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Barnard Pipeline, Inc. v. Travelers Prop. Cas. Co. of Am.

United States District Court for the District of Montana, Butte Division

March 13, 2014, Decided; March 13, 2014, Filed

CV 13-07-BU-DLC

Opinion

 [*867]  ORDER

Before the Court are the parties cross motions for partial summary judgment. Jurisdiction is based on diversity. For the reasons explained, the Court grants Plaintiff's motion for partial summary judgment in part and denies it in part and denies  [*868]  Defendant's cross motion for partial summary judgment.

Factual and Procedural Background

Plaintiff Barnard Pipeline, Inc., ("Barnard") brings this action against its insurer, Defendant Travelers Property Casualty Company of America ("Travelers"), for a declaratory judgment that Travelers is obligated to  [**2] provide coverage for losses claimed by Barnard under a builder's risk policy issued by Travelers to Barnard. Barnard also asserts a claim of insurance bad faith against Travelers. The parties' cross motions seek summary judgment on Barnard's claim for coverage. Barnard's motion also seeks dismissal of some of Travelers' affirmative defenses.

Barnard contracted with Kern River Gas Transmission Company to complete the Apex Pipeline Expansion Wasatch Loop project ("the Project"), which involved the construction and installation of a 28-mile gas pipeline along a right of way traveling through the Wasatch Mountain Range in Utah. Travelers reviewed the agreement between Kern and Barnard and insured Barnard under a builder's risk policy ("the Policy"). Travelers issued the Policy in October 2010.

The first phase of the Project involved construction and/or improvement of various roads to access the right of way. The first phase of the Project also involved the clearing of vegetation, stripping of topsoil, and leveling and/or grading of the right of way. The object of this excavation work was to get a level, safe, and compacted soil surface on which to perform the next phase of work. Once prepared,  [**3] the right of way was used as a route of travel for heavy equipment and also used as a working surface for constructing and installing the pipe.

After preparation and excavation of the right of way, the plan of construction was that Barnard would then dig a trench along the right of way, string the pipe along side the trench, perform any bending of the pipe as necessary, weld sections of the pipe together, and then install the pipe in the trench. After the pipe was installed and the trench backfilled, the right of way was then reseeded and restored to a more "natural" condition.

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3 F. Supp. 3d 865 *; 2014 U.S. Dist. LEXIS 33567 **

BARNARD PIPELINE, INC., a Montana Corporation, Plaintiff, vs. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Defendant.

Subsequent History: Motion granted by, in part, Motion denied by, in part Barnard Pipeline, Inc. v. Travelers Prop. Cas. Co. of Am., 2014 U.S. Dist. LEXIS 53778 (D. Mont., Apr. 17, 2014)

Motion granted by Barnard Pipeline, Inc. v. Travelers Prop. Cas. Co. of Am., 2014 U.S. Dist. LEXIS 64644 (D. Mont., May 2, 2014)

CORE TERMS

Travelers, right of way, coverage, affirmative defense, Declarations, contends, insurer, defenses, structures, pipe, reservation of rights letter, excavated, summary judgment, access road, damages, physical loss, job site, ambiguous, asserts, cleared, leveled, site, precipitation, constructed, Dictionary, provisions, losses, terms, soil, insurance contract

Civil Procedure, Summary Judgment, Entitlement as Matter of Law, General Overview, Burdens of Proof, Movant Persuasion & Proof, Genuine Disputes, Nonmovant Persuasion & Proof, Preliminary Considerations, Federal & State Interrelationships, Erie Doctrine, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Question of Law, Entire Contract, Ambiguous Terms, Coverage Favored, Exclusions, Reasonable Expectations, Evidence, Allocation, Commercial General Liability Insurance, Exclusions, Burdens of Proof, Coverage, Construction Against Insurers, Reservation of Rights, Notice to Insured Parties, Estoppel & Waiver, Reservation of Rights