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The AIG unit loses control of the well at the site



A federal appellate court has upheld a summary judgment of a lower court against an American International Group Inc. entity in disputes over an on-site well.

Houston-based Baker Hughes Inc. contracted with another company to carry out 34 steps of hydraulic fracturing at an oil and gas drilling site in Loving County, Texas, according to Wednesday's ruling by the 5th U.S. Circuit Court of Appeals in Houston in AIG Europe Ltd. against Caterpillar Inc; Dragon Products Ltd. BHI shut down all 16 pump units, but before the fire was extinguished, it damaged many of them according to the decision.

The replacement unit was manufactured by Deerfield, Illinois-based Caterpillar and Jacksboro, Texas-based Dragon Product had assembled the unit with BHI, according to the decision.

Caterpillar had recommended that the unit's oil be replaced after 250 hours of driving time, while BHI's own policy required an oil change every 800 hours, according to the decision.

The unit's oil was replaced for the only time in May 201

6. At that time, BHI's hour meter showed that the engine had run for about 800 hours, although its internal hour meter showed that it had run for 1,911 hours.

After the fire, an investigation showed that it originated from the replacement unit and that the engine had a disconnected crankshaft counterweight and a broken connecting rod.

As BHI's insurer, AIG filed lawsuits against Caterpillar and Dragon on charges including negligence, design defects, manufacturing defects and implied warranty breaches.

The U.S. District Court in Beaumont, Texas, among other rulings, granted a summary judgment for Caterpillar and Dragon on each of AIG's claims.

The decisions of the lower court were confirmed by a unanimous panel court with three judges. In the discussion on negligence, the decision claimed that AIG “claims that if the meter had worked, BHI could have taken measures to prevent the fire. Nevertheless, AIG points to no evidence that the meter's inoperability or BHI's lack of knowledge about the difference in engine hours caused the fire. "

" The district court had the right to issue a summary judgment Caterpillar on the causal element, "it said.

In addition, "AIG does not state any specific facts that attempt to show Draken's negligence," they said.

Lawyers in the case did not respond to a request for comment.

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