Spell v. N.L. Industries, Inc.

• Decision Date: 05 May 1993
• Docket Number: No. 92-692,92-692
• Citation: 618 So.2d 17
• Parties: Albert Lee SPELL, et al., Plaintiffs-Appellees, v. N.L. INDUSTRIES, INC., et al., Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

Page 17

618 So.2d 17

Albert Lee SPELL, et al., Plaintiffs-Appellees, v. N.L. INDUSTRIES, INC., et al., Defendant-Appellant.

No. 92-692.

Court of Appeal of Louisiana,

Third Circuit.

May 5, 1993.

Gilbert Hennigan Dozier, Lafayette, for plaintiffs-appellees Albert Lee Spell et al.

Richard Stephen Vale, Jeffery Wade McDonald, Metairie, for defendant-appellant TWO R DRILLING.

Randall Kurt Theunissen, Roger Ernest Ishee, Lafayette, for defendants-appellees Union Oil, Baroid Corp.

Before STOKER, and DECUIR, JJ., and CULPEPPER, J. Pro Tem. ^*

DECUIR, Judge.

This controversy arises out of a suit by Albert Lee Spell and Helen Spell adverse to N.L. Industries, Inc., N.L. Baroid, Baroid Drilling Fluids, Inc., Two "R" Drilling Company, Inc., and Union Oil Company of California, for personal injuries allegedly sustained by Albert Lee Spell while employed as a tankerman aboard a barge. Plaintiffs allege that defendants, Union Oil and/or Two "R" Drilling were the owners pro hac vice of the barge to which plaintiff was assigned at the time of his injury. Alternatively, plaintiffs allege that Albert Lee Spell was the employee of the owner or operator of the barge in question under a theory of joint principal or borrowed servant doctrine.

Two "R" Drilling filed a cross-claim adverse to Union Oil alleging that at the time of plaintiff's accident, plaintiff's employer was a contractor, invitee, or agent of Union Oil and further alleging the existence of a contract between Two "R" and Union wherein Union agreed to defend and indemnify Two "R" Drilling. Thereafter, Two "R" Drilling filed a motion for summary judgment contending there was no issue of material fact as to whether Union Oil owes a defense and indemnity to Two "R" in the action brought by Albert and Helen Spell. The trial judge granted Two "R" Drilling's motion and rendered judgment ordering Union Oil to assume the defense of Two "R" for the remainder of the litigation. Union Oil now appeals the judgment of the trial court.

The record reflects that Union subcontracted with plaintiff's employer, N.L. Industries or Baroid Corporation, to furnish drilling fluid material and chemicals and mud engineering and logging services. Union (operator) also contracted with Two "R" Drilling (contractor) to perform drilling services. Two "R" contends that according to the contract entered into between Two "R" and Union, Union must defend and indemnify Two "R" for any injuries to Union's invitees, employees, subcontractors, officers, and directors regardless of fault. A reciprocal indemnity provision in the same contract requires Two "R" to defend and indemnify Union against any suits brought by Two "R" employees, officers, directors, contractors and subcontractors, regardless of fault. The contract also contains the following insurance provisions:

13. INSURANCE:

During the life of this Contract, Contractor shall at Contractor's expense maintain with an insurance company or companies authorized to do business in the state where the work is to be performed or through a self-insurance program, insurance coverages of the kind and in the amounts set forth in Exhibit "A." Contractor shall, if requested to do so by Operator, procure from the company or companies writing said insurance a certificate or certificates that said insurance is in full force and effect and that the same shall not be cancelled or materially changed without ten (10) days prior written notice to Operator. For liabilities assumed hereunder by Contractor, its insurance shall be endorsed to provide that the underwriters waive their right of subrogation against Operator. Operator will, as well, cause its insurer to waive subrogation against Contractor for liability it assumes.

21. SPECIAL PROVISIONS:

* * * * * *

B. Insurance: Operator shall be named additional insured except for workman's compensation, on Contr. insurance. With a cross liability clause (severability of interest).

It is Union's contention that the contract between Union and Two "R" required as one of its terms that Union be named as an additional insured in Two "R" Drilling's insurance policies. Union contends that if Union is named as an additional insured as contractually required, then any obligation that Union contractually has to defend and/or indemnify Two "R" should be furnished by Two "R" 's insurance carrier. Union further argues that if Two "R" did not follow the mandate of this insurance provision, i.e. name Union as an additional insured, then Two "R" breached the contract and by virtue of this breach, Two "R" is not entitled to a defense or indemnification.

The trial judge, in reasons for judgment, found that the contractual provisions regarding indemnity and insurance are independent and the indemnification...