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Oil firm not covered in insurance dispute over worker’s death

Oil well

An oil exploration company cannot be considered an additional insured, the Montana Supreme Court unanimously held Tuesday in litigation over a worker’s death, overturning a lower court ruling.

Zachary Buckles was killed in April 2014 while working at a flow tester at a well site near Alexander, North Dakota, according to the ruling in Employers Mutual Casualty Co. v. Estate of Buckles.

The site was owned or leased by oil exploration company Continental Resources Inc., based in Oklahoma City. At the time of Mr. Buckles’ death, Continental had a master service contract with another firm to perform flow testing at the site.

That firm subcontracted the work to Glasgow, Montana-based Black Rock Testing Inc., which in turn subcontracted the work to another firm with which Mr. Buckles was working at the time of his death.

Black Rock had a commercial general liability insurance policy with Des Moines, Iowa-based Employers Mutual. In ensuing wrongful death litigation, Continental asked Employers Mutual to defend it as an additional insured under the CGL policy, which the insurer refused.

Employers Mutual and Continental sued and countersued one another over the issue of whether Continental could be considered an additional insured. A lower court in Glendive, Montana, ruled in Continental’s favor and was overturned by the Montana Supreme Court.

“This case raises the fundamental question whether Continental qualifies for any coverage under the subject policy regardless of the claim,” said the decision.

“Black Rock is the only named insured on the policy issued on February 28, 2014,” it said. “Employers Mutual produced the Policy and the Master Service Agreement between Black Rock and Continental” at the summary judgment briefing before the lower court, said the ruling. “Our interpretation of these documents is a matter of law … These documents establish unequivocally that Continental was not an automatic additional insured under the policy,” said the decision.

“Under any reasonable interpretation of the insurance contract and its endorsements, the Policy does not cover Continental as an additional insured. Thus, Employers Mutual owes no duty to defend or indemnify Continental under the Policy,” said the decision, in concluding the lower court had erred in its ruling.

Employer Mutual’s attorney, David C. Berkoff, of the Berkoff Law Firm P.C. in Missoula, Montana, said, “Obviously, my client is very pleased with the decision and we think it’s a well thought-out and quality decision by the Montana Supreme Court.”

Continental’s attorney did not immediately respond to a request for comment.

The Montana Supreme Court ruled last year that a Liberty Mutual Insurance Co. unit that covered an injured employee’s carpal tunnel syndrome when it was first diagnosed is also liable for coverage when the injury later worsened, even though it was no longer the company’s insurer. 



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