Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Estvold Oilfield Services, Inc. v. The Hanover Insurance Co.

United States District Court, D. North Dakota

August 28, 2018

Estvold Oilfield Services, Inc., Plaintiff,
v.
The Hanover Insurance Company and PayneWest Insurance, Inc., Defendants. Loc. No. Description of Covered Locations Coverage limits

          ORDER RE PENDING MOTIONS FOR SUMMARY JUDGMENT AND FOR RELIEF FROM THE SCHEDULING ORDER

          Charles S. Miller, Jr., Magistrate Judge United States District Court.

         Before the court are the following motions:

1. The Hanover Insurance Company's (“Hanover's) motion for summary judgment.
2. PayneWest Insurance, Inc.'s (“PayneWest's”) motion for summary judgment.
3. Estvold Oilfield Services, Inc.'s (“Estvold's”) motions to reopen the time for fact discovery.
4. Estvold's motion to reopen the time for disclosing expert opinions and for time to complete and file a Rule 26(A)(2) expert witness report.

         I. BACKGROUND

         Unless otherwise indicated, the following facts have either not been reasonably controverted or are stated most favorably for Estvold.

         Estvold is an oilfield services company that is headquartered several miles east of New Town, North Dakota, where it has a number of building and other structures at several rural locations all within several miles or less of each other. Relevant to this case, these include:

1. Two large shops, including offices, located at 3914 84th Ave. N.W.
2. Two smaller buildings and other structures located at 4211 Hwy 8.
3. A shop and an addition, which were under construction during the time relevant to this action, at 8449 39th St.

         For ease of reference, these locations may be referred to as the 84th Ave., the 4211 Hwy 8, and the 39th St. locations, respectively.

         This case arises out of a fire that occurred at the 39th St. location in May 2016, which Hanover, Estvold's property insurance carrier, refused to cover because the 39th St. location was not listed on the schedule of insured locations in its policy. In this action, Estvold sues Hanover on several different theories claiming that the structure at the 39th St. location was included in the policy but was erroneously listed as being at the 4211 Hwy 8 location, which was also erroneously described as being near Richardton, N.D. and not New Town. Estvold also sues PayneWest, its insurance broker, on several different theories alleging that PayneWest was responsible for the mistakes in its policy and Hanover's refusal to cover the loss.

         Prior to January 2015, Estvold used Leavitt Great West Insurance Services (“Leavitt”) as its broker for the procurement of insurance. In late 2014, PayneWest, a competing broker, made a sales call upon Estvold for the purpose of securing its business. In January 2015, Estvold decided to switch it business and entered into an agreement with PayneWest for brokerage services. For a flat fee of $60, 000 per year, PayneWest would (1) place the coverages elected by Estvold after obtaining PayneWest's advice on what coverages were available and would be appropriate, and (2) provide a number of additional ancillary services. While the language of the written contract is somewhat general, PayneWest represented to the North Dakota Insurance Department in securing its approval of the agreement that PayneWest would be providing the following services to the Estvold:

1. Placement of all insurance policies in lieu of commission
2. Safety compliance
3. Loss Control Services
4. Contract Review
5. ISN/PEC Compliance
6. Creation of Safety messages for Employees
7. Safety Consulting Visits by our on Staff Safety Team
8. Certificate/ID Cards
9. Claims Reviews-As needed.
10. Audit Control.

         On January 14, 2015, there was an in-person meeting in one of Estvold's shops at the 84th Ave. location to discuss a proposal that PayneWest would submit to various insurance carriers to obtain quotes for the upcoming policy year beginning January 31, 2015. Attending the meeting from Estvold were Mike Borgschatz, who was taking the lead in procuring the insurance on behalf of Estvold, and Chander Rush, who had a much lesser role. The persons attending on behalf of PayneWest included Brady Hoiness and his brother Devon Hoiness who were the PayneWest principals responsible for the engagement.

         At that point, PayneWest's draft proposal was incomplete in terms of the property to be covered. What was discussed during the meeting with respect to what additional property Estvold wanted covered and where it was all located is disputed. Relevant to what follows, Borgschatz testified in his deposition that he advised PayneWest that one of the additional properties Estvold wanted covered was a building Estvold was in the process of constructing located less than a mile away and kitty-corner from the shop at which they were meeting. Borgschatz testified there was some discussion about the advisability of the contractor having builder's risk insurance on the property, but that he wanted Estvold to have its own coverage up to a million dollars. He testified that Brady Hoiness asked about the address and he (Borgschatz) told him that a street address had not yet been assigned to the rural lot that ultimately became 8449 39th St. Borgschatz testified that Brady Hoiness assured him this would not be a problem.

         Following this meeting, PayneWest revised the proposal one or more times before soliciting its final quote from Hanover to include additional properties. It is not clear whether the proposal as finally revised and sent out for quote to Hanover's broker was forwarded to Estvold prior to PayneWest binding coverage with Hanover for the policy period beginning January 31, 2015 and ending January 31, 2016.

         The following are the locations that were ultimately included in the Hanover policy as covered locations. While in a slightly different format, the information is the same as set forth in the policy:

Loc. No.
Description of Covered Locations
Coverage limits

1-1

3962 84th Ave. NW, NEW TOWN, ND, 58763

(OFFICE/SHOP)

Building

Business personal property

$1, 500, 0000

$100, 000

2-1

3914 84th Ave. NW, NEW TOWN, ND, 58763 (SHOP)

Building

Business Personal property

$1, 500, 000

$250, 000

2-2

3914 84th Ave. NW, NEW TOWN, ND, 58763 (SHOP)

Building

Business Personal property

$1, 500, 000

$100, 000

3-1

LOT 1, BLOCK 6, ALEXANDER ENERGY PARK, ALEXANDER, ND 58831 (STORAGE) Building

$1, 040, 000

4-1

4211 HWY 8, RICHARDTON, ND 58652 (SHOP)

Building

Business Personal property

$1, 000, 000

$100, 000

4-2

4211 HWY 8, RICHARDTON, ND 58652

Building

Business Personal property

$280, 000

$20, 000

4-3

4211 HWY 8, RICHARDTON, ND 58652 (Office)

Building

Business Personal property

Propane Tanks, Propane & Water Depot Tanks, & Pumps

$180, 000

$25, 000

$135, 000

         It appears that the locations added to PayneWest's proposal prior to obtaining the final quote from Hanover were numbers 2-2, 3-1, 4-1, 4-2, and 4-3. In obtaining the final quote from Hanover, PayneWest did not deal directly ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.