EQT Production Co. v. Terra Services, LLC
179 F. Supp. 3d 486
W.D. Pa.2016Background
- EQT developed a natural‑gas well site including a geomembrane‑lined reserve water impoundment (the “S‑Pit”); holes later appeared in the liner, causing environmental liability claims by DEP and a neighboring landowner.
- EQT sued Terra Services (Terra), alleging Terra’s water‑treatment work caused the holes and asserting breach of contract, breach of express warranty, contractual indemnity, and (in the alternative) common‑law indemnity.
- Terra impleaded Trumbull (excavator) and ECI (liner installer), alleging Trumbull left sharp rocks/debris and ECI improperly installed the liner, both causing punctures; Terra and ECI seek contribution and common‑law indemnity from Trumbull.
- Trumbull moved to dismiss Terra’s third‑party complaint and ECI’s cross‑claims, arguing any liability of Trumbull to EQT would be contractual (not tort), and thus contribution and common‑law indemnity are unavailable.
- The court treated the pleadings as true for Rule 12(b)(6) purposes, applied Pennsylvania law (including the gist‑of‑action doctrine), and heard argument; it granted Trumbull’s motions and dismissed the claims with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Terra/ECI may seek contribution from Trumbull | Terra: EQT pleaded a common‑law indemnity (tort) claim against Terra, so Terra may implead joint tortfeasors for contribution | Trumbull: Contribution is available only among joint tortfeasors; here Trumbull’s potential liability to EQT is contractual | Dismissed — contribution unavailable because Trumbull’s liability to EQT would be contractual, not tortious |
| Whether Terra may seek common‑law indemnity from Trumbull | Terra: Terra could be secondarily liable and thus entitled to indemnity from the party actually at fault | Trumbull: Common‑law indemnity requires the claimant to have no active fault and is only for tort liability; Terra offers no scenario where it is secondarily liable while having no fault | Dismissed — Terra failed to plead a cognizable common‑law indemnity claim against Trumbull |
| Whether the gist‑of‑action doctrine converts third‑party tort claims into contract claims | Terra: Tort might exist despite contracts (citing examples where duty arose outside the contract) | Trumbull: Duties alleged arise from the written contracts (workmanlike performance, inspection, indemnity), so claims are contractual in essence | Held — gist of action applies: duties originate in contract, so Trumbull’s liability (if any) is contractual |
| Whether impleader under Fed. R. Civ. P. 14 was proper | Terra: Impleader proper because third parties may be liable to Terra for EQT’s asserted losses | Trumbull: Rule 14 cannot be used to bring in parties solely liable to the plaintiff; here Trumbull would only be liable to EQT under contract | Held — impleader improper; Terra cannot join Trumbull because Trumbull’s liability would be contractual and contribution/indemnity in tort are unavailable |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard requires plausible factual allegations beyond legal conclusions)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state a claim that is plausible on its face)
- Connelly v. Lane Construction Corp., 809 F.3d 780 (3d Cir. 2016) (distinguish factual allegations from legal conclusions under Iqbal)
- Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (court should accept well‑pleaded facts and determine plausibility)
- Bruno v. Erie Insurance Co., 106 A.3d 48 (Pa. 2014) (gist‑of‑action doctrine: origin of duty controls whether claim sounds in tort or contract)
- Builders Supply Co. v. McCabe, 77 A.2d 368 (Pa. 1951) (common‑law indemnity rests on secondary, not primary, liability)
- City of Wilkes‑Barre v. Kaminski Bros., 804 A.2d 89 (Pa. Commw. Ct. 2002) (common‑law indemnity shifts responsibility when legal relation compels payment for another’s act)