783 F.2d 1289 (5th Cir. 1986), 84-3050, Branch v. Fidelity & Cas. Co. of New York

Docket Nº:84-3050.
Citation:783 F.2d 1289
Party Name:Mrs. Wanda Selman BRANCH, et al., Plaintiffs-Appellants, Cross-Appellees, v. FIDELITY & CASUALTY CO. OF NEW YORK, Intervenor-Plaintiff-Appellee, Cross-Appellant, v. CHEVRON INTERNATIONAL OIL COMPANY, INC., et al., Defendants, CHEVRON U.S.A., INC., Defendant-Third-Party Plaintiff-Appellee, Cross-Appellant, v. PLATFORM COATING, et al., Third-Party De
Case Date:March 05, 1986
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 1289

783 F.2d 1289 (5th Cir. 1986)

Mrs. Wanda Selman BRANCH, et al., Plaintiffs-Appellants,

Cross-Appellees,

v.

FIDELITY & CASUALTY CO. OF NEW YORK,

Intervenor-Plaintiff-Appellee, Cross-Appellant,

v.

CHEVRON INTERNATIONAL OIL COMPANY, INC., et al., Defendants,

CHEVRON U.S.A., INC., Defendant-Third-Party

Plaintiff-Appellee, Cross-Appellant,

v.

PLATFORM COATING, et al., Third-Party Defendants-Appellants

Cross-Appellees.

No. 84-3050.

United States Court of Appeals, Fifth Circuit

March 5, 1986

Page 1290

Chaffe, McCall, Phillips, Toler & Sarpy, Robert B. Deane, New Orleans, La., for Stonewall Ins.

Jacques F. Bezou, New Orleans, La., for Branch and Marlowe.

McGlinchey, Stafford, et al., John E. Galloway, New Orleans, La., for Platform Coating Services, et al.

Faris, Ellis, Cutrone & Gilmore, Mat M. Gray, III, New Orleans, La. for Frank William Baiden, Lloyd's of London, et al.

Ivan D. Warner, III, New Orleans, La., for McMurrain.

McLoughlin, Barranger, Provosty & Melancon, Lloyd C. Melancon, New Orleans, La., for Chevron.

Rene A. Curry, Jr., Kurt S. Blankenship, New Orleans, La., for Fidelity & Cas. Co.

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

Before CLARK, Chief Judge, POLITZ, and JONES, Circuit Judges.

POLITZ, Circuit Judge:

This appeal arises out of an offshore oil platform accident in which Richard W. Branch, Jr. and James Danny Marlowe, two painters employed by Platform Coating Services, Inc., were killed. Their survivors sought damages from Chevron U.S.A., Inc., owner of the platform, based on allegations of negligence and strict liability. William McMurrain, a Platform Coating co-employee, brought an action for personal injuries allegedly sustained during a rescue attempt. The case was tried to a jury which returned a verdict in favor of the Branch and Marlowe plaintiffs on their negligence

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and strict liability claims, but rejected McMurrain's claims. The court enforced an indemnity contract and awarded Chevron judgment against Platform Coating and its insurers. On appeal we consider the propriety of the district court's admission into evidence and its comments about the settlements which plaintiffs made with Platform Coating, the validity and application of an indemnity agreement between Chevron and Platform Coating, and issues of negligence, strict liability, and contributory negligence. For the reasons assigned, we affirm.

BACKGROUND FACTS

Branch and Marlowe were members of a Platform Coating crew assigned to sandblast and paint one of Chevron's offshore platforms. During the early morning hours of December 11, 1978, they fell 70 feet to their deaths in the Gulf of Mexico, when a pipe handrail to which they had attached their scaffolding broke. The handrail was made of two-inch heavy steel pipe welded to the steel I-beam structures of the platform. The welds at both ends of the pipe had badly corroded and broke under the weight of the two painters and their equipment. McMurrain alleged injury to his back while trying to pull the decedents from the water and carrying one up the platform.

Mrs. Marlowe, personally and on behalf of her two minor children, and Mrs. Branch, personally and on behalf of her minor child, sued Chevron, claiming negligence in its inspection and maintenance of the platform, La.Civil Code article 2315, strict liability accountability for allowing the platform to fall into ruin, La.Civil Code article 2322, and for having custody of an unreasonably dangerous thing, La.Civil Code article 2317. McCurrain sought recovery for his personal injury.

Chevron invoked an indemnity agreement and filed a third-party action against Platform Coating and its insurers. Platform Coating denied responsibility to Chevron, contending that Chevron could not seek indemnification for its own negligence or strict liability.

The case was first tried to a jury in September of 1981, a trial which ended when the district court directed a verdict in favor of Chevron on the grounds that the handrail did not fail in its intended purpose and that Chevron was neither negligent nor strictly liable and that Branch and Marlowe were contributorily negligent. On appeal we reversed, Branch v. Chevron Intern. Oil Co., Inc., 681 F.2d 426 (5th Cir.1982), finding that the district court had applied an incorrect legal standard and inappropriately had made factual choices which were within the province of the jury. That decision constitutes the law of the case on all issues disposed of therein.

Prior to trial on remand, we rendered the benchmark decision in Hyde v. Chevron, U.S.A., Inc., 697 F.2d 614 (5th Cir.1983), holding, inter alia, that by a general indemnity agreement, one could be indemnified from losses occasioned by strict liability. Apparently concerned with its exposure if the plaintiffs recovered against Chevron on their strict liability claim and it was held liable to Chevron under the indemnity agreement, Platform Coating persuaded its insurers to settle with the plaintiffs. Pursuant to a settlement agreement, Mrs. Branch and Mrs. Marlowe, individually and on behalf of their children, each received $375,000; McMurrain received $250,000; and the compensation intervenor received $120,259.47.

The settlement agreement completely terminated Platform Coating's exposure. Should Chevron be found not liable then the matter would be concluded. Should Chevron be cast in judgment for at least as much as the settlement proceeds, but the claim for indemnification against Platform Coating be denied, the plaintiffs would return the monies received. Should Chevron be found liable and the indemnification be enforced, under the agreement the plaintiffs agreed not to execute on any judgment which would impose any further liability upon Platform Coating and its insurers.

Page 1292

When tried on remand, the district court admitted the settlement agreement into evidence, including the amounts paid to each plaintiff, and made extensive comments on the significance of the settlement, including the following excerpts:

Ladies and gentlement of the jury, it now seems to me to be important to tell you all a few things that I alluded to briefly when we first discussed the case....

This looks like a good time to put you in the picture.

Approximately 30 days ago the attorneys for various other parties in this lawsuit configurated a settlement proceeding or a settlement agreement....

They [the settlements] were important developments that I have decided you all should know about.

The lawyers then put together a settlement under the terms of which very significant payments were made.... Mrs. Marlowe was paid $375,000. Mrs. Branch was paid $375,000 and Mr. McMurrain was paid $250,000. Chevron was not a participant in those arrangements.

It seems to me that that significant event should be mentioned to the jury for you all to consider as you all see fit in determining the ultimate factual issue of Chevron's involvement, if any. I don't want you to either over or under respond to the fact that those settlements as between the people I have mentioned when you come to determine whether Chevron has any responsibility whatsoever in this case, or if it does, what the amount of its responsibility is.

I insisted that this information be made available to you all in the course of the trial ... Why? Well, frankly because I think that a jury should know everything that is going on in this case.

I'm going to tell you all that the fact of that settlement is something that you all must measure in determining at the proper time what, if any involvement there is either as far as Chevron is concerned.

I'm not going to permit that very significant bit of information to be shielded from you.

You may conclude that they [the settlements] are significant in your ultimate decision about who gets anything notwithstanding this settlement, how much it may be.

One of the significant evidentiary aspects of this case is that you all know about [the settlements].

Responding to special interrogatories, the jury returned a verdict against Chevron in favor of Mrs. Branch and her child in the amount of $375,000, and in favor of Mrs. Marlowe and her two children for $450,000. McMurrain's demands were rejected. The jury's findings included: Platform Coating was free of negligence; the platform was not in a state of ruin; Chevron was negligent; the pipe handrail was in a defective condition which caused the deaths; and although the decedents were negligent, their negligence was not a substantial cause of the accident. The district court entered judgment on the verdicts and then awarded Chevron a judgment of indemnification against Platform Coating. All parties appeal.

ANALYSIS

The accident occurred on a fixed platform on the outer continental shelf, off the coast of Louisiana. Under the Outer Continental Shelf Lands Act, 43 U.S.C. Secs. 1331 et seq., this dispute is to be resolved by resort to the substantive law of Louisiana which becomes surrogate federal law. Rodrigue v. Aetna Casualty & Surety Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969). Plaintiffs invoked three different tort concepts under Louisiana law, contending that Chevron was accountable for: (1) negligence in the maintenance and inspection of the platform, Civil Code article 2315; 1 (2) strict liability for permitting its

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platform to fall into a state of ruin, Civil Code article 2322; 2 and (3) strict liability...

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