CHARLESTON – Circuit Judge John Madden thought he found an easy way out of a wrongful death case with feuding defendants, but the Justices of the Supreme Court of Appeals expect him to work harder on it.
On April 23, the Justices reversed his ruling that a work order for an oil well required arbitration of a dispute between Halliburton Energy Services and Texas Keystone Inc.
"The fundamental problem with the circuit court's decision stems from the absence of a clear ruling by the circuit court as to whether the work order constitutes a valid, binding contract between the parties," Justice Margaret Workman wrote.
Madden reached a decision without developing facts, she wrote.
"Thus, the circuit court placed the proverbial cart before the horse," she wrote.
Texas Keystone, owner of a well in Tyler County, contracted with Halliburton to bring it into operating condition.
Driller Thomas Miller Jr., an employee of Falcon Drilling, died in an explosion at the well in 2005.
His estate sued Halliburton, Texas Keystone, and Falcon Drilling.
Halliburton answered with cross claims against Texas Keystone and Falcon Drilling.
The cross claim against Texas Keystone depended on a work order releasing Halliburton from liability for damage to property or persons.
The work order provided for resolution of any dispute by binding arbitration.
After filing the cross claims, Halliburton settled with Miller's estate.
Texas Keystone moved to dismiss the cross claim, arguing that an employee of Falcon Drilling signed it without authority to bind Texas Keystone.
Madden reached a decision but lacked confidence in it. "The Court feels the work order is valid," he wrote.
"It may be the case that after discovery is concluded, certain issues of fact remain for jury determination before the court could find as a matter of law that the work order constituted a binding agreement," he wrote.
He dismissed Halliburton's cross claim and ordered arbitration.
When Halliburton appealed, Falcon Drilling jumped into the act and pleaded for relief from its cross claim.
Falcon Drilling argued that Halliburton settled voluntarily and could no longer prove that it was without fault.
The Justices allowed Falcon Drilling to file a brief and appear at oral argument.
Workman easily disposed of that matter, writing that Halliburton's cross claim against Falcon Drilling was extinguished.
As for Texas Keystone, she left the contract mystery up to judge and jury.
If Madden or a jury decides that a valid contract existed, she wrote, they must then determine whether Halliburton's cross claim is subject to the arbitration provision.
James Varner Sr., Debra Hall Herron and Jeffrey Van Volkenburg, all of McNeer, Highland, McMunn and Varner in Clarksburg, represented Halliburton.
Scott Summers, of Offut Nord in Charleston, represented Texas Keystone.
Michael Gallaway, of Spilman Thomas and Battle in Wheeling, represented Falcon Drilling.