Background

Plains Pipeline, L.P. and Plains Marketing, L.P. sold pipeline assets to Arrowhead Gulf Coast Holdings, LLC and related entities in 2016. The purchase agreement contained Article X indemnification provisions with contractual survival periods, an assumed liabilities provision defining which obligations transferred to buyers, and an exclusive remedy clause. Following the sale, Plains faced litigation costs related to Louisiana erosion claims and sought recovery from Arrowhead under multiple contractual theories.

The Dispute

Plains advanced two principal arguments for indemnification. First, it contended the purchase agreement's assumed liabilities language created standalone indemnification obligations that survived independently of the Article X indemnity provisions and their associated survival periods. Second, it argued these assumed liabilities provisions established perpetual indemnification rights untethered to the contract's temporal limitations on indemnity claims.

The Court's Ruling

The Texas Business Court rejected both arguments and granted summary judgment for the buyers. The court held that Plains' indemnification claims failed because sellers missed the contractual survival period deadline governing Article X indemnity claims. The court ruled that assumed liabilities language does not create perpetual indemnification obligations that exist independently of express indemnity provisions. The court found that the exclusive remedy clause barred all of Plains' claims, channeling post-closing disputes through the Article X indemnity framework and its associated survival periods.

Key Takeaway

The court held that assumed liabilities provisions do not function as independent indemnification mechanisms that bypass express survival period limitations in the purchase agreement's indemnity provisions.