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Peterson v. Murex Petroleum Corp.

United States District Court, D. North Dakota

April 19, 2019

Adam Peterson, Plaintiff,
v.
Murex Petroleum Corporation, Mickey Peck, company man, Stokes and Spiehler, Earl Britzenhoff, Company Man, and Phoenix Operating Company, Defendants, and Murex Petroleum Corporation, Defendant and Third-Party Plaintiff,
v.
WISCO, Inc., Third-Party Defendant.

          ORDER RE MOTION FOR SUMMARY JUDGMENT AS TO MUREX'S CROSS-CLAIM AGAINST PHOENIX

          CHARLES S. MILLER, JR., MAGISTRATE JUDGE

         I. BACKGROUND

         In this action, plaintiff Adam Peterson (“Peterson”) is suing to recover damages for an injury he sustained on April 15, 2012, while working as a derrick hand for third-party defendant WISCO, Inc. (“WISCO”). At the time of the accident, WISCO was doing rehabilitative work on an oil well operated by defendant and third-plaintiff Murex Petroleum Corporation (“Murex”). Specifically the work on the day of the accident was rod removal. Plaintiff was injured when his arm became entangled in the rods while he was in a basket up in the derrick.

         In addition to contracting with WISCO to perform the rehabilitative work, Murex engaged the services of two companies who each provided a person to represent Murex at the wellsite with respect to the work being performed by WISCO. In oilfield parlance, the onsite representative for Murex is referred to as the “company man.” One of the firms that Murex engaged to provide it with a company man was defendant Phoenix Operating Company (“Phoenix”). The individual retained by Phoenix for this purpose was defendant Earl Britzenhoff (“Britzenhoff”). The other firm engaged by Murex was defendant Stokes and Spiehler (“Stokes”). The individual that Stokes retained to be Murex's company man was defendant Micky Peck (“Peck”).

         Plaintiff has alleged in the complaint that one or more of the defendants are at fault for his injuries (either directly as result of their own conduct or vicariously) on account of his not having a safe place to work and being directed to follow unsafe working practices. Among other things, plaintiff contends Murex's company man directed that work on the job should continue despite it being too windy for safe operation and instructed that he perform his work in an unsafe manner. Plaintiff has not sued his employer WISCO, presumably because of the immunity provided by North Dakota workers' compensation law.

         Peck has acknowledged that he was on the site and acting as a “company man” for Murex at the time of the accident. Whether Britzenhoff was also present and what role, if any, he played are disputed.

         Murex filed a cross-claim against Phoenix in which Murex claims it is entitled to a defense by Phoenix of the claims being made by Peterson and for contractual indemnity. In the motion now before the court, Murex seeks partial summary judgment on the issue of whether Phoenix is obligated at this time to provide Murex with a defense.

         Murex contends that its right to a defense by Phoenix arises out of a master services agreement entered into between Murex and Phoenix on March 8, 2012 (“Murex-Phoenix MSA”) and, more specifically, Section 7, which reads as follows:

7. INSURANCE AND INDEMNITY:
7.1 Contractor shall at all times while operations are conducted hereunder carry insurance of types and in minimum amounts as shown on the attached Exhibit “A, ” “Minimum Insurance Requirements” with insurers satisfactory to Murex, unless an officer of Murex Petroleum Corporation has consented to Contractor's being a self-insurer as to any one or more the risks as to which coverage is required in such Certificate of Insurance. Within ten (10) days after signing this agreement or before performing any work and/or Services hereunder, whichever is sooner, Contractor will furnish evidence to Murex of the required coverage on a Certificate of Insurance.
7.2 Contractor agrees to protect, defend, and indemnify and save Murex harmless from and against liability, loss, damage or expense by reason of any suits, claims, demands, judgments and causes of action caused by Contractor, its employees, agents or any subcontractor, arising out of or in consequence of the performance of this agreement or any Service Agreement entered into pursuant to the terms hereof, except that in no instance shall Contractor be held responsible for reservoir loss or damage, nor for any liability, claim, demand, or cause of action attributable solely to the negligence of Murex. This provision requires Contractor to protect, defend and indemnify and save Murex harmless for concurrent negligence, including that part, if any, of such concurrent negligence attributable to Murex.
This indemnity agreement by Contractor shall be insured by Contractor with insurers and in amounts satisfactory to Murex, except as to those risks as to which an officer of Murex has consented to Contractor's being a self-insurer.

(Doc. No. 89-1, pp. 1-2). Phoenix does not in its response dispute that the Murex-Phoenix MSA governs. Rather, Phoenix contends it does not have a duty to defend under the particular circumstances of this case. Phoenix also goes on to argue that any claim for indemnity is premature given that causation and negligence have not been determined. Murex does not dispute that it is premature to consider whether Phoenix might be required to provide indemnity and sates its motion is limited to whether it is presently entitled to a defense.

         Murex argues in its brief that, under the plain language of Section 7.2, Phoenix is obligated to defend Murex for “(1) a suit, (2) caused by Phoenix or its employees, (3) arising out of the performance of the Phoenix Contract, (4) so long as the suit is not solely attributable to Murex's negligence.” And, while Murex agrees it is premature to determine whether Phoenix has any obligation to indemnify because the third and fourth factors have not been determined, citing cases addressing the obligation of insurers Murex argues the duty to defend is separate from and broader than the obligation to provide indemnity. Murex contends that, in determining whether Phoenix has duty to defend Murex with respect to the claims brought by Peterson, the court should look to Peterson's complaint. ...


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