Opinion ID: 1598921
Heading Depth: 1
Heading Rank: 4

Heading: Petrotech vs. Patrick

Text: Petrotech appealed the trial court's dismissal of its cross-claim against Patrick for any sums that it be responsible for as a result of the Estate's third-party claim against it, including costs, disbursements, and attorney fees. The trial court dismissed the cross-claim because it had dismissed the Estate's third-party claim and, therefore, there was no basis for a judgment against Petrotech. The trial court also denied the request for attorney fees in defending the third-party claim, concluding that Petrotech failed to meet its burden of proof on the issue of attorneys fees. Patrick's assignment to Petrotech contains this clause: Assignor agrees to indemnify, defend and save Assignee harmless from any liability, causes of action, claims, demands or defaults resulting from acts or omissions of Assignor which have occurred prior to August 9, 1983. Assignee agrees to indemnify, defend and save Assignor harmless from any causes of action, claims, demands or default resulting from acts or omissions of Assignee which occur on or after said date. Patrick argues that the trial court properly dismissed Petrotech's cross-claim because the Estate's third-party claim does not raise a question about an act or omission by Patrick before August 9, 1983. Petrotech argues that the Estate's claim is based solely on Patrick's acts prior to August 9, 1983, and that, under this court's decision in Hoge v. Burleigh County Water Management Dist., 311 N.W.2d 23 (N.D. 1981), Patrick is responsible for Petrotech's attorney fees in defending the third-party claim. Neither party is correct. The Estate's claim against Patrick is based on the August 7, 1978, lease, the accompanying letter agreement between Kathleen and Patrick, and subsequent representations made by Patrick prior to August 9, 1983. The Estate's third-party complaint asserts that Patrick Petroleum, through its employees and agents, represented to Kathleen O'Connell, and later to the representatives of the Estate ... that the intent of the parties to the letter agreement... was that Patrick Petroleum Company and its assigns would pay all costs on Kathleen O'Connell's working interest before and after payout. The Estate also asserts that Patrick paid all costs attributable to Kathleen O'Connell's working interests through the time of assignment of its interests and obligations in Mosser 1-26 to Petrotech.... The Estate's claim against Petrotech is partially based on Petrotech's actions after August 9, 1983. The Estate asserts that from August 8, 1983, until April 4, 1984, Petrotech, Inc. paid all costs on Mosser 1-26 represented by Kathleen O'Connell's working interest and did not claim or notify any person or entity that it disputed its contractual obligation to pay such costs. According to the Estate, it and Kathleen relied on the representations and conduct of Patrick ... and Petrotech ... to their detriment. Thus, the Estate seems to seek indemnity for both Patrick's own pre-assignment acts and Petrotech's own post-assignment acts. Under the indemnity provisions of the assignment agreement, Patrick and Petrotech divide responsibility for indemnification between themselves depending on whether any liability, causes of action, claims, demands or defaults resulted from Patrick's pre-assignment acts or omissions or resulted from Petrotech's post-assignment acts or omissions. Still, it is not clear to what extent the Estate seeks to hold Petrotech liable for Patrick's pre-assignment acts and to hold Patrick liable for Petrotech's post-assignment acts. Correspondingly, the trial court made no findings on whether any liability of Petrotech would result from Patrick's pre-assignment acts, nor on whether any liability of Patrick would result from Petrotech's post-assignment acts. At this point, we are unable to determine to what extent the indemnity clause of Patrick's assignment to Petrotech applies. We therefore reverse the trial court's dismissal of Petrotech's cross-claim against Patrick for indemnity, including attorney fees, and remand for resolution of these factual questions. Accordingly, the judgment is reversed and the cases are remanded for proceedings consistent with this opinion. ERICKSTAD, C.J., and LEVINE, VANDE WALLE and GIERKE, JJ., concur.