Carney v. Marathon Oil Co., Civ. A. No. 83-2517.

• Decision Date: 18 March 1986
• Docket Number: Civ. A. No. 83-2517.
• Citation: 632 F. Supp. 1037
• Parties: Mary Louise Simboli CARNEY, et al. v. MARATHON OIL COMPANY.
• Court: U.S. District Court — Western District of Louisiana

632 F. Supp. 1037

Mary Louise Simboli CARNEY, et al. v. MARATHON OIL COMPANY.

Civ. A. No. 83-2517.

United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.

March 18, 1986.

COPYRIGHT MATERIAL OMITTED

Anthony D. Moroux, Domengeaux & Wright, Lafayette, La., for plaintiff.

James R. Shelton, Pugh & Boudreaux, Lafayette, La., for intervenor.

W. Richard House, Jr., Milling, Benson, Woodward, Hillyer, Pierson & Miller, New Orleans, La., for McDermott, Inc.

John A. Bernard and Joseph L. Lemoine, Jr., Onebane, Donohoe, Bernard, Torian, Diaz, McNamara & Abell, Lafayette, La., and Thomas L. Grand, Jr., Houston, Tex., for defendant Marathon Oil Co.

John Blackwell, Gibbens & Blackwell, New Iberia, La., for defendant Normco Contractors, Inc. & Travelers.

MEMORANDUM RULING

DUHE, District Judge.

This matter, coming before the court on cross-motions for reconsideration of this court's second ruling on a motion by Normco Contractors, Inc. ("Normco") and Travelers Insurance Company ("Travelers") for summary judgment dismissing Marathon Oil Company's ("Marathon") third-party claim for indemnity against them, presents two issues for this court's determination: (1) whether the exclusive liability provision of the Longshoremen and Harbor Workers' Compensation Act ("LHWCA"), 33 U.S.C. § 905(a), bars all third-party claims for indemnification from an LHWCA employer, and (2) the extent to which the Louisiana Oilfield Anti-Indemnity Act ("OAIA"), 9 La.Rev.Stat.Ann. 2780 (West Supp.1986), nullifies indemnity provisions in oilfield contracts.

BACKGROUND

Plaintiffs brought this action against Marathon to recover damages for the fatal injuries sustained by their decedent, P.J. Carney, during the course of his employment with Normco, while aboard a fixed platform that was owned by Marathon and located on the Outer Continental Shelf adjacent to Louisiana. Travelers, Normco's LHWCA insurer, subsequently intervened to recover the amount it had paid plaintiffs in LHWCA benefits. Marathon then brought a counterclaim against Travelers, and a third-party action against Normco, seeking indemnification for any amounts for which it might be held liable to the plaintiffs. Marathon originally based its indemnification claims on (1) the indemnity provisions of the master-service contract that existed between Normco and Marathon at the time of the accident, and (2) Normco's alleged breach of the implied warranty of workmanlike performance ("WWLP") it allegedly owed Marathon.

In its former ruling this court found that a § 905 employer is subject to non-vessel third-party indemnity claims arising out of a contractual (express or implied) or delictual obligation that the employer owes the third party. Carney v. Marathon Oil Co., 615 F.Supp. 48, 49-50 (W.D.La.1985) (citing Horton v. Sun Exploration & Production Co., 616 F.Supp. 130 (W.D.La.1985); Pippen v. Shell Oil Company, 661 F.2d 378, 386-87 (5th Cir.1981)). Nonetheless, this court rejected Marathon's claim for indemnity on the basis of the WWLP, finding that the Fifth Circuit has eliminated the WWLP as a basis for indemnification in platform situations. At 49 (citing Law v. Sea Drilling Corp., 510 F.2d 242 (5th Cir. 1975)). Moreover, though recognizing that a delictual obligation between Normco and Marathon could support an indemnity claim, because Marathon presented no evidence of such an obligation between it and Normco, summary judgment against Marathon was found to be appropriate.¹ This court also found that the OAIA does not render express indemnity provisions such as the one in Normco and Marathon's master-service contract null in their entirety, but "only to the extent they purport to require indemnification or defense for the indemnitee's negligence." At 50.

Marathon now (1) moves for reconsideration of the July 26, 1985 ruling dismissing its claim for indemnity on the basis of an alleged delictual obligation between Normco and Marathon, and (2) seeks a clarification of that ruling to establish whether it is entitled to maintain an indemnification claim against Normco based on breach of contract. Normco and Travelers, in turn, ask this court to reconsider its ruling on the Louisiana OAIA and hold that the Act nullifies indemnity provisions in oilfield service contracts in their entirety.

For the reasons that follow, this court affirms its July 26, 1985 ruling and (1) dismisses Marathon's claim for indemnity based on an alleged delictual obligation between Normco and Marathon, and (2) finds that though § 905(a) of the LHWCA does not bar Marathon's claims for express or implied contractual indemnification from Normco and Travelers, (3) Fifth Circuit jurisprudence does not recognize the WWLP as an implicit contract between LHWCA employers and platform owners on which the latter can recover indemnity from the former, and (4) the OAIA bars Marathon's express contractual claim for indemnity under the master-service contract only to the extent it seeks to recover for its own negligence or fault. In light of recent Fifth Circuit decisions to be discussed below, however, this court also amends its earlier ruling to add that because plaintiffs allege in their complaint that Marathon was negligent and/or at fault in causing the death of plaintiffs' decedent, Marathon may not recover the costs of defending this lawsuit. See Knapp v. Chevron, USA, Inc., 781 F.2d 1123, (5th Cir.1986); Sullen v. Missouri Pacific R. Co., 750 F.2d 428 (5th Cir.1985).

DISCUSSION

A. Marathon's Claim for Indemnity on the Basis of an Alleged Independent Delictual Duty Between Normco and Marathon

As stated above, Fifth Circuit jurisprudence recognizes that a non-vessel third party may recover indemnity over against an LHWCA employer on the basis of an independent delictual duty between the employer and the third party; § 905(a) does not bar such claims. See Pippen v. Shell Oil Co., 661 F.2d 378, 387 n. 14 (5th Cir. 1981); Horton v. Sun Exploration and Production Co., 616 F.Supp. 130 (W.D.La. 1985). This court dismissed Marathon's claim for indemnity on summary judgment in the former ruling simply because Marathon did not put forth any evidence of a delictual duty between it and Normco to create an issue of fact whether such a duty exists. Though Marathon's failure to present evidence sufficient to defeat the summary judgment constitutes procedural error, because the substance of Marathon's claim is an area in which Fifth Circuit guidance has been ambivalent, this court is willing to rehear Marathon's claim for indemnity based on Normco's alleged breach of delictual obligation to Marathon.

Marathon alleges two bases on which Normco owes it an obligation in tort. First, it alleges that there is an issue of fact whether Normco was the "manufacturer" or "designer" of the light pole that electrocuted plaintiffs' decedent and is therefore liable to Marathon on a theory of products liability. Second, Marathon alleges that Normco was the lessor of a defective product that it knew was defective, and, consequently, perhaps had a duty to correct the defect or warn the lessee of the defect under La.C.C. Art. 2320.

Though Marathon's first argument should be commended for its creativity, it is simply too farfetched to deserve any level of credence. Marathon alleges that because Normco simply assembled a light pole that was used on Marathon's rig, Normco is the "manufacturer" of the light pole. Under products liability law, a manufacturer is one who manufactures a product that it sells and hence puts into the stream of commerce. See Weber v. Fidelity & Casualty Ins. Co. of N.Y., 259 La. 599, 250 So.2d 754 (1971). There is no evidence that Normco put this or similar light poles into the stream of commerce. Normco is therefore neither a "manufacturer" within the meaning of products liability law nor liable to Marathon on that basis. See id.

Moreover, Marathon has cited no authority for the proposition that as a lessor of an allegedly defective product, Normco has a duty to indemnify Marathon from any damages it might have sustained as a result of that "product's" defect. Hence, as Marathon has failed to allege any cognizable legal basis for an independent obligation in tort between it and Normco, this court concludes that Marathon has not raised a genuine issue as to any material fact and that, as a matter of law, Normco's summary judgment should be upheld.

Though Pippen found that a delictual duty between a third party and an LHWCA employer could support an indemnity claim by the former against the latter, it did not give any examples of specific relationships that could support such a duty. Because there has been demonstrated a strong need to understand the nature of the relationship giving rise to the sort of delictual obligation upon which indemnity might be had under Pippen, this court will offer the little guidance available.

In Holden v. Placid Oil Co., 473 F.Supp. 1097 (E.D.La.1979), Judge Cassibry suggested that a third-party could recover against an LHWCA employer who was a manufacturer if Louisiana products liability law provided for such recovery. 473 F.Supp. at 1102. The court denied the manufacturer's motion for summary judgment to dismiss the third-party indemnity claim against it on the grounds that there remained an issue of fact whether the LHWCA employer, as manufacturer of the defective product giving rise to the main action owed the third-party a delictual duty on which the third-party could base its indemnity claim. It did not reach the question of whether Louisiana law in fact does provide for such recovery.

Beyond Holden, there exists law only on the basic requirements of the delictual relationship, and examples of what does not satisfy those requirements. The fundamental requirement is that the court must find the third-party's indemnity claim is based on a tort duty the employer owes directly to the third-party and not to the employee. See White v. Texas Eastern Transmission...