The opinion
ACCEPTED
01-15-00867-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
11/12/2015 8:00:39 PM
CHRISTOPHER PRINE
CLERK
NO. 01-15-00867-CV
FILED IN
FIRST COURT OF APPEALS 1st COURT OF APPEALS
HOUSTON, TEXAS
HOUSTON, TEXAS 11/12/2015 8:00:39 PM
CHRISTOPHER A. PRINE
Clerk
PENN VIRGINIA OIL & GAS GP, L.L.C. & PENN VIRGINIA OIL AND GAS, L.P.,
Appellants.
v.
ALFREDO DE LA GARZA, INDIVIDUALLY AND AS NEXT FRIEND FOR XXXXXX
XX XX XXXXX AND XXXXXXXX XX XX XXXXX, MINORS
&
JOHN PAUL ADAME, INDIVIDUALLY AND AS NEXT FRIEND OF XXXXXXXXX
XXXXXX XXXXX, XXXX XXXX XXXXX XXX, AND XXXX XXXXXXXX XXXXX,
MINORS,
Appellees
On Appeal from the 215th Judicial District Court,
Harris County, Texas
Cause No. 2014-42519
APPELLEES' MOTION TO DISMISS FOR LACK OF JURISDICTION
TO THE HONORABLE JUSTICES OF THE FIRST COURT OF APPEALS:
NOW COMES Appellee Alfredo De La Garza, individually and as next friend for
XXXXXX XX XX XXXXX AND XXXXXXXX XX XX XXXXX, minors, and files this
Appellees' Motion to Dismiss Appellants, Penn Virginia Oil & Gas GP, LLC and Penn Virginia
Oil & Gas L.P. 's appeal, and in support thereof would respectfully show the Court the following:
Introduction & Summary of Motion
1. Appellants are Penn Virginia Oil & Gas GP, LLC and Penn Virginia Oil & Gas L.P. Appellees
are Alfredo De La Garza, individually and as next friend for XXXXXX XX XX XXXXX AND
XXXXXXXX XX XX XXXXX, minors.
2. Appellants filed their Motion to Compel Arbitration and to Abate on June 18, 2015. A copy of
that motion is attached as Exhibit "A". Appellees filed their response to appellants' Motion
to Compel Arbitration and to Abate on July 30, 2015. A copy of that response is attached as
Exhibit "B". On August 26, 2015, appellees filed their First Amended Response to appellants'
Motion to Compel Arbitration and to Abate. A copy of this amended response is attached as
"Exhibit "C". On September 10, 2015, appellants filed their reply to appellees' Response to
Motion to Compel Arbitration and to Abate. A copy of appellants' reply is attached as Exhibit
"D". On September 11, 2015, appellees filed their first supplement to their First Amended
Response to appellants' Motion to Compel Arbitration and to Abate. A copy of this
supplement is attached as Exhibit "E". The hearing on appellants' Motion to Compel
Arbitration and to Abate was initially set on July 31,2015, but was reset at appellees' request
for September 11,2015 with agreement of counsel for appellants. On September 11,2015, the
trial court heard appellants' Motion to Compel Arbitration and to Abate. Appellants' Motion
to Compel Arbitration and to Abate was denied by order dated September 11, 2015. See
Exhibit "F".
3. Appellants filed a Motion for Reconsideration of Order Denying Motion to Compel Arbitration
on October 1, 2015. A copy of this motion is attached as Exhibit "G". Appellees opposed
this motion and objected to the. affidavit of Ernest Nelson, attached to appellants' Motion for
Reconsideration of Order Denying Motion to Compel Arbitration. A copy of appellees'
response is attached as Exhibit "H". On October 9, 2015, appellants filed their reply to
appellees' Response to Motion for Reconsideration of Order Denying Motion to Compel
Arbitration. A copy of appellants' reply is attached as Exhibit "1". The Hon. Elaine Palmer,
Judge of the 215th District Court denied appellants' Motion for Reconsideration of Order
Denying Motion to Compel Arbitration on October 12, 2015. A copy of the order is attached
as Exhibit "J".
4. Appellants filed their Notice of Appeal on October 13, 2015. A copy of this notice is attached
hereto as Exhibit "K". In appellants' Notice of Appeal, they seek to appeal the court's order
denying appellants' Motion to Compel Arbitration and to Abate signed on September 11, 2015.
Appellants also seek to appeal the order denying defendant's motion for reconsideration of the
order denying the motion to compel arbitration signed by Judge Palmer on October 12, 2015.
5. On October 14, 2015, appellants filed their Motion for Extension of Time to File Notice of
Appeal.
6. The notice of appeal was untimely. The facts averred to by appellants' counsel fail to
reasonably explain the need for an extension.
7. The order denying appellants' Motion for Reconsideration of Order Denying Motion to
Compel Arbitration is not an appealable order.
Argument and Authorities
8. This is an accelerated appeal pursuant to Tex. R. App. P. 28.1. Perfecting the appeal is
completed by timely filing notice of appeal within 20 days pursuant to Tex. R. App. P. 28.1(b)
and 26.1(b). Appellants' notice of appeal was filed 33 days after Judge Palmer's September
11, 2015 order was signed and is untimely. The notice should have been filed on October 1,
2015.
9. The facts alleged in appellants' motion and supported by appellants' affidavit attached to their
motion for extension of time do not reasonably explain the need for extension as required by
Tex. R. App. P. 10.5(b)(l)(C).
10. The reply filed by appellants in response to Appellees' Response to Appellants' Motion for
Extension of Time to File Notice of Appeal fails to address Thomas J. Smith's knowledge of
the deadline for filing the notice of appeal in an accelerated appeal. The verification of Kelly
C. Hartmann filed by appellants was not timely filed within fifteen days as required by Tex.
R. App. P. 26.3 and Tex. R. App. P. 10.5(b).
11. Appellants also seek to appeal the October 12, 2015 order denying appellants' motion for
reconsideration of the trial court's order denying appellants' motion for arbitration and to
abate. This is a non-appealable order. Tex. Civ. Prac. & Rem. Code§ 51.016. 9 U.S.C. § 16(a).
The motion for reconsideration also did not extend the appellate timetable. Hydro
Management Systems, LLC v. Jalin, Ltd., No. 04-09-00813-CV, 2010 WL 1817813 (Tex.
App.-San Antonio May 5, 2010, no pet. h.). See also Nabors Well Servs. Co. v. Aviles, No.
06-10-00018-CV, 2010 WL 2680087, at *1-2 (Tex. App. July 7, 2010, no pet. h.).
12. Tex. Civ. Prac. & Rem. Code§ 51.016. provides that "[i]n a matter subject to the [FAA], a
person may take an appeal or writ of error to the court of appeals from the judgment or
interlocutory order of a district court, county court at law, or county court under the same
circumstances that an appeal from a federal district court's order or decision would be permitted
by 9 U.S.C. Section 16." Tex. Civ. Prac. & Rem. Code Ann.§ 51.016.
13. Section 16(a) of the FAA, titled "Appeals," provides, in relevant part, as follows:
*2 (a) An appeal may be taken from(1)-
(1) an order-
(A) refusing a stay of any action under section 3 of this title,
(B) denying a petition under section 4 of this title to order arbitration to proceed,
(C) denying an application under section 206 of this title to compel arbitration,
(D) confirming or denying confirmation of an award or partial award, or
(E) modifying, correcting, or vacating an award.
9 U.S.C. § 16(a) (2015).
14. Lucchese Boot Co. v. Licon, 388 S.W.3d 365 (Tex. App. El Paso 2012, no pet. h.) is
distinguishable because it dealt with an amended motion to compel arbitration on an arbitration
agreement which had not previously been offered as a basis for its original motion to compel
arbitration. See also: Nazareth Hall Nursing Ctr. v. Castro, 374 S.W.3d 590 (Tex. App. El
Paso 2012, no pet. h.) (following Hydro Mgmt. Sys. LLC. and distinguishing Lucchese).
Prayer
Wherefore, premises considered, appellees, Alfredo De la Garza, XXXXXX XX XX
XXXXX and XXXXXXXX XX XX XXXXX, minors, pray that this Court dismiss appellants'
appeal for want of jurisdiction pursuant to Tex. R. App. P. 42.3(a), and for such other and further
relief to which they may be entitled, whether in law or in equity.
Respectfully submitted,
JOHN DAVID HART
State Bar No. 09147700
THE LAW OFFICES OF JOHN DAVID HART
Wells Fargo Tower
201 Main Street, Suite 1720
Fort Worth, Texas 76102
(817) 870-2102 - phone
(817) 332-5858 - facsimile
j ohnhart@hartlaw. com
ATTORNEY FOR APPELLEES, ALFREDO DE
LA GARZA, INDIVIDUALLY AND AS NEXT
FRIEND FOR XXXXXXX XX XX XXXXX and
XXXXXXXX XX XX XXXXX, MINORS
CERTIFICATE OF CONFERENCE
Pursuant to Tex. R. App. P. 10.l(a)(5), I conferred with counsel for Appellants on October
21, 2015 who have indicated that they are opposed to this Motion.
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a copy of the above and foregoing instrument has
been forwarded on this the 12th day of November, 2015 to the following attorneys of record
pursuant to Tex. R. App. P. 9.5:
VIA CERTIFIED MAIL & E-MAIL VIA CERTIFIED MAIL & E-MAIL
Mr. Thomas J. Smith Mr. J.J. Knauff
Mr. Kelly C. Hartmann The Miller Law Firm
Ms. Alexis M. Butler Hester Turtle Creek Centre
Galloway, Johnson, Tompkins, 3811 Turtle Creek Blvd., Ste. 1950
Burr & Smith Dallas, Texas 75219
1301 McKinney, Suite 400 Attorney for Third Party Defendant
Houston, Texas 77010 Penn Virginia MC Energy, LLC
Attorneys for Appellants, Penn Virginia
Oil & Gas GP, LLC and Penn Virginia VIA CERTIFIED MAIL & E-MAIL
Oil & Gas, L.P. Mr. BritT. Brown
Mr. Benjamin A. Escobar, Jr.
VIA CERTIFIED MAIL & E-MAIL Beirne, Maynard & Parsons, L.L.P.
Mr. J. Javier Gutierrez 1300 Post Oak Blvd., Suite 2500
Ms. Ana Laura Gutierrez Houston, Texas 77056
The Gutierrez Law Firm, Inc. Attorney for Third Party Plaintiff
700 East Third Street Cudd Pressure Control, Inc.
Alice, Texas 78332
Attorneys for Appellees, John Paul Adame,
Individually and as Next Friend for
x:xxxxxxxx x:xxxx.x xxxxx, .x:xxx
.X:XXX .XXXX.X ~ and .X:XXX
.X'XXXXXX"X XXXXX, minors
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EXHIBIT "A"
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7/30/2015 7:58:21 AM
Chris Daniel - District Clerk Harris County
Envelope No. 6284037
By: JEANETTA SPENCER
Filed: 7/30/2015 7:58:21 AM
CAUSE NO. 2014-42519
ALFREDO DE LA GARZA, § IN THE DISTRICT COURT OF
INDIVIDUALLY and AS NEXT FRIEND §
FOR REDACTED and §
REDACTED , minors §
§
v. § HARRIS COUNTY, TEXAS
§
PENN VIRGINIA OIL & GAS, L.P., PENN §
VIRGINIA OIL & GAS GP LLC, §
MIKE FERGUSON, TRIFECTA OILFIELD §
SERVICES, LLC, CUDD PRESSURE §
CONTROL, INC., ROYWELL § 21Sth JUDICIAL DISTRICT
SERVICES, INC., and OAKS PERSONNEL §
SERVICES, INC. d/b/a THE OAKS GROUP §
PLAINTIFFS' RESPONSE TO DEFENDANTS, PENN VIRGINIA OIL & GAS, L.P.
AND PENN VIRGINIA OIL & GAS GP LLC'S MOTION TO COMPEL ARBITRATION
AND TO ABATE
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COMES Plaintiff Alfredo De La Garza, individually and as next friend for REDA
RED
CTED
ACT
REDACTED ED
minors, and files this Plaintiffs' Response to Defendants,
Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP, LLC's Motion to Compel
Arbitration and to Abate, and in support thereof would respectfully show the Court the following:
I. SUMMARY OF ARGUMENT
There is no valid agreement to arbitrate between Plaintiff Alfredo De La Garza and
Defendants Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC (hereinafter
referred to collectively as the Penn Virginia defendants). The incident made the basis of this
lawsuit occurred on April 29, 2014 on the Welhausen A2H well in Lavaca County, Texas. The
work done between Nabors Completion & Production Services Co. (hereinafter referred to as
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 1
Motion to Compel Arbitration and to Abate
EXHIBIT "B"
"NCPS"), and Penn V.irginia Oil & Gas, L.P., the operator of the well, was performed pursuant to
a Master Service Contract (hereinafter referred to as the "MSC") dated March 28, 2013. A copy
of this MSC is attached as Exhibit "A". This MSC does not reference Nabors Industries, Inc.'s
Dispute Resolution Program (hereinafter referred to as the "DRP"), and does not provide that either
Penn Virginia Oil & Gas, L.P. or Penn Virginia Oil & Gas GP LLC is an "electing entity" or would
participate in Nabors Industries, Inc~'s DRP. A copy of the DRP is attached as Exhibit "B". The
Penn Virginia defendants' argument that Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil &
Gas GP LLC are "electing entity[ies ]"under the DRP is not a valid argument. The Penn Virginia
defendants rely on a 2008 drilling contract between Penn Virginia Oil & Gas, L.P. and Nabors
Drilling USA, LP for a well in Jefferson County, Texas, attached as Exhibit "C", and a 2010
drilling contract between Penn Virginia MC Energy, LLC and Nabors Drilling USA, LP for a well
in Oklahoma, attached as Exhibit "D", as the basis for their argument that they were an "electing
entity" under the Nabors Industries, Inc.'s DRP. Both of these contracts were only valid for the
term for completion of operations for drilling those wells. Those contracts did not control any of
the work done on the Welhausen A2H well or the relationship between NCPS and the Penn
Virginia entities for the work done on the Welhausen A2H well in April, 2014.
The drilling contracts relied on by the Penn Virginia defendants only apply to "pr~sent and
former" employees and applicants ofNabors' entities at the time of the contracts. Plaintiff Alfredo
De La Garza was not a "present or former" employee of any Nabors entity as of 2008 or 201 0, as
noted in Keith Nicholson's affidavit, attached as Exhibit "E".
Furthermore, arbitration cannot be compelled in this matter because claims asserted by
Plaintiffs Alfredo De La do not fall within the scope of the DRP and its arbitration provisions.
Additionally, Defendants have failed to establish that Plaintiffs REDACTED ,
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 2
Motion to Compel Arbitration and to Abate
minors, are subject to any valid arbitration agreement. Plaintiffs further contend that arbitration
should not be compelled in this matter because Defendants have waived any right to compel
arbitration in this matter.
For the foregoing reasons, Plaintiffs respectfully request that the Penn Virginia defendants'
Motion to Compel Arbitration and to Abate be denied. In the alternative, Plaintiffs request that
their continuance of Defendants' motion be granted; that they be allowed to conduct discovery as
to arbitrability; that they be allowed to participate in a full evidentiary hearing as to the Penn
Virginia defendants' Motion to Compel Arbitration and to Abate; and that upon hearing the
arguments and evidence, that Defendants' Motion to Compel Arbitration and to Abate be denied.
Plaintiffs request that their claims against Defendant Mike Ferguson and Defendant Oaks
Personnel Services, Inc. d/b/a The Oaks Group be severed from any claims against the Penn
Virginia defendants and that these claims be tried on October 19, 2015. While Defendant Mike
Ferguson has pled for arbitration, he has not filed a motion for arbitration, a notice of arbitration,
nor has he joined in the Penn Virginia defendants' motion for arbitration. Defendant Oaks
Personnel Services, Inc. d/b/a The Oaks Group has not asserted a claim or plead that it is entitled
to arbitration in connection with Plaintiffs' claims.
II. INTRODUCTION & FACTUAL BACKGROUND
On April29, 2014, Plaintiff Alfredo De La Garza was an employee ofNabors Completion
& Production Services Co. (hereinafter referred to as "NCPS"). NCPS is a subsidiary of Nabors
Industries, Inc. On this date, Plaintiff was working on Nabors Rig No. 1480, outside of Shiner,
Texas. Penn Virginia Oil & Gas, L.P. was the operator of the well and was directing workover and
completion operations on the well.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 3
Motion to Compel Arbitration and to Abate
The well service operations on the W elhausen A2H well were being conducted pursuant to
a MSC between Penn Virginia Oil & Gas, L.P. and NCPS dated March 28, 2013. The MSC is
attached to this response as Exhibit "A". By its terms, the MSC supersedes all prior agreements
between the parties. The agreement states in part that, "This Contract shall become effective the
date first hereinabove written and shall supersede all prior service contracts between the parties
hereto with respect to new work or services commenced during the term of this Contract to be
performed in connection with this Contract." Exhibit "A", page 2. There is no reference in the
MSC to Nabors Industries, Inc.'s DRP. The MSC does not contain an agreement that either of the
Penn Virginia defendants and NCPS agree that Penn Virginia Oil & Gas, L.P. or Penn Virginia
Oil & Gas GP LLC will be an "electing entity" in Nabors Industries, Inc.'s DRP.
During the operations, there was a pressure control failure that caused senous and
permanent injuries to Plaintiff Alfredo De La Garza. As a result of the serious, permanent, and
disabling injuries to Plaintiff Alfredo De La Garza, minors Plaintiffs REDACTED
have suffered a loss of consortium.
Plaintiffs filed this action against the Penn Virginia defendants on July 24. 2014. A copy
of this petition is attached as Exhibit "F". Plaintiffs' filed their First Amended Original Petition
on September 8, 2014. A copy of Plaintiffs' First Amended Original Petition is attached as Exhibit
"G". Plaintiffs filed their Second Amended Original Petition on October 1, 2014. A copy is of
this petition is attached as Exhibit "H".
On June 18, 2015, the Penn Virginia defendants filed their Motion to Compel Arbitration
and to Abate. A copy of the Nabors Industries, Inc.'s DRP is attached as Exhibit "B". In this
motion, the Penn Virginia defendants contend that Plaintiffs' claims against Defendants fall within
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 4
Motion to Compel Arbitration and to Abate
the scope of a valid arbitration agreement governed by Nabors Industries, Inc.'s DRP and the
Federal Arbitration Act.
The Nabors' DRP states that"[t]he Program is designed to provide a means for the quick,
fair, accessible, and inexpensive resolution of Disputes between the Company and the Company's
present and former Employees and Applicants for employment related to and arising out of a
current, former, or potential employment relationship with the Company." Exhibit "B" at p. 2.
Nabors' DRP further provides the following definitions:
"'Company' means Sponsor and every direct or indirect subsidiary (whether a corporation,
limited liability company, company partnership or other legal entity of Sponsor, any
Electing Entity ... provided, however, that in the case of an Electing Entity, "Company"
shall include the Electing Entity only to the extent provided in the Electing Entity's
agreement to be bound by the Program."
" 'Dispute' means all legal and equitable claims, demand, and controversies, of whatever
nature or kind, whether in contract, tort, under statute or regulation, or some other law,
between persons bound by the Program or by agreement to resolve Disputes under the
Program, or between a person bound by the Program and a person or entity otherwise
entitled to its benefits, including, but not limited to, any matters with respect to: ... any
personal injury allegedly incurred in or about a Company workplace or in the course and
scope of an Employee's employment."
" 'Electing Entity' means any legal entity that has agreed to be bound by the Program as
provided herein."
"'Employee' means any person who is or has been in the employment of the Company on
or after the effective date of this Program ... "
"'Party' means, with respect to a particular Dispute, affected person and/or entities bound
by this Program."
" 'Sponsor' means Nabors Industries, Inc., a Delaware corporation."
!d. at pp. 2-4.
As to "Electing Entities", the Nabors' DRP provides:"[ c]orporations or other.legal entities,
not otherwise Parties, may elect to be bound by this Program by written agreement with Sponsor."
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 5
Motion to Compel Arbitration and to Abate
I d. at p. 7. The DRP further provides that: "[ e]lection may be made only as to some types of
Disputes, or only as to some persons, in the discretion of Electing Entity." Id.
The Penn Virginia defendants rely on the 2008 International Association of Drilling
Contractors Drilling Bid Proposal and Daywork Drilling Contract- U.S. (hereinafter referred to
as the "2008 drilling contract"), attached as Exhibit "C". NCPS was not a party to this contract.
The 2008 drilling contract between Penn Virginia Oil & Gas, L.P. and NaborsDrilling USA, LP
was only in force and effect until drilling operations were completed for the well which was being
drilled in Jefferson County, Texas in 2008. The term of that agreement is defined in Paragraph 6.1:
"Duration of Contract: This Contract shall remain in full force and effect until drilling
operations are con1pleted on the well or v1ells specified in Paragraph 1 above, or for a term
of , commencing on the date specified in Paragraph 2 above." Exhibit "C", p. 1.
By its terms, the provisions relied on by the Penn Virginia defendants relating to Nabors
Industries, Inc.'s DRP only apply to "the present and former Employees and Applicants ofNabors"
as of the date of this drilling contract in 2008:
"Operator, its parent, subsidiary and affiliated corporations, as well as the employees,
officers and directors of each (collectively, "Operator") is cognizant of the Nabors Dispute
Resolution Program and wishes to become an Electing Entity, as defined in that Program.
Accordingly, Operator and Nabors Industries, Inc. ("Nabors") hereby agree that Operator
is an Electing Entity as to all Disputes between Operator and the present and former
Employees and Applicants of Nabors pursuant to the Nabors Dispute Resolution
Program as it currently exists and as maybe amended from time to time [emphasis added].
In the event the Program is amended, Nabors agrees to provide a copy of the amendment(s)
to Operator. Operator may withdraw this election to participate in the Program at any time
by giving notice of such withdrawal to Nabors, such revocation to be effective with respect
to any claims not yet instituted as of the date of revocation. Operator understands that it is
bound by the terms of the Program with respect to all Disputes with Nabors employees,
regardless of whether such Dispute is initiated by the employee or by Operator. Operator
and Nabors acknowledge that the Program does not apply to disputes between Operator
and Nabors and that the Program does not alter the terms of any indemnification agreement
between them." Exhibit C, page 1 of the 2008 drilling contract's Exhibit "C": Contractors
Special Provisions.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 6
Motion to Compel Arbitration and to Abate
The Penn Virginia defendants also rely on the 2010 International Association of Drilling
Contractors Drilling Bid Proposal and Daywork Drilling Contract- U.S. (hereinafter referred to
as the "2008 drilling contract"), attached as Exhibit "D". NCPS was also not a party to this
contract. The 2010 drilling contract between Penn Virginia MC Energy, LLC and Nabors Drilling
USA, LP was only in force and effect until drilling operations were completed for the well which
was being drilled in Logan County, Oklahoma in 2010. The term of that agreement is defined in
Paragraph 6.1:
"Duration of Contract: This Contract shall remain in full force and effect until drilling
operations are completed on the well or 'Neils specified in Paragraph 1 above, or fur a term
of , commencing on the date specified in Paragraph 2 above." Exhibit D, page 1.
By its terms, the provisions relied on by the Penn Virginia defendants relating to Nabors
Industries, Inc.'s DRP only apply to "the present and former Employees and Applicants ofNabors"
as ofthe date of this agreement in 2010:
"Operator, its parent, subsidiary and affiliated corporations, as well as the employees,
officers and directors of each (collectively, "Operator") is cognizant of theN abors Dispute
Resolution Program and wishes to become an Electing Entity, as defined in that Program.
Accordingly, Operator and Nabors Industries, Inc. ("Nabors") hereby agree that Operator
is an Electing Entity as to all Disputes between Operator and the present and former
Employees and Applicants of Nabors pursuant to the Nabors Dispute Resolution
Program as it currently exists and as may be amended from time to time [emphasis added].
In the event the Program is amended, Nabors agrees to provide a copy of the amendment(s)
to Operator. Operator may withdraw this election to participate in the Program at any time
by giving notice of such withdrawal to Nabors, such revocation to be effective with respect
to any claims not yet instituted as of the date of revocation. Operator understands that it is
bound by the terms of the Program with respect to all Disputes with Nabors employees,
regardless of whether such Dispute is initiated by the employee or by Operator. Operator
and Nabors acknowledge that the Program does not apply to disputes between Operator
and Nabors and that the Program does not alter the terms of any indemnification agreement
between them." Exhibit D, page 1 of the 2010 drilling contract's Exhibit "C": Contractors
Special Provisions.
Plaintiff Alfredo De La Garza was not a present or former employee ofNCPS in 2008 or
in 2010. Plaintiff Alfredo De La Garza initially applied for employment with NCPS on July 16,
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 7
Motion to Compel Arbitration and to Abate
2013. Mr. De La Garza's application is attached as Exhibit "1". Further, per Mr. Keith
Nicholson's sworn affidavit, Mr. De La Garza executed a document entitled "Application for
Hourly and Daily Employment." His affidavit is attached as Exhibit "E".
There is no written agreement purporting to bind the minor Plaintiffs REDACTED
to arbitration.
There is no written agreement purporting to bind Defendant Mike Ferguson or Defendant
Oaks Personnel Services, Inc. d/b/a The Oaks Group to arbitration.
III.APPLICABLE LEGAL STANDARDS
Under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, et seq., a party seeking to compel
arbitration must first establish the existence of an arbitration agreement subject to the FAA. In re
First Merit Bank, NA., 52 S.W.3d 749, 753 (Tex. 2001) (orig. proceeding). If one party denies
that there is a binding arbitration agreement, the trial court may summarily decide whether to
compel arbitration on the basis of uncontroverted affidavits, pleadings, discovery, and
stipulations. Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 269 (Tex.1992) (orig. proceeding).
However, if the material facts necessary to determine the issue are controverted, by an opposing
affidavit or otherwise admissible evidence, the trial court must conduct an evidentiary hearing to
determine the disputed material facts. Id.; TEX. CIV. PRAC. & REM. CODE§ 171.021.
When deciding whether the parties agreed to arbitrate under the FAA, court should apply
ordinary state law principles regarding the formation of contract. In reD. Wilson Canst. Co., 196
S.W.3d 774,781 (Tex. 2006); 9 U.S.C. § 1, et. seq.; TEX. CIV. PRAC. & REM. CODE§ 171.001
et seq. An arbitration agreement must meet all the requisite contract elements, and even though
there is a strong presumption favoring arbitration, the presumption only arises after the part seeking
to compel arbitration proves that a valid arbitration agreement exists. J.M Davidson, Inc. v.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 8
Motion to Compel Arbitration and to Abate
Webster, 128 S.W.3d 223, 227 (Tex. 2003); In re Halliburton, 80 S.W.3d 566, 570 (Tex. 2002).
The policy in favor of arbitration agreements does not apply when a court is examining the
threshold question of whether an arbitration agreement exists. Granite Rock Co. v. Int 'l
Brotherhood ofTeamsters, 130 S. Ct. 2847 (2010); In re Morgan Stanley & Co., 293 S.W.3d 182,
183 (Tex. 2009). If the trial court finds there is a valid agreement to arbitrate, the burden shifts to
the party opposing arbitration to prove his defenses. JM Davidson, Inc., 128 S.W.3d at 227. An
agreement to arbitrate may be avoided on a ground that exists at law or in equity for the revocation
of a contract. TEX. CIV. PRAC. & REM. CODE§ 171.001; Rachal v. Reitz, 403 S.W.3d 840, 843
(Tex. 2013).
Once a valid agreement to arbitrate has been established, the court must further determine
whether the non-movant's claims fall within the scope of the arbitration agreement. In re First
Merit Bank, NA., 52 S.W.3d at 753. Federal policy embodied in the FAA favors agreements to
arbitrate and courts must resolve any doubts about an arbitration agreement's scope in favor of
arbitration. !d. at 753. But those public policies favoring arbitration do not extend to any favorable
inclination one way or the other with regard to the questions of who is bound by the arbitration
agreement because the purpose of the FAA is to "make arbitration agreement as enforceable as
other contracts, but not more so." In re SSP Partners d/b/a Circle K and Jose Almaguer, 241
S.W.3d 162, 167-168 (Tex. App. Corpus Christi 2007, orig. proceeding [mand. denied]).
IV. ARGUMENT & AUTHORITIES
A. Defendants have failed to prove the existence of an agreement to arbitrate between
Plaintiff Alfredo De La Garza and the Penn Virginia defendants.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 9
Motion to Compel Arbitration and to Abate
The Court cannot properly compel arbitration of Plaintiffs claims in this matter because the
Penn Virginia defendants have failed to prove that an agreement to arbitrate exists between either
Penn Virginia entity and Plaintiffs.
In Defendants' Motion to Compel Arbitration, there is no contention that there is any direct
arbitration agreement between Plaintiffs and the Penn Virginia defendants. Rather, the Penn
Virginia defendants rely entirely on Nabors' Dispute Resolution Program relating to Plaintiff
Alfredo De La Garza's employment with Nabors Industries, Inc.'s subsidiary, NCPS.
The initial burden of the party seeking to compel arbitration - to establish the arbitration
agreement's existence includes proving the entity seeking to enforce the arbitration agreement
was a party to it or had the right to enforce the agreement notwithstanding. See Pepe Int 'l Dev. Co.
v. Pub Brewing Co., 915 S.W.2d 925, 931 (Tex. App.- Houston [1st Dist.] 1996, no writ).
The MSC specifically provides that it will govern work by and among Penn Virginia Oil
& Gas Corporation, Penn Virginia Oil & Gas, L.P., Penn Virginia MC Energy L.L.C., and Nabors
Completion & Production Services Co. The parties to that agreement did not choose to include
any reference to the Nabors Industries, Inc.'s DRP. The contract did not include any agreement
that either Penn Virginia defendant would be an "electing entity" in the Nabors Industries, Inc.'s
DRP. As a matter of law, there is no agreement to arbitrate between Plaintiffs and the Penn
Virginia defendants based on the MSC.
Despite their contentions, the Penn Virginia defendants have not established their right to
enforce any arbitration agreement that may exist between Plaintiff Alfredo De La Garza and
NCPS. The Penn Virginia defendants cannot avail themselves of the Nabors Dispute Resolution
Program as an "Electing Entity", as any agreement entered into by Defendants to be bound by
Nabors' DRP fails by the express terms of the DRP.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 10
Motion to Compel Arbitration and to Abate
As dictated by the terms of Nabors' DRP, an Electing Entity "may elect to be bound by
this Program by written agreement with Sponsor." Id. atp. 7. The Sponsor under the DRP is Nabors
Industries, Inc. Id. at p. 4. Although Defendants state that it is an "undisputed fact" that they are
Electing Entities ofN abors' DRP, no written agreement between the Penn Virginia defendants and
Nabors Industries, Inc., as a signatory, is attached to Defendants' motion establishing such status.
Instead, Defendants attached two "IADC contracts" to its motions: (1) a 2008 contract executed
by Defendant Penn Virginia Oil & Gas, LP and Nabors Drilling ysA, LP. Exhibit "C"; and, (2)
a 2010 contract executed by Penn Virginia MC Energy and Nabors Drilling USA, LP. Exhibit
"D". Neither contract establishes a written agreement with Nabors Industries, Inc., the Sponsor of
Nabors' DRP; therefore, the Penn Virginia defendants cannot take advantage of any agreement to
arbitrate that may exist between Plaintiff Alfredo De La Garza and his employer NCPS because
Defendants do not qualify as an Electing Entity under the Program. Each of these contracts would
certainly have expired by its own terms years before the incident made the basis of the suit
occurred.
Plaintiffs should not be compelled to arbitrate their claims against the Penn Virginia
defendants in absence of an agreement to do so. Trico Marine Servs., Inc. v. Stewart & Stevenson
Technical Services, Inc., 73 S.W.3d 545, 548 {Tex. App. - Houston [1st Dist.] 2002, orig.
proceeding [mand. denied]). The burden is upon the party seeking to compel arbitration to establish
the existence of an arbitration agreement. In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571,
573 (Tex. 1999). Because Defendants have failed to meet this burden, Defendant's Motion to
Compel Arbitration and to Abate should be denied as to the claims of Plaintiffs Alfredo De La
Garza and minor Plaintiffs REDACTED .
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 11
Motion to Compel Arbitration and to Abate
B. Defendants have failed to establish that Plaintiff Alfredo De La Garza's claims are
within the scope of any arbitration agreement.
Defendants have failed to establish that Plaintiff Alfredo De La Garza's claims fall within
the scope of any agreement to arbitrate.
If a valid arbitration agreement is found to exist, the Court would then need to determine
if the claims asserted by Plaintiffs fall within the scope of the arbitration agreement. Personal Sec.
& Safety Sys., Inc. v. Motorola, Inc., 297 F.3d 388, 392 (5th Cir. 2002); In re Oakwood Mobile
Homes, Inc., 987 S.W.2d at 573. Only matters subject to the covenant of arbitration should be
arbitrated. See Wee Tots Pediatrics, P.A. v. Morohunfola, 268 S.W.3d 784, 793 (Tex. App.-Fort
Worth 2008, no pet. & orig. proceeding). In determining whether a claim falls within the scope of
an arbitration agreement, looks at the facts alleged, rather than the legal causes of actions
presented, and considers whether the facts touch matters covered by the underlying arbitration
agreement. Rachal v. Reitz, 403 S.W.3d at 846. Here, Plaintiff Alfredo De La Garza's claims are·
outside the express scope of the purported arbitration agreement and elections allegedly made by
the Penn Virginia defendants in 2008 and 2010.
In Defendants' Motion to Compel Arbitration, the Penn Virginia defendants contend that
Plaintiff Alfredo De La Garza's claims "clearly fall within the scope of the arbitration agreement"
because "the DRP clearly and unequivocally states that it applies to and binds the Company, each
Employee and Applicant." Defendants argue that Plaintiff Alfredo De La Garza was an employee
of NCPS at the time of the incident giving rise to Plaintiffs' claims and therefore is subject to
Nabors' DRP. Defendants' contentions fail to take into account the specific terms of the election
made by Defendants its written agreements to be bound by the Nabors' DRP. Specifically, in the
agreements the Penn Virginia defendants elected to be bound by Nabors' DRP as to current and
former employees of Nabors Industries, Inc.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 12
Motion to Compel Arbitration and to Abate
In their motion, Defendants attached two "IADC contracts": (1) the 2008 contact executed
by Defendant Penn Virginia Oil & Gas, LP and Nabors Drilling USA, LP (Exhibit "C"); and, (2)
the 2010 contract executed by Penn Virginia MC Energy and Nabors Drilling USA, LP (Exhibit
"D"). Defendants contend that a provision in the "Contractors Special Provisions" of these
contracts constitutes Defendants' agreement to be bound to Nabors' DRP. In both contracts, the
provision states:
"Operator, its parent, subsidiary and affiliated corporations, as well as the employees,
officers and directors of each (collectively, "Operator") is cognizant ofthe Nabors Dispute
Resolution Program and wishes to become an Electing Entity, as defined in that Program.
Accordingly, Operator and Nabors Industries, Inc. ("Nabors") hereby agree that Operator
is an Electing Entity as to all Disputes between Operator and the present and former
Employees and Applicants ofNabors".
Exhibit "C", page 1 of the 2008 drilling contract's Exhibit "C": Contractors Special Provisions
(emphasis added); Exhibit "D", page 1 of the 2008 drilling contract's Exhibit "C": Contractors
Special Provisions (emphasis added).
Under the express terms of the "Contractors Special Provisions" that Defendants contend
binds them to Nabors' DRP, Defendants elected to limit its participation in the DRP as to only
current and former employees of Nabors Industries, Inc. Nabors' DRP specifically provides for
such an election, stating that: "[ e]lection may be made only as to some types of Disputes, or only
as to some persons, in the discretion of Electing Entity." Exhibit "B", page 7.
Here, it is undisputed that Plaintiff Alfredo De La Garza was hired by NCPS as a crew
worker on July 22, 2013. Exhibit "E" at 3. Further, it is undisputed that Plaintiff Alfredo De La
Garza was an employee of NCPS at the time of the incident giving rise to his claims against
Defendants. I d. at 3. As such, Plaintiff Alfredo De La Garza was not a current or former employee
of Nabors Industries, Inc. or any subsidiary during or prior to 2010. The drilling contracts were
entered into on September 23, 2008 and September 8, 2010, years before Plaintiff Alfredo De La
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 13
Motion to Compel Arbitration and to Abate
Garza applied to or was ever employed by NCPS, a subsidiary of Nabors Industries, Inc. Plaintiff
Alfredo De La Garza's claims fall outside the scope of the arbitration agreement alleged to exist
by the Penn Virginia defendants. Defendants' Motion to Compel Arbitration and to Abate should
be denied as to the claims of Plaintiff Alfredo De La Garza or his minor children.
C. Defendants have failed to establish that Plaintiffs REDACTED
loss of consortium claims are subject to arbitration.
Defendants have failed to establish a valid arbitration agreement that encompasses the loss
of consortium claims of the minor children of Plaintiff Alfredo De La Garza, REDACTED
A child can recover for loss of parental consortium when the parent suffered
serious, permanent, and disabling injury or death. In re SSP Partners, 241 S.W.3d at 171 (citing
Reagan v. Vaughn, 804 S.W. 2d 463, 467 (Tex. 1990)). Although a claim for loss of parental
consortium is derivative to the extent that liability for the parent's injury must be established, the
claim is separate and independent and not automatically extinguished merely because, for instance,
the injured parent settled his claim for personal injuries. I d. (citing Lehamn v. Har-Con Corp., 76
S.W.3d 555, 564 (Tex. App.-Houston [14th Dist.] 2002, no pet.)). Because Defendants have
provided no evidence of a written agreement signed by the children, an express provision of
Nabors' DRP binding the children to arbitration, or the application of direct-benefits estoppel,
Defendants have failed to demonstrate that Plaintiffs REDACTED claims are
subject to arbitration.
Arbitration is a matter of contract and should not be compelled without an agreement. Trico
Marine Servs., Inc., 73 S.W.3d at 548. As previously addressed, public policies favoring arbitration
do not extend to any favorable inclination one way or the other with regard to the questions of who
is bound by the arbitration agreement because the purpose of the FAA is to "make arbitration
agreement as enforceable as other contracts, but not more so." In re SSP Partners, 241 S.W.3d at
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 14
Motion to Compel Arbitration and to Abate
167-168 (court refused to enforce an arbitration agreement in connection with claims for loss of
parental consortium by minor children of an etnployee who was injured on the job and who has
signed an enforceable agreement to arbitrate all disputes relating to her employment). In this case,
the Penn Virginia defendants contend that the claims of Plaintiffs REDACTED ,
minors, are "subject to the arbitration agreement as they are derivative of De La Garza['s] claims."
Defendants provide no other basis or support for this contention.
Under Nabors' DRP, a "dispute" is defined as "all legal and equitable claims, demand, and
controversies, of whatever nature or kind, whether in contract, tort, under statute or regulation, or
some other law, between persons bound by the Program or by agreement to resolve Disputes under
the Program, or between a person bound by the Program and a person or entity otherwise entitled
to its benefits, including, but not limited to, any matters with respect to: ... any personal injury
allegedly incurred in or about a Company workplace or in the course and scope of an Employee's
employment." Id. at p. 3. This provision does not expressly bind the minor children of any person
bound by the Program, unless the children are found to be "otherwise entitled to [the Program's]
benefits." Id. Here, the Penn Virginia defendants have provided no evidence that Plaintiffs REDA
CTED
are third-party beneficiaries of the purported arbitration agreement
between their father and NCPS. In re SSP Partners, 241 3d at 170-171 (court refused to apply
direct benefits estoppel because minor children were not bringing claims that sought direct benefits
from a contract containing an arbitration clause, nor were they seeking and obtaining substantial
benefits from the contact itself outside the litigation). Moreover, Plaintiffs REDACTED
REDACT did not individually sign any written agreement that would bind them to the Nabors'
ED
DRP. "Texas law does not ordinarily bind children to the contracts their parents sign. In re SSP
Partners, 241 S.W.3d at 170 ((quoting Fleetwood Enterprises, Inc. v. Gaskmap, 280 F.3d 1069,
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 15
Motion to Compel Arbitration and to Abate
1076 (5 1h Cir. 2002) (applying Texas law), opinion supplemented on denial ofreh'g, 303 F.3d 570
(5th Cir. 2002)( court held minor children were not bound by arbitration agreement where children
did not personally sign the arbitration agreement and there was no provision expressly stating that
parents, on behalf of their children, agreed to submit the children's claims to arbitration)). Plaintiff
Alfredo De La Garza did not sign any agreement or document acknowledging the Nabors' DRP
on behalf of his minor children or as representative of his children. Additionally, there is no
provision within any executed documents or the Nabors' DRP stating that Plaintiff Alfredo De La
Garza agreed to submit his children's claims to arbitration. Absent express agreement, Texas law
does not require that minors arbitrate "simply because they are minors and their claims are related
to that of their pa~ent." I d. at 170. Defendants have failed to establish that minor Plaintiffs REDA
CTED
REDACTED parental consortium claims are bound by any valid arbitration
agreement. Defendants' Motion to Compel Arbitration and to Abate should be denied as to the
claims of the minor children.
D. The Penn Virginia defendants waived their right to compel arbitration
Even if the Penn Virginia defendants had established that a valid arbitration agreement
exists and Plaintiffs' claims fall within its scope, Defendants have substantially invoked the
judicial process and have waived their right to compel arbitration in this matter.
A party seeking to enforce an arbitration agreement can lose their right to do so through
waiver. The right to have a dispute submitted to arbitration, like any other contractual right, may
be waived either expressly or implicitly. Perry Homes v. Cull, 258 S.W.3d 580, 593 (Tex. 2008),
cert. denied, 129 S. Ct. 952 (2009). Express waiver arises when a party affirmatively indicates that
it wishes to resolve the case in the judicial forum, rather than through arbitration. In re Citigroup
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 16
Motion to Compel Arbitration and to Abate
Global Markets, Inc., 258 S.W.3d 623, 626 (Tex. 2008). Implied waiver arises when a party acts
inconsistently with the right to arbitrate and prejudices the opposing party. Id.
The legal test for a waiver of arbitration requires conduct or activity inconsistent with the
right to arbitration and prejudice to the party claiming waiver. In re Bank One, NA., 216 S.W.3d
825, 826 (Tex. 2007) (orig. proceeding) (per curiam). A party waives an arbitration clause when
it substantially invokes the judicial process to the other party's detriment. Perry Homes, 258
S.W.3d at 590. To invoke the judicial process, a party must engage in some overt act in court that
evinces a desire to resolve the arbitrable dispute through litigation rather than arbitration. Pilot
Travel Centers, LLC v. McCray, 416 S.W.3d 168, 187 (Tex. App.-Dallas 2013, no pet.). As it
applies to waiver, "prejudice" relates to inherent unfairness in terms of delay, expense, or damag~
to a party's legal position that occurs when the party attempts to have it both ways by switching
between litigation and arbitration to its own advantage. Kennedy Hodges, L.L.P. v. Gobellan, ~33
S.W.3d 542, 545 (Tex. 2014) (per curiam); Perry Homes, 258 S.W.3d at 597.
The issue of whether there has been a waiver of arbitration rights is to be decided case by
case based on the totality of the circumstances. Gobellan, 433 S.W.3d at 545; Perry Homes, 258
S.W.3d at 591. In assessing the totality of the circumstances, the court will consider the following
factors:
(1) whether the movant was the plaintiff, who chose to file in court, or the defendant, who
merely responded;
(2) how long the movant delayed before seeking arbitration;
(3) when the movant knew of the arbitration clause;
(4) whether the movant sought or opposed arbitration earlier in the case;
(5) how much time and expense had been incurred in litigation;
(6) whether activity in court would be duplicated in arbitration;
(7) whether the movant filed affirmative claims or dispositive motions or sought judgment on
the merits;
(8) how much discovery had been conducted and who initiated it;
(9) how much of the discovery would be useful in arbitration; and
(1 0) how much pretrial activity related to the merits, rather than arbitrability or jurisdiction.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 17
Motion to Compel Arbitration and to Abate
Perry Homes, 258 S.W.3d at 591-592.
Plaintiffs filed this case against the Penn Virginia defendants on July 24, 2014. Exhibit
"F". Plaintiffs' filed their First Amended Original Petition on September 8, 2014. Exhibit "G".
Plaintiffs filed their Second Amended Original Petition on October 1, 2014. Exhibit "H".
On August 25, 2014, the Penn Virginia defendants filed their Original Answer which was
not subject to a motion to compel arbitration. Defendants filed a First Amended Answer to
Plaintiffs' Second Amended Petition on April 10, 2015. Defendants waited until the filing of this
answer to plead in the alternative that Defendants would assert the affirmative defenses of
arbitration and award. On April 20, 2015, Defendants filed their Second Amended Answer to
Plaintiffs' Second Amended Petition. It was not until this answer that Defendants specifically
plead that Plaintiffs' claims are "subject to mandatory binding arbitration and as such this suit must
be abated and/or dismissed. On this same date, Defendants sent a notice of arbitration. A copy of
this notice is attached as Exhibit "J".
This case has been pending before this Court for over a year. Defendants waited until June
18, 2015, to file their Motion to Compel Arbitration and to Abate. In the meantime, Defendants
have propounded interrogatories on Plaintiffs; submitted requests for production and requests for
admissions; participated in numerous depositions; and, responded to Plaintiffs' written discovery.
Defendants did not raise the issue of arbitration in any motions, pleadings, or filings made before
their amended answer filed on April 10, 2015. Defendants delayed in filing a motion to compel
arbitration until approximately four months before the date scheduled for trial of October 19, 2015.
This delay wasted judicial resources and disadvantaged Plaintiffs who are preparing for an October
19, 2015 trial. Defendants have caused detriment and prejudice to Plaintiffs through their delay in
seeking arbitration to the extent that Plaintiffs' trial setting may be delayed.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 18
Motion to Compel Arbitration and to Abate
While Defendant Mike Ferguson has pled for arbitration, he has not filed a motion for
arbitratio.n, a notice of arbitration, nor has he joined in the Penn Virginia defendants' motion for
arbitration. Defendant Oaks Personnel Services, Inc. d/b/a The Oaks Group has not asserted a
claim or plead that it is entitled to arbitration in connection with Plaintiffs' claims. This case
should proceed to trial against Defendant Mike Ferguson and Defendant Oaks Personnel Services,
Inc. d/b/a The Oaks Group on October 19, 2015.
V. CONCLUSION & PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully request that the Penn
Virginia defendants' Motion to Compel Arbitration and to Abate be denied. In the alternative,
Plaintiffs request that their continuance of this motion be granted, that they be allowed to conduct
discovery as to arbitrability, and that they be allowed to participate in a full evidentiary hearing as
to the Penn Virginia defendants' Motion to Compel Arbitration and to Abate; and upon hearing
the arguments and evidence, that Defendants' Motion to Compel Arbitration and to Abate be
denied. Plaintiffs request that their claims against Defendant Mike Ferguson and Defendant Oaks
Personnel Services, Inc. d/b/a The Oaks Group be severed from any claims against the Penn
Virginia defendants and' that these claims be tried on October 19, 2015.
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 19
Motion to Compel Arbitration and to Abate
Respectfully submitted,
J DAVIDHART
State Bar No. 09147700
THE LAW OFFICES OF JOHN DAVID HART
Wells Fargo Tower
201 Main Street, Suite 1720
Fort Worth, Texas 76102
(817) 870-2102- Telephone
(817) 332-5858 -Facsimile
j ohnhart@hartlaw. com
ATTORNEY FOR PLAINTIFFS
CERTIFICATE OF SERVICE
The undersigned hereby ;zrtifies that a copy of the above and foregoing instrument has
been forwarded on this :jO ~ay of July, 2015, to the following attorneys of record pursuant
to the Texas Rules of Civil Procedure as indicated below:
VIA CMRRR & FACSIMILE VIA CMRRR & FACSIMILE
Mr. Thomas J. Smith Mr. J. Javier Gutierrez
Mr. K~lly C. Hartmann Ms. Ana Laura Gutierrez
Ms. Alexis Butler Hester The Gutierrez Law Firm, Inc.
Galloway, Johnson, Tompkins, 700 East Third Street
Burr & Smith Alice, Texas 78332
1301 McKinney, Suite 1400
Houston, Texas 77010 VIA CMRRR & FACSIMILE
Mr. Benjamin A. Escobar, Jr.
Mr. BritT. Brown
Beirne, Maynard & Parsons, L.L.P.
1300 Post Oak Blvd., Suite 2500
Houston, Texas 77056
JcfuN DAVID HART
Plaintiffs' Response to Defendants, Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC's Page 20
Motion to Compel Arbitration and to Abate
CAUSE NO. 2014-42519
ALFREDO DE LA GARZA, § IN THE DISTRICT COURT OF
INDIVIDUALLY and AS NEXT FRIEND §
FOR REDACTED and §
REDACTED , minors §
§
v. § HARRIS COUNTY, TEXAS
§
PENN VIRGINIA OIL & GAS, L.P., PENN §
VIRGINIA OIL & GAS GP LLC, §
MIKE FERGUSON, TRIFECTA OILFIELD §
SERVICES, LLC, CUDD PRESSURE §
CONTROL, INC., ROYWELL § 215th JUDICIAL DISTRICT
SERVICES, INC., and OAKS PERSONNEL §
SERVICES, INC. d/b/a THE OAKS GROUP §
AFFIDAVIT OF JOHN DAVID HART
STATE OF TEXAS §
COUNTY OF TARRANT §
Before me, the undersigned notary, on this day personally appeared John David Hart, a
person whose identity is known to me. After I administered an oath to him, upon his oath he stated
the following:
"My name is John David Hart. I am over 18 years of age, of sound mind, and capable of
making this affidavit. I am counsel for the Plaintiffs in the above styled case."
"I certify that the Master Service Contract between Penn Virginia Oil & Gas, L.P. and
Nabors Completion & Production Services Co. referenced in the above response is a true and
correct copy of the Master Service Contract between these entities as produced by Defendants."
"These documents were produced to Plaintiffs in response to Requests for Production that
were served on the Penn Virginia defendants."
"I certify that the Affidavit of Keith Nicholson referenced in the above response is a true
and correct copy of the Affidavit of Keith Nicholson as produced by the Penn Virginia defendants
in their motion for arbitration."
"I certify that the Notice of Arbitration referenced in the above response is a true and
correct copy of the Notice of Arbitration as produced by the Penn Virginia defendants on April20,
2015."
Affidavit of John David Hart Page 1
"Further, I certify that on January 13, 2015; pursuant to Rule 193.7 of the Texas Rules of
Civil Procedure, Defendants Penn Virginia Oil & Gas, L.P. and Penn Virginia Oil & Gas GP LLC
were advised that Plaintiffs intend to use the documents produced by these Defendants in
connection this cause of action."
"I certify that the Nabors Dispute Resolution Program and Rules referenced in the above
response is a true and correct copy of the Nabors Dispute Resolution Program and Rules as
produced by Nabors Completion & Production Services Co. in response to a subpoena request."
"I certify that the 2008 International Association of Drilling Contractors Drilling Bid
Proposal and Daywork Drilling Contract- U.S. referenced in the above response is a true and
correct copy of the 2008 International Association of Drilling Contractors Drilling Bid Proposal
and Daywork Drilling Contract - U.S. as produced by Nabors Completion & Production Services
Co. in response to a subpoena request."
"I certify that the 2010 International Association of Drilling Contractors Drilling Bid
Proposal and Daywork Drilling Contract - U.S. referenced in the above response is· a true and
correct copy of the 2010 International Association of Drilling Contractors Drilling Bid Proposal
and Daywork Drilling Contract - U.S. as produced by Nabors Completion & Production Services
Co. in response to a subpoena request."
"I certify that the Application for Hourly and Daily Employment for Alfredo De La Garza
with Nabors Completion & Production Services Co. that is referenced in the above response is a
true and correct copy of the Application for Hourly and Daily Employment for Alfredo De La
Garza with Nabors Completion & Production Services Co. as produced by Nabors Completion &
Production Services Co. in response to a subpoena request."
"I certify that Plaintiffs' Original Petition and any amendments thereof that are referenced
in the above response are true and correct copies of all petitions filed by Plaintiffs with the Court
in this matter."
John David Hart
jk.
SWORN TO AND SUBSCRIBED TO before me on this ~day of July, 2015 .
,,uu,,,
~~~~~ CELINA DAVILA
.
~:~ ~_.tJ MY COMMISSION EXPIRES
"'-<~·.?;.;".~~~-: March 22, 2018
My Commission Expires: 3- U . . , 8 Notary Public, State of Texas
Affidavit of John David Hart Page 2
........ ·-·--------
CONTRACT NO.GC-13-28
:i
MASTER SERVICE CONTRACT [
~:
DATED AS OF MARCH 28, 2013 ·.
BYANDAMONG
PENN 'VIRGINIA OIL & GAS CORPORATION,
PEI\"N VIRGINIA OIL & GAS, L.P .,
PENN VIRGINIA MC ENERGY L.L.C.
AND
NABORS COl\1PLETION & PRODUCTION SERVICES CO.
EXHIBIT
I A
Nabors MSA (PV cmts 3·28-13).d~
PVOG 1
-------------=======-==--===~~~--·----···· ..... .
TABLE OF CONTENTS
· Page
I. WORK OR SERVICES COVERED .............................................:····........................... u ••• 1
I~. WARRANTIES AND OTHER MATIERS REGARDING MANNER OF
PERFORMANCE OF WORK OR SERVICES ......................... ~ ..........................:......... .".. 2
III. RELATIONSHIP OF TI-IE PARTIES ................................................................................ 4
N. LAws Al"\lD REGULATIONS ............................................................................................ 5
V. IN"SU"RANCEREQUmED ................................................................................................ 6
\TI. rnDE1v.Il'-IIFICATION.......................................................................................................... 7
VII. ENVIRONMENTAL MATIERS .................................................................................... 12
VIII. FIDELITY......................................................................................................................... 14
IX. TERM ...............................................:.. .. ........ ..... ... ... .•. ........ .... ..•.. .. ..... .... .. ................ .. .. .. . 15
X. NOTICES .......................................................................................................................... 15
XI. ASSIGNMENT ................................................................................................................. 15
XII. AUTJIORITY OF EXECUTING PARTIES ...................... n ............................................ 15
XIII. AUDIT PROVISION ........................................................................................................ 15
XIV. APPLICABLE LAW ........................................................................................................ 16
. if!ol. \VAIVER OF LIEN .......................................................................................................... 16
XVI. AFF~IA1ED COMPANIES ........................................................................................... 16
XVII. GONFIDENTIALITY....................................................................................................... 17
XVIII. ARBITRATION ............................................................................................................... 17
XIX. MISCELLANEOUS ......................................................................................................... 18
EXHIBITS
EXHIBIT "A" MINIMUM INSURANCE REQtnREivffiNTS
EXHIBIT ''Bu WAIVER OF LIEN AGREElvlENT
EXHIBIT "C" JOINDER TO MASTER SERV1CE CONTRACT
EXHIBIT "D" ADDITIONAL PROVISIONS
PVOG2
i!
MASTER SERVICE CONTRACT I
!
THIS MASTER SERVICE CONTRACT (this "Contract"), made and entered this 28TH l.
r~
day of March, 2013, by and among (i) PENN VIRGINIA OlL & GAS CORPORATION~ a ·:
Virginia corporation ("PVOG Corp.',), PENN VIRGINIA OIL & GAS, L.P.:t a Texas limited i
partnership ("PVOG LP,~) and PENN VIRGINIA MC EN4RGY L.L.C., a Delaware limited ~
liability company e'PVMCE''), herein collectively referred to as "Company'', and (li) Nabors i
Completion & Production Services Co., a Delaware corporation, herein referred to as i·
I
"Contractor.':t
IMPORTANT NOTICE: SECTIONS VI AND VII OF THIS CONTRACT
I
!.
CONTAIN OBLIGATIONS TO INDEMNIFY AND RELEASE THE
OTHER PARTY FOR DAMAGES CAUSED BY ITS OWN NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL FAULT
WITNESSETH, that:
For and in co:uSideration of the mutual covenants and agreements herein contained and of
the payments which may be made by. Company to Contractor pursuant to the provisions hereof,
the parties hereto mutually agree as follows: · I
i
I. WORK OR SERVICES COVERED i l
A. This Contract is for operations conducted by (i) PVOG Corp. in Kentucky~· i
i
Mississippi, New Yor~ Pennsylvania, Virginia and/or West Virginia, (ii) PVOG LP in Louisiana !
and/or Texas and (iii) PVMCE in Oklahoma and/or Texas. For the purposes of this Contractt the
term "Company'~ shall refer to the applicable Company entity that requests that Contractor !
perform work or services as set forth in Section I(B) of· this Contract. Contractor shall be in
privity of contract with respect to specific work or services only with the Company entity
requesting sucli work or services. The liability of each Company entity under this Contract shall :.
be several, and not joint. Accordingly, the obligationS, representations, covenants and
ag1:ee1nents of each Cmnpany entity under this Cont1·act are several and relate only to the work or
services requested by such Company to be performed by Contractor under this Contract.
B. Company desires to establish and mait1tain an approved list of contractors and to
offer work or contracts only to those contractors who are included on such approved list. It is
contemplated that, from time to time during the term of this Contract, Company may request~
either orally or in 'Writing, that Contractor perform work or render services for the benefit or
account of Company. In the event that Contractor agrees to undertake the perfonnance of such
work or services for Company, the~ in each instance, the designation of work or services to be
performed and the consideration to be paid by Company to Contractor shall be as agreed by the
parties in writing and incorporated herein by reference; provided, however, that: (i) the
provisions of this Contract shall govern and be fully applicable to the performance of all such
work <;>r services and the relationship of the parties relating to or arising out of the performance
of such work. and services shall be controlled and regulated hereby; and (il) in the event of a
dispute or conflict between this Contract and any Wiiting (including, without limitation, any
1
PVOG3
work order, work ticket, manifest or other vvriting between the parties) entered into or executed
subsequent to the date first set forth above, this Contract shall govern in all instances. In the
event that there is no written agreement on pricing between the parties, then pricing will be at the i
rates agreed to· at the time such services are provided. However, any work or services provided r
by Contractor to Company shall be governed by this Contract even if no such writirig is l
generated. This Contract shall become effective the date first hereinabove Wlitten and shall !
supersede all prior service contracts between the parties hereto witli respect to new work· or l
services commenced during the term of tllis Contract to be performed in cmmection with this
Contract. ·
I
i
C. The words "work" and Hservices", as used herein, contemplate any business
activity of Contractor which requires that its employees, servants, agents or representatives, or
the employees, servants, agents or representatives of its subcontractor(s), enter upon or utilize
any property or premises owned (in whole or in part), leased or operated by Company or which
requires that Contractor or its subcontractor(s) construct, install, recondition, 1naintain or repairt
for the benefit of Company, any propetty owned (in whole or in part), leased or operated by
Company. All work or services will be subject to the availability of excess personnel and
equipment at Contractor's facility in the area such services are to be provided.
D. Tlus Contract does not obligate Company to order or request any work or services
from Contractor, nor does it obligate Contractor to accept orders or request for work or services
,.'
from Company, but this Contract shall govern the parties' rights and obligations concerning all
work or services provided by Contractor to Company.
II. WARRANTIES AND OTHER MATTERS REGARDING MANNER OF
PERFORMANCE OF WORIC OR SERVICES
Contractor warrants as follows:
A. Contractor will perform, and will cause its subcontractors to perfom1, all work or
services contemplated by this Contract with due diligence and in a good, workmanlike and
timely manner) all in strict conformity with the specifications of Company, generally accepted
industry pt•actices, all Laws (as defined in Section N(A)) and this Contract The term
"worlananlike manner" means services performed in a manner deemed proficient by those with
the speciallmowledge, training and experience to judge such. services.
B. Contractor shall furnish, at its sole expense and risk, all necessary personnel,
equipment, materials, tools, supplies, expertise and supervision reasonably necessary for the safe
performance of the work or services. Contractor !las adequate equipment in good working order
and adequate numbers of fully trained personnel capable of safely operating such equipment and I
performing the work or services. Contractor shall test its equipment to ensure the same is in good
working order prior to delivery" to the work site and regularly conduct training and safety programs
for such personnel. Contractor shall not employ in any work for Company any employee whose r
employment violates any labor, employment or other applicable Laws. Contractor shall not r
employ in any workfor Company any employey who is a minor.
2
PVOG4
C. All Contractor supplied products and equipment shall meet Company's
specifications with respect to the services for which such products an4 equipment are used. All
such products and equipment shall be selected and used with good oilfield practices for their
respective purposes and shall be in good working condition and free from defects in design} .·
workmanship and nmterials and shall comply with all Laws. Any portion of the work found i
defective or unsuitable shaH be removed, replaced or corrected by Contractor without additional
cost or risk to Company. ·contractor agrees to hispect ~ll materials arid· equipn1ent furnished by
Company directly employed in the course of operations conducted hereunder and shall notify
I
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Company of any defects therein before using such materials and equipment. Should Contractor
use such materials and equipment without notifying Company of any defect, Contractor shall be I
1
deemed to have assumed all risk and liability for any mishap that may occur in the operations
conducted hereunder by reason of failure or defect in such materials and equipment. Unless
otherwise stated in writing, the risk of loss remains with Contractor until Company has care,
custody and control of such products, equipment or other goods; provided, however-; that title to
such products shall pass upon delivery of such products to Company. Contractor shall provide
Company and its other applicable subcontractors all Material Safety Data Sheets applicable to all
products, equipment and other goods delivered to Company>s work site. Contractor agrees to •.
maintain its equipment in good opet·ating condition at all times and shall use all reasonable
means to control and prevent fires and blowouts, protect the hole and protect Con1pani•s
property, equipment and other goods. If Contractor provides rental products or equipmen~ such r
!
products or equipment shall be (and shall be kept) in good working order and conditio~ shall !
include all appropriate safety and emissions control devices, shall include all emergency and i
environmental placards and warnings and ·shall meet Company's specifications with respect to I·
!
the services for which such products and equipment are used. All consumable goods provided
by Contractor shall meet the specifications when delivered and for their normal shelf life. For
shelf life, Contractor warrants that the represented quality, composition and effectiveness of the
goods shall not be materially lessened during storage. Tins warranty requires that such stol'age
complies in material respects with the manufacturer's or supplier's recommended storage
conditions and storage period. The product or matel'ial must meet the specifications on the date
of use and on the last day ofi1s shelf life.
D. Contractor and its subcontractors and their respective employees, agents and
representatives shall be familiar with and comply with Company's "Health and Safety Policy,
(the "Manual"), a copy of which has been given to Contractor. Contractor agrees to ensure that
its employees~ subcontractors, agents and representatives performing work or services under this
Contract have been supplied wlth a copy of the Manual and shall comply with it.
E. Contractor shall comply with (i) Company,s requirements with respect to drug
testing programs under U.S. Department of Transportation regulations (if applicable) and
(ii) Company's -written policies~ if any, concerning a drug free workplace.
!·
F. Contractor shall comply with the requirements of Company for maintaining and i.
!
providing daily recol'ds of work or services perf01med under this Contract.
!
G. Contractor shall promptly cure or begin to cure~ if not curable within 5 days) all
defects described in Company's written notices within 5 days of notice from Company. If
Contractor fails to so cure such defects within a reasonable time after being notified, Company
3
PVOG5
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may cure such defects dkectly or through another contractor, vendor or supplier. What is a i
J
"reasonable time" shall depend upon the circumstances~ but in no event shall it exceed thirty (30) !
l.
:•
days. Within thirty (30) days after receipt of a written invoice, Contractor shall reimburse l
i!
Company for the reasonable cost of sttch warranty work; provided> that, the ammmt of such I
waiTanty work is uncontested by Contractor. Contractor shall not be required to pay such i
Il
amount if Contractor is disputing its warranty obligation in good faith and has provided notice of I
such dispute in writing to Company within 10 business days of Company, s written notice to a
Corporate Officer of Contractor of the defect with sufficient detail in Company's notice to
I
provide Contractor the ability to understand the location of the defect, the general estimated
amount of the rein1bursement required, the location and date such defective work was performed
lj·
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and that such notice references that there is a limitation of 10 business days for Contractor to !
respond per the provisions of this Contract. The provisions of this Paragraph G shall be subject i
!~
to Article I, Paragraph C above. =·l·
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H. In addition to Contractor's walTanties, Contractor shall obtain, to the maximum F.
extent reasonably possible, assignable warranties from its subcontractors, vendors and suppliers ~
that are no less f-avorable than the general product warranty and general service warranty provided
herein. Whatever warranty is obtained, however, shall be assigned to Company. If no formal
assignment is made, such warranties shall be deemed assigned when the applicable services
hereunder have been performed. If the foregoing warranty is breachec4 Contractor, if necessary to
liI
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enforce the warranty, shall accept return of the goods and present the manufacturer or supplier with I
a demand that the warranty be honored. !
I. EXCEPT AS IS OTHERWISE EXPRESSLY PROVIDED PURSUANT TO THE !
TERMS OF THIS CONTRACT, GONTRACTOR MAKES NO WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED (INCLUDING) WITHOUT LIN1ITATION, IMPLffiD
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE),
!
REGARDING THE MATERIALS SUPPLIED BY AGREEMENT OR WORK PERFORMED
BY CO:NTRACTOR.
Ill. RELATIONSHIP OF THE PARTIES
A. It is expressly understood that Contractor shall perform work or services as an
independent contractor, wltl1 the authority and right to direct and control all of the details of the
work. Company shall exercise no control over Contractor's employees, servants, .agents or
representatives, nor those of its subcontractor(s), nor the methods or means employed by
Contractor in the performance of such work or services, Company being solely interested in the
attainment of tl,.e desired results. Compa11y shall only have the right of inspection and
supervision in order to secure the satisfactory completion of the work or services. Contractor is
not authorized to enter into or commit Company to any agreements or contracts, and Contractor
shall not represent itself as the agent or legal representative of Company.
B. In all cases where Contractor's or its subcontractors' employees (defined to
include, without limitation, direct, borrowed, special or statutory employees) are subject to the
Louisiana Worker's Compensation Act~ La. R.S. 23.:1021 et seq., the parties agree and recognize,·
and Contractor stipulates, that all work and operations pe1fonned by Contractor and its
employees pursuant to this Contract and any orders are an integral part of and are essential to the
4
PVOG6
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ability of Company to genetate Company's goods, products and services for purposes of La. R.S. j
23:1061 (A)(l). Furthermore, the Parties agree and recognizet and Contractor stipulates, that
Company is the principal or statutory employer of Contractor's employees for purposes of La.
L
R.S. 23:1061 (A)(3) and Company shall be entitled to the protections that are afforded a stattttory f
!
employer.under Louisiana law. In·espective of Company's status as the statutory employer or i
i
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special employer [as defined in La. R.S. 23:1031 (C)] of Contractor's employees) Contractor
agrees to remhln solely and primarily responsible for the payment of Louisiana Worker's
Compensation benefits to its employees and shall not be entitled to seek contribution for any
i
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such payments from Company. Contractor and/or Contractor's insurers agree that they shall
have no right to seek, and shall not seek, any contribution or indemnity from Comp~y for any
compensation benefits paid by Contractor and/or its insurers.
!
C. In all cases where Contractor, s or its subcontractors 2 employees are covered by
the Longshore and Harbor Wo1·kers' Compensation Act, the parties agree and recognize, and
Contractor stipulates, that all work and operations perfonned by Contractor and its 1-
i
subcontractors and its and their employees pursuant to this Contract are an integra[ part of and
~.
are essential to the ability of Company to generate Company's goods and services at Company's :.
work site for the duration of the project pursuant to Company's health and safety policies, that f.
Company is the temporary or special employer of such employees for purposes of the Longshore
and Harbor \Vorkers, Compensation Act, that Company may direct such employees beyond
necessary cooperation but not to the extent of control required by the doctrine of respondeat
superior, that remuneration received by Contractor from Company for services rendered will be
used directly or indirectly to pay such employees and that Contractor will remove any of such
employees from the project and replace· the same when required by Company. Claims made
against Company by such employees of Contractor or its subcontractors based upon the doctrine
of"borrowed. servant" shall, for the purposes of Longshore and Harbor Workers' Compensation
Act insurance of Contractor, be treated ao;; a claim arising under said insurance against Contractor
or its subcontractor as the case may be, and Company shall have benefit of said insurance to that
extent. Irrespective of Company's status as the tempoiary or special employer of Contractor's or
its subcontractors' employees) between Contractor and Company, Contractor agrees to remain
~ primarily responsible through its or its subcontractors' insurance for the payment of benefits
under the Longshore and Harbor .workers' Compensation Act to its employees and its
subcontractors" employees and Contractor and its subcontractors and its and their insurance
carriers shall not be entitled to seek contribution for any such payments from Company.
IV. LAWSANDREGULATIONS
A. In oonnection with the performance of work and services contemplated by tills
Contract, Contractor agrees to comply with all laws, statutes, rules and regulation.S, Federal,
State, County/Parish and Municipal, which are now, or during the term of this Contract may be,
applicable to its business, equipment and employees engaged in, or in any manner connected
with, Contractor's performance of work or services for Company (collectively; "Laws,),
including, but not limited to, Laws pertaining to protection or conservation of the air~ land, water,
human health, industrial hygiene or other aspects of the environment, including, without
limitatio~ the following statutes, as supplemented and amended: the Clean Air Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Federal Water
Pollution Control Act, the Solid Waste Disposal Act, the Resource Conservation and Recovery
5
PVOG7
.........----·-·-·---:-----------·-··
Act, the Safe Drinking Water Act, the Toxic Substances Control Act~ the Hazardous Materials
Transportation Act, the Federal Oil Pollution Act of 1990) Articles 15, 17, 27 and 40 of the New
York State Envirorunental Conservation Law; Article 12 ofthe New Yol'k State Navigation Law,
the Pennsylvania Solid Waste Management Act, 35 P.S. § 6018.103) and any other comparable
federal~ state or local laws, statutes; ordinances and codes and the rules, regulations; policies,
guidelines, interpretations, decisions~ orders and directives of federal, state and/or local
governmental ·agencies 'and authorities with ·respect thereto (collectively, "Environmental
Laws,').
B. In particular, Contractor shall fully comply with the following statutes and
executive orders as well as the regulations, orders and rules promulgated under suclJ. statutes and
executive orders, where required by applicable Laws, and such statutes and executive orders, as
they may be hereafter amended, are hereby inco:rporated in this Contract by reference as if fully set
out: (1) Equal Opportunity Clause (Applicable to aU work or purchase orders in excess of $10,000,
41 CFR 60-1.4); (2) Affrrmative Action Compliance Programs (Applicable to work or purchase
orders of $.50,000 or more and if Contractor has 50 or more employees, 4 I CFR 60" 1.40);
(3) Equal Employment Oppottunity Reporting Requirements (Applicable to work or purchase
orders of $50.,000 or more and if Contractor has 50 or more· employees, 41 CFR 60-1.7);
(4) Affirmative Action Regarding Individuals with Disabilities (Applicable to work or purchase
orders of$2,500 or more, 41 CFR 60~741); (5) Employment of Disabled Veterans and Veterans of
the Vietnam Era (Applicable to work or purchase orders of $10,000 or more, 41 CFR 60-250);
(6) Utilization of Minority Business Enterprises (Applicable to work or purchase orders of $10,000
or more~ 41 CFR 1-1.13); (7) Utilization of Small Business Concerns (Applicable to work or
purchase orders of $10,000 or more, 41 CFR 1-1.710-3); (8) Utilization of Labor Surplus Area
Concerns (Applicable to work or purchase orders of $10,000 or more, 41 CPR l~I.805-3(a));
(9) ~mority Business Enterplise Subcontracting, Small Business Subcontracting and Labor
Surplus Area Subcontracting Programs (Applicable to work or purchase orders of $500,000 or
more, 41 CFR 1-1.1310-2(b), 1-1710-3(b), 1-1.805.3); and (10) Clean Air and Water (Applicable
to work or purchase orders of $100,000 or more, 40 CFR 15.4 and 15.5, 41 CFR 1-1.2303). If
Company is required to pay any fine or penalty resulting from Contractor,s failure to comply with
applicable Laws and/or Environmental Laws, then Contractor shall :immediately reimburse
Company for such payment.
C. Contractor certifies that it does not and will not (i) maintain or provide for its
employees any segregated facilities at any of its establishments and (ii) permit its employees to
perform their services at any locati.on, under its control, where segregated facilities are
maintained. Contractor agrees that it will obtain identical certifications from proposed
subcontractors.
V. INSURANCE REQUIRED
A. Contractor and Company each agrees to procure and maintain at its sole ex.pense
during the entire term of this Contract the policies of insurance in the specified minimum
amounts set forth in Exhibit "A" attached hereto and made a prot hereof. Such insurance shall
support each party's ·indemnity obligations to the other and other potential liabilities hereunder.
6
PVOG8
··-- ··;·-· ...-----.... ·---~·-··------- ... ·---········--··-~-,
f
i
B. Prior to the commencement of any work or· senrices contemplated by this
Contract, Contractor shall furnish to Company certificates, in duplicate~ on a fmm acceptable to
Company, signed by an authorized representative of the insurance companies providing the
.coverage, evidencing ~ coverages, extensions and limits requh·ed to be carried by Contractor
under the provisions of this Contract. Upon request, Company sball.have the right to examine or
inspect the originals or certified copies of such insurance policies in the offices of Contractor
during its rionnal business hours. · · ·
C. Failure to secure the insurance coverages, or the failure to comply fully with any
of the insurance provisions of this Contract, shall in no way act to relieve any party from the
obligations of this Contract, any provisions hereof to the contrary notwithstanding. Jf a party
fails to maintain any of the insurance herein required, such party shall release~ protect, defend,
indemnifY and hold harmless the other party's Group~ including their insurers, from and against
any and all Claims (as defmed in Section VI(A))7 which would otherwise be covered by such
insurance. Unless expressly stipulated to the contrary herein, a party's indemnification
obligations under this Contract (express or implied) shall not be limited to the amount or scope
of coverage provided by the insurance which is required to be maintained by such party under
the terms hereof. "Group" means Company Group or Contractor Group, as applicable (each as
defined in Section VI(A)).
D. Contractor shall require all of its subcontractors to secure and maintain the
insurance described in Exhibit "A".
VI. INDEMNIFICATION
The parties recogniZe that in connection with th~ petformance of the work or services
and/or the provision of goods) equipment and facilities contemplated. by this Contract, there is
some risk that accidents and events may occur in which property is lost, damaged or destroyed
and/or in which persons may be ldlled or injured. Th.e parties desire to allocate these risks
between them and to require that these risks be adequately insured so as to minimize the
possibility of disputes and to engage in effective risk management For these reasons, the parties
agree to the indemnities and defense obligations set furth below.
A. Mutual Release, Defense and Indemnity.
1. Cmnpany Group shall not be liable for and Contractor agrees to release,
protect, defend) indemnify and ~old harmless Company Group from and against any and all
claims, damages, liabilities, losses, demands, liens, encumbrances, causes of action of any kind
(including, without limitation, actions in rem or in. personam (civil or criminal) and those
concerning personal injury, death or property loss or damage), obligations) costs (including,
without limitation, l'easonable attorney 7 s fees), judgments, interest and awards, whether created
by law, contract, tort, or otherwise (collectively, '~Claims'') for personal injury, illness> death,
property (whether real or personal) owned or leased) damage and loss arising out of or resulting
from the performance of this Contract or any breach hereof by any member(s) of Contractor
Group suffered by any member(s) of Contractor Group (including Claims of spouses, heirs,
survivors or legal representatives, successors and assigns of any member(s) of Contractor
Group)t even if such are contributed to or caused by the sole, joint, comparative,
7
PVOG9
-~-..-r- ....· - - - - · -.. ·-·~·· -~··.,........._-·~
t
concurrent, active or passive negligence or g-ross negligence of any mcmber(s) of Company
Group. The release, protection, defense~ indemnity and hold harmless obligations assumed by
Contractor, ~nd the limitatiol].s afforded Company Group, in this Section VI(A)(l) include any
liab~lity for employment .discl'imination, medical, compensation or other benefits owed to
employees of Contractor Group as a result of the direct employ1nent relationship of such
individuals with a member of Conil:actor Group even if such individuals are determined to be the
bon:owed or statutory employee of any inember(s) of Company Group. "Company· GrouJl"
li.
means Company, its contractors (other than Contractor and its subcontractors of any tier),.
subcontractors) co..interest owners, joint venturers, co~lessees and invitees~ and its/their affiliates,
r:
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shareholders, partners, members, officers, directors, employees (including the Company I
representative at the work site whether a consultant or not), agents, consultants, servants and l
insurers. !:
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2. Contractor Group shall not be liable for and Company agrees to release,
protect) defend1 indemnify and hold harmless Contractor Group from and against any and all rr
Claims for personal injury, illness, death, property (whether real or personal, owned or leased) ::.
of
damage and loss adsing out or resulting from the performance of this Contract or any breach
..~
hereof by any member(s) of Company Grortp suffered by any member(s) of Company Group
(including Claims of spouses, heirs, survivors or legal representatives, successors and assigns of
any n-~ember(s) of Company Group)) even if sueh are contributed to or caused by the sole,
joint, comparative, concurrent, active or passive negligence or gross negligence of any II
member{s) of Contractor Group. The release, protectio~ defense, indemnity and hold !
harmless obligations assumed by Company, and the limitations afforded Contractor Group~ in I
!
this Section VI(A)(2) include any liability for employment discrimination, medical, r
compensation or other benefits owed to employees of Company Group as a result of the direct
employment relationship of such individuals with a member of Company Group even if such
individuals are determined to be the borrowed or statutory employee of any member(s) of
I.
Contractor Group. ('Contractor Group'' means Contractor, its contractors and subcontractors, co-
interest owners, joint venturers, co-lessees and invitees, and its/their affiliates:. shareholderst
partners, members, officers, directors, employees, agents, consultants, servants and insurers. :·
B. Indemnification: Savings Clauses
1. The indemnities in this Contract shall only be effective to the maximum
extent pennitted by applicable 'Laws. If any Law is enacted in any state that limits in any way
the extent of which indemnification may be provided to an indemnitee and such Law is
applicable to this Contrac4 then this Contract shall automatically be amended to provide that the
indemnification provided hereunder shall extend only to the maximum extent permitted by the
applicable Laws, but shall extend to such maximum extent.
2. In the event that this Contract is interpreted under the Laws of the State of
Texas for a particular occtmence, then Sections VI(A)(l) and VI(A)(2) shall apply, but for the
purposes of Title 6, Chapter 127 of the Texas Civil Practice and Remedies Code, commonly
known as the Texas Oilfield Anti ..Inderonity Act, the indemnity and insurance provisions of this
Contract applicable to properly damage and the indemnity m1d insurance provisions· applicable to
personal injury, bodily injury and death shall be deemed separate for interpretation,·enforcement
and other purposes. All indemnities in this Contract shall only be effective to .the maximum
8
PVOG 10
i
extent permitted by applicable Laws. If the Laws of the State of Texas gove1n this Contract, [.
then Contractor and Company incorporate Title 6) Chapter 127 of the Texas Civil Practice ru).d ·'t
Remedies Code (Texas Oilfield Anti-Indemnity Act) and agree to the limits of that statute. r~
::.
The parties will each support their respective mutual indemnity obligations by furnishing iI
liability insurance coverage (or qualified selfwinsurance) of the types set furth above obtained by
each of the parties for the benefit of the other party and its respective Group as indemnitee(s). I·
The parties will each support their respective ·unilateral indemnity obligation by
I·
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furnishing liability insurance coverage (or qualified self-insurance) of the types set forth above in
'
the applicable statutory amounts. '
If the foregoing provisions do not meet the criteria for either a mutual or unilateral '•
indemnity obligation under such statutory provision) then the same shall be modified by the court
to the extent necessary to so comply.
3. In the event that this Contract is interpreted under the Laws of the State of
Louisiana for a particular occut1·ence, then Sections VI(A)(l) and VI(A)(2) shall apply, but for
the purposes of La. R.S. 9:2780, commonly known as the Louisiana Oilfield Anti-Indemnity Act,
the indemnity and insurance provisions of this Contract applicable to pr-operty damage and the
indemnity and insm·ance provisions applicable to personal injury, bodily injury and death shall
be deemed separate for interpretation, enforcement and other purposes. All indemnities in tlrls
Contract shall only be effective to the maximum extent pennitted by applicable Laws. If the
Laws of the State of Louisiana govern. tlrls Contract~ then Contractor and Company incorporate
La. R.S. 9:2780 (Louisiana Oilfield Anti-Indemnity Act) and agree to the limits of that statute. ::
For any services for wl1ich such statute would apply, Company agrees that it will, on behalf of
Company Group, pay the premium for the extension of Contractor's insurance to cover Company
Group as an additional insured to the extent of the liabilities assumed by Conh·actor herein, and
Contractor agrees that its insurers will ilwoice Company the premium for such extension of
coverage in favor of Company Group. Contractor warrants that such premium shall constitute all
material costs for such extension of coverage. At each subsequent renewal, Contractor shall
advise Company as respects the amount for the premium required fur such extension of coverage
and shall acrange to have Company billed for the material costs of the premium for such
extension of coverage to Company Group. For any services for which such statute would apply,
Contractor agrees that it will, on behalf of Contractor Group, pay the premium for the extension
of Company,s insurance to cover Contractor Group as an additional insured to the extent of the
liabilities assumed by Company herein, and Company agrees that· its insurers will invoice
Contractor the premium for such extension of coverage in favor of Contractor Group. Company
warrants that such premimn shall constitute all material costs for such extension of coverage. At
each subsequent renewal, Company shall advise Contractor as respects the amount for the
premium required for such extension of coverage and shall arrange to have Contractor billed for
the matetial costs of the premium for such extension of coverage to Contractor Group.
4. In the event that New York General Obligations Law§ 5-322.1, W.Va.
Code § 55-8-14 or any other or similar Law purporting ·to limit indemnity obligations in
construction or similar contracts, is found to be appl!cable with respect to this Contract or any
services provided hereunder, then this Section VI is hereby modified to the extent necessary for
9
PVOG 11
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compliance with and enforceability under such Law or Laws. Notwithstanding the foregoing,
however, no modification of this Section VI pursuant hereto shall cause any change to or
modification of the liability insurance coverage required by Section V or Exhibit A hereto, which
cove.rage Contractor confinns and agrees to ensu~e shall continue to fully support Contractor's
indemnity obligations above as and to the full extent set forth in this Contract. '
i
c; · Indemnity Not Altered by Third Party Obligations
I
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All indemnities in this Contract shall apply even though an insurer or other person or !
!•
entity is required to pay for any Claim or to make a contribution to such Claim. Even though
insurance may be arranged or other persons or entities may have certain liabilities or obligations, !
each party hereto remains responsible for its indemnity and other obligations under this Contract,
even if such insurer or such other person or entity, for any reason, does not pay.
D. Third Party Liability
1. Except as provided in this Contract to the contrary, Contractor shall
release) protect, defend, indemnify and hold harmless COJ.l!.pany Gl.'oup for personal injury,
illness, death, property (whether real or personal or owned or leased) damage and other loss to
the extent that third party claims arising out of or resulting from the performance of this Contract
are contributed to or caused by the negligence, gross negligence or willful or wanton misconduct
of any member(s) of Contractor Group. ·
2. Except as provided in this Contract to the contrary, Company shall release,
protect, defend, indemnify and hold harmless Contractor Gl·oup for personal injury, illness,
death, property (whether reaL or personal or owned or leased) damage and other loss to the extent
that third party claims arising out of or resulting from the performance of this Contract are
contributed to or caused by the negligence, gross negligence or willful or wanton misconduct of
anymember{s) ofCompany Group.
3. For the ptuJ1oses of this Section VI, the plu:ase "arising out of or resulting
from the p~rformance of tlrls Contract" shall be broadly construed to include, but not be limited
to, not only formal work) but also any occurrences at the work site, including transportation to
and from the work (other than personal or public transportation to· the work site), breaks, ;·.
recreation, rest periods and any other presence at the wor~ site.
E. Consequential Damages f:
Notwithstanding anything to the contrru·y in this Contract, neither party shall be liable to
the other for special, indirect or consequential damages, including, without limitation, loss of
use, loss of data, loss of assets, loss of business, loss of profit or business interruptions, resulting
from or arising out of this Contract, however same may be caused and regardless of the sole,
joint, comparative, concurrent, active or pa8sive negligence or gross negligence of the other
party. In no event, however, shall the provisions of this Section VI(E) limit the indemnities
given in. this Contract with respect to actions bl'ought by third parties.
F. h1tellectual Property
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=..,._......,...__ _ _ _ _ _ _..........,._ _ _ _ _ _"""':.~..:-:". ..._,.....:-'.""l.'=""=......,..-· ---~~-~~--------·--·-·· ...
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Contractor shall indemnify, defend and hold harmless Company from and against any
and all Claims arising from or by reason of any infringement or alleged infringement of any
patent, trademark, copyright or other like right protected by law in respect of any property~
equipmell,t, services, work) methods ot process furnished or used by Contractor in connection
with this Contract. .
G. Radioactivity, Wild Well, ReserVoir Damage, and Subsurface Trespass
Contractor Group shall not be liable for and Company agrees to protect, defend,
indemnifY, and hold harmless Contractor and its subcontractors from and against any' and all
claims for personal injury, illness, death~ property (whether real or personal,. owned or leased)
loss and damage, excluding that suffered by any employee of Contractor or its subcontractors,
incidental to or resulting :from (a) radioactivity where the release is caused, in whole or in part,
by conditions or events below the rotary table~ (b) loss of well control ("a wild well"), including
(without limitation) the costs of controlling a .wild well) (c) reservoir or underground damage,
including (without limitation) the costs of oil, gas, other mineral substances, water, and the well
bore, and (d) subsurface trespass or any action in the nature thereof, even if the Claims are
contributed to or caused by the sole, joint, comparative, enncurrent, active or passive
negligence of any n1ember(s) of Contractnr Group.
H. General
'VITHOUT LIMITING TI~ GENERALITY OF THE FOREGOING, THE
PARTIES EXPRESSLY·ACI<NOWLEDGE AND AGREE, AND HEREBY INTEND TO
CLEARLY AND UNEQUIVOCALLY AFFIRM, THAT THE APPLICATION OF THE
PROVISIONS OF THIS SECTION VI MAY INVOLVE (I)INDEMNIFICATION FOR
CLAIMS/LOSSES DUE TO THE INDEMNITEE'S OVVN NEGLIGENCE, GROSS
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT, AS " 7ELL AS
(II) INDEMNIFICATION FOR CLA~MS!LOSSES DUE TO THE NEGLIGENCE OF
OTHERS (i.e., THIRD PARTIES). BOTH PARTIES AGREE THAT TmS STATEMENT
CO:MPLIES WITH THE REQUIREMENTt KNOWN AS THE <'EXPRESS
NEGLIGENCE RULE," TO EXPRESSLY STATE IN A CONSPICUOUS MANNER
THAT ONE PARTY (THE INDEMNITOR) HAS RESPONSIDILITY FOR THE
NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OF
ANOTHER PARTY (THE INDEMNITOR). .
Notwithstanding any other provision of this Contract to the contrary,. Company agrees to
repair or replace any equipment which is (a) lost or damaged (other than ordinary wear and tear)
while being used in the well below the rotary table level, (b) damaged due to abnormal abrasion or
corrosion due to exposure to well effluents~ or (c) lost or damaged during marine transportation at
any time after delivery to Company or Company's other contractors at the landing, until returned to
the landing (d) lost or damaged for whatever reason when such equipment is provided on a rental
basis without a crew. Company's responsibility for such loss of or damage to any down hole,
marine transported, or rental equipment shall apply even if the loss or damage is due to the joint)
comparative, or concurrent negligence of Contractor. If the do'\'\'Il hole or rental equipment cannot
be repaired or the costs of 1·epair exceed the replacement ·value of the damaged .equipment,
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PVOG 13
Company agrees to pay Contractor the full replacement cost of such equipment. Company has the I
option to replace the equipment in kind if Contractor approves the offe~ed replacement. Il·.
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VII. ENVIRONMENTAL MATTERS
I
A. Mutual Release, Defense and Indemnity for Pollution !
1. Subject to Sections VI(A)(l) and VI(A)(2)~ but notwithstanding any other
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provision of this Contract to the contrary, Company Group shall not be liable for and Contractor
agrees to release, protect, defend, indemnify and hold harmless Company Group from and
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against any and all Claims (including~ without limitation, the cost of control and cleanup) arising
out of pollution or contamination, including, but not limited to) .fuels, lubricants, motor oils,
paints, solvents, garbage, chemicals and other pollutants (produced fluids, solids and gases,
drilling/completion fluids and cuttings are specifically excluded), originating from Contractor
Group's property which is (1) used in the performance of this Contract or any order, and (2) in
its care, custody and control~ even if such is contributed to or caused by tbe sole, joint,
comparative, concurrent, active or passive negligence or gross negligence of any member(s)
of Companv Group.
2. Subject to Sections VI(A)(l) and VI(A)(2), but notwithstanding any other
provision of this Contract to the contrary, Contractor Group shall not be liable for and Company
agrees to relea~e, protect, defend~ indemnify and hold hru.mless Contractor Group from and
against any and all Claims (including, without limitation, the cost of control and cleanup) for all
other pollution or contamination such as that originating from a pipeline (other than due to
Contractor Group's anchor) or storage facility or from produced fluids, solids or gases,
drilling/con1pletion fluids or cuttings or from a blowout or loss of well control, even if such is
contributed to or caused by the sole, joint, comparative, concurrent, active or passi'Ve
negligence of any mmnber(s) of Contractor Group, but NOT when caused bv the gross
negligence or willful miseonduct of a member of Contractor Group.
B. Hazardous Material and Waste Disposal and Clean Up
1. Contractor shall, at its sole expense and risk, transport and dispose of
(except as otherwise mutually agreed) any spent or used chemicals or other hazardous waste or
materials supplied by any member(s) of Contractor Gmup and used by any member(s) of
Contractor Group in the performance of this Contract or any order. Contractor is not responsible
for any materials on the location or at the work site where title has been transferred to any
member(s) of Company Group or which has passed through the well b.ead or below the level of
the rotary table, whichever is applicable, including, without limitation, matedal returns from the
well.
2. With respect to the materials Contractor is not responsible for under
Section VII(B)(l), Company shall~ at its sole expense and risk, transport and dispose of (except
as otherwise mutually agreed) any spent or used chemicals or their empty packages, drums or
containers ·or other hazardous waste or materials even if such materials have ·resulted from or
were incident to the performance by any member(s) of Contractor Group of this Contract;
provided, however, that no provisions of this Contract shall relieve a transporter of hazardous
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PVOG 14
waste of its obligation to safely transport the hazardous waste to its agreed upon destination.
·Contractor Group shall not be liable for and Company agrees to· release, protect, defend,
indemnify and hold harmless ContJ.•actol' Group from and against any and all Claims (including,
without limitation, cost of control and cleanup) incurred by any member(s) of Contractor Group
under any statute, regulation or otherwise arising from Company's failure to properly transport
and/or dispose of such hazardous waste or materials) even if such is contributed to or caused
by the sole, joint, comparative, concurrent, active or
passive negligence oi· gross negligence
of any member(s) of Contractor Group.
3. As used in Sections VII(B)(l) and VII(B)(2}, the reference to hazardous
roatetials and/or hazardous waste, whether in upper or lower case, refers to the following:
(i) any chemical, material or substance at any time defined as or
included in the definition of<'hazardous substances", w&azarduus wastes", "hazardous materials,,,
'~extretnely hazal'dous waste", "acutely hazardous waste", ''radioactive waste", '~biohazardous
waste", ~~pollutant", "toxic pollutant") "contanrinanf>, "restricted hazardous waste'\ "infectious
waste", "toxic substances") or any other tenn or expression intended to defme, list or ·classify
~ubstances by reason of properties harmful to health, safety or the indoor or outdoor env1ronment
(including hannful properties such as ignitabillty, corrosivity, reactivity, carcinogeni~ity,
toxicity, reproductive toxicity, "TCLP toxicity, or "EPA toxicity" or words of similar import
under any applicable Environmental Laws);
(ii) any oil, petroleum, petroleum fraction or petroleum derived
substance;
(iii) any drilling fluids, produced waters and other wastes associated
with the exploration, development or production of crude oil) natural gas or geothennal
resources;
(iv) any flammable substances or explosives;
(v) any radioactive materials;
(vi) any asbestos~containing materials;
(vii) urea formaldehyde foam insulation;
(viii) electrical equipn1ent which contains any oil or dielectric fluid
containing polychlorinated biphenyls;
(ix) pesticides; and
(x) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority or which may or could pose a
hazard to the health and saf-ety of the owners, occupants or any petsons in the vicinity of any
WOlic site or to the indoor or
outdoor environment: . .
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PVOG 15
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4. In conducting its operations hereunder, Contractor agrees to comply with i.
all Environmental Laws. Contractor agrees to report to Company, as soon as reasonably
practicable, all the details of every environmental upset or spillage and to fully cooperate in all
clean up and reclamation activities by providing .labor and equipment ~n order to restore and
protect the environment. Clean up and reclamation activities by Company Group shall not
relieve Contractor of its duties or liabilities under this Contract Contractor shall reimburse
·company Group for all such costs l'elated to clean up and reclamation by Company Group to the
extent that such risk is allocated to Contractor herein.
C. General
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
PARTIES EXPRESSLY ACICNOWLEDGE AND AGREE, AND HEREBY INTEND TO
CLEARLY AND UNEQUIVOCALLY AFFIRM, THAT THE APPLICATION OF THE
PROVISIONS OF TillS SECTION VII MAY INVOLVE (I) INDEMNIFICATION FOR
CLAIMS/LOSSES DUE TO THE INDEMNITEE'S OWN NEGLIGENCE, GROSS
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT, AS WELL AS
(II) INDEMNIFICATION FOR CLAIMS/LOSSES DUE TO THE NEGLIGENCE OF
OTHERS (i.e., TIDRD PARTIES). BOTH PARTIES AGREE THAT TillS STATEMENT
COMPLIES WITH THE REQUIREI\1ENT~ KNOWN AS THE "EXPRESS
NEGLIGENCE RULE," TO EXPRESSLY STATE IN A CONSPICUOUS MANNER
THAT ONE PARTY (I'HE INDEMNITOR) HAS RESPONSIDILITY FOR THE
NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY OR OTIIER FAULT OF
ANOTHER PARTY (THE INDEMNITOR}.
Vill. FIDELITY
Neither Contractor nor any of its subcontractors perfonning work or services hereunder
shal1 pay any commissions or fees or grant any rebates or other remuneration or gratuity to any
employee, dil'ector, agent or representative of Company m· to any member of the immediate
family of any of the foregoing persons. Neither Conu:actot nor any of its subcontractors
performing work or services hereU.nder shall pay any commissions or fees or grant any rebates or
other xemtmeration or gratuity to any employee, director, agent or representative of the other or
to any member of the imn1ediate family of any of the foregoing persons. Gifts of nominal value
and entertainment) meals and social invitations that are customary and proper under the
circumstances and do not place the recipient under obligation are acceptable. If any employee of
Company should soli9it a gift or gratuity from Contractor) then Contractor hereby agrees to
notify an officer of Company of such act, and Company agl'ees to hold such notification in
confidence. Failure by Contractor to comply with this Seciion VIII may, at the Company's
option, result in the termination of this Contract and may preclude any :further dealings between !.
the parties. Company ~hall have the right to inspect and audit all records of Contractor, of
whatsoever nature, relating to ~y gifts or gratuities :fu:rtrlshed to any member of Company Group
at any time, and from time to time, while this Contract remains in effect and for a period of
two (2) years ther~after.
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PVOG 16
IX. TERM
This Contract shall have a term of one (1) year from and after the date hereof and shall
continue. in full force and effect thereafter, on a year-to-year basis, unless sooner tenninated by
the parties as hereinafter provided. It is understood and agreed, however, that either party hereto
may tenninate this Contract at any tune by giving the other party at least thirty (30) days' prior
· written notice of such termination and that Company may terminate this Contract immediately if
Contractor is in breach of any of the terms hereof. Notwithstanding the foregoing~ (i) the
provisions of Sections II~ VI, VII) XITI, XIV, XVII, XVIII and XIX and Exhibit "D, shall
survive the tennination of this Contract, and (ii) all of the tetms and conditions hereof shall
survive the tennination of this Contract for all completed and cun·ent orders.
X. NOTICES
Any and all notices req~1ired or permitted to be given hereunder shall be deemed to have
been properly given when delivered via Federal Exp1·ess or similar courier, via telecopy to the
address shown on the signature page hel'eto or via mail addressed, postage prepaid, to the
add!'esses shown on the signature page hereto. Either party may change its address shown by
giving written notice thereof to the other party.
XI. ASSIGNMENT
Contractor may not alienate, transfer or assign any rights hereunder to any third party
without the express mitten approval of Company, which approval may be withheld in
Company's sole discretion. Any purported assignment without such \Witten approval shall be
null and void. Except as limited by the foregoing, this Contract shall be binding upon the
transferees, successors and assigns of the parties hereto.
XII. AUTHORITY OF EXECUTING PARTIES
Each of the persons executing this Contract represents and wan·ants that he or she has full
right and authority to execute this Contract on behalf of Company or Contractor:~ as the case may
be, and to bind such party to the fulfillment of all of the provisions hereof.
XIII. AUDIT PROVISION
Contractor shall maintain a tnte and correct set of records pertaining to its performance of
services hereunder for a period of not less than two (2) calendar years following the end of the
calendar year in which the final invoice for such services was sent. This two-year period is not a
limitation on C01npany' s right to atldit. .Any representative or representatives authorized by
Company may inspect and audit any and all records of Contractor pertaining to the goods and
services provided under this Contract. Such inspection shall be conducted at Contractor's offices
during normal business hours after 1·easonable notice. Contractor shall make a good faith effort
to include a similar audit provision in its subcontracts. Contractor shall promptly reimburse
Company for any overpayments discovered in the audit, and Contractor hereby waives any
statute of limitations or laches concerning the same. In addition, all safety, environmental and
health infonnation furnished by Contractor to Company will be subject to audit and shall be
retained by Contractor for the same period or as otherwise required by Law. ·
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PVOG 17
XIV. APPLICABLE LAW
This Contract may govetn goods and services supplied by Contractor to Company in
several different jurisdictions. W~th respect to the selection of the governing law in this
Section XIV, the parties stipulate that certainty of enforcement is an important expectation
negotiated between the parties in entering this Contract. Where any goods or service are to be
provided in a geographic location covered by the General Maritime law, General Maritime law
shall apply and shall govern the validity~ interpretation and perfmmance of this Contract. In
those instances where the General Maritime law does not apply, the Laws· of the State where the
principal work site is located shall apply and govern the validity, interpretation and performance
of this Contract. With respect to any govetning Laws that the parties select, the parties agree that
the Laws of the selected jurisdiction shall apply exclusive of any principles of conflicts of laws
that would require application of the substantive laws of another jurisdiction. References in this
Contract to any Law shall be deemed to include references to such as the same may be amended)
replaced or reenacted fi·om time to time.
XV. WAIVEROFLIEN
To the extent pe1.n1itted by Law, Contractor shall not encumber and shall not allow its
subcontractors to encumber Company's property. Whether a claim is valid or invalid) no lien,
privilege, charge or similar encun1brance shall become fixed upon Company) s leases, wells,
equipment, lands., :fixtures) improvements or other property because of the failure of any member
of Contractor Group to be paid for goods or services provided for hereunder. After being
notified ofthe existence of any such lien., privilege, charge or encumbrance, Contractor shall take
all necessary steps to obtain the release of such lien, ptivilege) charge or encumbrance. l
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Contractor shall ensure that all subcontractors, as a condition of providing work or services for l
Contractor covered by this Contract, shall execute a Waiver of Lien Agreement in the form set
forth in Exhibit "B', hereto. Contractor shall provide Company with a list of subcontractors}
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together with documents evidencing that all laborers, subcontractors and suppliers of mate1ials
and equipment have been paid and are not claiming liens on Company's property for such labor,
services or materials under the provisions of applicable Laws.
XVI. AFFILIATED COMPANIES
Affiliates of Contractor may join this Contract (any such joining affiliate, a «Joining
Contractor") by executing a joinder hereto in the fom1 set forth in Exhibit ''C" hereto. and
f01warding it to Company. Any and all references to "Contractorn in thls Contract shall be
deemed to refer to Contractor or any Joining Contractor, as applicable to the particular work or
services performed hereunder. The liability of Contractor and any Joining Contractor under this
Contract shall be severaL) and not joint A.ccordingly, the obligations, representations, covenants
and agreements of Contractor and any Joining Contractor under this Contract are several and
relate only to the work or services perf01med or to be performed by Contractor or such Joining
Contractor under tlus Contract.
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PVOG 18
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XVII. CONFIDENTIALITY i
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A. Infom1ation provided by Company to Contractor while performing services ~ ..
(including> without limitation> information·regarding Companyts operations, a well being drilled, :.!
or geological· and/or geophysical information, such ·as the depth of a well, the formations
penetrated, the results of coring) logging, testing and surveying) is proprietary to Company, and
such information and the existence and terms and conditions of this Contract or any work or
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services perfonned under this Contract e'Confidential Information'') are confidential. Contractor
shall use Confidential Information only in connection with the work or services to be performed
under this Contract, and Contractor shall not divulge Confidential Inf01mation and shall take all
reasonable steps to assure that Contractor~s and its subcontractors, and their respective officers,
directors, employeest ~gents, representatives, consultants and subcontractors, will not divulge
Confidential Information to any person or entity other than Company's representatives.
Contractor shall safeguard and protect all Confidential Information in its custody or control.
Contractor's confidentiality obligation shall survive the termination of this Contract for five (5)
years.
B. Contractor agrees that no adequate remedy at law exists for a breach or threatened
breach of any of the provisions of tlus Section XVII, t11e continuation of which, ·if not remedied)
will cause the non-breachlng party to suffer irreparable harm. Accordingly, Company and
Contractor agree that Company shall be entitled, in addition to other remedies that may be
available to Company, to immediate injunctive relief from any breach of any of the provisions of
this Section XVII and to specific pe1formance of its rights hereunder, as well as to any other
remedies available at law or in equity.
'•.
XVIII. ARBITRATION
A. Any disputes and claims arising out of or resulting from the performance of this
Contract shall be resolved by binding arbitration, to be held in Housto~ Texas, as set forth
beJow. If at any time any party shall desire to bring a claim against any the other party, and the
parties cannot agree upon the resolution of such claim) then such claim shall be referred to a
board of arbitrators (the "Board"). The Board shall be composed of one representative chosen by
each party, and a third arbitrator who shall be chosen by the two arbitrators herein provided for.
Each arbitrator shall be independent of the parties and shall have at least ten (1 0) years
experience in the oil and gas business. In the event that the two arbitrators are unable to agree
within ten (1 0) days upon a third arbitrator, then the American Arbitration Association shall
designate a disinterested person to act as such arbitrator; and, in the event that the Receiving
Party (as defineQ. below) should, for a period of ten (1 0) days after receipt of an Arbitration
Notice (as defmed below), fail to select and make known in writing to the Notifying Party (as
defined below) the arbitrator selected by the Receiving Party> the Board shall be comprised of
. the one sole arbitrator chosen by the Notifying Party. Either party {the ~~otifying Party") may at
any time serve upon the other (the "Receiving Party,} a notice (an uArbitration Notice") setting
forth the point or points upon which the decision of the Board is desired and the identity of the
arbitrator chosen by the Notifying Party. Within ten (1 0) days after the date of such Arbitration
Notice, the Receiving Party shall deliver a com:iter..notice to the Notifying Party which shall
identify the arbitrator chosen by the Receiving Party, respond to the claim in the Arbitration
17
PVOG 19
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Notice and specify any additional points or differences arbitrable hereunder upon which the
Receiving Party may desire a decision.
B. . Promptly after the coJp.position of the Board has been identified, the Board shall
give the respective parties written notice of the time and place of arbitration hearing, which
hearing must take place .within six (6} months of the date of the Arbitration Notice, The parties
may then commence with and exchange requests for documents in accordance with: Rule .34 of
the Federal Rules of Civil Procedure. No other form of discovery, including, but not limited to,
interrogatories, requests for admissions, or depositions, shall be pe1mitted. The Board (or the
sole arbitrator, as the case may be) shaH conduct the arbitration heru..ing for as long as the Board
deems reasonably necessary and the parties shall be entitled to submit expert testimony and/or
written documentation in such hearing. The Board shall, by majority vote taken within two (2)
days after such hearing> select the position of one party with respect to the claim(s) and notify
both parties in writing of such selection. The decision of the Board (or the soie arbitrator) as the
case may be) shall be final, conclusive and obligatory upon the parties and their successors and
assigns, and without appeal, and each party agrees to abide by and comply with every such
decision. Judgment on the decision of the Board may be entered and enforced by a court of
competent jurisdiction. The costs ofboth parties in connection with any such arbitration shall be
paid by the losing party. Notwithstanding the requirement to arbitrate any dispute, any party
hereto may appty to a court for interim measures, such as injtmctions, attaclnnents and
conservation orders, which measures may be immediately enforced by comt order. Any decision
with respect to such interim measures shall promptly be referred to the Board for review and
final decision.
XIX. :tv1ISCELLANEOUS
A. The parties may, by mutual written agreement, amend this Contract in any
respect, and either party, as to such party, may (i) extend the lime for the performance of any of
the obligations of the other party; (li) waive any inaccuracies in representations and warranties
by the other party; (iii) waive compliance by the other party with any of the co:venants or
agreements contained herein ·and performance of any obligations by the other party; and
(iv) waive the fulfillment of any condition that is precedent to the performance by such party of
any of its obligations under this Contract. To be effective, any such extension or waiver must be
in writing and be signed by the party providing such waiver or extension, as the case may be. No
such. extension or waiver by any party, nor any waiver by any Pru:ty of any breach of any
provision of this Contract, shall operate or be construed as a waiver of any subsequent breach,
whether or not similar. No failure or any delay by any pru.ty in exercising any right, power or
privilege under this Contract shall operate as a waiver of such right) power or p1ivilege, and no
single or partial exercise of any such right, power or privilege shall preclude any other or further
exercise of such rigbt, power or privilege or the exercise of any other right, power or privilege.
Except as otherwise 1)rovided in this Contract, the rights and remedies herein provided are
cumulative and are not altel'native.
B. The headings, sub-headings and other s~bdivisions of this Contract are inserted
for convenience of reference orily. The parties do riot intend them to be· an aid in legal
construction.
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C. All references to cash or monetary amounts refer to U.S. Dollars only unless
specifically stated to be in the currency of anothe1' govennnent. The words Hthls Contract,'~
'~herein,,) "hereby,') "hereundet, and ~'hereof:" and words of similar import, refer to this Contt.·act
as a whole and not to any particular subdivisio11, unless expressly so limited. The wprds "tllis
Article," '~this Section~' and "this subsection," and words of sirnllar import, refer only to the
Articles, Sections or subsections, respectively, hereof in which such words occur. The vvord
"including'~ (in its various forms) means "including without lhnitation., Any reference to any
federal, state or local Law shall be deemed also to refer to all rules and regulations promulgated
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thereunder, unless the context requires otherwise. Pronouns in masculine, feminine or neuter !·
genders shall be construed to state and include any other gender and words, terms and titles
(including terms defined herein) in the singular fonn shall be construed to include the plural and
vice versa, unless the context otherwise expressly requires. Unless the context otherwise
requires~ all defined terms contained herein shall include the singular and plural and the
conjunctive and disjunctive forms of such defined terms.
D. Except for the designation of the work or service to be performed and the
consideration provided for h1 Section I, it is understood and agreed between the parties hereto
that this Contract constitutes the sole and complete basis· for the agreement between the parties
and that no other representations of any kind, oral or otherwise, have been made to Contractor.
E. In the event one or more of the provisions contained in this Contract shall be held,
for any reason, to be invalid, void, illegal or unenforceable in any respect, such invalidity,
voidness, illegality or 1Ulenforceability shall not affect the remaining provisions hereof, and this
Contract shall remain unaffected and shall be construed as if such invalid~ void, illegal or
unenforceable provision never had been contained herein.
F. No consideration shall be given to the fact or presumption that one party has a
greater or lesser hand in drafting this Contract.
G. Tins Contract represents a final, complete and exclusive statement of the agreement
between the parties, supersedes any prior oral or written representation, agreement or
understanding between the parties, and may not be modified, supplemented, explained or waived,
except in writing signed by an authorized representative of both parties.
H. This Contract may be executed in any number of counterpatts> and each such
counterpart shall be deemed an original of this Contract for all purposes. No party shall be
bound to this Contract unless and until all parties have executed a: counterpart. A signature page
signed by a party and sent by facsimile or other electric transmission to the other party shall be
deemed to be valid as an original and shall be binding as between the parties.
I. IN SIGNING TIDS CONTRACT, CONTRACTOR EXPRESSLY
ACKNOWLEDGES THAT IT IS AWARE OF ITS RIGHT TO OBTAIN LEGAL
COUNSEL TO REVIEW TillS CONTRACT. FURTHERMORE, CONTRACTOR
EXPRESSLY ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS ALL OF
THE PROVISIONS CONTAINED IN TIDS CONTRACT, INCLUDING WITHOUT
LIMITATION, THE INDEMNITY AND RELEASE PROVISIONS, AND AGREES TO
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ALL SUCI! PROVISIONS, AS INDICATED BY THE SIGNATURE OF ITS
AUTHORllZED REPRESENTATJLVE BELOW.
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-----------·~-Additional-ptovisions;-ifany;-are-attached-hereto-as-Exhibiti..'D~-----------------t-
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[Signature Pages Follow] !
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-:--------"""""""""""""_ _..........,....=....,.,..---.,----------_....,.-..........,-._-~_....,.,.---·----·-~--·--~'-=---''-,
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IN WITNESS WHElrnOF, the pl:ll'ties hereto have executed and delivered this Contract l
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effective as ofthe date fil'st hereinabove shown.
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COMPANY: ..
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PENN VIRGINIA OlL & GAS CORPORATION. ~ 1
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By~·-------it=:;;..._---===-
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Name: i
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Title:
Address: 840 Gessner> Suite 800
This text is long and has been trimmed here. Open the source document for the complete record.