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Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 

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. ' - FILED 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

United St.ates Court of Appeals Tenth Circuit 

MAR 1 41989 

ROBERT L. HOECKER 

Clerk UNITED STATES FIDELITY & GUARANTY 

COMPANY, 

Plaintiff-Appellee, 

v. 

COLUMBIA DRILLING COMPANY, 

Defendant, 

N.T.E. OF NORMAN, OKLAHOMA, INC., 

Defendant-Appellant. 

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ORDER AND JUDGMENT* 

No. 87-2379 

(D.C. No. 86-1033W) 

(W.D. Okla.) 

Before MCKAY and BARRETT, Circuit Judges, and JENKINS, Chief 

Judge.** 

**Honorable Bruce S. Jenkins, Chief Judge, United States District 

Court for the District of Utah, sitting by designation. 

United States Fidelity & Guaranty Company (USF&G) brought 

this action for declaratory judgment regarding two insurance 

policies it had issued to Columbia Drilling Company. USF&G sought 

a court ruling that it did not have a duty to defend or indemnify 

*This order and 

be cited, or 

for purposes of 

res judicata, 

judgment has no precedential value and shall not 

used by any court within the Tenth Circuit, except 

establishing the doctrines of the law of the case, 

or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 87-2379 Document: 010110024592 Date Filed: 03/14/1989 Page: 1 
. - Columbia in a suit filed by N.T.E. of Norman, Oklahoma, Inc. The 

district court decided in favor of USF&G and NTE appeals. 1 

On June 16, 1981, NTE contracted with Columbia for the 

drilling of an oil well in Grayson County, Texas. Under the 

drilling contract, Columbia, as contractor, agreed to drill the 

oil well for NTE, the operator, and to supply the equipment and a 

supervised drilling crew. During Columbia's drilling operations, 

the well casing was damaged, forcing the well to be abandoned. 

NTE filed suit on October 27, 1983, against Columbia and various 

other defendants, alleging it suffered damages because of 

defective casing, improper drilling methods, and the use of 

improper supervision and improper equipment by Columbia. Columbia 

filed for bankruptcy and NTE was permitted to proceed against 

Columbia in state court only to the extent it was covered by the 

USF&G insurance policies. USF&G filed the present declaratory 

judgment action in federal court, requesting that the district 

court find the insurance policies did not cover the damages 

alleged by NTE. 

USF&G filed a motion for summary judgment. After both 

parties briefed the motion, they agreed to submit the case to the 

district court pursuant to Rule 52 based on the pleadings, 

evidentiary materials submitted with the briefs, and the parties' 

stipulation of facts. Doc. 49. The district court made extensive 

findings of fact and conclusions of law and ultimately concluded 

that each insurance policy excluded coverage for the type of 

damages alleged by NTE. NTE appeals this decision. 

1 Columbia Drilling is not a party to this action. 

2 

Appellate Case: 87-2379 Document: 010110024592 Date Filed: 03/14/1989 Page: 2 
. - In reviewing a decision of the trial court under Rule 52, we 

will not disturb the court's findings of fact unless they are 

clearly erroneous. Fed. R. Civ. P. 52(a). The determination of 

ambiguity of a contract is a question of law and will be reviewed 

de novo on appeal. In re Arnarex, Inc., 853 F.2d 1526, 1529-30 

(10th Cir. 1988). Likewise, the interpretation of an unambiguous 

contract is a question of law. Id. 

At the time the oil well was damaged, Columbia was covered by 

two insurance policies issued by USF&G. Policy No. SMP 730880 

provided Columbia with coverage limited to certain premises listed 

in the policy and limited to the kinds of property or coverage for 

which a specific liability amount was listed. Policy No. MP 

70467, which was issued to Berry Petroleum Corporation, Columbia's 

parent company, named Columbia as an insured by endorsement and 

provided general liability coverage for Berry Petroleum and 

several of its subsidiaries. USF&G argued that neither policy 

covered the specific damages alleged by NTE because the damages 

fell under specific exclusion clauses contained in the policies. 

NTE argued the exclusion clauses were ambiguous and should be 

interpreted against the insurer. 

The district court determined that Policy SMP 730880 only 

covered the designated premises owed by Columbia listed in the 

policy, and therefore did not extend to the oil well in question 

in this case. In addition, the court held that a specific clause 

included in an endorsement to the policy excluded coverage for the 

type of damages alleged by NTE. The relevant clause, subsection 

(o), states that the insurance policy does not apply "to property 

3 

Appellate Case: 87-2379 Document: 010110024592 Date Filed: 03/14/1989 Page: 3 
. - damage to work performed by or on behalf of the Named Insured 

arising out of the work or any portion thereof, or out of 

material, parts or equipment in connection therewith .• II The 

district court found this clause directly applicable to NTE's 

claims against Columbia. Unfortunately, NTE fails to discuss this 

exclusion clause or in any way contend the district court erred in 

applying the exclusion to the facts of this case. In its brief on 

appeal, NTE only discusses section (k), another exclusion clause 

contained in Policy 730880. 2 The district court specifically 

determined that exclusion clause (k) did not apply to NTE's 

alleged damages and thus would not exclude coverage. 

Ordinarily, when a party does not argue or even address an 

issue in its brief, it waives the right to have that issue 

considered on appeal. Price v. Digital Equip. Corp., 846 F.2d 

1026, 1028 (5th Cir. 1988); Jasperson v. Purolator Courier Corp., 

765 F.2d 736, 740-41 (8th Cir. 1985); International Union of 

Bricklayers, Local Union No. 20 v. Martin Jaska, Inc., 752 F.2d 

1401, 1404 (9th Cir. 1985); see generally Fed. R. App. P. 28(a). 

No argument or specific designation of error can be reasonably 

inferred from appellant's brief regarding the trial court's 

determinative ruling on Policy 730880, including its construction 

of the exclusion clause which was held to preclude coverage in 

2 

to: 

Section (k) states that the insurance policy does not apply 

(k) property damage to 

(1) property owned or occupied by or 

Insured, 

(2) property used by the Insured, or 

(3) property in the care, custody 

Insured or as to which the Insured is 

exercising physical control . 

4 

rented to the 

or control of the 

for any purpose 

Appellate Case: 87-2379 Document: 010110024592 Date Filed: 03/14/1989 Page: 4 
. ,, 

this case. We therefore will not review this portion of the 

order, and we affirm the court's ruling as to Policy 730880. 

The second insurance policy issued by USF&G, Policy MP 70467, 

provides coverage for the "premises and operation, independent 

contractors, completed operations and products" of the insured, 

Berry Petroleum. An endorsement to the insurance policy contained 

the following provision under subsection (A)(2): 

[The insurance policy does not apply:] 

(b) to tools or equipment while being used by the 

insured in performing his operations. 

(d) to that particular part of any property, not on 

premises owned by or rented to the insured, 

(i) upon which operations are being performed by or 

on behalf of the insured at the time of the 

property damage arising out of such operations, or 

(ii) out of which any property damage arises, or 

(iii) the restoration, repair or replacement of 

which has been made or is necessary by reason of 

faulty workmanship thereon by or on behalf of the 

insured . . . . 

NTE's claimed losses include the well casing, the oil well, and 

replacement costs for these two types of property. The district 

court held that these claims for damages were subject to the 

provisions of (A)(2)(d) quoted above. "Both losses are within the 

provisions as constituting any property damage arising from 

Columbia's performance or as claims for restoration or replacement 

necessitated by such workmanship or operation on off-premises 

property." 

NTE claims the exclusion clause is ambiguous and should be 

construed in favor of coverage. Specifically, NTE argues section 

5 

Appellate Case: 87-2379 Document: 010110024592 Date Filed: 03/14/1989 Page: 5 
(2)(d)(ii), which states "out of which any property damage 

arises," is ambiguous, and that sections (i) and (iii) simply do 

not apply to the facts of this case. "Where an insurance policy 

contains ambiguous or equivocal language, it should be interpreted 

favorably to the insured. However, a court cannot resolve an 

ambiguity where none exists, and an unambiguous insurance 

contract, like any other contract, should be enforced as written." 

Young v. Fidelity Union Life Ins. Co., 597 F.2d 705, 707 (10th 

Cir. 1979)(citation omitted). All parts of an insurance contract 

are taken together and given such reasonable meaning as will 

effectuate the intent of the parties. Taylor v. New York Life 

Ins. Co., 324 F.2d 768, 771 (10th Cir. 1963); John Hancock Mut. 

Life Ins. Co. v. Tuggle, 303 F.2d 113, 115 (10th Cir. 1962); 

Haggard v. Calhoun, 294 P.2d 836, 841 (Okla. 1956). The words of 

an insurance contract must be accepted in their plain and ordinary 

sense. Fehring v. Universal Fidelity Life Ins. Co., 721 P.2d 796, 

798 (Okla. 1986). 

We find no ambiguity or uncertainty in the exclusion clause 

in question. Any uncertainty is not caused by language of the 

policy, but in how it applies to the facts of this case. This is 

primarily a factual issue and the trial court's factual findings 

will not be reversed unless clearly erroneous. Supre v. Ricketts, 

792 F.2d 958, 961 (10th Cir. 1986). 

Section (A)(2)(d) explicitly excludes coverage for any damage 

to property upon which the insured is working (the well) or, to 

property which is the source of its own damage (the well casing}, 

or to property needed to be repaired or replaced because of the 

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Appellate Case: 87-2379 Document: 010110024592 Date Filed: 03/14/1989 Page: 6 
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faulty workmanship of the insured (the well casing and the well). 

As stated by the district court, the plain language of this 

exclusion clause indicates the parties clearly did not intend to 

have the policy cover the property damage to the well or well 

casing caused by Columbia's improper drilling methods, improper 

supervision, or use of improper equipment. Doc. 53 at 25. 

We agree with the trial court's interpretation of the 

insurance contracts and conclude the trial court's application of 

the facts of this case to the exclusion clause is not clearly 

erroneous. The judgment of the United States District Court for 

the Western District of Oklahoma is AFFIRMED. 

The mandate shall issue forthwith. 

ENTERED FOR THE COURT 

PER CURIAM 

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