Hale v. Co-Mar Offshore Corp.

• Decision Date: 26 July 1984
• Docket Number: Civ. A. No. 83-0496.
• Citation: 588 F. Supp. 1212
• Parties: David M. HALE v. CO-MAR OFFSHORE CORPORATION, et al.
• Court: U.S. District Court — Western District of Louisiana

588 F. Supp. 1212

David M. HALE v. CO-MAR OFFSHORE CORPORATION, et al.

Civ. A. No. 83-0496.

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

July 5, 1984.

Opinion on Denial of Reconsideration July 26, 1984.

Lynn M. Luker, Adams & Reese, New Orleans, La., for Noble Drilling Corp.

Clarence A. Frost, Faris, Ellis, Cutrone & Gilmore, New Orleans, La., for Anadarko Production Company.

SHAW, District Judge.

RULING

This matter comes before the Court on the motion of Noble Drilling Corporation for summary judgment in its favor on its cross claim for contractual indemnity from Anadarko Production Company. The plaintiff in this suit, David Hale, alleges that he was injured while working aboard the M/V C Crusader. At the time of this alleged accident, Noble was acting as a drilling contractor for Anadarko on a fixed platform located on the Outer Continental Shelf off the coast of Texas. The M/V C Crusader and her crew were time-chartered to Anadarko by Co-Mar Offshore Corporation to provide supplies for the drilling rig. Hale has brought suit against Co-Mar, a related entity, Noble and Anadarko under the Jones Act and under the doctrine of unseaworthiness. As Hale has requested a jury trial, it must be presumed that he is bringing the Jones Act claim on the "law side" and is pending the maritime claim of unseaworthiness thereto.

The indemnity clause in the Noble-Anadarko drilling contract provides that Anadarko will indemnify and defend Noble against claims brought by employees of Anadarko and its subcontractors. The indemnity obligation runs from Anadarko to Noble without regard to whether Noble was itself negligent. It remains undisputed that this indemnity clause applies to Hale's claim against Noble.¹ Thus, Noble will be entitled to defense and indemnity from Anadarko if the clause is otherwise enforceable.

Article 32 of the Noble-Anadarko contract provides that the rights and obligations under the agreement will be determined according to Oklahoma law. An agreement in a drilling contract to indemnify an indemnitee against the consequences of its own negligence is valid under Oklahoma law. See Kelly-Springfield Tire Co. v. Mobil Oil Corp., 551 P.2d 671 (Okla.App. 1976). If Texas law were to apply, on the other hand, the indemnity agreement would probably be invalid under Tex.Civ.Stat.Ann. art. 2212b, which provides in pertinent part:

Except as specified in Section 4 of this Act, a covenant, promise, agreement, or understanding contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water, or mine for any mineral, is void and unenforceable if it purports to indemnify the indemnitee against loss or liability for damages arising from either death or bodily injury to persons, or injury to property, or any other loss, damage, or expense arising from either death or bodily injury, injury to property, or loss, damage, or expense, which is caused by or results from the sole or concurrent negligence of the indemnitee, or an agent or employee of the indemnitee, or an independent contractor who is directly responsible to the indemnitee.

Tex.Civ.Stat.Ann. art. 2212b. Accordingly, Anadarko urges that the contractual choice of Oklahoma law is ineffective because its application here would violate a fundamental policy of the state of Texas against indemnity for an indemnitee's negligence under a drilling contract.

Yet Anadarko notes that there is an initial question as to which jurisdiction's choice-of-law principles will apply to reach this result. Louisiana choice-of-law principles might apply because the parties on the cross-claim are of diverse citizenship and the Court is geographically situated in Louisiana. Cf. Delhomme Industries, Inc. v. Houston Beechcraft, 669 F.2d 1049 (5th Cir.1982) (Louisiana choice-of-law rules applied to main demand in diversity action). Or federal choice-of-law rules might apply because the cross-claim is ancillary to a federal-question claim. Texas law as surrogate federal law under the Outer Continental Shelf Lands Act, 43 U.S.C. § 1333, stands as another possibility. Cf. Gulf Offshore Company v. Mobil Oil Corporation, 594 S.W.2d 496 (Tex.Civ.App.1979), aff'd in part, vacated in part on other grounds, 453 U.S. 473, 101 S.Ct. 2870, 69 L.Ed.2d 784 (1980) (Louisiana law applied to indemnity issues where an OCS platform worker was injured on a crewboat nearby). Anadarko maintains that the rule is the same and that the contractual choice of Oklahoma law is ineffective in this situation regardless of which body of law applies. The Court concludes, however, that Noble's indemnity claim arises out of the performance of a maritime obligation and that it therefore falls within the admiralty jurisdiction. Thus, the critical inquiry focuses not upon Texas law and policy, but upon maritime law and policy.

As a general rule, an agreement governing drilling operations on a fixed offshore platform is not a maritime contract. Such an agreement is usually governed by either state law or state law as surrogate federal law under the Outer Continental Shelf Lands Act.² Yet admiralty law recognizes that not all contracts are either strictly maritime or strictly nonmaritime. A "mixed contract" results where the parties agree to perform both maritime and nonmaritime services in the same contract. The separable maritime elements of an otherwise nonmaritime contract are subject to maritime, rather than state, law. Thus, if the injury occurs in the performance of a maritime obligation, the subsidiary indemnity and choice of law provisions will be subjected to scrutiny under maritime law. See generally Note, Contractual Indemnity under Maritime and Louisiana Law, 43 La.L.Rev. 189, 198-99 (1982).

In the case at bar, Anadarko agreed to furnish a supply boat under Article 14 and Exhibit C-2 of the drilling contract. An agreement to transport people and supplies in a vessel to and from an offshore drilling rig is a maritime contract. Ardoin v. Union Oil Company, 226 F.Supp. 192 (W.D.La.1964). Anadarko therefore undertook a maritime obligation when it agreed to furnish a vessel for transporting supplies to the platform. The plaintiff's alleged injury occurred in the performance of this maritime obligation. Thus, the contractual indemnity obligation arising out of this activity, and the choice of law provision pertaining to this activity, are governed by maritime law.³

Under admiralty law, the law of the state chosen by the parties to govern their contractual rights and duties will be applied unless either (a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of the jurisdiction which would provide the rule of decision for the particular issue involved in the absence of an effective contrary choice of law by the parties.⁴ Here, Oklahoma has a substantial relationship to these parties because Noble is an Oklahoma corporation. See Restatement (Second) of Conflict of Laws § 187, comment f, at 567 (1971). As for public policy considerations, the Court must look to those underlying admiralty law because maritime rules of decision would apply in the absence of a choice of Oklahoma law. An agreement to indemnify an indemnitee against the consequences of his own negligent act does not violate any fundamental policy of maritime law. E.g., Corbitt v. Diamond M Drilling Co., 654 F.2d 329, 333 (5th Cir.1981). All that is required is that such an agreement be clearly expressed in unequivocal terms. Id. Here, the indemnity clause contains a clear and unequivocal expression of the intent to indemnify Noble against the consequences of its own negligence. Cf. Transcontinental Gas Pipe Line Corporation v. Mobile Drilling Barge, 424 F.2d 684, 692 (5th Cir. 1970) (the opinion presents a phrase that is strikingly similar to the one in the case at bar as being more than sufficient). Thus, the contractual choice of Oklahoma law is effective. As noted earlier, Noble can enforce the indemnity agreement under Oklahoma law.

Accordingly, the motion of Noble Drilling Company for summary judgment in its favor on its cross-claim for contractual indemnity from Anadarko Production Company is GRANTED.

ON RECONSIDERATION

Anadarko Production Company moves for reconsideration of the Court's ruling granting Noble Drilling Corporation's motion for summary judgment on its claim for contractual indemnity. For the reasons set forth below, the motion for reconsideration is denied. The Court has expedited disposition of the motion in order to give the parties ample opportunity to pursue this novel issue before the Fifth Circuit. The Court will amend the previously rendered judgment to permit an appeal under Federal Rule of Civil Procedure 54(b).

The Nature of the Obligation

Anadarko first contends that its obligation to provide a supply boat under Article 14 and Exhibit C-2 of the drilling contract is not maritime in nature, contrary to the Court's earlier holding in this regard. Anadarko seeks to characterize its agreement as a preliminary contract leading to the charter of a vessel. Anadarko argues that its agreement is therefore nonmaritime, just as agreements to make a charter party or to act as an agent for the procurement of a charter are nonmaritime. See Christman v. Maristella Compagnia Naviera, 293 F.Supp. 442, 443-44 (S.D.N.Y. 1968); The Thames, 10 F. 848 (S.D.N.Y. 1881).

The Court had examined Christman, The Thames and similar cases before rendering its earlier ruling and did not find them controlling. The agreement in the Noble-Anadarko drilling contract is unlike those found in Christman and other cases. Anadarko did not agree to make a charter party nor did it agree to act merely as an agent for Noble for the procurement of a charter. Anadarko quite simply and quite directly agreed to...