Opinion
Civil Action Nos: 00-2282 c/w 00-3367, Section: "R" (5)
February 21, 2002
ORDER AND REASONS
Before the Court are cross motions for summary judgment by defendants Ocean Energy, Inc. and TCB Industries, Inc. Plaintiff in limitation, Elevating Boats, Inc., joins Ocean Energy's summary judgment motion. For the reasons stated, the Court grants defendants' motion for summary judgment and denies TCB's motion for summary judgment.
I. BACKGROUND
This case arises out of a slip and fall that occurred aboard the vessel the MATT JEANFREAU. On November 6, 1999, Dewane Coleman, a deckhand aboard the MATT JEANFREAU, a self-propelled lift boat, allegedly slipped and fell on degreaser on the deck of the vessel. The MATT JEANFREAU is owned and operated by Coleman's employer, Elevating Boats, Inc. At the time of the incident, the vessel was operating under a charter party between EBI and Ocean Energy, Inc., a company that leases and operates the East Bay Oilfield, where the alleged accident occurred. OEI entered into a charter party with EBI for the MATT JEANFREAU so that OEI could use the vessel to transport men and equipment to its oil wells and so that the vessel could serve as a mobile work platform.
Defendant TCB Industries, Inc. is a suppler of labor to oil companies, and in this case OEI hired TCB as an independent contractor to perform certain work and to provide services in the East Bay Oilfield. In May 1994, TCB and OEI entered into a Master Service Agreement ("MSA"), which contained general provisions governing work and services TCB would perform for OEI under separate individual assignments and work orders. The MSA includes an indemnity provision that requires TCB to defend and indemnify OEI against all clams. OEI's Ex. 1, MSA at 3-4. The MSA covered the work performed by TCB employees aboard the MATT JEANFREAU on the day of the incident. The TCB work crew assigned to the MATT JEANFREAU performed maintenance and repair work on oil wells, such as replacing and fitting pipes. The work was performed on the deck of the vessel or on the well platforms. The vessel transported the workers from well to well as needed and could elevate its deck to the level of the platform so the workers could move from the deck to the platforms to perform their work. The vessel also transported maintenance equipment and supplies to the platforms which the TCB crew unloaded. The TCB crew were to clean the deck of the vessel by applying degreaser and hosing down the deck with the vessel's fire hose. Plaintiff alleged that the degreaser used to clean the deck caused his injury.
At the time the parties entered into the MSA, OEI operated under the name "Flores Ruck, Inc." In June 1997 Flores Ruck changed its corporate name to Ocean Energy, Inc. See OEI's Ex. 9 (copy of certificate of corporate name change).
This lawsuit began when EBI filed an action for exoneration from or limitation of liability in response to Coleman's accident. After EBI filed its action, Coleman included a claim for unseaworthiness in his responsive pleadings to EBI's action, and he filed a separate action against OEI and TCB based on claims of negligence and unseaworthiness. EBI intervened in Coleman's lawsuit and filed a third-party demand seeking contractual indemnity from TCB and its insurer under the MSA. OEI filed a cross-claim against TCB in the same action asserting contractual indemnity from TCB under the MSA. EBI and OEI also asserted in their motions that TCB owes them tort indemnity and/or contribution based on the alleged negligence of TCB's employee. The Court consolidated the limitation action and the Coleman action. Plaintiff settled his claims with the defendants, and all the defendants agreed to contribute equally to fund the settlement. The issue of indemnification among the defendants remains. OEI filed this motion for summary judgment on its claim for contractual indemnity against TCB. TCB contends that the MSA's contract indemnity provisions are invalid under the Louisiana Oilfield Indemnity Act, Louisiana Revised Statute 9:2780. In addition, TCB moves for summary judgment to dismiss OEI's tort indemnity claim on the theory that the employee accused of negligence is the borrowed servant of OEI.
II. DISCUSSION
A. Summary Judgment Standard
Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552 (1986). A court must be satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words, "that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to return a verdict in her favor." Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990) ( citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511 (1986)), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069, 1075 n. 14 (5th Cir. 1994). The moving party bears the burden of establishing that there are no genuine issues of material fact.
If the dispositive issue is one for which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. at 2554; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. Additionally, the nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue exists for trial. See id. at 325, 106 S.Ct. at 2553-54; Little, 37 F.3d at 1075. The nonmovant may not rest upon conclusory allegations, unsubstantiated assertions, or merely a scintilla of evidence. See Little, 37 F.3d at 1075.
B. Nature of the Contract
OEI and TCB contest whether the Court should apply Louisiana or general maritime law to interpret the contract between them. In order to determine which law applies, the Court must first determine the nature of the contract in question.
In a contract consisting of multiple parts, such as a master work agreement and a work order, the court must interpret the parts together in evaluating whether maritime law applies. See Davis Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313, 315 (5th Cir. 1990). As Judge Rubin wrote in Davis, if an injury occurs in the performance of a separable maritime obligation, the entire contract is subject to maritime law, even if the obligation arises from an initial blanket contract that is principally non-maritime:
A contract may either contain both maritime and non-maritime obligations or, . . . contemplate future detailed contracts having different characteristics. If the separable maritime obligations are imposed by the supplementary contracts, or work orders, these are "maritime obligations [that] can be separately enforced [in admiralty] without prejudice to the rest," hence subject to maritime law. If therefore, an injury occurs in the performance of a separable maritime obligation even though it is provided for by an initial blanket contract that is principally non-maritime, the complete contract is nevertheless subject to maritime law. See id. at 315-16.
Whether a contract is maritime or not depends on the "nature of the contract, rather than its place of . . . performance." Id. Courts determine the nature of a contract by its historical treatment in the relevant jurisprudence and by an inquiry into the facts surrounding the contract. See id. at 316. A review of the relevant jurisprudence indicates that a contract to furnish labor to work on special purpose vessels to service oil wells is a maritime contract. See Demette v. Falcon Drilling Company, Inc., 2002 WL 58890, *5 (5th Cir. 2002); Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115, 1123 (5th Cir. 1992); Davis 919 F.2d at 317; see also Gilbert v. Offshore Production Salvage, Inc., 1997 WL 149959, *4 (E.D. La. 1997). Fifth Circuit jurisprudence has regularly distinguished between cases in which the contractor did not utilize the vessel's equipment to perform its services on offshore wells from those in which the contractor's services are integrally linked to the vessel and its mission. See Domingue v. Ocean Drilling and Exploration, 923 F.2d 393, 397 (5th Cir. 1991) (wireline work did not require contractor to use vessel's equipment to execute work order; contract was nonmaritime); DuPont v. Sandefer Oil Gas, Inc., 962 F.2d 60, 62 (5th Cir. 1992) (contract that required contractor to supply and equip vessel was maritime); Smith v. Penrod Drilling Corp., 960 F.2d 456, 460 (5th Cir. 1992) (contract that focused on use of jack-up vessel in workover operations was maritime); Gilbert, 1997 WL at *5 (contractor's work involved use of jack-up drilling vessel); Laughlin v. Falcon Operators, Inc., 2001 WL 506172, *2 (E.D. La. 2001) (contract to furnish lift barge and its crew was maritime). Further, contrary to TCB's assertion, the Fifth Circuit has not adopted a blanket rule that MSA's arising out of the operations of jack-up barges are non-maritime. Thus, the jurisprudence supports a finding that a contract to provide a work crew to perform maintenance on an offshore well through the use of a special purpose jack-up rig is maritime in nature.
After considering the relevant jurisprudence, the court must consider the facts surrounding the contract. The Davis court identified six factors to examine in interpreting whether a contract is maritime in nature:
(1) what does the specific work order in effect at the time of injury provide?
(2) what work did the crew assigned under the work order actually do?
(3) was the crew assigned to work aboard a vessel in navigable waters?
(4) to what extent did the work being done relate to the mission of that vessel?
(5) what was the principal work of the injured worker? and
(6) what work was the injured worker actually doing at the time of injury?See id. at 316.
The parties do not dispute that there is no evidence of a specific work order for November 6, 1999. The TCB crew actually performed general maintenance and repair work on the oil wells, such as fabricating and fitting pipes, and transported materials from platform to platform. See OEI's Ex. 2, Coleman Deposition at 67-68; OEI'S Ex. 4, Brian Knight Deposition at 8-9. To fulfill these tasks, the TCB crew traveled in navigable waters aboard the MATT JEANFREAU from one job site to another within the East Bay Oilfield. See OEI's Ex. 7, EBI Daily Log Reports. They performed much of the work from the deck of the MATT JEANFREAU. ( See TCB's Ex. B, Knight Deposition at 104). See Davis, 919 F.2d at 317 (describing nearly identical facts). As in Davis, "the particular nature of the terrain and production equipment involved required a special purpose vessel like the [MATT JEANFREAU] that could function as a mobile work platform." Id. According to Brian Knight, the MATT JEANFREAU's special lift feature was so vital to the TCB crew's mission that "there's no way you could do without it." TCB's Ex. B, Knight Deposition at 104. TCB's reliance on Domingue and on the fact that TCB did not supply the vessel under the MSA is misplaced. The Fifth Circuit's decision in Domingue was grounded on the "distinctly nonmaritime" nature of the wireline services provided under the contract, which did not require the use of a vessel or its equipment. See 923 F.2d at 395-96. Here, the work of the TCB crew is comparable to that of the contractors in Davis and Campbell, in which the work was "inextricably intertwined with maritime activities since it required the use of a vessel. . . ." Campbell, 979 F.2d at 1122 ( quoting Davis, 919 F.2d at 317); see also Gilbert, 1997 WL 149959 at *5-6 (contractor's actual work enabled the vessel to perform the function for which it was designed). Further, the Fifth Circuit recently confirmed that even a contract for offshore drilling services that does not mention any vessel is maritime if its execution requires the use of vessels. See Demette, 2002 WL 58890 at *5 ( citing Lewis v. Glendel Drilling Co., 898 F.2d 1083, 1086 (5th Cir. 1990) (holding that a contract to provide drilling services is maritime even if it does not mention vessels)); see also Campbell, 979 F.2d at 1117-18 (even though labor contractor did not furnish vessel under the master servant agreement, contract is maritime).
The fifth and sixth Davis factors assume that the injured worker was employed by the contractor who performed the work under the two-party contract in dispute. See Domingue, 923 F.2d at 398. Here, since Coleman was not hired by TCB nor engaged in its work, "it would be immaterial to the nature of the [TCB] contract whether his work was or was not maritime." Id. Nevertheless, it is undisputed that Coleman's work as a deckhand aboard the vessel is maritime in nature. The Court concludes that the Davis factors indicate that maritime law applies.
C. Indemnity and Defense
Indemnity agreements are generally valid and enforceable under maritime law. See Lirette v. Popich Bros. Water Transp., Inc., 699 F.2d 725, 728 (5th Cir. 1983). These contracts are construed to cover "all losses, damages, or liabilities which reasonably appear to have been within the contemplation of the parties." Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1214 (5th Cir. 1986). OEI claims that if it is entitled to indemnity and defense of all claims by virtue of the indemnity clause in Section 4 of the MSA, which provides:
(b) [TCB] agrees to defend, indemnify, and hold harmless [OEI] against all claims, demands, losses or suits (including but not limited to, claims, demands, or suits for property damage, bodily injury, illness, disease, death or loss of services property or wages) which may be brought against [OEI] by any party but not limited to, any employee of [TCB], subcontractor of [TCB], or by any employee of subcontractor of [TCB], or the legal representative or successor of any such employee, in anywise [sic] arising out of or incident to the work to be performed under this contract by [TCB] or [TCB's] subcontractors, or [TCB's] presence in, on or about [OEI's] property or job site, irrespective of whether such claims, demands or suits are based on the relationship of master and servant, third party, or otherwise, and even though occasioned, brought about, caused by arising out of or resulting from [TCB's] work, or its acts, activities, or presence on any location, structure, or vessel, the unseaworthiness or unworthiness of vessels or craft, or the negligence or strict liability, in whole or in part, of [OEI] of the contractual liability of [OEI], or by or from any other means, relationship, or cause, without limitation whatsoever. OEI's Ex. 1, MSA at 3-4.
Under Section 4(b), TCB is obliged to defend and indemnify OEI for the claims of EBI's employees such as Dewane Coleman, "irrespective of whether such claims, demands, or suits are based on the relationship of master and servant, third party and otherwise, and even though brought about, caused by, arising out of or resulting from [TCB's] work . . . the unseaworthiness or unairworthiness of vessels or craft, or the negligence, strict liability, in whole or in part of [OEI] . . . or by or from any other means, relationship, or cause, without limitation whatsoever." Id. Therefore, TCB must indemnify OEI for the cost of Mr. Coleman's claims. EBI is also covered by TCB's indemnification and defense obligation because it is a contractor of OEI's by virtue of the charter party between EBI and OEI. See Cesaroni v. United States, 624 F. Supp. 613, 620 (S.D. Ga. 1985) ( quoting Leary v. United States, 81 U.S. 607, 610 (1871)). Under the terms of Section 4(a) of the MSA, all references to OEI in the indemnification provision cover "contractors (other than [TCB]) and subcontractors . . ." See OEI's Ex. 1, MSA at 3. Therefore, EBI is protected by OEI's indemnity provision.
D. Borrowed Servant Status
The Court finds it unnecessary to determine whether Brian Knight, the TCB employee who was allegedly negligent, is a "borrowed servant" of OEI's, because the indemnification provision of the MSA protects OEI even if Knight were OEI's borrowed servant. See Warren Petroleum Corporation v. J.W. Green Contractors, 417 F.2d 242, 245 (5th Cir. 1969) (whether indemnitor is liable to indemnitee turns on interpretation and scope of contract, not precise legal status of worker as borrowed servant). Here, the indemnity provision provides that it applies to all claims "irrespective of whether such claims, demands, or suits are based on the relationship of master and servant, third party, or otherwise, and even though occasioned, brought about, caused by, arising out of or resultinq from . . . the negligence or strict liability, in whole or in part, of [OEI] . . . or by or from any other means, relationship, or cause, without limitation whatsoever." OEI's Ex. 1, MSA at 4. Accordingly, TCB's motion for summary judgment is dismissed as moot.
III. Conclusion
For the foregoing reasons, OEI's and EBI's motion for summary judgment is GRANTED and TCB's motion for summary judgment is dismissed as moot.