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CAZA Drilling (California), Inc. v. TEG Oil & Gas U.S.A., Inc.

California Court of Appeal
142 Cal. App. 4th 453 (2006)


TEG Oil & Gas U.S.A., Inc. (TEG) (defendant) hired CAZA Drilling (California), Inc. (CAZA) (plaintiff) to drill an oil well. The contract stated that “[e]xcept for such obligations and liabilities specifically assumed by [CAZA], [TEG] shall be solely responsible and assume liability for all consequences of operations by both parties.” CAZA’s specifically-assumed obligations and liabilities included damages to its equipment, injury to its employees, and certain environmental concerns. The contract also stated that CAZA was required to use “all reasonable means” to prevent well blowouts and to comply with all federal, state, and local government laws, rules, and regulations. There was a blowout, destroying the well. CAZA sued TEG for breach of contract, among other claims. TEG filed a cross-claim against CAZA, alleging that CAZA’s negligence caused the blowout. CAZA moved for summary judgment based on the exculpatory clause in the contract. The trial court granted CAZA summary judgment on the cross-claim. TEG appealed.

Rule of Law


Holding and Reasoning (Epstein, J.)

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