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CAUSE NO. 2017 48075
TOTAL PETROCHEMICALS & IN THE DISTRICT COURT OF
REFINING USA, INC. and
ACE PROPERTY & CASUALTY
INSURANCE COMPANY
HARRIS COUNTY, TEXAS
KINDER MORGAN PETCOKE, LP and
KINDER MORGAN PETCOKE GP LLC 129th JUDICIAL DISTRICT
AUSE NO. 2017 48075
TOTAL PETROCHEMICALS & IN THE DISTRICT COURT OF
REFINING USA, INC. and
ACE PROPERTY & CASUALTY
INSURANCE COMPANY
HARRIS COUNTY, TEXAS
KINDER MORGAN PETCOKE, LP and
KINDER MORGAN PETCOKE GP LLC thJUDICIAL DISTRICT
CORRECTED FINAL SUMMARY JUDGMENT
ONTHIS DAY the Court heard Plaintiff TOTAL Petrochemicals & Refining USA, Inc.’s
(“TOTAL”) Motion for Final Summary Judgment against defendants Kinder Morgan Petcoke LP
and its general partner, Kinder Morgan Petcoke GP LLC (together “KINDER MORGAN’), filed
onJuly 30, 2019 (“MFSJ”); and KINDER MORGAN’ s Motion for Partial Summary Judgment as
to Damages (“MPSJ,” filed August 13, 2019). Having considered the foregoing motions, together
with the parties’ several replies, sur replies and letters to the Court, the arguments of counsel at
the (Zoom) hearing held on May 5, 2020, and the Court’s prior interlocutory summary judgment
Order
in this matter (entered on August 17, 2019), which granted TOTAL’s and Ace Property &
Casualty Insurance Company’s (“CHUBB”) motions for partial summary judgment on liability,
the undersigned finds and rules as follows:
KINDER MORGAN’s MPS] is hereby DENIED in party. The Court finds, as a
matter
of law, that TOTAL’s damages as asserted herein are direct and not consequential; and,
therefore, KINDER MORGAN’s affirmative defense based upon the contractual exclusion of
liability for consequential damages in Article 23 of the Crane Contract (“the Contract”) fails as a
matter of law.
TOTAL’s MFSJ is hereby GRANTED in part. Specifically, the Court finds that
(as previously ruled in the August 17, 2019 interlocutory Order) KINDER MORGAN breached
the Contract by:
Failing to carry the ired minimum insurance policies (not less than $1 million
Commercial General Liability [CGL] and not less than $5 million follow form
excess (umbrella) liability) in accordance with the terms of the Contract; and by
Failing to make TOTAL and its employees additional insureds on the Contract’s
required minimum insurance policies.
KINDER MORGAN’s breaches of the Contract caused TOTAL damages by
depriving TOTAL and its employees of primary and non contributory coverage of the underlying
claims arising out of the fatal injury of Gary Counts. Further, pursuant to its insurance policy
issued to TOTAL, CHUBB is subrogated
to TOTAL’s right to recover for KINDER MORGAN’ s
contractual breaches
as set forth herein.
The Court further finds that TOTAL’s damages for the foregoing breaches of
contract are limited to the $6 million minimum policy limits required
by the tenms of the Contract.
Specifically, the Court adopts KINDER MORGAN ' s interpretation of the contract’ s terms on this
point because, without limitation: a) its obligation to provide insurance coverage extends (per
Article 9 of the Contract) to the “insurance coverage as set forth on Exhibit ‘X’”; (b) the
requirement
to name TOTAL an additional insured likewise relates to those policies “[a]s outlined
in greater detail in Exhibit
X” and, per Section 1.3 of Exhibit
X, “to the extent required
by the
Contract...”; (c) Exhibit X references neither KINDER MORGAN’s $10 million self insured
retention nor its $25 million excess (umbrella) liability coverage (which, undisputedly, is not
“follow fot of the required CGL coverage); and (d) Section 1.3(b) of ExhibitX clarifies that it
is the “coverage provided to the Additional Insureds by [KINDER MORGAN’ s] insurance under
this Contract’ that must be primary
and non contributory. (Emphasis added.)
TOTAL’
s interpretation of the Crane Contracts additional requirements effectively
reads the prefatory phrase “TaJs outlined in greater detail in Exhibit X” out of the contract,
contrary
to Texas law. The Court further finds that Article 9’s phrase, “whether required hereby,”
modifies the immediately preceding exclusion respecting Worker’ s Compensation and Employer’
[sic] Liability coverages rather than the more distance reference to “all insurance carried by
[KINDER MORGAN)” [as outlined in Exhibit X].
Accordingly, and to the extent described above, KINDER MORGAN’s MPS] is
hereby GRANTED in part, and TOTAL’s MFSJ is hereby DENIED in part, with respect
to the
question whether TOTAL may recover more than $6 million on TOTAL’s breach of contract
claims against KINDER MORGAN as found by the Court.
Itis, accordingly, ORDERED, ADJUDGED and DECREED that:
TOTAL and CHUBB shall recover from KINDER MORGAN actual damages in
the amount of $1,000,000.00 plus prejudgment at 5% per annum as and from
August 3, 2016 to the date of this Judgment; and
TOTAL and CHUBB shall have and recover from KINDER MORGAN post
judgment interest on the above sums awarded herein at a rate of 5% per annum. as
and from the date ofthis Judgment until the date said sums are paid
in full.
Any relief requested by any party that is not granted herein is hereby DENIED.
This is a Final Judgment
that is intended to dispose
of all claims and all parties.
SIGNED this day of
PRESIDING JUDGE
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