Sinclair Wyoming Refining Company v. Pro-Inspect Inc, No. 2:2012cv00196 - Document 211 (D. Wyo. 2019)

Court Description: OPINION and ORDER Stating Findings of Fact and Conclusions of Law by the Honorable Alan B Johnson. IT IS ORDERED that Sinclair is not entitled to relief in its favor on its breach of contract claim and that judgment shall be entered in favor of Pro-I nspect on that claim. It is further ORDERED that Sinclair is not entitled to relief in its favor on its negligence claim and that judgment shall be entered in favor of Pro-Inspect on that claim. It is further ORDERED that any remaining pending motions shall be, and are, DENIED AS MOOT. Judgment shall be entered accordingly. (Court Staff, ssw)

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Sinclair Wyoming Refining Company v. Pro-Inspect Inc Doc. 211 US niSTRlCi OiSTRiCT Or WYQhuNo 2Cl9 AUo <i3 Pi. v>' 11 IN THE UNITED STATES DISTRICT COURT . on.r n -p STEPHAH HARRIS. Cl.i-Kf CHEYENNE FOR THE DISTRICT OF WYOMING SINCLAIR WYOMING REFINING COMPANY, a Wyoming corporation. Plaintiff, vs. Case No. 12-CV-196-J PRO-INSPECT INC, a Texas corporation dba Moody International Asset Integrity Services Inc, Defendants. OPINION AND ORDER STATING FINDINGS OF FACT AND CONCLUSIONS OF LAW This matter is beforethe Courtfollowinga nine-daybench trial. At trial, the plaintiff Sinclair WyomingRefining Company("Sinclair") was representedby Patrick R. Day, Buck S. Beltzer,and Geraldine A. Brimmer. The defendant Pro-Inspect, Inc. (d/b/a Moody International Asset Integrity Services, Inc., a Texas Corporation) ("Pro-Inspect" hereafter for purposes of this order) was represented by Paul J. Hickey, O'Kelley H. Pearson, John J. Kenney, and Jules R. Cattie, III. Having carefully considered the testimony and evidence presented and the arguments of counsel, the Court makes the following findings of fact and conclusionsof law.' ' Having reviewed the parties' proposed findings of fact and conclusions of law, as wellas (continued...) 1 Dockets.Justia.com Introduction and Brief Summary of Contentions Sinclair owns and operates a refinery located at Sinclair, Wyoming, processing crude oil, including sour crude from Canada. Sinclair is a Wyoming corporation, with its principal place of business in Utah. Pro-Inspect is engaged by refiners to perform inspection services at their facilities. Pro-Inspect is a Texas corporation and its principal place of business is in Texas. Sinclair has assertedtwoclaimsagainstPro-Inspect, breachofcontractand negligence. Sinclair's complaintwas filed August 30,2012, seeking torecover approximately $7.5 million inproperty damages and $50 million in other "business interruption" losses it claims areattributable to the fire thatoccurred on September 1, 2011, when a pipe containing high temperature slop oil ruptured. Pro-Inspect has denied allclaims and disputes that Sinclair isentitled torecover damages inany amount. This Court has diversity jurisdiction pursuant to28 U.S.C. § 1332. Venue isproper inthis district pursuant to 28 U.S.C. § 1390. Broadly, Sinclair contends that Pro-Inspect's inspector. Josh Kiss, was required by the parties' contract, and bythe American Petroleum Institute (API) Codes governing piping inspections by API 570 certified inspectors, to review all the data gathered by technicians Malave and Hulsey and carefully consider potential risks to the piping circuit. Sinclair contends it hired Pro-Inspect specifically to provide a knowledgeable API 570 certified inspector to conduct inspections atthe '(...continued) all the testimony and evidence presented atthe trial, the Court finds thatfurther argument would not be helpful tothe Court. The Court will decide the matter based upon allmatters ofrecord, including evidence and testimony from thetrial, and the parties' written submissions. Both parties submitted extensive proposed Findings of Fact and Conclusions which clearly set forth their respective assessments of the trial and the decision they believe to be appropriate. refinery. Sinclair contends the API Code obligates inspectors to,among other things: (1) review all ultrasound data; (2)consider prior inspection histories; (3)confirm thatpiping systems are properly classified for risk; (4) evaluate the need for, and determine the proper number of corrosion monitoring locations (CMLs); (5) ensure that CML locations are placed on a circuit and that thickness dataat those locations are collected; (6) consider the datacollected for the riskof failure; (7) calculate the remaining life of the piping in thecircuit; and (8) immediately report thin pipe to the refinery owner for further evaluation and action. Sinclair contends these obligations are all components ofa standard industry inspection and are spelled outinAPI 570, theapplicable piping inspection code. Sinclair contends that Pro-Inspecfs inspector. Josh Kiss, failed todo every one of these tasks, causing a significant stretch of paper-thin pipe to be missed, proximately causing the explosion and fire and resultant damages. The section of pipe involved inthe fire has been lost or destroyed by Sinclair and as a consequence could notbe inspected or tested by Pro-Inspect. Pro-Inspect denies Sinclair's allegations and denies any liability forthe September 1,2011 fire. It asserts that its employees. Josh Kiss and Michael Fitzpatrick, were directed by Sinclair to perform two assignments: one, toorganize certain refinery piping systems into manageable circuits in order to facilitate the inspection process (i.e., to systemize andcircuitize); and, two, to conduct anextemal visual inspection to look forextemal damage tothepiping structure, which was wrapped in thick, non-transparent insulation. Theonly work thatPro-Inspect did on the circuit which is the subject ofthis lawsuit, 02-04-02, was extemal visual inspection ofthepiping byKiss. Neither Kiss nor Fitzpatrick, nor any other person at Pro-Inspect, was asked or directed by Sinclair to make ultrasonic thickness ("UT") readings to measure intemal corrosion ofthe pipes. Sinclair had hired a different contractor, TechCorr, to perform that service through its employees, Juan Malave and Russell Hulsey. Pro-Inspect maintains that its inspectors performed all ofthe tasks that Sinclair directed them to perform,and that they did so, with no complaintsor otherinstructionsfrom the Sinclairpersonnel overseeing their work, Pro-Inspect assertsthat it fulfilled its contractual obligations to Sinclair and cannot be heldresponsible for the fire. Furthermore, Pro-Inspect urges that anyactsandomissions Sinclair complains of were the acts of Sinclair or TechCorr, the employer of Malave andHulsey, and notPro-Inspect. Pro-Inspect asserts that theproximate cause of thefire and resulting damages was Sinclair's poor management of itsown refinery and nota result of anything Pro-Inspect didor failed to do. Standard for Non-Jury Trial Fed. R. Civ. P. 52(a) provides that inall actions tried upon the facts without ajury or with an advisory jury, the court shall find the facts specially and state its conclusions oflaw separately. Thus, the role ofthisCourt inthis action tried upon thefacts without ajuryisto find thefacts specially and to state separately its conclusions oflaw thereon. OCI Wyoming, LP. v. Paciflcorp, 479 F.3d 1199, 1203 (10th Cir. 2007)(citing Fed. R. Civ. P. 52(a)). The Court's findings of fact "should be sufficient to indicate the factual basis for the court's general conclusion as to ultimate facts[,]... should indicate thelegal standards against which theevidence was measured[,]... [and] should be broad enough to cover all material issues." Id. (citations omitted). The Court is not required to undertake this task in excruciating detail. Id. at 1204. "Thejudge needonlymake brief. definite, pertinent findings and conclusions upon the contested matters; there is no necessity for overelaboration of detail or particularization of facts." Id. (citations omitted). Findings of Fact On September 1,2011, there was a fire at the Sinclair Wyoming Refining Company, which occurred after a pipe ruptured in therefinery's 585 Vacuum Unit at Circuit 02-04-02. Fortunately, no one was injured inthe fire. Sinclair's claimed damages include property and business interruption economic damages. Sinclair alleges that the fire and claimed resultant damages were caused by Pro- Inspect's breach ofcontract and negligence in the inspection ofthat same circuit inJanuary of2011, nearly nine months before the fire. Pro-Inspect denies these claims and asserts that the fire was the resultof Sinclair'sownfailures andstatesthatit fulfilled allcontractual obligations owedto Sinclair and was not negligent in the performance of its duties. There are two main crude processing units in Sinclair's refinery: the 582 unit processes sweet crude and the 581/583 unit processes primarily sour crude. Raymond Hansen, who was the operations manager at the facility in 2011, testified about production at the Sinclair refinery. He explained there are a number of intermediate units which process oil from the crude umts into marketable products, such as LPG, gasoline, jet fuel, diesel, sulfur, and other products for consumers. There are two components ofthe 581/583 unit including the 581 atmospheric distillation tower in which sour crude is heated and distilled into different fractions; reduced crude which is not distilled bythe 581 unit ispiped into the 583 unit, which separates reduced crude further inthe 583 vacuum tower. A 2008 revamp of therefinery was intended, at least in part, to allow theprocessing of less expensive crudes. The 2008 revamp project involved a considerable investment by Sinclair, approximately $90 million. Itincluded extensive pipe and heater replacements to allow production of the less costly Canadian crude oils. The pipe that ruptured September 1, 2011 in the 02-04-02 circuit and which is at issue here had not been replaced during the 2008 revamp, although some modifications had been made to the line during therevamp. The particular pipe that had been left in place during the 2008 revamp had been in service for 30 years at the time ofthe September 1, 2011 rupture. In 2010, less costly but more corrosive Canadian Cold Lake crudes were introduced into the refinery. Canadian Cold Lake and Western Canadian Select crudes were run in the refinery in 2010 and in 2011. Beginning in October 2010, Sinclair's refinery processed up to 40% Canadian Cold Lake Crude. Jt. Ex. 31, Ex. Z11. Crude oil coming into the refinery may be received from various sources, called a"basketofcrude," which might include Canadian, North Dakotaor Wyoming crude oils. Tr. Vol. 1, Hansen, 94. Hansen testified "[w]hat we try to do isrun really as smooth as we can because ofthe complexity ofthe refinery. There's apush and pull between all these different umts and our incoming inventories, our outgoing inventories, and so we try to run acrude that's really a consistent sulfur on the sour unit, a consistent sulfur onthe sweet unit, and that it's a consistent density. We refer to that as API gravity." Id. Hansen described equipment, noting that there are massive amounts of piping surrounding the umts, with the piping and interconnecting piping described as very complex. All ofthe piping and equipment must be inspected periodically. After crude is processed, products for sale are temporarily stored in tanks and eventually transported out of the refinery through pipelines. The Canadian crudes, also known in the industry as "opportunity crudes," are poor quality, less expensive crudes that can increase a refinery's profitability. Ex. A12. Sinclair itself recognized that the corrosive nature of these crudes was a concern long before the September 1,2011 rupture/fire happened. Ex. Q. The downside to using the cheaper opportunitycrudes is that they are highly corrosive and place greater demands onrefinery facilities, especially onpiping systems. Heavy sourcrudes contain high amounts ofnaphthenic acid which cancause extensive damage to refinery piping systems, and cancause localized, accelerated corrosion greater thanthat caused by sweeter crudes. With higher naphthenic acid content, opportunity crudes can cause pipes to corrode by as much as 100 mils to over 200 mils per year.^ There are different types of processes that might corrode and degrade a refinery's piping and equipment, much ofwhich depends on the type and quality ofthe crude oil being processed. Sulfidation is one type ofcorrosion process that occurs inside apipe as aresult of areaction between the pipe's surface and sulfur contained incrude oil. This isthe generally expected corrosion mechanism thataffects much of the piping in Sinclair's CrudeA^acuum Unit, including the vacuum tower slop oil 02-04-02 piping circuit at issue in this case. The characteristics of sulfidation are gradual thinning over time and fairly uniform thinning throughout a piping circuit. Inother words, the various locations within a piping circuit are generally considered to corrode at similar rates by sulfidation. Sulfidation also results in an adherent sulfide coating on the inside surface of the pipe which acts like a barrier between the corrosive oil flowing through the piping mil is one thousandth (.001) inches. 7 system and the steel wall so that it effectively slows down the rate ofcorrosion. Sulfidation would have been the expected corrosion mechanism operative in the 02-04-02 piping circuit at issue here as all available information indicated a fairly uniform pattern of thinning throughout the circuit. Erosion corrosion is another corrosionprocess described in API 571 and is exacerbated by crude oils containing high levels of naphthenic acid. Erosion corrosion causes accelerated and generally localized corrosion because oftheerosive actions oftheoilflowing through a circuit. For this reason, API 570directs placement of corrosion monitoring locations ("CMLs") at points on a circuit where flow changes, rather than straight runs. Crude oils that are more corrosive, such as those with more naphthenic acid, will increase therate of erosion corrosion in a piping system. Vacuum-unit piping such as the slop oil circuit 02-04-02, when exposed tonaphthenic acids, can suffer from severe erosion corrosion and metal loss, depending on the particular variables of temperature, velocity, sulfur content, total acid number ("TAN"), and the concentrations of naphthenic acid within the piping circuit. Naphthenic acid corrosion is another form ofcorrosion that does not occur uniformly throughout apiping circuit. Instead, itmay occur atdiscrete locations within apiping circuit and can occur when crude oil containing naphthenic acids, such as Canadian Cold Lake crude, isput through the system. Naphthenic acid corrosion isnot predictable even when the TAN, the temperature, and velocity are known. Naphthenic acid corrosion isepisodic, sporadic, and localized and can occur at rates of 200 mils per year and higher. No information was made available toPro-Inspect that would have alerted ittoany issues with this more aggressive corrosion mechanism. However, there is no disagreement that the particular piping that ruptured had in fact 8 corrodedand was thin pipe at the time and locationthat it rupturedin Septemberof2011. Whether thatthinning andrupture in that location wascaused byfailures in performing the pipinginspection nine months earlier was clearly contested. This requires the Court to consider what the parties' agreement for inspections encompassed in this case. James Eggleston was a corporate project supervisor at the refinery at the time of trial. Initially, he was hired by Sinclair as an inspector and eventually he became the supervisor ofthe piping inspection department, and was the supervisor at the relevant times at issue in this case. The American Petroleum Institute has published standardized procedures governing inspections, including API 570, entitled "Piping Inspection Code: In-service Inspection, Rating, Repair and Alteration ofPiping Systems." Joint Ex. 4. Eggleston was certified in 2008 as an API 570 inspector employed by Sinclair; all other full time inspectors reported to him. He testified that various third party inspectors were also hired at the refinery to provide inspection services, including Pro-Inspect, among others. Eggleston was responsible for directing Pro-Inspect's activities at the refinery prior to and after 2010 during turnarounds and gave instructions to inspectors. Eggleston sought and received approval in 2010 to hire TechCorr and Pro-Inspect again for the update mechanical integrity (sometimes "MI" or "catchup") project because Sinclair personnel were unable to handle the big job presented by the catchup plan. Thus, contract workers were also used to help with the catchup inspections. Michael Fitzpatrick, aPro-Inspect contract inspector at the time, was already onsite working atthe refinery when the catchup plan began. Fitzpatrick was not then an API certified 570 piping inspector; he was certified for API 510 vessel inspection atthat time. Fitzpatrick worked closely with and received instructions from Eggleston during this time period. Eggleston himself was an API 570 certified piping inspector and had a mechanical engineering degreefromthe University ofWyoming. He had inspectionresponsibilities in addition to supervisory duties. He arranged all piping inspections at the refinery. He was responsible for reviewing inspection reports fordeficiencies, communicating deficiencies totherefinery's reliability engineers and unit inspectors, and for identifying and initiating corrective action. The inspection department at Sinclair was expected to develop and maintain the thickness monitoring program allowing for monitoring of internal corrosion inthe piping systems at the refinery. Ex. A3,6.3.1. To facilitate the catchup project, in addition to Sinclair's own inspectors, as stated earlier, independent contractors were also engaged. Eggleston outlined the scope ofthe work he wanted done in the crude units in the beginning of the project and assumed those instructions would be passed on to Kiss by Fitzpatrick or others. He defined the scope ofwhat he wanted inspected. The scope ofwork was orally given to Fitzpatrick to systemize, correct, circuitize, and perform visual inspections. Eggleston maintained that he had not undertaken the detailed planning ofthe project and that his plan was simply to get the units inspected based onneeds he had identified. Eggleston acknowledged and agreed that he was responsible for the inspection work performed on the 581 and 583 units. Eggleston, asinspection supervisor, had supervisory authority over contract inspectors in addition to Sinclair's inspectors and he was responsible for all inspection work done at the refinery. Atalltimes, Sinclair retained supervisory authority over contract inspectors' work. Pro-Inspect was started asa family owned company in 1996, with its business described as the visual inspection ofpetrochemical equipment, including piping, pressure vessels, storage tanks in the refining andchemical plantindustry. Pro-Inspect arranged for and coordinated contract API 10 certified inspectors and licensed technicians for many refineries needing inspections for piping, equipment, vessels and other assets. Under the contracts between Sinclair and Pro-Inspect, it was understood that Pro-Inspect would be providing API 570 inspectors, charging its customers an hourly rate for the work performed by its contract inspectors, dependentupon the inspector's experience, skills, and certifications. The API 570 certified inspector is the highest qualified employee,with the requisite years ofexperience andpassage oftheAPI testdemonstrating knowledge ofthecode. Pro- Inspect charged Sinclair $72.77 straight time and$99.39 perhour overtime, forJoshKiss, theAPI 570 inspector working on this project. Josh Kiss was employed by Pro-Inspect and provided services as directed by Sinclair at the job site once he began work at the refinery in January of2011 ? When the catchup project was beginning, Pro-Inspect's certified vessel inspector, Fitzpatrick, was onsite at Sinclair, working on other projects. Eggleston had worked with Pro-Inspect and Fitzpatrick previously during the 2008 upgrade to the 581/583 umts. During that time, Fitzpatrick had developed and used inspection work requests (IWR) to recommend immediate repairs based on inspection findings. IWR forms were presented to Eggleston for further consideration, a standard process at the refinery. Because oftheir favorable prior work relationship, Eggleston agreed to Pro- Inspect's Fitzpatrick's request to participate in the catchup inspection project. Eggleston and Fitzpatrick met in late November 2010 to discuss and plan the work on the MI catchup project. Work on the project included external visual pipeline inspection, calculating and placing CMLs on piping circuits, consistent with guidelines under API 570 § 5.6.3, among other things. Eggleston ^In Kiss's testimony, he stated he believed the hourly rate he was paid was $52 and that he was paid time and a half overtime (approximately 10-20 hours/week). Tr. VII, Kiss, 1394. These discrepancies are not significant to the Court's decision. 11 askedFitzpatrickto havePro-Inspect bringanotherAPI570certifiedinspectoron board. Fitzpatrick was a certified vessel inspector, but did not then have API 570 certification. Kiss was contacted initially by Brad Wells, of Pro-Inspect, regarding a job in Sinclair in January of 2011. Wells outlined the basic details ofthe job and asked if Kiss would be interested, with Kiss responding yes. Kiss did not recall specificallysending a resume to Pro-Inspectdirectly, and indicated that he had used different websites, some with recruitment companies, to learn about upcoming work. Kiss was later telephoned byMike Fitzpatrick, who outlined thejob inmore detail saying that Sinclair was going to systemize and circuitize three different units in a six month long project, with two months per unit, and toperform any external visual inspections asneeded. Kiss was interviewed telephonically by Fitzpatrick about work on the catchup project at Eggleston's request. After that interview. Kiss was called back by Brads Wells ofPro-Inspect about the job, and met with Wells and possibly others inPasadena, Texas to discuss the jobworking atthe Sinclair refinery. In January 2011, Kiss went to the Wyoming Sinclair refinery and reported for work as a Pro-Inspect API 570 contract inspector on the catchup project. He first reported to the safety council in Rawlins for a safety training course and clearance before he could begin work atthe refinery. After that. Kiss went to the refinery, met with Fitzpatrick atthe construction trailer and was given information about the scope ofwork. Fitzpatrick introduced Kiss to the TechCorr techmcians and to Eggleston. To Eggleston, Fitzpatrick introduced Kiss as the inspector who would be picking up onsystemizing and circuitizing and performing external visuals as needed. Separate contracts were entered into with TechCorr and Pro-Inspect, with TechCorr charged with drafting isometric drawings and taking UT readings ofthe pipe. UT readings provide asnapshot ofa particular piece ofpipe at a particular location. Alone, UT readings are not singular tools for 12 identifying troublesome corrosion, but the data gathered with UT readings can be used to determine rates of corrosion over time by comparing earlier or previous UT measurements to newer, more recent UT readings. A corrosion rate is a predictive tool but is not designed to identify locations that arein the mosturgentneedof repair. UT readings are takenat designated locations and intervals and are used to calculate how much pipe wall is lost over time throughcorrosion. The sameCMLs are used for repeat orsubsequent measurements togenerate meaningful corrosion data. Corrosion rates aid in estimating the remaining life of any particular piping system. This is calculated by determining how long ittakes for athickness reading to reach apredetermined minimum thickness, with the goal being replacement of piping prior to reaching that minimum thickness. Minimum thickness isdefined by API 570 asthe greater of pressure design thickness orstructural minimum thickness, but a refinery may elect to utilize a higher thickness minimum value instead ofcodedefined minimum thickness values indetermining useful life ofpiping, depending upon whether the policy at the refinery is conservative and how much risk is acceptable. In this case, Sinclair established a minimum thickness value for all piping systems equal to the piping pressure design thickness, which is the point where internal pressure would cause the pipe to rupture. Forthe 02-0402 circuit, this is 0.004 inches. Other tools areavailable, including radiography, thatare also used to monitor piping system health. Radiography samples a larger area ofa piping circuit than standard UT measurements and may be more effective when evaluating localized corrosion, such as that seen with the use ofsour crude oil with high concentrations ofnaphthenic acid inheavy Canadian crude oil. Sinclair did not use radiography to monitor its piping systems. In addition to visual inspections, an API 570 inspector might be expected to locate and 13 determine the number of necessary CMLs, and after inspection, to submit a report. TechCorr and Pro-Inspect worked hand in hand on the catchup project. Eggleston reported to John Rosacker, who was in charge of the Sinclair Process Management/Inspection Department. Eggleston was responsible for the refinery's inspection program and directed Sinclair's technicians and all of the refinery's contract inspector technicians. Eggleston directed Sinclair's refinery unit inspectors, the employees responsible for managing inspections ofthe crude units, and the activities ofthird party contract inspectors, including Pro-Inspect among others. On January I, 2010, Sinclair and Pro-Inspect entered into a written contract, which was subsequently extendedthrough Pro-Inspect's work in 2011. Joint Ex. 3. The 2011 contractdescribed the scope of work simply as follows: Pro-Inspect will provide API Certified Inspectors +NDE Techs to access [assess] piping and vessels as directed by Sinclair. Joint Ex. 3, PI-1656. The scope ofwork language was copied by Pro-Inspect's Misti Jones in her own handwriting fi*om aprevious 2009 contractthathad been entered into between Sinclairand Pro- Inspect. Jt. Ex. 2("Pro-Inspect will provide API certified inspectors &NDE technicians to assess piping &vessels as directed by Sinclair.") Jones was authorized to sign contracts on behalf ProInspect. Jt. Ex. 2, PI-1558. The contract further provides "Contractor shall perform the Work diligently and carefully in a good and workmanlike manner according to accepted standards of construction and is an independent contractor with "full power and authority to select the means, methods and manner of performing the Work, being responsible to Company for all materials delivered and for the results contracted for." Joint Ex. 3, 1634. Excerpts from the deposition testimony of Steve Wells, 14 employed by Pro-Inspect between June 2006 and April 2012, were read into the record at trial. Wells was employed ascoordinator andmanager of field services forPro-Inspect, coordinating and sending inspectors to refineries. He testified astohisexpectations ofAPI certified inspectors, tothe professionalism expected ofthem, and to the expectation that they will exercise the judgment and expertise that accompanies API certification. They are expected to understand the API code, know where to find answers necessary to implement the code, and to work independently in a refinery. Sinclair's Eggleston explained that he was responsible for arranging all ofthe inspections during 2011. Def. Ex. A3. Once the project began, Eggleston claimed he was not involved in the actual on the ground inspection ofeach circuit and that he received progress reports from Fitzpatrick in morning meetings. Eggleston claimed that he provided no additional direction about the project. Minutes ofmorning meetings discussing the project and its progress were received and are included atPI. Ex. 13. However, atthe refinery itself, Eggleston for Sinclair usually gave oral instructions to Fitzpatrick (who was then with Pro-Inspect) outlining the scope ofwork on the project and work that was to be accomplished. Oral instructions were shared with API certified inspectors dailyor weekly, but those instructions were not written down. In other words, details as to the exact scope of inspection work to be accomplished were as provided and as directed by Sinclair. The parties have disagreed about the scope ofwork for this project. Sinclair asserts its inspection supervisor, Eggleston, specifically told Pro-Inspect's lead supervisor, Fitzpatrick, that Sinclair wanted a "full API 570" inspection. Sinclair contends this would include review of ultrasound thickness data (UT data), placement ofCMLs, calculation ofthe remaining life ofpiping circuits and verbally reporting problems that might be found. Pro-Inspect has asserted Sinclair only directed it to conduct external visual inspections of the exterior of the piping systems and related 15 supports and says that review and analysis of UT data was Sinclair's responsibility, working separately to review data collectedbythe TechCorrtechnicians. The Court agreeswith Pro-Inspect. GP Amerispectworked at the refineryfrom 1999to 2004 and did some inspections in 2002. Between 2002and 2008,there wereno inspections on the 583 unit. Inspections were conducted by TechCorrin 2008; no corrosionrates were calculatedfrom the 2008 inspections. The 2008revamp ofthe 583 unit was completed inAugust of 2008. As explained briefly earlier, in2010, Eggleston began planning for the 2011 catchup inspections, also called the MI (mechanical integrity) project; his plans anticipated several phases ofwork, and his catchup plan was approved by Sinclair. Joint Ex. 21. Eggleston stated in his November 17,2010 email to Sinclair's Jim Larscheid, regarding the mechanical integrity catchup plan (Jt. Ex. 21): As you know, we have several phases ofwork to be completed for the Mechanical Integrity program to become functional. The first step is to start using the information that has been gathered. Iwould like to move the Sinclair personnel currently employed to a status of"Run and Maintain where SWRC personnel will begin re-surveying areas ofthe plant and entering data into MaxiTrak on adaily basis. This would not only move the MI program forward, but allow scheduled time for SWRC's API certified inspectors to obtain the necessary on the job training for certification in NDE. Initially, Ihave stated agoal of one piping circuit or pressure vessel external inspection per day from each inspector not in the "Rover" position. This would include gathering the UT data ^d field walkdown, analyzing the UT data with past history and writing the inspection report in the MaxiTrak program. Issuing IWR's for repairs would be part ofthis process as well. Initially the unit priority will be based on the Shutdown schedule for 2011 in an effort to get datapriorto shutdown on these units. Another phase isto get the units that have been radically revamped since the initial survey re-circuitized. The units included here are 581/583 Crude, 582 Crude, Reformer, and Hydrocracker units. Additionally, we have two small subsections of the alky complex that were skipped over inthe initial survey effort, such as the catpoly unit and the GRU. I would like to utilize contract personnel to perform these baseline surveys, consisting ofone API 570 inspector, and three to four technicians based on workload. These areas will require revision to existing sketches and in 16 many cases complete new sketches, along with baseline UT data. Both ofthese efforts will require support from insulation and scaffold personnel. The main support will be from the insulation personnel to install inspection ports in the piping, every effort will be made to place insulation ports in relevant locations that will be accessible without scaffold on a long term basis. I am sure that I can coordinatethe scaffold supportthrough the maintenancedepartment,but it might be a smootherprocess if I had control of a subset of insulation personnel that can be coordinated by my department to facilitate workflow of the new systems. The workflow has the following steps: 1.) Systemize the P&ID's and break into circuits. 2.) Send technician to sketch circuit. 3.)The API would calculate thenumber ofCML's, and assign ondrawing with input on accessibility from Technician. 4.) Assign package to technician to mark areas withpainton piping. 5.)Assign package to insulation crew for inspection portinstallation. 6.) Assign package to technical to gather UT data. 7.) The final step is data entry into MaxiTrak. This can beaccomplished two ways: a. By directentryone circuitat a time, or b. By entering multiple circuits into a spreadsheet and sending to Canada for bulk entry. I also envision a clerkto helpput the information packages together. Jt. Ex. 21. Collected datawas never entered into MaxiTrak system ina timely manner bySinclair. The purpose ofthe program was to organize data and make information easily accessible and retrievable. The program was also intended to perform corrosion rate and remaining life calculations on piping circuits. The program had been purchased in 2007, but inspection data had not been entered into the program in 2011. The data management program was never implemented for Unit 583 for any time period relevant to this litigation, with Sinclair explaining it lacked manpower resources to do so. Sinclair inspectors were the only inspectors with access to the MaxiTrak program; contract inspectors did not have authority to use that program. Fromhis earlierworkat therefinery, Fitzpatrick wasfamiliar withthe2008581 and583 umt 17 upgrade project. That project had altered some piping circuits that previously existed when an earlier inspection was performed by GP Amerispect. For inspections of the pre-2008 upgraded piping, including the circuit in this case, Eggleston instructed Fitzpatrick to use the prior 2002 GP Amerispect inspection data when conducting the 2011 inspections. Fitzpatrick did not agree with Eggleston on the number of CMLs andhad suggested instead that a CML calculation form he had used in work at other refineries be used duringthe catchup project. Eggleston said he thought GP Amerispect's placement of CMLs onthe circuits was not adequate and said hetold Fitzpatrick he wanted more CMLs placed onthe circuits. Eggleston recognized that thecode really did not provide a specific guideline on how many CMLs there should be. Eggleston stated that he had "developed aCML calculation form to,um, tosettle that argument, Iguess, todefine a number ofCMLs for each circuit based on the characteristics of the circuit, um, taking into account the length, the number of fittings, the corrosion rate, the number of deadlegs, all of these are factors in determining the appropriate number ofXMLs for a particular circuit." Tr. Vol. II, 378. So, Eggleston instructed that the CML Excel spreadsheetcalculation form that Eggleston had developed be used to decide the appropriate placement and number ofCMLs. There was no training onuse ofthe form. Thereafter, the workflow for the catchup project began bysegregating piping into manageable circuits, then moved to creating an isometric drawing ofeach circuit, locating CMLs, taking UT readings, analyzing the UT readings and expanding the scope ofthe inspections if so indicated by those readings, and preparing an inspection report for the circuit. Eggleston required theuse of hisCML calculation form byeveryone ontheproject, including UTtechs andinspectors, such as Fitzpatrick and Kiss. Interestingly, during trial Eggleston made mistakes himself when he discussed how calculations were to be made when trying to demonstrate proper use of this CML 18 calculation form. Subsequent to the fire at issue in this case, Eggleston began to hold specific training classes for inspectors to make sure that they understood how Eggleston wanted the form to be used. Egglestonsaid the calculationform was based on API 570 factors, including classification and material codes,total length, numberof fittings, deadlegs and corrosion rates. PI. Ex. 138. The CMLs GP Amerispect had previously placed on a circuit were to be entered on that form and retained so as to reflect corrosion between 2002 and 2011. If required, additional CMLs would provide baseline readings for future inspections. API 570 5.6.1 states: CMLs are specific areas along the piping circuit where inspections are to be made. The nature of the CML varies according to its location in the piping system. The selection of CMLs shall consider the potential for localized corrosion and service- specific corrosion asdescribed inAPI 574 and API 571. Examples ofdifferent types of CMLs include locationsfor thicknessmeasurement, locationsfor stress cracking examinations, locations for CUI'* and locations for high temperature hydrogen attack examinations. Joint Ex. 4. To accomplish this part ofthe project, at trial Eggleston said he wanted the form to be filled out by an API 570 certified inspector, which he testified required judgment calls and input of the inspector. In practice, the form was used by everyone on the project with information obtained during external visual inspection, new UT readings by TechCorr, and use ofpre-existing data such as GP Amerispect's 2008 UT readings. "^Corrosion under insulation, including stress corrosion cracking under insulation. API 570 3.2. Kiss described GUI as a program put in place in many facilities to determine the rates of corrosion under stainless and carbon steels in insulated piping, to establish suspect areas through piping systems, have insulation stripped, and conduct inspection under the insulation. Tr. V. VI, 1275. 19 API 570, at 4.3.4, addresses authorized piping inspectors, and provides: When inspections, repairs, or alterations are being conducted on piping systems, an authorized piping inspector shall be responsible to the owner/user for determining that the requirements ofAPI 570 on inspection, examination, qualityassurance and testing are met. The inspector shallbe directly involved in the inspection activities which in most cases will require field activities to ensure that procedures are followed. Theinspector isalsoresponsible forextending thescopeof the inspection (with appropriate consultation with engineers/specialists), wherejustifieddepending upon the findings of the inspection. Where nonconformances are discovered, the inspector isresponsible for notifying the owner-user inatimely manner and making appropriate repair or othermitigative recommendations. The authorized piping inspector may be assisted inperforming visual inspections by other properly trained and qualified individuals, who may or may not be certified piping inspectors (e.g. examiners and operating personnel). Personnel performing NDEs^ shall meet the qualifications identified in4.3.5, but need not be authorized piping inspectors. However, all examination results shall be evaluated and accepted by the authorized piping inspectors. Joint Ex. 4. API 570, at 5.6.3, discusses CML selectionand indicates that priordata should be considered, with thickness measurements and knowledge ofthe process unit to "optimize the CML selection for each circuit, balancingthe effort ofcollecting the data with the benefits provided by the Data." Joint Ex. 4. More CMLs can be selected for piping systems with any ofthe following characteristics: a) higher potential for creating asafety or environmental emergency in the event of aleak; b) higher expected or experienced corrosion rates; c) higher potential for localized corrosion; d) more complexity in terms offittings, branches, deadlegs, injection points, and other similar items; e) higher potential for GUI. API 570, § 5.6.3 continues: ^Nondestructive examination. API 570, 3.2. 20 Fewer CMLs can be selected for piping systems with any of the following three characteristics: a) low potential for creating a safetyor environmental emergency in the event of a leak; b) relatively noncorrosive piping systems; c) long, straight-run piping systems. CMLs canbeeliminated forpiping systems withanyofthefollowing characteristics: a) extremely low potential for creating a safety or environmental emergency in the event of a leak; b) noncorrosive systems, as demonstrated by history or similar services; and c) systems not subject to changes that could cause corrosion as demonstrated by history and/or periodic reviews. Every CML should have at least one or more examination points identified. Examples include: -locations marked on un-insulated pipe using paint stencils, metal stencils, or stickers; -holes cut in the insulation and plugged with covers; -temporary insulation covers for fittings nozzles, etc; -isometrics or documents showing CMLs; -radio frequency identification devices (RFID). Careful identification of CMLs andexamination points arenecessary to enhance the accuracy and repeatability of the data. Corrosion specialists should be consulted about the appropriate placement and number ofCMLs for piping systems susceptible to localized corrosion orcracking, or in circumstances where CMLs will be substantially reduced or eliminated. Joint Ex. 4. Additionally, API 570, § 6.1, states in part: This code isbased upon monitoring arepresentative sampling ofinspection locations on selected piping with specific intent toreveal areasonably accurate assessment of the condition of the piping. Joint Ex. 4. Locating CMLs isafunction integral to an API 570 inspection and an API inspection under §5.6.3 requires an inspector to consider UT thickness data and proper classification ofpiping and 21 corrosion risks, but may not always require placement of CMLs or always require more than an external visual inspection. Placement ofCMLs is, as set out in § 6.1, necessary to get a reasonably accurate assessment of the condition of the piping. The code also suggests that sometimes consultation with a corrosionspecialistmay be appropriate. A visual inspectionis a component of anAPI 570 inspection andincludes anumber ofobservations suchaswhether there areleaks visible, physical characteristics ofpiping inthe field, condition ofinsulation, whether insulation islagging, evaluation of vibration, evaluation of piping supports and whether they are in place and adjusted properly. Section 3 of API 570, entitled "Terms, Definitions, Acronyms," at a note in § 3.1.36, states that NDE may be conducted by examiners at the discretion ofthe authorized piping inspector and become part ofthe inspection process, but the authorized piping inspector shall review and perform the results. However, the API Code isnot achecklist oraprescribed recipe tofollow for inspections ofpiping. It provides general guidance and guidelines for pipeline inspection which may vary according to need. As noted above, Eggleston himselfwas an API 570 certified inspector, and itwas Eggleston who established the hierarchy, flow, and scope ofwork to be performed. Eggleston had directed inspectors to use his CML calculation form and had determined that the function of inspectors was to circuitize and systemize the circuit. The project, as outlined by Eggleston to Fitzpatrick, contemplated the initial inspection, entry ofthe data into Sinclair's data system, and subsequent evaluationofthat data. Egglestontestified he did notprovide Sinclair's InspectionPolicy (Ex. A3) to Kiss orFitzpatrick while they were working atthe refinery in2011. He also did not train Kiss when hebegan working at the refinery inJanuary of 2011 about calculating CMLS under the Inspection Policy hehad developed for Sinclair. IfEggleston required more than circuitizing and 22 systemizing of the API 570 inspections, his testimony clearly reflects his expectations were not communicatedin writing or orally to any of the persons reporting to him during the course of this project. His after-the-fact attempt to redefine or rewrite the contract to include unspecified responsibilities or stretch the scope of work is unavailing. Theprojectbeganwiththe 581 crude and 583 vacuum units andwas to laterinclude the 582 crude unit, thereformer complex andhydrocracker unit. Kissbegan working attherefinery January 17,2011, after thecatch upprogram was well underway. Kiss was instructed byFitzpatrick thatthe Sinclair CML calculation form, an Excel spreadsheet, must be used by all API 570 inspectors, including Kiss,® and all of the UT technicians, to calculate CMLs for each circuit. Fitzpatrick's instructions were theinstructions hehad been given byEggleston directing theusetheSinclair CML calculation form for these calculations. Kiss testified UT data was collected by TechCorr s employees, Malave or Hulsey, and reported on Sinclair's required Excel CML form. Kiss did not recall review ofthat UT data; he relied onthe isometric drawings inconducting his inspection and reported the results of his API 570 external inspection, signing off on his various reports for inspected circuits. His report and recommendations for the 02-04-02 circuit are set out in the report atJoint Ex. 18. Kiss had no recollection that he played any role inadding CMLs oncertain isometric drawings. During his testimony, he discussed the system and circuit tracking system, describing systemizing as "takingyour different processes, and you're separating those. So where you have one ®Kiss was employed byPro-Inspect for approximately eight8 months, mid-January tomidAugust. Six months ofthe eight were spent circuitizing and systemizing; hestayed on to continue doing extemal visual inspections on the piping for the additional two months extending into September. Tr. VI, 1288. Kiss says heleft after that because hehad fulfilled his original agreement, and did not likethe facility; he saidhe felt it wasn't safe. Tr. Vol. VI, 1288-1289. 23 system might be methanol, and all ofthe piping within that methanol system you would break down into smaller increments called circuits." Tr. Vol. VI, at 1291. Kissstatedhe had been assignedto do systemizing and circuitizingand make externalvisual inspections anddidnotplay any role in calculating CMLs. Calculations forcircuit inspections were received after input of data into Sinclair's own Excel CML spreadsheet, as instructed by Sinclair. Per Sinclair's instructions, the CML calculation form provided the meansby whichthe number of CML readings tobetaken onacircuit were tobedetermined, based oninput ofdata, including CML readings from prior inspections, new and additional readings after placement ofadditional CMLs, if necessary, and identified piping classifications and fluids in the circuits, using information supplied by Sinclair. For purposes of piping inspections, corrosion rates in mils per year were assumed to be less than 2 mils per year. Kiss's report for the 02-04-02 circuit sets out the results ofhis 570 external visual inspection observations. Itstates "SCOPE: An external visual inspection ofinsulated circuit 02-04-02 was performed per API 570 piping inspection code, and Sinclair piping material specification P3 IE."'' His report also included, for example, identification ofareas where there was damaged or missing caulk, insulationjacket damage, steam trace leaks, insulation breaks or missing cap on insulation, areas ofinadequate support and vibration, and missing CML portplug. The report covered external visual inspectionofthe insulated 02-04-02 circuitperformed perthe API 570 code and Sinclairpiping material specification P3 IE. The report includes recommendations and notes ofrepairs made or recommended, as well as reference photographs. No repairs were made at the time of inspection. Jt. Ex. 18. Kiss's clean isometric drawing is at Jt. Ex. 19. 'Each Piping Inspection Report signed off on by Kiss included a substantially similar description of scope ofwork for circuits for external inspection orexternal visual inspection. See e.g., Ex. Z-6. 24 Kiss indicated that once the reports were completed, they were filed in the Sinclair filing system. When a unit inspection was completed, all ofthe reports were transferred to Eggleston, as owner/user and API 570 inspectorfor Sinclair. Kiss believedreportswould be reviewedbySinclair, andrepairs would thenbe planned andmade by Sinclair as required. If reports were of active leaks at valve or actual chemical process leak (not steam trace leaks). Kiss said he would report them directly to operations, the area responsible for running, repairing and maintaining the units. Itwas Kiss's understanding that the data collected by TechCorr and reports were filed and stored in bankers' boxes until ready to be shipped by Sinclair to Canada to be processed to determine the corrosionrates for those circuits. Kiss statedthat "as far as I knew, once everythingwas turnedover from Pro-Inspect, orfrom any inspection firm on site to Sinclair, itwas in their [meaning Sinclair's] hands." Id. at 1287. Kiss testified that during the time heworked at the refinery systemizing and circuitizing and performing external visual examinations between January and June, he saw Eggleston about once aweek. Eggleston would pop in and check on things and see how they were going. There were no complaints and Kiss believed things were proceeding as expected. Kiss did offer that he was there toprovide additional support for the UT techs, ifneeded, and was always available. Kiss did not do any GUI (corrosion under insulation) inspection, and he understood Sinclair was not going toperform orfund aGUI program. "Iwas given aspecific scope, which was to perform an external visual inspection, and, uh, I had made a few inquiries,- nothing specific, but pertaining to apossible GUI inspection, and the return that Igot was that, no, Sinclair will only perform a, an external visual." /c/. at 1335. Kiss consistently stated that the scope ofwork he was to perform was limited to visual external inspection, as instructed by Pro-Inspect's project leader, Fitzpatrick, whose activities inturn were supervised and directed by Sinclair's Eggleston. 25 Fitzpatrick testified that Eggieston directed Pro-Inspect's work and that they had been instructed byEggieston to perform twotasks: (1)systemize andcircuitize Sinclair's piping and(2) perform external visual inspections. Fitzpatrick Depo. 40 ("I wasgiven the scope of work byJ. R. Eggiestontosystemize and circuitize piping P&IDs' and perform visual external inspections only."), at41 ("[T]hey hired Josh Kiss [as the API 570], who inturn come into systemize and circuitize the piping P&IDs and perform external visual inspections."), at 53-54, 66 ("His exact words, that we were tosystemize and circuitize the P&IDs and perform visual inspections. TechCorr will take care ofthe UTs."); at67 ("We had two tasks. I can remember systemize and circuitize P&IDs, perform the visual inspections. TechCorr will take care of the UTs."). Eggieston had orgamzed the progression ofwork flow to systemize and circuitize the work, inspections, and entry ofdata into the company's electronic data management system, along with review and analysis of the data. Although he asserted he wanted an API 570 inspection, Eggieston's testimony was somewhat ambiguous as the scope ofwork he had actually requested and directed, little ofwhich, ifany, was memorialized in writing in the pertinent contract or otherwise. Eggieston never told Kiss or Fitzpatrick that it was their specific responsibility to review the TechCorr UT readings. To the contrary, Eggieston indicated that after Fitzpatrick had been hired as adirect employee ofSinclair, one ofFitzpatrick's functions, along with Eggieston, was to review inspection reports. Eggieston never told Fitzpatrick or Kiss to analyze UT data. Fitzpatrick stated that the boxes ofreports that included reports for the 02-04-02 circuit were located in his office across the hall from Eggieston's office. Later, when Fitzpatrick was anemployee of Sinclair, Fitzpatrick said he wanted to review ^Process and instrumentation diagram, a drawing showing a section of the refinery and sketching outvarious flows and connections in that section. Tr. Vol. II, 361. 26 and go through those inspection reports and files before turning them over to Eggleston; Eggleston expected Fitzpatrick to perform that task. API 570, at 5.5.4, does not explicitlyrequirereviewof UT thickness data as part of an external visual inspection. Jt. Ex. 4. Eggleston hadnorecollection ifthatoccurred before Fitzpatrick leftSincleiir's emplojmient, but said that if Fitzpatrick had not done so, the responsibility for reading those files and reports would have fallen to himselfor John Bergeson, another Sinclair employee. Most of that review never occurred until after the September 1,2011 fire. The fact is that the computerized data input and use ofthe MaxiTrak system was never utilized ascontemplated prior tothe September 2011 fire. Fitzpatrick, who later became API 570 certified but was an API 510 certified vessel inspector at the relevant times, stated in his deposition: Q. So Fmwondering, Mr. Fitzpatrick, then, ifthe project required a 570 inspector, why itwas that there were approximately four months without a570 inspector for the project? A, Because- A. —systems —systemizing and circuitizing takes time. You can't go perform external inspections on piping just walking through the unit. You have to have systems and circuits established. And that requires a 570. So the systemizing and circuitizing does not require you to be anAPI 570. Performing visual inspections does. So with that being said, the P&IDs were being systemized and circuitized and gathering of information from J. R. Eggleston. Q. (By Ms. Brimmer) SodoI understand your testimony to be,then, thatthenature 27 ofthe work performed during the months ofAugust, September, October, November and December were the systemizing and circuitizing of the P&IDs? A. Yes. Q. (By Ms. Brimmer) Andthe external visual inspections that you've referred to in your testimony did not begin until January when Mr. Kiss arrived? A. Correct. Yes. Q. (By Ms. Brimmer) And once Mr. Kiss arrived, what was your role during that time that you and Mr. Kiss overlapped? A. My role wentto the equipment files. Q. (By Ms. Brimmer) And what do you mean by the equipment files? A. All equipment that exists in Sinclair Refinery. They have files for each one of these pieces of equipment that has certain data inthem. Q. Where were those files located? A. They were located in the main engineering building. Q. So once Mr. Kiss arrived, do I understand that your responsibilities shifted somewhat? A. Not somewhat. They shifted. Q. (By Ms. Brimmer) Okay. Fair enough. So they shifted toyou being inthe file 28 room that's located near the engineering department. A, Correct. Q. And what were you doing with those equipment files? Were you reviewing them? A. I was reviewing files, making sure they had certain documentation. Q. And this was in connection with a PSM audit? A. Yes, ma'am. Q. And who was supervisingyou on this project? A. John Rosacker, J. R. Eggleston. Q. Were you interacting at all with Mr. Kiss during this time? A. At the beginning— A. -1 gave Josh Kiss the same direction that J. R. Eggleston gave me. Systemize and circuitize P&IDs, perform visual inspections, and TechCorr would take care of theUT. Atthat time, I rolled over to theinspection ortheequipment file project, as you might say. And that's when the whole transition of me becoming Sinclair became. ... Fitzpatrick Depo., 70-74 (counsel's various objections to form omitted). J. Robert Sims discussed API 570, inthecontext of thegoverning contract between Sinclair and Pro-Inspect. His testimony isconsistent with, and elaborates on, the notion that a contract may provide for specifically defined services or inspections, as occurred in this case. He reviewed the contract with Pro-Inspect and agreed that the scope ofwork was determined and directed by Sinclair. 29 Sims also reviewed the MI catchup plan crafted by Eggleston that described the workflow of that plan. UT data was to be gathered by technicians (TechCorr in this case) and entered directly into the MaxiTrak database and system. Because neither TechCorr nor Pro-Inspect were authorized to access the MaxiTrak database, ofnecessity, Sinclair would have had to enter the data and information from reportsintothat systemwhich wouldall be run throughthat computerprogramfor analysis. Sinclair did not get that data and other information entered into its system for analysis during the relevant time frames. Sims opined that, after review of the contract, API 570, and deposition testimony. Kiss's responsibilities were those necessary to satisfy API 570 with respect to visual external examination and location or placement of CMLs. The contract did not require Kiss to perform unassigned tasks. Responsibility for tasks not assigned toKiss would have fallen to Eggleston (or Bergeson) as the authorized certified 570 piping inspector in charge ofinspection. Kiss provided the visual external examination and met the requirements of API 570 for the assigned task. Kiss reported nonconformities in his visual examination reports, which also included repair recommendations in some cases. The visual inspection reports should have been evaluated by Sinclair's Eggleston or Bergeson when they were available on paper or after data entry and analysis into the MaxiTrak program. However, that did not occur prior to the fire inSeptember of2011. Among other things, Sims noted that the information he had been provided for review indicated that Fitzpatrick and Kiss were directed by Sinclair's Eggleston touse classification codes developed by GE Amerispect in 2001 or2002; they were instructed to calculate CMLs using the form developed by Eggleston, in the manner Eggleston directed and using existing data, also as directed by Eggleston. Sims considered Sinclair's litany of failures by Kiss and Pro-Inspect, including, simply by way of example, the alleged failures to review or evaluate UT measurements. 30 alert Sinclair ofnonconformances shown in UT measurements, extend the scope ofinspection based on findings shown in UT measurements, but recognized that Kiss had not been assigned those tasks and it was not Kiss's responsibility to look at UT data or extend the scope ofinspection. Eggleston for Sinclair would have been the primary person with authorityand responsibilityto considerthose deficiencies to determine how to address them. Unquestionably, Sinclair has asserted that Kiss had theobligation and authority to extendor modify thetaskshe was assigned to perform. However, the agreement between Sinclair andPro-Inspect required Kiss to perform visual external examinations consistent with the parameters of API 570. He was not required to perform tasks other than those encompassed inthe contractual agreement, as assigned to him by the Sinclair certified API inspector, Eggleston, who identified and supervised the work Kiss was asked to do. Sims, Tr. Vol. V, 894-971. Sims opined that Kiss did comply with the API 570 requirements of the contract. Sims also acknowledged that while numerous tasks and modes ofinspection are delineated and encompassed in API 570, the contract defining the scope of work governed what tasks Kiss was expected to accomplish pursuant to that contract. This is a proposition the Court agrees with. The Court finds that Sinclair required Pro-Inspect's API 570 inspector Josh Kiss to systemize, circuitize, and perform visual inspections as directed and assigned by Sinclair. That was the work Kiss infact performed. After that work was performed, Sinclair's employees would then take on the task ofrecording and evaluating the data collected. Sinclair did not complete that task nor did it read any inspection reports until after the September 1,2011 fire. The contract between Pro-Inspectand Sinclair was satisfied. Evenifthe Courtwasconvinced thatthecontract required something otherthanasdescribed above, (and it isnot so convinced), it isunclear whether the information reflected inthe reports and 31 data obtained and included in the inspection reports would actually have disclosed that the particular piping line in the 02-04-02 circuit was so thin that a rupture was imminent and immediate replacement ofthe piping was required. Sinclair's Hansen testified that ifhe had been aware ofthe readings and data from the inspection on January 22,2011, he would have taken further measures at that time and replaced the pipe, which he said could have been accomplished without shutting the refinery down. Inthe Court's view, thistestimony wassomewhat self-serving andquitespeculative, consisting primarily of a personal beliefthat if the pipe had beenreplaced earlierit would not have burst as it did. It does not explain Sinclair's failures to review information it actually already had. The expert testimony received and heard at trial did not persuade the Court that Sinclair would have taken any action to replace pipe or that it would have done so before the rupture in September 2011. What all ofthe expert testimony did reveal isthat there is significant variance in how the standards and guidelines embraced in the API codes are applied and utilized within the industry. For instance, two experts offered divergent opinions as to probability the pipe would have ruptured as itdid would have changed with different number and/or placement locations for CMLs on the circuit. Dr. Caligiuri, plaintiffs expert, testified that 46 CMLs placed approximately every 2 feet in an80 foot stretch of piping onthe circuit would have been appropriate, rather than the 11 or 13 that were already in place. Dr. Casey testified that the calculation and placement of the 11 CMLs onthe circuit was proper. However, neither expert's testimony was such that the Court was persuaded that the thinness ofthe pipe atthe point ofrupture inthe 02-04-02 circuit would have been more likely to have been discovered during inspection with theplacement of more CMLs orwould have prompted immediate repair or replacement of the piping. Sinclair'sexpert. Dr. Caligiuri, opined that the rupture occurred when extensive localized 32 wall thinning caused the pipe to become sufficiently thin that it could no longer withstand the internal pressure associated with normal operation. Dr. Caligiuri testified that ifthe correct number of CMLs had been calculated and placed that the inspection team would have found the thin piece of pipe. Dr. Caligiuri suggested that at least one of the additional CMLs would have actuallybeen placed on the piece of pipe where the actual rupture occurred. Dr. Caligiuri asserted that if the inspections on the circuit had been expanded, Sinclair would have been able to prevent the September 2011 fire. Dr. Caligiuri recognized and stated that the API code is not a "cookbook." However, heopined that Kiss's inspection was notsufficient because hefailed tocalculate and locate CMLs without considering UT readings and prior inspection data. He believed the inspection performed did not really assess the condition of the pipe, and that caused Sinclair to lose the opportunity to identify a problem and have the circuit removed before the September 1fire. Dr. Caligiuri did opine about ideal 570 inspections; he did not include in his assessment ofthe Kiss inspection that Sinclair's contract with Pro-Inspect was for visual external inspection, as contemplated by the catchup project plan crafted by Eggleston. It appears that much of Dr. Caligiuri's opinion was based upon representations made to him by Eggleston aboutwhat he had told Pro-Inspect he wanted in connection with this inspection and ofthe work to be performed. Dr. Caligiuri's discussion ofhis understanding oftypical API 570 inspections, combined with what he learned from Eggleston, may support his ultimate opinion. Standing alone, his opinion is understandable. However, the evidence presented to the Court at trial, including the testimony of Eggleston, Fitzpatrick, Josh Kiss and others, and documentary evidence, reflects that the inspection required atthe time was an external visual inspection, with other work, including data entry, review, and repairs ifrequired to be performed ata later date. This undercuts the validity ofDr. Caligiuri's 33 opinion that the inspection performed was not adequate, with the result that the thin pipe was not replaced or repaired prior to the September 2011 rupture. Pro-Inspect's expert was Dr. Casey, whose expertise was in failure analysis, mechanical integrityinvestigations and metallurgical analysis. Dr. Caseyreviewedthe samematerialsreviewed byDr. Caliguiri, but reached different conclusions. Dr. Casey's opinion wasthat the failure of the pipe was notforeseeable based upon thedataavailable toPro-Inspect, andfurther, thatifPro-Inspect had analyzed UT data in the manner Sinclair has suggested it should have done, theremaining life of the piping circuit would have been either 14 years or approximately 7 years depending on standards used. Dr. Casey opined that the piping inthe relevant circuit was not thin and that, against objective standards like API 570 and 574, the 0.137 value would indicate that pressure design and structural minimum was well above thevalue defined byAPI 574asalert thickness. Heopined there was nothing to support the assertion that the 0.137 measurement would have prompted immediate replacement ofthe pipe. Dr. Casey testified that ifthe number ofCMLS had been increased itwas unlikely that aCML would have been placed on the vertical section ofthe pipe in the area ofthe rupture because of API 570 guidance and because the Sinclair CML calculation form gave ahigh preference for placement ofCMLs at fittings, locations in apiping system potentially susceptible to accelerated corrosion. To conclude that the addition of more CMLs on the particular line would have increased the discovery ofthe point ofrupture leading to the September 1,2011 fire would be speculative, particularly given the calculated remaining thickness measurements were not such that immediate replacement would have beenappropriate. Sinclairswitchedto the useof a morecorrosive Canadian ColdLakeCrudeoil in September of 2010. This information was not shared with the contract inspectors. Information supplied by 34 Sinclair toany inspector ortech working onthe catchup project was incomplete and often erroneous. By way ofexample and not asanexhaustive listing, other problems included incorrect piping circuit and service classifications, improper use of the CML calculation sheet, corrosion rates were not assumed, andremaining life for equipment was not calculated appropriately. Pro-Inspect placed a great deal ofemphasis on the switch to Canadian Cold Lake Crude in September 2010 as apossible factor contributing to accelerated corrosion in the piping system. The testimony and evidence demonstrated'that the use ofCanadian Cold Lake crude oil in September of 2010 could have caused the piping to erode atan accelerated rate between the time it began to be used in Septemberof2010, continuing through the period including the January 2011 inspection and on through the period up to the September 1, 2011 fire that occurred after the piping ruptured. Sinclair's awareness that this change inproduct source was likely having deleterious consequences and impacts on its equipment is evident when events occurring after January 2011 are considered. Sinclair's 30(b)(6) designee, Moote, testified in his deposition regarding metallurgy in the slop wax line, consideringthe corrosive nature ofmaterial, corrosioncapabilities inthe crude stream, and temperature. He testified sometimes sulfur can be acorrosion inhibitor with naphthenic acids; each stream and each condition must be evaluated, adetermination made as to what is corroding or not corroding and when it should be replaced. Ifreplacement is determined to be appropriate, the type of material to be used to replace materials then in service would be based upon the cause of corrosion or the cause ofthinning. Different metallurgy may be required for different situations. Moote indicated that Sinclair began processing Canadian Cold Lake crude inabout mid-2010 as part ofthe crude mix through perhaps as late as June 2011. After that, itwas not used as part ofthe crude being processed as Cold Lake crude had a higher sulfur content than the assay showed and was 35 loading up sulfur plants and hydro treaters more than anticipated. "It also had more bottoms to it, which created more feed for your coker, which we didn't anticipate, so we moved from that crude to other crudes that would fit our configuration better." Tr. Vol. VII, 1478. In early2011, Sinclairwasconsidering anddiscussingpossibleuse ofa GE programoffering called the Predator Assessment. The program was designed to assess and consider, among other things, napthenic acidcorrosion control andmonitoring. JointEx.59,which wasdatedFebruary 2, 2011, with the subject line"Predator Monitoring Proposal" from GEto Sinclair, withattention to Gregg Byers, Bob Portz and Ray Hansen, outlined plans for sample collection for analysis in the initial Predator Monitoring Program. GE did do some preliminary hydrocarbon analysis for the 581/583 crude unit, a study designed to identify corrosion risks and possible means ofmitigating those risks and apreliminary report inApril of2011. Jt.Ex. 56;Ex. V-13. On September 23,2011, after the incident giving rise to this litigation, GE submitted to Sinclair its 581/583 Predator Assessment report. "The primary scope ofthe Predator Assessment is to evaluate the impact of processing opportunity crude oils like WCS and Cold Lake on the physical assets ofthe refinery 581 crude and 583 vacuum units." Jt. Ex. 57,96183. Inthat September 23,2011 assessment, GEmade recommendations and gave warnings about the use and processing ofCanadian Cold Lake crude oil. Jt. Ex. 57. The GE September 23, 2011 assessment continues, ... the thinning occurring on the intemal surface ofthe T5 low-alloy steel pipe was likely caused by an erosion corrosion mechanism. Erosion corrosion is the accelerated attack of a metal component because of the relative motion between a fluid and the metal surface. Metal is removed from the surface as dissolved ions, or forms solid corrosion products, which are mechanically swept from themetal surface. High temperature corrosion mechanisms such as naphthenic acid formation or sulfidation (sulfidic corrosion) may have been involved intheattack. Inaddition to the chemical factors, the velocity in the location where this sample was installed in the line may also be relevant to the overall erosion mechanism. Areas of high 36 velocity and turbulence lead to greater metal wastage rates. At temperatures of650700 °F, metal loss rates by sulfidic corrosion would approach 0.007-0.014 inch/yr. (714 mpy) in T5 low-alloy steel depending on sulfur content (see Appendix). The presence of hydrogen may also increase sulfidic corrosion rates. Page 4 The conclusions of the assessment include: 1. The internal metal wastage on the pipe sample from the Slop Oil Line of the Vacuum Unit was likely caused by an erosion corrosion mechanism. Micrometer measurements indicated a minimum and maximum wall thickness of0.007 and .032 inches. The original wall thickness of the piping was not known. 2. The velocity in the location wherethis sample was installed is directly related to the overall erosion/corrosion mechanism. Areas ofhigh velocity and turbulence lead to greater metal wastage rates. 3. Erosion corrosion is usually associated with naphthenic acid formation in high temperature refinery operations and was likely involved inthe attack. Sulfidation is also possible. It is recommended that a review ofslop oil be conducted along with the determination of the total acid number (TAN) and naphthenic acid number (NAN) to better understand thecause of damages in this piping. 4. To mitigate high temperature corrosion inthis slop oilline it may benecessary to use a suitable corrosion inhibitor treatment program or up-grade to stainless steel piping. 304 and 316 austenitic stainless steels offer superior resistance to sulfidic corrosion attemperatures up to750° F. Naphthenic acid attack may be mitigated by using higher molybdenum content austenitic stainless steels such as 317. Jt. Ex. 57, SWRC096246. Other problems make it difficult to assess whether Pro-Inspect's alleged failures, ifthere were any, caused the damages Sinclair claims that itsuffered. After the fire, a6inch piece ofpipe was taken from a larger 2-1/2' to 3' section ofpipe between the flanges on the south side ofthe slop oil loop and was sent by Federal Express to GE. Rosacker, who sent the pipe sample to GE, did not contact orwrite GE torequest that the pipe be maintained after completing its analysis. A second piece ofpipe evidencing the actual failure ofthe pipe wall was given toDan Bulkley and George Zak ofthe Wyoming OSHA office at the beginning oftheir investigation after the fire. Bulkley stated 37 they then kept the piece of pipe onsite in the trailer at the refinery under lock and key. After OSHA had concluded its investigation and left the Sinclair site, in September and October 2011, the pipe remained in the trailer for some period of time, although Bulkley recalled that the last time he saw the pipe it was in the back ofRosacker's pickup. PI. Ex. 15 (photos - Bulkley). At the time oftrial, and even before this litigation commenced, the pipe was lost or disposed by Sinclair, perhaps taken to the "boneyard" whereSinclairputsold equipment andpipingout to pasture, whichmightlaterbe sold tojunkdealers assalvage. Itwas never made available toPro-Inspect or itsexperts for analysis and evaluation. Following the fire in September of 2011, a "lessons learned" memo was prepared by Eggleston. Jt. Ex. 15. There are numerous statements inthe lessons learned memo that cause the Court to take askeptical view ofSinclair's claims inthis case, and that also reveal Sinclair's inability and failure tocommunicate anddirect activities attherefinery clearly andfailure tocapture itsactual contract requirements in the pertinent agreements for inspection and assessment ofthe piping in the circuit. The September 14, 2011 memo stated "[djuring the initial investigation phase ofthe 583 fire that occurred on 9/1/11, the focus turned to the inspection department and highlighted several failures in our system. This fire should not have happened, SWRC inspection failed to do the job properly 1.) " The memo written by Eggleston continues: The circuit that failed was improperly classified per API 570. This particular line was partially classified asclass 2 by GP Amerispect in2001 and partially asclass 3 piping. This portion ofthe data was not questioned when the umt was re-circuitized and systemized late last year. The review process failed totake into account that this system runs atatemperature high enough for auto-igmtion when exposed. The entire line was assumed to be API 570classthreepipingbasedon the fact that two of the three GP Amerispect circuits incorporated in the newsingle circuit (02-04-02) were class three and the remaining circuit class two. 38 Lesson 1 - never assume that the job was done right the first time, take the time and make the effort to analyze and verify the classification is correct, especially when the entire unit is to be re-circuitized and systemized. If you are unsure about the classification, ask Tech Services, Engineering, Operations to sit down and help determine the severity and criticality of the service. 2.) The CML calculation sheet that is used to determine the number of CML on a particular circuit was not used properly. A corrosion rate was not assumed for this calculation, which is necessary to determine an adequate starting number for CML. Lesson2 - Correctly use the tools provided for thejob. If the numberofCMLfeels wrong, it probably is wrong. If you are consistently getting results that feel wrong, take the time to ask questions about the process. Do NOT just scratch out the calculation resultand put in a number that matched what wasthereor feels right. 3.) Erratic or low readings were not followed up onby the 570 in charge ofthe piping project. The low readings were flagged by the technician. While the calculations indicated a moderate corrosion rateof 8-9mpy, referring this valuebackto the CML calculation sheetwould have triggered more inspection points to be placed on the line and perhaps flagged this line for immediate replacement. Lesson 3 - Calculate a remaining life for every piece ofequipment inspected. With every report, if the corrosion rate is higher than expected, gather more data. As a certified inspector, you have been trained and tested for your ability to do these calculations. 4.) This data sat in a box for nine months and was not properly reviewed until an accident occurred. We cannot fix whatwe do not know about. Afterreviewing all ofthe reports, several were identified that mentioned active leaks on process piping. The notification process isfairly well defined here at SWRC. You will all receive training on how tonotify SWRC personnel ofa potential problem. Lesson 4- Make sure everyone associated with the inspection department atSWRC is trained in the IWR process. 5.) Lack of SWRC oversight. No data was reviewed until after the accident. This is not acceptable. Lesson 5 - Do not get offended when someone wants to look over your work and review it. In fact I encourage you to ask someone else to review thedata before it is turned in or filed. Everyone is capable of missing something, but everyone is capable of catching something that was missed. 39 After trial and consideration ofthe evidence and testimony, the Court finds that Sinclair has failed to show by a preponderance of the evidence that Pro-Inspect breached the contract and has failed to show that the January inspection of the 02-04-02 piping circuit was not performed in accordance \vith the underlying agreement between Sinclair and Pro-Inspect. The tasks required by thecontract werein factperformed, as directed by Sinclair. The CourtfindsthatPro-Inspect did not breach the contract, as alleged by Sinclair. Sinclair gotwhatit bargained for. Additionally, Sinclair has failed to show bya preponderance oftheevidence thatPro-Inspect was negligent in performing the piping inspection and failed toshow by apreponderance ofthe evidence that its claimed damages were caused by Pro-Inspect's alleged negligence. Along with the contract claim, Sinclair's negligence claimagainst Pro-Inspect fails. Conclusions of Law 1. Any finding offact which includes a conclusion oflaw isincorporated herein. 2. The Court has diversity jurisdiction under 28 U.S.C. § 1332(a). Venue is proper in this Court pursuant to 28 U.S.C. § 1391(a). Jurisdiction and venue are not contested. 2. In a diversity case like this one, "except in matters governed by the Federal Constitution or by acts ofCongress, the law to be applied in any case is the law ofthe state." James River Ins. Co. V. Rapid Funding, LLC, 658 F.3d 1207, 1216-17 (10th Cir.2011) (quoting Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). The Court applies Wyoming substantive law to all liability and damages questions in this case. 3. Abreach of contract claim in Wyoming consists ofthefollowing elements: (1)a lawfully enforceable contract, (2) anunjustified failure to timely perform allor anypartof what ispromised 40 therein, and (3) entitlement of the injured party to damages. Hailing v. Yovanovich, 391 P.3d 611, 616 (Wyo. 2017), quoting Schlinger v. McGhee, 268 P.3d 264,268 (Wyo.2012); see also Morrow V. Xanterra Parks & Resorts, 925 F. Supp.2d 1231 (D. Wyo. 2013). 4. There is no dispute that the parties have a valid contract, satisfying the first element. However, there has been no unjustified failure to timely perform all or any part of what was promised in that contract. Pro-Inspect performed as instructed and in accordance withthe parties' agreement. The plaintiffhasfailed toprove the second element bya preponderance ofthe evidence. 5. As to the third element,even ifSinclairhad provedthat Pro-Inspectbreachedthe contract, which it hasnot, Sinclair hasfailed to prove thata breach of contract by Pro-Inspect was the cause ofdamages claimed to have been suffered as aresult ofthe September 1,2011 fire. The plaintiffhas failed to demonstrate its entitlement to recover damages in this case, failing to prove the third elementof the contractclaim by a preponderance of the evidence. 6. The plaintiff, Sinclair, is not entitled to recover damages from Pro-Inspect on its claim for breach ofcontract. Pro-Inspect isentitled to judgment in its favor ofthe breach ofcontract claim asserted by Sinclair against Pro-Inspect. 7. Plaintiff's negligence claim fails for several reasons. In the usual case, inorder to state aclaim for negligence, aplaintiffs factual allegations must establish the following elements: "'(1) the defendant owed the plaintiffaduty to conform to aspecified standard ofcare; (2) the defendant breached the duty ofcare; (3) the defendant's breach ofthe duty ofcare proximately caused injury to the plaintiff; and (4) the injury sustained by the plaintiffis compensable by money damages.' Birt V. Wells Fargo Home Mortgage, Inc., 75 P.3d 640,658 (Wyo. 2003)." Angell v. Freedom Mortgage Corporation, 2016 WL 9453335, *5 (D. Wyo. 2016); Hebert v. Sinclair Oil Corp., 2016 WL 41 9450460, *4 (D. Wyo. 2016), citing Valance v. Vl-Doug, Inc., 50 P.3d 697,701 (Wyo. 2002); Clark V. Keller Transport, Inc., 644 Fed. Appx. 846, 851 (10th Cir. 2016) (the same, quoting Laredo v. SolvayAm., Inc., 212 P.3d 614, 630 (Wyo.2009)). 8. The duty ofcare is defined by the parties' contract; the Court found the contract was not breached by Pro-Inspect. Sinclair also failed to proveby a preponderance of the evidence that the alleged breach proximately caused theclaimed injury anddamages. Sinclair claims thatthecontract was breached whenJoshKissandPro-Inspect failed to doa properAPI570inspection ofthepiping in January of 2011. The Court has already determined that Sinclair directed inspections and Pro- Inspect, and Kiss, performed as directed. The fire occurred in September of 2011. The expert testimony offered by all the parties failed to demonstrate that the inspection, even ifperformed as Sinclair has claimed, was the cause of the fire and resulting damages in September. Clearly, corrosion and thinning ofpipe occurred. However, none ofthe evidence and testimony heard by the Court proved by a preponderance ofthe evidence that the fire nearly nine months later would not have occurred if additional CMLs had been placed orthe API 570 inspection had been performed differently. The assertionthat Sinclairwouldhave replaced the pipe immediately is self-serving, and clearly inconsistent with the recognition that Sinclair's own failures contributed to the cascade of problems that could be regarded as significant contributors to the September 2011 fire. While there are threads that could be used to weave a logical explanation, the woven explanation remains speculative. Plaintiff is unable to prove by apreponderance ofthe evidence the alleged breach of aduty caused the damages itclaims to have suffered. One must speculate that what might or might not have happened if the January inspections had been done differently or the parties' agreement clearly required more than anexternal visual inspection. One must speculate that there might have 42 been a different outcome and the pipe rupture and fire would not have occurred. This is not sufficient to support any decision finding that Sinclair is entitled to an award of damages as a result of negligence on the part of Pro-Inspect. 9. Additionally, the economic loss rule bars recovery in tort when a plaintiff seeks purely economic losses unaccompanied by physical injury to person or property. Rissler & McMurty v. Sheridan Area Water Supply Jt, PowersBd, 929P.2d 1228,1234(Wyo. 1996). Here, Sinclair has claimed business interruption and property damages, which areeconomic losses within themeaning of the rule. This includes the loss of profits and business interruption damages Sinclair seeks to recover here. There is no duty in this case that Pro-Inspect is alleged to have breached that is independent of the contract at issue in this case. 10. This Court has had an opportunity to discuss the economic loss rule in another recent case, also involving Sinclair. Sinclair Wyoming Refinery Co. v. A&B Builders, Ltd., United States District Court for the District ofWyoming, Case No. 15-CV-91-ABJ, Doc. 241. While the instant case is distinguishable, some ofthe analysis in A&B Builders is helpful. In that case, the moving party argued that Sinclair was improperly seeking to pursue tort causes ofaction without alleging violation ofaduty independent from the parties' contract. \nA&B Builders, the Court acknowledged the difficulty that exists in examining the independent duty rule apart from the economic loss rule: A. The Independent Duty Rule in General In orderto resolvethe Motion, the Courtmust applyWyoming's independent duty rule. Unfortunately, it is difficult to examine theindependent duty rule separate from the economic loss rule as the Court has not found a Wyoming case that deals with the two separately. Furthermore, Sinclair has relied onthe presence ofeconomic loss in many of the cases below as a distinguishing factor. TheCourt will begin byexamining therelevant case lawstarting with JBCof Wyoming Corp. v. City of Cheyenne, 843 P.2d 1190 (Wyo. 1992). In JBC the 43 Wyoming Supreme Court acknowledged that "a breach ofan independent duty which arises out ofthe contractual relationship may give rise to an action in tort." Id. at 1197 (citations omitted). However, the court held "[f]ailure to pay sums due under a contract" can only support a breach ofcontract claim. Id. In declining to extend a tort cause ofaction for consequential damages flowing from a breach ofcontract, the court listed three reasons: First, it is not our policy to recognize tort actions for purely economic damages....Second,tort recoverybasedon the contractualrelationship should only be allowed where the breach constitutes an independent injury over and above disappointment of the plaintifTs expectation interest.... Finally, tort liability can only be premised on a duty independent of contractual duties. Id. (citations omitted). Unfortunately, JBC only addresses whether an independent duty arises for failure to pay under a contract. Id. at 1197. Since failure to pay is not an issue in the present case, JBC only helps to outline the broad principles of the independent duty rule. The next case, Rissler & McMurry v. Sheridan Area Water Supply Joint Powers Bd, presents a straightforward statement of law that when the parties have "contracted to protect against economic liability caused by the negligence of the defendant, there is no claim under Restatement of Torts (Second), supra, § 552 for purely economic loss." 929 P.2d at 1235. As part of its explanation, the court gave deference tothe ability ofsophisticated parties to order their affairs asthey saw fit. Id. The CB&I Parties have taken up this language and pointed out that each party involved in the present matter is a sophisticated business entity and together they addressed all the alleged negligence issues inthe ECP Contract. ECF No. 176, p. 19. Sinclair counters that this case is not applicable because the damages in Rissler & McMurry are economic while Sinclair's are not. ECF No 194, p. 17. For reasons discussed below, the parties' level of sophistication is much less important than whether the parties addressed the negligence claims in their contract and the type of damages is less important than the presence ofan independent duty. The Wyoming Supreme Court expressedthe economic loss rule again inExcel Construction, Inc. v. HKMEngineering, Inc., 2010 WY 34,228 P.3d 40(Wyo. 2010). InExcel Construction, thecourt held thateven incases ofpurely economic loss, atort claim cansurvive if it flows from an independent duty. Id. ^ 31,228 P.3dat 48. This framing ishelpful because itplaces the specific type ofloss, economic orotherwise, subordinate to the question of whether there is anindependent duty. The Wyoming Supreme Court also identified factors important indetermining whether there is an independent duty. Id., 288 P.3d at 48. These are a "consideration of the conduct alleged, its relationship tothe contractual duties ofthe parties, the source ofthe tort duty alleged to have been breached, and the nature ofthe damages." Id., 288 P.3d at 48. Sinclair Wyoming Refinery Co. v. A&B Builders, Ltd., Case No. 15-CV-91-ABJ, Doc. 241,4-6. 44 11. The factors identified mA&B Builders, relying upon J5C, provide meaningful guidelines in allowing the Court in this case to determine that the negligence claim asserted by Sinclair against Pro-Inspect in this case is barred. This case is one where a party may not sidestep contractual limitations by pleading a tort claim. Sinclair's attempt to assert the negligence claim is "simply a repackaged contract claim that requires consideration of the conduct alleged, its relationship to the contractual duties of the parties, the source of the tort duty alleged to have been breached, andthe nature of the damages claimed." Excel Construction, Inc. v. HKM Engineering, Inc., 229 P.3d 40, 48 (Wyo. 2010). Here, the conduct alleged by Sinclair to support its negligence claim against Pro- Inspect is the same as the conduct upon which the parties' contractual duties are based and similarly, the source ofthe tort duty Sinclair alleges tohave been breached. There isno independent duty that sustains this negligence claim. Pro-Inspect is entitled to judgment its favor on the negligence claim asserted by Sinclair. 12. The Court concludes that Pro-Inspect was not negligent and that Sinclair isnot entitled to the relief it requests. Conclusion For the reasons stated above, the Court concludes that Pro-Inspect is entitled tojudgment in its favor onallclaims and that Sinclair isnotentitled torecover from Pro-Inspect onany ofitsclaims. \ It is therefore ORDERED that Sinclair is not entitled to relief in its favor on its breachof contract claim and that judgment shall beentered infavor ofPro-Inspect onthat claim. It isfurther ORDERED that Sinclair is not entitled to relief in its favor on its negligence claim and that 45 judgment shall be entered in favor of Pro-Inspect on that claim. It is further ORDERED that Pro-Inspect shall recover its costs, pursuant to Fed. R. Civ. P. 54 and U.S.D.C.L.R. 54.2. It is further ORDERED that any remaining pending motions shall be, and are, DENIED AS MOOT. Judgment shall be entered accordingly. Dated this 2.3 ^day of ^ ALAN B: JOHNSON UNITED STATES DISTRICT JUDGE 46

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