Case 4:09-cv-02975 Document 1 Filed in TXSD on 09/11/09 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

MAVERICK TUBE CORPORATION, §

a Delaware Corporation; §
§
MAVERICK TUBE, LLC, f/k/a §
MAVERICK TUBE, LP, §
a Delaware Limited Liability Company; §
§
TUBOS DEL CARIBE, LTDA., §
a Colombian Sociedade por Quotas §
De Responsabiliadade Limitada; §
§
and §
§
TENARIS, GLOBAL SERVICES (U.S.A.) §
CORPORATION, §
a Delaware Corporation, §
§
Plaintiffs, §
§
v. § CASE NO. ______________
§
WESTCHESTER SURPLUS LINES §
INSURANCE COMPANY, §
A Georgia Corporation, § JURY TRIAL DEMANDED
§
§
Defendant. §

COMPLAINT

Plaintiffs Maverick Tube Corporation (“MTC”), Maverick Tube, LLC f/k/a

Maverick Tube, LP (“MTLP”), Tubos del Caribe, Ltda. (“Caribe”), and Tenaris Global Services

(U.S.A.) Corporation (“Tenaris USA”), by and through their attorneys, for their Complaint against

Defendant Westchester Surplus Lines Insurance Company (“Westchester”) state as follows:

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PARTIES

MTC is a Delaware corporation. MTC, at times relevant hereto, had its principal

place of business in Chesterfield, Missouri. MTC’s current principal place of business is

Houston, Texas.

MTLP is a limited liability corporation formerly known as Maverick Tube, LP, a

Delaware limited partnership. MTLP, at times relevant hereto, had its principal place of business

in Chesterfield, Missouri.

1. Caribe is a Colombian Sociedade por Quotas de Responsabiliadade

Limitada, with its principal place of business in Cartegena, Colombia.

2. Tenaris USA is a Delaware corporation, with its principal place of

business in Houston, Texas.

3. Upon information and belief, Westchester is a Georgia Corporation that

has its principal place of business in Georgia. Westchester does business in Missouri and writes

insurance in Missouri. Westchester Surplus Lines Insurance Company may be served through its

Registered Agent for service of process, Mark G. Irwin, 500 Colonial Center Pkwy, Roswell,

Georgia 30076.

JURISDICTION AND VENUE

4. This Court has personal and subject matter jurisdiction pursuant to 28

U.S.C. § 1332, as the parties are citizens of different states and the amount in controversy

exceeds $75,000 excluding interest and costs.

5. Venue is proper under 28 U.S.C. § 1391.

THE POLICIES

6. For and in consideration of the stated premium, Westchester issued to

Maverick Tube Corporation (“MTC”) as the first Named Insured a contract of insurance, policy

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number G22033621 001, for the period of October 1, 2005 to October 1, 2006 (“Primary

Policy”). By endorsement, the policy period was amended to be October 1, 2005 to January 1,

2007.

7. The Primary Policy contains a Named Insured endorsement that identifies

Maverick Corporation, Maverick LP, Tubos del Caribe S.A. “and/or any subsidiary company or

corporation (including subsidiaries thereof) and/or any other entity in which Maverick Tube

Corporation or its subsidiaries have more than 50% ownership interest.”

8. The Primary Policy contains an Additional Insured – Vendors

endorsement naming “All Vendors.”

9. The Primary Policy contains a self-insured retention endorsement.

10. For and in consideration of the stated premium, Westchester issued to

MTC as the first Named Insured a contract of insurance, commercial umbrella policy number

G2198615A 001, for the period of October 1, 2005 to October 1, 2006 (“the Umbrella Policy”).

By endorsement, the policy period was amended to be October 1, 2005 to January 1, 2007. The

Primary Policy and the Umbrella Policy will be collectively referred to as “Policies.”

11. The Umbrella Policy defines “insured” to include “any of your subsidiary

companies or any company over which you exercise control and actively manage.”

12. The Policies were issued in Missouri, and the Umbrella Policy states it

was procured pursuant to Missouri law. A copy of the Policies are attached as Exhibit 1 and

Exhibit 2 and incorporated by reference herein.

13. Pursuant to the terms of the Policies, Westchester agreed to provide, inter

alia, certain general liability insurance coverage to Plaintiffs, as set forth in the insuring

agreement, in return for premiums, which have been paid.

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14. Plaintiffs have complied with all terms, obligations and conditions

precedent of the Policies.

15. Plaintiffs have exhausted the self-insured retention under the Primary

Policy.

BARROW-SHAVER CLAIM

16. Prior to April, 2006, Caribe manufactured certain casing (the “Casing”).

17. As part of the manufacturing process, Caribe used a chain conveyance

system to move the Casing into and out of tempering furnaces. Caribe utilized this same chain

conveyance system in the manufacture process for all of the Casing.

18. MTLP purchased certain Casing from Caribe.

19. MTLP sold certain Casing to Trigon Tubulars Incorporated (“Trigon”),

who was a vendor for MTLP.

20. In August, 2006, Trigon sold the Casing to Barrow-Shaver Resources

Company (“Barrow-Shaver”).

21. In September, 2006, Barrow-Shaver used the Casing and ran the casing in

Mast-Middlebrook #1 oil and gas well (the “Well”).

22. The Casing run in the Well was completed and the Well reached its total

depth.

23. A portion of the run of Casing was cemented into place.

24. Barrow-Shaver claimed that the Casing was defective.

25. Barrow-Shaver claimed that the defective Casing caused a loss of use of

the well and damages.

26. In November 2006, Barrow-Shaver undertook to frac the Well, a process

utilized to make geological formations more permeable thereby enhancing their productivity.

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27. Barrow-Shaver claimed that while fracing the Well, the Casing failed,

destroying the Well and the reservoir in the proximity of the Well’s location.

28. Barrow-Shaver’s claim was that due to the defective nature of the Casing,

that Barrow-Shaver suffered property damage beyond the Casing itself and extending to both the

Well and the surrounding reservoir.

29. Barrow-Shaver made a claim for damages relating to the defective Casing

(the “Claim”).

30. Barrow-Shaver made written demands for damages as well as verbal

demands.

31. Barrow-Shaver’s demands were forwarded to Westchester and insurance

coverage under the Policies was requested.

32. Barrow-Shaver ultimately filed a multi-count lawsuit (the “Lawsuit”)

alleging negligence and property damage to the Casing, the Well and the surrounding reservoir.

33. The lawsuit was forwarded to Westchester and insurance coverage under

the Policies was requested.

34. Westchester agreed to defend Plaintiffs but qualified its agreement to

defend by reserving its rights under both the Primary Policy and the Umbrella Policy, including

with respect to the Policies’ self-insured retention.

35. Although it had agreed to defend under a reservation of rights,

Westchester nevertheless otherwise failed to fully pay Plaintiffs’ attorneys fees, claiming certain

deductions from those fees.

36. During the course of the lawsuit, although requested to by Plaintiffs,

Westchester refused to settle Barrow-Shaver’s claim, although Barrow-Shaver’s settlement

demand was well within Westchester’s policy limits.

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37. On or around July 20, 2009 Plaintiffs participated in a mediation with

Barrow-Shaver. Westchester offered to contribute only a fraction of Barrow-Shaver’s settlement

demand conditioned on a full release by Plaintiffs of their claims against Westchester under the

Policies.

38. Plaintiffs refused such condition and settled with Barrow-Shaver (the

“Settlement”) in an amount in excess of Westchester’s offer, in an amount in excess of the

jurisdictional limits of this Court and subject to a confidentiality provision in such Settlement.

39. To date, Westchester continues to assert a reservation of rights and has

refused to unconditionally recognize that it had a duty to defend and indemnify its insureds for

the Claim asserted by Barrow-Shaver.

40. Plaintiffs’ Settlement with Barrow-Shaver was reasonable and in good

faith.

COUNT I

Declaratory Judgment - Coverage

41. Plaintiffs hereby reallege and incorporate by this reference the allegations

set forth in Paragraphs 1 through 42 of their Complaint as though fully set forth herein.

42. By reserving its rights under the Policies, Westchester qualified its duty to

defend and indemnify Plaintiffs for Barrow-Shaver’s Claim.

43. Plaintiffs assert they were entitled to a full defense, without reservation of

rights, under the Policies because the Claim, if taken as true solely for the purposes to determine

the duty to defend, constitutes an occurrence(s) resulting in property damage within the coverage

territory.

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44. Plaintiffs assert that they were entitled to full indemnity for Barrow-

Shaver’s claim for, and arising out of, the property damage alleged by Barrow Shaver and for the

Settlement, without reservation of rights, from Westchester under the Policies.

45. Westchester denies that it owes a full defense and indemnity to Plaintiffs.

46. An actual, justiciable controversy presently exists between the parties

concerning Westchester’s obligations to defend Plaintiffs, to reimburse Plaintiffs for all incurred

attorneys fees and defense costs, and to indemnity Plaintiffs for the Settlement as provided under

the Policies for the Claim.

47. Plaintiffs do not have an adequate remedy at law.

48. By reason of the foregoing, a declaratory judgment is both necessary and

proper in order to set forth and determine the rights, obligations and liabilities that exist among

the parties.

WHEREFORE, Plaintiffs pray this Court to enter declaratory judgment in favor

of Plaintiffs and against Westchester on Count I of their Complaint, declaring that Plaintiffs have

full defense and indemnity coverage for the Barrow-Shaver Claim and Settlement under the

Primary and Umbrella Policies; declaring that Plaintiffs’ self-insured retention has been

exhausted; awarding Plaintiffs their attorneys’ fees; and for such other and further relief as the

Court deems just and proper under the circumstances.

COUNT II

Breach of Contract

49. Plaintiffs hereby reallege and incorporate by this reference the allegations

set forth in Paragraphs 1 through 42 of their Complaint as though fully set forth herein.

50. On or around July 20, 2009, Barrow-Shaver and Plaintiffs participated in a

mediation regarding the Claim.

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51. Westchester appeared by counsel at the mediation.

52. During the mediation, Barrow-Shaver made a demand for settlement that

was within the limits of the Policies.

53. Plaintiffs demanded that Westchester settle the Claim.

54. Westchester placed improper conditions upon its participation in any

Settlement.

55. Westchester was obligated to settle the Claim pursuant to the Policies.

56. Westchester breached the Policies by failing to settle the Claim and by

failing to comply with the Policies’ provisions.

57. Westchester breached the Policies by failing and refusing to pay the

entirety of Plaintiffs’ attorneys’ fees expended in defense of the Claim.

58. Plaintiffs thereafter settled the claim.

59. As a result of Westchester’s breach, Plaintiffs have been damaged.

60. Despite repeated demand, Westchester has failed and refused to pay

Plaintiffs’ covered losses under the Policies, all in breach of the Policies and to Plaintiffs’

detriment.

WHEREFORE, Plaintiffs respectfully request judgment against Westchester on

Count II of their Complaint for a sum to be determined, for vexatious refusal, interest at the legal

rate, including prejudgment interest, and costs, for their attorneys’ fees, and for such other and

further relief as the Court shall deem just and proper.

DEMAND FOR JURY TRIAL

Plaintiffs demand a jury trial on all issues triable to a jury.

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Respectfully submitted,

BAKER BOTTS L.L.P.

By: /s/ Stephen G. Tipps

Stephen G. Tipps
State Bar No. 20070500
One Shell Plaza
910 Louisiana Street
Houston, Texas 77002
(713) 229-1234 Telephone
(713) 229-1522 Facsimile

ATTORNEY-IN-CHARGE FOR PLAINTIFFS

MAVERICK TUBE CORPORATION,
MAVERICK TUBE, LLC F/K/A MAVERICK
TUBE, LP, TUBOS DEL CARIBE, LTDA., AND
TENARIS GLOBAL SERVICES (U.S.A.)
CORPORATION

OF COUNSEL:

GALLOP, JOHNSON & NEUMAN, L.C.

Alan S. Breckenridge, Esq.
101 South Hanley
Suite 1700
St. Louis, Missouri 63105
Telephone: 314-615-6227
Facsimile: 314-615-6001

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