DCP Operating Company, LP & DCP Midstream, LP v. St. Paul Fire and Marine Ins. Co.

Summary

The United States District Court for the District of New Mexico considers cross-motions for summary judgment concerning an insurer’s duty to defend and indemnify DCP entities as additional insureds under a policy issued to their contractor. The court analyzes the policy, the parties’ master agreement, and New Mexico’s oilfield and construction anti-indemnity statutes. The opinion concludes, in the portion provided, that the oilfield anti-indemnity statute does not apply and that the construction anti-indemnity statute applies and limits coverage to losses attributable to the contractor’s negligence.

Holdings

1. N.M. Stat. Ann. § 56-7-2 does not apply because the work under the Master Goods and Services Agreement involved downstream transportation and processing infrastructure rather than operations at or immediately connected to a wellhead.
2. N.M. Stat. Ann. § 56-7-1 applies to the Master Goods and Services Agreement and renders any indemnity or insurance obligation unenforceable to the extent it would require J&M to indemnify or insure DCP for DCP's own negligence; enforceable coverage is limited to losses caused by J&M's own negligence or fault.
3. St. Paul owed DCP a duty to defend the underlying action because the allegations and information reasonably available to St. Paul potentially implicated negligence by J&M and therefore potentially brought the claims within the policy's coverage.
4. The duty to indemnify could not be resolved on summary judgment because material factual disputes remained concerning J&M's negligence or fault, causation, and whether the underlying settlement was reasonable and entered in good faith.
5. The Colorado court's denial of J&M's motion for summary judgment did not have collateral-estoppel effect because it was an intermediate, nonfinal order that did not adjudicate the merits of indemnification or fault.
6. The Workers' Compensation Act did not bar DCP's contractual claims for defense and indemnification against J&M's insurer.
7. St. Paul was not entitled to summary judgment based solely on its standing argument because the record supported an inference that DCP Operating indirectly controlled DCP Midstream through affiliated entities, and DCP Operating indisputably had contractual rights.

Questions Presented

1. Whether the New Mexico oilfield anti-indemnity statute, N.M. Stat. Ann. § 56-7-2, applies to the Master Goods and Services Agreement and policy.
2. Whether the New Mexico construction anti-indemnity statute, N.M. Stat. Ann. § 56-7-1, applies and limits indemnity and insurance obligations to losses caused by J&M's own negligence or fault.
3. Whether St. Paul owed DCP a duty to defend the underlying personal-injury action despite the absence of an express allegation that J&M was negligent.
4. Whether St. Paul's duty to indemnify DCP for the underlying settlement could be resolved on summary judgment.
5. Whether a Colorado state court's denial of J&M's summary-judgment motion had collateral-estoppel effect.
6. Whether the New Mexico Workers' Compensation Act barred DCP's contractual defense and indemnification claims.
7. Whether DCP Midstream, LP had standing to assert contractual defense and indemnification rights.

Disposition

other