Porche v. Gulf Mississippi Marine Corporation

• Decision Date: 20 January 1975
• Docket Number: Civ. A. No. 74-771.
• Citation: 390 F. Supp. 624
• Parties: Horace P. PORCHE, Individually and as administrator of the Estate of Gerald Porche, and Irene M. Porche, Plaintiffs, v. GULF MISSISSIPPI MARINE CORPORATION et al., Defendants.
• Court: U.S. District Court — Eastern District of Louisiana

390 F. Supp. 624

Horace P. PORCHE, Individually and as administrator of the Estate of Gerald Porche, and Irene M. Porche, Plaintiffs, v. GULF MISSISSIPPI MARINE CORPORATION et al., Defendants.

Civ. A. No. 74-771.

United States District Court, E. D. Louisiana.

January 20, 1975.

COPYRIGHT MATERIAL OMITTED

Huntington B. Downer, Jr., Joseph L. Waitz, Houma, La., for plaintiffs.

H. Edward Weidlich, Jr., New Orleans, La., for defendant Allen Welding.

Winston E. Rice, New Orleans, La., for defendant Coastal Marine, Inc.

Clarence A. Frost, Stanley Loeb, New Orleans, La., for defendant Fluor Ocean Services, Inc.

Terrence C. Forstall, George A. Frilot, III, George B. Matthews, New Orleans, La., for defendant Gulf Mississippi Marine.

ALVIN B. RUBIN, District Judge:

The plaintiffs brought this suit to recover damages suffered as a result of the death of their son, Gerald Porche. The decedent was employed by Allen Welding; Allen, pursuant to a contract with Fluor Ocean Services, supplied Porche to work aboard a barge floating offshore and do welding on a pipeline being laid by the barge, replacing a regular Fluor employee who was absent from work. Fluor was to pay Allen an hourly rate for these services beginning when Porche left his home. Allen in turn paid Porche's wages, withheld income taxes and FICA payments.

It was Fluor's responsibility to provide transportation from a Louisiana port to its barge, and it contracted with Coastal Marine to supply this service. Coastal transported Porche and several other persons to the barge on a crewboat. Porche met his death while transferring from the crewboat to the Fluor barge. The plaintiffs sued Fluor, under the Jones Act, on the basis their son had been its borrowed servant, and Coastal for negligence under the general maritime law. Coastal cross-claimed against Fluor for indemnity under its contract with Fluor, and Fluor sought indemnity from Allen Welding under the Allen-Fluor contract. The trial of the case was to a jury with respect to arising claims under the Jones Act; the court tried the general maritime claims against Coastal and the cross-claims and the third-party demand.

After the court had directed a verdict that the decedent had been a borrowed servant of Fluor, the jury returned a verdict finding that Fluor had itself been negligent, and that it was responsible also vicariously for the acts of Coastal. The jury also found Porche to have been contributorily negligent and found that his own negligence was 45% responsible for his death. The court found Coastal to have been independently negligent and entered a judgment casting both defendants; the cross-claims of Coastal against Fluor and the third-party claim of Fluor against Allen now must be considered.

Since it pertains to maritime employment, the indemnity contract is maritime in nature, and its construction is controlled by admiralty principles, not state law. Transcontinental Gas Pipe L. Corp. v. Mobile Drill. Barge, 5 Cir. 1970, 424 F.2d 684; Halliburton Company v. Norton Drilling Company, 5 Cir. 1962, 302 F.2d 431; A/S J. Ludwig Mowinckels Rederi v. Commercial Stevedoring Co., 2 Cir. 1958, 256 F.2d 227. Where one party is at fault, and the other free of all fault, the indemnity obligation is easy to interpret, and the express clause may, indeed, add little to the principles of implied indemnity. Where, however, there is some other combination of fault —non-fault, and the parties have not expressly foreseen the ultimate turn of events, the intention of the clauses becomes more difficult to divine. In a contract between shipowner and contractor either party may be an indemnitor or an indemnitee, and frequently, each party will owe and receive indemnity in reciprocal terms. Where a third person is injured, we may hypothesize the possible combinations of events as follows:

1. Neither party is at fault and the plaintiff does not recover. Here the issue ultimately is merely which party bears the expense of litigation.

2. The shipowner is solely at fault (or is solely responsible because of liability without fault, for example, for unseaworthiness of the vessel), and the contractor is therefore not cast in judgment.

3. The contractor is solely at fault and the shipowner is not cast in judgment.

4. The contractor is solely at fault but the shipowner is cast in judgment vicariously.

5. Neither party is at fault but one or both are cast in judgment vicariously because of the fault of some third person.

6. Both shipowner and contractor are at fault.

The indemnity clause, as applied to each of these circumstances is a risk assignment or risk shifting device. As noted in Cole v. Chevron Chemical Company—Oronite Division, E.D.La.1971, 334 F.Supp. 263, 266, reversed in part on other grounds, 5 Cir. 1973, 477 F.2d 361:

In the usual tort situation, there is no prior relationship between the potential tort defendant and his prospective indemnitor. Hence they have no opportunity to alter the distribution of risks. But where a principal employs a contractor, the contract between them may embrace not only the work to be done and the price to be paid, but also the risk of tort claims that may arise. See 2 Williston on Contracts, ¶ 345 (3d ed. 1959), 1 Harper and James, The Law of Torts, ¶ 10.2, at 723 (1956). By contract either party may relieve the other from the duty of contribution or from the duty of indemnity. And either may undertake a duty to contribute or indemnify where none would otherwise exist.

Where one party alone is at fault, the principles of contractual interpretation were set for this circuit in Batson-Cook Company v. Industrial Steel Erectors, 5 Cir. 1958, 257 F.2d 410:

While it need not be done in any particular language or form, unless the intention is unequivocally expressed in the plainest of words, the law will consider that the parties did not undertake to indemnify one against the consequences of his own negligence. 257 F.2d at 412.

The Batson-Cook rule has been expanded to fit the joint-fault situation. Thus the court said in Transcontinental Gas Pipe L. Corp. v. Mobile Drill. Barge, supra, 424 F.2d at 692,

Although in Batson-Cook the indemnitor was not negligent and the damage was caused solely by the negligence of the indemnitee, the rule requiring specificity of the intent to indemnify for the indemnitee's own negligence is equally applicable in situations where, as here, the concurring negligence of the indemnitee and indemnitor causes the damage. See United States v. Seckinger, 5 Cir. 1969, 408 F.2d 146, reversed on other grounds, 397 U.S. 203, 90 S.Ct. 880, 25 L.Ed.2d 224 October 13, 1969.

As noted in Transcontinental Gas Pipe L. Corp. v. Mobile Drill. Barge, supra, the contract need not contain talismanic words to shift the indemnitee's share of the liability where joint fault is found. But there must be something to reflect that intention either in the contract language or the surrounding circumstances ("in the realities of the situation from the standpoint of the parties at the time the contract was made," Transcontinental Gas Pipe L. Corp. v. Mobile Drill. Barge, 424 F.2d at 692).

The question is not one merely of finding a definition of the terms used by consulting dictionary and decision, but of construing a contract intended to effect a desired economic result. Hence it must be accomplished by reading the contract and its accompanying documents, such as contractually-required insurance, as a whole, and in the light of the situation of the parties and the purpose of the indemnity clause. Compare Day v. Ocean Drilling and Exploration Co., E.D.La.1973, 353 F.Supp. 1350, 1351. Thus, it is appropriate to consider whether the contractor is undertaking to supply a completed result or is merely furnishing labor, to be directed by the other parties. See Tidewater Oil Company v. The Travelers Ins. Co., 5 Cir. 1972, 468 F.2d 985, 987. The word "employee" may, or may not, embrace a borrowed servant, depending on the intention of the parties and whether under their arrangement the term "employee" was intended to reflect that person's Jones Act status or whether it was designed merely to adopt the conventional definition by looking only to the payroll relationship.

We apply these principles in resolving the issues before us:

COASTAL'S CROSS-CLAIM AGAINST FLUOR

Coastal's indemnity claim is based on a contract clause that reads in part:

Fluor assumes all risk of liability in connection with injury or death of any of its employees, its authorized agents or representatives acting as a crew aboard the BARGE as shipriders aboard the TUG, or CREWBOAT and FLUOR agrees to indemnify and hold OWNER harmless and its subsidiary corporations harmless against and from all claims, demands or causes or actions which may be asserted by any such crew member or shiprider against OWNER and/or the TUG or CREWBOAT arising out of or in connection with any such injury or death, however caused and whether resulting in part from the negligence of OWNER, but excluding OWNER's soul sic negligence or fault.

Fluor claims that the decedent was not its "employee" as the term is used in this clause; Porche was an employee of Allen for the payment of wages and withholding purposes, thus the entire clause is inapplicable. This would be an incongruous construction of the clause whether its construction be viewed narrowly as merely a question of defining the word "employee" or broadly in the light of the functional relationship of the various parties.

The clause deals with indemnity for personal injury and death claims, not the other aspects of the employment relationship. It therefore seems appropriate to define the term "employee" in the context of personal injury liability. For this purpose, Porche was Fluor's employee because Fluor had control over his activities and he was a member of the crew of the Fluor barge. As between Fluor and Coastal, all of the workers employed on the Fluor barge under the...