed under the contract, the court then looked to Article 24 of the Drilling
    Contract to conclude that BP was not covered under Transocean’s policy for the
    pollution-related liabilities deriving from the Deepwater Horizon Incident (as the
    spill originated below the surface of the water).5
    4
    BP argues this motion did not require a determination of any rights or obligations of
    BP or Transocean to one another under any provisions of the Drilling Contract. We agree.
    5
    With respect to pollution-related liabilities, Article 24.1 of the Contract provides:
    CONTRACTOR [Transocean] shall assume full responsibility for and
    shall protect, release, defend, indemnify, and hold COMPANY [BP] and
    its joint owners harmless from and against any loss, damage, expense,
    claim, fine, penalty, demand, or liability for pollution or
    contamination, including control and removal thereof, originating on
    or above the surface of the land or water, from spills, leaks, or
    6
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    No. 12-30230
    Following further submissions of the parties, the district court then
    entered a partial final judgment on the Insurers’ complaints under Rule 54(b).
    Effective March 1, 2012, the court held “by its terms, the Court’s Order and
    Reasons [on BP’s motion for judgment on the pleadings] not only denied BP’s
    motion but also granted judgment on the pleadings against [BP] and in favor of
    the Plaintiff Insurers on the Plaintiff Insurers’ complaints.”6                    BP timely
    appealed.
    II.
    We review de novo a district court’s grant of judgment on the pleadings
    under Rule 12(c). United States v. Renda Marine, Inc., 
    667 F.3d 651
    , 654 (5th
    Cir. 2012). The standard for dismissal under Rule 12(c) is the same as that for
    dismissal under Rule 12(b)(6). Johnson v. Johnson, 
    385 F.3d 503
    , 529 (5th Cir.
    2004). To survive a Rule 12(b)(6) motion, the plaintiff must plead facts sufficient
    “to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 
    556 U.S. 662
    , 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 
    550 U.S. 544
    , 570
    (2007)).
    discharges of fuels, lubricants, motor oils, pipe dope, paints, solvents,
    ballast, air emissions, bilge sludge, garbage, or any other liquid or solid
    whatsoever in possession and control of CONTRACTOR . . . .
    (Emphasis added.) Article 24.2 then provides:
    COMPANY [BP] shall assume full responsibility for and shall protect,
    release, defend, indemnify, and hold CONTRACTOR [Transocean]
    harmless from and against any loss, damage, expense, claim, fine,
    penalty, demand, or liability for pollution or contamination,
    including control and removal thereof, arising out of or connected
    with operations under this CONTRACT hereunder and not
    assumed by CONTRACTOR in Article 24.1 above . . . .
    (Emphasis added.)
    6
    In its brief, BP notes that this partial final judgment was entered in favor of the
    Insurers “and Transocean” and argues that Transocean is not a proper party to this order.
    BP’s Rule 12(c) motion was directed only to the Insurer’s complaints and claims—not against
    Transocean.
    7
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    We similarly review issues of contract interpretation de novo. One Beacon
    Ins. Co. v. Crowley Marine Servs. Inc., 
    648 F.3d 258
    , 262 (5th Cir. 2011). The
    parties agree that Texas law governs interpretation of the Policies, under the
    Policies’ choice-of-law provisions. “Under Texas law, the same general rules
    apply to the interpretation of contracts and insurance policies.” Aubris, 566 F.3d
    at 486 (citing Am. Mfrs. Mut. Ins. Co. v. Schaefer, 
    124 S.W.3d 154
    , 157 (Tex.
    2003)). Courts should consider contracts “as a whole,” affording “each part of the
    contract . . . effect.” Forbau v. Aetna Life Ins. Co., 
    876 S.W.2d 132
    , 133 (Tex.
    1994). Discerning the parties’ true intent, as expressed in the language of the
    policy, is the court’s primary concern. Kelley-Coppedge, Inc. v. Highlands Ins.
    Co., 
    980 S.W.2d 462
    , 464 (Tex. 1998).           And the court may not adopt a
    construction that renders any portion of a policy meaningless, useless, or
    inexplicable. ATOFINA Petrochemicals, Inc. v. Cont’l Cas. Co., 
    185 S.W.3d 440
    ,
    444 (Tex. 2005).
    If an insurance coverage provision is susceptible to more than one
    reasonable interpretation, the court must interpret that provision in favor of the
    insured, so long as that interpretation is reasonable. Nat’l Union Fire Ins. Co.
    of Pittsburgh, Pa. v. Hudson Energy Co., 
    811 S.W.2d 552
    , 555 (Tex. 1991). The
    court must do so even if the insurer’s interpretation is more reasonable than the
    insured’s—“[i]n particular, exceptions or limitations on liability are strictly
    construed against the insurer and in favor of the insured,” id., and “[a]n intent
    to exclude coverage must be expressed in clear and unambiguous language.”
    ATOFINA, 256 S.W.3d at 668, 668 n.27 (citing Hudson Energy Co., 811 S.W.2d
    at 555); see also Certain Underwriters at Lloyds, London v. Law, 
    570 F.3d 574
    ,
    577 (5th Cir. 2009) (“If . . . ambiguity is found, the contractual language will be
    ‘liberally’ construed in favor of the insured.” (citing Barnett v. Aetna Life Ins. Co.,
    
    723 S.W.2d 663
    , 666 (Tex. 1987))).
    8
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    No. 12-30230
    III.
    Under Texas law, to discern “whether a commercial umbrella insurance
    policy that was purchased to secure the insured’s indemnity obligation in a
    service contract with a third party also provides direct liability coverage for the
    third party,” we look to the “terms of the umbrella insurance policy itself,”
    instead of looking to the indemnity agreement in the underlying service contract.
    ATOFINA, 256 S.W.3d at 662, 664; see also Aubris, 566 F.3d at 488-89. We
    apply this analysis so long as the indemnity agreement and the insurance
    coverage provision are separate and independent. ATOFINA, 256 S.W.3d at 664
    n.5 (citing Getty Oil Co. v. Ins. of N. Am., 
    845 S.W.2d 794
    , 804 (Tex. 1992);
    Aubris, 566 F.3d at 489. We examine each step of the analysis in turn.
    A.
    First, we ask whether the umbrella policy between the Insurers and
    Transocean itself limits coverage for any additional insureds, including BP.
    ATOFINA is instructive, as its facts significantly parallel the facts of the case
    now before us. 
    256 S.W.3d 660
    . ATOFINA owned an oil refinery at which it
    hired Triple S to perform maintenance functions. Id. at 662. ATOFINA and
    Triple S entered a services contract which stipulated that ATOFINA was to be
    named an additional insured in each of Triple S’s policies.                    Id. at 663.
    Specifically, this provision stated:
    [ATOFINA], its parents, subsidiaries and affiliated
    companies, and their respective employees, officers and
    agents shall be named as additional insured in each of
    [Triple S’s] policies, except Workers’ Compensation;
    however, such extension of coverage shall not apply
    with respect to any obligations for which [ATOFINA]
    has specifically agreed to indemnify [Triple S].7
    7
    Petitioner’s Br. on the Merits, Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 
    256 S.W.3d 660
     (Tex. 2008) (No. 03-0647), 
    2004 WL 1047377
    , at *4.
    9
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    After a Triple S employee drowned while servicing the ATOFINA refinery,
    his estate sued ATOFINA and Triple S for wrongful death. Id. at 663. Triple S’s
    insurer, Evanston, and ATOFINA disagreed over who was required to pay for
    the litigation; ATOFINA contended it was an additional insured and thus
    covered, while Evanston argued ATOFINA’s agreement to indemnify Triple S for
    ATOFINA’s sole negligence precluded coverage. Id.
    The Texas Supreme Court began by noting that ATOFINA sought
    coverage from Evanston on the basis that it was Triple S’s additional
    insured—and had not sought indemnity directly from Triple S. Id. at 663-64.
    The court next looked to Section III.B.6 of the policy, which defined who is an
    insured as
    A person or organization for whom you have agreed to
    provide insurance as is afforded by this policy; but that
    person or organization is an insured only with respect
    to operations performed by you or on your behalf, or
    facilities owned or used by you.
    Id. at 664. Because, by its own terms, this Section covered ATOFINA “with
    respect to operations performed by” Triple S, the court found this Section
    provided ATOFINA direct coverage even for its sole negligence. Id. at 667.
    Moreover, the court stated that “had the parties intended to insure ATOFINA
    for vicarious liability only, ‘language clearly embodying that intention was
    available.’” Id. at 666 (citing McIntosh v. Scottsdale Ins. Co., 
    992 F.2d 251
    , 255
    (10th Cir. 1993)).
    This Court subsequently applied ATOFINA’s teachings in Aubris. 
    566 F.3d 483
    . Again, this case involved a particularly analogous set of facts: United
    hired J&R Valley to service its oilfields pursuant to a services contract that
    required J&R Valley to name United as an additional insured in its commercial
    general liability policy. Id. at 485. The agreement further contained a general
    indemnity provision requiring United to indemnify J&R Valley for causes of
    10
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    action deriving from United’s own negligence. Id. at 485-86. The court noted
    that “[o]ur starting point is the insurance policy itself.” Id. at 487. This policy
    defined an additional insured as
    Any person or organization that you agree in a written
    contract for insurance to add as an additional protected
    person under this agreement is also a protected person
    for the following if that written contract for
    insurance specifically requires such coverages for
    that person or organization[.]
    Id. (emphasis in original).    Because this definition referred to a “written
    contract for insurance,” the court then looked to the additional insured provision
    in the services agreement to determine whether coverage was required. Id.
    That provision stated, in relevant part:
    UNITED . . . shall be named as additional insureds in
    each of [J&R Valley’s] policies, except Workers’
    Compensation; however, such extension of
    coverage shall not apply with respect to
    obligations for which UNITED has specifically
    agreed to indemnify [J&R Valley].
    Id. (emphasis in original). On the basis of this term, J&R Valley’s insurer
    argued the general indemnity provision of the services agreement prevented
    United from being covered. Id.
    The court disagreed, stating, “[w]e take from [ATOFINA] that in
    determining whether there is coverage, a court looks only to the additional
    insured provision itself; that indemnity is a separate, and later arising, question
    from coverage.” Id. at 488. Again, the court noted that United sought coverage
    from J&R Valley’s insurer and not indemnity from J&R Valley itself—just as
    ATOFINA sought coverage from Evanston and not indemnity from Triple S. Id.
    at 489.
    The court held:
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    [I]t is not material to the [ATOFINA] rule whether the
    additional insured provision is finally determined in the
    policy or with the aid of the parties’ service contract.
    The separate indemnity provision is not applied to limit
    the scope of coverage. Indeed, on this point the Texas
    Supreme Court could not have been clearer:
    We have noted that where an additional insured
    provision is separate from and additional to an
    indemnity provision, the scope of the insurance
    requirement is not limited by the indemnity clause.
    Id. at 489 (quoting ATOFINA, 256 S.W.3d at 664 (citing Getty Oil Co. v. Ins. Co.
    of N. Am., 
    845 S.W.2d 794
    , 804 (Tex. 1992))).
    Most recently, and subsequent to the district court’s ruling, the Texas
    Court of Appeals addressed this same question of coverage in Pasadena Refining
    System, Inc. v. McCraven, Nos. 14-10-00837-CV, 14-10-00860-CV, 
    2012 WL 1693697
     (Tex. App. May 15, 2012). The umbrella policy there provided a broad
    definition of “additional insured,”8 and the services agreement required the
    8
    
    2012 WL 1693697
    , at *14-15:
    Any person or organization . . . for whom the named insured . . . has
    specifically agreed by written contract to procure bodily injury . . .
    insurance, provided that:
    a. This insurance applies only to the type of coverage which is
    otherwise provided by this policy and which the named insured
    has agreed to provide by contract, but in no event shall the
    coverage exceed, in type or amount, the coverage otherwise
    provided by this policy;
    b. The amount of insurance is limited to the minimum amount
    required by such written contract, or to the limits of liability
    provided by this policy, whichever is lower;
    c. The insurance applies only with respect to liability arising out
    of the work done by or on behalf of the named insured under such
    written contract; and
    d. This insurance shall apply as primary insurance with regard
    to the additional insured for whom the named insured has agreed
    by written contract to provide insurance on a primary basis, and
    in such cases, any other insurance or self insurance available to
    the additional insured shall be excess to, and not contributory
    with, the insurance afforded by this policy to that additional
    insured. However, if the contract does not specifically require
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    COMPANY be named as an additional insured in all
    such certificates, except insurance providing protection
    against worker’s or workmen’s compensation claims, to
    the extent of the coverage required and only in the
    minimum amount required by contract, and only with
    respect to liability arising out of work done by or on
    behalf of the named insured, and only to the extent
    COMPANY is indemnified by CONTRACTOR under
    the terms of the contract.
    Id. at *14. The insurer argued that this clause in the services agreement
    expressed the parties’ clear intent to limit additional insured coverage to the
    indemnities listed in that agreement. Id. at *16. The court, however, applied
    ATOFINA and Shell Chemical L.P. v. Discover Property & Casualty Insurance
    Co., CIV. A. No. H-09-2583, 
    2010 WL 1338068
     (S.D. Tex. Mar. 29, 2010), and
    concluded that only the policy could limit the scope of additional insured status.
    
    2012 WL 1693697
    , at *15-16. Looking to the “unambiguous [umbrella] policy,
    which neither contains a limitation on additional insured coverage concerning
    indemnity under the [services] agreement nor incorporates any such limitation,”
    the court held the company was an additional insured entitled to coverage as a
    matter of law. 
    2012 WL 1693697
    , at *14, *16-17.
    This case law makes clear to us that only the umbrella policy itself may
    establish limits upon the extent to which an additional insured is covered in
    situations such as the one now before us. As an initial matter we note that here,
    as in ATOFINA and Aubris, BP is not seeking indemnity from Transocean, but
    is seeking coverage from the Insurers. The umbrella policy in this case defines
    an additional insured as “any person or entity to whom the ‘Insured is obliged
    that this insurance be primary, this insurance shall be excess
    over and not contributory with any other valid and collectible
    insurance or self insurance available to the additional insured
    whether such other insurance or self insurance is primary,
    excess, or contingent, or on any other basis.
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    by any oral or written ‘Insurance Contract’ . . . to provide insurance such as is
    afforded by this policy.” And it defines “Insurance Contract” as “any written or
    oral contract or agreement entered into by the ‘Insured’ . . . and pertaining to
    business under which the ‘Insured’ assumes the tort liability of another party to
    pay for ‘Bodily Injury’, ‘Property Damage’, ‘Personal Injury’ or ‘Advertising
    Injury’ to a ‘Third Party’ or organization.” This language is very similar to the
    language in the umbrella policies in ATOFINA, Aubris, and Pasadena
    Refining—indeed, we can find no principled distinction between the policy
    language in these three cases and in the case now at hand.9 Just as the policies
    in these three earlier cases did not limit coverage, so here the policy itself does
    not contain any limitation on additional insured coverage nor incorporate any
    limits from the underlying Drilling Contract.
    The Insurers, however, argue that the additional insured provision in the
    Drilling Contract specifically limits BP’s status as an additional insured to
    circumstances involving those liabilities Transocean specifically assumes under
    the Contract. This argument is simply not persuasive given how Texas law has
    developed. The language to which the Insurers cite for support is virtually
    identical to the additional insured provision contained in the services agreement
    in ATOFINA; additionally, it is very similar to the language in both Aubris and
    Pasadena Refining.         To make the parallels clear, we note again that the
    agreement in ATOFINA provided that
    [ATOFINA], its parents, subsidiaries and affiliated
    companies, and their respective employees, officers and
    9
    The district court distinguished the current case from ATOFINA by noting that the
    policy in that case, in defining “additional insured,” did not specifically refer to an underlying
    services contract. This is a true, but ultimately an unpersuasive distinction. First, that policy
    did include in its additional insured definition language referencing entities “for whom you
    have agreed to provide insurance as is afforded by this policy.” Second, the policies in both
    Aubris and Pasadena Refining specifically reference an underlying contract requiring
    insurance coverage in their definitions of additional insureds, yet in each of these cases the
    respective courts found this reference insufficient to constitute a limit on coverage.
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    No. 12-30230
    agents shall be named as additional insured in each of
    [Triple S’s] policies, except Workers’ Compensation;
    however, such extension of coverage shall not apply
    with respect to any obligations for which [ATOFINA]
    has specifically agreed to indemnify [Triple S].
    And the Drilling Contract here requires:
    [BP], its subsidiaries and affiliated companies, co-
    owners, and joint venturers, if any, and their
    employees, officers and agents shall be named as
    additional insureds in each of [Transocean’s] policies,
    except Workers’ Compensation for liabilities assumed
    by [Transocean] under the terms of this Contract.
    While the parties ardently disagree as to how this clause in the Drilling
    Contract should be interpreted, we find, in the light of ATOFINA, that we need
    not now decide this contentious issue. Even if the clause is construed as the
    Insurers desire, that is, even if it is understood to mean that BP is an additional
    insured under Transocean’s policies only for liabilities Transocean specifically
    assumed in the Drilling Contract, the outcome is a clause materially identical
    to the additional insured provision in ATOFINA—and the Texas Supreme Court
    found that this clause was insufficient to limit coverage. Despite the services
    contract’s language, the ATOFINA court found the umbrella policy controlled
    coverage. Accordingly, we find we are bound to look only to the policy itself to
    determine whether BP is covered in the current case. Because the umbrella
    policy’s provision describing an additional insured is substantially similar to the
    pertinent policy provisions in ATOFINA, Aubris, and Pasadena Refining, we
    hold that there is no relevant limitation to BP’s coverage under the policy as an
    additional insured, that is, so long as the insurance provision and the
    indemnities clauses in the Drilling Contract are separate and independent. See
    ATOFINA, 256 S.W.3d at 664 n.5, 670; Getty Oil, 845 S.W.2d at 804.
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    B.
    And now that is the question we must next resolve: Whether the Drilling
    Contract’s additional insured provision is separate from and additional to the
    indemnity provisions. Getty Oil, 845 S.W.2d at 804. Notably, in ATOFINA,
    Aubris, and Pasadena Refining, the respective courts found the additional
    insured provisions were independent of the indemnity provisions. ATOFINA
    considered two cases in reaching this conclusion. First, it examined Fireman’s
    Fund v. Commercial Standard Ins. Co., 
    490 S.W.2d 818
     (Tex. 1972), in which the
    Texas Supreme Court held GM was not entitled to indemnity because the
    contract did not extend indemnity to GM’s negligence. In that case, GM had
    contracted with Sam P. Wallace Co., Inc. (“Wallace”) to perform work on GM’s
    Arlington assembly plant, and, in the contract, Wallace agreed to indemnify GM
    for any losses arising from Wallace’s own negligence and to obtain liability
    insurance to satisfy that obligation.       Id. at 820.    The ATOFINA court
    distinguished that case by noting that in Fireman’s Fund, GM was not an
    additional insured under Wallace’s liability policy—while Wallace was required
    to obtain insurance to cover its liabilities, it was not further required to name
    GM as an additional insured in those policies. 256 S.W.3d at 669-70. As
    described below, this same distinction applies to the case now before us.
    Second, the ATOFINA court looked to Getty Oil, 
    845 S.W.2d 794
    . Getty
    contracted with NL Industries to purchase chemicals, and the services contract
    included an indemnity provision as well as a broad insurance requirement
    providing, in paragraph 1, that “[a]ll insurance coverages carried by [NL],
    whether or not required hereby, shall extend to and protect [Getty.]” Id. at 797.
    The Getty Oil court found this contract was “significantly different from that in
    Fireman’s Fund.” Id. at 804. It reasoned that, while the indemnity provision in
    paragraphs 3-4 of the relevant contract was supported by an insurance
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    provision, this provision was “separate from and additional to the additional
    insured provision in paragraphs 1-2.” Id.
    The ATOFINA court applied the reasoning in these cases to find that,
    “[a]lthough the service contract in this case does not include an insurance
    requirement quite as clear as the one in Getty, it is clear enough—it requires
    that ATOFINA ‘shall be named as additional insured in each of [Triple S’s]
    policies.’” 256 S.W.3d at 670 (alteration in original). The court then concluded
    it was
    unmistakable that the agreement in this case to extend
    direct insured status to ATOFINA as an additional
    insured is separate and independent from ATOFINA’s
    agreement to forego contractual indemnity for its own
    negligence. We disapprove the view that this kind of
    additional insured requirement fails to establish a
    separate and independent obligation for insuring
    liability.
    Id. (emphasis in original).
    Accordingly, to render an additional insured provision separate from and
    additional to an indemnity provision, Texas law only requires the additional
    insured provision be a discrete requirement. As evidenced in Getty Oil and
    ATOFINA, it need not be an entirely separate provision of the contract, and its
    independent status is not altered merely by the fact that the contract also
    includes a provision requiring the relevant party to obtain insurance to cover its
    liabilities under the contract.
    Here, as the Insurers note, one clause of Exhibit C (describing
    Transocean’s insurance obligations) requires Transocean to obtain coverage for
    its contractual liabilities,10 while another provision simply requires Transocean
    10
    See Exhibit C, ¶ 1.c:
    1. The insurance required to be carried by [Transocean] under this
    Contract is as follows:
    ...
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    to name BP as an additional insured.11 This setup is similar to the contract in
    Getty Oil, which imposed a requirement that NL obtain insurance for its
    contractual liabilities in paragraphs 3-4, while requiring Getty be named an
    additional insured in paragraphs 1-2.              Moreover, the additional insured
    provision here is nearly identical to the additional insured provision in
    ATOFINA. Accordingly, we hold, under Texas case law, it is “unmistakable”
    that the provision in the Drilling Contract extending direct insured status to BP
    is separate and independent from BP’s agreement to forego contractual
    indemnity in various other circumstances. See ATOFINA, 256 S.W.3d at 670.
    IV.
    Texas law compels us to interpret insurance coverage provisions in favor
    of the insured, so long as that interpretation is reasonable—and even if the
    insurer’s proffered interpretation denying coverage is more reasonable. Id. at
    668, 668 n.27; Hudson Energy Co., 811 S.W.2d at 555. Texas law further
    establishes that “‘where an additional insured provision is separate from and
    additional to an indemnity provision, the scope of the insurance requirement is
    not limited by the indemnity claims.’” Pasadena Refining, 
    2012 WL 1693697
    , at
    *17 (quoting ATOFINA, 256 S.W.3d at 664 n.5); see also Aubris, 566 F.3d at 488-
    89. Accordingly, we conclude: Because we find the umbrella policies between
    the Insurers and Transocean do not impose any relevant limitation upon the
    extent to which BP is an additional insured, and because the additional insured
    c. Comprehensive General Liability Insurance, including
    contractual liability insuring the indemnity agreement as
    set forth in the Contract and products-completed operations
    coverage with a combined single limit of not less than
    $10,000,000 covering bodily injury, sickness, death and property
    damage.
    (Emphasis added.)
    11
    Exhibit C, ¶ 3: “[BP] . . . shall be named as additional insureds in each of
    [Transocean’s] policies, except Workers’ Compensation for liabilities assumed by [Transocean]
    under the terms of this Contract.”
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    provision in the Drilling Contract is separate from and additional to the
    indemnity provisions therein, we find BP is entitled to coverage under each of
    Transocean’s policies as an additional insured as a matter of law. We reverse
    the judgment of the district court and remand the case with instructions to enter
    the appropriate judgment consistent with this opinion.
    REVERSED and REMANDED for entry of judgment.
    19