Thurmond v. Delta Well Surveyors
| Decision Date | 04 February 1988 |
| Docket Number | No. 86-3853,86-3853 |
| Citation | 836 F.2d 952 |
| Parties | Roosevelt THURMOND, Plaintiff, v. DELTA WELL SURVEYORS, et al., Defendants. GULF OIL CORP., Plaintiff-Appellee, v. DELTA WELL SURVEYORS and P & S Well Service, Inc., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Deborah B. Rouen, Joel L. Borrello, Adams & Reese, New Orleans, La., for defendants-appellants.
Jeanmarie LoCoco, Edward J. Koehl, Jr., Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, La. for plaintiff-appellee.
Appeals from the United States District Court for the Eastern District of Louisiana.
Before WISDOM, GARWOOD, and JONES, Circuit Judges.
This case raises another close question on the applicability of maritime law to offshore oil and gas activities. 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. This issue is essentially a choice of law problem: whether a contract to perform wireline services in navigable waters is governed by maritime law or state law. The parties agree that if the contract is nonmaritime, it is governed by state law and its indemnity provision is invalid under the Louisiana Oilfield Indemnity Act (LOIA). 1 But if the agreement is a maritime contract, then its indemnity provision is enforceable under maritime law. 2 The defendants/appellants, Delta Well Surveyors ("Delta") and P & S Well Services ("P & S"), contend that the primary obligation is nonmaritime, because its object is to provide wireline services, which is not a maritime activity. The plaintiff/appellee, Gulf Oil Corp., asserts, however, that the contract is maritime, because its predominant obligation is to provide a barge and crew with wireline equipment, indispensable maritime components of offshore wireline services. We hold that the district court erred in determining that this contract is governed by maritime law. Although this contract of necessity contained incidental maritime obligations, this suit arose out of P & S's nonmaritime primary obligation to perform wireline services. 3 The enforceability of this contract's indemnity provision is, therefore, subject to state law.
On February 1, 1981, P & S and Gulf Oil entered into a "blanket contract", which provided that P & S would perform wireline services for Gulf Oil's offshore wells in the delta areas of Louisiana. The contract also provided that P & S would indemnify Gulf Oil for "all causes of action, suits or other litigation ... of every kind and character" 4 that might arise out of their contractual relationship. The contract was not binding standing alone. Like many other offshore oil production contracts, "[t]he agreement provided the framework for subsequent contracts which were to result from verbal or written work orders ...". 5 Such a contract "merely sets out the rules of the game in the event the parties decide to play ball." 6
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 blow-out preventer, and other wireline tools. The barge's crew consisted of Arnold Buras, the barge operator, and helper Roosevelt Thurmond. The crew both operated the barge and performed the wireline services.
On March 8, 1983, the crew received a verbal assignment from Gulf Oil to perform a wireline service on Well JG Timelot 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 wellhead to bleed the casing pressure from the well. Roosevelt Thurmond stepped off the barge and on the wellhead to open the valve. When he did the stem and seat of a motor valve popped off the wellhead and struck his chin.
Thurmond filed a personal injury suit against Gulf Oil, and Gulf Oil filed suit seeking indemnity under the blanket contract against P & S and Delta, Thurmond's employer. The two cases were later consolidated. Delta and P & S filed a motion for summary judgment arguing that Gulf Oil's claims were barred by the LOIA. The district court granted the motion for summary judgment, but later vacated the judgment on the ground that the LOIA was inapplicable because the parties' agreement was a maritime contract. The district court then granted Gulf Oil's motion for summary judgment on the ground that Gulf Oil was entitled to indemnity under the blanket contract as a matter of law. This appeal followed.
A major treatise on admiralty, Benedict on Admiralty, defines the traditional concept of a maritime contract broadly:
In matters of contract, the principal determinant which emerges from a long course of decisions is the relation which the cause of action bears to the ship, the great agent of maritime enterprise, and to the sea as a highway of commerce. A contract relating to a ship in its use as such, or to commerce or navigation on navigable waters, or to transportation by sea or to maritime employment is subject to maritime law and the case is one of admiralty jurisdiction, whether the contract is to be performed on land or water. 7
P & S and Delta argue that a wireline service contract does not fit within this definition of a maritime contract, because the wireline service contract does not address a ship, navigation, or any traditional maritime activity. The contract instead addresses only an oil production activity that is performed on land and at sea. But Gulf Oil argues that the contract is maritime within the Benedict formulation because a contract for offshore wireline services necessitates the use of a vessel, a barge equipped to perform wireline services, the vessel's only mission.
The development of offshore oil production has necessitated an expansion of maritime law 8 generally and the definition of a maritime contract specifically. As Gulf Oil notes, this Court in Theriot v. Bay Drilling Corp., 9 held that a contract for offshore oil and gas drilling is a maritime contract, because "[o]il and gas drilling on navigable waters aboard a vessel is recognized to be maritime commerce". 10 Offshore oil production certainly is considered part of maritime commerce, and Gulf Oil is correct in arguing that this contract for offshore wireline services included some maritime obligations.
P & S and Delta argue that there are, however, limits to the ability of maritime law to deal adequately with oil production problems, as Congress recognized in the enactment of the Outer Continental Shelf Lands Act. 11 This act, for example, requires that fixed platforms on the outer continental shelf "be treated as though they were federal enclaves in an upland state". 12 Thus, this Court held in Laredo Offshore Constructors, Inc. v. Hunt Oil Co. that the Lands Act requires the application of state law to a contract for the construction of a stationary platform on the shelf, even though "the contract no doubt contemplates the hiring of vessels and seamen to build the structure". 13
P & S and Delta argue that Laredo demands a similar result in this case, even though this case is not governed by the Land's Act. In Laredo, which involved a contract containing both maritime and nonmaritime obligations, this Court stated, "It is fundamental that the mere inclusion of maritime obligations in a mixed contract does not, without more, bring nonmaritime obligations within the pale of admiralty law." 14 The defendants correctly argue that the Laredo rule of mixed contract interpretation is not limited in its application to Lands Act cases; the severability of maritime and nonmaritime obligations in a variety of contracts is well established. 15 The main question then is whether, as P & S and Delta argue, the contract for wireline services in this case is mixed with maritime and nonmaritime obligations, and whether this dispute arose out of the performance of a separate nonmaritime obligation governed by state law.
The principal obligation under this contract was to perform wireline services, clearly a nonmaritime obligation in the sense 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 wells 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." 16 On the other hand, state law is well suited to cope with oil production problems.
Furthermore, this suit arose out of the performance of the contract's principal--nonmaritime--obligation. Roosevelt Thurmond filed suit for injuries that he sustained while performing a wireline service, and Gulf Oil seeks indemnity for its liability to him. When he was injured, Thurmond was not engaged in the performance of a maritime obligation, such as 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 wellhead, a fixed platform, and he was opening a well valve. The wellhead was an island, a small one but an island.
We reject Gulf Oil's contention that this Court's holding in Theriot v. Bay Drilling Corp. is indistinguishable from this case. In Theriot the contract was for drilling, and it specifically addressed the use of a ship:
The contract provided that Bay Drilling would furnish the equipment, materials, supplies, and services necessary to the drilling and completion of the well. As Exhibits A and C of the contract reveal, the main piece of equipment to be supplied by Bay...
To continue reading
Request your trial
-
Neal v. Barisich, Inc., Civil A. No. 88-3119.
...806, 815 n. 17, 39 L.Ed.2d 9 (1974). See In re S/S Helena, 529 F.2d 744, 747 (5th Cir.1976). 5 Thurmond v. Delta Well Surveyors, 836 F.2d 952, 958 n. 2 (5th Cir.) (Garwood, J., concurring) (citing S/S Helena, 529 F.2d at 753 (refusing to apply Louisiana's wrongful death statute in a case co......
-
Barker v. Hercules Offshore, Inc.
...in oil and gas industry cases. See Matte [ v. Zapata Offshore Co.], 784 F.2d [628,] 630 [ (5th Cir.1986) ]; Thurmond v. Delta Well Surveyors, 836 F.2d 952, 954–55 (5th Cir.1988); Union Texas Petroleum, 895 F.2d at 1048–49. The Supreme Court has criticized our “expansive” view of maritime em......
-
Berge Helene Ltd. v. GE Oil & Gas, Inc.
...(“Oil and gas drilling on navigable waters aboard a vessel is recognized to be maritime commerce”); see also Thurmond v. Delta Well Surveyors, 836 F.2d 952, 954 (5th Cir.1988) (“The development of offshore oil production has necessitated an expansion of maritime law generally and the defini......
-
Campbell v. Sonat Offshore Drilling, Inc.
...Co., 923 F.2d 393 (5th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 874, 116 L.Ed.2d 779 (1992), and Thurmond v. Delta Well Surveyors, 836 F.2d 952 (5th Cir.1988). In Domingue, the issue before this court was whether a contract to perform wireline services aboard a drilling vessel was ......
-
CHAPTER 3 THE TEXAS AND LOUISIANA ANTI-INDEMNITY STATUTES AS APPLIED TO OFFSHORE OIL & GAS INDUSTRY CONTRACTS
...Corp., 783 F.2d 527 (5th Cir. 1986) 170 Theriot v. Gulf Oil Corp., 427 F. Supp. 50 (E.D. La. 1976) 132 Thurmond v. Delta Well Surveyors, 836 F.2d 952 (5th Cir. 1988) 170, 233, 266 300, 315 [Page 3-122] Tobin v. Gulf Oil Corp., 535 F. Supp. 116 (E.D. La. 1982) 57 Transcontinental Gas Pipe Li......
-
Transferring risk by contractual indemnity: a view from oil and energy.
...(W.D. La. 1984). (48.) See also Lefler v. Atlantic Richfield Co., 785 F.2d 1341 (5th Cir. 1986). (49.) Thurmond v. Delta Well Surveyors, 836 F.2d 952 (5th Cir. (50.) 104 F.3d 1158 (9th Cir. 1997). (51.) Angelina Cas. Co. v. Exxon Corp. USA Inc., 876 F.2d 40 (5th Cir. 1989). (52.) 563 So.2d ......