Simmons v. Cudd Pressure Control, 969 N.W.2d 442

Background

On August 2011, Robert Simmons (WISCO employee) was struck by a section of pipe that slipped through an elevator while Cudd was removing pipe from a Murex‑operated well; Cudd supplied the elevator, not the pipe.
Murex had a Master Service Agreement (MSA) with Williston Industrial (WISCO’s predecessor) that required subsequent written "Service Agreements" for the MSA to govern specific work; Murex also had an MSA with Cudd that required Murex to defend and indemnify Cudd (except for gross negligence).
Simmons sued Cudd, Murex, and others; Murex interpleaded/sued WISCO claiming WISCO (as successor to Williston) must defend and indemnify under the MSA; Cudd sued Murex for breach of its MSA duty to defend/indemnify.
The district court granted summary judgment for Murex against WISCO, ordering WISCO to pay Murex attorney fees; the court declined summary judgment on whether Murex owed Cudd defense/indemnity because of factual dispute over gross negligence.
After an evidentiary hearing, the district court found Cudd had spoliated the elevator (allegedly by cleaning/altering/replacing parts) and struck the defense/indemnity provisions and dismissed Cudd’s breach claim; the court also gave an adverse‑inference instruction at trial.
The jury awarded Simmons $9,272,000 and apportioned fault 70% Cudd / 15% Murex / 10% WISCO / 5% Simmons; Cudd and WISCO appealed; this Court reversed portions addressing MSA application and sanctions and remanded for a new trial on fault apportionment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether WISCO is bound by the Williston MSA and must defend/indemnify Murex (and pay fees).	Murex: WISCO assumed Williston’s MSA obligations via the asset purchase and/or waived the written‑agreement requirement.	WISCO: Not a party to the MSA; no written Service Agreement existed so the MSA wasn’t triggered.	Reversed: MSA did not apply because no written Service Agreement governed the work; waiver misapplied; attorney‑fee award vacated.
Whether the district court permissibly found Cudd spoliated the elevator.	Murex: Cudd cleaned/altered/replaced elevator parts after the accident and after preservation duty arose; sanctions warranted.	Cudd: Record does not show when or whether alterations occurred after preservation duty; no spoliation.	Reversed: Court erred because record lacked a finding that alterations occurred after Cudd’s duty to preserve; sanction finding legally insufficient.
Whether the district court’s sanctions (striking indemnity defense and dismissing Cudd’s claim) were appropriate.	Murex: Severe sanctions appropriate given spoliation undermined Murex’s ability to defend.	Cudd: Sanctions unduly harsh and unsupported by findings.	Reversed: Sanctions were an abuse of discretion because the threshold factual finding (timing of alteration) was missing.
Whether the adverse‑inference jury instruction against Cudd was proper.	Murex: Instruction appropriate because court found spoliation.	Cudd: Instruction improper absent a valid spoliation finding and prejudiced apportionment.	Reversed: Instruction improper; it likely prejudiced Cudd’s fault allocation; remand for new trial on fault only.

Key Cases Cited

RTS Shearing, LLC v. BNI Coal, Ltd., 965 N.W.2d 40 (N.D. 2021) (summary judgment standard)
Mobil Oil Corp. v. Schlumberger, 598 So.2d 1341 (Ala. 1992) (MSA framework governs subsequent work and incorporation into future orders)
Wallace v. Oceaneering Int’l, 727 F.2d 427 (5th Cir. 1984) (example of MSA governing verbal and written work orders)
Barkley, Inc. v. Gabriel Bros., Inc., 829 F.3d 1030 (8th Cir. 2016) (example of MSA requiring written statements of work)
Sanders v. Gravel Prods., Inc., 755 N.W.2d 826 (N.D. 2008) (waiver requires voluntary relinquishment of a known right)
Savre v. Santoyo, 865 N.W.2d 419 (N.D. 2015) (waiver may be inferred from conduct)
Pfeifle v. Tanabe, 620 N.W.2d 167 (N.D. 2000) (waiver by delay or acceptance of performance different than contract)
Fines v. Ressler Enters., Inc., 820 N.W.2d 688 (N.D. 2012) (district court’s sanction power for spoliation and its purposes)
Ihli v. Lazzaretto, 864 N.W.2d 483 (N.D. 2015) (duty to preserve evidence when litigation reasonably foreseeable)
Mont. State Univ.-Bozeman v. Mont. First Judicial Dist. Ct., 426 P.3d 541 (Mont. 2018) (sanctionable spoliation requires breach of a preservation duty at time of destruction)
Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311 (Fed. Cir. 2011) (sanctions only where duty to preserve existed when evidence was destroyed)
Kronisch v. United States, 150 F.3d 112 (2d Cir. 1998) (adverse inference requires an obligation to preserve at time of destruction)