Fear Not Law Articles: CAZA DRILLING (CALIFORNIA), INC., v. TEG OIL & GAS U.S.A., INC PART-II

CAZA DRILLING (CALIFORNIA), INC., v. TEG OIL & GAS U.S.A., INC

Filed 8/29/06

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

CAZA DRILLING (CALIFORNIA), INC.,

Plaintiff, Cross-defendant and Respondent,

TEG OIL & GAS U.S.A., INC.,

Defendant, Cross-complainant and Appellant;

SEFTON RESOURCES, INC.,

Cross-complainant and Appellant.

B182892

(Los Angeles County

Super. Ct. No. PC033872)

Continue from Part I â€¦â€¦â€¦

Appellants contend these factors are present here. We disagree. Although the Supreme Court did not specifically exclude contracts between relatively equal business entities from its definition of contracts in the public interest, it is difficult to imagine a situation where a contract of that type would meet more than one or two of the requirements discussed in Tunkl. With respect to the second and third factors, for example, CAZA did not hold itself out as performing services for the public, but only for the small number of entities that happened to be oil field operators. While the production of oil is of great importance to the public, the drilling of a particular oil well is generally only important to the party who will profit from it. With respect to the fourth and fifth factors, appellants' argument that it was forced into an adhesion contract boils down to this: â€

Description	Court properly rejected oil company's cross-complaint against drilling company stemming from damages caused by blowout, on basis that exculpatory and limitation of liability provisions in parties' contract were valid--rather than improper attempt under Civil Code Section 1668 to exempt a contracting party from responsibility for fraud, willful injury, or violations of law--where drilling company did not seek or obtain complete exemption from culpability on account of its potential negligence or violation of any applicable regulations, but only sought to limit its liability for economic harm suffered by oil company. The parties foresaw possibility that a blowout could occur and agreed between themselves concerning where the losses would fall. The agreement required drilling company responsibility for damage to its equipment, injury to its employees and certain pollution and contamination removal and control activities. Thus not adversely affecting public or drilling company's employees.
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