Day v. Ocean Drilling and Exploration Company

• Decision Date: 25 January 1973
• Docket Number: Civ. A. No. 72-754.
• Citation: 353 F. Supp. 1350
• Parties: Calvin DAY v. OCEAN DRILLING AND EXPLORATION COMPANY.
• Court: U.S. District Court — Eastern District of Louisiana

353 F. Supp. 1350

Calvin DAY v. OCEAN DRILLING AND EXPLORATION COMPANY.

Civ. A. No. 72-754.

United States District Court, E. D. Louisiana.

January 25, 1973.

Charles Hanemann, Houma, La., for plaintiff.

W. K. Christovich, New Orleans, La., for Ocean Drilling and Exploration Co.

John O. Charrier, Jr., New Orleans, La., for Houma Welders, Inc. and Travelers Insurance Co.

ALVIN B. RUBIN, District Judge:

The motion for summary judgment raises the oft litigated question of interpreting a contract containing an indemnity agreement. The issue is not to be determined by narrowly parsing a single clause or sentence, but by reading the contract as a whole. Louisiana Civil Code, Art. 1955; White v. California Co., W.D.La.1965, 260 F.Supp. 586; Reuter v. Reuter's Succession, 1944, 206 La. 474, 19 So.2d 209; Solomon v. Hickman, La.App.1969, 219 So.2d 330.

Odeco, as Drilling Contractor, made a service contract with Houma Welders, as subcontractor, on a printed form prepared by Odeco. The contract contained the following agreements by Subcontractor (Houma):

(1) To perform its work "diligently and without delay, in a safe, proper and workmanlike manner . . .." (Par. 2)

(2) To carry workmen's compensation, employer's liability insurance and comprehensive general liability insurance in stipulated amounts, requiring that "such insurance shall additionally cover the contractual liabilities and indemnities herein assumed by Subcontractor (Houma) with minimum limits of $300,000.00" (Par. 8). The policies were to be carried in companies acceptable to Odeco with a clause forbidding cancellation without 10 days notice to Odeco. The policies were to waive subrogation against Odeco.

(3) ". . . To indemnify and hold harmless Drilling Contractor from and against . . . any and all claims, demands, or suits for damages to persons and/or property . . . which may be brought against Drilling Contractor (including, but not limited to those brought by Subcontractor's employees and agents . . .) incident to, arising out of, in connection with, or resulting from the activities of Subcontractor, its employees and agents . . . or in connection with the work to be performed, services to be rendered, or material to be furnished, under this contract, . . . whether occasioned, brought about or caused in whole or in part by the negligence of Drilling Contractor, its agents, directors, officers, employees, servants or subcontractors, or otherwise . . ., regardless of whether such negligence or unseaworthiness be actibe or passive, primary or secondary." (Par. 9).

(4) To release Drilling Contractor from liability for damages to Subcontractor's equipment or materials even though caused in whole or in part by Drilling Contractor's negligence. (Par. 10).

(5) To report all accidents or occurrences involving personal injury or property damage to Drilling Contractor. (Par. 11).

Day, plaintiff in this action, was an employee of Houma. He was working on a fixed platform located on the Outer Continental Shelf. He went to get some boards and a pipe wrench. While returning with these to the place where his work was to be done, he passed by a compressor owned by Odeco. As he passed it, it suddenly flashed and exploded, injuring him. Neither Day nor any other Houma employee had any duties in connection with the compressor, and it is not contended that they had anything to do with causing the explosion. It was a mere happenstance that Day was at the place where he was injured.

Louisiana law applies to Day's cause of action, 43 U.S.C. § 1331 et seq.; Rodrique v. Aetna Casualty & Surety Co., 1969, 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360. A fortiori, it applies to the interpretation of the contract, which was made in Louisiana, and was to be applied to work on the platform.

The Outer Continental Shelf Act, 43 U.S.C. § 1333, states that where applicable and not inconsistent with other provisions, the civil and criminal laws of each adjacent State "as of August 7, 1953"¹ shall be employed. Thus it clearly directs application of State law as of that date. While this clause precludes the application of State statutes enacted after that date, as well as other changes in State law occurring thereafter, the statute does not imply that this federal court, in determining what Louisiana law was at that time, must blind itself to decisions rendered by Louisiana courts after that date. As is the case with State decisions arising after a federal appeal has been lodged but the question is the application of State law at an earlier time, Oklahoma Packing Co. v. Oklahoma Gas & Electric Co., 1940, 309 U.S. 4, 60 S.Ct. 215, 84 L.Ed. 447, 537, the Court may look to all decisions of State courts that enlighten it concerning what Louisiana law in fact was in 1953, whether they were rendered before or after that time.

In Louisiana, as indeed it would be elsewhere, the contract is the law between the parties. Louisiana Civil Code Art. 1901. Louisiana courts have said that an indemnity agreement is to be read narrowly, but that "does not mean it is to be disregarded. The agreement must be given effect according to the intention of the parties . . .." Cole v. Chevron Chemical Company-Oronite Division, E.D.La.1971, 334 F.Supp. 263, 265.

The Louisiana rules for interpreting indemnity agreements, as reflected in a series of decisions,² are discussed at length in this court's earlier opinion in Cole v. Chevron Chemical Company-Oronite Division, E.D.La.1971, 334 F. Supp. 263.

There are a host of cases, in Louisiana³ and elsewhere⁴ dealing with the meaning to be given such terms as "arising out of" and "in connection with" when used in such agreements. A few of the cases cited in the notes are singularly apposite to the present factual situation; while th...