Mills v. Zapata Drilling Co., Inc., 81-3800

• Citation: 722 F.2d 1170
• Decision Date: 15 December 1983
• Docket Number: No. 81-3800,81-3800
• Parties: Vicki E. MILLS, Plaintiff, The Home Indemnity Company, Intervenor, v. ZAPATA DRILLING COMPANY, INC., et al., Defendants-Appellees, Louisiana Casing Crew and Rental Tool Corporation, Third-Party Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1170

722 F.2d 1170

1985 A.M.C. 606

Vicki E. MILLS, Plaintiff, The Home Indemnity Company, Intervenor, v. ZAPATA DRILLING COMPANY, INC., et al., Defendants-Appellees,

Louisiana Casing Crew and Rental Tool Corporation,

Third-Party Defendant-Appellant.

No. 81-3800.

United States Court of Appeals, Fifth Circuit.

Dec. 15, 1983.

Bailey & Leininger, Metairie, La., B. Ralph Bailey, Metairie, La., for third-party defendant-appellant.

Montgomery, Barnett, Brown & Read, Wood Brown, III, New Orleans, La., for CNG Producing Co. and Zapata Drilling Co.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before REAVLEY and JOHNSON, Circuit Judges, and WYZANSKI ^*, District Judge.

WYZANSKI, District Judge:

A. DESCRIPTION OF APPEAL

This is an appeal from the district court's October 15, 1981 judgment which has only two operative paragraphs: (1) one ordering judgment "in favor of third party plaintiff, CNG Producing Co., and against third party defendant, Louisiana Casing Crew & Rental Tool Corporation for indemnity in the sum of $200,000 being that portion of the settlement of the principal claim paid by third party plaintiff, and for the costs and expenses of the principal claim," and (2) another ordering judgment "in favor of CNG Producing Co., Zapata Drilling Company, Inc. and Zapata Offshore Co., and against Louisiana Casing Crew and Rental Tool Corporation, dismissing its counterclaims."

B. INTRODUCTORY PARAGRAPHS

In this multifaceted case we start with introductory paragraphs outlining the complicated structure of the case.

Arland Mills, a mud man, employed by Louisiana Casing Crew and Rental Tool Corporation ["Louisiana"], while working for that employer on a rig located on a platform, operated on the Outer Continental Shelf in the Gulf of Mexico by CNG Producing Co. ["CNG"], was killed by the negligent act of William Swisher, a driller employed by Zapata Drilling Company, Inc. ["Zapata"], who was working on the same platform.

Mills and Swisher were both working in connection with an enterprise for development of an oil and gas well in that part of the Gulf of Mexico adjacent to Louisiana, a development in which CNG was the general contractor and Louisiana and Zapata were subcontractors, pursuant to different written contracts containing different indemnification clauses.

Following Mills's death, his widow, Vicki Mills, became the representative of his estate. She, invoking the Outer Continental Shelf Lands Act, 43 U.S.C. Sec. 1331 et seq., on September 18, 1978 brought against Zapata what we shall denominate "the principal action," seeking to recover damages for her husband's death. Pursuant to the contract between them, Zapata tendered to CNG the opportunity to take over the defense of the action begun by Mrs. Mills. Then, out of an abundance of caution, on November 2, 1978 Zapata filed against CNG a third-party action alleging CNG's contractual obligation to indemnify Zapata if it were required to pay Mrs. Mills in the principal action.

On January 3, 1979 CNG filed against Louisiana its own third-party action (which for convenience we shall denominate a "fourth-party action"), alleging that Louisiana was under a contractual obligation to indemnify CNG if it were required to pay either Mrs. Mills in the principal action or Zapata in the third-party action.

On March 29, 1979 Home Insurance Co., the insurer of Louisiana, filed a petition to intervene in all of the actions; and on December 2, 1980, pursuant to a stipulation of all parties, the court granted the petition.

On December 8, 1980 the parties to the principal action had a settlement conference. According to the unchallenged recitals in the district judge's opinion, Mrs. Mills's claim in the principal action, "was settled, prior to trial, for four hundred five thousand dollars. Four hundred thousand dollars was paid, with one-half of that amount put forward by CNG and its insurer, United States Fidelity & Guaranty Company ("USF & G"), and one-half contributed by Louisiana Casing and its insurer, the Home Insurance Company. The agreement entered into between the parties provided that the dispute as to which of these defendants owed the settlement was reserved for submission to the Court. The agreement also provided that the party who would be cast in judgment would owe to the plaintiff the additional $5,000.00 not previously paid to her."

The record fails to show that there has ever been entered any judgment with respect to the settlement of the principal action. Nor indeed, so far as appears, has any estimate been made of the "costs and expenses of the principal claim."

On October 15, 1981 the district court entered the judgment recited in the first paragraph of the present opinion. In effect this was a judgment for CNG on what we have called its fourth-party complaint, and awarded CNG the $200,000 it had actually contributed to the settlement of Mrs. Mills's claim and also purported to award her an unspecified sum of money not attributable to the costs of the plaintiff in the third-party action, but, strangely, attributable to the costs of some undetermined person or persons who were party to Mrs. Mills's suit against Zapata. [The court's earlier opinion, dated October 6, 1981, states that if the parties cannot agree on the amount of those costs, then they shall be determined by the magistrate.]

C. THE CONTRACT UNDER WHICH CNG CLAIMS INDEMNIFICATION BY LOUISIANA

Having set forth the structural background of this case, we now turn to the critical facts. As to none of them is there any dispute.

CNG, the platform operator, had the master contract for the construction of the proposed oil and gas well, the enterprise during which Mr. Mills lost his life. As master contractor, CNG made with Louisiana (which as subcontractor was to do the casing work on the well) a contract which contained provisions with respect to indemnification of CNG. Those provisions are the very basis of what we have called the fourth-party action upon which the district court entered the $200,000 October 15, 1981 judgment now on appeal. And the text of those indemnification provisions is as follows:

Contractor [Louisiana] shall be responsible, and CNG shall never be liable, for personal injury to or death of any of Contractor's employees or the employees of Contractor's subcontractors, and Contractor agrees to indemnify and hold harmless CNG, any or all co-lessees of CNG who wholly or partially bear the cost of operations hereunder and any or all agents, directors, officers, employees, invitees, or servants of CNG or such co-lessees, against any and all claims, demands or suits (including, but not limited to, claims, demands or suits for bodily injury, illness, disease, death or loss of services, property or wages) which may be brought against CNG or against CNG and such co-lessees, whether one or more, or in which CNG or such co-lessees, whether one or more, or in which any or all such agents, directors, officers, employees, invitees or servants of CNG or of any such co-lessees may be named party defendant or parties defendant, as the case may be, by any employee of Contractor, subcontractor of Contractor, or by any employee of subcontractor of Contractor, or the legal representative or successor of any such employee, in anywise arising out of or incident to the work to be performed under this Contract, irrespective of whether such suits are based on the relationship of master and servant, third party, or otherwise, and even though occasioned, brought about or caused in whole or in part by the negligence of CNG, its agents, directors, officers, employees, servants, invitees,...