United States District Court, D. North Dakota
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY
L. Hovland, Chief Judge
the Court is the Plaintiff Great West Casualty Company's
(“Great West”) motion for summary judgment filed
on July 27, 2017. See Doc. No. 38. The Defendant
Wildcat Trucking, LLC (“Wildcat”) filed a
response in opposition to the motion and a cross-motion for
summary judgment on September 14, 2017. See Doc.
Nos. 50 and 53. The Defendant Petroleum Experience, Inc.
(“Petroleum Experience”) filed a response in
opposition to the motion on September 14, 2017. See
Doc. No. 52. The Defendant XTO Energy, Inc.
(“XTO”) filed a response in opposition to the
motion on September 21, 2017. See Doc. No. 55. Great
West filed a reply brief on October 6, 2017. See
Doc. No. 58. At the Court's direction, the parties filed
supplemental briefs on October 1, 2018. See Doc.
Nos. 70, 72, 73, 75. XTO included a motion for attorney's
fees in its supplemental brief. See Doc. Nos. 75 and
82. A telephone status conference with the parties was held
on December 21, 2018. For the reasons set forth below, Great
West's motion for summary judgment is granted.
Wildcat's motion for summary judgment and XTO's
motion for attorney's fees are denied.
September 18, 2008, XTO and Wildcat entered into a Master
Service Agreement (“MSA”) which called for
Wildcat to perform work for XTO from time to time and
pursuant to job specific work orders, on oil and gas wells
owned and operated by XTO. See Doc. No. 41-3. The
MSA contained an indemnification clause obligating Wildcat to
indemnify and hold harmless the XTO Group, which includes
XTO, from all claims and injuries arising out of performance
of the agreed upon work. See Doc. No. 41-3, §
10.1. The MSA also required Wildcat to secure and maintain
insurance and name the XTO Group as an additional insured.
See Doc. No. 41-3, §§ 11.1 and 11.4.
Wildcat was insured by Great West. See Doc. No.
41-4. XTO is an additional named insured on the policy Great
West issued to Wildcat. See Doc. No. 41-4, p. 46.
The MSA qualifies as an “insured contract” under
the policy, meaning the policy covers the indemnity
obligation Wildcat owes to XTO pursuant to the MSA.
See Doc. Nos. 41-4, pp. 64 and 75; 59-1, p. 8.
West is a Nebraska corporation based in South Sioux City,
Nebraska. XTO is a Texas corporation based in Fort Worth,
Texas. Wildcat is a Nebraska corporation based in Sidney,
Montana. The Great West policy was issued by Stieg &
Associates in Billings, Montana.
18, 2014, Wildcat employees Charles Branch and Brian Groover
drove to a oil well located in Williston, North Dakota, which
was owned by XTO, in order to deliver fresh water. Both
Branch and Groover suffered serious injuries when a flash
fire occurred while they were at the well site.
about January 27, 2016, Branch commenced a personal injury
lawsuit in federal court in North Dakota. See Charles
Branch v. XTO Energy, Inc. et al, No. 1:16-cv-010,
(“Branch Lawsuit”). On or about February 1, 2016,
Groover commenced a nearly identical personal injury lawsuit
in federal court in North Dakota. See Brian Groover v.
XTO Energy, Inc., et al, No. 1:16-cv-015,
lawsuits it is alleged that on the day of the incident,
“XTO was in the process of removing plugs from the well
after it had been ‘fracked' and recovering fluids
and energized gases used in the fracking of the well.”
See Doc. Nos. 41-1, ¶ 7 and 41-2, ¶ 7. XTO
retained various contractors to participate in such
activities, including Petroleum Experience, Inc., a
consulting company, which provided an employee “to
oversee the flow back operation” on behalf of XTO.
See Doc. Nos. 41-1, ¶ 8 and 41-2, ¶ 8.
contractor, T &R Transport, was hired to “maintain,
manage, and perform filtration services necessary to recover
flow back water.” See Doc. Nos. 41-1, ¶
10 and 41-2, ¶ 10. In doing so, it used a diesel-powered
generator and hydraulic pump. According to the complaints, it
is well known that during the filtration project, hydrocarbon
vapor clouds can form that are extremely flammable.
See Doc. Nos. 41-1, ¶ 11 and 41-2, ¶ 11.
It is therefore necessary to set back equipment capable of
becoming an ignition source to prevent ignition of the
hydrocarbon vapors. The generator and hydraulic pump were
ignition sources and allegedly “located near the frac
tank from which production water was being pumped” in
violation of XTO's safety procedures and industry
standards. See Doc. Nos. 41-1, ¶ 13 and 41-2,
Branch and Groover were delivering fresh water to the well
site, the generator/hydraulic pump unit ignited a hydrocarbon
vapor cloud emitting from the frac tanks which resulted in a
flash fire. See Doc. Nos. 41-1, ¶ 14 and 41-2,
¶ 14. Branch and Groover suffered burn injuries as a
result of the flash fire. The lawsuits generally allege that
the defendants were negligent in locating the equipment too
close to the frac tanks in violation of XTO's safety
guidelines and industry standards and/or in ensuring that
such guidelines and standards were followed.
August 10, 2015, counsel for Branch sent a pre-suit
settlement demand to XTO and Petroleum Experience. On
September 2, 2015, XTO tendered the Branch settlement demand
to Wildcat and its insurers pursuant to the applicable
provisions of the MSA. See Doc. No. 41-5. XTO also
claimed that pursuant to the terms of the MSA, it was an
additional insured under Wildcat's insurance policies.
November 9, 2015, James River Insurance Company, on behalf of
Petroleum Experience, also tendered the Branch settlement
demand to XTO pursuant to a MSA in place between XTO and
Petroleum Experience. See Doc. No. 41-6. XTO, in
turn, tendered Petroleum Experience's tender to Wildcat
and its insurers on November 13, 2015. See Doc. No.
41-7. In its letter, XTO stated that Petroleum Experience was
part of the XTO Group and pursuant to the MSA between XTO and
Wildcat, Wildcat was required to provide a defense and
indemnity to Petroleum Experience, and the XTO Group was an
additional insured on Wildcat's insurance policies.
February 24, 2016, XTO tendered the Groover Lawsuit to
Wildcat and its insurers seeking defense and indemnity.
See Doc. No. 41-8. In doing so, XTO referenced the
MSA between XTO and Wildcat and its status as an additional
insured under Wildcat's policies.
April 18, 2016, Wildcat's insurer, Great West, accepted
the tender and provided a defense to XTO in the Branch
Lawsuit subject to a full reservation of rights. See
Doc. No. 77, pp. 3-14. On November 3, 2016, Great West sent
Wildcat and XTO a supplemental reservation of rights letter
accepting the tender of both the Branch and Groover lawsuits.
See Doc. No. 59-1. In its letter, Great West agreed
to provide XTO a defense, subject to a full reservation of
rights, and subject to a determination by a court of its
coverage obligations. See Doc. No. 59-1, p. 9.
November 7, 2016, Great West filed this declaratory judgment
action in federal court seeking a declaration that the policy
it issued to Wildcat contains a hydrofracking exclusion which
excludes any coverage for the Branch and Groover lawsuits.
See Doc. No. 1. A related coverage lawsuit was filed
by Northfield Insurance Company against XTO and Wildcat in
federal court in North Dakota on March 8, 2017. See
Northfield Ins. Co. v. XTO Energy, Inc., No.
global mediation was held in February of 2018. Great West
participated in the mediation. The Groover and Branch
lawsuits did not settle at the mediation, but discussions
continued and settlement agreements were executed in both
cases in May of 2018. See Doc. Nos. 73-1. XTO,
Wildcat, and Great West all contributed funds to settle the
Branch and Groover lawsuits. The Northfield coverage
action was also settled and dismissed in June of 2018. Great
West has declined to dismiss its coverage suit, maintaining
it was not a party to the settlement agreements in the Branch
and Groover personal injury lawsuits.
STANDARD OF REVIEW
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.
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
showing a genuine issue for trial. Id.; Fed.R.Civ.P.
56(c)(1). The court must consider the substantive standard of
proof when ruling on a motion for summary judgment.
Anderson, 477 U.S. at 252.
the Court addresses the summary judgment motions, it must
decide whether an actual controversy remains after the
underlying personal injury cases were settled. The Defendants
contend Great West participated in and contributed to the
settlement and should be bound by the release which
accompanied the settlement. In addition, they contend the
settlement renders the coverage action moot. Great West