Larry Doiron, Inc. v. Specialty Rental Tools & Supply, L.L.P. (In re Larry Doiron, Inc.)

Citation849 F.3d 602
Decision Date23 February 2017
Docket NumberNo. 16-30217,16-30217
Parties IN RE: In the Matter of the Complaint of LARRY DOIRON, INCORPORATED as Owner and Operator of the Barge Pogo and M/V Billy Joe for Exoneration from or Limitation of Liability Larry Doiron, Incorporated, Plaintiff–Appellee Robert Jackson, Intervenor Plaintiff–Appellee v. Specialty Rental Tools & Supply, L.L.P.; Oil States Energy Services, L.L.C.; Zurich American Insurance Company, Defendants–Appellants
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Clarence William Emory, Georges M. Legrand, Mouledoux, Bland, Legrand & Brackett, L.L.C., Alan David Ezkovich, Attorney, Aaron James Weidenhaft, Ezkovich & Company, New Orleans, LA, for PlaintiffAppellee and Intervenor PlaintiffAppellee.

Mark Lynn Clark, Robert Jeffrey Bridger, Esq., Thompson, Coe, Cousins & Irons, L.L.P., New Orleans, LA, for DefendantsAppellants.

Before DAVIS, DENNIS, and SOUTHWICK, Circuit Judges.

LESLIE H. SOUTHWICK, Circuit Judge:

We are yet again required to determine whether a contract is a maritime one. Here, the focus is on a contract to perform flow-back services to improve the performance of an offshore natural-gas well when performance eventually required the use of a crane barge. Plaintiffs Larry Doiron, Inc. and Robert Jackson argue that maritime law applies. Defendants Specialty Rental Tools & Supply, Oil States Energy Services, and Zurich American Insurance Company (collectively, "STS") argue that state law, specifically that of Louisiana, applies. The district court determined the contract was maritime in nature. We conclude the question is close but agree that the specific contract at issue, which was an oral work order in effect at the time of injury, should be considered maritime. AFFIRMED.

FACTUAL AND PROCEDURAL BACKGROUND

On October 12, 2005, Apache Corporation and STS entered into a master services contract ("MSC"). The MSC does not describe individual tasks but operates as a "broadform blanket agreement" that contemplates future tasks to be performed under subsequent work orders to be agreed upon as necessary.1 The MSC contains an indemnification provision that requires STS to defend and indemnify Apache and its "Company Group" against all claims for property damage or bodily injury. On appeal, the parties do not dispute that Larry Doiron, Inc. ("LDI") and Jackson are part of Apache's Company Group and are covered by the terms of the MSC.2

In early 2011, Apache hired Specialty Rental Tools & Supply ("STS") to perform flow-back services on its offshore well, located in West Lake Verret in the Atchafalaya Basin. The flow-back process is designed to dislodge solid objects from inside the well to "get it to produce gas again." The work was to be performed on Apache's fixed production platform. The flow-back services were arranged by an oral work order; neither party produced a written agreement for these particular services.

On February 24, 2011, STS sent its employees Peter Savoie and Matt Delahoussaye to perform the flow-back operation. After being unsuccessful that day, Savoie informed Brandon LePretre, Apache's representative, that STS would need additional equipment to perform the operation, including a flow-back iron, a hydraulic choke manifold, and a hydraulic gate valve. In Savoie's estimation, STS would also need a crane barge because the additional equipment was too heavy for the workers to remove from the wellhead. LePretre contacted VAS Gauging, Inc., which arranged for LDI to provide the crane barge POGO3 for use at the Apache well. Robert Jackson was the crane operator. LePretre testified that he knew LDI owned the barge and that it was used at the well site with Apache's consent.

On the second day of the flow-back operation, Savoie and Delahoussaye were again unsuccessful, even with use of the crane. Savoie informed LePretre that he needed a coiled tubing unit, so they terminated the operation until one could be obtained. Savoie began "rigging down" and directed Jackson to lower the crane. Instead, Savoie reported the crane came toward him and "knocked [him] off balance." He clutched the crane to avoid falling backward but eventually lost his grip, which caused him to fall approximately eight feet onto the deck of the barge. His accident resulted in "a crush type injury to the right lower extremity."

Later that year, LDI made a formal demand that STS defend and indemnify LDI against any claims Savoie may bring. STS rejected the demand. LDI then filed a Vessel Owner Limitation Action for exoneration from liability on the basis of admiralty jurisdiction under 46 U.S.C. §§ 30501 –30512. Savoie answered the complaint, alleging he was injured by LDI's negligence and through no fault of his own. LDI then filed a third-party complaint against STS and its affiliates. Jackson intervened in the Vessel Owner Limitation Action, seeking protection under the MSC and the insurance policy issued by Zurich. STS ultimately settled with Savoie, and the district court severed the indemnity claims from the personal-injury case.

LDI and Jackson filed a motion for summary judgment to "enforce their contractual right to defense and indemnity." LDI and Jackson argued the MSC obligated STS to indemnify LDI and Jackson against Savoie's claims. In response, STS filed a cross-motion for summary judgment, arguing that the MSC "must be construed under Louisiana law and that the indemnity provision contained therein is void and unenforceable under the Louisiana Oilfield Indemnity Act." The district court granted the motion submitted by LDI and Jackson and denied the cross-motion submitted by STS.

Thereafter, the parties filed a joint motion to dismiss the claims not resolved by summary judgment and for entry of final judgment on the others. The parties reserved the right to appeal "the limited issue of whether Defendants were contractually obligated to defend and indemnify Plaintiffs...." The court granted the motion and entered final judgment on March 10, 2016. STS filed a timely notice of appeal.

DISCUSSION

We review de novo the district court's grant of summary judgment. James v. State Farm Mut. Auto. Ins. Co ., 743 F.3d 65, 68 (5th Cir. 2014). Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). A genuine dispute exists if a reasonable jury could find in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc ., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). All facts and evidence are viewed in the light most favorable to the non-movant. James , 743 F.3d at 68.

The issue here is whether maritime or state law should be applied to determine the validity of the MSC's indemnity clause. The MSC contains a choice-of-law provision:

This contract shall be construed and enforced in accordance with the general maritime law of the United States whenever any performance is contemplated in, on or above navigable waters, whether onshore or offshore. In the event that maritime law is held inapplicable, the law of the state in which the work is performed shall apply.

The district court correctly analyzed the conflict as being one between Louisiana state law and general maritime principles. The Louisiana Oilfield Indemnity Act provides that indemnity clauses in "agreements pertaining to wells for oil, gas, or water" are void as violations of public policy. LA. REV. STAT. § 9:2780. Maritime law "does not bar enforcement of [those] provisions." Hoda v. Rowan Cos., 419 F.3d 379, 380 (5th Cir. 2005). There are, though, no "clean lines between maritime and nonmaritime contracts." See Norfolk S. Ry. Co. v. Kirby , 543 U.S. 14, 125 S.Ct. 385, 393, 160 L.Ed.2d 283 (2004).

We articulated the legal framework for deciding cases like this in Davis & Sons, Inc. v. Gulf Oil Corp ., 919 F.2d 313 (5th Cir. 1990). Distinguishing between maritime and non-maritime contracts "turns on a minute parsing of the facts," but we are bound by the Davis approach—however inexact it may be. Hoda , 419 F.3d at 380–81. In Davis , the parties entered a Master Service Agreement under which Gulf Oil would issue work orders directing Davis to perform specific tasks related to its natural-gas and crude-oil wells. Davis , 919 F.2d at 314. The agreement contained an indemnity clause requiring Davis to indemnify Gulf Oil against any claims that may arise out of their relationship. Id. Under the work order at issue, Davis supplied land-based barges to perform routine maintenance on the wells. Id. The work platforms around the wells did not provide adequate workspace, so most of the work was done on the barge itself. Id.

On the day of the accident in Davis , the barge employee supervising the operation drowned. Id . His representatives sued both Davis and Gulf Oil, and the parties settled. Id. at 315. Davis sought a declaratory judgment that Louisiana law governed the contract and that the indemnity provision was therefore void. Id. Gulf Oil argued that maritime law applied to validate the indemnity provision. Id. The district court applied Louisiana law. Id.

On appeal, we held that when a contract involves two parts—"a blanket contract followed by later work orders"—the two must be interpreted together to determine whether maritime or state law applies. Id. We then articulated a two-part analysis. Id. at 316. First, we determine the nature of the contract by reference to its historical treatment. Id . If the historical treatment is unclear, we must consider six factors:

1) [W]hat does the specific work order in effect at the time of injury provide? 2) [W]hat work did the crew assigned under the work order actually do? 3) [W]as the crew assigned to work aboard a vessel in navigable waters[?] 4) [T]o what extent did the work being done relate to the mission of that vessel? 5) [W]hat was the principal work of the injured worker? and 6) [W]hat work was the injured worker actually doing at the time of injury?

Id . ; see also H...

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