Opinion
CIVIL ACTION NO: 00-1484, c/w, 00-2102; 00-2346; 00-2067, SECTION: "R" (4)
December 4, 2002
ORDER AND REASONS
Before the Court are Chet Morrison Contractors, Inc.'s and Stone Energy Corporation's cross-motions for summary judgment. For the following reasons, the Court GRANTS in part and DENIES in part Stone's motion for summary judgment and DENIES Chet Morrison's motion for summary judgment.
I. BACKGROUND
This case arises out of an accident that occurred on April 21, 2000, when a lift barge, the L/B JOHNETTE, owned by Falcon Operators, Inc., capsized and became partially submerged in the territorial waters of Louisiana. Chet Morrison provided a crew to Stone under a General Work Agreement, which contained general provisions governing the work Chet Morrison would perform for Stone under separate work orders and requests for services. The General Work Agreement also contained indemnity obligations between the parties.
Several workers on the barge filed suit against Stone and Falcon. In May of 2001, this Court granted summary judgment in part to Stone on its cross-claim against Falcon, finding that their contract is governed by general maritime law and finding the indemnity provisions valid. Similarly, Stone filed a crossclaim against Chet Morrison, claiming that, under their contract, Chet Morrison must defend and indemnify Stone against its alleged negligence. This case was stayed in May of 2001, and Chet Morrison now reurges a motion for summary judgment against Stone. Stone filed a cross-motion for summary judgment against Chet Morrison. Like Falcon, Chet Morrison claims that the contract indemnity provisions are invalid under the Louisiana Oilfield Indemnity Act, LA. REV. STAT. ANN. § 9:2780. Stone again argues that the provisions should be interpreted under the general maritime law, under which they are valid.
II. DISCUSSION
A. Legal 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, 322-323, 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)). The moving party bears the burden of establishing that there are no genuine issues of material fact.
If the dispositive issue is one on 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. a: 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. 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 v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1996).
B. Nature of the Contract
Chet Morrison and Stone contest whether the Court should apply Louisiana or general maritime law to interpret the contract between them. 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 general 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 the Fifth Circuit held 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 nonmaritime:
A contract may either contain both maritime and non-maritime obligations or, . . . contemplate future detailed contracts having different characteristics. If 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 depends on the nature and character of the contract, not its place of performance. Id. at 316. Courts consider the historical treatment of the contract in the relevant jurisprudence and the facts surrounding it. See id. The relevant jurisprudence indicates that a contract to furnish labor to work on special purpose vessels, such as lift barges, to service oil wells is a maritime contract. See Demette v. Falcon Drilling Company, Inc., 280 F.3d 492, 500-01 (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 U.S. Dist. LEXIS 3592, 1997 WL 149959, *4 (E.D. La. 1997). In Davis, a work order to provide a crew to work on a barge that functioned as a movable work platform was deemed maritime in nature. See Davis, 919 F.2d at 317. 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 and those in which the contractor's services are integrally linked to the vessel and its mission. See DuPont v. Sandefer Oil Gas, Inc., 963 F.2d 60, 62 (5th Cir. 1992) (finding that contract requiring contractor to supply and equip vessel was maritime); Smith v. Penrod Drilling Corp., 960 F.2d 456, 459 (5th Cir. 1992) (finding that contract focusing on use of jack-up vessel in workover operations was maritime); Domingue v. Ocean Drilling and Exploration, 923 F.2d 393, 397 (5th Cir. 1991) (holding that contract involving wireline work which did not require contractor to use vessel's equipment to execute work order was nonmaritime); Laughlin v. Falcon Operators, Inc., 2001 WL 506172, *6 (E.D. La. 2001) (finding that contract to furnish lift barge and its crew was maritime); Gilbert, 1997 U.S. Dist. LEXIS 3592 at *5 (holding that contract in which contractor's work involved use of jack-up drilling vessel was maritime). Special purpose structures, such as the JOHNETTE, a jackup barge, are considered vessels. See Manuel v. P.A.W. Drilling Well Serv., Inc., 135 F.3d 344, 347 (5th Cir. 1998). This remains true even when the barge is moored, dry-docked, immobilized or secured to land. See id. at 348. Thus, the jurisprudence supports a finding that a contract to provide a work crew to perform construction services for an offshore platform 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 Davis, 919 F.2d at 316.
There is no evidence of a specific work order for April 21, 2000. It is undisputed, however, that for three or four days leading up to the accident and on the day of the accident, the Chet Morrison crew performed tasks of welding pipes and building a platform for the well, all of which was primarily performed on the elevated deck of the JOHNETTE while it was jacked up. ( See Laughlin Depo., Ex. 3 at 20-21, 216; Smith Depo., Ex. 4 at 34-36; Cothran Depo., Ex. 4 at 29-32; Williams Depo., Ex. 5 at 70; Poindexter Depo., Ex. 7 at 41-43, 45-47.) Further, Chet Morrison's crew on the JOHNETTE worked on navigable waters. The barge had been mobilized from Fourchon, Louisiana to its offshore location, and was to return to Fourchon after completing its assignment. The JOHNETTE was also maneuvered several feet in the water while the crew was aboard it. ( See Poindexter Depo., Ex. 7 at 56.) Moreover, in ruling on summary judgment between Stone and Falcon, this Court previously held that the JOHNETTE "served as a mobile work platform on which work was performed to service an offshore platform." Laughlin, 2001 WL 506172 at *8. As in Davis, "the particular nature of the terrain and production equipment involved required a special purpose vessel like the [JOHNETTE] that could function as a mobile work platform." Davis, 919 F.2d at 317. Here, the work of the Chet Morrison 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 1123 (quoting Davis, 919 F.2d at 317); see also Gilbert, 1997 U.S. Dist. LEXIS 3592 at *5-6 (holding that contractor s actual work enabled the vessel to perform the function for which it was designed).
Chet Morrison's argument that it did not supply the JOHNETTE or assign its crew to the JOHNETTE under the General Work Agreement is unavailing. The Fifth Circuit recently confirmed that a contract for offshore drilling services that does not mention any vessel is maritime if its execution requires the use of a vessel. See Demette, 280 F.3d at 500-01 (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 (holding contract maritime even though labor contractor did not furnish vessel under the master servant agreement). In Demette, the Fifth Circuit held that a contract to furnish well casing services was maritime even though the casing work was done on a jack-up vessel furnished by another contractor.
The fifth and sixth Davis factors are easily met because it is undisputed that the Chet Morrison crew's principal work until the accident occurred consisted of building a well platform and welding pipes on the deck of the JOHNETTE and placing them on the well.
For the foregoing reasons, the Court concludes that the Davis factors indicate that maritime law applies to the general work agreement.
The Court notes that the General Work Agreement contains a choice of law provision of general maritime law. In light of the Court's finding that maritime law applies, it is unnecessary to address the choice of law issue.
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). Stone claims that it is entitled to indemnity and defense of all claims brought by Chet Morrison's employees and other parties because of the indemnity clauses in the General Work Agreement, which provide:
(B) [Chet Morrison] agrees to defend, indemnify and hold [Stone] . . . harmless from and against any and all losses, claims, demands, liabilities or causes of action of every kind and character, in favor of any person or party, for injury to or illness or death of Contractor, any subcontractor, and employee of Contractor or any employee of subcontractors of Contractor and for damage to property of Contractor, or subcontractor of Contractor, which injury, illness, death or damage arises out of or is incident to the work performed under this Agreement, and regardless of the cause of such property damage, injury, illness or death, even though caused in whole or in part by a pre-existing defect, any indemnitee's negligence or strict liability, or other legal fault of any indemnitee. Contractor shall fully defend any such claim, demand or suite [sic] at its sole expense, even if the same is groundless.
(D) [Chet Morrison] agrees to defend, indemnify and hold [Stone] . . . harmless from and against any and all losses, claims, demands, liabilities or causes of action of every kind and character, in favor of any person or party, for injury to or illness or death of any person other than as provided in Paragraphs A and B of this Article VII or damage to property of any such person which injury, illness, death or damage arises out of or is incident to the work performed under this Agreement but only when such injury, illness, death or damage is caused by the sole negligence of [Chet Morrison].
(General Work Agreement, attached to Stone's Mot. Summ. J., Ex. 1 § VI(B), (D).) Under section VI(B), Chet Morrison is obliged to defend and indemnify Stone for the claims of Chet Morrison's employees incident to the work they performed under the Agreement, "regardless of the cause" and "even though caused in whole or in part by a pre-existing defect, any indemnitee's negligence or strict liability, or other legal fault of any indemnitee." ( Id. § VI(B).) Thus, Chet Morrison must defend and indemnify Stone for its employees' claims.
The correct section is VII.
As to claims made by other parties under section VI(D), Chet Morrison is obliged to indemnify Stone when injury, illness, death or damage was caused by Chet Morrison's sole negligence. ( Id. § VI(D).) As factual questions remain in this case regarding the cause of the injuries of several parties not employed by Chet Morrison, including those of Ricky Ardoin, Raymond Smith, and some Falcon employees, the Court finds it premature to consider on summary judgment Stoner's indemnity claims against Chet Morrison under section VI(D). See Oxford Shipping Co. v. New Hampshire Trading Corp., 697 F.2d 1, 7 (1st Cir. 1982); A/S J. Ludwig Mowinckles Rederi v. Tidewater Constr. Corp., 559 F.2d 928, 932 (4th Cir. 1977) (finding indemnity claims not ripe because no determination of liability had been made).
III. CONCLUSION
For the foregoing reasons, the Court GRANTS in part and DENIES in part Stone's motion for summary judgment and DENIES Chet Morrison's motion for summary judgment.