Xtreme Coil Drilling Corp. v. Encana Oil & Gas, Inc., 958 F. Supp. 2d 1238

Background

Xtreme Coil Drilling (Plaintiff) provided drilling services to Encana (Defendant) on Rigs 6 and 7 under a written contract; a May 4, 2008 catastrophic drawworks accident shut Rig 6 and prompted repairs.
After Xtreme investigated and made equipment changes (kinetic energy system, better brakes, larger motor), Encana continued the relationship but later terminated both rigs and refused to pay certain invoices from May–October 2008.
Xtreme sued for breach of contract and prevailed at jury trial: roughly $2 million for Rig 6 and $500,000 for Rig 7.
Post-trial motions: Encana renewed Rule 50 motion (JMOL) and alternatively moved for a new trial arguing evidentiary and jury-instruction errors (material breach, after-acquired evidence, setoff, estoppel). Xtreme moved for contractual attorney’s fees and prejudgment interest.
The court denied Encana’s JMOL and new-trial motions, awarded Xtreme reasonable attorney’s fees and non-taxable expenses in a reduced lodestar amount, and denied prejudgment interest under the contract.

Issues

Issue	Plaintiff's Argument (Xtreme)	Defendant's Argument (Encana)	Held
Rule 50 — material breach re: Rig 6 equipment	Xtreme had substantially performed; post-accident cures remedied prior defects and Encana affirmed performance	Equipment (no KEMS, defective brakes, underpowered motor, new tech issues) amounted to material breach relieving Encana of payment	Denied JMOL: jury reasonably could find Xtreme substantially performed; Encana affirmed contract post-cure so only pre-May invoice potentially affected
New trial — after-acquired-evidence instruction (drug-policy breaches)	N/A (Xtreme argued Encana knew of many issues and didn’t treat them as material)	Court should have instructed jury that Encana may be excused even if it learned of breaches only after refusing performance	Denied: court’s instructions allowed consideration of breaches; failure to give specific instruction was not prejudicial
New trial — setoff / counterclaim for Encana’s idled-equipment costs	N/A	Encana’s shutdown leasing/supervision costs (~$500k) offset Xtreme’s invoices	Denied: court found Encana’s proof insufficient to tie specific avoidable costs to Xtreme’s breach, and jury’s verdict for Xtreme undermined Encana’s counterclaim
Attorney’s fees and expenses under contract	Contract authorizes prevailing-party reasonable fees and costs; Xtreme sought ~$717k fees+costs	Encana conceded prevailing-party status but challenged rates, hours, and certain expenses	Granted in part: lodestar reduced (hourly rates and hours trimmed; partner-heavy staffing reduced; legal-research expenses cut) totaling $470,558.60 (fees) + $30,051.50 (expenses) = $500,610.10 awarded
Prejudgment interest under contract	Contract permits 1%/month on unpaid sums; Xtreme argued disputed invoices merged into judgment so interest should run	Encana argued invoices were timely disputed so excluded by contract clause	Denied: court held disputed-but-judged invoices become ultimately paid upon judgment, so the contract exception applies and prejudgment interest not awarded
Estoppel instruction	N/A	Encana argued Xtreme’s silence/waiting to revise rates induced reliance and changed Encana’s drilling decisions	Denied: no evidence Encana relied or materially changed position; estoppel instruction properly refused

Key Cases Cited

Jones v. United Parcel Service, 674 F.3d 1187 (10th Cir. 2012) (standard for viewing evidence on Rule 50 motion)
Western Distributing Co. v. Diodosio, 841 P.2d 1053 (Colo. 1992) (substantial performance doctrine in contract cases)
Montgomery Ward & Co. v. Duncan, 311 U.S. 243 (1940) (standard for granting new trial based on jury instruction error)
Hensley v. Eckerhart, 461 U.S. 424 (1983) (lodestar method for attorney’s fees)
Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) (lodestar aims to approximate market fee)
Missouri v. Jenkins, 491 U.S. 274 (1989) (prevailing market rates standard for reasonable hourly rates)