XTO Energy’s Insurance Coverage Victory

Haynes and Boone successfully represented XTO Energy in the case.

XTO Energy Inc. is an American energy company, principally operating in North America, specializing in the drilling and production of unconventional oil and natural gas assets, typically from shale rock through a process known as hydraulic fracturing. It is a subsidiary of Exxon Mobil Corporation.

The insurance dispute stems from a 2016 explosion and fire at an oil and gas well in North Dakota that killed one worker and caused severe burn injuries to others. The families of victims sued XTO, the owner and lease operator of the well, and contractors hired by XTO. 

Some of the contractors’ insurance carriers denied coverage, potentially depriving XTO of policies with combined limits in excess of $55 million. In motions for summary judgment, the carriers — Berkley National Insurance Co.; Commerce and Industry Insurance Co.; and StarStone National Insurance Co. — alleged a number of coverage defenses, including that XTO was not an “additional insured” under its contractors’ insurance policies and that their policies included “pollution exclusions” barring coverage for bodily injury and damages arising from pollutants.

In a May 3, 2021, opinion, U.S. District Judge Daniel L. Hovland of North Dakota ruled that XTO is an additional insured under the policies. He also ruled that the carriers could not deny coverage on the basis of the pollution exclusions, in part due to policy language that the exclusions did not apply to damages arising out of heat, smoke or fumes from a hostile fire. 

Haynes and Boone’s team was led by Partner Ernest Martin Jr. (Picture), assisted by Partner Leslie Thorne, co-chair of the Litigation Practice, and Associates Carla Green and Greg Van Houten.

Involved fees earner: Carla Green – Haynes and Boone; Ernest Martin Jr. – Haynes and Boone; Leslie Thorne – Haynes and Boone; Greg Van Houten – Haynes and Boone;

Law Firms: Haynes and Boone;

Clients: XTO Energy;

Author: Martina Bellini