Broussard v. Conoco, Inc.

• Decision Date: 22 April 1992
• Docket Number: No. 91-4317,91-4317
• Citation: 959 F.2d 42
• Parties: Oliver BROUSSARD, et al., Plaintiffs, v. CONOCO, INC., Defendant Third Party Plaintiff-Appellant, v. SHRM CATERING, INC., Plaintiff-Third Party Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 42

959 F.2d 42

1993 A.M.C. 2404

Oliver BROUSSARD, et al., Plaintiffs, v. CONOCO, INC., Defendant Third Party Plaintiff-Appellant, v. SHRM CATERING, INC., Plaintiff-Third Party Defendant-Appellee.

No. 91-4317.

United States Court of Appeals Fifth Circuit.

April 22, 1992.

Rehearing and Rehearing En Banc

Denied May 26, 1992.

Craig W. Marks, Jeansonne & Briney, Lafayette, La., for defendant third party plaintiff-appellant.

Robert B. Nolan, Adams & Reese, New Orleans, La., Richard O. Kingrea, Adams & Reese, Baton Rouge, La., for plaintiff-third party defendant-appellee.

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

Before REAVLEY, JOLLY and HIGGINBOTHAM, Circuit Judges.

REAVLEY, Circuit Judge:

The district court granted summary judgment in favor of an oilfield caterer after determining that Louisiana's Oilfield Anti-Indemnity Act voids a contract clause indemnifying Conoco, Inc. (Conoco) for personal injuries sustained by the caterer's employees. We affirm.

BACKGROUND

SHRM Catering Services, Inc. (SHRM, or Caterer) employed Oliver Broussard (Broussard) as a galley hand on Grand Isle 47AQ, a fixed platform in the Gulf of Mexico on the Outer Continental Shelf off of the Louisiana coast. 47AQ is a quarters platform adjacent to Grand Isle 47A, a production platform. ¹ Conoco owns and operates both platforms. 47AQ contains sleeping quarters, a cafeteria, and offices for Conoco employees. 47AQ houses no drilling or production facilities.

Conoco entered into a contract under which SHRM provided catering services for Conoco's employees on 47AQ. This contract obligated the Caterer to provide housekeeping, laundry, and meal preparation services. The contract also required the Caterer to indemnify Conoco for any injury to an employee of the Caterer regardless of Conoco's negligence or other fault. ²

Broussard fell off a stool supplied by Conoco while changing linens on a sleeping bunk and injured his back. Alleging that the stool collapsed, Broussard sued Conoco to recover damages for his personal injuries. Conoco joined the Caterer pursuant to the Caterer's promise of indemnification, and both of these parties sought summary judgment on the issue of whether Louisiana's Oilfield Anti-Indemnity Act, LA.REV.STAT.ANN. § 9:2780 (West 1991) (OAIA), voids the indemnification provision. ³ The district court held that the OAIA precludes indemnification and entered judgment for the Caterer. Conoco appeals and presents our only issue.

DISCUSSION

The OAIA voids certain indemnification terms in "[a]ny provision contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water, or drilling for minerals...." Id. at 9:2780(B) (emphasis added). An "agreement" within this statute is any agreement "concerning any operations related to the exploration, development, production, or transportation" of oil, gas, or minerals. Id. at 9:2780(C) (emphasis added). "Operations" include but are not limited to "drilling, deepening, reworking, repairing, improving, testing, treating, perforating, acidizing, logging, conditioning, altering, plugging, or otherwise rendering services in or in connection with any well drilled for the purpose of producing" any mineral. Id. (emphasis added). The statute also covers "an agreement to perform any such work or services or any act collateral thereto, including the furnishing or rental of equipment, incidental transportation, and other goods and services furnished in connection with any such service or operation." Id. (emphasis added).

This court interprets the OAIA to require a two-part inquiry: 1) whether the agreement in question pertains to a well; and 2) whether the contract is involved with "operations related to the exploration, development, production, or transportation of oil, gas, or water," as the statute defines those operations. Transcontinental Gas Pipe Line Corp. v. Transportation Ins. Co., 953 F.2d 985, 991 (5th Cir.1992) [hereinafter Transco]. Noting that the issue of whether a contract "pertains to a well" requires case-by-case analysis, the Transco court proposed a series of factors relevant to determining the point at which natural gas in transportation "can no longer be identified with a particular well, or is so fundamentally changed ... that [it] no longer 'pertains to a well.' " Id. at 994.

The catering contract at issue in this case does not directly concern the transportation of oil or gas, or maintenance of a pipeline junction platform detached from production, and consequently some of the Transco factors are not relevant. But other factors are, and we specifically consider in this case:

(1) whether the structures or facilities to which the contract applies or with which it is associated are part of an in-field production system;

(2) what is the geographical location of the structure or facility relative to a well or wells;

(3) what is the purpose or function of the facility or structure in question;

(4) who owns and operates the relevant facility or structure;

(5) and "any number of other details affecting the functional and geographic nexus between 'a well' and the structure or facility that is the object of the agreement...."

Id. at 994-95.

The catering contract dealt with maintenance of facilities, i.e., employees and living quarters, related to in-field production. The quarters platform was located adjacent to a production platform, and the employees worked on a production platform. The purpose or function of the facilities covered by the contract was to sustain manpower for production. Conoco owns the quarters platform and the adjacent production platform. And additional "functional nexus" arises from the fact that production employees are...