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

OASIS PETROLEUM NORTH AMERICA LLC v. DRAKIN OILFIELD CONSTRUCTION, INC. et al

ATTENTION: It is possible that this information may no longer be current and therefore may be inaccurate. The index contains both open and closed cases and is not a complete list of cases in which an ACE Insurance Group company is involved. This information is provided to give interested persons an idea of the issues disputed in the indexed cases. For a full understanding of a case, one should read the rest of the court file, including the response. For the most up-to-date and complete information on a case, visit www.pacer.gov or contact the clerk of the relevant court.

Case Number: 
4:14-cv-00077 Search Pacer
ACE Group party(s): 
Opposing Party: 
Oasis Petroleum North America LLC
Court Type: 
Federal
US District Court: 
District of North Dakota
Date Filed: 
Jul 17 2014

Jurisdiction
1. This Court has jurisdiction with respect to the above-captioned matter pursuant to
28 U.S.C. § 1332(a), in that the parties are citizens of different states and the amount in controversy
exceeds $75,000, exclusive of interest and costs.
2. Oasis Petroleum North America LLC (hereinafter "Oasis") is a Delaware Limited
Liability Company with its principal office located in Houston, Texas.
3. Drakin Oilfield Construction, Inc. (hereinafter "Drakin"), is a North Dakota
corporation with its principal office in McGregor, North Dakota.
4. B&G Roustabout Service, LLC (hereinafter "B&G"), is a North Dakota Limited
Liability Company with its principal office in Williston, North Dakota.
5. Ace American Insurance Company and Ace Property and Casualty Insurance
Company were, at all times material hereto, the liability insurers of Drakin. Ace American
Insurance Company was incorporated in the state of Pennsylvania and has its principal office in
Philadelphia, Pennsylvania. Ace Property and Casualty Insurance Company was incorporated in
the state of Pennsylvania and has its principal office in Philadelphia, Pennsylvania.
6. Bituminous Insurance Company and Bituminous Fire & Marine Insurance were, at
all times material hereto, the liability insurers for B&G. Bituminous Casualty Corporation was
incorporated in the state of Illinois and has its principal office in Rock Island, Illinois. Bituminous
Fire & Marine Insurance Company was incorporated in Illinois and has its principal office in Rock
Island, Illinois.
Factual Allegations
7. Drakin and B&G were retained by Oasis to construct a pipeline which would carry
produced saltwater off various oil and gas well locations operated by Oasis. In November 2013,
Drakin and/or B&G left a valve open on the pipeline and failed to do proper inspection of the
pipeline before releasing saltwater into the pipeline, thereby causing saltwater to escape from the
pipeline through the open valve, causing the surrounding real estate to become polluted and
contaminated by the saltwater (hereinafter "the pollution incident").
8. The real estate which became polluted and contaminated was owned by Charles
McCauley Partnership L.L.L.P. (hereinafter "McCauley Partnership"). Prior to the construction
of the pipeline, Oasis had entered into a right of way agreement with the McCauley Partnership.
The McCauley Partnership brought a claim against Oasis for control, removal, and cleanup of the
pollution and contamination.
9. Oasis commenced control and removal of the pollution and contamination in
November 2013 and, because of the intervening winter months, the control, removal, and restoration
was completed in 2014.
10. Drakin and B&G had actual knowledge of the pollution incident at the time it
occurred. Oasis and/or its insurer gave written notification to Drakin and B&G and their insurers
of the pollution incident and claim, but they have refused to either perform or pay for the control
and removal of the pollution and contamination and restoration of the property. Therefore, these
costs have been paid by Oasis and/or its liability insurer, St. Paul Fire and Marine Insurance
Company.
The Master Service Agreements
11. Prior to the pollution incident referred to above, (i) Drakin and Oasis entered into a
Master Service Agreement dated July 11, 2013, and (ii) B&G and Oasis entered into a Master
Service Agreement dated December 19,2012; ((i) and (ii) collectively referred to hereinafter as the
"Master Service Agreements"). In Section 8.a of each of the Master Service Agreements, Drakin
and B&G warrant that they will perform their services in a good and workmanlike manner in
accordance with good industry practices. In addition, Sections 9.e and 9.f of the Master Service
Agreements provide as follows:
e. Contractor shall assume responsibility for the control and removal of,
and shall protect, defend, indemnify, and hold Company Group harmless from and
against any and all Claims arising from pollution or contamination: (i) which
originates or emanates from spills of fuels, lubricants, motor oils, pipe dope, paint,
solvents, ballast, bilge and garbage, debris or any other substances, in its possession
or control or originating from Contractor Group's equipment, materials or transport;
or (ii) which otherwise results from performance of the Services hereunder by
Contractor and is caused by the negligence (whether sole, joint, or concurrent) of
Contractor Group. Notwithstanding the foregoing, the assumptions of liability by
Contractor under this Section 9.e. apply only to the cost of, and liability for, control
and removal of such pollution and contamination and do not apply to loss or damage
to property or injuries to or death of persons caused by such pollution or
contamination and shall, in no event, alter, lessen or affect the liabilities or
responsibilities of Contractor specified elsewhere in this Agreement, and Contractor
agrees to assume responsibility for and to protect, defend, indemnify, and hold
Company Group harmless from and against any Claims resulting from pollution or
contamination caused by the negligence (whether sole, joint, or concurrent) or other
fault of Contractor Group.
f. Contractor and Company agree to support their mutual indemnity
obligations in this Section 9 with liability insurance or self-insurance with minimum
limits of Three Million U.S. Dollars (US $3,000,000). Except as otherwise
mandated by applicable law, the indemnity obligations of Contractor and Company
as set out above shall be without monetary limit. Moreover, the indemnity
obligations of Contractor as set out in this Section 9 are independent of any
insurance requirements as set out in Section 10 and Exhibit A. and such indemnity
obligations shall not be lessened or extinguished by reason of Contractor's failure
to obtain the required insurance coverage or by any defenses asserted by
Contractor's insurers.
12. Section 10 of the Master Service Agreements further requires Drakin and B&G to
purchase insurance coverage to support their obligations and further provides that all insurance
policies of Drakin & B&G, whether or not required by the Master Service Agreement, shall name
Oasis as an additional insured on a broad form basis with such additional insured coverage
including coverage for the sole or concurrent negligence of Oasis and not being restricted to
ongoing operations, coverage for vicarious liability, or circumstances in which Drakin and/or B&G
were partially negligent and that such insurance policies purchased by Drakin and B&G will be
primary over any other liability coverage purchased by Oasis.
13. The insurance requirements specifically include pollution liability coverage for
Drakin and B&G, among other types of liability insurance coverages.
Count I - Indemnity
14. That Oasis is entitled to express indemnity from all the defendants pursuant to the
terms of the Master Service Agreements and the insurance policies purchased by Drakin and B&G.
15. Oasis is entitled to implied indemnity from all the defendants, because Oasis has paid
for a loss that was the responsibility of the defendants.
Count II - Breach of Warranty
16. Drakin and B&G breached their warranty under the Master Service Agreements by
failing to perform their services in a good and workmanlike manner in accordance with good
industry practices.
17. The breach of warranty by Drakin and B&G was the proximate cause of the liability
and damages sustained by Oasis as a result of the above-described pollution incident.
Count III - Negligence
18. That Drakin and B&G were negligent and otherwise at fault for the pollution
incident.
19. That such negligence or other fault on the part of Drakin and B&G was the proximate
cause of the liability and damages sustained by Oasis.
20. That Drakin and B&G are jointly and severally liable to Oasis.
21. That Oasis is entitled to damages from the defendants, jointly and severally.
Count IV - Additional Insured/Breach of Contract
22. That pursuant to the terms of the Master Service Agreements, Drakin and B&G were
required to purchase appropriate liability insurance coverage naming Oasis as an additional insured
on a broad form basis and that such additional insured coverage includes coverage for the sole or
concurrent negligence of Oasis and is not limited to ongoing operations, coverage for vicarious
liability, or circumstances in which Oasis was partially negligent.
23. The Master Service Agreements further provided that the liability insurance coverage
provided to Oasis as an additional insured would be primary as respects any other coverage
purchased by Oasis.
24. That all of the insurance company defendants have refused to provide additional
insured coverage to Oasis on a primary basis as required by the Master Service Agreements and the
provisions of their respective insurance policies.
25. That if there is no additional insured coverage for Oasis under any of the insurance
policies purchased by Drakin and B&G, Drakin and B&G have breached their Master Service
Agreements with Oasis and Drakin and B&G are required to act as insurers and to indemnify Oasis
as a result of Drakin's and B&G's failure to obtain the required insurance coverage.
Count V - Damages
26. Oasis hereby requests judgment against the defendants individually and jointly and
severally as follows:
a. For all amounts incurred for the control and removal of the contamination
and pollution and restoration of the property; and
b. For costs and attorney's fees incurred in any way involving the pollution
incident and this lawsuit against the defendants; and
c. Prejudgment interest on all amounts resulting from the pollution incident;
and
d. For such further relief as the Court deems equitable.

The provided text is an excerpt from a document filed in this case. For a full understanding of the case, one should read the complete court file, including the response.