Fontenot v. Chevron U.S.A. Inc.

• Decision Date: 02 July 1996
• Citation: 676 So.2d 557
• Parties: 95-1425 La
• Court: Louisiana Supreme Court

Page 557

676 So.2d 557

95-1425 La. 7/2/96

James Billy Ray FONTENOT, et al. v. CHEVRON U.S.A. INC., Dantzler Boat and Barge Co., and Aetna Casualty and Surety Co.

No. 95-C-1425.

Supreme Court of Louisiana.

July 2, 1996.

Darryl M. Phillips, New Orleans, Gainsburg, Benjamin, David, Meunier, Noriea & Warshauer, J. Michael Placer, Lafayette, for Applicant.

Ben E. Clayton, New Orleans, Lefant & Associates, for Respondent.

[95-1425 La. 1] CALOGERO, Chief Justice. ^*

The issue in this case is whether the Louisiana Oilfield Anti-Indemnity Act, La. RS 9:2780, applies in determining the validity and interpretation of a waiver of subrogation clause in a worker's compensation insurance policy.

Hercules Offshore Drilling Company entered into a workover contract with Chevron, USA, Inc. for "remedial well services" and the performance of drilling or workover operations on several Chevron platforms located in the Gulf of Mexico. In its contract with Chevron, Hercules agreed to provide its employees with federal Longshore and Harbor Workers' Compensation insurance and further agreed to a blanket and unrestricted waiver of its right, and consequently its insurer's right, to subrogation for reimbursement of such worker's compensation benefits as it or its insurer might be required to pay. Specifically, the Workover Contract provided:

CONTRACTOR [Hercules] agrees that its Workmen's Compensation [95-1425 La. 2] insurance policy shall be endorsed to designate OPERATOR [Chevron] as an alternate employer and as a statutory employer, and shall be endorsed to provide a blanket and unrestricted waiver of its underwriter's or insurer's rights of subrogation. (emphasis added.)

Aetna Casualty and Surety Company provided a policy of worker's compensation insurance to Hercules. Responsive to the contractual obligation of Hercules, Aetna waived its right to subrogation in its contract of worker's compensation insurance with Hercules. The contract of insurance states in pertinent part:

WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT

We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule.... This agreement shall not operate directly or indirectly to benefit any one not named in the Schedule.

Schedule

"FOR COVERAGE OBTAINED THROUGH THE LOUISIANA WORKERS COMPENSATION INSURANCE PLAN, THE COMPANY SHALL AS APPLICABLE INDICATE A PREMIUM CHARGE OF 1% OF THE TOTAL STANDARD PREMIUM SUBJECT TO A MINIMUM CHARGE OF $250, AND A MAXIMUM CHARGE OF $1,500."

"ALL PERSONS OR ORGANIZATIONS THAT ARE PARTIES TO A CONTRACT THAT REQUIRES YOU TO OBTAIN THIS AGREEMENT, PROVIDED YOU EXECUTED THE CONTRACT BEFORE THE LOSS."

Hence, this waiver applied to Chevron, and an increase in premium was charged by Aetna and paid by Hercules in exchange for Aetna's waiving these compensation subrogation rights.

After a Hercules employee was injured in the course and scope of his employment, Aetna paid worker's compensation benefits and then intervened in the employee's state court lawsuit which raised claims of negligence and a breach of Civil Code article 2317 against Chevron and two other defendants. The employee, James Billy Ray Fontenot, settled his lawsuit, as explained further below, and then filed a motion for summary judgment against Aetna, arguing that Aetna was not entitled to reimbursement because it had waived its right of subrogation in its policy with Hercules (which, of course, it had). Aetna then filed a cross motion for summary judgment, arguing that such a waiver of subrogation was prohibited, and unenforceable under the Anti-Indemnity Act, La. RS 9:2780. ¹ [95-1425 La. 3] In response, the employee argued that federal maritime law, which allowed indemnity and waiver of subrogation clauses, was alone applicable and it superseded Louisiana's Anti-Indemnity Act. Hence the waiver of subrogation provision was valid and Aetna's recovery barred.

The trial court granted Aetna's cross motion for summary judgment, determining that Aetna was entitled to receive the full amount of its intervention, and to be reimbursed for the monies paid in worker's compensation benefits, presumably based upon a legal conclusion that Aetna's waiver of subrogation was invalid because of Louisiana's Anti-Indemnity Act. The Court of Appeal affirmed. The record does not reflect a judgment on the employee's motion for summary judgment filed against Aetna, although by implication it has surely been denied.

We granted writs to consider the applicability of Louisiana's Anti-Indemnity Act in these circumstances. After reviewing the record and the pertinent law, we conclude that Aetna's waiver of subrogation of its claim for reimbursement of worker's compensation benefits paid to plaintiff is enforceable because Louisiana's Anti-Indemnity Act does not apply in this situation.

James Billy Ray Fontenot, an employee of Hercules, was assigned as a crane operator to Chevron South Pass 62A Platform, a fixed or stationary oil platform located in South Pass 62 A off Venice, Louisiana. On July 31, 1989, Chevron was forced to evacuate the platform because of an approaching hurricane. The majority of employees were evacuated by helicopter, or by use of a personnel basket which was used to transfer employees from the platform to the M/V BIG CHIP, a transport vessel allegedly owned pro hac vice, operated, chartered, managed and/or controlled by Dantzler Boat and Barge Co. ² Fontenot operated the crane which [95-1425 La. 4] transferred the personnel basket from the platform to the waiting vessel. The vessel was brought alongside the platform but was not moored or anchored. As there was no one available to work the crane when it was Fontenot's turn to evacuate the platform, he was instructed to board the M/V BIG CHIP by swinging on a rope from the platform to the vessel. Because of the rough seas, his first swing rope transfer attempt failed, and he was forced to swing back to the platform. He then made a second attempt and fell to the deck of the vessel, injuring his back, hip and other parts of his body. His injuries later required surgery.

Fontenot and his wife, individually and on behalf of their two children, filed suit against Chevron as owner of the platform, Dantzler as owner and operator of the vessel M/V BIG CHIP, and a Chevron representative (who was later dismissed). Suit was brought pursuant to the provisions of the "savings to suitors" clause, 28 U.S.C. § 1333(1), which allowed Fontenot to bring his claims in state court. Fontenot and his family alleged that defendants were negligent in forcing him to evacuate the platform by swing rope transfer onto an unmoored vessel in rough seas. Mrs. Fontenot and the two children filed loss of consortium claims. Chevron filed a cross claim against Dantzler. Aetna intervened, seeking subrogation for medical and wage compensation benefits it had paid to Fontenot as Hercules' worker's compensation insurer. ³ As earlier indicated, prior to trial Fontenot settled his claim against Chevron and Dantzler for $437,500 without the participation or consent of Aetna.

[95-1425 La. 5] Cross-motions for summary judgment were filed by plaintiff Fontenot and intervenor Aetna on the issue of whether Aetna was entitled to subrogation and reimbursement of the compensation payments made to Fontenot out of the proceeds received by Fontenot in settlement of his claims against Chevron and Dantzler, notwithstanding the waiver of subrogation in Aetna's insurance contract with Hercules. The trial court granted Aetna's motion for summary judgment and the Court of Appeal affirmed. Fontenot, Chevron and Dantzler appealed.

In affirming the trial court, the Court of Appeal rejected appellants' argument that this case was governed by 33 U.S.C. Section 905(c), a federal statute which provides for suits by certain persons allegedly injured by the "negligence of a vessel" and which specifically sanctions the enforcement of indemnity provisions. ⁴ The Court of Appeal noted that this statute refers only to indemnity agreements which exist between the employer and a vessel, and in this case, there is no evidence of any indemnity agreement between the employer, Hercules, and the operator of the vessel, Dantzler. Thus, the Court of Appeal concluded that even if 33 U.S.C. Sec. 905(c) is inconsistent with Louisiana's Anti-Indemnity Act as appellants argue (because it expressly authorizes the type of indemnity agreements which Louisiana's Anti-Indemnity Act prohibits), it does not displace or supersede the state statute because it does not apply under the facts of this case. ⁵

[95-1425 La. 6] The appellate court then turned to La. RS 9:2780(B) of Louisiana's Anti-Indemnity Act, which invalidates certain indemnity agreements, and concluded that the statute would make any waiver of subrogation by Aetna unenforceable. The Court of Appeal further held that even if the waiver of subrogation against Chevron were valid, the result would be the same because appellants cannot show a waiver of subrogation in favor of co-defendant Dantzler. So Aetna would still be entitled to seek recovery on its subrogated claim against Dantzler. Thus, the Court of Appeal affirmed the trial court's granting Aetna's motion for summary judgment. One member of the Court of Appeal panel dissented. ⁶

Fontenot, Chevron and Dantzler applied for writs in this Court, assigning as errors the appellate court's failure to invoke federal maritime law to a claim cognizable in admiralty, its purportedly erroneous conclusion that under Herb's Welding, Inc. v. Gray, 470 U.S. 414, 105 S.Ct. 1421, 84 L.Ed.2d 406 (1985), a workover contract is a non-maritime contract, and its finding that the [95-1425 La. 7] workover contract was subject to Louisiana's Anti-Indemnity Act, a finding which is allegedly inconsistent with prior jurisprudence and interferes with the uniformity of federal maritime...