Brashar v. Mobil Oil Corp.

• Decision Date: 19 December 1984
• Docket Number: Civ. No. 83 1226BB.
• Parties: Gary BRASHAR, Plaintiff, v. MOBIL OIL CORPORATION and Mobil Producing Texas and New Mexico, Inc., Defendants, and MOBIL OIL CORPORATION and Mobil Producing Texas and New Mexico, Inc., Defendants and Third-Party Plaintiffs, v. George E. COLEMAN, Coleman Drilling Company and Reliance Insurance Company, Third-Party Defendants.
• Court: U.S. District Court — District of New Mexico

626 F. Supp. 434

Gary BRASHAR, Plaintiff, v. MOBIL OIL CORPORATION and Mobil Producing Texas and New Mexico, Inc., Defendants, and MOBIL OIL CORPORATION and Mobil Producing Texas and New Mexico, Inc., Defendants and Third-Party Plaintiffs, v. George E. COLEMAN, Coleman Drilling Company and Reliance Insurance Company, Third-Party Defendants.

Civ. No. 83 1226BB.

United States District Court, D. New Mexico.

December 19, 1984.

David Pittard, Briones & Pittard, P.A., Farmington, N.M., Alfred L. Green, Jr., Shaffer, Butt, Thornton & Baehr, P.C., Albuquerque, N.M., for plaintiff.

Rodey, Dickason, Sloan, Akin & Robb, P.A., Jackson G. Akin, James O. Browning, Albuquerque, N.M., for defendants.

Shaffer, Butt, Thornton & Baehr, Paul Butt, Alfred L. Green, Jr., Albuquerque, N.M., for Reliance Ins. Co.

Tansey, Rosebrough, Roberts & Gerding, PC, Richard L. Gerding, Farmington, N.M., for third-party defendants Coleman & Coleman Drilling Co.

MEMORANDUM OPINION AND ORDER

BALDOCK, District Judge.

THIS MATTER comes on for consideration of the Motion for Partial Summary Judgment against Coleman Drilling Company submitted by defendants and third-party plaintiffs Mobil Oil Corporation and Mobil Producing Texas and New Mexico, Inc., filed May 30, 1984. The court, having considered the accompanying memoranda and the relevant law, and otherwise being advised fully in the premises, finds that the motion is well taken in part and should be granted in part.

George E. Coleman, on behalf of Coleman Drilling Company and Mobil Producing Texas and New Mexico, Inc. entered into a written drilling contract dated January 9, 1981, and amended on May 26, 1981. According to the terms of the written contract, Coleman, in pertinent part, agreed to the following: to indemnify and hold harmless Mobil for claims arising from personal injury to Coleman's employees "growing out of, incident to, or resulting directly or indirectly from the work to be performed by contractor hereunder." ¶ 18 of the January 9, 1981, drilling contract. Coleman agreed to carry employer's liability insurance (¶ 18 of the drilling contract, ¶ 16 of Exhibit A of the contract, and the Minimum Insurance Requirement schedule which is Exhibit D of the contract), and to include Mobil as an additional insured under the policy (Minimum Insurance Requirement schedule). Coleman also agreed to insure its contracts, including the hold harmless agreement. Exhibit A of the drilling contract, ¶ 16. Coleman agreed to reimburse Mobil for expenses and attorney's fees in investigating or defending any claims. ¶ 18 of the drilling contract.

By its motion, Mobil seeks (1) a declaration that the contract provisions are valid and enforceable, (2) that Coleman breached certain agreements, and (3) that Coleman is, therefore, liable either on the contract or for breach of contract for any judgment obtained by the plaintiff against defendant Mobil and for any expenses and attorney's fees incurred in defending against plaintiff's claims and in prosecuting its third-party action. It does this via Rule 56 of the Federal Rules Civil Procedure. There is no doubt, however, that summary judgment is appropriate when there is a request for declaratory relief, if there is no genuine factual dispute. 6 (Part 2) Moores Federal Practice § 5617 19, at 56-841 (2d ed. 1948). It is appropriate, therefore, to determine who is entitled to judgment as a matter of law as long as there is no genuine issue of material fact.

Before considering any other matters raised by Mobil, it is necessary to determine whether the drilling contract between Mobil and Coleman is valid and enforceable. There is no question of fact that Coleman entered into a contract with Mobil in 1981 covering certain wells to be drilled in the State of Colorado. The fact that a contract was formed is not disputed. The primary matter that is in dispute pertains to when the contract was formed and where it was formed.

Because this is a contract dispute in a diversity case, this court is bound by the dictates of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and its progeny, and must apply whatever law would be applied by the courts of New Mexico. This, of course, includes the conflicts law of New Mexico. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Before the court can apply New Mexico conflicts law, it must determine whether the contract is a New Mexico contract or a Texas contract. If it is a New Mexico contract, then the court will apply pertinent New Mexico substantive law. If it is a Texas contract, then it will apply New Mexico conflict law. New Mexico follows the traditional conflicts of law analysis of the Restatement of Conflicts of Law (1934). See, e.g., Miller v. Mutual Benefit Health & Acc. Association, 76 N.M. 455, 415 P.2d 841 (1966); Eichel v. Goode, Inc., 101 N.M. 246, 680 P.2d 627 (Ct.App.1984).

To determine what law is applicable to contracts, it is necessary to establish where the contract is made. According to New Mexico law, a contract is made "at the time when the last act necessary for its formation is done, and at the place where the final act is done." Merriman v. Harter, 59 N.M. 154, 158, 280 P.2d 1045 (1955). New Mexico conflicts law indicates that a contract shall be interpreted in reference to the laws of the place where the final act was performed which created the contract. Miller v. Mutual Benefit Health, 76 N.M. at 457, 415 P.2d 841.

The evidence supports the conclusion that the drilling contract was executed in the State of Texas. Mobil prepared the contract and mailed it to Coleman in New Mexico. Coleman signed the contract, mailed it back to Mobil in Texas where it was signed by Glen W. Barb in Midland, Texas, on behalf of Mobil Producing Texas and New Mexico, Inc. A copy of the fully executed contract was returned to Coleman. The issue, therefore, can be reduced further to whether the last signature on the contract was the last act necessary for its formation.

Coleman argues that the last act necessary for the formation of the contract was his signing the contract in New Mexico. The drilling contract itself specifically required that it be executed by a representative of Mobil. ¶ 20 of the January 9 drilling contract. Under traditional contract law, if the contracting parties do not intend a contract to become effective unless and until reduced to a signed, integrated writing, that interpretation will be given effect, and the contract will not bind either part...