The Fifth Circuit has asked the Texas Supreme Court to weigh in on the litigation surrounding the April 2010 explosion and oil spill at the Deepwater Horizon offshore oil rig. The Texas Supreme Court has docketed the case as , No. 13-0670 .
The issue is whether the insurance policies that were purchased by Transocean also cover BP for its losses as an “additional insured.”
The two sides disagreed about how to read a previous Texas Supreme Court decision on the subject, Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660 (Tex. 2008).
With that disagreement about a controlling question of state law, the Fifth Circuit chose to certify the question to the Texas Supreme Court and await an answer. (This is the third such certified question that the Texas Supreme Court has received in the past two weeks.)
In its certification order, the Fifth Circuit has asked the Texas Supreme Court to provide the definitive answer under Texas law about two legal questions, before returning the case to the Fifth Circuit for final disposition.
The first question asks about how to apply ATOFINA to these facts:
- Whether Evanston Ins. Co. v. ATOFINA Petrochems., Inc., 256 S.W.3d 660 (Tex. 2008), compels a finding that BP is covered for the damages at issue, because the language of the umbrella policies alone determines the extent of BP’s coverage as an additional insured if, and so long as, the additional insured and indemnity provisions of the Drilling Contract are “separate and independent”?
The second question asks whether the general principle that ambiguous contract language is construed against the person who drafted it (contra proferentum) applies in this context:
- Whether the doctrine of contra proferentem applies to the interpretation of the insurance coverage provision of the Drilling Contract under the ATOFINA case, 256 S.W.3d at 668, given the facts of this case?
The Texas Supreme Court will most likely accept these certified questions and set a briefing schedule for the parties, with an oral argument to follow late this fall or early next year.