Collins Backhoe & Water Serv. v. Anadarko Petroleum Corp.

• Decision Date: 23 March 2016
• Docket Number: CIVIL ACTION NO. H-15-196
• Parties: COLLINS BACKHOE & WATER SERVICE, v. ANADARKO PETROLEUM CORPORATION
• Court: U.S. District Court — Southern District of Texas

COLLINS BACKHOE & WATER SERVICE,
v.
ANADARKO PETROLEUM CORPORATION

CIVIL ACTION NO. H-15-196

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

March 23, 2016

MEMORANDUM AND ORDER

These cross-motions for summary judgment raise two questions. The first is whether Texas or Wyoming law applies; the second is whether and how that choice matters. Both answers turn on whether a contract to install a sand trap on a gas well is an "agreement pertaining to any well for oil, gas, or water" under Wyoming law. This memorandum and opinion addresses that issue.

Collins Backhoe & Water Service sued Anadarko Petroleum Corporation, seeking a declaratory judgment that the parties' contract requires Anadarko to indemnify Collins in a Wyoming state-court negligence action. Collins moved for summary judgment, arguing that the contract's indemnification clause is enforceable under Texas law. Anadarko filed a cross-motion on the basis that Wyoming's anti-indemnity statute voids the indemnity provision. Collins responded that even if Wyoming law applies, that state's anti-indemnity statute does not. (Docket Entry Nos. 14, 16, 19).

Based on a review of the motions, the briefs and submissions, the pleadings, the record, and the applicable law, the court grants Collins's motion for summary judgment. The court also orders Collins to file a proposed final judgment, after circulating it to Anadarko for approval as to form, no later than March 29, 2016.

The reasons are explained below.

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I. Background

The parties did not conduct discovery and agree that there are no material fact disputes in the record. The summary judgment evidence includes the parties' contract, the complaint filed in the state-court action for which Collins seeks indemnification, and an investigation report Anadarko wrote about the workplace accident giving rise to the lawsuit. (Docket Entry No. 14, Exs. A-C).

Collins is a South Dakota corporation with its principal place of business in Wyoming. Anadarko is a Delaware corporation with its principal place of business in Texas. (Docket Entry No. 1 at p. 2). In January 2007, Collins entered into a contract with Anadarko to perform oilfield services. The contract was negotiated and executed by Anadarko in Texas and by Collins in Wyoming. (Docket Entry No. 14, Ex. A).

The contract provided that Anadarko would indemnify Collins for its negligence. The indemnity provision reads:

Notwithstanding anything to the contrary in the other provisions of this Agreement, COMPANY [Anadarko] AGREES TO BE RESPONSIBLE FOR AND ASSUME ALL LIABILITY FOR AND HEREBY AGREES TO DEFEND, RELEASE, INDEMNIFY, AND HOLD HARMLESS CONTRACTOR INDEMNITEES [Collins] AGAINST CLAIMS ARISING IN CONNECTION WITH: (I) BODILY INJURY TO AND/OR DEATH OF COMPANY'S PERSONNEL AND COMPANY'S INVITEES; AND/OR (II) SUBJECT TO SECTION 5, DAMAGE TO PROPERTY OF COMPANY, COMPANY'S PERSONNEL, AND ITS AND THEIR INVITEES; ARISING IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF FAULT.

(Id. at ¶ 13(d) (emphasis in original)). The contract defined the term, "regardless of fault," to mean:

WITHOUT REGARD TO THE CAUSE OR CAUSES OF ANY CLAIM, INCLUDING, WITHOUT LIMITATION, A CLAIM CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, JOINT, CONCURRENT, COMPARATIVE, CONTRIBUTORY, ACTIVE, PASSIVE, GROSS, OR OTHERWISE), WILLFUL MISCONDUCT, STRICT LIABILITY, OR OTHER FAULT OF ANY MEMBER OF COMPANY INDEMNITEES, CONTRACTOR INDEMNITEES, INVITEES AND/OR

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THIRD PARTIES, AND WHETHER OR NOT CAUSED BY A PRE-EXISTING CONDITION OR THE UNSEAWORTHINESS OF ANY VESSEL OR UNAIRWORTHINESS OF ANY AIRCRAFT OF A PARTY WHETHER CHARTERED, OWNED, OR PROVIDED BY COMPANY INDEMNITEES OR CONTRACTOR INDEMNITEES.

(Id. at ¶ 13(a)(4) (emphasis in original)).

The contract also contained a choice-of-law clause. It read:

This agreement shall be governed by and interpreted in accordance with General Maritime Law, but if General Maritime Law is not applicable, the laws of the State of Texas (exclusive of any principles of conflicts of laws which would direct application of the substantive laws of another jurisdiction) shall govern.

(Id. at ¶ 12 (emphasis in original)).

The work Collins agreed to perform included installing a sand trap on a recently completed Anadarko gas well in Wyoming. (Docket Entry No. 14, Ex. B). A sand trap separates sand and other particles from oil and natural gas. (Id.). Two days after Collins installed the trap, Curtis Simkins, an Anadarko employee, was injured when he tried to empty it. He sued Collins for negligence in Wyoming state court, where the suit is pending. (Docket Entry No. 14, Ex. C).

The parties do not dispute the following facts alleged in Simkins's state-court complaint:

Collins was a sub-contractor hired to install a sand trap on a new gas well owned by Anadarko known as Church Butte Buffer 8-27 located in the southeast corner of the southwest corner of Section 27, Township 18 north, Range 112th west, in Uinta County, Wyoming (hereinafter referred to as the "well site").

[T]he sand trap was installed by Collins on or about June 19, 2007. The sand trap unit was completely installed by Collins employees. Following the installation of the sand trap on said date, Collins employees performed pressure testing on the sand trap using well head pressure. During the pressure testing, fluid leaks were detected in two valves and a [mismatched] hammer union was discovered.

[Collins] returned back to the job site and made repairs and performed another pressure test of the sand trap. The system checked out under pressure and the well was returned to production.

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On June 21, 2007, [Simkins] proceeded to the well site to check the pressure on the well head. [Simkins] found that the well had shut itself down. While attempting to blow down the sand trap to empty out sand that accumulated from well production, [Simkins] heard pressure coming through the line. The line separated from the bottom of the sand unit and impacted [Simkins] [with] such force to cause him to be thrown back 40 feet from the sand unit. When the pipe separated from the sanding unit, it struck [Simkins] causing numerous injuries, including but not limited to a right arm fracture, rib fractures, shoulder injuries, abrasions, and lacerations and other debilitating injuries.

(Docket Entry No. 14, Ex. C at ¶¶ 10-13). These facts are consistent with the facts stated in an injury-investigation report Anadarko wrote after the accident. (Docket Entry No. 14, Ex. B).

II. The Legal Standard for Summary Judgment

"Summary judgment is required when 'the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'" Trent v. Wade, 776 F.3d 368, 376 (5th Cir. 2015) (quoting FED. R. CIV. P. 56(a)). "A genuine dispute of material fact exists when the 'evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Nola Spice Designs, LLC v. Haydel Enters., Inc.,783 F.3d 527, 536 (5th Cir. 2015) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). "The moving party 'bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.'" Id. (quoting EEOC v. LHC Grp., Inc., 773 F.3d 688, 694 (5th Cir. 2014)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

"Where the non-movant bears the burden of proof at trial, the movant may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial." Id. (quotation marks omitted); see also Celotex, 477 U.S. at 325. Although the party moving for

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summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). "A fact is 'material' if its resolution in favor of one party might affect the outcome of the lawsuit under governing law." Sossamon v. Lone Star State of Texas, 560 F.3d 316, 326 (5th Cir. 2009) (quotation omitted). "If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, regardless of the nonmovant's response." United States v. $92,203.00 in U.S. Currency, 537 F.3d 504, 507 (5th Cir. 2008) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc)).

"Once the moving party [meets its initial burden], the non-moving party must 'go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.'" Nola Spice, 783 F.3d at 536 (quoting EEOC, 773 F.3d at 694). The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party's claim. Baranowski v. Hart, 486 F.3d 112, 119 (5th Cir. 2007). "This burden will not be satisfied by 'some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.'" Boudreaux, 402 F.3d at 540 (quoting Little, 37 F.3d at 1075). In deciding a summary-judgment motion, the court draws all reasonable inferences in the light most favorable to the nonmoving party. Connors v. Graves, 538 F.3d 373, 376 (5th Cir. 2008); see also Nola Spice, 783 F.3d at 536.

When the parties cross-move for summary judgment, the court must review "each motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party." Mid-Continent Cas. Co. v. Bay Rock Operating Co., 614 F.3d 105, 110 (5th Cir. 2010)

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(alteration omitted) (quotation marks omitted).

III. Discussion

Under the contract's choice-of-law clause, Texas law applies unless "any...