In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
No. 02-25-00214-CV
URBAN FUND III, LP AND URBAN OIL AND GAS PARTNERS C-1, LP,
Appellants
V.
BLACKBEARD OPERATING EAST, LLC; BLACKBEARD RESOURCES, LLC;
LEGACY RESERVES OPERATING LP; LEGACY RESERVES, LP; REVENIR
ENERGY INC. F/K/A LEGACY RESERVES INC.; MARATHON OIL
COMPANY; MARATHON OIL (EAST TEXAS) LP; OXY USA, INC.; KERRMCGEE OIL & GAS ONSHORE LP, IN ITS OWN CAPACITY AND AS
SUCCESSOR TO SUN EXPLORATION AND PRODUCTION COMPANY,
Appellees
On Appeal from the 17th District Court
Tarrant County, Texas
Trial Court No. 017-337372-22
Before Sudderth C.J.; Kerr and Womack, JJ.
Memorandum Opinion by Justice Womack
MEMORANDUM OPINION
I. INTRODUCTION
This appeal centers around certain oil and gas properties and leases in
Louisiana (the Louisiana Assets). Over the last few decades, the Louisiana Assets
have changed hands many times, with the most recent purchaser being Appellants
Urban Fund III, LP and Urban Oil and Gas Partners C-1, LP (collectively, Urban).
Urban acquired the Louisiana Assets from Appellees Blackbeard Operating East, LLC
and Blackbeard Resources, LLC (collectively, Blackbeard). Blackbeard’s predecessors
to the Louisiana Assets—a group we will collectively refer to as the Up-Chain
Defendants—consist of Appellees Legacy Reserves Operating LP; Legacy Reserves,
LP; Revenir Energy Inc. f/k/a Legacy Reserves Inc.;1 Marathon Oil Company;
Marathon Oil (East Texas) LP;2 Oxy USA, Inc.; and Kerr-McGee Oil & Gas Onshore
LP, in its own capacity and as successor to Sun Exploration and Production
Company.
Beginning in 2018, certain landowners in Louisiana filed several environmental
lawsuits (the Louisiana Lawsuits) against Urban, Blackbeard, and the Up-Chain
Defendants alleging damages sustained from the exploration and production of oil
and gas on the Louisiana Assets. The Up-Chain Defendants then tendered demands
1
We will collectively refer to Legacy Reserves Operating LP, Legacy Reserves, LP, and Revenir Energy Inc. f/k/a Legacy Reserves Inc. as Legacy.
2
We will collectively refer to Marathon Oil Company and Marathon Oil (East Texas) LP as Marathon.
2
for defense and indemnity down the chain. Those tenders were accepted all the way
down the chain to Blackbeard, who then tendered its demand for defense and
indemnity to Urban. While Urban accepted defense and indemnity for Blackbeard’s
direct liability in the Louisiana Lawsuits, it refused to defend and indemnify
Blackbeard for the amounts it had paid to defend and indemnify the Up-Chain
Defendants.
Urban later filed the underlying declaratory-judgment action seeking certain
declarations regarding the various rights and obligations of the parties under the
2018 purchase-and-sale agreement governing Blackbeard’s sale of the Louisiana
Assets to Urban (the Blackbeard–Urban PSA). Blackbeard and the Up-Chain
Defendants answered and filed their own declaratory-judgment actions regarding
Urban’s defense and indemnity obligations. All parties moved for summary
judgment, and the trial court denied Urban’s motion; granted Blackbeard’s and the
Up-Chain Defendants’ respective motions; awarded Blackbeard damages and
attorney’s fees; and awarded the Up-Chain Defendants’ attorney’s fees.
In three issues on appeal, Urban argues that (1) the Blackbeard–Urban PSA
does not require it to provide defense and indemnity to the Up-Chain Defendants;
(2) because Marathon’s indemnity claims against Legacy were discharged in Legacy’s
2019 bankruptcy case, any defense and indemnity obligations that Urban may owe to
Marathon or its predecessors-in-interest have been extinguished; and (3) an antiassignment clause in an amendment to the Marathon–Legacy PSA renders Legacy’s
3
purported attempt to transfer defense and indemnity obligations to Blackbeard—and
Blackbeard’s purported attempt to transfer such obligations to Urban—void. Because
we conclude (1) that the Blackbeard–Urban PSA requires Urban to defend and
indemnify Blackbeard for all of its liabilities related to or associated with the conveyed
oil-and-gas properties—including Blackbeard’s own defense and liability obligations
to the Up-Chain Defendants; (2) that Marathon’s defense and indemnity claims were
not discharged in Legacy’s bankruptcy case and that even if they had been discharged,
Urban’s own obligations would be unaffected; and (3) that the anti-assignment
provision in the amendment to the Marathon–Legacy PSA does not eliminate Urban’s
obligations to defend and indemnify Blackbeard for its own obligations to defend and
indemnify the Up-Chain Defendants, we affirm the trial court’s judgment.
II. BACKGROUND
A. Sun’s 1985 Sale to Marathon
In 1985, Sun sold certain properties that were included within the Louisiana
Assets to Marathon pursuant to a partial assignment and bill of sale (the Sun–
Marathon PABOS). The Sun–Marathon PABOS contained an indemnification
provision providing, in pertinent part, that
[Marathon] hereby agrees to assume all responsibility for said wells . . . ,
and [Marathon] agrees to protect, defend, indemnify[,] and hold [Sun]
and its employees free and harmless from and against any and all costs,
expenses, claims, demands[,] and causes of action of every kind and
character arising out of, incident to, or in connection with the abovedescribed leases.
4
B. Oxy’s 1994 Sale to Marathon
In 1994, Oxy sold other properties that were included within the Louisiana
Assets to Marathon pursuant to a purchase-and-sale agreement (the Oxy–Marathon
PSA). The Oxy–Marathon PSA contained the following indemnification provision:
[Marathon] shall defend, indemnify[,] and hold harmless [Oxy] . . . from
any and all losses, claims, demands, suits, damages, expenses, costs,
causes of action[,] or judgments of any kind or character with respect to
all liabilities and obligations or alleged or threatened liabilities and
obligations, including claims for personal injury, illness, disease,
wrongful death, damage to property, liability based on strict liability or
condition of the Properties being assigned herein . . . , and claims
. . . resulting from environmental damage or pollution which arise from,
or are attributable to, the obligations assumed by [Marathon] herein,
[Marathon’s] acts or omissions, [Oxy’s] acts or omissions with respect to
the Properties, the ownership or operation of the Properties by [Oxy] or
[Marathon] on or after the effective date, or which arise or are asserted
with respect to the Properties on or after the effective date, or which are
attributable to the ownership or operation of the Properties on or after
the said effective date by [Oxy] or [Marathon] . . . .
C. Marathon’s July 2015 Sale to Legacy
In July 2015, Marathon sold the Louisiana Assets to Legacy pursuant to a
purchase-and-sale agreement (the Marathon–Legacy PSA). The Marathon–Legacy
PSA contained the following provision regarding Legacy’s assumption of Marathon’s
liabilities:
[Legacy] assumes and hereby agrees to fulfill, perform, pay, and
discharge . . . all obligations and liabilities, known or unknown, with
respect to the Assets, regardless of whether such obligations or liabilities
arose prior to, on, or after the Effective Date, including obligations and
liabilities relating in any manner to the Material Contracts or the
condition, use, ownership, or operation of the Assets.
5
The Marathon–Legacy PSA also stated that Legacy would indemnify and defend
Marathon against losses incurred or suffered by Marathon relating to or arising out of
Legacy’s assumption of Marathon’s liabilities.
D. Legacy’s August 2015 Sale to Blackbeard
After it purchased the Louisiana Assets from Marathon, Legacy immediately
conveyed them to its wholly owned subsidiary, Akin Beene Resources, LLC. Legacy
then sold Akin Beene to Blackbeard through a membership-interest purchase-and-sale
agreement (the Legacy–Blackbeard MIPSA).
E. Blackbeard’s 2018 Sale to Urban
In 2018, Blackbeard sold the Louisiana Assets to Urban pursuant to the
Blackbeard–Urban PSA. The Blackbeard–Urban PSA contained a broad
indemnification provision.3
F. Legacy’s Bankruptcy
In June 2019, Legacy filed for Chapter 11 bankruptcy protection in the United
States Bankruptcy Court for the Southern District of Texas.
In its bankruptcy schedules, Legacy identified the Marathon–Legacy PSA as an
executory contract. Legacy’s Chapter 11 plan provided that, unless given special
treatment in the plan, “all [e]xecutory [c]ontracts or [u]nexpired [l]eases not otherwise
assumed or rejected w[ould] be deemed assumed” as of the plan’s effective date. As
3
We will discuss the Blackbeard–Urban PSA and the specific terms of its indemnification provision in more detail later in the opinion, particularly during our discussion of Urban’s first issue.
6
part of the plan’s solicitation, Marathon received an assumption notice identifying the
Marathon–Legacy PSA as an executory contract that would be assumed pursuant to
the plan.
In November 2019, the bankruptcy court confirmed Legacy’s Chapter 11 plan.
In accordance with the plan’s terms, the confirmation order provided that—with
certain exceptions that did not apply to the Marathon–Legacy PSA—all executory
contracts were to be “assumed by the applicable [r]eorganized [d]ebtor” as of the
plan’s effective date. The bankruptcy case was closed in December 2020.4
G. The Louisiana Lawsuits and the Tenders of Defense and Indemnity
In 2018, the first of the Louisiana Lawsuits was filed. The plaintiffs in these
lawsuits generally alleged that their property had been negligently contaminated or
otherwise damaged by the defendants’ oil-and-gas exploration and production
activities.
In response to the Louisiana Lawsuits, Oxy and Kerr-McGee (Sun’s successorin-interest) each tendered to Marathon a demand for indemnity and defense.
Marathon, in turn, tendered a demand for indemnity and defense to Legacy. Legacy
then tendered a demand for indemnity and defense to Blackbeard, who then tendered
4
In December 2022, Urban filed a motion to reopen Legacy’s bankruptcy case to obtain the bankruptcy court’s interpretation and enforcement of the Chapter 11 plan and the confirmation order. The bankruptcy court denied Urban’s motion based on its conclusion that Urban lacked standing. See generally In re Legacy Reserves Operating LP, No. 19-33401, 2023 WL 6797776 (Bankr. S.D. Tex. Oct. 13, 2023).
7
a demand to Urban. Blackbeard’s tender to Urban sought defense and indemnity not
only for itself but also for all the Up-Chain Defendants.
H. Procedural History
In October 2022, Urban filed a declaratory-judgment action against Blackbeard
in the trial court. Urban sought certain declarations concerning the various rights and
obligations of the parties under the Blackbeard–Urban PSA. Blackbeard answered the
lawsuit and filed a counterclaim seeking a declaratory judgment that Urban’s defense
and indemnification obligations under the Blackbeard–Urban PSA included an
obligation to defend and indemnify Blackbeard for its own defense and indemnity
obligations owed to the Up-Chain Defendants and to assume the defense of the
Louisiana Lawsuits on behalf of the Up-Chain Defendants. Blackbeard later amended
its counterclaim to seek breach-of-contract damages relating to Urban’s
indemnification obligations. Urban subsequently brought claims against the UpChain Defendants.
The parties filed cross-motions for summary judgment. The trial court denied
Urban’s motion for summary judgment, but it granted the motions of Blackbeard,
Legacy, Marathon, Oxy, and Kerr-McGee (i.e., Sun). The trial court awarded
Blackbeard damages in the amount of $1,220,909.70 for defending itself and the UpChain Defendants in the Louisiana Lawsuits, and it awarded Blackbeard $1,545,424.83
in attorney’s fees. The trial court also awarded attorney’s fees to Legacy, Marathon,
Oxy, and Kerr-McGee. The trial court later signed an amended final judgment
8
incorporating its various summary-judgment rulings and awards of damages and fees.
This appeal followed.
III. DISCUSSION
A. Standard of Review
In determining the applicable standard of review for a declaratory-judgment
ruling, we refer to the procedure that the trial court used to resolve the declaratory
action. See Tex. Civ. Prac. & Rem. Code § 37.010; Zurich Am. Ins. Co. v. Burlington N.
& Santa Fe Ry. Co., No. 02-23-00245-CV, 2025 WL 807496, at *5 (Tex. App.—Fort
Worth Mar. 13, 2025, pet. filed) (mem. op.). Here, the parties moved for traditional
summary judgment on the same claims, so we review the propriety of the trial court’s
denial of Urban’s declaratory-judgment claims using the standard applicable for
reviewing a traditional summary-judgment motion. See Zurich Am. Ins. Co., 2025 WL
807496, at *5.
When both parties move for traditional summary judgment on the same claim,
we review the cross-motions de novo. Rosetta Res. Operating, LP v. Martin, 645 S.W.3d
212, 218 (Tex. 2022); MVP Fort Worth Taylor, LLC v. Roy, No. 02-23-00060-CV,
2024 WL 3529432, at *5 (Tex. App.—Fort Worth July 25, 2024, no pet.) (mem. op.);
see Healy Law Offs., P.C. v. Troutmen, No. 12-24-00350-CV, 2025 WL 3724365, at *3
(Tex. App.—Tyler Dec. 23, 2025, no pet.) (mem. op.). Each movant has the burden
to show that no material fact issue exists and that it is entitled to judgment as a matter
9
of law. Tex. R. Civ. P. 166a(c);5 see Rosetta Res. Operating, 645 S.W.3d at 218. We will
review each of the competing motions and responses, consider the evidence
presented by the parties, determine all questions presented, and render the judgment
the trial court should have rendered. Rosetta Res. Operating, 645 S.W.3d at 218; Nettye
Engler Energy, LP v. BlueStone Nat. Res. II, LLC, 639 S.W.3d 682, 689 (Tex. 2022).
When, as here, the trial court does not specify a basis for its order granting a
party’s motion for summary judgment, we must affirm the order if there was any legal
basis raised in the motion that supports the judgment. Rosetta Res. Operating,
645 S.W.3d at 226–28; Sana Healthcare Carrollton, LLC v. Metrocrest Hosp. Auth., No. 02-25-00183-CV, 2026 WL 706437, at *6 (Tex. App.—Fort Worth Mar. 12, 2026, pet.
denied) (mem. op.).
B. Urban’s First Issue
In its first issue, Urban contends that the Blackbeard–Urban PSA does not
require it to provide defense and indemnity to Blackbeard for its defense of the UpChain Defendants. We disagree.
5
The Texas Supreme Court has amended Rule 166a. See Sup. Ct. of Tex., Final Approval of Amendments to Rule 166a of the Texas Rules of Civil Procedure, Misc. Docket No. 26-9012 (Feb. 27, 2026). But the “amendments apply only to a motion for summary judgment filed on or after March 1, 2026,” id., so they do not apply here. All citations to Rule 166a reference the prior version of the Rule, which continues to govern motions for summary judgment filed before March 1, 2026.
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1. Applicable Rules of Construction
We are to construe indemnity agreements under normal rules of contract
construction. Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000);
RKI Expl. & Prod., LLC v. Ameriflow Energy Servs., LLC, No. 02-20-00384-CV,
2022 WL 2252895, at *9 (Tex. App.—Fort Worth June 23, 2022, no pet.) (mem. op.).
Our primary concern in interpreting a contract is to ascertain and give effect to the
parties’ intent as it is expressed in the contract. Pathfinder Oil & Gas, Inc. v. Great W.
Drilling, Ltd., 574 S.W.3d 882, 888 (Tex. 2019); Seagull Energy E & P, Inc. v. Eland
Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). To achieve this objective, “courts
should examine and consider the entire writing in an effort to harmonize and give
effect to all the provisions of the contract so that none will be rendered meaningless.”
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). We should “afford
contract language its plain, grammatical, and ordinary meaning unless doing so ‘would
clearly defeat the parties’ intentions’ or the instrument shows the parties used the
terms in a different or technical sense.” Nettye Engler Energy, LP, 639 S.W.3d at 690
(quoting Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 479 (Tex.
2019)).
2. Analysis
Application of the above-referenced construction rules to the Blackbeard–
Urban PSA leads to the inexorable conclusion that Urban contractually agreed to
defend and indemnify Blackbeard against all of Blackbeard’s obligations related to or
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associated with the Louisiana Assets—including Blackbeard’s defense and indemnity
obligations to the Up-Chain Defendants.
Under the Blackbeard–Urban PSA, Urban agreed to
assume and be responsible for, . . . pay on a current basis, and . . .
defend[], indemnif[y], hold[] harmless[,] and forever release[]
[Blackbeard] . . . from and against any and all Liabilities, whether or not
relating to Third[-]Party Claims or incurred in the investigation or
defense of any of the same . . . arising from, based upon, related to[,] or
associated with . . . the Assumed Obligations.
The agreement broadly defines “Liabilities” as
any and all claims, obligations, causes of action, payments, charges,
judgments, assessments, liabilities, losses, damages, penalties, fines, costs,
and expenses, including any attorneys’ fees, legal or other expenses
incurred in connection therewith, including liabilities, costs, losses and
damages for personal injury, death, property damage, or environmental
damage.
And it defines “Assumed Obligations” as
all obligations and Liabilities, known or unknown, arising from, based
upon, related to[,] or associated with the Conveyed Interests, regardless
of whether such obligations or Liabilities arose prior to, at[,] or after the
Effective Time, other than any obligations or Liabilities to the extent
that they are Retained Obligations.
It is undisputed that the term “Conveyed Interests”—which includes oil-and-gas
leases, the lands covered by those leases, and oil-and-gas wells—encompasses the
properties at issue in the Louisiana Lawsuits.
Thus, Urban agreed to “assume and be responsible for, . . . pay . . . , and . . .
defend[], indemnif[y], hold[] harmless[,] and forever release[] [Blackbeard] . . . from
and against any and all” “claims, obligations, causes of action, . . . liabilities, . . .
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damages, . . . costs, and expenses” “arising from, based upon, related to[,] or
associated with” the Conveyed Assets, “including any attorneys’ fees, legal [expenses,]
or other expenses incurred in connection therewith, including liabilities [and]
costs . . . for . . . environmental damage.” Under any reasonable interpretation of this
broad, sweeping language, Blackbeard’s obligations to defend and indemnify the UpChain Defendants in connection with the Louisiana Lawsuits—which, at a minimum,
are “related to or associated with” the Conveyed Assets—constitute Liabilities that
Urban has agreed to “assume,” “be responsible for,” and “pay.” See Walgreens v.
McKenzie, 713 S.W.3d 394, 400 (Tex. 2025) (characterizing “relates to” as “the
broadest connective language”); Johnson v. Windsong Ranch Cmty. Ass’n, No. 02-23-00385-CV, 2024 WL 725523, at *6 n.10 (Tex. App.—Fort Worth Feb. 22, 2024, no
pet.) (mem. op.) (recognizing that the phrase “associated with” carries a “broad
scope”). To avoid this seemingly inescapable conclusion, Urban relies upon two
primary arguments.
First, Urban argues that it has no duty to defend or indemnify the Up-Chain
Defendants because the Blackbeard–Urban PSA’s language makes clear that “the only
party . . . who is entitled to receive defense or indemnity from Urban is Blackbeard.”
While Urban’s assertion that it owes defense and indemnity duties only to Blackbeard
is correct as far as it goes,6 its party-focused argument misses the point. None of the
6
Section 13.3 of the Blackbeard–Urban PSA provides that Urban shall defend and indemnify Blackbeard “and its Affiliates, and all of its and their respective stockholders, partners, members, directors, officers, managers, employees, attorneys,
13
Up-Chain Defendants has sought defense or indemnity directly from Urban; rather,
each entity in the Louisiana Assets’ chain of title has tendered its defense and
indemnity demand to its immediate transferee. As Blackbeard is the only party
seeking defense and indemnity from Urban, the fact that Urban does not owe any
defense or indemnity duties directly to the Up-Chain Defendants is of no moment.
Because Urban is obligated to defend and indemnify Blackbeard for its Liabilities
related to or associated with the conveyed oil-and-gas properties—including
Blackbeard’s own defense and liability obligations to the Up-Chain Defendants—and
because Blackbeard, honoring its own defense and liability obligations, has paid the
Up-Chain Defendants’ defense costs, Urban must reimburse Blackbeard for those
defense costs.7
consultants, agents, and representatives.” And Section 15.11 clarifies that “[n]otwithstanding anything contained in [the Blackbeard–Urban PSA], nothing in th[e] [a]greement, expressed or implied, is intended to confer on any Person other than the Parties or their respective successors and assigns, or the Parties’ respective related Indemnified Parties hereunder any rights, remedies, obligations[,] or Liabilities under or by reason of th[e] [a]greement.”
7
Within the framework of its broader party-focused argument, Urban, relying on this court’s decision in Nabors Drilling USA, L.P. v. Encana Oil & Gas (USA), Inc., No. 02-12-00166-CV, 2013 WL 3488152 (Tex. App.—Fort Worth July 11, 2013, pet. denied) (mem. op.), contends that the Blackbeard–Urban PSA lacks sufficient language to make Urban liable for Blackbeard’s defense and indemnity obligations to the Up-Chain Defendants. But Nabors does not support this contention. In Nabors, we held that certain contractual claims brought by Encana’s subcontractors fell outside the scope of a narrow indemnification provision requiring Nabors to defend and indemnify Encana for any claims asserted by a Nabors employee for bodily injury. Id. at *3–5. In so holding, we noted that “[a] plain reading of the contracts d[id] not conclusively reveal an intention by the parties that extra-contractual liabilities . . . [could] be passed through” to Nabors and that “we [could not] expand
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Second, Urban argues that it is not required to cover Blackbeard’s defense and
indemnity obligations to the Up-Chain Defendants because they constitute “Retained
Obligations” as that term is defined in the Blackbeard–Urban PSA. The Blackbeard–
Urban PSA provides that Blackbeard is responsible for paying all Retained
Obligations, which include all Liabilities “arising from, based upon, related to[,] or
associated with” the “Excluded Assets,” a defined term that includes “any Excluded
Information.” Because (1) Excluded Information includes “any contracts . . . whose
change in ownership or transfer is prohibited or subjected to a payment of a fee or
other consideration by an agreement with a Third Party . . . and for which no consent
to transfer has been received”; (2) the Oxy–Marathon PSA, the Marathon–Legacy
PSA, and the Legacy–Blackbeard MIPSA (collectively, the Up-Chain Agreements)
each include language prohibiting their assignment without consent; and (3) Oxy,
Marathon, and Legacy had not consented to any assignments to Urban before the
Blackbeard–Urban PSA was signed, Urban asserts that the Up-Chain Agreements
meet the definition of Excluded Information and therefore are Excluded Assets.8
the contractual language beyond the contract’s express language.” Id. at *5. However, unlike the contracts at issue in Nabors, the Blackbeard–Urban PSA contains indemnity language that is clearly broad enough to require Urban to cover Blackbeard’s defense and indemnity obligations to the Up-Chain Defendants. Thus, the situation presented here is not one in which a party seeks to pass through “extra-contractual liabilities” under an indemnity clause; rather, Blackbeard merely seeks defense and indemnity for liabilities that fall within the indemnity language’s broad scope.
8
Urban argues that Blackbeard’s failure to list the Up-Chain Agreements as “Material Contracts” in the Blackbeard–Urban PSA supports the conclusion that the parties intended to exclude them from Urban’s Assumed Obligations. But as
15
This argument is based on the faulty premise that Urban’s defense and
indemnity obligations arise from the Up-Chain Agreements and are owed directly to
the Up-Chain Defendants, but as explained above, these obligations arise from the
Blackbeard–Urban PSA itself and are owed only to Blackbeard. Blackbeard never
purported to assign or transfer to Urban its contractual obligations to defend and
indemnify the Up-Chain Defendants. Instead, Blackbeard entered into a separate
agreement with Urban—the Blackbeard–Urban PSA—whereby Urban agreed to act
as Blackbeard’s surety in carrying out those obligations. And Marathon and Legacy
proceeded in like fashion; neither purported to assign their respective defense and
indemnity obligations when divesting the Louisiana Assets; rather, their respective
transferees agreed to act as their sureties in fulfilling their up-chain obligations. The
chain of demands and tenders—in which each Up-Chain Defendant has asserted its
defense and indemnity rights against its immediate transferee, not directly against
Urban—bears this out. Because none of the Up-Chain Defendants has
“transfer[red]” or “[ex]change[d] . . . ownership” of its respective Up-Chain
Blackbeard explained in its briefing, a contract was only considered “material” if it was “reasonably expected” to result in payments of at least $250,000 in a single year. When the parties executed the Blackbeard–Urban PSA, the only pending Louisiana Lawsuit was Smith v. Marathon Oil Company. Because Blackbeard had agreed to retain all liabilities and obligations relating to the Smith case and because nothing in the record suggests that Blackbeard should have reasonably anticipated the filing of the other Louisiana Lawsuits, there was no reason for Blackbeard to believe that the UpChain Agreements met the materiality threshold at the time that the Blackbeard– Urban PSA was executed. Thus, Blackbeard’s failure to list the Up-Chain Agreements as Material Contracts does not support Urban’s proposed construction of the parties’ agreement.
16
Agreement and instead has merely sought to assert its defense and indemnity rights
against the party with whom it contracted, the Up-Chain Agreements do not fall
within the definition of Excluded Information.9
Further, if the parties had wished to exclude Blackbeard’s defense and
indemnity obligations to the Up-Chain Defendants from the Assumed Obligations,
they could have easily done so in a straightforward manner instead of relying on a
byzantine chain of defined terms rooted in the obscure, technical definition of
Excluded Information. Indeed, they did just that with regard to Blackbeard’s
liabilities pertaining to the first of the Louisiana Lawsuits to be filed: Smith v. Marathon
Oil Company. The Blackbeard–Urban PSA clearly lists the “Liabilities of [Blackbeard]
that are caused by or arise from” the Smith lawsuit as Retained Obligations. The
9
As Marathon and Blackbeard pointed out in their briefing, the associatedwords canon supports the conclusion that the Up-Chain Agreements do not constitute Excluded Information as defined in the Blackbeard–Urban PSA. Under this canon, associated words bear on each other’s meaning and are “known by the company they keep.” Headington Royalty, Inc. v. Finley Res., Inc., 623 S.W.3d 480, 492 (Tex. App.—Dallas 2021), aff’d 672 S.W.3d 332 (Tex. 2023); see Greater Hous. P’Ship v. Paxton, 468 S.W.3d 51, 61 (Tex. 2015) (“The canon of . . . construction known as noscitur a sociis—‘it is known by its associates’—holds that the meaning of a word or phrase, especially one in a list, should be known by the words immediately surrounding it.”). The Blackbeard–Urban PSA defines Excluded Information as including “any contracts, books, records, files, maps, information, data, software and licenses . . . , or copies thereof, whose change in ownership or transfer is prohibited or subjected to payment of a fee or other consideration by an agreement with a Third Party . . . and for which no consent to transfer has been received.” All the listed terms surrounding the word “contracts” refer to informational assets and licensing agreements. This suggests that the contracts falling under the definition of Excluded Information are those that grant access to information or the right to use certain proprietary software, not chain-of-title documents like the Up-Chain Agreements.
17
straightforward exclusion of the Smith-lawsuit liability from the Assumed Obligations
militates against the notion that the parties would exclude Blackbeard’s defense and
indemnity obligations to the Up-Chain Defendants in the tortuous, convoluted
manner suggested by Urban.
Moreover, Urban’s proposed construction of the Blackbeard–Urban PSA—
that every contract with an unreceived consent constitutes Excluded Information and,
thus, an Excluded Asset—would render Section 5.5(b) of the agreement meaningless,
an interpretive outcome forbidden by Texas law. See J.M. Davidson, Inc. v. Webster,
128 S.W.3d 223, 229 (Tex. 2003); Doe v. Tex. Ass’n of Sch. Bds., Inc., 283 S.W.3d 451,
458 (Tex. App.—Fort Worth 2009, pet. denied). Section 5.5(b) specifically addresses
“Required Consents”; delineates which consents are, in fact, required; and specifies
whether a Conveyed Interest subject to such consent is included in the sale
(depending on whether or not the consent in question is a “Required Consent” and
whether the consent is subsequently obtained within a short period after the closing
of the sale). Because Urban’s proposed interpretation of the Blackbeard–Urban PSA
would render Section 5.5(b) nugatory and effectively read it out of the agreement, it
violates the principles of contract construction. See David v. Howeth, No. 02-20-00078-CV, 2020 WL 6165298, at *10 (Tex. App.—Fort Worth Oct. 22, 2020, pet. denied)
(mem. op.).
We overrule Urban’s first issue.
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C. Urban’s Second Issue
In its second issue, Urban contends that because Marathon’s indemnity claims
against Legacy were discharged in Legacy’s 2019 bankruptcy case, Blackbeard’s
acceptance of Legacy’s defense and indemnity claim on Marathon’s behalf was
voluntary and did not compel Urban to indemnify Blackbeard for the defense costs
incurred by Marathon or its predecessors-in-interest, Sun and Oxy. In other words,
Urban asserts that Legacy’s bankruptcy discharge effectively cut off the defense-andindemnity chain at Legacy’s level.10 We disagree.
Urban’s argument that Marathon’s defense and indemnity claims against Legacy
have been discharged betrays a fundamental misunderstanding of applicable
bankruptcy law. According to Urban, because the Marathon–Legacy PSA was
executed prior to the commencement of Legacy’s bankruptcy case, Marathon’s
defense and indemnity claims arose prepetition and were therefore discharged. But
Urban’s oversimplified analysis ignores the effect of Legacy’s assumption of the
Marathon–Legacy PSA. See 11 U.S.C. §§ 365(a) (authorizing a trustee to “assume or
reject any executory contract . . . of the debtor”), 1107(a) (providing that a Chapter 11
debtor-in-possession has “all the rights . . . and powers . . . of a trustee”). Because
Legacy assumed the Marathon–Legacy PSA, the defense and indemnification
Because Legacy’s personal liability for any claims asserted in the Louisiana
10
Lawsuits would have been discharged in its bankruptcy case, Urban essentially argues that Legacy’s bankruptcy discharge cut off the defense-and-indemnity chain at Blackbeard’s level.
19
obligations arising from that agreement were not discharged and instead became
Legacy’s post-confirmation obligations. See In re Sandridge Energy, Inc., No. 16-32488,
2025 WL 1490539, at *11 (Bankr. S.D. Tex. May 23, 2025) (“When [the debtor]
assumed the [i]ndemnification [o]bligations through its plan, they became [its] postconfirmation obligations.”); see also 2 William L. Norton III, Norton Bankr. L. & Prac.
3d § 46:27 (2026) (“[I]n a . . . Chapter 11 . . . case, an assumed obligation is a
postpetition obligation that is not discharged, and which therefore continues to be an
obligation of the reorganized debtor.”). Thus, Urban’s contention that Marathon’s
defense and indemnity claims have been discharged is simply incorrect.11
11
In its reply brief, Urban cites two cases to support its contention that “Legacy’s ‘assumption’ of the 2015 Marathon[–]Legacy PSA is irrelevant,” but neither is on point. First, Urban cites Matter of German Pellets Louisiana, L.L.C., 91 F.4th 802, 809 (5th Cir. 2024), but this case did not involve the debtor’s assumption of an agreement obligating it to provide defense and indemnity to the contracting party; indeed, it did not address assumption or rejection issues at all. Thus, it is inapposite. Second, Urban cites NCL Corporation v. Lone Star Building Centers (Eastern), Inc., 144 B.R. 170, 178–80 (S.D. Fla. 1992), for the proposition that “when a debtor assumes [a] contract, only post-assumption rights and obligations are assumed, and obligations arising pre-assumption are not assumed.” But Urban overstates and oversimplifies NCL’s holding. In NCL, the debtor had leased certain property on which hazardous substances had been released. Id. at 172–73. During the debtor’s bankruptcy case, the lease had been assumed and had ultimately been assigned to NCL. Id. at 173. NCL sued the landlord to recover the costs that it had incurred, and would continue to incur, in cleaning up the contamination; the landlord countersued. Id. at 172. NCL moved to dismiss the landlord’s counterclaims on the grounds that they had been discharged in the debtor’s bankruptcy case. Id. at 174. The landlord argued that its claims had not been discharged because, among other things, the bankruptcy trustee had assumed the debtor’s lease, which required the debtor “to comply with all legal and regulatory requirements and indemnify [the landlord] for its failure to comply with its lease obligations.” Id. at 178. According to the landlord, because the debtor had been in default for failing to comply with state and federal regulations at the time the lease was assumed, the debtor had assumed these defaults
20
Further, even if Marathon’s claims had been discharged, Urban could not
benefit from that discharge. “The discharge of a debt does not eliminate the debt[;] it
just eliminates the debtor’s personal liability on the debt.” Legacy Reserves Operating LP,
2023 WL 6797776, at *4 (citing In re Edgeworth, 993 F.2d 51, 53 (5th Cir. 1993)).
Moreover, a discharge generally “does not affect the liability of any other entity
on . . . [the discharged] debt.” 11 U.S.C. § 524(e). Thus, a bankruptcy discharge
protects debtors but not their third-party insurers or indemnitors. See Legacy Reserves
Operating LP, 2023 WL 6797776, at *4; see also Edgeworth, 993 F.2d at 54 (explaining
that it does not make “sense to allow an insurer to escape coverage for injuries caused
by its insured merely because the insured receives a bankruptcy discharge” and that
“[t]he ‘fresh-start’ policy is not intended to provide a method by which an insurer can
escape its obligations based simply on the financial misfortunes of the insured”
and had passed them on to NCL when it assigned the lease. Id. The district court rejected this argument because a trustee is required to cure any defaults at the time of assumption and because, despite having received notice of the proposed assumption, the landlord had neither objected nor asserted any defaults. Id. at 179. But unlike in NCL, there is nothing in the record in this case to suggest that Legacy had defaulted on its defense and indemnity obligations to Marathon at the time that it assumed the Marathon–Legacy PSA or that it failed to cure any such defaults. Indeed, as Urban acknowledges, Marathon had not even tendered its defense and indemnity demand to Legacy prior to the assumption date. At the time Legacy assumed the Marathon– Legacy PSA, only two of the Louisiana Lawsuits had been filed, and Urban has pointed to no evidence showing that Marathon’s defense and indemnity claims had become fixed and certain—or that Legacy had failed to pay any such fixed and certain amounts—as of the assumption date. See Noble Energy, Inc. v. ConocoPhillips Co., 532 S.W.3d 771, 777–78 (Tex. 2017) (“[A] claim based on a contract that provides indemnification from liability does not accrue until the indemnitee’s liability becomes fixed and certain.” (quoting Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 205 (Tex. 1999))).
21
(quoting In re Jet Florida Sys., Inc., 883 F.2d 970, 975 (11th Cir. 1989))). As the
bankruptcy court noted when it denied Urban’s motion to reopen Legacy’s
bankruptcy case, “It would be inequitable to allow an indemnitor, Urban, to escape
coverage for liability incurred by its indemnitees, Blackbeard and Legacy, merely
because Legacy[] received a bankruptcy discharge.” Legacy Reserves Operating LP,
2023 WL 6797776, at *4 (citing Edgeworth, 993 F.2d at 54).
In sum, Marathon’s defense and indemnity claims were not discharged in
Legacy’s bankruptcy case, and even if they had been discharged, Urban’s own
obligations would be unaffected.
We overrule Urban’s second issue.
D. Urban’s Third Issue
In its third issue, Urban argues that an anti-assignment clause in an amendment
to the Marathon–Legacy PSA renders Legacy’s purported attempt to transfer defense
and indemnity obligations to Blackbeard—and Blackbeard’s purported attempt to
transfer such obligations to Urban—void. We disagree.
1. The Amendment’s Anti-Assignment Provision and Urban’s Argument
In August 2015, Marathon and Legacy amended the Marathon–Legacy PSA
(the Amendment). The Amendment deleted the Marathon–Legacy PSA’s original
Section 15.2,12 and it added the following anti-assignment provision in its place:
12
The Marathon–Legacy PSA’s original Section 15.2 provided as follows:
22
No Party may assign or otherwise transfer this Agreement in whole or in
part, or assign or otherwise transfer any of its rights under this
Agreement, or delegate or otherwise transfer any of its obligations or
duties under this Agreement. Any attempted assignment or other
transfer by a Party of this Agreement in whole or in part, or assignment
or other transfer by a Party of any rights under this Agreement, or
delegation or other transfer by a Party of any obligations or duties under
this Agreement, shall be deemed void and of no effect. This Agreement
will inure to the benefit of a Party’s successors.
Urban claims that the Amendment’s anti-assignment provision was violated by
Section 11.1(a) of the Legacy–Blackbeard MIPSA, which states that Blackbeard
“assumes and hereby agrees to fulfill, perform, pay, and discharge . . . all obligations
and liabilities, known or unknown, with respect to the
Assets, . . . including . . . [Legacy’s] agreements and obligations under [the Marathon–
Legacy PSA].” According to Urban, “[b]ecause Legacy’s 2015 attempt to assign,
transfer, or delegate obligations under the 2015 Marathon[–]Legacy PSA to
Blackbeard was void, Urban could not have assumed obligations from Blackbeard in
2018 that Blackbeard never effectively assumed from Legacy.” This argument is
flawed for a number of reasons.
2. The Defense and Indemnity Obligations Were Not Assigned
First, as discussed above, Blackbeard and the Up-Chain Defendants never
purported to assign or transfer their contractual obligations to defend and indemnify
No Party shall assign this Agreement or any part hereof without the
prior written consent of the other Parties (which consent will not be
unreasonably withheld, conditioned[,] or delayed). Subject to the
foregoing, this Agreement will be binding upon and inure to the benefit
of the Parties and their respective permitted successors and assigns.
23
their immediate predecessors-in-interest. Rather, each time the Louisiana Assets were
transferred, the transferee agreed to act as the transferor’s surety in fulfilling its upchain obligations. Because the defense and indemnity obligations were not assigned,
the Amendment’s anti-assignment provision never came into play—and certainly did
not render void Urban’s obligations to defend and indemnify Blackbeard for
Blackbeard’s own defense and indemnification obligations to the Up-Chain
Defendants.
3. The Amendment Postdates the Legacy–Blackbeard MIPSA
Second, Urban’s reliance on the Amendment is misplaced because it was
executed two days after the Legacy–Blackbeard MIPSA and does not provide that it
applies retroactively.13 Thus, when the Legacy–Blackbeard MIPSA was executed, the
Amendment’s anti-assignment provision was not in place to void any assignment or
transfer between Legacy and Blackbeard.14 And while Urban contends in its reply
The Legacy–Blackbeard MIPSA was executed on August 29, 2015, and the
13
Amendment was not executed until August 31, 2015. Indeed, the Legacy–Blackbeard MIPSA had an effective date of July 1, 2015—almost two months prior to the Amendment’s execution.
14
In its reply brief, Urban contends that regardless of whether the Amendment was in effect at the time of the Legacy–Blackbeard MIPSA’s execution, the original language in Section 15.2 of the Marathon–Legacy PSA provided that no party could assign any part of the Marathon–Legacy PSA without the prior written consent of the other party. However, in contrast to the Amendment, that original provision said nothing to indicate that an assignment of the Marathon–Legacy PSA was void. Moreover, in its original appellate brief, Urban based its third issue on the Amendment’s anti-assignment provision. It did not suggest that we should look instead to the original anti-assignment provision until it filed its reply brief. Because it did not raise that argument in its original appellate brief, we may not consider it. See
24
brief that “regardless of whether [the Amendment] was effective when the Legacy[–]
Blackbeard [MI]PSA was signed, it was clearly effective three years later when the
2018 Blackbeard[–]Urban PSA was signed,” we fail to see how the Amendment would
void the 2018 agreement between Blackbeard and Urban if it did not first void the
2015 agreement between Legacy and Blackbeard, and Urban has not cited any
authority that would persuade us otherwise.
4. Urban Lacks the Ability to Enforce the Anti-Assignment Provision
Third, even if (1) the Legacy–Blackbeard MIPSA and the Blackbeard–Urban
PSA did purport to assign the respective sellers’ indemnification and defense
obligations as Urban claims and (2) the Amendment’s anti-assignment provision
applied retroactively, Urban would lack the ability to enforce it.
To enforce a contract, one must be either a party to or a third-party beneficiary
of that contract. AmeriPath, Inc. v. Hebert, 447 S.W.3d 319, 336 (Tex. App.—Dallas
2014, pet. denied); Pagosa Oil & Gas, L.L.C. v. Marrs & Smith P’ship, 323 S.W.3d 203,
210 (Tex. App.—El Paso 2010, pet denied); see also Maddox v. Vantage Energy, LLC,
361 S.W.3d 752, 757 (Tex. App.—Fort Worth 2012, pet. denied) (“A third party may
enforce as a third-party beneficiary a contract it did not sign when the parties to the
contract entered the agreement with the clear and express intention of directly
benefitting the third party.”). Here, Urban was neither a party to nor a third-party
Madhu Lodging Partners, LP v. AmGuard Ins. Co., No. 02-23-00379-CV, 2024 WL 2760482, at *2 n.5 (Tex. App.—Fort Worth May 30, 2024, pet. denied) (mem. op.) (“[A]n appellant may not raise new issues in its reply brief.”).
25
beneficiary of the Amendment, and it has not argued otherwise. Thus, it lacks the
ability to enforce the Amendment’s anti-assignment provision. See AmeriPath, Inc.,
447 S.W.3d at 336; Pagosa Oil & Gas, L.L.C., 323 S.W.3d at 210; see also Debes v. Gen.
Star Indem. Co., No. 09-12-00527-CV, 2014 WL 3384679, at *11 (Tex. App.—
Beaumont July 10, 2014, no pet.) (mem. op.) (holding that appellant lacked standing
to enforce contract because he was neither a signatory to the contract nor a thirdparty beneficiary of it).
Indeed, while there is scant Texas case law addressing whether an assignee can
undo a transaction due to a predecessor’s failure to obtain a necessary consent to
assignment, courts in other jurisdictions have held that an assignee cannot escape
liability in such a scenario.15 See Fox-Greenwald Sheet Metal Co. v. Markowitz Bros.,
452 F.2d 1346, 1351 (D.C. Cir. 1971) (“Judicial holdings sustain overwhelmingly the
proposition that a contractual ban on assignment ordinarily serves to protect the
15
Urban cites Jetall Cos. v. Four Seasons Food Distribs., Inc., 474 S.W.3d 780 (Tex. App.—Houston [14th Dist.] 2014, no pet.), to support its claim that the Amendment’s anti-assignment provision “breaks the chain of alleged pass-through indemnity after the 2015 Marathon[–]Legacy PSA.” But Jetall is materially distinguishable from the present case. Jetall involved a contract for the purchase of a shopping center that included an anti-assignment clause. Id. at 781. The buyer attempted to assign the contract to a second buyer, but the seller refused to consent to the assignment. Id. at 782. The would-be assignee filed suit against the seller and the original buyer, but the court rejected the assignee’s claims because it could not obtain rights under a void contract. Id. at 783. Jetall’s holding is inapplicable here because in that case the entity that was trying to enforce the anti-assignment provision was a party to the contract—the original seller. See id. It did not involve a situation like the one presented here in which a purported assignee seeks to absolve itself of its assumed liabilities by enforcing a predecessor’s anti-assignment provision.
26
obligor alone[] and in no way imperils the transaction as between assignor and
assignee.”); Bell BCI Co. v. Old Dominion Demolition Corp., 294 F. Supp. 2d 807, 812
(E.D. Va. 2003) (recognizing the “well-established contract principle that ‘[a] contract
term prohibiting assignment of rights under the contract, unless a different intention
is manifested . . . is for the benefit of the obligor . . . and does not prevent the
assignee from acquiring rights against the assignor’” (quoting Restatement (Second) of
Contracts § 322 (1981))); Johnston v. Landucci, 130 P.2d 405, 408 (Cal. 1942) (“[T]he
overwhelming weight of authority . . . is to the effect that provisions against
assignment . . . are for the benefits of the vendor only, and in no way affect the
validity of an assignment without consent as between the assignor and assignee.”).
We overrule Urban’s third issue.
IV. CONCLUSION
Having overruled each of Urban’s issues, we affirm the trial court’s judgment.16
/s/ Dana Womack
Dana Womack
Justice
Delivered: August 27, 2026
We decline Urban’s request to reverse the trial court’s order sustaining
16
Blackbeard’s hearsay objection to paragraph 9 of the declaration of Brent Kirby that Urban offered in support of its summary-judgment motion. See Tex. R. App. P. 47.1.
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