Marathon Petroleum Co. v. Cherry Moving Co.

550 S.W.3d 791
CourtCourt of Appeals of Texas
DecidedMay 1, 2018
DocketNO. 14-16-00634-CV
StatusPublished
Cited by12 cases

This text of 550 S.W.3d 791 (Marathon Petroleum Co. v. Cherry Moving Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marathon Petroleum Co. v. Cherry Moving Co., 550 S.W.3d 791 (Tex. Ct. App. 2018).

Opinion

Kem Thompson Frost, Chief Justice

After the trial court dismissed an oil company's indemnity claims for want of prosecution, the company sought an equitable bill of review asserting that the trial court clerk sent the notice for the dismissal hearing under Texas Rule of Civil Procedure 165a to the wrong address. The trial court granted the defendant's summary-judgment motion on the grounds that there is no evidence of official mistake unmixed with any fault or negligence on the oil company's part. Concluding that the summary-judgment evidence raises a genuine fact issue on this point, we reverse and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellant/plaintiff Marathon Petroleum Company, LP, successor in interest to Marathon Petroleum Company, LLC and Marathon Ashland Petroleum, LLC filed a petition for equitable bill of review in the trial court, naming appellee/defendant Cherry Moving Company, Inc. d/b/a Cherry Demolition as the sole defendant. Marathon sought relief from a January 2015 order dismissing Marathon's claims against Cherry for want of prosecution signed by the trial court in Marathon Ashland Petroleum, LLC v. Frontier Pacific Insurance Company , No. 98-CV-0687-A (the "Underlying Case"). Marathon asserts that it did not receive notice of the trial court's intent to dismiss the Underlying Case for want of prosecution until September 2015, after the deadlines for filing a motion to retain, motion to reinstate, motion for new trial, and after the trial court lost plenary power to grant relief from the dismissal order.

A. The Underlying Case

According to Marathon, the underlying claims arose from an industrial accident that occurred at Marathon's Texas City refinery in 1998. Several contract workers sustained injuries in an explosion or flash fire in a vacuum tower that was being demolished, and one worker died from his injuries.1 Marathon arranged for the demolition *794work under a service contract with Cherry. Marathon contends that the governing contract document contains indemnity language requiring Cherry to indemnify Marathon from liabilities and injuries or deaths arising in the course of the work.

An injured Cherry worker filed suit against Marathon. The estate and family of a deceased worker intervened in the suit. Marathon demanded indemnity from Cherry. Cherry and its insurers did not respond favorably. Based on the indemnity and insurance obligations under the contract documents, Marathon later asserted claims against Cherry, Frontier Pacific Insurance Company and other parties, seeking to enforce Marathon's rights to coverage and indemnity. In 2000, the trial court severed Marathon's claims into cause number 98-CV-0687-A, the Underlying Case. The parties engaged in intensive negotiations in an attempt to resolve the personal-injury and wrongful-death claims. During the final stages of the negotiation, Royal Insurance, Cherry's excess-insurance carrier, agreed to participate in resolving the claims subject to full participation by Frontier, Cherry's primary carrier. At that juncture, Frontier made it known that Frontier could not contribute funds needed to settle the claims. In response, Marathon agreed to advance $1 million to cover the refusal or inability of Frontier and Cherry to contribute funds as required by contract, without waiving Marathon's rights. After Marathon made available the initial $1 million in settlement funds, Royal negotiated the settlement of the personal-injury and wrongful-death claims for a confidential amount that Marathon claims amounted to several times Marathon's contribution.

Thereafter, Marathon renewed its efforts to recover on its insurance and indemnity claims in the Underlying Case. State authorities placed Frontier in receivership and supervised liquidation. Courts in New York and California issued stay orders that prevented any further legal action against Frontier. Attorneys for Frontier requested an abatement in the Underlying Case. The trial court granted an initial abatement in October 2001.

Frontier's insolvency brought about a long period of inaction on Marathon's claims, pending resolution of the financial status of Frontier, the primary insurer on the personal-injury and wrongful-death claims. Marathon sought to recover more than $500,000 in litigation costs as well as its $1 million settlement contribution. Frontier's liquidation was placed under the supervision of the California Insurance Commissioner. Marathon perfected a claim in that proceeding, and the claim was allowed.

The trial court retained the Underlying Case on its docket for more than a decade, all while the parties and the trial court awaited final resolution of the Frontier liquidation. In 2012, Marathon received a partial distribution from the Frontier liquidation. In May 2015, the California court supervising the liquidation approved a final distribution to Marathon. On September 2, 2015, after Marathon received this final distribution, counsel for Marathon reported to the trial court by letter that the Frontier liquidation proceeding should close by December 2015, at which point Marathon wanted to proceed with its claims against the remaining parties. That same day, counsel for Royal Insurance emailed counsel for Marathon, informing Marathon that on January 22, 2015, the trial court had signed an order dismissing Marathon's claims in the Underlying Case for want of prosecution ("Dismissal Order").

*795Marathon asserts that it received notice of the Dismissal Order for the first time on September 2, 2015.

B. Marathon's Petition for Equitable Bill of Review

In December 2015, Marathon filed its petition in this case seeking an equitable bill of review. Marathon contends that an equitable bill of review is its only remedy to the Dismissal Order. Marathon alleges that it has a meritorious indemnity claim against Cherry. According to Marathon, the indemnity provision is enforceable and Marathon is entitled to full indemnity against Cherry, regardless of any alleged negligence by Marathon. Though Marathon asserted claims against other parties in the Underlying Case, Marathon now seeks to pursue only its claims against Cherry.

Even after receiving the distributions from the Frontier liquidation, Marathon alleges that it still has more than $200,000 in actual damages on its indemnity claim that remains due and owing, as well as prejudgment interest in excess of $200,000 and the reasonable attorney's fees incurred by Marathon in pursuing its indemnity claim against Cherry.

Marathon's counsel of record testified in an affidavit made part of the live petition that he has confirmed that before September 2, 2015, his law firm received no actual, written, or oral notice that dismissal of Marathon's claims was planned or entered. Marathon did not seek reinstatement, file a motion for new trial, move for relief under Texas Rule of Civil Procedure 306a, file a notice of appeal, or file a notice of restricted appeal. If Marathon did not receive any notice of the trial court's intention to dismiss for want of prosecution or of the Dismissal Order until September 2, 2015, then Marathon could not have timely sought any of these remedies.

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Bluebook (online)
550 S.W.3d 791, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marathon-petroleum-co-v-cherry-moving-co-texapp-2018.