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Gainsco Insurance Co. v. Amoco Production Co.8/19/2002
For instance, as admitted in Gainsco's motion for summary judgment, Andrews worked for years under the contract transporting equipment and doing dirt work.
[ ] The question, then, is whether the work being performed under the Contract at the time of Abraham's death was more akin to the service of pumping units, as in Cities Service Co., and therefore covered by the statute, or to the digging of fluid waste pits after a fire at a separation plant, as in Reliance Ins. Co., and therefore not covered by the statute. We conclude that delivering oil by truck to a tank battery is not an activity closely related to well drilling. Consequently, Wyo. Stat. Ann. § 30-1-131 does not serve to invalidate the contract provision whereby Amoco was indemnified against its own negligence.
[ ] In reaching this conclusion, we have continued to give effect to the rule of statutory construction, ejusdem generis, whereby a general term following a list of specifically enumerated terms should be construed as limited to the same genus as the things enumerated. See Reliance Ins. Co., 713 P.2d at 770. As applied to this statute, this rule means that "or otherwise rendering services in or in connection with any well" is limited to those services similar to "drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging . . .." Wyo. Stat. Ann. § 30-1-132. Without doubt, those terms are directly related to the well, itself, and not to general oil field work. We have also recognized that Wyo. Stat. Ann. §§ 30-1- 131 and 30-1-132 restrict freedom to contract, a common law right, and, therefore, must be strictly construed.
CONCLUSIONS
[ ] Our conclusions, numbered to coincide with the issues presented, may be summarized as follows:
1. The damage element of the tort of third-party bad faith against an insurer for failing to settle a claim may be satisfied despite the inclusion in a settlement between the insured and the claimant of the claimant's covenant not to execute against the insured. This is true even with language in the policy that limits coverage to sums that the insured becomes legally obligated to pay. The district court's ruling was correct.
2. The tort of third-party bad faith requires a judgment in excess of policy limits, and where there is no risk of such judgment, an insurer who declines an offer to settle within policy limits has not acted in bad faith. In the instant case, the contract between Amoco and Andrews specifically limited Andrews' indemnity liability to the amount of the insurance coverage. Therefore, there could be no excess judgment and Gainsco did not act in bad faith in declining the settlement offers. The ruling of the district court to the contrary was in error.
3. There has been no controlling precedent in Wyoming as to the extent of the total pollution exclusion in a commercial general liability policy. Further, authority nationwide has been split as to whether the exclusion is limited to environmental pollution. Consequently, the question of such coverage was fairly debatable and Gainsco did not commit first-party bad faith in its initial denial of coverage under the exclusion. The ruling of the district court to the contrary was in error.
4. Under an objective standard, Gainsco's denial of coverage based upon its subjective interpretation of the insured contract exclusion in its policy was not reasonable. The language at issue--"the indemnitee's sole tort liability"--simply cannot be twisted to mean "no liability on the part of the indemnitor," as contended by Gainsco. Gainsco's denial of coverage under its unreasonable interpreta
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