Nexen Inc. v. Gulf Interstate Engineering Co.

224 S.W.3d 412, 166 Oil & Gas Rep. 629, 2006 Tex. App. LEXIS 10289, 2006 WL 3438699
CourtCourt of Appeals of Texas
DecidedNovember 30, 2006
Docket01-04-01223-CV
StatusPublished
Cited by46 cases

This text of 224 S.W.3d 412 (Nexen Inc. v. Gulf Interstate Engineering 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
Nexen Inc. v. Gulf Interstate Engineering Co., 224 S.W.3d 412, 166 Oil & Gas Rep. 629, 2006 Tex. App. LEXIS 10289, 2006 WL 3438699 (Tex. Ct. App. 2006).

Opinion

OPINION

TIM TAFT, Justice.

Appellants, Nexen Inc., Nexen Petroleum Operations Yemen Limited, and Canadian Nexen Petroleum Yemen (collectively, “the Nexen parties”), appeal from a take-nothing summary judgment rendered on their claims against appellee, Gulf Interstate Engineering Co. (“GIE”), for engineering work that GIE had done in Yemen on a pipeline for the Nexen parties’ corporate predecessor. We determine whether (1) the statute of repose of Texas or Alberta, Canada applied and (2) GIE conclusively proved its affirmative defense that the applicable statute of repose barred the Nexen parties’ claims again it. We affirm the judgment.

Background

In 1991, as alleged by the Nexen parties, CanadianOxy Offshore International Ltd. (“COIL”) entered into a contract (“the contract”) with GIE, a company headquartered in Texas, for GIE to provide engineering services for COIL’s proposed oil processing and development facility in the Masila Block area of Yemen (“the Masila Project”). Under the contract, GIE provided engineering services for what was designated “Phase 1” of the Masila Project, which included preparation of a design-basis manual, a project-execution plan, and a detailed estimate of total in *415 stallation costs for the facilities for the Masila Project. The Masila Project had nine principal components: a gathering system, a pump station, a central production facility, a pipeline, an export terminal, data and communications systems, offshore facilities, infrastructure, and power generation and distribution.

On January 1, 1992, COIL and GIE entered into an amendment to the 1991 contract (“the amended contract”). The amended contract provided for GIE’s engineering services to continue into “Phase 2.” In Phase 2, GIE was to design and to engineer the detailed design, procurement, engineering, and “other project-related services” required for the Masila Project facilities. At no time did GIE perform construction services for the Masila Project.

The Nexen parties alleged in their petition and have asserted in their brief, without dispute by GIE, that appellant Nexen Inc. is the corporate successor to the company that was the corporate assignee of COIL; that appellant Nexen Inc. was a partner in appellant Canadian Nexen Petroleum Yemen, which in turn had an interest in the ownership and operations of the Masila Project; and that appellant Nexen Petroleum Operations Yemen Limited was a partner in appellant Canadian Nexen Petroleum Yemen and was also a successor to COIL.

In July or August 1993, the pipeline at the Masila Project was completed, with the exception of punch-list and “ROW cleanup” items, and became operational, although engineering and construction on the overall Masha Project was still ongoing. In July 1994, GIE certified that it had completed all of its engineering work for the Masila Project.

The Nexen parties alleged that, in April 2002, rainfall caused flooding at the Masila Project site. The flooding caused the pipeline to move, which further caused the pipeline to strain, to buckle, and to lose its concrete coating, resulting in damage to the pipeline. In April 2004, the Nexen parties sued GIE for fading to design and to engineer the pipeline and its route properly, alleging claims for breach of contract, breach of warranty, negligence, and strict liability for design defect. GIE answered, alleging, among other things, the affirmative defense of the 10-year statute of repose under Texas or Alberta law.

GIE moved for traditional summary judgment against all of the Nexen parties’ claims. GIE asserted that the statute of repose under both Texas and Alberta law precluded the Nexen parties’ claims. Concerning the choice of law, GIE argued:

Although there is some indication in the contracts] between the parties that the laws of Alberta, Canada should apply, the choice of law is immaterial because the overall result is the same whether Texas law or Alberta law applies: [the Nexen parties’] claims must be dismissed with prejudice as a matter of law.

GIE then analyzed the statutes of repose under both jurisdictions’ laws. 1 The crux of GIE’s argument was that (1) under both statutes, the date of substantial completion of GIE’s work was the accrual date for purposes of repose and (2) that date was July 1993, when the pipeline became fully operational. The Nexen parties responded that (1) the repose law of Alberta and Texas differed materially; (2) Alberta law applied; (3) the Nexen parties’ claims were timely filed under Alberta’s repose statute; and, alternatively, (4) the Nexen *416 parties’ claims were timely filed under Texas’s repose statute. 2 In particular, the Nexen parties argued that the pipeline portion of GIE’s work was only part of the work that GIE had contracted to do for the Masila Project and that GIE’s overall work was not substantially completed until at least July of 1994.

GIE filed a summary-judgment reply, in which it again argued that the result was the same under either Texas or Alberta law and in which GIE also clarified its summary-judgment grounds by arguing that, because the Nexen parties had sued for GIE’s actions relating to the pipeline portion of the Masila Project, the accrual date for calculating the statutes of repose should be the date that GIE finished its work on the pipeline. In their supplemental briefing below, the Nexen parties responded that GIE could not sever its work under the contract into discrete portions merely to invoke the statutes of repose starting at an earlier date. GIE then filed another brief, again asserting that the result was the same under either Texas or Alberta law and that, for purposes of calculating the repose statutes’ accrual dates, the pipeline portion of GIE’s work was severable from its overall work. 3

In October 2004, the trial court rendered a take-nothing summary judgment in favor of GIE on all of the Nexen parties’ claims against it. The summary-judgment order did not specify the grounds upon which it was rendered.

Standard of Review

GIE moved for traditional summary judgment. See Tex.R. Civ. P. 166a(c). Summary judgment under rule 166a(c) is proper only when a movant establishes that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Randall’s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex.1995). A defendant is entitled to summary judgment if the evidence disproves as a matter of law at least one element of each of the plaintiffs causes of action or if it conclusively establishes all elements of an affirmative defense. Id.

In our review, we indulge every reasonable inference in favor of the nonmovant, resolve any doubts in its favor, and take as true all evidence favorable to it. Id. When, as here, an order granting summary judgment does not specify the grounds upon which the trial court ruled, we must affirm to the extent that any of the summary judgment grounds is meritorious. See Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995).

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Cite This Page — Counsel Stack

Bluebook (online)
224 S.W.3d 412, 166 Oil & Gas Rep. 629, 2006 Tex. App. LEXIS 10289, 2006 WL 3438699, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nexen-inc-v-gulf-interstate-engineering-co-texapp-2006.