Ruckdeschel v. Falcon Drilling Co., 34865.

Citation693 S.E.2d 815,225 W.Va. 450
Decision Date23 April 2010
Docket NumberNo. 34865.,34865.
CourtSupreme Court of West Virginia
PartiesHeather RUCKDESCHEL, Administratrix of the Estate of Thomas G. Miller, Jr., Plaintiff Below,v.FALCON DRILLING COMPANY, L.L.C., and Texas Keystone, Inc., Defendants Below, Appellees,Halliburton Energy Services, Inc., Defendant Below, Appellant.

Syllabus by the Court

1. “Generally, the existence of a contract is a question of fact for the jury.” Syl. Pt. 4 Cook v. Heck's Inc., 176 W.Va. 368, 342 S.E.2d 453 (1986).

2. ‘It is presumed that an arbitration provision in a written contract was bargained for and that arbitration was intended to be the exclusive means of resolving disputes arising under the contract; however, where a party alleges that the arbitration provision was unconscionable or was thrust upon him because he was unwary and taken advantage of, or that the contract was one of adhesion, the question of whether an arbitration provision was bargained for and valid is a matter of law for the court to determine by reference to the entire contract, the nature of the contracting parties, and the nature of the undertakings covered by the contract.’ Syllabus Point 3 Board of Education of the County of Berkeley v. W. Harley Miller, Inc., 160 W.Va. 473, 236 S.E.2d 439 (1977).” Syl. Pt. 3 State ex rel. Clites v. Clawges, 224 W.Va. 299, 685 S.E.2d 693 (2009).

3. “A contract providing a procedure for arbitration of disputes, and providing that: (1) all claims, disputes or other matters in question arising out of, or relating to the contract shall be decided by arbitration, unless the parties mutually agree otherwise; (2) the arbitration agreement shall be specifically enforceable under the prevailing arbitration law; (3) the arbitration award shall be final; and (4) the judgment may be entered upon the award in accordance with applicable law in any court having jurisdiction thereof-, creates a condition precedent to any right of action arising under the contract.” Syl. Pt. 2 Bd. of Educ. v. W. Harley Miller, Inc., 159 W.Va. 120, 221 S.E.2d 882 (1975).

4. “When a trial court is required to rule upon a motion to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-307 (2006), the authority of the trial court is limited to determining the threshold issues of (1) whether a valid arbitration agreement exists between the parties; and (2) whether the claims averred by the plaintiff fall within the substantive scope of that arbitration agreement.” Syl. Pt. 2, State ex rel. TD Ameritrade, Inc., v. Kaufman, 225 W.Va. 250, 692 S.E.2d 293 (2010).

5. When a circuit court is presented with the issue of whether an arbitration agreement is applicable, the court must determine the threshold issues of (1) whether a valid arbitration agreement exists between the parties; and (2) whether the claims averred fall within the substantive scope of that arbitration agreement.

6. ‘The general principle of implied indemnity arises from equitable considerations. At the heart of the doctrine is the premise that the person seeking to assert implied indemnity-the indemnitee-has been required to pay damages caused by a third party-the indemnitor. In the typical case, the indemnitee is made liable to the injured party because of some positive duty created by statute or common law, but the actual cause of the injury was the act of the indemnitor.’ Syl. Pt. 2, Hill v. Joseph T. Ryerson & Son, Inc., 165 W.Va. 22, 268 S.E.2d 296 (1980).” Syl. Pt. 2, Harvest Capital v. W. Va. Dep't of Energy, 211 W.Va. 34, 560 S.E.2d 509 (2002).

7. “The requisite elements of an implied indemnity claim in West Virginia are a showing that: (1) an injury was sustained by a third party; (2) for which a putative indemnitee has become subject to liability because of a positive duty created by statute or common law, but whose independent actions did not contribute to the injury; and (3) for which a putative indemnitor should bear fault for causing because of the relationship the indemnitor and indemnitee share.” Syl. Pt. 4, Harvest Capital v. W. Va. Dep't of Energy, 211 W.Va. 34, 560 S.E.2d 509 (2002).

8. “In non-product liability multi-party civil actions, a good faith settlement between a plaintiff and a defendant will extinguish the right of a non-settling defendant to seek implied indemnity unless such non-settling defendant is without fault.” Syl. Pt. 7, Hager v. Marshall, 202 W.Va. 577, 505 S.E.2d 640 (1998).

James T. Varner, Sr., Esq., Debra T. Hall Herron, Jeffrey D. Van Volkenburg, McNeer, Highland, McMunn and Varner, Clarksburg, WV, for Appellant.

Michael G. Gallaway, Spilman Thomas & Battle, Wheeling, WV, for Appellee, Falcon Drilling Company, LLC.

Scott L. Summers, Offut Nord, Charleston, WV, for Appellee, Texas Keystone, Inc.

WORKMAN, Justice:

The Appellant, Halliburton Energy Services, Inc. (Halliburton), appeals from an Order of the Circuit Court of Tyler County, West Virginia, entered October 29, 2008, dismissing its cross-claims for contractual indemnification and contribution against the Appellee Texas Keystone, Inc. (Texas Keystone), because Halliburton's indemnification claim was subject to arbitration. The circuit court subsequently entered a February 6, 2009, Supplemental Order holding: 1) that the original dismissal Order was intended to encompass Halliburton's cross-claim for both indemnification and contribution; 2) that Halliburton's implied indemnification and contribution claims against the Appellee Falcon Drilling Co., LLC (Falcon Drilling), were still pending; 1 and 3) that its original dismissal Order was subject to appeal pursuant to the provisions of West Virginia Rule of Civil Procedure 54(b). On appeal, Halliburton argues the circuit court erred: 1) by misapplying the relevant legal standard for a Motion to Dismiss; 2) by dismissing its cross-claim for contractual indemnification against Texas Keystone when settled contract law requires that Halliburton is entitled to indemnification without arbitrating the issue: 3) by expanding the scope of the arbitration clause; 4) by ruling that Texas Keystone did not waive its right to assert the affirmative defense of arbitration when it failed to include the affirmative defense in its Motion to Dismiss Halliburton's cross-claim; and 5) by dismissing Halliburton's claim for contribution. Based upon a review of the record, the respective parties' briefs and arguments, as well as all other matters submitted before the Court, we reverse the decision of the circuit court and remand the case for further proceedings consistent with this decision.

I. Procedural and Factual History

The Plaintiffs, Heather Ruckdeschel and Thomas G. Miller, Sr., as co-administrators of the estate of Thomas G. Miller, Jr., deceased, filed a Complaint in the Circuit Court of Tyler County, West Virginia, asserting a wrongful death action against Halliburton, Texas Keystone, and Falcon Drilling. The claim arose from an explosion and fire that occurred on October 19, 2005, at the Wiley No. 8 well site in Tyler County, resulting in the death of Thomas G. Miller, Jr. Mr. Miller, the decedent, was an employee of Falcon Drilling. Falcon Drilling was the driller of Wiley No. 8 well. Texas Keystone was the owner of the well site. Halliburton was contracted by Texas Keystone to perform certain functions to place the well into an operating state.

The Plaintiffs subsequently filed an Amended Complaint, which contained separate counts against Halliburton, Texas Keystone, and Falcon, averring that each of these Defendants was responsible for Mr. Miller's death due to negligence. In its Answer to the Amended Complaint, Halliburton asserted cross-claims against Texas Keystone and Falcon Drilling. The cross-claim against Falcon Drilling was for implied indemnity and common law contribution. The cross-claim against Texas Keystone was for contractual indemnification and contribution. Following the filing of its Answer and Cross-claims against Texas Keystone, Halliburton entered into a settlement with the Plaintiffs.

The sole basis for Halliburton's claim for contractual indemnification against Texas Keystone was a Halliburton Work Order No. 40002179 (hereinafter “work order”). The work order was prepared by Halliburton Energy Services, Inc., and reflects the customer as being Texas Keystone. The work order, however, was signed by Paul Gelles, an employee of Falcon Drilling. According to Texas Keystone, Mr. Gelles had no authority to bind Texas Keystone by signing the work order.

The work order contained the following language:

C. RELEASE AND INDEMNITY Customer [ (Texas Keystone) ] agrees to RELEASE Halliburton Group from any and all liability for any and all damages whatsoever to property of any kind owned by, in the possession of, or leased by Customer and those persons and entities Customer has the ability to bind by contract or which are co-interest owners or joint venturers with Customer. Customer also agrees to DEFEND, INDEMNIFY AND HOLD Halliburton Group HARMLESS from and against any and all liability, claims, costs, expenses, attorney fees and damages whatsoever for personal injury, illness, death, property damages and loss resulting from loss of well control, services to control a wild well, whether underground or above the surface, reservoir or underground damage, including loss of oil, gas, other mineral substances or water, surface damage arising from underground damage, damage to or loss of the well bore; subsurface trespass or any action in the nature thereof; fire; explosion; subsurface pressure; radioactivity; and pollution and contamination and its cleanup and control.

The work order further provided:

CUSTOMER'S RELEASE, DEFENSE, INDEMNITY AND HOLD HARMLESS obligations will apply even if the liability and claims are caused by the sole, concurrent, active or passive negligence, fault, or strict liability of one or more members of the Halliburton Group, the
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