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BDI, LLC v. Summit Drilling Co., Inc.

United States District Court, N.D. Oklahoma

April 14, 2017

BDI, LLC, Plaintiff,
v.
SUMMIT DRILLING COMPANY, INC., Defendant.

          OPINION AND ORDER

          CLAIRE V. EAGAN, UNITED STATES DISTRICT JUDGE

         Now before the Court is defendant Summit Drilling Company, Inc.'s (Summit) motion for summary judgment (Dkt. # 55). Summit moves for summary judgment, arguing that plaintiff BDI, LLC's (BDI) breach of contract and negligence claims are barred by the parties' contract and that BDI has failed to provide sufficient evidence to support its fraud claim. Dkt. # 55, at 8-13. BDI responds that it assumed only reasonably foreseeable risks in the contract, that the contract does not restrain consequential damages in this case, and that questions of fact remain as to Summit's alleged fraudulent misrepresentation. Dkt. # 76, at 10-15.

         I.

         On October 16, 2014, the parties entered into a drilling contract, under which Summit would drill an oil well in Richardson County, Nebraska. Dkt. # 55-1, at 1. The contract is a standard form created by the International Association of Drilling Contractors (IADC) (Drilling Bid Proposal and Footage Drilling Contract - U.S. # 14-2114, revised 2003). See Dkt. # 55-1, at 1. First, the contract provides that:

When operating on a Daywork Basis, [1] [Summit] . . . assumes only the obligations and liabilities stated herein as being applicable during Daywork operations. Except for such obligations and liabilities specifically assumed by [Summit], [BDI] shall be solely responsible and assumes liability for all consequences of operations by both parties while on a Daywork Basis, including results and all other risks or liabilities incurred in or incident to such operations.

Dkt. # 55-1, at 1 (emphasis omitted). The contract also specifies that “[i]n the event the hole should be lost or damaged, while [Summit] is working on a Daywork Basis, [BDI] shall be solely responsible for such damage to or loss of the hole . . . .” Id. at 4. Additionally, the contract states that:

it is the intent of the parties hereto that all releases, indemnity obligations and/or liabilities assumed by such parties under terms of this Contract . . . be without limit and without regard to the cause or causes thereof, including but not limited to . . . any theory of tort, breach of contract, fault, the negligence of any degree or character, . . . or any other theory of legal liability.

Id. at 5.

         Summit drilled the well to the depth set out in the contract, but BDI determined that it was likely unproductive and asked defendant to plug the well. Dkt. # 55, at 5; Dkt. # 76, at 5. Approximately a year later, BDI hired a different drilling company to re-open the well by performing a washdown, a procedure for opening a plugged well by drilling through the cement plugs. Dkt. # 55, at 2 & n.1. After drilling through the upper cement plug, the drilling company hit an object that prevented further drilling. Dkt. # 55-2, at 33. After hitting the object, BDI president Mark Crawford sent a text message to Summit employee Scott Miller informing him of BDI's attempted washdown of the well and asking if Miller knew anything about a metal object left in the well. Id. Miller responded:

         I understand. I will ask. Shouldn't be anything down that hole other than cement!

I've talked to the guys that are still with us and no one knows of anything dropped down hole. Unfortunately that doesn't mean much at this point. If you do identify the metal, I'd like to know. Especially if it points to us. That's not the reputation I want to have.

Id. at 33-34. BDI alleges that the object was a joint of a metal drill pipe left by Summit when it was plugging the well. Dkt. # 76, at 9. Plaintiff asserts that the object blocking the well destroyed the well's ability to effectively produce oil. Id. at 10.

         II.

         Summary judgment pursuant to Federal Rule of Civil Procedure 56 is appropriate where there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Kendall v. Watkins, 998 F.2d 848, 850 (10th Cir. 1993). The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex, 477 U.S. at 317. ‚ÄúSummary judgment procedure is properly regarded not as a disfavored procedural shortcut, ...


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