The Oklahoma Supreme Court has reversed a lower court’s decision in the case of Oklahoma City oil and gas producer Charter Oak Production and a saltwater spill from a leaking pipeline.
The lower court had originally ruled against Charter Oak Production which had sought damages from JM Eagle, Inc. and Rainmaker Sales, Inc. who had supplied the pipe used in the installation of a saltwater transfer pipeline in McClain County. A district court had granted summary judgment in favor of JM Eagle and Rainmaker, claiming that Charter Oak had lacked the legal relationship required to assert an indemnity claim and that the claim was barred by the economic loss rule. The ruling was reversed by the Court of Civil Appeals.
The Supreme Court recently ruled against both courts, vacating the Civil Appeals ruling, reversing the district court decision and remanding the matter for “further proceedings consistent with this opinion.”
The justices concluded that Charter Oak’s liability to the landowners arose because it was the “dominant tenant of the easement, which required it to prevent damage to the property.”
For that reason, Charter Oak, according to the justices, had a legal relationship established and necessary for the company to seek indemnity from JM Eagle and Rainmaker.