In re Offshore Oil Servs.
| Docket Number | Civil Action 21-1522 |
| Decision Date | 22 March 2023 |
| Parties | IN THE MATTER OF OFFSHORE OIL SERVICES, INC. |
| Court | U.S. District Court — Eastern District of Louisiana |
SECTION “E” (2)
ORDER AND REASONS
Before the Court is a Motion for Summary Judgment (“Motion”) filed by Third Party Defendant Island Operating Company, Inc. (“IOC” or “Defendant”).[1] Third Party Plaintiff Offshore Oil Services, Inc. (“Offshore” or “Plaintiff”) opposes.[2] IOC filed a reply.[3]Offshore filed a sur-reply with leave of Court.[4] The Court held a status conference with the parties on February 16, 2023, where, inter alia IOC's Motion was discussed.[5] During the status conference, the Court granted Offshore further leave of Court to file a second sur-reply,[6] which Offshore did.[7] IOC then filed a supplemental reply.[8] For the reasons that follow, IOC's Motion is GRANTED IN PART and DENIED IN PART.
This action arises out of a limitation of liability petition filed by Offshore on August 11, 2021.[9] Offshore is the owner and operator of the M/V Anna M (“vessel”) seeking exoneration from and/or limitation of liability for an alleged injury that occurred to claimant, Tyrone Felix, during a personnel basket transfer from the deck of the vessel to a Fieldwood Energy, LLC (“Fieldwood”) platform, an offshore oil and gas production platform.[10] Felix, an employee of IOC, alleged he sustained injuries to his knee, neck, and back.[11] Felix has filed a claim against Offshore in the underlying limitation action,[12] as has IOC's federal and state compensation insurer, Louisiana Workers' Compensation Corporation, in connection with Felix's alleged incident.[13]
On May 26, 2022, Offshore filed a third-party demand against IOC,[14] in which Offshore brings three claims pursuant to the Master Services Contract (“MSC”) between IOC and Fieldwood: (1) a claim for indemnity for the claims brought by Felix and Louisiana Workers' Compensation Corporation; (2) a claim for indemnity insurance coverage “for any damages” Offshore “may be found to” owe; and (3) a claim for defense costs.[15] With respect to defense costs and indemnification, the MSC includes an indemnity provision, pursuant to which IOC agrees to defend and indemnify, inter alia, Offshore for personal injuries sustained by IOC's respective employees regardless of fault.[16]Specifically, the MSC provides:
With respect to indemnity insurance coverage, the MSC also provides “[IOC] agrees that it will support its [] indemnity obligations . . . with insurance ”[21]
On July 8, 2022, IOC filed a Motion to Dismiss Third-Party Demand or, in the alternative, Motion for Summary Judgment (“MTD/MSJ”).[22] On July 28, 2022, the Court held a status conference with the parties to discuss IOC's MTD/MSJ.[23] IOC “informed the Court” of its intention to withdraw its MTD/MSJ because “[t]he parties agree[d]” a motion for “summary judgment [wa]s the appropriate vehicle for determin[ing] the issues raised in IOC's [MTD/MSJ] and that additional discovery [wa]s needed.”[24] Thereafter, upon joint motion of the parties, the Court put in place a discovery order “outlining the discovery needed prior to submission of [IOC's] motion for summary judgment.”[25] That period of discovery has concluded, and IOC now moves for summary judgment,[26]asserting the defense, indemnity, and insurance coverage provisions in the MSC are null and void under the Louisiana Oilfield Indemnity Act (“LOIA”). Offshore opposes.[27]
Summary judgment is appropriate only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”[28] “An issue is material if its resolution could affect the outcome of the action.”[29]When assessing whether a material factual dispute exists, the Court considers “all of the evidence in the record but refrains from making credibility determinations or weighing the evidence.”[30] All reasonable inferences are drawn in favor of the nonmoving party.[31]There is no genuine issue of material fact if, even viewing the evidence in the light most favorable to the nonmoving party, no reasonable trier of fact could find for the nonmoving party, thus entitling the moving party to judgment as a matter of law.[32]
If the dispositive issue is one on which the moving party will bear the burden of persuasion at trial, the moving party “must come forward with evidence which would ‘entitle it to a directed verdict if the evidence went uncontroverted at trial.'”[33] If the moving party fails to carry this burden, the motion must be denied. If the moving party successfully carries this burden, the burden of production then shifts to the nonmoving party to direct the Court's attention to something in the pleadings or other evidence in the record setting forth specific facts sufficient to establish that a genuine issue of material fact does indeed exist.[34]
If the dispositive issue is one on which the nonmoving party will bear the burden of persuasion at trial, the moving party may satisfy its burden of production by either (1) submitting affirmative evidence that negates an essential element of the nonmovant's claim, or (2) demonstrating there is no evidence in the record to establish an essential element of the nonmovant's claim.[35] When proceeding under the first option, if the nonmoving party cannot muster sufficient evidence to dispute the movant's contention that there are no disputed facts, a trial would be useless, and the moving party is entitled to summary judgment as a matter of law.[36] When, however, the movant is proceeding under the second option and is seeking summary judgment on the ground that the nonmovant has no evidence to establish an essential element of the claim, the nonmoving party may defeat a motion for summary judgment by “calling the Court's attention to supporting evidence already in the record that was overlooked or ignored by the moving party.”[37] Under either scenario, the burden then shifts back to the movant to demonstrate the inadequacy of the evidence relied upon by the nonmovant.[38] If the movant meets this burden, “the burden of production shifts [back again] to the nonmoving party, who must either (1) rehabilitate the evidence attacked in the moving party's papers, (2) produce additional evidence showing the existence of a genuine issue for trial as provided in Rule 56(e), or (3) submit an affidavit explaining why further discovery is necessary as provided in Rule 56(f).”[39] “Summary judgment should be granted if the nonmoving party fails to respond in one or more of these ways, or if, after the nonmoving party responds, the court determines that the moving party has met its ultimate burden of persuading the court that there is no genuine issue of material fact for trial.”[40]
[41]
FACTS[42]
The following facts are undisputed. In its third-party demand, Offshore seeks defense and indemnification from IOC for claims brought by Tyrone Felix against Offshore for bodily injury alleged to have been caused by Offshore.[43] To this end, Offshore's third-party demand seeks to enforce the January 1, 2014 MSC between Fieldwood (platform owner/operator) and IOC (Tyrone Felix's employer).[44]
Under the MSC, together with the work order applicable to the work of Tyrone Felix, IOC provided production operators to man Fieldwood offshore production platforms producing oil and/or gas in the West Delta 90 and 103 blocks, which work included, inter alia, controlling and/or monitoring wellheads and casing pressures on individual wells, conducting pressure tests, using test separators, checking for leaks on production equipment, and opening and closing wellheads and production valves.[45]Tyrone Felix was called out to work in the West Delta area of the Gulf of Mexico, which is located on the Outer Continental Shelf, off the coast of the State of Louisiana.[46] IOC did not expect the substantial use of a vessel to complete the MSC and work order.[47]
Offshore argues IOC's motion for summary judgment should be denied because there are disputed issues of material fact. First IOC and Offshore dispute the extent to which the terms of the MSC and applicable work order contemplated additional work, beyond platform work, involving the use of a vessel. Under the terms of the MSC, IOC contends the contract contemplated a vessel only...
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