McCall v. Columbia Gas Development Corp.
| Decision Date | 24 January 1986 |
| Docket Number | Civ. A. No. 83-3004. |
| Citation | 635 F. Supp. 49 |
| Parties | Charles McCALL v. COLUMBIA GAS DEVELOPMENT CORPORATION, et al. |
| Court | U.S. District Court — Western District of Louisiana |
Anthony D. Moroux, Domengeaux & Wright, Lafayette, La., for plaintiff.
John E. McElligott, Jr., Davidson, Meaux, Sonnier & McElligott, Lafayette, La., for Columbia Gas Development.
John A. Jeansonne, Jr., Jeansonne & Briney, Lafayette, La., for Maryland Casualty Co. and Consolidated Operating Co.
Susan A. Daigle and Edwin C. Preis, Jr., Preis, Kraft, LaBorde & Daigle, Lafayette, La., for PBW, Inc. and National Union Ins. Co. of Pittsburg.
W. Marvin Hall, Hailey, McNamara, Hall, Larmann & Papale, Metairie, La., for PBW, Inc.
Michael G. Lemoine, Mouton, Roy, Carmouche, Bivins & Henke, Lafayette, La., for intervenor American Mut. Liability.
RULING ON MOTIONS OF THIRD PARTY DEFENDANTS FOR SUMMARY JUDGMENT
This matter comes before the Court upon the motions of third party defendants, PBW, Inc., National Union Fire Insurance Company of Pittsburgh, PA, Consolidated Operating Company, Inc. and Maryland Casualty Company for summary judgment to enter on their behalves as to the third party complaint of Columbia Gas Development Corporation. In its third party complaint, Columbia seeks indemnity and/or contribution from third party defendants arising from their alleged contractual obligations and/or tortious conduct.
Charles McCall was allegedly injured while in the course of painting and sandblasting an offshore drilling platform, located on the outer Continental Shelf adjacent to the State of Louisiana, owned by Columbia and operated by Consolidated on or about July 28, 1983. McCall's employer, PBW, had contracted with Columbia "to furnish labor, equipment and materials necessary to do blasting and painting" on the platform, while Columbia had contracted with Consolidated to operate the platform. McCall initiated the present action, alleging negligence on the part of Columbia, later amending his complaint to allege negligence also on the part of Consolidated as a direct defendant. In its answer to the complaint, filed prior to plaintiff's amended complaint, Columbia included the instant third-party complaint against PBW and its insurer, National Union Fire Insurance Co. of Pittsburgh, PA hereinafter collectively referred to as PBW, as well as Consolidated and its insurer, Maryland Casualty Company hereinafter collectively referred to as Consolidated. In that third-party action, Columbia contends that PBW, Consolidated and their insurers are obligated to indemnify and defend it pursuant to the contracts in effect between them, and further alleges indemnity and/or contribution on the basis of PBW's and Consolidated's tortious negligence.
PBW and Consolidated have now filed for summary judgment on the ground that the indemnity provision of the contract in effect between the relative parties is null and void in accordance with the Louisiana Oilfield Anti-Indemnity Act, LRS 9:2780. Moreover, PBW asserts that Columbia's tort claim for contribution and/or indemnity is barred by the exclusivity provision set forth in 33 U.S.C. § 905(a).
The law is well-established that the Louisiana Oilfield Anti-Indemnity Act "OAIA" applies where, as here, the incident giving rise to the complaint occurred on a stationary drilling platform on the outer Continental Shelf adjacent to the State of Louisiana.1 See Mills v. Zapata Drilling Corp., 722 F.2d 1170, 1174 (5th Cir.1983); Moser v. Aminoil U.S.A., Inc., 618 F.Supp. 774 (W.D.La.1985). Columbia contends, however, that Texas law, rather than Louisiana law, should govern the dispute insofar as the effect of the indemnification agreements between the respective parties.
In considering the choice-of-law issue raised by Columbia, the Court is bound to apply the conflicts-of-law rules of Louisiana. Hebert v. Kerr-McGee Corp., 618 F.Supp. 767, 769-72 (W.D.La.1985).2 Louisiana choice-of-law rules employ the interest analysis of the Restatement, Second, Conflict of Laws. Lee v. Hunt, 631 F.2d 1171, 1175-76 (5th Cir.1980). Under that law, in determining which state has the most significant interests, the Court is to consider, inter alia, the place of contracting, place of negotiation, place of performance, location of the subject matter of the contract at issue, and the domicile, place of incorporation and place of business of the parties. Columbia contends that under this approach, Texas has the most significant interests because it is Columbia's principal place of business and because the contracts at issue were "negotiated and perfected" there. The Court finds Columbia's limited analysis to be wholly unpersuasive. While Columbia may have its principal place of business in Texas, both PBW and Consolidated are Louisiana corporations, and all three corporations conduct business within Louisiana. Moreover, the place of the contract's performance is on the outer Continental Shelf adjacent to the State of Louisiana. While Texas may have an interest in having its law apply to issues of the interpretation of contracts negotiated within its borders, those issues involving the validity of contractual provisions more significantly involve the interests of the place of performance. See, e.g., Keene Corp. v. Insurance Co. of North America, 597 F.Supp. 934, 941 (D.D.C. 1984). All parties clearly understood that the place of performance was to be within Louisiana and the adjacent outer Continental Shelf, as the contract between Columbia and PBW, as well as the contract between Columbia and Consolidated, specifically provided: "The work to be performed hereunder shall be undertaken solely within the State of Louisiana and the outer Continental Shelf of the Gulf of Mexico subject to federal jurisdiction under the OCS Lands Act, as amended, and/or the maritime jurisdiction of the U.S. Federal Courts." While the fixed platform on which McCall allegedly sustained his injury was not physically within the State of Louisiana, Louisiana yet has a significant interest in the application of its substantive law to those structures adjacent to its coast. This interest was recognized to have major significance in the congressional hearings on the OCSLA and has been noted by the United States Supreme Court. Rodrigue v. Aetna Casualty and Surety Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969); see generally, Hearings before the Cong., 1st Sess., on S. 1901 (1953). The "special relationship" between the men working on fixed platforms on the outer Continental Shelf and the adjacent shore to which they commute to visit their families was of primary consideration in the passage of 43 U.S.C. § 1333(a)(2)(A), which makes the substantive law of the adjacent state applicable to the fixed platform on the outer Continental Shelf to the extent that it is not inconsistent with federal statutory law. As such, Louisiana clearly has the most significant interest in the present dispute, and its substantive law therefore governs the case.
Columbia argues that even if Louisiana law is to be applied under the OCSLA, the contracts at issue should not be subject to the application of the Louisiana OAIA because the agreement to sandblast and paint the fixed drilling platform does not sufficiently pertain to "any operations related to the exploration, development, production, or transportation of oil, gas, or water, or drilling for minerals ..., including but not limited to ... rendering services ... in connection with any well ... or other structure ... or ... any such work or services or any act collateral thereto. ..."3 Columbia's position is meritless in view of the breadth of the quoted language of L.R.S. 9:2780 C, and this Court finds that both of the agreements at issue most certainly concern the rendering of services in connection with a fixed drilling platform and they therefore fall within the purview of the OAIA.
Columbia furthermore contends that, in any event, the OAIA "does not nullify the indemnity agreements in their entirety" because it provides that an oilfield agreement "is void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages ... caused by or resulting from the sole or concurrent negligence or fault (strict liability) of the indemnitee...."4 While it is clear that no defense or indemnity is owed where the indemnitee is at least partially at fault, the principal issue is essentially whether or not the OAIA prohibits the indemnitor from being obliged to pay the costs of defense if the indemnitee is ultimately found free from fault by the trier of fact. In Aucoin v. Pelham Marine, Inc., 593 F.Supp. 770 (W.D.La.1984), Senior District Judge Hunter held that if the OAIA is applicable, not only are the indemnity provisions of the contract invalidated, but any duty to defend is also nullified and the indemnitor owes no duty to defend the indemnitee. Id. at 776-77. This Court has subsequently followed and embellished this rationale in the case of Moser v. Aminoil, U.S.A., Inc., 618 F.Supp. 774 (W.D.La.1985). Other federal district courts, however, have ruled in accordance with Home Insurance Co. v. Garber Industries, Inc., 588 F.Supp. 1218 (W.D.La.1984), wherein Judge Shaw held that the OAIA nullified the indemnity agreements to the extent that they purported to require the indemnitors to indemnify and defend the indemnitees against the consequences of the indemnitees' own negligence, but that the indemnitees would yet be entitled to the costs of defense if the jury subsequently found that the indemnitees were not negligent and were free from fault. Id. at 1222-23. Under this line of reasoning, a factual question as to the existence or absence of Columbia's sole or concurrent negligence or fault would preclude summary...
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