Battelle Memorial Institute v. Nowsco Pipeline Services, Inc.

56 F. Supp. 2d 944, 1999 U.S. Dist. LEXIS 10394, 1999 WL 493112
CourtDistrict Court, S.D. Ohio
DecidedJune 18, 1999
DocketC2-97-955
StatusPublished
Cited by9 cases

This text of 56 F. Supp. 2d 944 (Battelle Memorial Institute v. Nowsco Pipeline Services, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Battelle Memorial Institute v. Nowsco Pipeline Services, Inc., 56 F. Supp. 2d 944, 1999 U.S. Dist. LEXIS 10394, 1999 WL 493112 (S.D. Ohio 1999).

Opinion

OPINION & ORDER

MARBLEY, District Judge.

This cause comes before the Court on Plaintiffs Motion for Summary Judgment and Defendant’s Motion for Declaratory Judgment. For the following reasons, Plaintiffs Motion for Summary Judgment is GRANTED in part and DENIED in part; Defendant’s Motion for Declaratory Judgment is DENIED.

I. FACTS

Plaintiff Battelle Memorial Institute (“Battelle”) is a not-for-profit corporation, organized under the laws of Ohio, which operates a testing facility for performing scientific research and development for *946 government and industrial clients. One of Battelle’s operations is a research facility known as the Gas Research Institute Pipeline Simulation Facility (“GRI/PSF”). The GRI/PSF includes an underground pipeline (the “Flow Loop”), which simulates pipelines used in the gas transmission industry. Among other things, the Flow Loop is used for the testing of magnetic flux leakage tools (commonly referred to in the pipeline business as “MFL pigs”). These “pigs” are designed to detect leaks and corrosion in oil and gas pipelines.

Defendants Nowsco Pipeline Services, Inc. and Nowsco Well Services are organized under the laws of States other than Ohio, and are in the business of providing services related to gas wells and pipelines. This includes equipping oil and gas companies with MFL pigs. Both parties agree that Defendant BJ Services Company, a Delaware corporation, is Nowsco’s successor in interest. All Defendants will be referred to collectively as “Nowsco” for the purposes of this opinion.

In May, 1994, Nowsco and Battelle entered into a business relationship. The contractual arrangement between the parties was comprised of three sets of documents. First, in May of 1994, the parties entered into a contract captioned Task Order Number CP024467 (“Task Order”) which provided for the testing of Nowsco’s prototype pig in Battelle’s GRI/PSF facility. Second, by letters written in the fall of 1995 between officers of the respective companies, the parties agreed that the testing of Nowsco’s pig at the Battelle test facility would be conducted pursuant to Task Order Number CP024467, even though a more recent Task Order had been executed. 1 Third, in October of 1995, just before the commencement of the pig testing, Battelle entered into four separate contracts with Nowsco and four of Now-sco’s individual employees: Jim Smith, Greg Brown, Rod Clifford and Rob Ene-son. Each contract was labeled an “Access Agreement” and was a three-way contract between Battelle, Nowsco and the individual who was going to be at the GRI/PSF facility to participate in the project. These three contracts are the sum of the parties’ agreements; the Court’s opinion will be based almost entirely on the interpretation of these documents. The Court has conducted a careful examination of these papers.

While the contracts must, of course, be examined in their entirety, there are two key provisions related to this dispute. First, Paragraph 6 of the Task Order Agreement provides:

CLIENT [Nowsco] agrees to indemnify and hold BATTELLE harmless from any and all liability, claims, demands, damages, and all costs and expenses in connection therewith, for or arising out of BATTELLE’s performance under this agreement, except for injury or damage directly resulting during performance of the agreement activities on BATTELLE-owned premises where fault of CLIENT is not a contributing cause of such injury or damage. BAT-TELLE PROVIDES NO WARRANTY OR GUARANTY OF RESULTS, INCLUDING WARRANTIES OF FITNESS FOR PURPOSE OR OF MERCHANTABILITY FOR ANY ITEM OR RESEARCH RESULT WHICH MAY BE DELIVERED UNDER THIS AGREEMENT. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF.

Second, Paragraph 6 of each Access Agreement contains the following provision:

*947 COMPANY [Nowsco] and PARTICIPANT agree, for themselves and for their successors and assigns, and heirs and administrators, to release, indemnify and hold harmless BATTELLE and GRI, their divisions, affiliates, officers, trustees, agents and employees, from all liability, damages, claims, suits or other consequences (including but not limited to personal injury or death) caused by or arising out of this Agreement and the access granted thereby.

These two provisions govern the allocation of risk between Battelle and Nowsco for the Flow Loop experiments.

On October 12,1995, the testing of Now-sco’s MFL pig at Battelle’s GRI/PSF facility commenced. Nowsco representatives were present at the site. Sixteen test runs were completed without problems or complications. During the seventeenth test run, the pig became lodged in the Flow Loop. Nowsco’s representatives introduced a second pig, called a “pusher pig,” into the Flow Loop to dislodge the stuck pig. Both pigs were designed and built by Nowsco. As the pusher pig began moving the first pig, a fire ignited in the pipeline, explosively rupturing the Flow Loop and ejecting both pigs. The explosion caused severe damage to the Flow Loop and completely destroyed the pigs.

II. PROCEDURAL POSTURE

On August 27, 1997 Battelle filed suit against Nowsco Pipeline services, Inc., Nowsco Well Service, Ltd., and BJ Services Company. On September 8, 1997 Battelle filed its Amended Complaint against Nowsco for negligence (Count I), breach of implied warranty (Count II) and breach of written contract (Counts III and IV, addressing damages to the Flow Loop and the contractual fees due for services provided, respectively). Additionally, in Count V of its Amended Complaint, Bat-telle requests declaratory relief from Now-sco’s counterclaims pursuant to 28 U.S.C. § 2201(a). Battelle claims it was released from liability to Nowsco for any damage arising from the loss of the pigs pursuant to the terms of the Task Order and Access Agreements. Nowsco filed its Answer and Counterclaim on October 10, 1997, claiming damages for the loss of its MFL pigs under theories of negligence (Count I), breach of warranty (Count II) and breach of contract (Count III).

Now, Battelle moves for summary judgment on Count V of its Amended Complaint and Counts I, II and III of Nowsco’s Counterclaim. Similarly, Nowsco has filed a “Motion for Declaratory Judgment on the Contract,” with respect to Counts III and V of Battelle’s Amended Complaint. These two Motions raise the same basic issues.

A. Battelle’s Motion for Summary Judgment

Battelle moves for summary judgment on Count V of its Amended Complaint and Counts I, II, and III of Nowsco’s Counterclaim. Battelle advances four basic arguments in its Motion for Summary Judgment. First, Battelle argues that the Access Agreements prevent Nowsco from holding Battelle liable for the damage resulting from the use of the Flow Loop. Battelle points to the clause in which Nowsco agrees to release, indemnify, and hold Battelle harmless from all liability arising out of the Access Agreement, or the access granted thereby.

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Bluebook (online)
56 F. Supp. 2d 944, 1999 U.S. Dist. LEXIS 10394, 1999 WL 493112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/battelle-memorial-institute-v-nowsco-pipeline-services-inc-ohsd-1999.