Opinion
Civil Action No. 03-1428 C/W 04-929 Section: "J" (1).
August 19, 2004
ORDER AND REASONS
Before the Court are cross- Motions for Partial Summary Judgment filed by Chevron (Rec. Doc. 99) and Fireman's Fund (Rec. Doc. 100) on the question whether the operative contract between Broussard Brothers ("Broussard") and Chevron is maritime or non-maritime. The significance of the issue is that if the operative contract is non-maritime, state law will govern the parties' dispute and pursuant to the Louisiana Oilfield Indemnity Act, La.Rev.Stat. 9:2780 ("LOIA") Broussard's contractual obligation to indemnify Chevron may be void.
The Court held oral argument on the cross-motions on August 18, 2004, after which it took the matter under advisement. For the reasons which follow, the Court finds that Fireman Fund's motion should be granted in part, and Chevron's motion should be denied.
BACKGROUND FACTS
The relevant facts in this case are not disputed, and may be summarized as follows. On August 3, 1998, Chevron and Broussard entered into a Master Service Order and Agreement, in which Broussard agreed to indemnify Chevron. On April 30, 2002, Chevron and Broussard entered into a Master Time Charter Agreement in which Broussard also agreed to indemnify Chevron. In late 2002, pursuant to a verbal work order, Chevron retained Broussard to conduct offshore platform construction and repair work for Chevron in the Vermilion Bay Field. The work was accomplished by utilizing a spud barge, the BB-10, and other Broussard vessels. The BB-10 provided equipment and housed and transported the Broussard crew.
On November 21, 2002, while working on Chevron's Platform 31 to disconnect a manifold from the platform, Broussard roustabouts Antoine "Burt" Guillot and Kevin Constantine were injured by escaping pressurized gas. Broussard filed a limitation action on May 20, 2003; Guillot and Constantine filed claims on June 10 and June 16, 2003, respectively. In accordance with the Chevron-Broussard contracts, on September 23, 2003, Fireman's Fund, Broussard's insurer, agreed to defend the claims. On April 1, 2004, Fireman's Fund filed suit against Chevron (and others) seeking, inter alia, a declaratory judgment that Broussard's indemnity obligations, which Fireman's Fund insures, are void under LOIA. Fireman's Fund Ins. Co. v. Navigator's Ins. Co., et al, Civil Action No. 04-929. The instant cross-motions are directed to the issue of the nature of the contract (maritime or non-maritime), which in turn will govern whether LOIA may apply.
DISCUSSION
As stated on the record at oral argument, the Court finds that the operative agreements in this case are the Master Service Agreement supplemented by the verbal work order. Accordingly, its inquiry is directed to whether those contracts considered in tandem are properly characterized as maritime or non-maritime. As the Fifth Circuit has previously noted, and as this Court stated at oral argument, the fact that claimants may be seamen for purposes of the Jones Act has no bearing on wether the contract between Chevron and Broussard is maritime or not. Lefler v. ARCO, Inc., 785 F.2d 1341 (5th Cir. 1986).
The Davis test
As the Fifth Circuit acknowledged in Davis Sons, Inc. v. Gulf Oil Corp., "[t]he attempt to determine whether a contract, particularly one linked to offshore gas and oil production, is governed by state or maritime law has led to much confusion." 919 F.2d 313, 315 (5th Cir. 1990). Recognizing "apparent inconsistencies" in decisions on this question, the Davis court attributed these to "the highly fact-specific nature of the inquiry necessary to determine whether a contract is governed by maritime law." Id. Nevertheless, the Davis court went on to note that while it could "discern no single method of analysis in the many cases addressing this subject," the cases are "based on a fairly consistent underlying approach," which it endeavored to synthesize and articulate. Id.
Under Davis, in cases like the one at bar, involving two-part contracts (a Master Service Agreement followed by a later work order) the two must be interpreted together to determine whether maritime or land law is applicable to the contract's provisions.Id. Whether the contracts read together are maritime or not depends "on the nature and character of the contract, rather than on its place of execution or performance." Id. at 316 (internal quotations omitted).
To this end, Davis set out a six-part test to determine how a contract should be characterized, which requires courts to consider: "(1) what [did] 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?" Id. Application of Davis to the present case
Applying these factors to the case at bar, the Court concludes that the principal obligation of the Broussard-Chevron contract was non-maritime. The specific work order in effect at the time of injury was a verbal work order in which Chevron requested Broussard to provide offshore construction and repair services to Chevron platforms in Vermilion Bay Field, following Hurricane Lily in late 2002. The crew assigned under this work order performed offshore construction work on and to Chevron's Vermilion Bay platforms. On the date in question, the Broussard crew was engaged in tearing down walkways from wells to platforms, removing pilings, pulling platform slabs, removing platforms, pulling and replacing grating, constructing handrails, and the like — in other words, construction work.
Guillot and Constantine were assigned to the BB-10, a spud barge and vessel in navigable waters. At the time of the accident, BB-10 was spudded down and serving as a stationary work platform. Moreover, at the time of the accident, claimants were working on the Chevron platform, not the BB-10. The mission of the BB-10 was to provide transportation and a work platform for its crew. The work being done by claimants Guillot and Constantine was construction work on the Chevron platform.
Guillot and Constantine's principal work was as roustabouts assigned to the BB-10, whose mission was to perform repairs on the Chevron installations. At the time of injury, Guillot and Constantine were located on Chevron Platform 31 performing construction work, specifically, removing a manifold from the platform.
The result of this inquiry leaves the Court to conclude that while there is no doubt that the Broussard-Chevron contract contained both maritime and non-maritime elements, the principal obligation under the operative agreement — the Master Service Agreement coupled with the verbal work order in effect at the time of claimants' injuries — was to perform construction and maintenance services, a non-maritime obligation that did not concern the operation of the BB-10 or any other vessel. Platform construction services, like the wireline services at issue inThurmond v. Delta Well Surveyors, "are peculiar to the oil and gas industry, not maritime commerce." 836 F.2d 952, 955 (5th Cir. 1988). Further, as in Thurmond, and as borne out by the application of the Davis factors to this case, this suit has arisen out of the performance of the contract's principal — non-maritime — obligation. See id. The claimants have sued for injuries sustained while performing platform construction and repair, and Chevron seeks indemnity for its liability to them. At the time they were injured, Guillot and Constantine were not engaged in the performance of a maritime obligation, such as one relating to the navigation or operation of the BB-10. Rather, they were on the Chevron platform performing construction tasks. The fact that performance of the contract required a barge for transportation of the equipment and workers does not alter this fact, because the use of the barge was incidental to the contract's principal obligation. Id. Accordingly, the contract in question is properly considered non-maritime, and state law applies with respect to the enforceability of the indemnity agreement between Broussard and Chevron. Therefore,
IT IS ORDERED that the Motion for Partial Summary Judgment filed by Chevron (Rec. Doc. 99) should be and is hereby DENIED; IT IS FURTHER ORDERED that the Motion for Partial Summary Judgment filed by Fireman's Fund (Rec. Doc. 108) should be and is hereby GRANTED in part; IT IS FURTHER ORDERED that counsel shall inform the Court by letter, within five days of entry of this order, if and how this ruling affects the other pending motions in this case.
While the application of state law means that LOIA potentially applies, the Court specifically declines to reach the question of whether LOIA voids the contract at issue in this case. To do so would require a finding of fault on the part of the indemnitee (Chevron) or one of its agents, which the Court is not prepared to do at this juncture. La.Rev.Stat. 9:2780(B).