Babineaux v. McBroom Rig Bldg. Service, Inc., 85-4886
| Decision Date | 07 January 1987 |
| Docket Number | No. 85-4886,85-4886 |
| Citation | 806 F.2d 1282 |
| Parties | Stephen BABINEAUX, Plaintiff, v. McBROOM RIG BUILDING SERVICE, INC. and North River Insurance Company, Intervenors-Appellees, v. READING & BATES DRILLING COMPANY, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Cliffe E. Laborde, III, LaBorde & LaFargue, Dean Anderson Cole, Lafayette, La., for defendant-appellant.
James Huey Gibson, Allen, Gooch, Bourgeois, Breaux & Robison, Arthur I. Robison, Lafayette, La., for North River Ins. Co. and McBroom.
Appeal from the United States District Court for the Western District of Louisiana.
Before GARZA, DAVIS and JONES, Circuit Judges.
Reading & Bates Drilling Company (Reading & Bates) appeals the dismissal of its counterclaim against McBroom Rig Building Service, Inc. (McBroom) and North River Insurance Company (North River). The district court dismissed the counterclaim on summary judgment, relying on the Louisiana Oilfield Indemnity Act. La.Rev.Stat.Ann. Sec. 9:2780 (West 1986). We affirm.
This case arises out of injuries sustained by Stephen Babineaux in the course of his employment with McBroom aboard a Reading & Bates fixed platform. After recovering Longshore and Harbor Workers' Compensation Act benefits from McBroom, Babineaux brought the instant tort action against Reading & Bates. McBroom and its insurer, North River, intervened in the lawsuit to recoup the compensation payments previously made to Babineaux. Reading & Bates counterclaimed against McBroom and North River seeking indemnity for any sums Reading & Bates might be required to pay Babineaux. Reading & Bates' indemnity claim is based on language included in the master/service agreement requiring McBroom to indemnify Reading & Bates. That provision required McBroom to "indemnify and defend" Reading & Bates and hold Reading & Bates "harmless from any and all claims ... for or on account of any injury to any person ... even though said injury, death or damage may be or may be alleged to be attributable to negligence or other legal fault of [Reading & Bates]." The contract also required McBroom to procure certain designated insurance policies and that "[e]ach insurance policy secured by [McBroom] shall name [Reading & Bates] as an additional insured...." 1 McBroom complied with the contract and procured a comprehensive general liability insurance policy from North River which named Reading & Bates as an additional insured.
The district court found that Reading & Bates' counterclaim for indemnity from McBroom was expressly blocked by the Louisiana Oilfield Indemnity Act, better known as the Anti-Indemnity Act. The district court further found that Reading & Bates was not entitled to the benefit of the North River insurance policy McBroom purchased to comply with the service agreement. This appeal followed.
Reading & Bates argues on appeal that the Anti-Indemnity Act does not invalidate the liability insurance protection afforded to Reading & Bates by North River. Reading & Bates points out that subsection G facially applies only to agreements "arising out of the operations, services, or activities listed in subsection C," such as drilling for oil, gas, water, or minerals. 2 La.Rev.Stat.Ann. Sec. 9:2780(G) (West 1986). Reading & Bates therefore concludes that the Anti-Indemnity Act only bars its indemnity claim predicated on language in the master service agreement with McBroom and has no effect on its rights in the insurance contract with North River. Reading & Bates emphasizes that the Anti-Indemnity Act was passed in order to protect small oilfield contracting companies, not insurance companies. La.Rev.Stat.Ann. Sec. 9:2780(A) (West 1986).
Reading & Bates' argument is not persuasive. Subsection G expressly invalidates agreements requiring "additional named insured endorsements or any other form of insurance protection which would frustrate or circumvent the prohibitions of this section." Subsection I expands the Act's coverage to apply to "provisions contained in, collateral to, or affecting agreements ... which are designed to provide indemnity...." 3 The insurance agreement between McBroom and North River is collateral to McBroom's master/service agreement with Reading & Bates. We agree with Judge Hunter's observation in Aucoin v. Pelham Marine, Inc., 593 F.Supp. 770, 775 (W.D.La.1984), that: "Certainly the insurance agreement between South State and Champion is 'collateral to' Champion's contract with Chevron to provide indemnity." Reading & Bates ignores the fact that subection I brings collateral agreements, such as insurance, within the reach of the Anti-Indemnity Act's prohibitions. We are persuaded that it would...
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