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Continental Resources, Inc. v. Rink Construction, Inc.

United States District Court, D. North Dakota

October 24, 2018

Continental Resources Inc., Plaintiff,
v.
Rink Construction, Inc., Defendant,

          ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          DANIEL L. HOVLAND, CHIEF JUDGE

         Before the Court is the Plaintiff's motion for partial summary judgment filed on December 13, 2016. See Docket No. 18. The Defendant file a response in opposition to the motion on January 17, 2017. See Docket No. 25. The Plaintiff filed a reply brief on January 30, 2017. See Docket No. 26. The Defendant filed a supplemental brief on January 12, 2018. See Docket No. 45. The Plaintiff filed a reply to the Defendant's supplemental brief on February 2, 2018. See Docket No. 51. For the reasons set forth below, the motion is granted.

         I. BACKGROUND

         Continental Resources Inc. (“Continental”) is an Oklahoma corporation with its principal place of business in Oklahoma City, Oklahoma. Continental conducts oil and gas exploration and development work in North Dakota. Rink Construction Inc. (‘Rink”) is a North Dakota corporation with its principal place of business in Keene, North Dakota. Rink performs a variety of services for its clients, including building roads, general construction, and oil well maintenance.

         On April 21, 2008, Continental and Rink entered into a Master Service Contract (“MSC”) wherein Rink and Continental agreed that from time to time Rink would perform work and/or provide services to Continental. Specific work details were to be set forth in a work order. The MSC is governed by the laws of the State of Oklahoma.

         Brad Lodholtz was an employee of Rink and worked as supervisor of a Rink maintenance crew from April 2013 through December 17, 2013. Continental retained Rink to provide services with respect to an oil and gas well in McKenzie County, North Dakota, known as the Bohmbach 4-35H well (the “Well”). On December 17, 2013, Lodholtz was severely injured while working on flow lines at the Well (“Incident”).

         On July 29, 2015, Lodholtz and his wife filed a personal injury lawsuit in the District Court for McKenzie County, North Dakota, against Continental for injuries arising out of the Incident. The personal injury lawsuit was removed to the United States District Court for the District of North Dakota on August 21, 2015. Lodholtz claimed his injuries resulted from the negligence of Continental. A loss of consortium claim was also made.

         On August 7, 2015, nine days after the Lodholtzs' filed the personal injury lawsuit, Continental served a demand upon Rink requesting Rink defend, indemnify, and save harmless Continental against all claims, demands, judgments, defense costs or suits arising out or related to, directly or indirectly, the Incident. Continental further demanded Rink provide Continental with complete and full defense of any lawsuits brought against Continental arising out of the Incident. On August 24, 2015, after receiving no response to its first demand letter, Continental served a second demand letter upon Rink.

         By letter dated October 7, 2015, Rink's insurer, Mid-Continent Casualty Company (“Mid-Continent”), advised Continental it was investigating the insurance coverage available to Continental under the terms of Rink's commercial general liability insurance policy. By letter dated April 4, 2016, Mid-Continent advised Continental it had accepted Continental's tender of defense and indemnity upon a full reservation of rights to contest the obligation. Mid-Continent has provided Continental a full defense in the Lodholtz lawsuit, including on appeal, since April 4, 2016.

         Continental filed this separate declaratory judgment action against Rink in federal court on April 25, 2016. Continental seeks a declarations that the indemnification clause in the MSC is valid and enforceable and requires Rink to defend, indemnify, and save harmless Continental from the claims of the Lodholtzs. Continental has also asserted a claim for breach of contract but that claim is not the subject of this motion. Rink denies it has any obligation under the MSC to defend, indemnify, and save harmless Continental from the claims of the Lodholtzs. On February 14, 2017, the Court stayed the declaratory judgment action until the underlying Lodholtz personal injury lawsuit was resolved.

         On July 22, 2017, a jury found Continental negligent in the Lodholtz personal injury lawsuit and awarded damages in the amount of $8, 496, 000. The jury apportioned fault as 72.5% to Continental and 27.5% to Lodholtz. No. fault was apportioned to Rink. On or about August 25, 2017, Continental sent a letter to Rink demanding that Rink indemnify Continental for the entire verdict amount as per the terms of the MSC. The stay of the declaratory judgment action was lifted on November 3, 2017.

         After the damages were adjusted to account for the percentage of fault attributed to Lodholtz and post-trial motions were ruled upon, a second amended judgment in the amount of $6, 159, 600 was entered against Continental on May 10, 2018. Both parties have appealed and the matter is currently pending before the Eighth Circuit Court of Appeals. Execution of the judgment has been stayed pending the outcome of the appeal. Continental's motion for partial summary judgment on its claim for declaratory relief is now ripe for consideration.

         II. STANDARD OF REVIEW

         Summary judgment is appropriate when the evidence, viewed in a light most favorable to the non-moving party, indicates that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Davison v. City of Minneapolis, Minn., 490 F.3d 648, 654 (8th Cir. 2007); see Fed.R.Civ.P. 56(a). Summary judgment is not appropriate if there are factual disputes that may affect the outcome of the case under the applicable substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of material fact is genuine if the evidence would allow a reasonable jury to return a verdict for the non-moving party. Id.

         The Court must inquire whether the evidence presents a sufficient disagreement to require the submission of the case to a jury or whether the evidence is so one-sided that one party must prevail as a matter of law. Diesel Mach., Inc. v. B.R. Lee Indus., Inc., 418 F.3d 820, 832 (8th Cir. 2005). The moving party bears the responsibility of informing the court of the basis for the motion and identifying the portions of the record which demonstrate the absence of a genuine issue of material fact. Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011). The non-moving party may not rely merely on allegations or denials in its own pleading; rather, its response must set out specific facts ...


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