Campbell v. Sonat Offshore Drilling, Inc.

• Decision Date: 30 December 1992
• Docket Number: Nos. 91-4934,92-4428,s. 91-4934
• Citation: 979 F.2d 1115
• Parties: Felix J. CAMPBELL, Jr., and Annette V. Campbell, Plaintiffs, v. SONAT OFFSHORE DRILLING, INC., Defendant-Appellee. UNION TEXAS PETROLEUM CORPORATION, Defendant-Third Party Plaintiff-Appellee, v. FRANK'S CASING CREWS & RENTAL TOOLS, INC., and Richard Kempton Webb, as Representative of Certain Underwriters at Lloyd's London, Etc., Third Party Defendants-Appellants. Felix J. CAMPBELL, Jr., et ux, Plaintiffs, v. UNION TEXAS PETROLEUM CORPORATION, et al., Defendants-Appellees, v. Richard Kempton WEBB, Etc., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1115

979 F.2d 1115

1993 A.M.C. 1008

Felix J. CAMPBELL, Jr., and Annette V. Campbell, Plaintiffs, v. SONAT OFFSHORE DRILLING, INC., Defendant-Appellee.

UNION TEXAS PETROLEUM CORPORATION, Defendant-Third Party Plaintiff-Appellee, v. FRANK'S CASING CREWS & RENTAL TOOLS, INC., and Richard

Kempton Webb, as Representative of Certain

Underwriters at Lloyd's London, Etc.,

Third Party Defendants-Appellants.

Felix J. CAMPBELL, Jr., et ux, Plaintiffs, v. UNION TEXAS PETROLEUM CORPORATION, et al., Defendants-Appellees, v. Richard Kempton WEBB, Etc., Defendant-Appellant.

Nos. 91-4934, 92-4428.

United States Court of Appeals Fifth Circuit.

Dec. 30, 1992.

John Craig Jones, Voohries & Labbe, Lafayette, La., for Frank's Casing Crew & Rental Tools, Inc.

Susan A. Daigle, Broussard, David & Daigle, Lafayette, La., for Richard Kempton Webb, as Rep. of Certain Underwriters at Lloyd's London.

Mark A. Lowe, Liskow & Lewis, Lafayette, La., for Union Texas Petroleum Corp. & Sonat Drilling Co.

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

Before KING, WILLIAMS and SMITH, Circuit Judges.

KING, Circuit Judge:

Felix J. Campbell brought this action against Union Texas Petroleum Corporation ("UTP") and Sonat Offshore Drilling, Inc. ("Sonat") ¹ to recover for injuries allegedly sustained by Campbell as he attempted to transfer from the M/V TRUDY BRUCE, a vessel hired by UTP, to Sonat's drilling vessel, the OFFSHORE TAURUS. At the time he was injured, Campbell was employed by Frank's Casing Crew and Rental Tools, Inc. ("Frank's"), which was hired by UTP to perform casing services for an offshore drilling operation on the outer continental shelf.

Soon after Campbell brought this action against UTP and Sonat, UTP filed a Third Party Complaint against Frank's and its insurers, Certain Underwriters at Lloyd's and Companies ("Lloyd's"). UTP sought defense and indemnity for itself and Sonat pursuant to the terms of a contract between UTP and Frank's which governed the work Campbell was performing at the time he was injured. UTP then moved for summary judgment on this issue of Frank's duty to defend and indemnify; Frank's and Lloyd's (together "defendants") filed cross-motions for summary judgment on this same issue. Holding that Frank's must indemnify UTP and Sonat, the district court granted partial summary judgment in their favor. Defendants appeal, asserting that (1) Frank's never agreed to indemnify UTP or Sonat, (2) Louisiana law applies and invalidates any indemnity agreement between Frank's and UTP, (3) the Longshore and Harbor Workers Compensation Act (LHWCA), 33 U.S.C. § 901 et seq., prohibits any agreement by Frank's to indemnify Sonat, and, (4) if liable at all, Frank's is not liable to indemnify UTP and Sonat for more than $300,000. Finding that Frank's is obligated to indemnify UTP and Sonat pursuant to the terms of agreements between UTP and Frank's and UTP and Sonat, we affirm the district court's grant of partial summary judgment in favor of UTP and Sonat on this issue of indemnity.

I. BACKGROUND

This case arises out of UTP's efforts to drill a well in the outer continental shelf off the coast of Louisiana. To accomplish this, UTP hired a drilling vessel--the OFFSHORE TAURUS--from Sonat, and entered into a verbal agreement with Frank's to provide drive pipe, hammer work, and casing services ² on board the OFFSHORE TAURUS.

Campbell, a member of the casing crew provided by Frank's, was allegedly injured on December 10, 1988 while attempting to transfer from the M/V TRUDY BRUCE to the OFFSHORE TAURUS in adverse weather conditions on the high seas. Following Campbell's injury, Frank's continued to provide casing services for UTP and, on December 21, UTP issued a written purchase order to Frank's detailing the equipment and services provided. The back of this purchase order contains a provision for indemnification ³ and another establishing insurance requirements. ⁴ The purchase order also contains a provision which designates the laws of Texas as those governing the agreement.

Campbell brought this suit against UTP and Sonat to recover for the injuries he sustained on December 10, 1988. UTP, on its own behalf and on behalf of Sonat, then filed a Third Party Complaint against defendants for contractual defense and indemnity. All parties moved for summary judgment on this issue, UTP asserting that its purchase order constitutes a contract between the parties and that, in accordance with the indemnity provision on the back of the order, Frank's must indemnify. UTP also moved to strike the affidavit of Robert Gilbert, a Frank's employee, submitted by Frank's in opposition to UTP's Motion for Partial Summary Judgment on the grounds that this affidavit constitutes parol evidence intended to vary the terms of a written contract. The district court granted UTP's motions ⁵ and denied those of defendants, holding that defendants must indemnify UTP and Sonat. Defendants appeal.

II. STANDARD OF REVIEW

In considering the defendants' appeal from the district court's grant of partial summary judgment in favor of UTP and Sonat, we review the record de novo. See Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.), cert. denied, --- U.S. ----, 113 S.Ct. 82, 121 L.Ed.2d 46 (1992); International Shortstop, Inc. v. Rally's, 939 F.2d 1257, 1263 (5th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 936, 117 L.Ed.2d 107 (1992). Our standard is well settled: Summary judgment is proper if the party moving for such a judgment establishes that there is an absence of genuine issues of material fact. See FED.R.CIV.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986); Matsushita Elec. Ind. Col. v. Zenith Radio Corp., 475 U.S. 574, 585-88, 106 S.Ct. 1348, 1355-57, 89 L.Ed.2d 538 (1986). Once a movant has made such a showing, the nonmovant must establish each of the challenged essential elements of its case for which it will bear the burden of proof at trial. See Catrett, 477 U.S. at 322, 106 S.Ct. at 2552; Topalian, 954 F.2d at 1131. Although the nonmovant may satisfy this burden by tendering depositions, affidavits, and other competent evidence, ⁶ "[m]ere conclusory allegations are not competent summary judgment evidence, and they are therefore insufficient to defeat or support a motion for summary judgment." Topalian, 954 F.2d at 1131 (citations omitted). In short, "the adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial." FED.R.CIV.P. 56(e). Where the nonmoving party fails to make such a showing and the moving party has met its summary judgment burden, the latter is entitled to summary judgment as a matter of law. FED.R.CIV.P. 56(c).

III. DISCUSSION

Defendants raise the following contentions on appeal: (a) the UTP-Frank's purchase order does not constitute a contract in effect at the time of Campbell's injury; (b) even if this agreement does constitute a contract in effect at the time of Campbell's injury, it is not maritime in nature and, therefore, it is governed by Louisiana law; (c) the indemnity provision of the UTP-Frank's agreement falls within the LHWCA's proscription against such indemnity provisions; (d) if liable at all, Frank's is not liable to indemnify UTP for more than $300,000; and (e) the district court erred in striking the Gilbert affidavit.

A. The UTP-Frank's Agreement

According to defendants, "the purchase order issued to Frank's by [UTP] thirteen days after the accident occurred cannot obligate Frank's to defend and indemnify [UTP] or Sonat." However, in response to UTP's and Sonat's assertion in their Third Party Complaint that, "[a]t all times pertinent, there was in full force and effect between [Frank's] and [UTP] a contract pursuant to which [Frank's] was required to defend, protect, indemnify and hold harmless [UTP] and [Sonat] from and against the claims filed by [the Campbells]," Frank's admitted "that there exists between [Frank's] and [UTP] a contract, which contract being a written instrument is the best evidence of its terms and conditions all of which are pled herein...."

We have held repeatedly that "factual assertions in pleadings are ... judicial admissions conclusively binding on the party that made them." Davis v. A.G. Edwards & Sons, Inc., 823 F.2d 105, 108 (5th Cir.1987) (emphasis in original), quoting White v. ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir.1983); see Ferguson v. Neighborhood Housing Services, Inc., 780 F.2d 549, 551 (6th Cir.1986) (facts admitted in pleadings are no longer at issue). Moreover, our reliance on Frank's original response to UTP's assertion that a contract was in force at the time of Campbell's accident is buttressed by evidence that (1) UTP and Frank's have conducted business on a regular, continuous basis for years, (2) it is common practice between UTP and Frank's for individual purchase orders to postdate the services rendered, (3) the basic indemnity language in these UTP-Frank's contracts has remained constant and, (4) as for the specific contract at issue, UTP paid Frank's in accordance with the contract's terms and Frank's accepted that payment without objection. Where parties share a history of business dealings and standardized provisions have become part of those dealings, such familiar provisions within purchase orders issued after performance are binding where they are accepted without objection. See Grillet v. Sears, Roebuck & Co., 927 F.2d 217, 220 (5th Cir.1991) ("A party cannot be permitted to retain the benefits received under a contract and at the same time escape the obligation imposed by the contract."), superseded by statute, Oberg v. Allied Van Lines, Inc., 1992 WL 186098 (N.D.Ill. July 24, 1992) (No. 91 C 6576); see also M/V American Queen v. San Diego Marine Constr. Corp., 708 F.2d 1483, 1488-89 (9th...