Opinion
Civil Action No. 02-067, C/W 04-1034, Section: "I"(4).
September 30, 2004
ORDER AND REASONS
Four motions are before the Court in the above-captioned case. Third party defendant, ART Catering, Inc. ("ART"), filed a motion for summary judgment seeking a dismissal of the third party demand of Can Do, Inc. I ("Can Do"), which requested that ART provide Can Do with a defense and indemnification. Third party plaintiff, Can Do, responded with a motion for summary judgment in connection with its demand against ART for defense and indemnification. Offshore Towing, Inc. ("OTI") filed a motion for summary judgment requesting dismissal of the claims asserted by Diamond Offshore Drilling, Inc., Diamond Offshore Team Solutions, Inc. ("DOTS"), Diamond Offshore Company ("Diamond Offshore Company"), and Diamond Offshore (USA), (collectively "Diamond claimants") against OTI. Finally, the Diamond claimants filed a motion for partial summary judgment with respect to their claim for damages against Can Do.
Rec. Doc. No. 76.
Rec. Doc. No. 80.
Rec. Doc. No. 79.
Rec. Doc. No. 82.
Factual Background
At the time of the casualty at issue, Diamond Offshore Company owned a semi-submersible mobile offshore drilling unit, the OCEAN CONCORD, situated near Block 69, Green Canyon, off the Louisiana coast in the Gulf of Mexico. In May, 1996, Diamond Offshore Company entered into a "Blanket Agreement for Towing and Other Vessel Services" ("Blanket Agreement") with OTI, a vessel brokerage company, to provide vessels for the purpose of towing and providing other services to Diamond Offshore Company's drilling rigs in the Gulf of Mexico. In November, 2000, OTI in turn entered into a "Vessel Services `Back to Back' Agreement" ("Back to Back Agreement") with Can Do and six other vessel owners pursuant to which the vessel owners would supply suitable vessels to Diamond Offshore Company in fulfillment of OTI's Blanket Agreement with Diamond Offshore Company. Previously, Diamond Offshore Company had entered into a "Catering Agreement" with ART, in July 1996, in which ART agreed to provide catering services to Diamond Offshore Company's rigs, including the OCEAN CONCORD.On November 19, 2001, the OCEAN CONCORD was preparing to relocate from Block 69, Green Canyon, to Block 200, Garden Banks. Gordon Powell ("Powell") was the offshore installation manager ("OIM") of the OCEAN CONCORD. The OIM is considered to be the master of the vessel and he is responsible for its navigation. Lee Coleman ("Coleman"), the barge supervisor, worked directly for and reported to the OIM. Powell was asleep at the time of the accident and Coleman was in control of the rig.
The barge supervisor is also known as the barge engineer or barge captain.
When working properly, the rig is secured to the floor of the Gulf by eight Vicinay Offdrill anchors. However, at the time of the accident, it was secured by only two anchors in preparation for the move. The water depth at Block 69, Green Canyon Area is 1,420 feet. Rec. Doc No. 101.
As was its customary practice, Diamond Offshore Company engaged two vessels to move the OCEAN CONCORD: the M/V ELIZABETH ADAMS, an ocean towing tug, and the M/V SEABULK NEVADA, an anchor handling tug supply vessel. Can Do owned and operated both vessels.
When two tugs tow a rig, the tugs are customarily made up with the rig. The tug's tow lines are shackled into the rig's pennant wires which are attached underwater at the forward port and starboard bow of the rig's lower hulls or pontoons. Between midnight, November 18, 2001, and the evening of November 19, 2001, Diamond Offshore Company decided to have the rig moved by the M/V ELIZABETH ADAMS. The M/V SEABULK NEVADA was assigned to retrieve the eight anchors. David Pitre was the captain in control of the M/V ELIZABETH ADAMS at the time of the accident.
When a single vessel is to tow a rig, the port and starboard pennant wires are placed together at a "tri-plate" or "fishplate" to form a triangular bridle which is then hooked to the tow line of the single tugboat. At the time of the accident, Captain Pitre was attempting to make up the bridle on the rear deck of the tug. In order to do so, he had to back the tug into a position nearly under the rig's main deck between the port and starboard pontoons upon which the rig floats.
The underwater pontoons can be ballasted up or down to adjust the draft of the rig.
At Coleman's direction, Captain Pitre had earlier hooked the starboard pennant wire to the bridle on the M/V ELIZABETH ADAMS's rear deck. With the M/V ELIZABETH ADAMS shackled to the OCEAN CONCORD's starboard pontoon, Captain Pitre was attempting to retrieve the port pennant wire that had been dropped from an air tugger located on the rig's main deck in the vicinity of the port pontoon. During the maneuver, the tug's port propeller struck and punctured the rig's port pontoon. As a result, the OCEAN CONCORD took on water and began to list, requiring the evacuation of personnel from the rig. The rig had to be towed into port and placed in dry dock for repairs. When Diamond Offshore Company made a claim against Can Do for its damages, Can Do filed this limitation proceeding.
The air tuggers are air operated winches. They are mounted on pipe bracing forward and below the main deck on both the port and starboard side of the deck. A 3/4" cable turns on the air tugger winch drum so that the pennant wire can be lowered directly beneath the air tugger to a waiting vessel.
Analysis
Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56 (c). Once the moving party carries its burden pursuant to Rule 56(c), the nonmoving party must come forward with specific facts showing that there is a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). That burden is not satisfied by creating merely some metaphysical doubt as to the material facts, by conclusory allegations, unsubstantiated assertions or by only a scintilla of evidence. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations omitted). The materiality of facts is determined by "the substantive law's identification of which facts are critical and which facts are irrelevant." Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed.2d 202 (1986). Therefore, a fact is material if it "might affect the outcome of the suit under the governing law." Id. A dispute about a material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita, 475 U.S. at 587, 106 S. Ct. at 1356 (internal quotation omitted).
In order to demonstrate that summary judgment should not lie, the nonmoving party must "go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S. Ct. 2548, 2553, 91 L. Ed.2d 265 (1986); Auguster v. Vermillion Parish School Board, 249 F.3d 400, 402 (5th Cir. 2001). A court will resolve factual controversies in favor of the nonmoving party, "but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little, 37 F.3d at 1075. The mere existence of a scintilla of evidence on the non-moving party's position is insufficient to defeat a properly supported motion for summary judgment, and the non-movant may not rely on mere allegations and denials. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed.2d 202 (1986).
When the non-moving party bears the burden of proof on a claim, the moving party may obtain summary judgment without providing evidence that negates the non-moving party's claim. See Celotex Corp., 477 U.S. at 322-25, 106 S. Ct. 2548, 91 L. Ed.2d 265 (1986). Rather, the moving party need only highlight the absence of evidence in support of the non-moving party's claim. See id. A. CROSS MOTIONS FOR SUMMARY JUDGMENT BY ART AND CAN DO
Terrence Washington ("Washington"), an employee of ART, made a claim against Can Do and Diamond Offshore Company seeking recovery of damages for personal injuries he allegedly received during his evacuation from the OCEAN CONCORD. Both Can Do and Diamond Offshore Company tendered the defense and indemnity of Washington's claim to ART. ART accepted the defense and indemnity of Diamond Offshore Company pursuant to the Catering Agreement between them, but it rejected Can Do's tender of defense and indemnity for Washington's claim. Can Do then filed a third party complaint against ART for defense and indemnity.
Rec. Doc. No. 32.
Whether the indemnity provision in the Catering Agreement requires ART to indemnify Can Do is a legal issue requiring interpretation of language in the various contracts. There are no factual issues in dispute and the matter is ripe for summary judgment.
Under federal maritime law, an indemnity contract:
should be construed to cover all losses, damages, or liabilities which reasonably appear to have been within the contemplation of the parties, but it should not be read to impose liability for those losses or liabilities which are neither expressly within its terms nor of such a character that it can be reasonably inferred that the parties intended to include them within the indemnity coverage.Babcock v. Continental Oil Co., 792 F.2d 1346, 1351 (5th Cir. 1986) (quoting Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 333 (5th Cir. 1981)) (emphasis omitted).
The indemnity provision (paragraph 16) of the Catering Agreement requires that ART indemnify an indemnified party as follows:
16. To release, defend, indemnify and hold harmless Company [Diamond Offshore Company], and any company for whom Company may be working (herein referred to as "Operator") [DOTS], Company's [Diamond Offshore Company's] and Operator's [DOTS] subcontractors and all of such parties' respective officers, directors, employees, and agents (such parties being herein referred to collectively and individually as "Indemnified Parties") from and against any and all claims . . . for damages to persons and/or property . . . which may be brought against any Indemnified Party by Contractor [ART], Contractor's subcontractors, their respective . . . employees . . . incident to, arising out of, in connection with, or resulting from, the activities of Contractor, its employees . . ., or in connection with the work to be done, services to be performed or material to be furnished under this Agreement, whether occasioned, brought about, or caused in whole or in part by the negligence of any Indemnified Party or otherwise, or by the unseaworthiness of any vessel owned, operated, or contracted by any Indemnified Party or other person or by any defective condition of any equipment of any Indemnified Party or other person (whether or not existing prior to the date of this agreement), regardless of whether such negligence, unseaworthiness or defective condition be active or passive, primary or secondary.
Rec. Doc. No. 76, ART memo, exhibit 1 (emphasis added).
The plain language of paragraph 16 is that ART agrees to indemnify Diamond Offshore Company, DOTS, and both their subcontractors from claims made by ART, its subcontractors, and ART's and its subcontractors' employees.
In support of its position of no liability, ART asserts that: 1) Can Do has no contractual relationship with Diamond Offshore Company that would trigger the provisions of the indemnity agreement; 2) Can Do is not a subcontractor within the meaning of ART's contract with Diamond Offshore Company; and 3) even if Can Do were to qualify as Diamond Offshore Company's subcontractor, the claims against it do not arise out of or have any connection with the work to be performed pursuant to the Catering Agreement.
Can Do claims that it is Diamond Offshore Company's subcontractor in connection with the towing services it supplied to OTI for Diamond Offshore Company. Can Do contends that when five contracts are read together, "it is clear that Can Do was acting as a subcontractor of Diamond Offshore Company." Can Do attaches copies of these five contracts to its memorandum.
Rec. Doc. No. 81, Can Do memorandum ("Can Do memo") in support of its motion for summary judgment against ART, conclusion (unnumbered pages).
Rec. Doc. No. 81, Can Do memo, exhibits A, B, C, D and E.
The determinative question is whether Can Do is a subcontractor to Diamond Offshore Company. The Court notes that the Catering Agreement does not identify any "subcontractors" of Diamond Offshore Company. Fifth Circuit law defines a subcontractor as "one who takes a portion of a contract from the principal contractor or another subcontractor." Avondale Indus., Inc., v. Int'l Marine Carriers, Inc., 15 F.3d 489, 494 (5th Cir. 1994). Can Do cites Avondale Industries for the proposition that it is Diamond Offshore Company's subcontractor.
In Avondale Industries, the United States Navy contracted with International Marine Carriers ("IMC") to operate and maintain the USNS BELLATRIX. Id. at 491. IMC awarded a contract for the routine dry-docking and regular "topside" repairs and maintenance of the vessel to Avondale. Id. The issue in Avondale Industries was whether a pilot ("Thomas"), who was hired by Avondale and who was found to be at fault in causing damage to Avondale's dock, was Avondale's subcontractor. The Fifth Circuit held:
The record reflects that Avondale contracted to provide "tugs, pilots, [and] linehandlers." Pilot Thomas then contracted with Avondale to perform the piloting duties that Avondale was obligated to provide under the contract. Pilot Thomas was a subcontractor for purposes of the indemnity clause of the contract.Id. at 494.
In this case, Devon SFS had an Offshore Turnkey Drilling Contract ("drilling contract") with DOTS ("Contractor") to "plug and abandon" specified wells. The drilling contract refers to the "OPERATOR," Devon SFS, and the "CONTRACTOR," DOTS, and at section 15.1 on page 18, provides that "CONTRACTOR shall be and is an independent contractor." DOTS, as the operator, then entered into a Domestic Daywork Drilling Contract ("Operating Agreement") with Diamond Offshore Company, as the contractor, "to furnish the drilling vessel OCEAN CONCORD [to DOTS] together with drilling and other equipment (hereinafter called the `Drilling Unit'), insurance and personnel, . . ., for the purpose of drilling said wells and performing said auxiliary operations and services for Operator." At section 106 on page 3, the Operating Agreement states "Contractor shall be an independent contractor in performing its obligations hereunder." Can Do points to other language in the Operating Agreement, section 703 on page 11, providing as follows:
Rec. Doc. No. 81, Can Do memo, exhibit A.
Rec. Doc. No. 81, Can Do memo, exhibit B.
Contractor [Diamond Offshore Company] shall provide the supervision and assist Operator [DOTS] in engaging tugs, anchor handling vessels, anchor handling services and all other associated services to demobilize the Drilling Unit. Operator shall be responsible for the cost of tugs, anchor handling vessels, fuel anchor handling services and all other associated services required for such demobilization.
Can Do also directs the Court's attention to section 1101 on page 20, entitled "Subcontracts," providing that the Operator and the Contractor may employ other contractors to perform any of the operations or services to be provided or performed by it.
Can Do's argument is as follows: (1) Diamond Offshore Company contracted to provide tug services to DOTS for the demobilization of its rig just as Avondale contracted to provide "pilots" to IMC in Avondale Industries; (2) Diamond Offshore Company then entered into a Blanket Agreement with OTI to provide those tug services; and (3) OTI subsequently entered into a Back-to-Back Agreement with Can Do to supply tug services to Diamond Offshore Company. See id. Accordingly, Can Do argues that it took a portion of the contract from the principal contractor through its contract with OTI and it is, therefore, Diamond Offshore Company's subcontractor. The Court agrees.
Rec. Doc. No. 81, Can Do memo. Can Do adds that DOTS actually paid Can Do's purchase order for the tug services. Id., exhibit F.
ART's first assertion, that the indemnity provision is not applicable because Can Do did not have a contractual relationship with Diamond Offshore Company, is correct to the extent that there was no direct contractual relationship between Can Do and Diamond Offshore Company. However, the plain language of the Catering Agreement makes clear that the indemnity provision is not contingent on a direct contractual relationship, but rather it requires a subcontractual relationship.
Diamond Offshore Company entered into a drilling contract with DOTS to perform drilling and auxiliary services. Diamond Offshore Company then entered into the Blanket Agreement with OTI for towing and other vessel services related to the drilling contract. OTI then contracted with several vessel owners, including Can Do, via a Back to Back Agreement, whereby Can Do agreed to comply with all provisions of the Blanket Agreement between OTI and Diamond Offshore Company. As a result of the contract between Diamond Offshore Company and OTI, Diamond Offshore Company subcontracted with OTI to provide vessels; the `Back to Back' contract is a subcontract of the Diamond Offshore Company-OTI contract. Can Do took a part of the Diamond Offshore Company-OTI contract and it is, therefore, a subcontractor of a subcontractor. See Avondale, 15 F.3d at 494.
The agreement provides that "vessel owners [Can Do and others] have agreed to comply with all provisions of the Blanket Agreement as if they were designated as `Owner' thereunder." Rec. Doc. No. 81, Can Do memo, exhibit D. Oddly, but of no consequence with respect to these cross motions for summary judgment, no party is deemed "owner" in the Blanket Agreement. See Rec. Doc. No. 81, Can Do memo, exhibit C.
ART argues that the language in the contracts suggests that Diamond Offshore Company solely intended an independent contractor relationship with ART and OTI, rather than a subcontractor relationship. ART asserts that: 1) the Blanket Agreement between OTI and Diamond Offshore Company consistently refers to OTI as "Contractor" and Diamond Offshore Company as "Company," and 2) at paragraph 13, the Blanket Agreement provides that the "Agreement is a towing and service contract and shall not be construed as a charter of the vessel. Contractor shall not be construed as an agent of Company." However, no other provision in the Blanket Agreement suggests that the parties are to be classified as independent contractors alone. The terms independent contractor and subcontractor are not mutually exclusive. Walter Oil Gas Corp. v. Safeguard Disposal Sys., Inc., 961 F. Supp. 931, 934 (E.D. La. 1996) (citing Avondale, 15 F.3d at 494). Can Do's contract with OTI is a subcontract of the Diamond Offshore Company-OTI Blanket Agreement regardless of whether Can Do, OTI, or Diamond Offshore Company is classified as an independent contractor with respect to any other party.
Specifically, ART contends that its position is supported by Walter Oil Gas Corp. v. Safeguard Disposal Systems, Inc., 961 F. Supp. 931 (E.D. La. 1996). In that case, plaintiff, Walter Oil Gas ("WOG"), an oil and gas production company, entered into a Daywork Drilling Contract with MarDrill pursuant to which MarDrill agreed to furnish a jack-up rig to WOG that MarDrill owned and operated, along with other equipment and personnel to drill wells offshore. MarDrill also agreed to provide other auxiliary operations and services to WOG. WOG also entered into a "Master Service Contract" with Safeguard Disposal Systems, Inc. ("SDS"), whereby SDS agreed to perform certain services involving the cleaning, collection and disposal of debris and drill cuttings for WOG. An SDS employee was injured while working on MarDrill's rig and filed suit against MarDrill and WOG. WOG agreed to defend and indemnify MarDrill pursuant to the terms of their Daywork Drilling Contract. All parties stipulated that MarDrill was solely at fault for causing the employee's injuries and WOG paid the settlement pursuant to its indemnity agreement with MarDrill.
WOG and MarDrill subsequently sued SDS seeking reimbursement of the settlement payment pursuant to the indemnity provisions of the Master Service Contract between WOG, as "Company," and SDS, as "Contractor." WOG argued that the preamble to the Master Service Contract defined "Company" to include WOG and its subcontractors, and that MarDrill was WOG's subcontractor and it was, therefore, entitled to indemnity by SDS. Granting SDS's motion for summary judgment, the district court reasoned as follows:
In both the Master Service Contract between WOG and SDS and the Daywork Drilling Contract between WOG and MarDrill, SDS and MarDrill are referred to only as "Contractor." Additionally, both agreements provide that they will be regarded as "independent contractors" in relation to the performance of all obligations under the contracts. Although the terms "subcontractor" and "independent contractor" are not mutually exclusive because a subcontractor may or may not have an agency agreement with the contractor, the terms have distinct legal meanings. While parties to a contract are free to define terms within their agreement in any manner they see fit, the language of those definitions must surely be read so as to give them their "plain" meanings. Here, the parties clearly intended and emphasized the intention to confer upon MarDrill the status of independent contractor and not subcontractor. Had the parties to the Master Service Contract intended to include other independent contractors in the definition of the Company in the preamble or in the indemnity provision, the term could have easily been included. It was not.Id. at 934 (citations omitted).
The Court finds Walter Oil Gas inapposite. In that case, WOG relied on the preamble of the Master Service contract which defined "Company" to include WOG and its subcontractors. Furthermore, the facts indicated that "WOG was in the position of an owner and operator, not a contractor who could subcontract to others." Id. Every other factor in that court's analysis supported the parties' sole status as independent contractors. Id. The Walter Oil Gas court recognized that the "parties clearly intended and emphasized the intention to confer upon MarDrill the status of independent contractor and not subcontractor." Id.
ART further argues that Can Do is seeking indemnity for its own negligence which is contrary to the law. See Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 333 (5th Cir. 1981); United States v. Seckinger, 397 U.S. 203, 211-13, 90 S. Ct. 880, 885-86, 25 L. Ed.2d 224; Transcontinental Pipe Line Corp. v. Mobile Drilling Barge, 424 F.2d 684, 691 (5th Cir. 1970); see also Sumrall v. Ensco Offshore Co., 291 F.3d 316 (5th Cir. 2002) (distinguishing Corbitt and enforcing broad indemnification provision). Maritime law provides that indemnity agreements are to be construed strictly. See Babcock v. Continental Oil Co., 792 F.2d 1346, 1349 (5th Cir. 1986); Corbitt, 654 F.2d at 333 (limiting liability under an indemnity contract to conditions "expressly within its terms [or] of such a character that it can be reasonably inferred that the parties intended to include them within the indemnity coverage"). A "contract of indemnity will not afford protection to an indemnitee against the consequences of his own negligent act unless the contract clearly expresses such an obligation in unequivocal terms." Id. (finding such a contract to impose "an extraordinary obligation").
The broad language of the Catering Agreement's indemnity provision extends to the negligence of an "indemnified party." Notwithstanding its alleged negligence, Can Do is an indemnified party under the terms of the provision as a subcontractor of Diamond Offshore Company. The indemnity provision of the ART-Diamond Offshore Company contract extends to "subcontractors" of either DOTS or Diamond Offshore Company. Furthermore, it clearly extends the possibility of indemnifying a negligent party. The Court finds that ART's liability is expressly within the terms of the indemnity agreement, which applies to claims "whether occasioned, brought about, or caused in whole or in part by the negligence of any Indemnified Party."
Rec. Doc. No. 80, Can Do memo, exhibit E.
Rec. Doc. No. 80, Can Do Memo, exhibit E.
In addition to the requirement that Can Do be Diamond Offshore Company's subcontractor, the indemnity provision also requires that Washington's injury occur "in connection with the work to be done, services to be performed or material to be furnished" under the Catering Agreement. ART contends that Washington's claim does not arise out of any work being performed by Washington or ART under the agreement, but rather that his claim arises out of Can Do's towing services. ART does not contend that Washington was not working under the Catering Agreement at the time of the incident.
ART admits that Can Do was performing towing services "pursuant to the OTI contract with Diamond [Offshore Company]." Rec. Doc. No. 76, Art memo, p. 11. Furthermore, ART has accepted the defense and indemnity of Diamond Offshore Company for Washington's claim, which belies any suggestion that Washington's claim did not arise out of the work he was doing at the time. See Rec. Doc. No. 76.
The plain language of the indemnity provision merely requires that the claim be connected with the work to be done by ART or its employee. Furthermore, the indemnity provision includes incidents "occasioned, brought about, or caused in whole or in part by the negligence of any Indemnified Party [Can Do]." The indemnity provision expressly contemplates the situation at hand, an ART employee injured on the job by the negligence of Diamond Offshore Company, DOTS, or one of their subcontractors. Therefore, Can Do is entitled to summary judgment granting its demand for defense and indemnity.
B. MOTIONS FOR SUMMARY JUDGMENT AS TO LIABILITY
The Diamond claimants filed a complaint in Can Do's limitation proceeding against both OTI and Can Do alleging that the accident was caused by the negligence of Can Do and/or OTI and, alternatively, the unseaworthiness of the M/V ELIZABETH ADAMS. The Diamond claimants contend that Can Do and/or OTI owned and operated the vessel and are vicariously liable for the negligence of its captain and crew. The Diamond claimants pray for dismissal of Can Do's limitation proceeding and for damages in the amount of $1,021,443.90 against all defendants jointly, severally and in Solido.
Rec. Doc. No. 7.
Rec. Doc. No. 7. The Diamond claimants' complaint also names Navigator's Insurance Company and Gulf Coast Marine Underwriting Pool 2001 as defendants.
Plaintiffs in admiralty actions must prove their claims by a preponderance of either direct or circumstantial evidence. Skidmore v. Grueninger, 506 F.2d 716, 722 (5th Cir. 1975). "General negligence principles guide the analysis of a maritime tort case." River Parishes Co. v. M/V Flag Adrienne, No. Civ.A. 01-0007, 2002 WL 1453826 *4 (E.D. La. July 2, 2002) (citing Consolidated Aluminum Corp. v. C.F. Bean Corp., 833 F.2d 65, 67 (5th Cir. 1987)); see also Canal Barge Co. v. Torco Oil Co., 220 F.3d 370, 376 (5th Cir. 2000).
1. Diamond Claimants' Motion for Partial Summary Judgment against Can Do
In their motion for partial summary judgment, the Diamond claimants allege that the accident was caused solely by the negligence and/or fault of Can Do and its employees, for which Can Do is vicariously liable.
No party disputes that the M/V ELIZABETH ADAMS's port propeller struck and punctured the rig's port pontoon while the tug was attempting to retrieve the rig's port pennant wire. Relying largely on the deposition testimony of Captain Pitre, the Diamond claimants argue that the following facts are also undisputed and dispositive of the issue of Can Do's fault: Captain Pitre was in control of the M/V ELIZABETH ADAMS at the time of the accident. At about midnight on November 18, 2001, he boarded the rig for a pre-operation meeting. Captain Pitre acknowledged that it was important to know the location and clearance of the rig's underwater pontoons. On November 19, 2001, the rig called to tell him that only the M/V ELIZABETH ADAMS would tow the rig. Captain Pitre testified that he thought such an operation was "unsafe," but he decided to tow it alone when personnel on the rig told him that if he did not tow the rig, they would get another vessel to do it. He further testified that he believed it would be a "hard maneuver" because his vessel did not have a "bow thruster" or "shark jaws."
Rec. Doc. No. 82. A copy of Captain Pitre's deposition is attached to the Diamond claimants' memorandum in support of their motion for partial summary judgment (Diamond memo), exhibit B. The Diamond claimants also produced Can Do's supplemental and amended responses to their request for admissions (exhibit A), Can Do's marine safety manual (exhibit C), deposition testimony of two crew members of the M/V ELIZABETH ADAMS, Larry Bourgeois (exhibit D) and Kenneth Billiot (exhibit E), 30(b)(6) deposition of Diamond Offshore Drilling Inc. representative Nicholas Romolo (exhibit F), and the deposition of barge supervisor Lee Coleman (exhibit G).
Rec. Doc. No. 82, Diamond memo, exhibit B, p. 11.
Rec. Doc. No. 82, exhibit B, p. 17.
Rec. Doc. No. 82, exhibit B, pp. 26, 105.
Rec. Doc. No. 82, exhibit B, p. 27.
Rec. Doc. No. 82, exhibit B, pp. 27-28.
Rec. Doc. No. 82, exhibit B, pp. 115, 91. Shark jaws are a type of clamp that comes out of the vessel's deck in order to make it easier to hold the cable for towing. Id. at 138.
The Diamond claimants assert that Can Do is vicariously liable because Captain Pitre was in complete charge of the M/V ELIZABETH ADAMS; that he alone made the decision to back the tug between the OCEAN CONCORD's underwater pontoons even though he thought it was unsafe to do so; that he never looked to see if he could see the pontoons and he never asked the two crew members on the tug's rear deck to look for the pontoons. They claim that the testimony of two crew members corroborates Captain Pitre's version of the events and their argument that Can Do is solely at fault.
Can Do asserts that the accident was caused by Diamond Offshore Company's negligence and the rig's unseaworthiness. Can Do also claims that Diamond Offshore Company failed to make the rig safe for the tow hook-up.
Can Do produces several pages of Diamond Offshore Drilling, Inc.'s operations manual for the OCEAN CONCORD. At section 20.2, entitled "Towing or Tug Assisted Condition," the operations manual states that the "towing arrangement is designed so that connection and disconnection of the towing lines may be carried out without any danger to the personnel on the unit or to the towing vessel." At section 20.3, "Towing Equipment," the manual requires that each of four tow wire ropes be mounted on the appropriate padeyes (on the bow of the lower hull or pontoons) with a 120T shackle, that each of the four lines be fitted with 150 feet long, 3-inch-diameter wire rope, and that each tow wire rope be fitted with a wire rope stripper in the event the towing vessel drops the line. Section 20.3 further provides that "[f]or normal operation, the forward crane passes the towing wire rope back and forth whenever required."
Rec. Doc. No. 101, Can Do's opposition memorandum in opposition to the Diamond claimants' motion for partial summary judgment (Can Do opp. memo), exhibit I. The operations manual was approved by the American Bureau of Shipping.
It is undisputed that the forward pennant wires attached to the port and starboard pontoons were only 100 feet long. Captain Pitre and Joseph Hebert, Aker Marine Contractors' anchor coordinator, testified that Captain Pitre asked the barge supervisor to put the port and starboard pennant wires together on the rig, then use the rig's forward crane to pass the bridle to the M/V ELIZABETH ADAMS for hook-up to its tow line. The barge supervisor, Coleman, allegedly refused to do so, indicating that it was not possible. Instead, after it was hooked to the 100 foot long starboard pennant wire, Coleman ordered the M/V ELIZABETH ADAMS to back in near the port pontoon to receive the port pennant wire as it was dropped by the air tugger. The air tugger was located almost directly over the edge of the port pontoon. Hebert and Ronnie Hart, the OCEAN CONCORD's night toolpusher, both testified that the towing bridle could have been made up on the rig, and the rig's forward crane could have then lowered the bridle to the rear deck of the M/V ELIZABETH ADAMS. Additionally, Powell testified that he would not have refused Captain Pitre's request to use the forward crane to pass the bridle to the tug.
Rec. Doc. No. 101, Can Do opp. memo, exhibit D, affidavit of marine surveyor Timmy Anselmi.
This is the procedure described in the OCEAN CONCORD's operations manual. Rec. Doc. No. 101, Can Do opp. memo, exhibit J, deposition of Joseph Hebert, p. 78.
Rec. Doc. No. 101, Can Do opp. memo, exhibit J, pp. 75-80.
The air tugger is shown in photographs D9, D13 and D14. Rec. Doc. No. 101, Can Do opp. memo, exhibit D.
Rec. Doc. No. 101, Can Do opp. memo, exhibits D and K (deposition of Ronnie Hart, pp. 126-128).
Rec. Doc. No. 101, Can Do opp. memo, exhibit E, pp. 167-168.
The Diamond claimants allege that Can Do, as the operator of the towing vessel, violated its duties. In a contract for towage, a tug is neither a bailee nor the insurer of the tow, but the towing vessel owes the tow the duty to exercise such reasonable care and maritime skill that prudent navigators employ for the performing of similar services. River Parishes Co., 2002 WL 1453826 *4 (citing Tidewater Marine Activities, Inc. v. American Towing Co., 437 F.2d 124 (5th Cir. 1970)). The vessel's duty to tow "includes the requirement to assess the nature of the undertaking it assumes; it must be sufficiently knowledgeable about its vessel, its customer's ship and the interaction of the two upon the sea." Collier v. 3-A's Towing Co., 652 F. Supp. 576, 579-80 (S.D. Ala. 1987) (quoting M.P. Howlett, Inc. v. Tug Dalzellido, 324 F. Supp. 912, 917 (S.D.N.Y. 1971)).
Can Do contends that at the time of the accident, the OCEAN CONCORD was not under tow. Can Do asserts that according to Captain Pitre's testimony, the M/V ELIZABETH ADAMS was actually working as an assist tug under Coleman's direction with respect to the method of towing the rig, as well as how to effect making up the bridle and hooking up the tow line.
Rec. Doc. No. 82, Diamond memo, exhibit B, p. 150.
Assist tugs have a duty to follow the orders of others rather than taking action on their own. Crowley Am. Transp., Inc. v. Double Eagle Marine, Inc., 208 F. Supp. 2d 1250, 1267 (S.D. Ala. 2002); Hobson v. Guido Tugboat Salvage Corp., No. Civ.A.94-10222-RGS, 1997 WL 263735 * 5 (D. Mass. May 2, 1997) (citing Baker, Carver Morrell Ship Supplies, Inc. v. Mathiasen Shipping Co., Inc., 140 F.2d 522, 525 (2d Cir. 1944)). Can Do contends that in these circumstances, the rig was the "dominant mind" and, in such a case, the tug is not liable provided the tug obeyed the rig's orders and was not guilty of negligence, either in the manner of executing the orders or by participating in an obviously dangerous maneuver. See Dow Chem. Co. v. Tug Thomas Allen, 349 F. Supp. 1354, 1363 (E.D. La. 1972). Generally, when the tug supplies the "motive power," the tug becomes the dominant mind. Id. However, a different arrangement may be made by express agreement or implied by the circumstances. Id.
In support of this theory, Can Do urges that the OCEAN CONCORD was a fully manned tow with master and licensed crew on board. At the time of the accident, Powell, the OIM and "master" of the rig, was asleep and the rig was under the control of the barge supervisor, Coleman. Can Do produces the deposition testimony of both men that indicates that neither man knew exactly where the air tuggers were located in proximity to the pontoons. Coleman allegedly instructed Captain Pitre as to how to effect the tow maneuver, but Coleman apparently was unaware that the pennant wires were only 100 feet in length, not long enough to safely make up the bridle on the tug's rear deck. Further, Coleman allegedly could not or would not provide Captain Pitre with the size, location and depth of the pontoons, and he allegedly did not bother to see that the rig was ballasted down to a depth which would preclude contact between the tug's propeller and the pontoons.
Rec. Doc. No. 101, Can Do opp. memo, exhibit E (Powell deposition), pp. 127-132; exhibit H (Coleman deposition), p. 32.
The owner of the tow has a duty to deliver a seaworthy tow, and the tug owner is not required to make a detailed inspection of the tow to ascertain its seaworthiness. Nat G. Harrison Overseas Corp. v. Am. Tug Titan, 516 F.2d 89, 94 (5th Cir. 1975) (citations omitted). The duty to inquire and the quality and scope of any inspection made by the tug crew must be viewed in light of the circumstances. South, Inc. v. Moran Towing and Transp. Co., 360 F.2d 1002, 1006 (2d Cir. 1966). Based on the foregoing, there remains a genuine dispute of material fact with respect to the location and depth of the rig's port pontoons. Can Do has pointed to specific testimony establishing that it is unclear whether the M/V ELIZABETH ADAMS was working as a tug or the rig was the dominant mind and the M/V ELIZABETH ADAMS was an assist tug.
Finally, the Diamond claimants argue that Can Do must be presumed to be at fault pursuant to the "moving vessel doctrine." The moving vessel doctrine establishes that when a moving vessel strikes a stationary object, the moving vessel is presumed to be at fault since a moving vessel does not ordinarily collide with a stationary object "unless the vessel is mishandled." Odeco Drilling Services, Inc. v. M/V Mighty Tide, No. Civ.A. 92-3094, 1995 WL 795715 *6 (citing Bunge Corp. v. M/V Furness Bridge, 558 F.2d 790 (5th Cir. 1977)). While this presumption may affect the burden of proof, the doctrine must be applied in a "common sense manner." See Bunge Corp., 558 F.2d at 795.
Can Do contests the claim that the rig was a stationary object for purposes of the "moving vessel doctrine." Powell, the rig's OIM, testified at his deposition that the rig moved up to two and a half degrees when secured by eight anchors and that it moves even more when only secured by two anchors as it was at the time of the accident. Other deposition testimony confirms that the rig's anchors had been removed before the accident. If the rig was drifting because it was secured by less anchors than normal, then the rig arguably was not a stationary object for the purposes of applying the presumption of fault against the M/V ELIZABETH ADAMS.
Powell could not convert the degrees into a distance expressed in feet. Rec. Doc. No. 101, Can Do opp. memo, exhibit E, p. 143.
Rec. Doc. No. 101, Can Do opp. memo, exhibit E, pp. 138-149, esp. 148-149.
The Court finds that Can Do has produced sufficient evidence to raise a genuine factual dispute as to whether the rig's crew or Captain Pitre controlled or instructed the maneuver precipitating the M/V ELIZABETH ADAMS's propeller striking the OCEAN CONCORD. Can Do has established a genuine issue of material fact with respect to which party was responsible for the maneuver undertaken by the M/V ELIZABETH ADAMS. As such, partial summary judgment on the issue of liability in favor of the Diamond claimants against Can Do is precluded.
2. OTI's Motion for Summary Judgment with respect to the Diamond claimants' claims against it
In support of its motion for summary judgment, OTI argues that: 1) it is merely a vessel brokerage company that acted as the marketing agent for Can Do in connection with the services of the M/V ELIZABETH ADAMS; 2) the Back-to-Back Agreement identifies Can Do as a "vessel owner" and requires Can Do "to comply with all provisions of the Blanket Agreement as if designated as `Owner' thereunder;" and 3) Can Do owns and operates the M/V ELIZABETH ADAMS, hired the captain and the personnel aboard the vessel, and provided the training for the vessel's employees. Furthermore, OTI contends that even if Can Do is found to be at fault, OTI is not liable because the Diamond claimants cannot prove that OTI owned or operated the M/V ELIZABETH ADAMS or that it hired or trained her crew.
Rec. Doc. No. 79, OTI's memorandum (OTI memo) in support of its motion for summary judgment, exhibit A (OTI's 30(b)(6) deposition of Cory Kief, p. 9, ln. 9).
Rec. Doc. No. 79, OTI memo, exhibit C, p. 1.
Rec. Doc. No. 79, exhibit D (Can Do's 30(b)(6) deposition of Joey Adams, p. 7, lns. 6-20, pp. 22 and 24).
The Diamond claimants assert that their claim specifically alleges that the casualty was "caused by the negligence, fault, breach of contract, breach of the warranty of workmanlike performance and breach of other legal duties and responsibilities on the part of Can Do, Inc. I and/or Offshore Towing, Inc." The Blanket Agreement requires that any vessel furnished pursuant to it "shall be tight, staunch, strong and well and sufficiently tackled and equipped, and in every respect seaworthy and in good running order, condition and repair." The Diamond claimants assert that OTI breached the Blanket Agreement because the M/V ELIZABETH ADAMS did not have a competent crew and was not sufficiently tackled and equipped to perform the work intended.
Rec. Doc. No. 99, Diamond claimants' opposition memorandum (Diamond opp. memo) to OTI's motion for summary judgment, exhibit A, Blanket Agreement, p. 3.
Rec. Doc. No. 99, Diamond opp. memo, exhibit A, Blanket Agreement, p. 1. The Diamond claimants also argue that OTI may be considered the vessel owner pursuant to the language of the Blanket Agreement because the Blanket Agreement provides that "Contractor [OTI] or certain of its subsidiaries, if any, operate numerous marine vessels . . . including tugs," and that "[OTI] agrees to provide and Company [Diamond Offshore Company] agrees to hire such of Contractor's vessels as Contractor and Company shall designate." Id. The Court finds that this language does not create any duty for OTI other than a contractual one.
In order to establish maritime negligence, a plaintiff must demonstrate that there was a duty owed by the defendant to the plaintiff, breach of that duty, injury, and causation. Canal Barge Co. v. Torco Oil Co., 220 F.3d 370, 376 (5th Cir. 2000). OTI cites Volyrikis v. M/V Isabelle, 668 F.2d 863, 866 (5th Cir. 1982) (overruled on other grounds), a Jones Act case, for the proposition that it is not liable because it neither owned the vessel nor exercised control over the vessel's crew or master. The Court finds Volyrikis inapposite because it does not address general maritime negligence law. Notwithstanding OTI's misplaced reliance on Volyrikis, the Court finds that the Diamond claimants have failed to identify any factual evidence which establishes that OTI owned or exercised any control over the M/V ELIZABETH ADAMS with respect to this incident that would support a negligence cause of action. It is undisputed that Captain Pitre did not call OTI prior to the accident. The only fact that the Diamond claimants identify to establish OTI's negligence is that OTI's general manager testified that he would have advised Captain Pitre not to perform the operation had Pitre called him.
Even if Volyrikis is extended to non-Jones Act claims, Volyrikis does not address the situation where, as in this case, a party contracted to provide a properly equipped vessel.
Rec. Doc. No. 99, Diamond opp. memo, exhibit B.
Rec. Doc. No. 99, Diamond opp. memo, exhibit B, pp. 32, 39.
The Diamond claimants bear the burden of proof at trial with respect to their claims against OTI. For summary judgment, OTI may simply highlight the absence of evidence presented by the Diamond claimants to support its motion. See Perez v. Region 20 Educ. Serv. Ctr., 307 F.3d 318, 323-24 (5th Cir. 2002). Even assuming, arguendo, that OTI owed a duty to the Diamond claimants, the Diamond claimants have presented no evidence that indicates OTI breached a duty or that any breach of that duty caused the damages that the Diamond claimants sustained.
OTI's assertion that it cannot be held liable for the alleged negligence of the vessel's crew because it did not exercise any control of the vessel has not been met with any factual evidence creating a genuine issue of material fact. Accordingly, OTI's motion for summary judgment with respect to the Diamond claimants' negligence claim against it is GRANTED. However, OTI's argument that it is not the owner of the M/V ELIZABETH ADAMS and that it did not exercise any control over the vessel does not address the Diamond claimants' other causes of action.
The Diamond claimants assert, inter alia, a claim premised on OTI's contractual obligation to them. OTI's Blanket Agreement, paragraph 17, provides "if Contractor [OTI] furnishes a vessel owned or operated by a subsidiary or affiliate, Contractor remains responsible hereunder for fulfillment of all of Contractor's obligations under this contract, including but not limited to the insurance or indemnity requirements of the contract. . . ."
Rec. Doc. No. 99, Diamond opp. memo, exhibit A, Blanket Agreement, p. 3.
OTI submits that it is not liable because Can Do agreed in the Back to Back Agreement to comply with the requirements of OTI's contract with Diamond Offshore Company. Established principles of contract law recognize that assumption of a duty by a third party does not relieve an obligee of its contractual obligation, at least without consent to the delegation. See RESTATEMENT (2D) OF CONTRACTS § 318(3) (stating "[u]nless the obligee agrees otherwise, neither delegation of performance nor a contract to assume the duty made with the obligor by the person delegated discharges any duty or liability of the delegating obligor). OTI's subsequent contract with Can Do does not relieve OTI of its contractual obligation to Diamond Offshore Company. See Howe v. Varity Corp., 36 F.3d 746, 756 (8th Cir. 1994).
OTI has not addressed the Diamond claimants' argument that OTI breached the contractual obligations of the Blanket Agreement. As the Court noted in its discussion of the Diamond claimants' motion for partial summary judgment, there is evidence that the M/V ELIZABETH ADAMS lacked the proper equipment to safely accomplish the tow. This evidence is competent summary judgment evidence and it is sufficient to create a genuine issue of material fact with respect to OTI's obligation to provide properly equipped and tackled vessels. Therefore, OTI is not entitled to summary judgment dismissing the Diamond claimants' breach of contract claim against it. Accordingly, OTI's motion for summary judgment with respect to the Diamond claimants' breach of contract claim is DENIED.
See Rec. Doc. No. 99, Diamond opp. memo, exhibit D, deposition of Kenneth Billiot. Billiot, a crew member aboard the M/V ELIZABETH ADAMS, testified that Captain Pitre was reluctant to perform the operation because the vessel did not have shark jaws or a bow thruster. Id., p. 17.
Similarly, with respect to the Diamond claimants' allegations that OTI breached any warranty of workmanlike performance or breached any other legal duties and responsibilities, OTI's motion for summary judgment does not address these allegations. OTI's motion for summary judgment with respect to these claims is DENIED.