In Re: Crescent Energy Services, Llc

MOTION for Partial Summary Judgment

E.D. La.August 16, 2016

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA IN THE MATTER OF THE COMPLAINT OF CRESCENT ENERGY SERVICES, LLC, AS OWNER AND OPERATOR OF THE S/B OB 808, FOR EXONERATION FROM OR LIMITATION OF LIABILITY CIVIL ACTION NO. 15-819 JUDGE JANE TRICHE MILAZZO MAGISTRATE van MEERVELD CRESCENT ENERGY SERVICES, LLC CROSS MOTION FOR SUMMARY JUDGMENT ON CARRIZO OIL & GAS CONTRACTUAL CLAIM NOW INTO COURT, through undersigned counsel, comes Crescent Energy Services, LLC (“Crescent”), defendant in cross claim of Carrizo Energy Services, LLC (Carrizo), who joints with Starr Insurance, Liberty Mutual Insurance Company and Liberty International Underwriters and moves for Summary Judgment in finding that the contract between Crescent and Carrizo is not a maritime contract, all for the reasons as set forth in the Memorandum in Support of the instant Motion. Respectfully Submitted: Leefe Gibbs Sullivan & Dupré /s/ Richard K. Leefe Richard K. Leefe, Bar No.7544 Suite 1470, 3900 No. Causeway Blvd. Metairie, La. 70002 (504) 830-3939 Fax: 830-3998 rkleefe@leefegibbs.com Case 2:15-cv-00819-JTM-JVM Document 167 Filed 08/16/16 Page 1 of 2 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing pleading has been served on counsel for all parties to the captioned matter electronic CM/ECF notice via the court system and/or e-mailing or faxing a copy of this pleading to counsel for each known party, correctly addressed, on this 16th day of August, 2016. /s/ Richard K. Leefe Case 2:15-cv-00819-JTM-JVM Document 167 Filed 08/16/16 Page 2 of 2 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA IN THE MATTER OF THE COMPLAINT OF CRESCENT ENERGY SERVICES, LLC, AS OWNER AND OPERATOR OF THE S/B OB 808, FOR EXONERATION FROM OR LIMITATION OF LIABILITY CIVIL ACTION NO. 15-819 JUDGE JANE TRICHE MILAZZO MAGISTRATE van MEERVELD CRESCENT ENERGY SERVICES, LLC MEMORANDUM IN SUPPORT OF CROSS MOTION FOR SUMMARY JUDGMENT ON CARRIZO OIL & GAS CONTRACTUAL CLAIM NOW INTO COURT, through undersigned counsel, comes Crescent Energy Services, LLC (“CES”), as defendant in cross claim of Carrizo Energy Services, LLC (Carrizo), who provides this Memorandum in support of its Cross Motion for Summary Judgment in finding that the contract between CES and Carrizo is not a maritime contract. CES further adopts and arguments of Starr Insurance and Liberty International/Liberty Mutual in their similar motions in this matter to the extent of the issue concerning maritime status, but not relative to coverage, etc. The primary issue raised by the motions pending before the Court with these motion is whether the contract between CES and Carrizo in or is not a maritime contract. The basis for the contract lies in the Master Service Agreement (“MSA) between CES and Carrizo dated February 5, 2015. Carrizo Exhibit A 1 . The MSA, on Page 1 states that Carrizo is engaged in the production of oil and gas production. As noted in CES Uncontested Material Fact No.2, the sole business of CES is plug and abandonment of oil and gas wells, which it performs on land, inland 1 CES will refer to Exhibits filed by other parties in this matter, generally in support of each such party’s MSJ, rather than refile the same exhibits over in the matter. Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 1 of 15 2 and offshore. CES Exhibit B, McKim Deposition, Pp. 14, 31. Carrizo has primarily wells on land. Carrizo has approximately 550 wells, most of which are on land. CES Exhibit E, Carrizo Corporate Deposition, Pp. 199-200 The CES bid for the subject work (CES Exhibit A, Shoulder Deposition Exhibit 8, Page 2; CES Exhibit E, Carrizo Corporate Deposition, Pp. 182-183), describes the scope as: “CES will take over the project and continue with two intermediate plugs – the first at 5-7,000’ depending on the density of the packer fluid, consisting of a 300’ cement plug set between the tubing and the production casing, and the second to straddle the surface pipe shoe by perforating the tubing and casing.” The particular job of CES being performed by Carrizo at the time in question was to plug and abandon Larose Field Well No 3 of Carrizo, a well on a fixed platform (CES Exhibit E, Carrizo Corporate Deposition, Pp. 200) and Carrizo approved the plan. (CES Exhibit E, Carrizo Corporate Deposition, Pp. 183; Starr Exhibit “2"), The subject platform is fixed to the earth through shallow water in an inland area of Louisiana. CES Exhibit A, Shoulder Deposition Exhibit 17, Page ; CES Exhibit E, Carrizo Corporate Deposition, Pp. 200. The injured party, Plaintiff Corday Shoulder, was a member of the plug and abandon (“P&A”) crew of CES performing the P&A at the time of the incident. He was designated as a pump operator. (CES Exhibit A, Shoulder deposition, Pg. 38). He operated the pump which is to pump the cement, water, etc. into the well for the P&A work. (CES Exhibit A, Shoulder Deposition, Pg. 38). 2 He testified that the work he was doing at the time of his incident was exactly what he had done during his entire career as a P&A pump operator. (CES Exhibit A, Shoulder deposition, Pg. 121). Mr. Shoulder admitted that the work they were doing was capping and abandoning three wells. (CES Exhibit A, Shoulder deposition, Pg. 74). Mr. 2 It is noted that in its memorandum relative to the Carrizo MSJ, Carrizo uses the term “crew” as if it applies to a vessel crew. The terms crew in this case refers to the P&A crew. This crew does P&A work, whether it be on land, on a fixed platform or where ever the subject well may be. Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 2 of 15 3 Shoulder said his incident was because of “bad threads … on the flange that was on the well” (CES Exhibit A, Shoulder deposition, Pg. 121). As with much of the oil field work, sometimes a platform is simply too small to hold all the equipment for work such a P&A of a well, and a barge is used as a platform to work from, incidental to the downhole job. CES Exhibit B, McKim Deposition, at pp. 35, 164–165. SUMMARY JUDGMENT STANDARD Summary judgment shall be granted if the record and evidence presented show there is no genuine issue related to any material fact and that the moving party is entitled to judgment in its favor as a matter of law. Fed.R.Civ.P. 56(a); Beard v. Banks, 548 U.S. 521 (2006). The moving party must demonstrate by competent evidence that no issue of material fact exists. Burden v. General Dynamics Corp, 60 F.3d 213 (5 th Cir. 1995); Norman v. Apache Corp., 19 F.3d 1017 (5 th Cir. 1994). The non-moving party then has the burden of showing the existence of a specific disputed factual issue. Celotex Corp. v. Catrett, 477 U.S. 317 (1986). LAW AND ARGUMENT The Fifth Circuit has specified certain of the characteristics of a marine contract and the mere presence of a vessel does not make a contract maritime: Although the line between maritime and non-maritime contracts is often difficult to draw, the Supreme Court has noted that the true criterion is ‘the nature of the contract, as to whether it has reference to maritime service or maritime transactions.’ Id. A principal determinant is the relation the contract ‘bears to the ship...A contract relating to a ship and its use as such or to commerce...is subject to maritime law.’ (Citations Omitted). Not every contract touching incidentally on a vessel will be maritime: ‘in order that such [maritime] character should attach, there must be a direct and proximate juridical link between the contract and the operation of a ship...’. Id. Theriot v. Bay Drilling Corp., 783 F.2d 527, 538 (5 th Cir. 1986). Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 3 of 15 4 * * * * * The Fifth Circuit has likewise determined that ‘[i]n the context of contract disputes, the principle underlying Rodrigue and Kimble (citations omitted) precludes the application of maritime law except in those cases where the subject matter of the controversy bears the type of significant relationship to traditional maritime activities necessary to invoke admiralty jurisdiction.’ (Citations Omitted). Union Texas Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d 1043, 1048 (5 th Cir. 1990). The Fifth Circuit says to look to the contract and see what was the goal of the contract; what were the parties trying to accomplish. In this case, the non-maritime work of plugging and abandoning three wells. While doing that, Mr. Shoulder, whose job was as a member of the P&A crew, was injured on the fixed platform, working on Well No. 3. The fact that a barge was used in the operation as a platform for equipment because the fixed well platform was too small, does not change the fact that this was a contract for well operations and not a maritime based contract. A review of the Master Service Agreement in place between Carrizo and Crescent makes no reference, whatsoever, to a ship or vessel of any kind. Rather, the contract states: “Carrizo is engaged in the production of oil and gas for its own account and for the joint account of itself and others, and is the owner and operator of numerous oil and gas wells. In the course of Carrizo’s operations, it regularly and customarily enters into contracts for the performance of services or the provision of goods relating thereto. Contractor is in the business of performing services and providing supplies for the oil and gas industry.” Carrizo/CES MSA, p. 1-Exhibit 1. (Emphasis added). It is undisputed in this matter that CES is a company that specializes in plug and abandonment of oil and gas wells of all types. CES Exhibit B, McKim Deposition, Pg 14. The Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 4 of 15 5 well in this matter, which Mr. Shoulder was working on at the time of his incident was a well on a fixed platform, affixed to the earth. CES Exhibit D, Shoulder Deposition, Exh. 17. As the above confirms, the “focus” of the Carrizo/CES contract is oil and gas related activities. Grand Isle Shipyard v. Seacor Marine, LLC, 589 F.3d 778 (5 th Cir. 2009). The job being performed by CES at the time of the plaintiff’s accident was a plug and abandon project, not a “traditional” activity of the maritime industry. Having a barge act as a work platform for a plug and abandon job does not make Mr. Shoulder a seaman or change the fact that he was part of a plug and abandon crew and performing a plug and abandon job on a well, on a fixed platform, at the time of his incident. Having a barge available to hold equipment because the platform is too small, does not make a plug and abandon job a traditional maritime activity. If the Court should go beyond the nature of what the parties were intending in the contract in assessing whether a contract is governed by the General Maritime or State law, the Fifth Circuit has established what amounts to a two part test as outlined in the case of Davis & Sons, Inc. v. Gulf Oil Corporation, 919 F.2d 313 (5 th Cir. 1990). Initially, the court should analyze how contracts, such as the one in issue, have been treated historically by the jurisprudence. If that inquiry fails to provide an answer, the court should then look to the six part test enunciated by the Davis panel to assist in concluding which legal regime will govern the agreement. The six factors discussed by Davis are as follows: 1) What does a specific work order in effect at the time the injury provide?; 2) What work did the crew assign 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 the injury? Davis at 316. Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 5 of 15 6 CES suggests, though, that the six part inquiry just referenced need not be considered here as, in accordance with the Davis dictates, the jurisprudence has characterized contracts such as the one entered into between Carrizo and CES as historically non-maritime. Thurmond v. Delta Well Surveyors, et al, 836 F.2d 952 (5 th Cir. 1988). In Thurmond, the underlying facts of the casualty were remarkably similar to those present in the Shoulder case: “P&S provided the barge KATHY and its crew to perform the wireline services assigned by Gulf Oil. The barge KATHY is a self-propelled wireline barge equipped with a hydraulic wireline unit, a hydraulic pump, storage tanks, glands, a blowout preventer, and other wireline tools....On March 8, 1983, the crew received a verbal assignment from Gulf Oil to perform a wireline service on well JG TIME LOG B, 99D, in Gulf Oil’s Northwest Bay Field, located in Louisiana’s territorial waters. The crew’s specific assignment was to establish a water injection rate, which first required them to open a one half inch valve on the well head to bleed the casing pressure from the well. Roosevelt Thurmond stepped off the barge and on the well head to open the valve. When he did, the stem and seat of a motor valve popped off the well head and struck his chin.” Thurmond at 953. Here, Shoulder was standing on the well jacket attempting to bleed off pressure from the well when the line pipe/nipple attached to the valve blew off and struck him in the leg. Mr. Shoulder was in the act of performing the plugging of the well as anticipated in the scope of work at the subject time, and to set the plugs he needed to bleed off the pressure in the intermediate and surface casings. CES Exhibit A, Deposition C. Shoulder, Pg 75, 90. All of this related to the scope of the job relative to abandoning the well. These jobs, as anticipated, required primarily wireline work as shown below. Judge Wisdom defined the issue in Thurmond as: Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 6 of 15 7 “The key question is whether the primary obligation of a contract to perform wireline services for a well in navigable waters is maritime or non-maritime.” Thurmond at 952. Carrizo urges that the activity engaged in by the CES crew was a plug and abandon project, not a wireline job operation, as was being done in Thurmond. However, as the record in Shoulder confirms, core components of a plug and abandon job are wireline activities: “Q. Okay. But if you were setting bridge plugs, as you indicated earlier, you would – that would be a wireline operation, correct? A. Yes, sir. Q. Okay. And then it says perforate tubing at five thousand feet. See that? A. Yes, sir. Q. That would also be a wireline operation, wouldn’t it? A. Yes, sir. Q. Use explosives to perforate the – the – the tubing. A. Yes, sir. Q. Okay. And then M&P, sixty-three sacks? A. Mix and pump. Q. Okay. So that’s – you would be pumping cement into the well, correct? A. Yes, sir. Q. That says – you test the plug, then run up – rig up EL. That’s the electric line? A. Yes, sir. Q. And tag the plug. That’s a wireline operation, correct? A. Yes, sir. Q. Pull out. PU is pull up? A. Pick up. Q. Pick up. And perforate tubing and casing? A. Yes, sir. Q. That’s a wireline operation, isn’t it? A. Yes, sir. Q. Okay. Then you’d pump cement. Cut the tubing. Read that? See that? A. Yes, sir. Q. That’s a wireline operation isn’t it? A. Yes, sir. Q. Okay. Then set 7-5/8ths CIBP, that’s a cast iron bridge plug? A. Yes, sir. Q. That’s a wireline operation, isn’t it? A. Yes, sir. Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 7 of 15 8 Q. Cut 7-5/8ths. That’s cut the 7-5/8ths inch casing? A. Yes, sir. Q. That’s a – that’s a – a – a wireline operation, correct? A. Yes, sir. Q. Cut the 9-5/8ths inch. That’s a wireline operation, correct? A. Yes, sir. Q. Set the 13-3/8ths cast iron bridge plug. That’s a wireline operation, correct? A. Yes, sir.” CES Exhibit A, Deposition C. Shoulder, pp. 286-288, 291. Mr. Shoulder calculated that approximately half of the activities involved in a plug and abandon procedure involve wireline operations. CES Exhibit A, Shoulder Deposition, p. 291. In support of its conclusion that the activity in which the plaintiff in Thurmond was engaged was not the object of maritime contract, the Fifth Circuit focused on the facts presented in Thurmond which were, in essence, a mirror of those presented by the Shoulder case: “When he was injured, Thurmond was not engaged in the performance of a maritime obligation, such as the one relating to the navigation or operation of the barge KATHY. Indeed, when he was injured, Thurmond was standing on the small protective wooden jacket of the well head, a fixed platform, and he was opening a well valve. The well head was an island, a small one, but an island.” Thurmond at 955. As with the Carrizo/CES Master Service Agreement, the Thurmond court noted that, “...the wireline service contract between P&S and Gulf Oil did not address in any way the use of a ship.” Thurmond at 955. The Thurmond court then concluded that the involved contract was non-maritime in nature and, for that reason, State law (the LOAIA) governs its interpretation: “....we conclude that this contract contains severable maritime and non-maritime obligations, and the principal obligation of this contract was non-maritime. Because this suit arose out of a performance of a non-maritime obligation, we hold that the enforceability of this contract’s indemnity provision is subject to State law.” Thurmond at 956. Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 8 of 15 9 The fact that the Carrizo well had ceased production is not an impediment to application of state law. Wilcox v. Max Welders, 969 F.Supp. 2d 668, affirmed, 794 F.3d 531 (5 th Cir. 2015). The Wilcox case involved a plug and abandon operation, just as does Shoulder. In Wilcox, Judge Africk referenced an unreported decision by Judge Vance which involved pulling casing in preparation for a plug and abandon procedure: “The court similarly held that the agreement was related to the exploration, development, production or transportation of oil because ‘cutting and pulling the casing was at least collateral to the plugging process’. Id at Starr 7. The court explained that ‘cutting and pulling the casing can[not] be logically severed from the overall plug and abandonment operation,’ otherwise ‘LOAIA would cease to apply some arbitrary point in carrying out the plan. Neither the statute nor the Fifth Circuit’s test anticipated such a non-result.” Id at Starr 8. Wilcox at p. 681. Both Judge Africk and Judge Vance’s decisions cited by Judge Africk, Howell v. Avante Services, LLC, 2013 W.L. 1681436 (E.D. La. 2013), referenced the Fifth Circuit decision in Verdine which established that even working on a drilling rig in a shipyard, which was ultimately destined to work on wells, would subject the involved contract to the LOAIA. Verdine v. Ensco Offshore Co., 255 F.3d 246 (5 th Cir. 2001). Both Wilcox and Howell involved contracts to perform a plug and abandon job or acts collateral to such an operation and, in both instances, the Judges of the Eastern District concluded that those contracts were subject to the LOAIA. In referencing both Wilcox and Howell, the Fifth Circuit in the recent decision of Tetra Technologies, Inc. v. Continental Insurance Company, stated: “We conclude that these cases properly interpret LOAIA. Each case involved agreements to perform work in connection with ‘plugging and abandoning’ the wells at issue. Excepting the argument that the LOAIA could never apply to a non-producing Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 9 of 15 10 well would have required the District Courts to interpret the LOAIA in such a manner as to exclude an expressly covered activity. Those District Courts are certainly correct to reject such a restrictive view.” Tetra Technologies, Inc. v. Continental Insurance Co., 814 F.3d 733 (5 th Cir. 2016). Carrizo makes much of the fact that tools and equipment utilized by CES were aboard the CES barge. In addition, Carrizo emphasizes that a good deal of the preparation work in connection with the project was done on the barge, and the fact that plaintiff is a seaman. Carrizo addresses the court’s attention to testimony from Mr. Shoulder discussing the time and activities spent aboard the barge. All of these factors are fairly common in cases which address this type of dispute, just as was presented in Thurmond. Here, plaintiff was a “pump operator”, not a position typically identified with maritime commerce, but a common activity in the oilfield. Again, the facts of the Thurmond case certainly included and the Fifth Circuit addressed the maritime versus non-maritime aspects of these amphibious oil and gas operations. Almost identical arguments made by Carrizo were advanced in support of the argument that the contract in Thurmond was “maritime”, but rejected by the Fifth Circuit: “Gulf Oil argues that the contract is maritime within the Benedict formulation because the contract for offshore wireline services necessitates the use of a vessel, a barge equipped to perform wireline services, the vessel’s only mission.” Thurmond at 954. * * * * * “The defendants correctly argue that the Laredo Rule of Mixed Contract Interpretations is not limited in its application to Lands Act cases; the severability of maritime and non-maritime obligations in a variety of contracts is well established. The main question then is whether, as P&S and Delta argued, the contract for wireline services in this case is mixed with maritime and non- maritime obligations, and whether this dispute arose out of the performance of separate non-maritime obligation governed by State law. The principal obligation under this contract was to perform wireline services, clearly a non-maritime obligation in the sense Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 10 of 15 11 that it does not concern the operation of the vessel. Such services are peculiar to the oil and gas industry, not maritime commerce. Wireline services are performed on land based well and offshore wells, and wireline services present hazards and problems peculiar to the oil and gas industry. ‘Maritime law in the strict sense has never had to deal with the resources in the ground beneath the sea, and its whole tenor is ill adapted for that purpose’. On the other hand, State law is well suited to cope with the oil production problems.” Thurmond at 955. * * * * * The barge KATHY’s use for the transportation of wireline equipment and workers was incidental to the contract’s principal obligation.” Thurmond at 955. The Thurmond court then went on to state that releasing pressure by opening a well valve was not a maritime obligation. Thurmond at 955. CES suggests there should be no legal distinction drawn from the fact that Mr. Shoulder was releasing pressure by operating a well valve as an element of a P&A operation. Carrizo urges as a factor to be considered by the court in favor of the maritime nature of the contract that the plaintiff is a seaman. These are two different issues. The Fifth Circuit in Thurmond also discounted this argument: “The court determined that while as between employer and employee, a finding of seaman status suffices for the application of maritime law to their relationship, the contractual relationship between ARTCO and Gulf Coast was not governed by the fact that the plaintiff was a seaman....In other words, Lefler was not a case where implicit and incidental maritime obligations transformed into non-maritime contract into a wholly maritime contract. Thurmond at 956. CES also suggests that of critical significance is the fact that the LOAIA specifically references “plugging” of wells as an activity contemplated within the scope of the acts breadth: Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 11 of 15 12 “C. The term ‘agreement’, as it pertains to work for oil, gas or water ...as used in the section, means any agreement or understanding, written or oral, concerning any operations related to the...but not limited to drilling, deepening...altering, plugging, or otherwise rendering services in or in connection with any well...”. La.Rev.St. 9:2780(C). (Emphasis added). CES suggests that the Thurmond case is evidence that the actions undertaken by the CES crew and, specifically plaintiff, in bleeding off pressure from the well while situated on the well structure, confirms that contracts such as the Carrizo/CES MSA are non-maritime and, thus, subject to state law. However, for purposes of argument and moving onto the second aspect of the Davis test, that is, the six part inquiry, also suggests that the involved MSA is not maritime: 1. What does the specific work order in effect at the time of the injury provide? Davis at 316 - The bid in this matter which is the ‘specific’ work order in this instance, indicates P&A work on the well. The Master Service Agreement (not a marine charter party) indicated that Carrizo ‘...is engaged in the production of oil and gas for its own account...and, that, ‘contractor’ (CES) is in the business of performing services and providing supplies for the oil and gas industry.’ The bid defines the scope as to kill the wells, place a TTBP above the packer and pump in 30 feet of cement to the top of each well. Carrizo/CES MSA, p. 1, Exhibit 1; CES Exhibit C, Shoulder Deposition Exhibit 8, Page 2. 2. What work did the crew assign under the work order actually do? - Wirelining and plugging and abandoning the Carrizo wells; 3. Was the crew assigned work aboard a vessel in navigable waters? - The crew did work aboard a vessel in navigable waters but the principal Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 12 of 15 13 ‘assignment’ of the crew was to plug and abandon a well, which was supported by a fixed structure. 4. To what extent did the work being done relate to the mission of that vessel? - The vessel acted as a ‘work platform’ for the CES P&A crew. 5. What was the principal work of the injured worker? - Mr. Shoulder was an oilfield pump operator. 6. What work was the injured worker actually doing at the time of the injury? - positioned on the well structure releasing pressure from the well. Although certainly there are “maritime elements” to the job being performed by the CES P&A crew. CES suggests that, like Thurmond, these were incidental to the primary objective of the CES workers which was shutting in the Carrizo oil well. As the Thurmond case indicates, the presence and even necessity of a vessel at a work site does not dictate that the involved contract whereby the vessel is involved, is converted to one of a marine nature. Rather, the “transportation function” of the barge 808 was secondary to its status as a work platform for the CES P&A crew. Ultimately, the contract between the parties was for the plugging of an oil well, not a normal maritime function. In conclusion, CES submits Thurmond is the answer to Carrizo’s contractual defense/indemnity demand and, thus, that case should be the model for Your Honor’s ruling in this case. If the contract is not maritime, and state law applies, whether you apply Louisiana or Texas law relative to CES, indemnity as sought by Carrizo against CES is against public policy and declared void. Texas Oil Field Anti-Indemnity Act, Tex. Civ. Prac. & Rem. CODE Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 13 of 15 14 §§127.001 – 127.007; § 127.003 of the Statute provides that any “agreement pertaining to wells for oil, gas, or water or to a mine for a mineral” which purports to indemnify a person or entity against liability that (i) is caused by their sole or concurrent negligence and (ii) arises from personal injury or death; property injury; or any loss, damage or expense that arises from personal injury, death or property injury is void and unenforceable.” The Louisiana statute recognizes a similar anti-indemnity public policy relative to indemnity clause for an indemnitee’s own negligence in personal injury matter as this one. La. Rev. Stat. Ann. 9:2780. Conclusion In conclusion, it is suggested that a Master Service Agreement to plug and abandon a wells and a job to do so for a well in Louisiana territorial waters on a fixed platform attached to the earth, is not “maritime”. The scope of work for this particular job as anticipated by the parties was the plugging and abandoning of a well, primarily by wireline operations. Here, the claimant was bleeding off pressure from a well which was an act, in direct sequence, of the wireline operation which preceded it. To the extent necessary, CES prays that this memorandum will also act in opposition to the motion for summary judgement of Carrizo. CES further adopts the Opposition of Liberty to the Carrizo motion as filed by Liberty in this matter, except to the extent of any obligation of Liberty to provide coverage in this matter. Respectfully Submitted: Leefe Gibbs Sullivan & Dupré /s/ Richard K. Leefe Richard K. Leefe, Bar No.7544 Suite 1470, 3900 No. Causeway Blvd. Metairie, La. 70002 (504) 830-3939 Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 14 of 15 15 Fax: 830-3998 rkleefe@leefegibbs.com CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing pleading has been served on counsel for all parties to the captioned matter electronic CM/ECF notice via the court system and/or e-mailing or faxing a copy of this pleading to counsel for each known party, correctly addressed, on this 16th day of August, 2016. /s/ Richard K. Leefe Case 2:15-cv-00819-JTM-JVM Document 167-1 Filed 08/16/16 Page 15 of 15 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA IN THE MATTER OF THE COMPLAINT OF CRESCENT ENERGY SERVICES, LLC, AS OWNER AND OPERATOR OF THE S/B OB 808, FOR EXONERATION FROM OR LIMITATION OF LIABILITY CIVIL ACTION NO. 15-819 JUDGE JANE TRICHE MILAZZO MAGISTRATE van MEERVELD CRESCENT ENERGY SERVICES, LLC STATEMENT OF UNCONTESTED MATERIAL FACTS NOW INTO COURT, through undersigned counsel, comes Crescent Energy Services, LLC (hereinafter referred to, at times, as “CES”), who submits the following as uncontested facts material to CES’s Motion for Summary Judgment. 1. Carrizo, LLC, claimant herein, entered into a Master Service Agreement on February 5, 2015 with CES. Starr Exhibit 1, Master Service Agreement. 1 2. CES’s sole business is performing plug and abandon work on oil and gas wells which it performs on land, inland and offshore. Carrizo Exhibit B, McKim Deposition, Pp. 2,14, 31. 3. The MSA states that “Carrizo is engaged in the production of oil and gas for its own account and for the joint account of itself and others, and is the owner and operator of numerous oil and gas wells”. Starr Exhibit 1, p. 1. 4. The MSA also states that “Crescent is in the business of performing services and providing supplies for the oil and gas industry.” Starr Exhibit 1, p. 1. 1 CES will refer to Exhibits filed by other parties in this matter, generally in support of each such party’s MSJ, rather than refile the same exhibits over in the matter. Case 2:15-cv-00819-JTM-JVM Document 167-2 Filed 08/16/16 Page 1 of 4 2 5. Among those oil and gas wells owned or operated by Carrizo was a well identified as Delta Farms No. 3 Well. Starr Exhibit “3". 6. Carrizo’s Delta Farms No. 3 Well was situated in the territorial waters of Louisiana in Lafourche Parish. Starr Exhibit “3". 7. At some time prior to Mr. Shoulder’s accident (February 13, 2015), Carrizo produced oil and/or gas from Delta Well No. 3. 8. Surrounding Delta Farms Well No. 3 was a wood and metal structure which was erected on the water bottom. Starr Exhibit “2". 9. At some time prior to Mr. Shoulder’s accident (February 13, 2015), Carrizo determined that it would no longer seek production of oil and/or gas from Delta Well No. 3 and applied to the Louisiana Department of Conservation for a permit to plug and abandon the well. Starr Exhibit “3". 10. The Louisiana Department of Conservation issued a “WORK PERMIT” pursuant to Permit Serial No: 233130 to Carrizo authorizing it to plug and abandon Carrizo’s Delta Well No. 3. Starr Exhibit “3". 11. Pursuant to the Master Service Agreement with CES, Carrizo anticipated for CES to plug and abandon Carrizo’s Delta Well No. 3. CES Exhibit B, McKim Deposition, Pg 14, 23-24,25. The CES bid for the subject work (CES Exhibit A, Shoulder Deposition Exhibit 8, Page 2; CES Exhibit E, Carrizo Corporate Deposition, Pp. 182-183), describes the scope as: “CES will take over the project and continue with two intermediate plugs – the first at 5-7,000’ depending on the density of the packer fluid, consisting of a 300’ cement plug set between the tubing and the production casing, Case 2:15-cv-00819-JTM-JVM Document 167-2 Filed 08/16/16 Page 2 of 4 3 and the second to straddle the surface pipe shoe by perforating the tubing and casing.” 12. Corday Shoulder was a member of the CES crew assigned to plug and abandon Carrizo’s Delta Well No. 3. The work involved primarily wireline services in the subject well. CES Exhibit A, Deposition C. Shoulder, pp. 286-288, 291. 13. On February 13, 2015, at the time of his incident, Mr. Shoulder was on the subject fixed platform (CES Exhibit E, Carrizo Corporate Deposition, Pg. 200) and engaged in bleeding off pressure from Delta Well No. 3 when a line pipe or nipple, which was under pressure from the well, blew out from a flange, striking him in the body and causing the injuries alleged in suit. CES Exhibit A, Deposition C. Shoulder, Pg 74-75. Mr. Shoulder was in the act of performing the plugging of the well as anticipates in the scope of work at the subject time. CES Exhibit A, Deposition C. Shoulder, Pg 90. The particular job of CES being performed by Carrizo at the time in question was to plug and abandon Larose Field Well No 3 of Carrizo, a well on a fixed platform (CES Exhibit E, Carrizo Corporate Deposition, Pp. 200) and Carrizo approved the plan. (CES Exhibit E, Carrizo Corporate Deposition, Pp. 182-183; Starr Exhibit “2"), fixed to the earth through shallow water in an inland area of Louisiana. 14. At the time of the accident, Corday Shoulder was physically situated on the fixed platform well structure. CES Exhibit A, Deposition C. Shoulder, Pg 75. Case 2:15-cv-00819-JTM-JVM Document 167-2 Filed 08/16/16 Page 3 of 4 4 15. The P&A equipment that was on the barge/work platform; as a P&A package it was not permanently attached to the barge and all that equipment could be taken off the barge, moved to another location on land or a fixed platform, and used properly. CES Exhibit F, Mitchell Deposition, Pg 298. 16. The well involved in Corday Shoulder’s injury was located in the State of Louisiana; Carrizo’s Delta Well No. 3 was located on a Louisiana lease site. Starr Exhibit 3. CES intends to file an opposition to the Summary Judgment Motion of Carrizo, however, to the extend necessary at this point, CES adopts the Liberty International Underwriters and Liberty Mutual Insurance Company’s Statement of Contested Facts in Opposition to the Motion of Carrizo, as it plead in this matter. /s/ Richard K. Leefe Richard K. Leefe, Bar No.7544 Leefe Gibbs Sullivan & Dupré Suite 1470, 3900 No. Causeway Blvd. Metairie, La. 70002 (504) 830-3939 Fax: (504) 830-3998 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing pleading has been served on counsel for all parties to the captioned matter electronic CM/ECF notice via the court system and/or e-mailing or faxing a copy of this pleading to counsel for each known party, correctly addressed, on this 16th day of August, 2016. /s/ Richard K. Leefe Case 2:15-cv-00819-JTM-JVM Document 167-2 Filed 08/16/16 Page 4 of 4 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA IN THE MATTER OF THE COMPLAINT OF CRESCENT ENERGY SERVICES, LLC, AS OWNER AND OPERATOR OF THE S/B OB 808, FOR EXONERATION FROM OR LIMITATION OF LIABILITY CIVIL ACTION NO. 15-819 JUDGE JANE TRICHE MILAZZO MAGISTRATE van MEERVELD NOTICE OF SUBMISSION PLEASE TAKE NOTICE that Crescent Energy Services, LLC, will bring for submission their Cross-Motion for Summary Judgment on August 31, 2016, at 9:30 a.m., before the Honorable District Judge Jane Triche Milazzo at the United States District Court for the Eastern District of Louisiana, 500 Poydras Street, New Orleans, Louisiana, 70130. /s/ Richard K. Leefe Richard K. Leefe, Bar No.7544 Leefe Gibbs Sullivan & Dupré Suite 1470, 3900 No. Causeway Blvd. Metairie, La. 70002 (504) 830-3939 Fax: (504) 830-3998 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing pleading has been served on counsel for all parties to the captioned matter electronic CM/ECF notice via the court system and/or e-mailing or faxing a copy of this pleading to counsel for each known party, correctly addressed, on this 16th day of August, 2016. /s/ Richard K. Leefe Case 2:15-cv-00819-JTM-JVM Document 167-3 Filed 08/16/16 Page 1 of 1