Court Opinion

ID: 9758801
Source: CourtListenerOpinion
Date Created: 2023-08-28 23:46:53.259703+00
Date Added: 2024-06-11T07:28:56.074872
License: Public Domain

BURKE, Justice,
concurring in part and dissenting in part.
[¶ 45] I coneur in part and dissent in part. I disagree with the majority's decision to reverse the district court's denial of True's claim for attorney fees incurred prior to the filing of the amended complaint. I would affirm on this issue because, prior to the filing of the amended complaint, True was being sued solely for its own negligence. Any agreement to indemnify True for its own negligence was void pursuant to Wyo. Stat. Ann. § 30-1-181(a)(iii) (LexisNexis 2009):
§ 30-1-131. Provisions for indemnity in certain contracts; invalidity.
(a) All agreements, covenants or promises contained in, collateral to or affecting any agreement pertaining to any well for oil, gas or water, or mine for any mineral, which purport to indemnify the indem-nitee against loss or liability for damages for:
(1) Death or bodily injury to persons;
(ii) Injury to property; or
(iii) Any other loss, damage, or expense arising under either (1) or (i) from:
(A) The sole or concurrent negligence of the indemnitee or the agents or employees of the indemnitee or any *713independent contractor who is directly responsible to such indemnitee; or
(B) From any accident which occurs in operations carried on at the direction or under the supervision of the indemnitee or an employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee or employees or representatives of the indemni-tee, are against public policy and are void and unenforceable to the extent that such contract of indemnity by its terms purports to relieve the indemnitee from loss or liability for his own negligence. This provision shall not affect the validity of any insurance contract or any benefit conferred by the Worker's Compensation Law [§§ 27-14-101 through 27-14-805] of this state.
(Emphasis added.)3 The contractual obligation at issue here and the impact of Wyo. Stat. Ann. § 30-1-181 on that obligation was addressed, albeit in a slightly different context, by the federal district court for the District of Wyoming in Mid-Continent Casualty Co. v. True Oil Co., Case No. 05-CV-258-J, 2006 WL 6318834 (U.S.D.C.Wyo.2006), referenced in the majority opinion.
[¶ 46] There were two lawsuits in federal court regarding Mid-Continent's obligation to defend and indemnify True for claims asserted by Mr. Van Norman in this case. The first action was initiated by True after Mid-Continent had rejected True's initial demand that Mid-Continent provide a defense and indemnify True for claims made by Mr. Van Norman. Mid-Continent based its denial on its claim that the indemnity provision in True's contract with Pennant "was void as violating public policy of Wyo. Stat. § 80-1-131." Judge Johnson agreed with Mid-Continent and granted its motion for summary judgment. True appealed and the decision was affirmed. According to Judge Johnson: "This Court, and the Tenth Circuit, determined that the indemnity provision whereby Pennant agreed to hold True Oil harmless for True Oil's own negligence arising out of the work to be performed by Pennant had no effect due to Wyo. Stat. § 30-1-131, the Wyoming oilfield anti-indemnity statute."
[¶ 47] Shortly after Judge Johnson entered summary judgment against True, the district court in this action allowed Mr. Van Norman to file his amended complaint. This led to a second round of litigation in federal court. This time, Judge Johnson determined that True was entitled to indemnification for the vicarious liability claims:
The Court need not reiterate all facts and arguments that have been raised and asserted in this litigation further to determine that Mid-Continent's arguments are without merit. Pennant agreed to indemnify True in the MSC. Coverage for this agreement is provided for in the CGL. The agreement to indemnify is void only to the extent that it was one which purported to relieve True Oil from loss of liability caused by True Oil's own negligence. The agreement providing for indemnification from all claims and damages caused by the negligence of others, which would include the claims of vicarious liability in this case, is valid and enforceable under applicable Wyoming law.
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The Tenth Cireuit recognized that were it not for the operation of Wyo. Stat. Ann. § 30-1-131, an insured contract would exist between Pennant and True and-and, accordingly, True Oil would be an additional insured on Pennant's CGL policy with Mid-Continent. True Oil Co. v. Mid-Continent Casualty Co., 178 Fed.Appx. [645], at 650 [ (10th Cir.2006) ]. The Tenth Circuit did not go on, however, to consider whether the contract was valid and en-foreeable to the extent that it did not violate the Wyoming anti-indemnity statute. This Court believes that had the circuit court considered the issue if it had been before that court, it would have reached the same conclusion that this Court reaches here. This Court finds that the contract is invalidated only to the ex*714tent that the agreement is one purporting to relieve True Oil from liability for its own negligence and not from vicarious lability claims brought under a respondeat superi- or theory.
Accordingly, the Court finds that the motion for partial summary judgment filed by True, seeking a determination that it is entitled to seek indemnification for the late-raised allegations of vicarious liability in the Van Norman litigation, should be granted. To the extent that Mid-Continent's motion and responses seek a contrary determination, the request will be denied.
(Footnotes and emphasis omitted.)
[¶ 48] Despite finding for True on its indemnity claim arising from the vicarious liability allegations in the amended complaint, Judge Johnson specifically denied True's claim for attorney fees incurred prior to the filing of the amended complaint:
True has argued that Mid-Continent must pay all costs incurred by True in defending all of this related litigation. This Court disagrees. It is true that Wyoming law requires an insurer to defend an entire action. Shoshone First Bank v. Pacific Employers Ins. Co., 2 P.3d 510 (Wyo.2000). Mid-Continent has tendered a defense to True for the vicarious liability allegations asserted against it in the Van Norman litigation, under a reservation of rights. True urges this Court to determine as a matter of law that True is entitled to recover all costs associated in this litigation, under Shoshone First Bank.
The Court does not agree that Shoshone First Bank compels the result True urges. Shoshone First Bank does state that, "unless a policy between an insured and an insurer provides for allocation of defense costs in the instance in which some claims are covered and some are not, Wyoming will not allow allocation of defense costs from the insurer to the insured." Id., 2 P.3d at 517. In that case, where the policy did not provide coverage for prosecuting a counterclaim, the Wyoming court determined the insurer was not required to assume the expense of prosecuting the insured's counterclaim and permitted the insurer to allocate and recover those costs.
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This case has essentially been presented as two separate pieces of litigation. The Court believes that Mid-Continent is not required to pay the costs incurred by True in the Van Norman litigation prior to the amendment of the complaint, as that was not a matter for which there was coverage and it has been determined that Mid-Continent properly refused to defend. No "apportionment" of covered and non-covered claims is necessary in this case. None of the law cited by True obliges Mid-Continent to pay costs of defending where there was no coverage.
(Emphasis added.) In this case, the district court's decision denying attorney fees for the period prior to the filing of the amended complaint dovetailed with the conclusions reached by Judge Johnson in the federal litigation.
[¶ 49] The majority's decision to reverse the district court and award attorney fees is essentially premised upon "the freedom to contract" and our precedent as reflected in Northwinds of Wyo. v. Phillips Petroleum, 779 P.2d 753 (Wyo.1989) and Mountain Fuel Supply Co. v. Emerson, 578 P.2d 1351 (Wyo.1978). Both cases are clearly distinguishable from the instant case and the "freedom to contract" has limits. Here, the "freedom to contract" is restricted by Wyo. Stat. Ann. § 80-1-131, which specifically provides that agreements to indemnify an entity for its own negligence "are against public policy and are void and unenforceable." Northwinds is inapplicable because this Court was not applying Wyo. Stat. Ann. § 30-1-131 to the indemnity provision at issue.4 In Mountain Fuel Supply, the Court awarded attorney *715fees based upon an indemnity provision that was voided in part because it provided indemnification for the indemnitee's own negligence. However, in Mountain Fuel Supply, the indemnitee faced potential Hability for the negligence of the indemnitor from the inception of the action.5 That did not happen here and both Judge Johnson and the district court rejected True's claims to the contrary. According to Judge Johnson:
True has argued that it and Mid-Continent were aware, as early as November 2001, that a vicarious liability claim might be asserted in the Van Norman litigation. Accepting for purposes of the argument that is so, the fact is that no claim against True Oil for vicarious liability was properly pled in the Van Norman litigation until 2005 after this Court's earlier summary judgment disposition.
In the instant case, the district court reached a similar conclusion. In Exhibit E to True's third party complaint against Pennant, True stated:
We appeared before Judge James this morning to argue True Oil Company's Motion in Limine to prevent the Plaintiff from raising or arguing the issue of True's vicarious liability for any negligence of Pennant and Plaintiff Van Norman's opposition to that motion as well as his Motion to Amend Complaint to add a vicarious liability allegation. The Plaintiff was taking the position that the original Complaint is broad enough to include vicarious liability and argued that True's written demands on Pennant and Mid-Continent in late 2001 reflected that True was at least anticipating a vicarious liability claim.
The Judge heard all of the arguments and determined that the Complaint was not broad enough to include a vicarious liability claim but that justice required that the Plaintiff be allowed to amend his Complaint to allege a respondeat superior relationship between True and Pennant and the allegation that True is therefore, vicariously liable for any negligence of Pennant or its employees. During that same hearing Judge James granted our oral motion to permit True to file a Third-Party Complaint against Pennant pursuant to the terms of the Master Service Contract, seeking to recover any costs, attorneys' fees and judgment against True, if any, based upon True's vicarious liability for Pennant's negligence.6
[¶ 50] In summary, there was no duty to defend or indemnify True for its attorney fees prior to the filing of the amended complaint in 2005. Prior to that time, True was being sued solely for its own negligence. The decision reached by the majority is at odds with the result reached in federal court and this state's public policy as reflected in Wyo. Stat. Ann. § 830-1-181. The district court's decision denying attorney fees prior to the amendment of the complaint should be affirmed.

. It is undisputed that the indemnity agreement at issue in this case is an "agreement ... pertaining to any well for oil, gas or water ... which purport[s] to indemnify the indemmnitee against loss or liability for damages."

. See Northwinds, 779 P.2d at 757 n. 5. "Neither party suggests that this is a case to which Wyo. Stat. § 30-1-131 (1977) applies. Section 30-1-131 embodies the legislative public policy determination that contract provisions indemnifying against loss or liability resulting from one's own negligence in an agreement pertaining to wells for oil, gas, or water or mines for minerals shall be void and unenforceable. We agree that § 30-1-131 has no applicability to the instant case." (Internal citation omitted.)

. Mountain Fuel Supply was decided well before the adoption of comparative fault as reflected in Wyo. Stat. Ann. § 1-1-109. In Mountain Fuel Supply, the indernitee faced potential liability for the full amount of damages because of joint and several liability. See Haderlie v. Sondgeroth, 866 P.2d 703, 708 (Wyo.1993). Prior to the filing of the amended complaint in this case, True faced potential liability only for damages attributable to its own fault. See Wyo. Stat. Ann. § 1-1-109.

. There is no transcript of the hearing on the motion to amend the complaint in the record on appeal. Exhibit E was a March 8, 2005 letter to Pennant from True's counsel.