ConocoPhillips Co. v. Totem Well Serv.

• Court: U.S. District Court — Southern District of Texas
• Writing for the Court: ANDREW S. HANEN UNITED STATES DISTRICT JUDGE
• Docket Number: Civil Action 4:23-CV-3383
• Decision Date: 06 November 2025
• Citation: ConocoPhillips Co. v. Totem Well Serv., Civil Action 4:23-CV-3383 (S.D. Tex. Nov 06, 2025)
• Parties: CONOCOPHILLIPS COMPANY, Plaintiff, v. TOTEM WELL SERVICE, LLC, Defendant.
• topic: Contracts,Civil Procedure,Public Sector Law

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CONOCOPHILLIPS COMPANY, Plaintiff, v. TOTEM WELL SERVICE, LLC, Defendant.

Civil Action No. 4:23-CV-3383

United States District Court, S.D. Texas, Houston Division

November 6, 2025

ORDER

ANDREW S. HANEN UNITED STATES DISTRICT JUDGE

Pending before this Court is Plaintiff ConocoPhillips Company's (“Plaintiff' or “Conoco”) Motion for Summary Judgment (Doc. No. 25) and Defendant Totem Well Service, LLC's (“Defendant” or “Totem”) Cross Motion for Summary Judgment (Doc No. 26). Having considered Conoco's Motion for Summary Judgment, Totem's Cross Motion for Summary Judgment, the responses, and the summary judgment evidence, Conoco's Motion for Summary Judgment (Doc. No. 25) is DENIED. Totem's Cross Motion for Summary Judgment (Doc. No. 26) is GRANTED.

I. Factual Background

This is a contract interpretation dispute that turns primarily over which state law controls an oilfield-related, contractual indemnification clause. Conoco, a Texas company, and Totem, a New Mexico company, entered into a Master Service Agreement on October 26, 2021 (the “MSA”). (Doc. No. 25-1). By virtue of this contract, Conoco hired Totem to perform “well-related services” for Conoco's oil and gas wells. (Id.). The MSA included an indemnification clause, requiring Totem to “indemnify each of the members of Company Group from and against any and all claims arising out of or related in any way to personal injury.” (Id. at 38). Conoco, as “Company,” and Totem, as “Contractor,” agreed to the following:

CONTRACTOR SHALL INDEMNIFY EACH OF THE MEMBERS OF COMPANY GROUP FROM AND AGAINST ANY AND ALL CLAIMS ARISING OUT OF OR RELATED IN ANY WAY TO PERSONAL INJURY OF OFFICERS, DIRECTORS PERSONNEL, OR INVITEES OF ANY OF THE MEMBERS OF CONTRACTOR GROUP OCCURRING IN CONNECTION WITH THIS AGREEMENT, ANY CALLOFF ORDER, OR PERFORMANCE OF THE WORK UNDER ANY CALL-OFF ORDER, REGARDLESS OF THE TIMING OR NATURE OR STYLE OF SUCH CLAIMS AND REGARDLESS OF THE IDENTITY OF THE CLAIMANT, INCLUDING SUCH OFFICERS, DIRECTORS, PERSONNEL, OR INVITEES THEMSELVES AND THEIR RESPECTIVE REPRESENTATIVES, AGENTS, HEIRS, BENEFICIARIES, ASSIGNS, AND FAMILY MEMBERS.

(Id.).^[1]

Two years after the execution of the MSA, a Totem employee sued Conoco in Texas state court based upon personal injuries that he allegedly suffered while performing his job in Carlsbad, New Mexico. (Doc. No. 16-3). The plaintiff later nonsuited the Texas case and refiled his lawsuit against Conoco in New Mexico state court. (Doc. No. 26-2). Conoco then sent Totem a demand letter for defense and indemnification for the underlying litigation-citing the indemnification provision in the MSA. (Doc. No. 25-2 at 3). After Totem refused to comply with its demand, Conoco sued Totem in Texas state court, and the case was properly removed to this Court. See generally (Doc. No. 1). Conoco requests this Court to issue a declaratory judgment that pursuant to the MSA, Totem is required to provide defense and indemnity for the underlying litigation. (Doc. No. 13).

After a round of summary judgment briefing, the Court issued an Order that identified three questions that must be answered to resolve this contract interpretation dispute: (1) “whether § 21.3 is a valid disclaimer of the Texas Oilfield Anti-Indemnity Statute, and, if so, what is the result of its application to this dispute;” (2) “which state's law did the parties agree would govern the scope of the indemnity obligation;” and (3) “whether the parties' choice of law is enforceable for this indemnity dispute.” (Doc. No. 22 at 5). While the Court declined to address issue one in its prior Order, the Court held that the intention of the parties was to apply Texas law generally to the MSA, including the intent to apply Texas's choice of law principles. (Id. at 7). Nevertheless, the Court held that there was insufficient summary judgment evidence to determine whether the Texas choice-of-law principles require this Court to apply Texas law or New Mexico law to this dispute. (Id. at 11). As a result, the Court requested additional briefing, and in response, Conoco and Totem filed competing motions for summary judgment.

In addition to the indemnity clause, the MSA included three provisions relevant to the choice-of-law dispute:

21.1 The interpretation and performance of this Agreement and any Call-Off Order in relation thereto, and any dispute or Claim in connection with (i) this Agreement or any Call-Off Order in relation thereto or (ii) their subject matter or formation (including non-contractual disputes or Claims), are governed by and to be construed in accordance with the laws of the State of Texas, except for any rule or law of the State of Texas that would make the law of any other jurisdiction applicable. For Work performed offshore, this interpretation and performance of this Agreement and each Call-Off Order are governed by and to be construed in accordance with the general maritime law of the United States, or, if impermissible, with the laws of the State of Texas.

21.2 Specifically, if any provision of this Agreement or a Call-Off Order is determined to be unenforceable or in contravention of any Applicable Laws, such provision is to be deemed modified to the minimum extent required to bring such a provision into compliance with Applicable Laws. NOTHING CONTAINED HEREIN IS TO BE CONSTRUED AS CONTRAVENING THE EXPRESS INTENTION OF THE PARTIES THAT THE LAWS OF THE STATE OF TEXAS ARE TO APPLY IN ALL RESPECTS.

21.3 For the avoidance of doubt, the Texas Oilfield Anti-Indemnity Statute, V.T.C.A., Civil Practice & Remedies Code 127.000 et seq. and its amendments do not apply to Work performed outside the State of Texas.

(Doc. No. 25-1 at 51) (emphasis added).^[2]

Relying on the provisions in the MSA and the choice-of-law principles adopted in Texas, Conoco contends that that Texas law applies to Totem's indemnity obligation and requires the Court to declare that Totem has a duty to defend and indemnify Conoco, “as well as Conoco's contractors and subcontractors, from and against all claims relating to the” underlying New Mexico and now-dismissed Texas suits. (Doc. No. 25). In opposition, Totem contends that the Texas choice-of-law principles require this Court to apply New Mexico law to the MSA. Next, Totem argues that if New Mexico law applies, then Totem has no duty to defend or indemnify Conoco because the indemnification provision is void as violative of the public policy of New Mexico.

This Court hereby addresses the choice-of-law dispute and finds that the choice-of-law principles adopted in Texas require this Court to apply New Mexico state law to the MSA.

II. Legal Standard

A court may grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). In support of a motion for summary judgment, “[t]he movant bears the burden of identifying those portions of the record it believes demonstrate the absence of a genuine issue of material fact.” Triple Tee Golf, Inc. v. Nike, Inc., 485 F.3d 252, 261 (5th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)). Once a movant submits a properly supported motion, the burden shifts to the non-movant to show that the court should not grant the motion. Celotex, 477 U.S. at 321-25. The non-movant then must provide specific facts showing that there is a genuine dispute. Id. at 324; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

A dispute about a material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court must draw all reasonable inferences in the light most favorable to the nonmoving party in deciding a summary judgment motion. Id. at 255. The key question on summary judgment is whether there is evidence raising an issue of material fact upon which a hypothetical, reasonable factfinder could find in favor of the nonmoving party. Id. at 248. It is the responsibility of the parties to specifically point the court to the pertinent evidence, and its location, in the record that the party thinks are relevant. Malacara v. Garber, 353 E3d 393, 405 (5th Cir. 2003). It is not the duty of the court to search the record for evidence that might establish an issues of material fact. Id.

III. Analysis

This Court must determine, as a matter of law, whether the choice-of-law principles adopted by the State of Texas require this Court to apply the law of Texas or New Mexico to this dispute. First, the Court must determine whether there is an actual conflict between Texas and New Mexico law, as it applies to this dispute. Compaq Computer Corp. v. Lapray, 135 S.W.3d 657, 672 (Tex. 2004). Second, the Court must follow the choice-of-law analysis adopted by Texas courts to determine which law applies. DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677 (Tex. 1990).

A. There is an actual conflict between Texas and New Mexico state law.

The Court finds that there is an actual conflict between Texas and New Mexico state law regarding the validity of oilfield indemnification clauses. Generally, a court need not decide which state's laws apply unless those laws conflict. Compaq Computer Corp. v. Lapray, 135 S.W.3d 657, 672 (Tex. 2004). Under Texas law, oilfield indemnity clauses are typically invalid unless the requirement is mutual and supported by liability insurance. TEX. CIV. PRAC. & REM. CODE § 127.005. New Mexico also finds these indemnification clauses to be invalid, but unlike the Texas Legislature, the New Mexico Legislature has not enacted a corresponding insurance exception that exempts certain oilfield indemnity agreements from this...