Wyoming law usually prohibits those engaged in the oil and gas industry from contractually shifting to others liability for their own negligence. Lexington argued Wyoming’s Anti–Indemnity Statute declares void as a matter of public policy “[a]ll agreements … pertaining to any well for oil, gas or water … to the extent [they] … purport[ ] to relieve the indemnitee from loss or liability for his own negligence.” Wyo. Stat. Ann. § 30–1–131(a)(iii)(B).
The trouble for Lexington was the statute doesn’t stop there. The very next sentence adds that “[t]his provision shall not affect the validity of any insurance contract .” Wyo. Stat. Ann. § 30–1–131(a)(iii)(B) (emphasis added). So while indemnity agreements are generally impermissible in the oil and gas industry, insurance contracts supply an exception to the rule.
In this case, both Precision and Lexington agreed that Lexington issued and Precision invoked two insurance contracts that provided coverage for the accident here.
“When a statute is as clear as a glass slipper and fits without strain, it is [the Court’s] job merely to put it on the foot where it belongs.” – Justice Gorsuch
The 10th Circuit Court of Appeals held that Wyoming’s anti-indemnity statute did not apply to this particular set of facts and remanded the cast back to the Federal District Court of Wyoming. Upon remand and after a subsequent appeal, it was ultimately held that Lexington was responsible for the entire amount paid in settlement to Mr. Jent.