United Pacific Insurance v. United States Department of the Interior

ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

I.

Introduction

Plaintiff United Pacific Insurance Company (“UPIC”) has filed this action seek ing declaratory and injunctive relief against defendant United States Department of the Interior, Minerals Management Service (“MMS”). The action concerns certain payments demanded from UPIC by MMS, stemming from a bond (“Bond 83006” or “the Bond”) issued by UPIC on behalf of Powerine Oil Company (“Powerine”). Plaintiff UPIC seeks a declaration from this Court that it is exonerated from its obligations as surety on the 83006 Bond. Defendant MMS has asserted a counterclaim seeking indemnification for the $850,000 payment that it made to Powerine pursuant to a Settlement Agreement in a bankruptcy proceeding.

The Court previously considered cross-motions for summary judgment in this case on November 2, 1998. The Court found that the current action was not barred on grounds of res judicata, nor by the applicable statute of limitations or principles of laches. The Court also found that UPIC was not exonerated from its obligations because the Settlement Agreement did not change the…