United States District Court, N.D. Oklahoma
OPINION AND ORDER
V. EAGAN, UNITED STATES DISTRICT JUDGE
before the Court is Defendant's Motion for Attorneys'
Fees and Costs (Dkt. # 91). Defendant Summit Drilling
Company, Inc. (Summit) asks the Court for an order directing
plaintiff BDI, LLC (BDI) and/or its counsel to pay
Summit's attorney fees and costs incurred in this
litigation pursuant to Federal Rule of Civil Procedure 11, 28
U.S.C. § 1927, and the Court's inherent power to
impose sanctions. BDI responds that defendant has failed to
comply with Rule 11's safe harbor provision and its
motion is untimely under Rule 54(d). Dkt. # 92. Summit
replies that it is not asking for attorney fees pursuant to
Rule 54 and, even if it has failed to comply with Rule 11,
the Court may grant its motion under § 1927 or its
inherent power. Dkt. # 95.
is a drilling company that BDI hired in 2014 to drill an oil
well in Richardson County, Nebraska. Dkt. # 55-1, at 1. The
parties entered into a standard drilling contract created by
the International Association of Drilling Contractors
(Drilling Bid Proposal and Footage Drilling Contract - U.S. #
14-2114, revised 2003). See id. The contract
When operating on a Day work Basis, [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.
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
BDFs attempted washdown of the well and asking if Miller knew
anything about a metal object left in the well. Id.
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. After the text message conversation,
BDI unsuccessfully attempted to remove the object and
complete the washdown. Dkt. # 76-2, at 22-23. The object
rendered the well unusable, and BDI later drilled a new hole
in the area to replace the inoperative well. Dkt. # 56, at 4.
Crawford filed this suit against Summit, alleging that Summit
left a piece of drilling pipe in the well and asserting
claims for breach of contract, negligence, and fraud. Dkt. #
2-2. Summit moved to dismiss Crawford as a party, arguing
that he was not the real party in interest. Dkt. # 7. BDI and
Crawford did not oppose the motion and agreed to the
dismissal of Crawford from the case. Dkt. # 11. After
conducting discovery, Summit filed a motion for summary
judgment (Dkt. # 55), arguing that BDI's breach of
contract and negligence claims were barred by the
parties' contract and that BDI had failed to provide
sufficient evidence to support its fraud claim. BDI responded
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 remained as
to Summit's alleged fraudulent misrepresentation. Dkt. #
76, at 10-15. Summit replied that BDI's response was
untimely, the contract was valid and enforceable, and no
factual disputes existed as to the fraud claim. Dkt. # 85.
The same day that Summit filed its motion for summary
judgment, BDI filed a partial motion for summary judgment
(Dkt. # 56), arguing that Summit presented no evidence
showing that the object in the well was not metal and that
BDI had satisfied its burden under the doctrine of res
ipsa loquitur. Summit responded that res ipsa
could not be applied because the well was not in Summit's
exclusive control and that it had presented evidence that the
object in the well could have originated from at least three
other sources. Dkt. # 71, at 17-23. Summit also argued that
BDI's motion should be denied because BDI assumed the
risk for damage to the well under the contract. Id.
at 16, 23-24. BDI did not file a reply in support of its
Court entered an opinion and order (Dkt. # 86) granting
Summit's motion for summary judgment on all claims and
finding as moot BDI's partial motion for summary judgment
and three motions in limine. The Court found that BDI's
breach of contract and negligence claims were barred by the
contract. Under the contract, Summit was working on a daywork
basis when it was plugging the well, and BDI unambiguously
assumed all liability for the actions of both parties while
Summit worked on a daywork basis unless stated otherwise in
the contract. Dkt. # 86, at 5. The Court found no contract
provision where Summit assumed liability for its work
plugging the well. Id. at 5-6. Further, BDI
specifically assumed sole responsibility for any damage to or
loss of the hole while Summit worked on a daywork basis,
including the cost of removing any debris. Id. at 6.
The contract also provided that any release or assumption of
liability was to be without limit and included any theory of
tort or breach of contract. Id. The Court rejected
plaintiff's assumption of risk defense because it was
inapplicable to this case and the Kansas Supreme
Court explicitly abandoned the doctrine in 2013.
Id. at 7 n.2. Therefore, based on the contract, the
Court granted ...