Drilling a Dry Well Is Not an Occurrence Under a CGL Policy

more+
less-

In PPI Technology Services, LP v. Liberty Mut. Ins. Co., 2012 WL 130389 (S.D. Tex. Jan. 17, 2012), the Southern District of Texas held that there was no "occurrence" of covered "property damage" arising from underlying claims that a well was drilled in the wrong location.

Royal Production Company, Inc. retained PPI Technology Services, L.P. to assist in well planning and to oversee the drilling of various wells on the leases. Royal sued PPI, alleging that it caused the drilling rig to be placed in the wrong location. This misplacement resulted in the drilling of a dry hole that was ultimately plugged and abandoned. Royal alleged that it had to maintain three mineral leases in the absence of any production, incurred costs in drilling the well in the wrong location, and incurred property damage to the property where the well was drilled. Liberty Mutual Insurance Company, the commercial general liability insurer for PPI, denied that it owed a defense or indemnity to PPI. PPI then sued Liberty Mutual for breach of the insurance contract, breach of section 541.060 (prompt payment of claims) of the Texas Insurance Code, and breach of the duty of good faith and fair dealing. Liberty Mutual filed a motion for summary judgment, arguing it has no duty to provide a defense.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sedgwick LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×