Reliance Ins. Co. v. Chevron U.S.A. Inc.

• Decision Date: 30 January 1986
• Docket Number: No. 85-130,85-130
• Parties: RELIANCE INSURANCE COMPANY, Plaintiff, v. CHEVRON U.S.A. INC., Northern Gas Products Company, Defendants. NORTHERN GAS PRODUCTS COMPANY, a Delaware corporation, Third-Party Plaintiff, v. SEARLE BROS. CONSTRUCTION CO., a Wyoming corporation, Third-Party Defendant.
• Court: Wyoming Supreme Court

Page 766

713 P.2d 766

RELIANCE INSURANCE COMPANY, Plaintiff, v. CHEVRON U.S.A. INC., Northern Gas Products Company, Defendants.

NORTHERN GAS PRODUCTS COMPANY, a Delaware corporation, Third-Party Plaintiff, v. SEARLE BROS. CONSTRUCTION CO., a Wyoming corporation, Third-Party Defendant.

No. 85-130.

Supreme Court of Wyoming.

Jan. 30, 1986.

Harold E. Meier of Schwartz, Bon, McCrary & Walker, Casper, for plaintiff.

Michael J. Sullivan of Brown, Drew, Apostolos, Massey & Sullivan, Casper, for defendant Chevron U.S.A., Inc.

Before THOMAS, C.J., and ROONEY, ^* BROWN, CARDINE and URBIGKIT, JJ.

CARDINE, Justice.

We are here presented with the following certified question from the United States District Court for the District of Wyoming:

"Do the provisions of §§ 30-1-131 and 30-1-132, Wyoming Compiled Statutes, 1977, include the activities of the contractor as described in the stipulated fact situation so as to render void a contract provision indemnifying a party even though such party may have itself been negligent?"

We hold that the agreement between the contractor and Chevron, as reflected by the activities described in the stipulated fact situation, was an agreement to which §§ 30-1-131 and 30-1-132, W.S.1977 (June 1983 Replacement) do not apply. Therefore, §§ 30-1-131 and 30-1-132, taken together, do not void the indemnity provision at issue.

FACTS

On December 19, 1977, Searle Brothers Construction Company entered into a construction contract with Chevron USA Inc. The contract did not specify the kind of work Searle would be performing for Chevron. Under the heading "Description of Work and Materials to be Furnished," the contract merely stated that Searle would "[f]urnish labor, materials and equipment as needed to perform work as instructed by Chevron representatives."

The contract also contained an indemnity clause which stated:

"Contractor agrees, irrespective of negligence on the part of either Company or Contractor, to protect, defend, indemnify and hold Company, its agents and employees On August 28, 1982, a fire broke out at Chevron's oil and gas separation facility in the Painter Oil and Gas Field near Evanston, Wyoming. Because of the fire, large quantities of oil and water threatened to flow from the plant into local drainages. The Chevron plant manager contacted Searle and asked that it furnish two caterpillars to dig holding pits to contain the waste water and oil. Searle furnished two caterpillars as requested. In the process of digging the pits, one of the caterpillars struck a high pressure propane line owned by Northern Gas Products. A fire ensued which destroyed the caterpillar and caused Searle's operator serious burn injuries.

harmless from and against all loss, damage, liability, claims and liens of every kind arising out of or attributable, directly or indirectly, to the operations of Contractor hereunder, including without limitation, all claims for injury to or death of persons, loss of or damage to property * * *."

Reliance Insurance Company, Searle's insurer, paid the claims for damage and personal injury caused by the fire and thereby became subrogated to Searle's position. As Searle's subrogee, Reliance then filed suit against Chevron and Northern in the United States District Court to recover the monies it had paid. Chevron moved for summary judgment claiming that the indemnity clause in its contract with Searle would bar Searle from recovery even if Chevron was negligent and, therefore, Searle's subrogee, Reliance, was also barred by the clause. Reliance responded that the indemnity clause upon which Chevron relied was rendered void and unenforceable by § 30-1-131, W.S.1977 (June 1983 Replacement). The district court found against Reliance, holding that the indemnity provision in the contract was valid and enforceable. Reliance attempted an interlocutory appeal to the Tenth Circuit which refused to decide whether or not the indemnity clause was void and unenforceable pursuant to §§ 30-1-131 and 30-1-132, W.S.1977 (June 1983 Replacement). After remand, the district court certified the question to this court.

THE ANTI-INDEMNITY STATUTE

Section 30-1-131, W.S.1977, provides as follows:

"(a) All agreements, covenants or promises contained in, collateral to or affecting any agreement pertaining to any well for oil, gas or water, or mine for any mineral, which purport to indemnify the indemnitee against loss or liability for damages for:

"(i) Death or bodily injury to persons;

"(ii) Injury to property; or

"(iii) Any other loss, damage, or expense arising under either (i) or (ii) from:

"(A) The sole or concurrent negligence of the indemnitee or the agents or employees of the indemnitee or any independent contractor who is directly responsible to such indemnitee; or

"(B) From any accident which occurs in operations carried on at the direction or under the supervision of the indemnitee or an employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee or employees or representatives of the indemnitee, are against public policy and are void and unenforceable to the extent that such contract of indemnity by its terms purports to relieve the indemnitee from loss or liability for his own negligence. This provision shall not affect the validity of any insurance contract or any benefit conferred by the Worker's Compensation Law [ §§ 27-12-101 to 27-12-805] of this state." (Emphasis added.)

In their briefs and at oral argument, the parties have conceded that the indemnity clause in the Searle-Chevron contract is void and unenforceable if § 30-1-131, W.S.1977, supra, applies to the contract. But, § 30-1-131 voids only those indemnity clauses which are part of "any agreement pertaining to any well for oil, gas or water, or mine for any mineral." Reliance contends that the Searle-Chevron agreement

                pertains to a well for oil or gas while Chevron counters that it does not. 1  In order to discover which party is right, we must ascertain the scope of the agreement itself and then compare that agreement with § 30-1-132, W.S.1977, supra, which specifies when an agreement pertains to an oil or gas well
                

THE SEARLE-CHEVRON AGREEMENT

As we indicated in the statement of facts, the Searle-Chevron agreement does not, by itself, involve any particular services. It merely provides that Searle will "[f]urnish labor, materials and equipment as needed to perform work as instructed by Chevron representatives." We would not decide this certified question if only the written agreement were before us because extrinsic evidence would then be necessary to flesh out the contract. Our role in certified question cases does not include fact finding. Section 1-13-106, W.S.1977.

Fortunately, the district court and the parties agree upon the facts in certifying this question to us. In its certification order the district court stated: "The parties are in essential agreement as to the facts as they relate to the activities of Searle Bros. and work being done under the contract." The parties have indicated, in their briefs and at oral argument, that the Searle-Chevron contract is to be interpreted to have a scope coextensive with the activities of Searle at the August 28th fire. In other words, we view this contract as one covering only Searle's fire-related activities near Chevron's Painter Field Separation Plant at the time of the accident.

SECTION 30-1-132

Having set forth the scope of the Searle-Chevron agreement, we must next decide whether that agreement is one "pertaining to any well for oil, gas, or water" as that phrase is defined in § 30-1-132, W.S.1977, supra.

"The term 'agreement pertaining to any well for oil, gas, or water, or mine for any mineral' as used in section 1 hereof [ § 30-1-131], means any agreement or understanding, written or oral, concerning any operations related to drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging, or otherwise rendering services in or in connection with any well drilled for the purpose of producing or disposing of oil, gas or other minerals, or water, and designing, excavating, constructing, improving, or otherwise...