Lloyds of London v. Transcontinental Gas Pipe Line Corp., 95-31256
| Decision Date | 12 December 1996 |
| Docket Number | No. 95-31256,95-31256 |
| Citation | 101 F.3d 425 |
| Parties | LLOYDS OF LONDON, Plaintiff-Counter-Defendant-Appellant, v. TRANSCONTINENTAL GAS PIPE LINE CORPORATION, Defendant-Counter-Claimant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Edward S. Johnson, Salvador A. Pusateri, Johnson, Johnson, Barrios & Yacoubian, New Orleans, LA, for Lloyds of London.
Gary A. Bezet, Barrye Panepinto Miyagi, Kean, Miller, Hawthorne, D'Armond, McCowan & Jarman, Baton Rouge, LA, for Transcontinental Gas Pipe Line Corporation.
Appeal from the United States District Court for the Western District of Louisiana.
Before REYNALDO G. GARZA, DeMOSS and PARKER, Circuit Judges.
This case stems from a 1987 contract for sandblasting and painting services in offshore oilfields between Harrington Enterprises, Inc. ("Harrington"), a sandblasting and painting services contractor, and Transcontinental Gas Pipe Line Corporation ("Transco"), a corporation that owns and operates natural gas pipelines. For the second time, this case presents us with a question regarding the applicability of the Louisiana Oilfield Anti-Indemnity Act ("LOAIA") and its prohibition on indemnification provisions to this particular agreement. 1 Pursuant to our holding in Lloyds I, if this contract concerned work either at a particular meter, the 133A meter, or upstream of the 133A meter, the LOAIA applied and voided the contract's indemnity provision. In Lloyds I, we focused on whether or not the contract concerned work on the 133A meter. Now, we focus on whether or not the contract concerned work upstream of the 133A meter. Lloyds appeals the district court's judgment in favor of Transco, contending three sources of error: (1) that the district court erred by misstating our previous holding, (2) that the district court erred in finding that Lloyds submitted no evidence that the contract covered work upstream of the 133A meter, and (3) that the district court should not have assigned Lloyds the burden of proof. Because the district court clearly erred as a matter of law in its interpretation of the contract, we reverse its judgment.
Harrington was hired by Transco in 1987 to perform sandblasting and painting on Transco's natural gas pipelines and equipment located offshore of the Louisiana and Texas coasts. Harrington and Transco entered into a contract which called for Harrington to furnish:
Labor and equipment for sandblasting and painting platform structures and platform piping [and] also to furnish labor and equipment to perform various operations and maintenance functions as directed by [Transco's] authorized representative.
The contract also contained an indemnity clause that called for Harrington "to protect, indemnify and save [Transco] harmless from and against all claims, demands, and causes of action of every kind and character arising in favor of [Harrington's] employees" and to list Transco as an additional assured in a comprehensive general liability policy issued to Harrington by Lloyds.
This action arose from injuries suffered by one of Harrington's employees in 1987 who allegedly fell from the top of a sandpot while sandblasting and painting a Transco riser located on a structure in Block 133 of the Brazos area off the coast of Texas. The employee was on a boat at the time which was tied to the 133A platform. On the 133A platform, Transco owned and maintained three incoming pipelines, a meter station, a meter, and two outgoing pipelines.
Transco demanded that Harrington and its insurer defend and indemnify Transco for the Harrington employee's injuries. Lloyds denied Transco's claim for defense and indemnity and filed this suit for declaratory judgment in district court, alleging that the LOAIA rendered the indemnity provisions null and void. Transco responded with a reconventional demand against Lloyds, seeking a defense to and indemnity from the injured employee's action. Both parties then filed cross motions for summary judgment. The district court granted Lloyds' motion for summary judgment and denied Transco's motion. Underwriters at Lloyd's, London v. Transcontinental Gas Pipeline Corp., 847 F.Supp. 48 (W.D.La.1994).
Subsequently, Transco filed an appeal to this Court. We disagreed with the district court that there was sufficient evidence to conclude that the contract covered work to be conducted on the 133A meter. Because the contract did not refer specifically to meters, we considered the affidavit of Winfard Treme, Transco's district manager, as the sole summary judgment evidence addressing the actual meter located on the 133A platform. In Treme's affidavit, he explained that the 133A meter was housed inside a small building on the platform and would ordinarily be painted by a Transco employee. Consequently, we found absent evidentiary support that the contract concerned work on the 133A meter, thus rendering insufficient an evidentiary basis for the district court's grant of summary judgment. We vacated the district court's summary judgment and remanded the case for further proceedings consistent with our opinion. See Lloyds I, 38 F.3d 193.
Upon remand, the district court ordered the case submitted on briefs and depositions. The district court entered judgment in favor of Transco on October 24, 1995, and issued an accompanying Memorandum Ruling, reasoning that Lloyds failed to carry its burden of proof that the contract contemplated work on the 133A meter. Following the district court judgment, Lloyds filed a motion for a new trial or alternatively to alter judgment in which Lloyds questioned the district court's judgment. The district court denied the motion on November 6, 1995, and issued a second Memorandum Ruling, setting forth additional, alternative reasoning. The district court stated: "Lloyds has not offered evidence that work was specifically done or contemplated on the upstream portion of the 'meter station.' "
Lloyds now appeals the district court's judgment in favor of Transco to this Court.
Lloyds contests the lower court's judgment on the basis that (1) the district court misstated our holding in Lloyds I by requiring that the contract's work be performed or
contemplated at the meter, and (2) that the district court erred in finding that Lloyds failed to submit evidence demonstrating that the contract pertained to work upstream of the 133A meter. Lloyds also raises a third issue for the first time on appeal, contending that the district court erred in assigning the burden of proof to Lloyds.
Lloyds argues for reversal on the basis that the district court misapprehended our holding in Lloyds I in its ruling, requiring that work be performed or contemplated at the 133A meter, rather than either at or upstream of the 133A meter. While the district court did articulate such an erroneous reading of Lloyds I in its first memorandum opinion, 2 it correctly apprehended our holding in its second memorandum opinion 3 in which it denied Lloyds' motion for a new trial or amended judgment. Thus, we decline to reverse on the basis of the district court's misstatement since the district court articulated the proper legal standard in its second opinion. See Fed.R.Civ.P. 61. Federal Rule of Civil Procedure 61 instructs that an error in a ruling shall not be the basis for disturbing a judgment unless the substantial rights of the parties are affected. Given that the district court took the opportunity to correct its statement of our holding, its erroneous misstatement in its first opinion was harmless. See Barber v. Ruth, 7 F.3d 636, 641 (7th Cir.1993) ().
In the previous incarnation of this case, we held that if the contract concerned work either at the 133A meter or upstream of the 133A meter, the contract qualified as "pertaining to a well" under the LOAIA. See Lloyds I, 38 F.3d at 197. Transco defends the district court's judgment by claiming that no work in such an area was "contemplated" by the agreement between Harrington and Transco. It contends that the contract only "contemplated" work on an actually directed basis and Lloyds failed to submit evidence that Harrington was actually directed to engage in any work in the area that we previously described as "pertaining to a well," that is, at or upstream from the 133A meter. See Id. In making this argument, Transco relies on the language of the contract: "Labor and equipment for sandblasting and painting platform structures and platform piping [and] also to furnish labor and equipment to perform various operations and maintenance functions as directed by [Transco's] representative" (emphasis added). Transco argues that Lloyds did not submit supporting evidence of actually directed work upstream of the meter, and so Lloyds appropriately lost at the district court.
This issue is a question of contractual interpretation and not one particular to the LOAIA. The parties' argument centers on whether or not their agreement pertained to the subject it describes, or only to what extrinsic evidence, several years after the work was performed, indicates was the work actually directed. The question posed now is a purely contractual one: the identity of the contract's subject matter.
Transco reads Lloyds I incorrectly. It misguidedly focuses its argument on our decision's use of the term "contemplate." Our use of that word was merely to point out that the summary judgment evidence offered no indication that work was either done on the 133A meter or that the contract covered work on the 133A meter. We did not suggest that the contract must be interpreted by looking to...
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