Mar 16, 2017

Robert E. Kerrigan, Jr. and Raymond C. Lewis secure a favorable verdict

Robert E. Kerrigan, Jr. and Raymond C. Lewis secured a favorable verdict for Ole Brook Directional Services and its insurer after a four-day jury trial in the U.S. District Court for the Eastern District of Louisiana. Solstice v. OBES, Inc., et al., U.S. EDLA No. 12-2417.  In August 2011, JAM Petroleum LLC, as the operator of leases, and Solstice Oil & Gas I LLC, as the non-operating interest-holder, entered into a joint operating agreement to drill “ML Mann et al. No. 1 Well” in West Avondale Field, St. Charles Parish, La. JAM contracted with multiple drilling and servicing companies, including Ole Brook for its directional drilling services.

In October 2012, Solstice sued Ole Brook for breach of contract and negligence alleging that Ole Brook was charged with directionally drilling a non-vertical wellbore to a predetermined target bottom-hole location. Solstice alleged that Ole Brook’s deviation from the drilling plan and failure to reach the target bottom-hole location required the drilling of a second, side-track well to test the prospect. 

Ole Brook countered that Solstice, JAM, the Company Man, and other subcontractors had no experience drilling in South Louisiana and that lack of experience led to operational problems that pre-dated Ole Brook’s work and prevented Ole Brook from completing its work. Specifically, Ole Brook alleged that the drilling fluid and mud weight program for the Well were insufficient and inadequately maintained to successfully directionally drill the Well to the desired depth and target bottom-hole location.

In closing argument, Solstice asked the jury to find Ole Brook 100% responsible for the failure of the drilling project and award $5.7 million. Mr. Kerrigan explained that the problems faced at this project had nothing to do with Ole Brook and Solstice, JAM, and the Company Man bore the lion’s share of the responsibility for any alleged losses. 

After nearly five hours of deliberations, the jury found that Ole Brook’s work was not negligent but that it had breached a portion of its contract with JAM. However, the jury found Ole Brook to only be 10% at fault for Solstice’s losses. The jury apportioned the remaining 90% of fault to JAM (50%), Solstice (20%), and the Company Man (20%). Lastly, the jury found that Solstice’s total damages were only $474,530 – less than 8% of Solstice’s demand in closing.