Opinion
No. 2008 CA 1981.
May 8, 2009.
APPEALED FROM THE NINETEENTH JUDICIAL DISTRICT COURT IN AND FOR THE PARISH OF EAST BATON ROUGE, LOUISIANA TRIAL COURT NUMBER 538,254 HONORABLE ROBERT BURNS, JUDGE.
J. Burton LeBlanc, IV, Cameron R. Waddell, Jena L. Duncan, Jodi E. Anderman, Baton Rouge, LA, Attorneys for Plaintiff — Appellee, Ray F. Rando.
James M. Garner, Chritopher T. Chocheles, New Orleans, LA, Attorneys for Cross-Claim Plaintiff-Appellant, Murphy Oil, USA, Inc.
Paula M. Wellons, Desiree W. Adams, New Orleans, LA, Attorneys for Cross-Claim Defendant — Appellee Lou-Con, Inc.
BEFORE: PARRO, McCLENDON, AND WELCH, JJ.
Murphy Oil, USA, Inc. (Murphy) appeals a summary judgment entered in favor of Lou-Con, Inc., dismissing Murphy's cross-claim for contractual defense and indemnification. We affirm.
BACKGROUND
On November 22, 2005, Ray Rando, who contracted mesothelioma as a result of asbestos exposure, filed a lawsuit against a host of defendants, including his former employers, various premises owners where Mr. Rando was allegedly exposed to asbestos, as well as companies that designed, manufactured, sold, and installed asbestos-containing products. Lou-Con, Mr. Rando's employer, and Murphy, the owner of a refinery in Meraux, Louisiana, where Mr. Rando allegedly was exposed to asbestos while working for Lou-Con, were named as defendants in the lawsuit. In the petition, Mr. Rando asserted that premises owner Murphy was strictly liable as the owner of an unreasonably dangerous facility and was negligent for, among other things, failing to provide him with a safe place to work. Mr. Rando further alleged that Lou-Con was negligent for, among other things, failing to provide him with a safe workplace.
The facts forming the basis for the Rando litigation can be found in this court's decision in Rando v. Anco Insulations, Inc., 2007-2093 (La.App. 1st Cir. 5/2/08)(unpublished), writs granted, 2008-1163, 2008-1169 (La. 9/26/08), 992 So.2d 972, 973.
On November 8, 2006, Murphy filed a cross-claim against Lou-Con demanding full indemnity and defense costs incurred by Murphy in the Rando litigation under delictual and contractual theories of indemnification. Murphy averred that Mr. Rando testified that he worked for Lou-Con at the Meraux refinery in the early 1970s. Although unable to produce an actual contract containing a defense and indemnity provision that had been executed between Murphy and Lou-Con during the early 1970s, Murphy asserted that it would prove through secondary evidence the existence of contracts during the pertinent time frame in which Lou-Con agreed to indemnify Murphy against all bodily injury claims arising out of or in connection to the performance of the work contemplated by the parties' contractual arrangement. The secondary evidence identified by Murphy in its cross-claim consisted of a "short form" contract executed by Murphy and another contractor in 1967 containing an indemnity provision; an affidavit of Murphy's long-term employee, Marcel Leumas, who attested that all contracts between Murphy and its contractors, including Lou-Con, from 1967 forward contained the same or similar language; a 1976 purchase order issued by Murphy to Lou-Con referencing the existence of a 1976 "short form" agreement between the two; a 1976 document referencing Lou-Con and Murphy and containing an indemnity provision, but which was never executed by the parties; and contracts executed by Murphy and Lou-Con from 1980 through 1991 providing that Lou-Con would indemnify and defend Murphy if a lawsuit arose out of Lou-Con's negligent acts.
Murphy settled with Mr. Rando and was dismissed from the litigation on May 4, 2007, but reserved all rights in connection with its cross-claim against Lou-Con. Lou-Con answered the cross-claim, denying that it executed any contract containing an indemnity provision that would have been in effect for the period of Mr. Rando's alleged exposure at the Meraux refinery.
Thereafter, Lou-Con filed a motion for summary judgment, asserting that Murphy did not and could not prove that Lou-Con contractually agreed to defend and/or indemnify Murphy for work performed at the Meraux refinery in the years 1970-1973, the time period in which Mr. Rando claimed to have worked for Lou-Con at the Meraux refinery. Lou-Con asserted that no signed or unsigned formal contract executed between Murphy and Lou-Con for the time period in question existed and that the secondary evidence relied on by Murphy in support of its cross-claim did not prove the existence of a contract between Murphy and Lou-Con that would control work performed by Lou-Con in the years 1970-1973. Moreover, Lou-Con claimed that Murphy could not produce evidence of any employee with personal knowledge who could testify that he saw a signed contract with Lou-Con prior to 1980, that he saw a Lou-Con representative sign a contract, or that a contract had ever been submitted to Lou-Con for a signature prior to 1980.
In support of its motion for summary judgment, Lou-Con offered deposition testimony of its owner, purchase orders issued by Murphy to Lou-Con during the 1970s, a 1980 contract executed by Murphy and Lou-Con containing an indemnity provision, and excerpts of depositions of Murphy's corporate representatives on whose testimony Murphy was relying to establish the existence of contracts containing defense and indemnity provisions.
On December 6, 2007, Lou-Con and its principals were dismissed from the Rando litigation. Thereafter, Murphy filed an opposition to the motion for summary judgment, asserting that it had lost or misplaced contracts executed with Lou-Con in the 1970s and that under the law, it was entitled to present secondary evidence to prove the contents of the lost indemnity agreements. The secondary evidence relied on by Murphy in opposition to the motion for summary judgment consisted of Mr. Leumas's affidavit, the deposition testimony of one of its corporate representatives, two contracts executed by Murphy and other contractors in 1967 and 1972 containing indemnity provisions, a 1976 purchase order issued to Murphy containing a reference to a "short form" contract executed by Lou-Con in 1976, and a 1980 contract executed by Lou-Con and Murphy containing an indemnity provision. Murphy urged that this evidence supported the inference that Lou-Con signed "short form" contracts containing a provision requiring it to defend and indemnify Murphy during the years Mr. Rando worked at Meraux refinery.
The trial court held that indemnity agreements could not be proven by secondary evidence and granted summary judgment in favor of Lou-Con because Murphy failed to produce a written contract during the relevant time period containing an indemnity provision. Murphy appealed.
ADMISSIBILITY OF SECONDARY EVIDENCE
Murphy contends that the trial court committed legal error in holding that Murphy could not use secondary evidence to establish the existence of a lost indemnity agreement. It relies on Tri-State Insurance Company v. Elmore Labiche Plumbing Company, 212 So.2d 255 (La.App. 4th Cir. 1968), wherein the court held that a lost indemnity agreement could be proved by secondary evidence. In so doing, the court relied on former Louisiana Civil Code article 2279, which provided that when a written instrument containing obligations that a party wishes to enforce has been lost or destroyed, evidence may be given of its contents, provided the party shows the loss. The court observed that Louisiana courts had on innumerable occasions held that when an instrument is lost or destroyed, its contents could be proved by secondary evidence, and noted that neither the jurisprudential rules nor the civil code made an exception for any particular type of instrument or contract. Tri-State, 212 So.2d at 257.
The substance of Article 2279 is currently embodied in Civil Code article1832, which provides as follows:
When the law requires a contract to be in written form, the contract may not be proved by testimony or presumption, unless the written instrument has been destroyed, lost, or stolen.
Article1832 is an exception to the general rule that when an obligation is based on a writing, prima facie proof of the obligation requires introducing that writing. See Ascension Builders, Inc. v. Jumonville, 262 La.519, 263 So.2d 875, 878-879 (1972); Louisiana Workers' Compensation Corporation v. Pro Source Roofing, Inc., 2004-1118, pp. 3-4 (La.App. 1st Cir. 3/24/05), 907 So.2d 113, 116; Sudds v. Protective Casualty Insurance Company, 554 So.2d 149, 151 (La.App. 2nd Cir. 1989). Like its predecessor, Article1832 does not exempt any particular type of contract from its purview.
In Piper v. Rabalais, 407 So.2d 751, 752 (La.App. 1st Cir. 1981), this court relied on the Tri-State decision in holding that secondary evidence was admissible to prove the contents of a lost consent to surgery form. Moreover, we note that Article1004 of the Louisiana Code of Evidence permits the admission of other evidence to prove the contents of a writing where all originals of the writing have been lost or destroyed, unless the proponent lost or destroyed them in bad faith.
We agree with the rationale of the Tri-State ruling and find that, under Article1832 of the Civil Code and Article1004 of the Code of Evidence, the existence of a contract containing an indemnity agreement may be proven by secondary evidence where it is demonstrated that the contract is destroyed, lost, or stolen. Therefore, we find that the trial judge committed legal error in granting summary judgment on the basis that such evidence was inadmissible.
SUMMARY JUDGMENT
Because the record is complete, we shall determine, de novo, whether Lou-Con is entitled to summary judgment. Boudreaux v. Vankerhove, 2007-2555, p. 5 (La.App. 1st Cir. 8/11/08), 993 So.2d 725, 729-730. A motion for summary judgment will be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La.C.C.P. art. 966(B).
The burden is on the mover to present a prima facie case showing that no genuine issues of material fact exist. If the mover has made a prima facie case showing that the motion should be granted, the burden shifts to the nonmoving party to present evidence demonstrating that a material factual issue remains. The failure of the nonmoving party to produce evidence of material factual dispute mandates the granting of the motion. Jones v. Estate of Santiago, 2003-1424, p. 5 (La. 4/14/04), 870 So.2d 1002, 1006; Lewis v. Four Corners Volunteer Fire Department, 2008-0354, p. 4 (La.App. 1st Cir. 9/26/08), 994 So.2d 696, 699. Any doubts as to a dispute regarding a genuine issue of material fact must be resolved against granting the motion and in favor of trial on the merits. Lewis, 2008-0354 at p. 4, 994 So.2d at 698.
The evidence relied on by Murphy in support of its contractual indemnification claim consisted of an agreement entitled "Engineering — Construction Agreement — Short Form" executed by Murphy and another contractor, Gaffney, Inc., on December 12, 1967. In the "short form" agreement, Gaffney, Inc. agreed to indemnify Murphy "from and against any and all claims, demands, liabilities, suits, or actions (including expenses and attorneys' fees)" for bodily injuries to any persons, including Gaffney's employees, arising out of or in connection with the performance of the work under the agreement. Murphy also relied on the affidavit of Marcel J. Leumas, who was Murphy's chief mechanical engineer at the Meraux refinery from 1965 through 1974 and the manager of engineering and maintenance from 1974 until his retirement in 1986. Mr. Leumas attested that at some point in the mid-1960s, Murphy selected a "short form" contract to serve as a model for all future contracts between Murphy and its contractors. He declared that Murphy used this "short form" contract, or some version of the contract, for agreements with its contractors until 1986. Mr. Leumas stated that an example of this form is the December 12, 1967 agreement between Murphy and Gaffney, Inc., which Mr. Leumas signed. Mr. Leumas attested that to the best of his knowledge, all contracts between Murphy at its Meraux refinery and its contractors, including Lou-Con, in 1967 and the surrounding years, contained the same or similar language providing for Murphy's defense and indemnification in the event a contractor's employee sued Murphy for a bodily injury claim.
As additional support for its contractual indemnity claim, Murphy relied on a 1976 purchase order issued by Murphy to Lou-Con to perform work as directed in the Meraux refinery in 1976 and in conformance with the Engineering Construction "short form" agreement executed by Murphy and Lou-Con on January 12, 1976. Murphy also relied on a document entitled "Engineering — Construction Agreement — Short Form" dated January 1976, containing the following language:
Contractor hereby agrees to indemnify and save Owner harmless from and against any and all claims, demands, liabilities, suits or actions (including expenses and attorneys' fees) for bodily injuries, including death resulting therefrom, to any persons, including employees of Contractor and its subcontractors, and loss of or damage to property, including property of Contractor, arising out of or in connection with the performance of work under this Agreement.
The document, while referring to Murphy and Lou-Con and containing written notations and deletions of certain provisions, was never signed or otherwise executed by either party.
Lastly, Murphy relied on a 1980 contract executed by Murphy and Lou-Con containing the following defense and indemnification provision:
Contractor hereby agrees to indemnify and save Owner harmless from and against any and all claims, demands, liabilities, suits or actions (including expenses and attorney's fees) for bodily injuries, including death resulting therefrom, to any persons, including employees of Contractor and its subcontractors, and loss of or damage to property, including property of Contractor, arising out of or in connection with negligent acts of Contractor or its agents or employees in the performance of work under this Agreement.
In its motion for summary judgment, Lou-Con asserted that Murphy could not satisfy its burden of proving that Lou-Con contractually agreed to defend or indemnify Murphy for work performed at the Meraux refinery from 1970-1973, the time Mr. Rando claimed to have worked for Lou-Con at the refinery. It pointed out that Murphy did not elicit testimony of witnesses who could prove the existence of an executed formal contract containing a defense and indemnification provision for the time period at issue. Lou-Con posited that whether such contracts existed, whether they would have contained indemnity provisions, and what the language of the indemnity provisions would be were all matters of speculation. Lastly, Lou-Con urged that even if the court found there was a genuine issue of material fact concerning the existence of a contract between Lou-Con and Murphy containing an indemnification provision, there was no evidence to support the proposition that it contained an obligation on Lou-Con's part to defend and indemnify Murphy against Murphy's own negligence and/or strict liability.
In support of the motion for summary judgment, Lou-Con offered the deposition testimony of Mr. Rando, who stated that during the years 1970, 1971, 1972, and 1973, he worked for Lou-Con at Murphy's refinery, Tenneco, and another plant he could not recall. Mr. Rando did recall working on particular jobs as a pipefitter for Lou-Con at Murphy in 1971 and 1972.
Lou-Con also offered excerpts of three depositions of its owner, Mr. Virgil Carson, and Murphy's corporate representatives, Mr. Leumas and Mr. Vince Vicidomina, taken in connection with a lawsuit entitled Russo v. Air Products and Chemicals, Inc., that was filed in the Civil District Court for the Parish of Orleans. Mr. Carson stated that Lou-Con and Murphy had a very informal relationship and typically did business through a purchase order, which served as the parties' agreement. Mr. Carson acknowledged that at some point, Murphy and Lou-Con began entering into written contracts, and that at some point after 1979, he signed a contract with Murphy containing an indemnity provision.
In support of its claim that no Murphy employee would be able to testify from personal knowledge that a contract with an indemnity provision existed between Murphy and Lou-Con during the time period in question, Lou-Con offered Mr. Leumas's deposition testimony in which Mr. Leumas admitted that he could not recall whether Lou-Con signed contracts in the late 1960s or early 1970s agreeing to indemnify Murphy in the event a Lou-Con employee sued Murphy for bodily injury. Mr. Leumas was also unable to recall if Lou-Con signed any "short form" contracts during that time period agreeing to indemnify Murphy and had no knowledge when Murphy began using the "short form" contract containing an indemnity provision with its contractors.
In his deposition, Mr. Vicidomina, on whose testimony Murphy was relying to establish the existence of a contract, acknowledged that he did not begin working for Murphy until 1974, the year after Mr. Rando ceased working for Lou-Con, and admitted that he did not even become involved in the negotiation and preparation of contracts for Murphy until 1976. Additionally, Mr. Vicidomina admitted that he could not recall receiving an executed contract from Lou-Con prior to 1980 and did not know of anyone in the Murphy organization who could testify that they had a specific recollection of actually having received a signed, executed contract from Lou-Con for any work done prior to 1980.
Additionally, Lou-Con introduced eight purchase orders issued to it by Murphy from November 21, 1969, through March 31, 1972, along with documentation attached to some of the purchase orders. These purchase orders set forth the work to be performed, but do not contain any reference to a "short form" contract. However, a 1976 purchase order issued to Lou-Con by Murphy does contain a reference to a "short form" contract executed by Murphy and Lou-Con on January 12, 1976.
In opposition to the motion for summary judgment, Murphy introduced the deposition testimony of Mr. Vicidomina, Murphy's designated corporate representative in connection with the Russo litigation. During that lawsuit, Lou-Con sought production of all documents relating to the negotiation, formulation, preparation, and execution of all contracts between Murphy and its contractors at the Meraux refinery from 1960 to the present, as well as all purchase orders and related documentation for any work performed by Lou-Con for Murphy from 1960 through 1979. Mr. Vicidomina explained that in response to the request for production, Murphy's legal staff went through his files, the file room, and did extensive searches in storage locations where documents were kept at the Meraux refinery. Essentially, he stated, the lawyers looked everywhere they knew of to find any contracts or purchase orders between Lou-Con and Murphy.
Mr. Vicidomina, who began working for Murphy in August of 1974 as an associate mechanical engineer, admitted he had no knowledge of documents signed before 1974 except those he had seen. He first became involved in the negotiation, preparation, and execution of contracts for Murphy around 1976. Mr. Vicidomina stated that he believed Murphy entered into a "short form" contract with Lou-Con prior to 1976, but acknowledged that he had not seen any documentation to substantiate that belief. Mr. Vicidomina also testified that the "short form" contract was in existence at Murphy when he came on board in 1974, and stated that at least since 1976, it was standard practice by Murphy to send out and have "short form" contracts govern the work done by its contractors during the calendar year. Mr. Vicidomina admitted that he did not have a specific recollection of actually receiving a signed contract from Lou-Con prior to 1980.
Murphy also submitted two contracts entitled "Engineering — Construction Agreement — Short Form" executed by Murphy and Gaffney, Inc. on December 12, 1967, and by Murphy and General American Transportation Corporation on July 10, 1972. Both of these agreements contain indemnification provisions requiring the contractors to indemnify Murphy "from and against any and all claims, demands, liabilities, suits or actions (including expense and attorneys' fees) for bodily injuries . . . to any persons, including employees of Contractor and its sub-contractors . . . arising out of or in connection with the performance of the work under this agreement." Murphy claimed this evidence demonstrated that Murphy was using the same "short form" contract in the early 1970s as it was using in the late 1960s. Murphy relied on Mr. Leumas's affidavit indicating that the type of "short form" agreement utilized with respect to Gaffney, Inc. was used by Murphy for agreements with its contractors until he retired in 1986, and that to the best of his knowledge, all contracts between Murphy and its contractors, including Lou-Con, in 1967 and surrounding years, contained the same or similar language providing for Murphy's defense and indemnification in the event a contractor's employee sued Murphy for a bodily injury claim.
In opposition to the motion for summary judgment, Murphy insisted that its evidence supported the inference that Lou-Con signed "short form" contracts containing a provision requiring it to indemnify Murphy during the years Mr. Rando worked at the Meraux refinery. Murphy also urged that it would be premature for the court to decide on a motion for summary judgment whether the contract could be construed to indemnify Murphy from its own negligence, observing that the court could find that Murphy and Lou-Con executed a "short form" contract modeled on the 1967 Murphy-Gaffney "short form" contract, and could interpret the language of that indemnity agreement.
A party who demands performance of an obligation must prove the existence of the obligation. La.C.C. art. 1831. Clearly, Murphy has the burden of proving the existence of contracts containing defense and indemnification provisions in order to prevail on its contractual indemnification claim.
In support of its claim that it offered sufficient evidence in support of its indemnification claim to survive a motion for summary judgment, Murphy relies on a federal case, Paul Revere Variable Annuity Insurance Company v. Zang, 248 F.3d 1 (1st Cir. 2001). In that case, the plaintiff sought to establish an agreement to arbitrate by the defendant by proof that the defendant had signed and submitted an A-300 form in which he agreed to be bound by rules of the National Association of Securities Dealers (NASD), which included an arbitration rule. NASD was unable to locate the actual registration form signed by the defendant. However, plaintiff offered evidence of NASD records showing that defendant's registration with that body had been filed and approved, and that NASD required registrants to sign a registration application as part of its regular business practice. Additionally, the defendant did not contest that he in fact was registered with NASD and the contents of an A-300 form were not in dispute. Because there was no dispute as to the fact that the defendant signed the form or what the contents of the form were, and because the evidence showed that the defendant would not have been registered with the NASD in the absence of a signed form in light of NASD's business practices, the court upheld the lower court's conclusion that the defendant had in fact signed and submitted the form. In so doing, the court observed that testimony regarding a business practice can be sufficient to establish the existence and content of missing business documents. Paul Revere, 248 F.3d at 9.
Murphy urges that this court should similarly find that evidence submitted by Murphy in opposition to the motion for summary judgment regarding its business practices is sufficient to establish the existence and content of indemnity agreements signed by Lou-Con obligating Lou-Con to provide it with a defense and indemnity in the Rando litigation. It relies on Mr. Leumas's declaration in the affidavit that Murphy used the "short form" contract, or some version thereof, with all of its contractors, including Lou-Con, from the mid-1960s until the mid-1970s, as well as Mr. Vicidomina's testimony that Murphy was using the "short form" contract in 1974 and his statement that Lou-Con was not given leeway regarding signing contracts to do work at the Meraux refinery.
This evidence is a far cry from the secondary evidence submitted in the Paul Revere case. Unlike that case, where the party did not dispute that he in fact signed a document, Lou-Con disputed the existence of any signed indemnification agreements, and Murphy offered no evidence to demonstrate that any Lou-Con representative actually signed a contract containing an indemnity provision during the time frame at issue. There was no testimony by any Murphy official with personal knowledge that he observed Lou-Con sign a "short form" or that a "short form" contract executed by Lou-Con had actually been received by Murphy during the time in question. Moreover, unlike the Paul Revere case where the contents of the missing document were not disputed, the evidence demonstrated that the contractual indemnification language in the contracts offered by Murphy changed over time, making a determination of the language of the contractual indemnification provision, a matter of sheer speculation, even if Murphy's evidence showed such a contract existed.
Lou-Con's motion for summary judgment was properly supported, making it incumbent on Murphy to produce evidence of a genuine issue of material fact. There is no genuine issue of material fact if the nonmoving party who bears the burden of proof at trial cannot come forward at the summary judgment stage with evidence of sufficient quantity and quality for a reasonable factfinder to find that the party can satisfy his substantive evidentiary burden. See Martello v. State Farm Fire and Casualty Company, 96-2375, p. 8 (La.App. 1st Cir. 11/7/97), 702 So.2d 1179, 1184, writ denied, 98-0184 (La. 3/20/98), 715 So.2d 1215. We find Murphy failed to offer evidence of sufficient quantity and quality for a reasonable factfinder to determine that Murphy could satisfy its evidentiary burden at trial of proving the existence of executed contracts obligating Lou-Con to defend and indemnify Murphy for bodily injury claims arising out of the performance of Lou-Con's work at the refinery during the years 1970-1973. Murphy's witnesses were unable to testify from first-hand knowledge that such contracts did exist. Mr. Vicidomina did not begin working for Murphy until 1974 and did not become involved in the preparation of contracts until 1976. Moreover, he declared that it was standard practice, since 1976, for Murphy to have its contractors execute "short form" contracts to govern their work for the calendar year. Mr. Vicidomina clearly lacked knowledge of Murphy's routine business practices in dealing with its contractors prior to 1976, much less during the 1970-1973 time period in question. Moreover, Mr. Leumas, while attesting in his affidavit that all contractors, including Lou-Con, executed "short form" contracts from 1967 on, admitted in his deposition that he could not recall whether Lou-Con would have signed contracts in the late 1960s or early 1970s in which it would have agreed to indemnify Murphy in the event a Lou-Con employee sued Murphy for bodily injury. He also admitted that prior to 1980, it was possible that Lou-Con could have performed work at the Meraux refinery without a contract.
Not only did Murphy fail to establish a routine business practice with respect to its dealings with Lou-Con in particular, Murphy also failed to elicit the testimony of even one witness who saw an executed contract, who observed the parties sign such a contract, or who had first-hand knowledge that such a contract had been executed. Moreover, the contracts introduced by Murphy contained different indemnification language. Under these circumstances, we find that Murphy did not satisfy its burden of producing evidence to create a genuine issue of material fact as to the existence of and the contents of indemnity agreements between Lou-Con and Murphy for the time period at issue, and we conclude that Lou-Con is entitled to summary judgment dismissing Murphy's cross-claim.
CONCLUSION
For the foregoing reasons, the judgment appealed from is affirmed. All costs of this appeal are assessed to appellant, Murphy Oil, USA, Inc.