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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

Alleged Oops Moment for Oil Well Servicer Pumps Up Lawsuit Against ACE Unit

September 18th, 2012 - A client of Ace American Insurance Co. has sued the insurer in an effort to force it to cover defense and potential indemnity tied to a lawsuit claiming  that the plaintiff oversaw the drilling of an oil well - in the wrong direction.

Navigator Wireline Service Inc. had been hired by Savoy Energy L.P. to handle drilling services in late 2011 at a well in Roscommon County, Michigan. Savoy was attempting to turn a vertical well into a horizontal boring.

Savoy said it instructed Navigator to drill 90 degrees east from the existing vertical well. Instead, according to Savoy, Navigator and another firm allegedly caused the bore to be drilled in exactly the opposite direction - west.

Remedial measures were taken and the first bore was plugged and servicers made another attempt at heading east. Savoy alleged that this effort again led to a westward bore, whereupon Savoy filed suit in Michigan state court to collect damages against Navigator and other companies involved in the horizontal bores.

Navigator had a commercial general liability policy issued by the ACE Group unit at the time of the well drilling. The Roscommon, Michigan based company said it made a timely request to ACE for coverage, but that the insurer refused to either defend it or offer to reimburse it for any compensation that might be due Savoy.

Navigator then sued ACE in Michigan Circuit Court, claiming breach of contract. It did not state any position that ACE may have taken in denying the claim.

ACE has filed to remove the suit to U.S. District Court for the Eastern District of Michigan (Southern Division), where it will be asked to award to Navigator any appropriate damages.

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