Quarternorth Energy LLC v. Supreme Offshore Servs., Inc.

• Docket Number: CIVIL ACTION NO. 22-1852
• Decision Date: 10 February 2023
• Citation: Quarternorth Energy LLC v. Supreme Offshore Servs., Inc., 655 F.Supp.3d 461 (E.D. La. 2023)
• Parties: QUARTERNORTH ENERGY LLC, et al. v. SUPREME OFFSHORE SERVICES, INC., et al.
• Court: U.S. District Court — Eastern District of Louisiana

655 F.Supp.3d 461

QUARTERNORTH ENERGY LLC, et al. v. SUPREME OFFSHORE SERVICES, INC., et al.

CIVIL ACTION NO. 22-1852

United States District Court, E.D. Louisiana

Signed February 10, 2023

James Denman Bercaw, King & Jurgens, L.L.C., New Orleans, LA, for Quarternorth Energy LLC, et al.

Martin S. Bohman, Harry E. Morse, Bohman Morse, LLC, New Orleans, LA, for Supreme Offshore Services, Inc.

Jessica Gensler, Blue Williams, LLC, Metairie, LA, Michael Wayne Maldonado, Rufus C. Harris, III, Corey Patrick Parenton, James A. Crouch, Jr., Jason R. Kenney, Metairie, LA, Staines, Eppling & Kenney, LLC, for Express Weld, LLC.

SECTION "R" (1)

ORDER AND REASONS

SARAH S. VANCE, UNITED STATES DISTRICT JUDGE

Before the Court are defendant Express Weld, LLC's ("Express Weld") motion for summary judgment,¹ plaintiffs' cross-motion for summary judgment against Express Weld,² and plaintiffs' motion for summary judgment against defendant Supreme Offshore Services, Inc. ("Supreme").³ For the following reasons, the Court DENIES Express Weld's motion for summary judgment and plaintiffs' cross-motion for summary judgment against Express Weld.⁴ The Court GRANTS plaintiffs' motion for summary judgment against Supreme.⁵

I. BACKGROUND

This case is a declaratory judgment action filed by plaintiffs Fieldwood Energy III, LLC, and QuarterNorth Energy, LLC, successors to Fieldwood Energy LLC ("Fieldwood"),⁶ in which they seek a judicial declaration regarding their obligation to provide defense and indemnity to defendants in a separate lawsuit.

On January 1, 2014, Fieldwood and non-party Kilgore Marine Services, LLC ("Kilgore") entered into a master time charter agreement, pursuant to which Kilgore agreed to act as a broker to help Fieldwood charter vessels for use in Fieldwood's oil and gas operations (the "Master Time Charter").⁷ A few months later, on May 13, 2014, defendant Supreme entered into a brokerage agreement with Kilgore, by which Supreme appointed Kilgore to be Supreme's agent for purposes of obtaining charters or similar work contracts for Supreme's vessels (the "Brokerage Agreement").⁸ Pursuant to these agreements, Kilgore ultimately facilitated Fieldwood's charter of the M/V PENNY F, a vessel owned and operated by Supreme.

Separately, on May 7, 2015, Fieldwood entered into a contract with defendant Express Weld pursuant to which Express Weld would perform various services to facilitate Fieldwood's oil and gas operations (the "Master Service Contract").⁹ One such service was permitting Fieldwood to use Express Weld's dock in Port Fourchon, Louisiana.¹⁰ On September 9, 2020, Joseph Pigott, Fieldwood's employee, slipped while disembarking from the M/V PENNY F and fell onto Express Weld's dock.¹¹ Pigott sued Supreme and Express Weld for damages arising from the injuries he sustained in the fall.¹²

Supreme and Express Weld both made written demands to plaintiffs for defense and indemnification for Pigott's claims.¹³ Plaintiffs then filed this action seeking a judicial declaration that Supreme's contractual defense and indemnity claims against plaintiffs have been released, and that Express Weld's contractual defense and indemnity claims against plaintiffs are void as a matter of law pursuant to the Louisiana Oilfield Indemnity Act (the "LOIA").¹⁴ In its answer, Supreme filed counterclaims for a declaratory judgment regarding plaintiffs' duty to defend, and for breach of plaintiffs' duty to defend and indemnify Supreme.¹⁵

Express Weld then moved for summary judgment.¹⁶ In its motion, Express Weld argues that the Master Service Contract requires plaintiffs to defend and indemnify it from Pigott's claims. It contends that the Master Service Contract is a maritime contract, so it is governed by federal maritime law rather than Louisiana law.¹⁷ Accordingly, it contends that the LOIA does not apply to the Master Service Contract.¹⁸ Plaintiffs opposed the motion, contending that the Master Service Contract is not a maritime contract, so Louisiana law governs the contract and provides that the indemnity provisions therein are legally void.¹⁹ Plaintiffs also filed a cross-motion for summary judgment on the same basis,²⁰ which Express Weld opposed.²¹

Plaintiffs also moved for summary judgment on their claim against Supreme.²² In support of their motion, plaintiffs contend that in Supreme's Brokerage Agreement with Kilgore, it broadly agreed to defend and indemnify vessel charterers, including Fieldwood. They contend that this provision of the Brokerage Agreement operates as a waiver of Supreme's counterclaims.²³ Supreme opposed plaintiffs' motion, contending that Fieldwood must provide defense and indemnification to Supreme pursuant to the indemnification provision in the Master Time Charter, which, it argues, takes priority over the indemnification provision in the Brokerage Agreement.²⁴

The Court considers the parties' arguments below.

II. LEGAL STANDARD

Summary judgment is warranted when "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." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). "When assessing whether a dispute to any material fact exists, [the Court] consider[s] all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence." Delta & Pine Land Co. v. Nationwide Agribusiness Ins., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but "unsupported allegations or affidavits setting forth 'ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment." Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2738 (2d ed. 1983)); see also Little, 37 F.3d at 1075. "No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." EEOC v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).

If the dispositive issue is one on which the moving party will bear the burden of proof 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.' " Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991) (quoting Golden Rule Ins. v. Lease, 755 F. Supp. 948, 951 (D. Colo. 1991)). "[T]he nonmoving party can defeat the motion" by either countering with evidence sufficient to demonstrate the "existence of a genuine dispute of material fact," or by "showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party." Id. at 1265.

If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324, 106 S.Ct. 2548. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for resolution. See, e.g., id.; Little, 37 F.3d at 1075 ("Rule 56 'mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.' " (quoting Celotex, 477 U.S. at 322, 106 S.Ct. 2548)).

III. DISCUSSION

A. Plaintiffs' Obligations vis-à-vis Express Weld

The Master Service Contract between Fieldwood and Express Weld provides, in relevant part, that the

Company hereby agrees to release, indemnify, protect, defend and hold harmless Contractor Group from and against any and all claims for . . . the injury, illness or death of any member of the Company Group . . . without regard to whether any such claim is caused, in whole or in part, by the negligence . . . or other fault (excluding only the gross negligence and intentional misconduct) of any member of the Contractor Group[.]²⁵

The Master Service Contract defines the "Company" as Fieldwood and the "Company Group" to include Fieldwood's employees, including Pigott.²⁶ It defines the "Contractor Group" to include Express Weld.²⁷ Express Weld claims that, based on the plain language of the indemnity provision in the Master Service Contract, plaintiffs are contractually obligated to defend and indemnify Express Weld from Pigott's claims.

Plaintiffs do not dispute that the plain language of the indemnification provision in the Master Service Contract covers Pigott's claims. Rather, they assert that the indemnification provision is void under LOIA,²⁸ which applies to agreements "pertaining to wells for oil, gas, or water" and "declare[s] null and void any provision in any [such] agreement which requires defense and/or indemnification, for death or bodily injury to persons, where there is negligence or fault . . . on the part of the indemnitee[.]" La. Rev. Stat. § 9:2780(A).

"If Louisiana law applies, the indemnity agreement is void as against public policy. If, on the other hand, the contract is maritime and state law does not apply, then the indemnity obligation is enforceable." In re Larry Doiron, Inc., 879 F.3d 568, 571 (5th Cir. 2018). Resolution of Express Weld's motion and plaintiffs' cross-motion thus turns on whether the Master Service Contract qualifies as a "maritime contract."

Fifth Circuit...