Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Evanston Insurance Co. v. Riceland Petroleum Co.

United States District Court, W.D. Louisiana, Lake Charles Division

March 28, 2019

EVANSTON INSURANCE CO
v.
RICELAND PETROLEUM CO

          KAY MAGISTRATE JUDGE

          REASONS FOR DECISION

          ROBERT R. SUMMERHAYS UNITED STATES DISTRICT JUDGE

         Presently before the court is the Motion for Summary Judgment [Doc 20] filed by Evanston Insurance Company. A hearing on the matter was held on January 28, 2019. After hearing argument from counsel, the court took the matter under advisement.

         Riceiand Petroleum Company ("Riceland"), is a named insured under Evanston Oil and Gas Industries Liability policies, for two consecutive policy periods from March 21, 2000 through March 21, 2002, and two umbrella or excess policies, for the same policy periods. See Ex. 1, 2, 3, 4 to Motion for Summary Judgment. Riceland was sued in underlying litigation entitled Van Geffen Bros., LLC, et al. v. ConocoPhillips Company, et al, currently pending in the 31 st Judicial District Court for the Parish of Jefferson Davis, State of Louisiana ("Van Geffen litigation"), and requested insurance coverage and defense costs from Evanston, for its exposure in the Van Geffen litigation, and under the aforementioned policies. Evanston filed the instant Complaint for Declaratory Relief seeking a determination that Evanston's policies do not provide any coverage for the alleged liability of Riceland in the Van Geffen litigation, and also, that Evanston has no obligation to defend Riceiand in the Van Geffen litigation. Evanston seeks summary judgment declaring: (1) Evanston does not owe a duty to defend or indemnify Riceland in the Van Geffen litigation because the pollution exclusions of the Primary and the Umbrella Liability Policies apply to preclude coverage for the long-term, environmental pollution damage alleged by plaintiffs in the Van Geffen lawsuit; (2) the Van Geffen lawsuit does not trigger Evanston's "Coverage D-Bodily Injury and Property Damage-Oil and Gas Limited Pollution" endorsement in the Primary Policies, and Riceland has not met the conditions of the endorsement; and (3) there is no coverage for damage to property leased by Riceland and/or in the care, custody, and control of Riceland based on the Leased Property/Care, Custody and Control Exclusions in the Evanston Policies.

         BACKGROUND

         Van Geffen Bros., LLC, and other plaintiffs, filed a state court "legacy lawsuit" against Riceland and other oil and gas companies alleging pollution and environmental contamination.[1]The plaintiffs in the Van Geffen case are landowners or the descendants, heirs, or assignees who claim that Riceland and other oil and gas production companies in Louisiana caused environmental contamination of their properties by pollutants over a period of several years or even decades. Their allegations include the operation or construction of various oil and gas facilities, including pits, wells, sumps, flowlines, pipelines, tank batteries, wellheads, measuring facilities, separators and injection facilities.[2] The Van Geffen plaintiffs also allegedly suffered damages resulting from the improper disposal of oilfield waste in unlined earthen pits, constructed by Riceland and other defendants, on or near their properties during the course of oil and gas exploration and production activities.[3] The oilfield wastes deposited in these pits include such substances as naturally occurring radioactive material ("NORM"), produced water, drilling fluids, chlorides, hydrocarbons, and heavy metals.[4] Other toxic and hazardous substances allegedly used by Riceland and other defendants in their day to day exploration and production activities include mercury, lead based compounds, chromium based algicides, hydrochloric acid, caustic soda, and various corrosion inhibitors.[5] The Van Geffen plaintiffs allege that leaks, spills, and other surface and subsurface discharges of these and other substances from wells, pipelines, tank batteries, gas plants and other equipment or facilities have polluted the surface and subsurface of the properties.[6]They also allege that Riceland's and other defendants' failure to timely remove or remediate this "toxic pollution" in the soils and groundwater of the properties has allowed the pollution to "migrate and spread."[7] The Van Geffen plaintiffs also allege that the pollution has now permanently damaged the drinking water and other aquifers underlying the properties.[8] While the Van Geffen plaintiffs assert various causes of action, these causes of action are all grounded in the activities of the defendants and the pollution-related damage allegedly resulting from that activity.[9]

         LAW AND ANALYSIS

         1. Summary Judgment Standard

         A court should grant a motion for summary judgment when the movant shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56. The party moving for summary judgment is initially responsible for identifying portions of pleadings and discovery that show the lack of a genuine issue of material fact. Tubacex, Inc. v. M/VRisan, 45 F.3d 951, 954 (5th Cir. 1995). The Court must deny the motion for summary judgment if the movant fails to meet this burden. Id.

         If the movant makes this showing, however, the burden then shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quotations omitted). This requires more than mere allegations or denials of the adverse party's pleadings. Instead, the nonmovant must submit "significant probative evidence" in support of his claim. State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, Ml U.S. at 249 (citations omitted).

         A court may not make credibility determinations or weigh the evidence in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). The court is also required to view all evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Gift v. Gift, 210 F.3d 268, 270 (5th Cir. 2000). Under this standard, a genuine issue of material fact exists if a reasonable trier of fact could render a verdict for the nonmoving party. Brumfield v. Rollins, 551 F.3d 322, 326 (5th Cir. 2008).

         2. The Policies.

         Under Louisiana law, the duty to defend is determined strictly based upon the allegations in the underlying petition and the terms and conditions of the relevant policy. Vaughn v. Franklin, 785 So.2d 79, 84 (La.App. 1st Cir. 3/28/2001). Under the "eight corners" rule, the court must compare the four corners of the petition against the four corners of the insurance policy, to determine whether the claims fall within the scope of the duty to defend. Accordingly, the Court begins with the language of the policies.

         Coverage A under the Evanston Primary Policies, as well as the Umbrella Policies, contain almost identical pollution exclusions, which preclude coverage for property damage "arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of 'pollutants'" and "any loss, cost or expense arising out of any: (a) request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize or in any way respond to, or assess the effects of 'pollutants.'"[10] The Primary Policies provide:

         SECTION I - COVERAGES

         COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY

         I) INSURING AGREEMENT

         A) We will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies. We will have the right and duty to defend any 'suit' seeking those damages. We may at our discretion investigate any 'occurrence' and settle any 'claim' or 'suit' that may result. But:

(1) The amount we will pay for damages is limited as described in LIMITS OF INSURANCE (SECTION III); and
(2) Our right and duty to defend end when we have used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A., B. or D. or medical expenses under Coverage C.
No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under SUPPLEMENTARY PAYMENTS-COVERAGES A., B. and D.
B) This insurance applies to "bodily injury" and "property damage" only if (I) The "bodily injury" or "property damage" is caused by an occurrence that takes place in the "coverage territory"; and (2) The "bodily injury" or "property damage" occurs during the policy period.
C) Damages because of "bodily injury" include damages claimed by any person or organization for care, loss of services or death resulting at any time from the "bodily injury. "
2) EXCLUSIONS
This insurance does not apply to;
F) POLLUTION
(1) 'Bodily Injury' or 'property damage' arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of 'pollutants.'
(2) Any loss, cost or expense arising out of any:
(a) request, demand or order that any insured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize or in any way respond to, or assess the effects of 'pollutants'; or
(b) claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of 'pollutants.'

         The Umbrella Policies provide:

         SECTION I- INSURING AGREEMENTS

         Occurrence and Claims-Made Coverage

         A. This insurance applies to "bodily injury," "property damage," .... written on an "occurrence" basis, but only if:

         1. The "bodily injury" or "property damage" was caused by an "occurrence," ...;

         2. The "occurrence" or "offense" took place in the "coverage territory," and

         3. The "bodily injury," "property damage, "...occurred during the policy period of this policy.

         It ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.