Hardy v. Gulf Oil Corp.

• Decision Date: 07 January 1992
• Docket Number: No. 90-2061,90-2061
• Parties: Alfred L. HARDY, Plaintiff, v. GULF OIL CORPORATION, Zaire Gulf Oil Company, Gulf Oil Exploration and Production Company and Cabinda Gulf Oil Company, Defendants-Third Party Plaintiffs-Appellees, v. BOUYGUES OFFSHORE U.S.A., INC. and Bouygues Offshore S.A., Defendants-Third Party Defendants-Appellants, On and Offshore Quality Control Specialists, Inc., Defendant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 826

949 F.2d 826

Alfred L. HARDY, Plaintiff, v. GULF OIL CORPORATION, Zaire Gulf Oil Company, Gulf Oil

Exploration and Production Company and Cabinda

Gulf Oil Company, Defendants-Third Party Plaintiffs-Appellees, v. BOUYGUES OFFSHORE U.S.A., INC. and Bouygues Offshore S.A., Defendants-Third Party Defendants-Appellants, On and Offshore Quality Control Specialists, Inc., Defendant.

No. 90-2061.

United States Court of Appeals, Fifth Circuit.

Jan. 7, 1992.

Christopher Tompkins, David L. Campbell, Joseph L. Spilman, III, Deutsch, Kerrigan & Stiles, New Orleans, La., for defendants-third party defendants-appellants.

Jack L. Allbritton, Fulbright & Jaworski, Houston, Tex., for Gulf Oil, Zaire Gulf Oil & Cabinda Gulf Oil.

Appeal from the United States District Court for the Southern District of Texas.

Before BROWN, JOHNSON and BARKSDALE, Circuit Judges.

JOHNSON, Circuit Judge:

The posture of the parties in the instant appeal, if not entirely unprecedented, is nonetheless unusual. ¹ Alfred L. Hardy ("Hardy"), the unfortunate victim of a pipeline explosion off the coast of Zaire, initiated a personal injury action against multiple defendants. He later reached settlements with all of the defendants and thus is no longer a party to this action. The defendants, principally Zaire Gulf Oil Company ("ZAGOC") and Bouygues Offshore S.A. ("BOS"), remain in this dispute and contest whether under principles of contribution and indemnity ZAGOC owes BOS any further responsibility for Hardy's injuries. After a jury trial, the district court ruled that ZAGOC owes no responsibility to BOS. Unable to conclude that the district court committed reversible error, this Court affirms.

I. FACTS AND PROCEDURAL HISTORY

In early 1983 Bouygues Offshore S.A. ² entered into a service contract with Zaire Gulf Oil Company. Under the contract, BOS agreed to emplace several submerged pipelines in an oil and gas field off the African coast. BOS additionally agreed to install a jacket ³ over the Mibale 11, a new well in the field. To permit BOS to complete its obligations safely, ZAGOC agreed to halt production from any preexisting pressurized pipelines in the Mibale field. The contract specified, however, that BOS would indemnify and hold ZAGOC harmless against all claims arising out of BOS's performance.

ZAGOC subsequently hired On and Offshore Quality Control Specialists, Inc. ("On and Offshore") to inspect and supervise BOS operations in the Mibale field. On and Offshore assigned Alfred L. Hardy to supervise the installment of the jacket on the Mibale 11 well. On the evening of March 19, 1983, Hardy came aboard a jack up barge from which BOS was driving piles into the sea bed to anchor the jacket. One of the piles came in contact with a hard object seventeen feet below the mud line. After some initial hesitation, BOS officials agreed to attempt to break through the obstruction. Unknown to the officials, the obstruction was a preexisting ZAGOC gas pipeline. The pipeline ruptured and exploded; as a result, Hardy was seriously injured.

Alleging violations of the Jones Act and general maritime law, Hardy filed an action in Texas state court against BOS and ZAGOC. ⁴ BOS removed the action to federal district court. ZAGOC denied responsibility for the accident and, as an alternative form of relief, asserted a crossclaim against BOS contending that their contract required BOS to indemnify ZAGOC against Hardy's claims. BOS in turn filed a crossclaim against ZAGOC seeking indemnity or contribution for any judgment rendered against BOS. ⁵ Prior to trial, Hardy settled his case against ZAGOC for $125,000 and agreed to indemnify ZAGOC on any claim for contribution asserted by any defendant "excepting only the claim for indemnity which has been asserted by Bouygues [BOS] against the Gulf defendants [ZAGOC]."

Hardy proceeded to trial against BOS. Following several days of trial testimony, the jury returned a verdict in Hardy's favor, finding that BOS's negligence and the unseaworthiness of its jack up barge were the sole causes of the plaintiff's injuries. The jury concluded that neither ZAGOC nor Hardy had acted negligently. The district court entered a judgment against BOS and denied BOS's claim for indemnity and contribution from ZAGOC. ⁶ After judgment and pending appeal, BOS settled with Hardy for an undisclosed sum.

II. DISCUSSION

The common law has long held that each and every one of several tortfeasors is liable for the full amount of an injured plaintiff's damages. In its purest application, this rule of "joint and several liability" permits a plaintiff to obtain full legal redress from any defendant, even if that defendant's actions were not solely responsible for the plaintiff's injuries. Thus, joint and several liability can produce a seemingly inequitable result: one defendant might alone be required to bear the burden of several defendants' wrongs. The courts developed the principles of indemnity and contribution to alleviate this potentially unfair allocation of responsibility. Indemnity and contribution, although related concepts, are distinguishable. When a trial court applies indemnity principles, it permits one tortfeasor to shift all of the loss onto another tortfeasor, provided that the latter should appropriately answer for the entirety of the loss. Prosser & Keeton on The Law of Torts § 50, at 336-41 (5th ed. 1984). When the trial court applies contribution principles, it requires that each tortfeasor pay the proportion of the damages attributable to its actions. Id.

At trial in the instant case, the jury determined that ZAGOC was not negligent. As a result, the district court reasoned, BOS could not claim a legal right to either indemnity or contribution from ZAGOC because ZAGOC had committed no tort. BOS advances several arguments to support its claim that this Court should remand this case for a new trial: (1) the jury verdict that BOS's actions were the exclusive and sole cause of the accident was contrary to the weight of the law and the evidence; (2) the district court improperly failed to charge the jury regarding the legal ramifications of ZAGOC's contractual duty to shut off the gas in the area in which BOS was working; (3) the district court improperly failed to submit a jury interrogatory regarding the identity of the obstruction that BOS encountered at the pile driving site; and (4) the district court wrongfully prejudiced BOS's defense with unfair comments and selective admission of objectionable evidence. We need not address these arguments because we conclude, as a matter of law, that BOS had no right to recover indemnity or contribution from ZAGOC.

The parties are unsure whether Texas or general maritime law governs this lawsuit. The contract between BOS and ZAGOC specifies that Texas law governs the contract documents. The plaintiff premised its cause of action, however, on federal maritime principles. Rather than attempt to resolve a difficult choice of law question, this Court will examine the availability of indemnity and contribution under both Texas and general maritime law. ⁷

A. Texas Law

1. Indemnity

There are two basic categories of indemnity under Texas law--common law and contractual. These categories of indemnity do not share equal vitality. The availability of common law indemnity, unlike contractual indemnity, is extremely limited. See Cypress Creek Utility Serv. Co. v. Muller, 640 S.W.2d 860, 864 (Tex.1982); B & B Auto Supply, Sand Pit & Trucking Co. v. Central Freight Lines, Inc., 603 S.W.2d 814, 816-17 (Tex.1980). A party that desires indemnification for the consequences of its negligence typically must contract for this protection. Ethyl Corp. v. Daniel Const. Co., 725 S.W.2d 705, 708 (Tex.1987). BOS, however, has not secured such a contractual indemnity arrangement. Therefore, this Court concludes that Texas law does not support BOS's action for indemnity from ZAGOC. We examine each of the categories of indemnity in turn.

In 1973 the Texas legislature enacted a comparative negligence statute--the former article 2212a of the Texas Revised Civil Statutes--which established a scheme of contribution among joint tortfeasors. Interpreting this statute, the Texas Supreme Court ruled in 1982 that "[a]rticle 2212a has abolished the common law doctrine of indemnity between joint tortfeasors." Cypress Creek Utility Serv Co., 640 S.W.2d at 864. Subsequent supreme court opinions, while concluding that a vestige of common law indemnity remains, have confirmed that a defendant cannot ordinarily claim a right to common law indemnity from a joint tortfeasor.

The Texas Supreme Court has recognized only two exceptions to the rule that common law indemnity between joint tortfeasors is unavailable. First, common law indemnity survives in products liability actions to protect an innocent retailer in the chain of distribution. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 432 (Tex.1984); General Motors Corp. v. Simmons, 558 S.W.2d 855, 860-61 (Tex.1977). Second, common law indemnity survives in negligence actions to protect a defendant whose liability is purely vicarious in nature. Aviation Office of America, Inc. v. Alexander & Alexander of Texas, Inc., 751 S.W.2d 179, 180 (Tex.1988); Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 819-20 (Tex.1984); Knutson v. Morton Foods, Inc., 603 S.W.2d 805, 814 (Tex.1980) (Garwood, J., concurring). Neither of these exceptions are applicable in the instant case: BOS is not an innocent retailer in the chain of distribution and its liability is not vicarious in nature.

Although the Texas legislature has effectively abrogated the common law right of indemnity, the legislature has not attempted to curtail the availability of contractual indemnity. An agreement which states that one party will indemnify another is binding and effective. No statutory or common law principles other than those that govern the construction of contracts usually alter the...