BP files motion to dismiss Transocean's claims of insurance limitation

Alejandro de los Rios May 9, 2011, 8:00am


BP has filed a motion to dismiss countersuits filed by Deepwater Horizon oilrig owner Transocean, which disputes how much BP is insured by Transocean's policies.

The filing is the latest in a series of disputes that have arisen over the insurance policies taken out by BP, Transocean and other defendants on the Deepwater Horizon and whether or not they indemnify BP for the oilrig explosion and Gulf of Mexico oil spill.

Transocean filed a pair of federal suits where their insurers argue against BP's claim that it qualifies for coverage under Transocean policies.

BP's motion to dismiss Transocean's claims says the oilrig owner has no standing "because it seeks a declaration of insurance rights and obligations between the BP Parties, on one hand, and certain insurance companies, on the other."

"It does not seek a declaration of any insurance rights or obligations of Transocean itself," the motion states.

"The United States Constitution and Declaratory Judgment Act do not confer subject matter jurisdiction over a claim by a party that seeks a declaration of rights and obligations solely in respect to parties other than itself."

BP claims because Transocean is filing a claim on behalf of its insurers and not for itself, it does not have any legal standing to seek damages.

BP also claims it will "face a substantial risk of prejudice if the insurers are not joined and bound by a judgment on Transocean's claims."

San Francisco attorneys David Goodwin, M. Alexia dePottere-Smith and Washington D.C. attorneys Allan Moore, Seth Tucker and Christopher Wenk filed the motion.

The motion follows a letter penned by BP attorney Don Haycraft to U.S. District Judge Carl Barbier in February.

"The issue in the suits is the scope of BP's additional insured status under the policies," Haycraft on Feb. 22.

Barbier is overseeing the multidistrict litigation surrounding the BP oil spill.

Haycraft reported to him that, "The plaintiffs, Transocean Excess Insurers and Ranger Insurance Company, are liability insurance carriers that issued policies to Transocean as the named insured with total limits of $750 million."

"The insurers seek a declaration that to the extent that they provide the 'additional insured' coverage to BP, that coverage is limited to the scope of the 'indemnity' that Transocean agreed to provide to BP in the drilling contract," Haycraft wrote.

He wrote that BP filed a counter claim in the Ranger suit, seeking a declaration that the insurers must cover claims without such limitation.

He wrote that BP filed a cross claim in the Ranger suit against Marine Package Insurers.

"In turn, Transocean Marine Package Insurers filed a counter claim for the loss of the Deepwater Horizon hull in the amount of $560 million," Haycraft wrote.

He wrote that BP and leasehold co-owner MOEX Offshore intend to seek an order instructing the insurers not to dissipate their policy limits pending court consideration of these cases.

"BP and MOEX are evaluating other insurance policies, including other excess Transocean policies, in which they may be 'additional insureds' and may seek leave to amend to add that coverage to the insurance litigation," Haycraft wrote.

Federal MDL 2:10-md-2179

More News