Chapman v. Hiland Partners GP Holdings, LLC, 071417 FED8, 15-2103

Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
Judge Panel:Before KELLY and MURPHY, Circuit Judges, and MONTGOMERY, District Judge.
Opinion Judge:KELLY, CIRCUIT JUDGE.
Party Name:Lenny M. Chapman; Tracy M. Chapman Plaintiffs v. Hiland Partners GP Holdings, LLC, a foreign company; Hiland Partners, LP, a foreign partnership; Hiland Operating, LLC, a foreign company Defendants Lenny M. Chapman; Tracy M. Chapman, as assignees of Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating, LLC; Hiland ...
Case Date:July 14, 2017
Docket Nº:15-2103, 15-2396
 
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Lenny M. Chapman; Tracy M. Chapman Plaintiffs

v.

Hiland Partners GP Holdings, LLC, a foreign company; Hiland Partners, LP, a foreign partnership; Hiland Operating, LLC, a foreign company Defendants

Lenny M. Chapman; Tracy M. Chapman, as assignees of Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating, LLC; Hiland Operating, LLC Third Party Plaintiffs - Appellees

v.

Missouri Basin Well Service, Inc. Third Party Defendant-Appellant

B&B Heavy Haul, LLC Third Party Defendant

Missouri Basin Well Service, Inc. Cross Claimant - Appellant

v.

B&B Heavy Haul, LLC Cross Defendant-Appellee

Lenny M. Chapman; Tracy M. Chapman Plaintiffs

v.

Hiland Partners GP Holdings, LLC, a foreign company; Hiland Partners, LP, a foreign partnership; Hiland Operating, LLC, a foreign company Defendants

Lenny M. Chapman; Tracy M. Chapman, as assignees of Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating, LLC; Hiland Operating, LLC Third Party Plaintiffs - Appellees

v.

Missouri Basin Well Service, Inc. Third Party Defendant-Appellant

B&B Heavy Haul, LLC Third Party Defendant

Missouri Basin Well Service, Inc. Cross Claimant - Appellant

v.

B&B Heavy Haul, LLC Cross Defendant-Appellee

Nos. 15-2103, 15-2396

United States Court of Appeals, Eighth Circuit

July 14, 2017

          Submitted: December 15, 2016

         Appeals from United States District Court for the District of North Dakota - Bismarck

          Before KELLY and MURPHY, Circuit Judges, and MONTGOMERY, [1] District Judge.

          KELLY, CIRCUIT JUDGE.

         In this consolidated appeal, Missouri Basin Well Service, Inc. (Missouri Basin) appeals from the district court's2 grant of summary judgment to Lenny and Tracy Chapman (the Chapmans) and from the district court's rulings on post-judgment motions. Having jurisdiction under 28 U.S.C. § 1291, we affirm the court's orders granting summary judgment to the Chapmans, granting the Chapmans' Rule 59(e) motion, and denying Missouri Basin's Rule 59(e) motion.

         I. Background

         Hiland Partners GP Holdings, LLC, Hiland Partners, LP, and Hiland Operating, LLC (collectively, Hiland) own and operate a natural gas plant in Watford City, North Dakota. Missouri Basin offers trucking services to oil and gas companies in North Dakota. Hiland entered into a Master Service Contract (Hiland MSC) with Missouri Basin in 2008 whereby Missouri Basin, as "Contractor, " agreed to perform various services for Hiland. As part of the agreement, Missouri Basin agreed to "indemnify, defend and save harmless Hiland Group . . . from and against any and all claims, demands, judgments, defense costs, or suits . . . in any way, directly or indirectly, arising out of or related to the performance of this Contract." The Hiland MSC included an Oklahoma choice-of-law provision.

         B&B Heavy Haul, LLC (B&B) entered into a Master Services Contract with Missouri Basin (B&B MSC) in May 2011, in which B&B, as "Carrier" agreed "to provide the transportation services required by [Missouri Basin] and Customer." In the B&B MSC, B&B agreed to "indemnify, defend, and save harmless [Missouri Basin] and the Customer from any and all claims, demands, judgments, defense costs, or suits . . . in any way, directly or indirectly, arising out of or related to the performance of this Contract." The B&B MSC provided for the application of North Dakota law.

         On October 18, 2011, Hiland requested Missouri Basin remove water from condensate tanks at the Watford plant. Missouri Basin contacted B&B, which sent Lenny Chapman to the gas plant. Chapman arrived shortly after midnight. He and an employee of Hiland began connecting the tank to the B&B truck that Chapman was driving. An explosion occurred and Chapman was seriously injured.

         Chapman and his wife, Tracy, filed an action against Hiland, alleging negligence and loss of consortium. Hiland filed a third-party complaint against Missouri Basin and B&B, contending they were contractually obligated to indemnify and defend Hiland. Missouri Basin cross-claimed against B&B, seeking a defense and indemnification if it was required to indemnify Hiland.

         B&B filed a motion for partial summary judgment, contending the B&B MSC did not require it to indemnify Missouri Basin or Hiland for Hiland's negligence. On September 10, 2014, the district court granted B&B's motion, dismissing Hiland's third-party complaint against B&B and Missouri Basin's cross-claim against B&B. As for Hiland's third-party complaint, the court concluded as a matter of law that B&B had no legal duty under the B&B MSC to indemnify Hiland for its own negligence. The court further found that even if the B&B MSC could be construed to require B&B to indemnify Hiland for its own negligence, the contract was void and unenforceable under North Dakota law. With regard to Missouri Basin's cross-claim, the court concluded as a matter of law that B&B had no legal obligation to indemnify Missouri Basin for any indemnification obligations Missouri Basin might have to Hiland.

         On October 1, 2014, the Chapmans entered into a "Confidential Release and Settlement Agreement and Addendum" (Settlement Agreement) with Hiland, settling their claims against Hiland for $10 million. Of that amount, $3 million was to be paid by Hiland and $7 million by Hiland's insurers. As part of the settlement, Hiland assigned all its indemnity claims against Missouri Basin to the Chapmans. The Chapmans filed an amended third-party complaint, asserting, "as assignees of [Hiland], " the "right to pursue the Hiland Defendants' indemnity claims against Missouri Basin arising from the Missouri Basin MSC." The Chapmans sought a judgment "for all amounts that the Hiland Defendants, or others on their behalf, have paid or will pay" to the Chapmans under the Settlement Agreement.

         The Chapmans and Missouri Basin filed cross-motions for summary judgment. The parties disputed whether Oklahoma law or North Dakota law governed the Hiland MSC. Applying Oklahoma law, the district court found the indemnity provision in the Hiland MSC fully enforceable. On April 23, 2015, the court entered an order granting the Chapmans' motion for summary judgment, stating: "Missouri Basin is obligated to indemnify Third-Party Plaintiffs for all amounts that have been paid or will be paid as a result of the Confidential Release and Settlement...

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