NuStar Energy, L.P., and Kaneb Management Company, L.L.C. v. Diamond Offshore Company

402 S.W.3d 461, 2013 WL 2489939, 2013 Tex. App. LEXIS 7033
CourtCourt of Appeals of Texas
DecidedJune 11, 2013
Docket14-12-00657-CV
StatusPublished
Cited by25 cases

This text of 402 S.W.3d 461 (NuStar Energy, L.P., and Kaneb Management Company, L.L.C. v. Diamond Offshore Company) 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
NuStar Energy, L.P., and Kaneb Management Company, L.L.C. v. Diamond Offshore Company, 402 S.W.3d 461, 2013 WL 2489939, 2013 Tex. App. LEXIS 7033 (Tex. Ct. App. 2013).

Opinion

OPINION

TRACY CHRISTOPHER, Justice.

This is an appeal of the trial court’s rulings on cross-motions for summary judgment by the successors of the parties to an asset and stock purchase agreement. The parties to this suit asked the trial court to render declaratory judgment interpreting the contract. The seller’s successor contends that the trial court erred in granting summary judgment in favor of the purchaser’s successor and in denying its own summary-judgment motion. Because we conclude that the agreement is ambiguous, we reverse the judgment and remand the case to the trial court.

I. Factual and PROCEDURAL History

This appeal arises from a contract dispute between Diamond Offshore Company (“Diamond” or “Buyer”) and Kaneb Management Company, L.L.C. (“Kaneb” or “Seller”) concerning an asset and stock purchase agreement (“the Agreement”) between their respective predecessors; to avoid confusion, we will refer to Diamond and Kaneb as though they were the original parties to the contract. 1 Kaneb provided contract drilling services to the oil- and-gas industry. Directly or through subsidiaries, it owned a number of offshore drilling rigs, barge rigs, some yard facilities, personal property, and equity in other companies.

On June 30, 1989 (defined in the Agreement as “the Closing Date”), Diamond bought Kaneb’s assets. Some of Kaneb’s workers continued to work for Diamond after the sale; in the Agreement, these *464 individuals are called “Hired Employees.” Individuals who had been employed by Kaneb before the sale but did not work for Diamond after the sale are identified in the Agreement by the defined term, “Employees.” Some Employees later sued Diamond for personal injuries they allegedly sustained as a result of their exposure to asbestos while employed by Kaneb.

Diamond sued Kaneb and its parent company NuStar Energy L.P., seeking declaratory judgment that under the terms of the Agreement, Diamond did not assume liability for claims by “Employees” that were “[biased upon injuries identifiably sustained prior to the Closing Date” and that resulted from Kaneb’s “ownership or operation of the assets prior to the Closing Date.” Diamond also asked for a declaration that Kaneb assumed liability for these claims. Kaneb counterclaimed, asking for a declaration that Diamond assumed liability for claims that allegedly arose from asbestos exposure before the Closing Date, but that accrued after the Closing Date.

The parties filed cross-motions for traditional summary judgment. As summary-judgment evidence, both sides relied on a copy of the Agreement. Diamond’s summary-judgment evidence additionally included a claims-administration agreement that was attached to and incorporated in the Agreement; securities filings from 2010 of the limited partnership of which Kaneb is a subsidiary; a non-party’s discovery responses made in a Louisiana case; and the affidavits of two attorneys who participated in negotiating and drafting the Agreement. In response to Ka-neb’s summary-judgment motion, 2 Diamond additionally relied on excerpts from the deposition of an attorney; insurance policies that expired more than a decade before the Agreement; and a recent email exchange between attorneys seeking evidence of insurance coverage. Kaneb objected to the attorneys’ affidavits on numerous grounds, and in the alternative, moved for a continuance.

The trial court denied Kaneb’s motion for continuance, but held that “the contract is not ambiguous on the issue presented” and struck the attorneys’ affidavits as “inadmissible extrinsic evidence on the issue of intent and contract interpretation.” The trial court granted summary judgment in Diamond’s favor, and in its amended order on the motions, the trial court made the following declarations:

(1) Plaintiff [Diamond] — the liability successor of Buyer — did not assume liability for claims:
a. Filed by the Sellers’ Employees who did not become Hired Employees after the Closing;
b. Based upon injuries identifiably sustained prior to the Closing; or
c. Resulting from the Sellers’ ownership or operation of the Assets prior to the Closing.
and
(2) Defendant Kaneb Management Co., LLC — the liability successor of Sellers — assumed liability for claims:
a. Filed by the Sellers’ Employees who did not become Hired Employees after the Closing;
b. Based upon injuries identifiably sustained prior to the Closing; or
*465 c. Resulting from the Sellers’ ownership or operation of the Assets prior to the Closing. 3

The trial court denied all requests for attorneys’ fees.

II.Issues Presented

In its first issue, Kaneb argues that its interpretation of the Agreement is the only reasonable one, and thus, the trial court erred in denying its summary-judgment motion and granting Diamond’s cross-motion. As an alternative, Kaneb argues in its second issue that its interpretation of the Agreement is at least a reasonable one, and thus, the trial court erred in granting summary judgment to Diamond. As a further alternative, Kaneb asserts in its third issue that we must reverse the ruling and remand the case because the particular declarations recited in the judgment do not resolve the parties’ dispute.

III.Standard of Review

We review de novo the trial court’s grant of a summary judgment. Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d 642, 644 (Tex.2009) (per curiam) (citing Tex. Mun. Power Agency v. Pub. Util. Comm’n. of Tex., 253 S.W.3d 184, 192 (Tex.2007)). We must affirm the summary judgment if any of the movant’s theories presented to the trial court and preserved for appellate review are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex.2003).

The movant for traditional summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). Evidence is conclusive only if reasonable people could not differ in their conclusions. City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex.2005).

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Bluebook (online)
402 S.W.3d 461, 2013 WL 2489939, 2013 Tex. App. LEXIS 7033, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nustar-energy-lp-and-kaneb-management-company-llc-v-diamond-texapp-2013.