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Kaiser-Francis Oil Co. v. Noble Casing Inc.

United States District Court, District of Wyoming

May 10, 2017

KAISER-FRANCIS OIL COMPANY, Plaintiff,
v.
NOBLE CASING INC.; and BAKER HUGHES OILFIELD OPERATIONS INC., Defendants.

          ORDER ON KAISER-FRANCIS' MOTION TO DISMISS DEFENDANT NOBLE CASING'S COUNTERCLAIM AND NOBLE CASING'S CROSS MOTION FOR SUMMARY JUDGMENT

          Scott W. Skavdahl United States District Judge

         THIS MATTER comes before the Court on Plaintiff Kaiser-Francis' Motion to Dismiss Defendant Noble Casing, Inc.'s Counterclaim [ECF No. 28] and Defendant Noble Casing's Cross-Motion for Summary Judgment [ECF No. 30]. Having considered the pleadings, motions, relevant filings, and oral argument, the Court FINDS and ORDERS as follows:

         BACKGROUND

         Plaintiff, Kaiser-Francis Oil Company (“Kaiser-Francis”) filed this action on December 20, 2016, asserting breach of contract and negligence claims against Defendant Noble Casing (“Noble”) in addition to claims for breach of contract, negligence, and breach of implied warranties for sale of goods against Defendant Baker Hughes Oilfield Operations (“Baker Hughes”). [ECF No. 1]. These claims arise from oil and gas work performed on the Shelby 2-034H Well (“the Shelby Well”) in Laramie County, Wyoming in late 2015.

         Kaiser-Francis operates the Shelby Well and was preparing it for a fifty-stage hydraulic fracturing operation in September 2015. [ECF No. 1 at 2]. Defendant Baker Hughes sold and supplied Plaintiff with a pup joint and liner top pack assembly used to connect the lateral casing liners in the well during the fracturing operation. [ECF No. 21 at ¶ 8]. A pup joint is a pipe used to adjust the length of pipe strings while the liner top pack is designed to provide a reliable seal. This pup joint liner top was assembled by Baker Hughes in Casper, Wyoming and delivered to the Shelby Well by Baker Hughes. [ECF No. 21 at ¶ 9]. Representatives of Baker Hughes were present at the Shelby Well site on September 7, 2015. Id. at ¶ 11. Defendant Noble provided the casing crew and power casing tongs necessary to run the casing and pup joint liner top assembly at the Shelby Well. [ECF No. 13 at 2].

         On October 20, 2015, during the third stage of the fracturing operation, a leak was detected in the casing of the Shelby Well which required all fracturing operations to cease. [ECF No. 1 at ¶ 13]. After extensive fishing operations, Plaintiff recovered the pup joint liner top assembly and all pipe above the point of failure. [ECF No. 1 at ¶ 14].

         Plaintiff alleges a failure analysis of the recovered pup joint liner top assembly shows a longitudinal split that occurred within the deep tong marks on the pipe. [ECF No. 1 at 3]. Plaintiff alleges the excessively deep tong marks could have only been made by (1) Baker Hughes while assembling the pup joint liner top assembly; or (2) Noble when it ran the pup joint liner top assembly into the Shelby Well using its power tongs. [ECF No. 1 at 5]. Kaiser-Francis claims it incurred $1.65 million in costs when it was forced to shut down its operations, stabilize the Shelby Well, fish out over 8, 000 feet of casing, and prepare the Shelby Well for another frack job. Id.

         Figure 1 View of the split after cleaning.

         Image Omitted

         Figure 2 Close-up view of the split showing deep tong marks, indicated by yellow arrows, and shallow tong marks, indicated by white arrows.

         Image Omitted

         [ECF No. 1 at 4].

         There is no dispute Kaiser-Francis and Noble entered into a Master Service Agreement (“MSA”), effective August 28, 2015, that governs all work Noble performed for Kaiser-Francis at the Shelby Well. [ECF No. 25 at ¶ 19]. Relying upon ¶ 9[1] of the MSA Noble's Amended Answer asserts a Counterclaim against the Plaintiff alleging Kaiser-Francis assumed all liability for Noble and agrees to defend, indemnify, and save Noble harmless against any and all loss liability, damage, and claims incurred to Kaiser-Francis' property. [ECF No. 25 at 9]. Plaintiff, Kaiser-Francis seeks to dismiss Noble's Counterclaim for failure to state a claim. [ECF No. 28]. Noble has filed a cross-motion for summary judgment seeking summary judgment on its counterclaim for indemnification and against Kaiser-Francis' claims of negligence and breach of contract. [ECF No. 30].

         STANDARD ...


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