IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 12-31102

GLENN DUVAL,

 Plaintiff

v.

NORTHERN ASSURANCE COMPANY OF AMERICA; MARKEL AMERICAN

INSURANCE COMPANY, 

 Defendants-Third Party Plaintiffs - Appellants

v.

B H P BILLITON PETROLEUM DEEPWATER, INCORPORATED, 

 Third Party Defendant - Appellee

Appeals from the United States District Court

for the Western District of Louisiana

Before STEWART, Chief Judge, HIGGINBOTHAM and JONES, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

This appeal turns on whether third-party insurers can enforce a master

services agreement’s defense, indemnification, and insurance obligations. We

conclude that those obligations run between the two parties to the master

services agreement and thus are not enforceable by the insurers.

United States Court of Appeals

Fifth Circuit

F I L E D

July 5, 2013

Lyle W. Cayce

Clerk

 Case: 12-31102 Document: 00512297630 Page: 1 Date Filed: 07/05/2013
No. 12-31102

I.

BHP Billiton Petroleum Deepwater, Inc. (“BHP”) is an energy exploration

company. Prior to its bankruptcy filing, Deep Marine Technology, Inc. (“Deep

Marine”) was an oilfield service company that owned and operated vessels to

support offshore construction. Effective April 18, 2006, BHP and Deep Marine

entered into a Master Services Agreement (“MSA”), pursuant to which Deep

Marine agreed to provide construction support vessels to BHP. The MSA

contained reciprocal indemnity obligations and required the parties to support

their respective indemnity obligations with liability insurance, self-insurance,

or a combination thereof. In addition, the MSA contained a choice of law clause,

stipulating that general maritime law governs interpretation of the MSA and,

to the extent general maritime law is not applicable, Texas law applies. 

Glen Duval (“Duval”), an employee of Wood Group/Deepwater Specialists,

Inc. (another BHP contractor), claims to have suffered injuries during an

offshore personnel basket transfer from a vessel owned by Deep Marine to a

tension-leg platform owned by BHP. On April 8, 2008, he filed suit against Deep

Marine, alleging that the negligence of Deep Marine’s personnel aboard the

vessel caused his injuries. In an amended complaint, he also asserted a claim

against Dolphin Services, L.L.C., the employer of the allegedly negligent crane

operator. Duval did not, and has not, alleged that BHP has any liability for his

injuries. On April 25, 2008, Deep Marine sought defense, additional insured

status, and indemnity from BHP under the MSA, and it tendered the defense of

Duval’s claims to BHP. BHP accepted tender on May 14, 2008. 

On December 4, 2009, Deep Marine filed for Chapter 11 bankruptcy in the

Southern District of Texas, and Duval’s suit was automatically stayed. On

September 10, 2010, the bankruptcy court entered an order permitting Duval to

proceed with his case against Deep Marine’s insurers, but permanently enjoining

him from “enforcing, levying, attaching, collecting, or otherwise recovering in

any matter or by any means” against Deep Marine or its estate. Pursuant to

2

 Case: 12-31102 Document: 00512297630 Page: 2 Date Filed: 07/05/2013
No. 12-31102

that order, the district court reopened the case. On January 4, 2012, Duval

amended his complaint to name Northern Assurance Company of America and

Markel American Insurance Company (“Underwriters”), the protection and

indemnity insurers of Deep Marine, as additional defendants under Louisiana’s

Direct Action Statute.1 On February 7, 2012, Underwriters filed a third-party

complaint against BHP, seeking to be “fully protected, defended, indemnified,

held harmless and provided insurance coverage” by BHP in accordance with the

MSA and purporting to tender BHP to Duval under Federal Rule of Civil

Procedure 14(c). 

Underwriters and BHP filed cross-motions for summary judgment, each

disputing whether Underwriters could enforce BHP’s contractual insurance,

defense, and indemnity obligations to Deep Marine after Deep Marine’s

bankruptcy discharge. Following a hearing with oral argument, the district

court granted BHP’s motion for summary judgment, denied Underwriters’

motion for summary judgment, and dismissed the action with prejudice.2

Underwriters timely appealed.3

 We have subject matter jurisdiction pursuant

to 28 U.S.C. § 1292(a)(3), which provides for interlocutory appeal from a district

court’s order “determining the rights and liabilities of the parties to admiralty

cases.”4

II.

1 LA. REV. STAT. ANN. § 22:1269.

2 The district court did not issue a written opinion.

3 Duval did not appeal the district court’s judgment.

4

28 U.S.C. § 1292(a)(3).

3

 Case: 12-31102 Document: 00512297630 Page: 3 Date Filed: 07/05/2013
No. 12-31102

We review a district court’s order granting summary judgment de novo,

applying the same standards as the district court.

5

“Summary judgment is

warranted if the pleadings, the discovery and disclosure materials on file, and

any affidavits show that there is no genuine [dispute] as to any material fact and

that the movant is entitled to judgment as a matter of law.”6 When parties file

cross-motions for summary judgment, “we review each party’s motion

independently, viewing the evidence and inferences in the light most favorable

to the nonmoving party.”7

“Interpretation of the terms of a contract, including an indemnity clause,

is a matter of law, reviewable de novo on appeal.”8“[T]he obligation to indemnify

is to be strictly construed,”9and “a court should not construe an indemnity

clause to impose liability for a loss neither expressly within its terms nor of such

a character that the parties probably intended to exclude the loss.”10

III.

The parties dispute whether the MSA requires BHP to protect, defend,

indemnify, and hold harmless Underwriters against Duval’s claim. We conclude

that it does not and therefore affirm the district court’s grant of summary

judgment in favor of BHP. To be clear, the parties agree that the MSA required

5 Greater Hous. Small Taxicab Co. Owners Ass’n v. City of Hous., 660 F.3d 235, 238 (5th

Cir. 2011).

6

Id. (quoting DePree, 588 F.3d at 286) (alteration in original).

7 Ford Motor Co. v. Tex. Dept. of Transp., 264 F.3d 493, 498 (5th Cir. 2001).

8 Kemp v. Gulf Oil Corp., 745 F.2d 921, 924 (5th Cir. 1984).

9 Foreman v. Exxon Corp., 770 F.2d 490, 497 n.12 (5th Cir. 1985) (internal quotations

and citations omitted)

10 Kemp, 745 F.2d at 924 (quoting Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 333

(5th Cir. 1981)); see Hardy v. Gulf Oil Corp., 949 F.2d 826, 834 (5th Cir. 1992); Foreman, 770

F.2d at 497 n.12.

4

 Case: 12-31102 Document: 00512297630 Page: 4 Date Filed: 07/05/2013
No. 12-31102

BHP to protect, defend, indemnify, release and hold harmless Deep Marine

against Duval’s claim. Specifically, the MSA provided:

Company [BHP] shall protect, defend, indemnify, release, and hold

harmless Contractor Group from and against any and all claims

arising out of, resulting from or in connection with the provision of

the Goods and/or Services pursuant to this Contract for: 

(I) any injury, death, or illness suffered by any person in Company

Group; and

(II) any damage to or loss of any equipment, materials, vessels, or

other property of any member of Company Group . . . . 

The parties defined “Contractor Group” to include the Contractor (Deep Marine);

its subsidiaries, affiliates, contractors, and subcontractors; and the “agents,

representatives, servants, directors, officers, assigns, managers, members,

shareholders, owners, employees and invitees of all of the foregoing.” It defined

“Company Group” to include BHP, as well as its subsidiaries, affiliates,

contractors, and subcontractors, and employees “of all of the foregoing.” Finally,

the MSA defined “claims” to include “all claims losses, demands, causes of action,

suits, proceedings,fines, penalties, judgments, obligations and liabilities of every

kind and character.” Thus, Duval’s claim against Deep Marine fell within the

scope of BHP’s indemnification obligation because it was a personal injury claim

asserted by a person in Company Group (an employee of a BHP contractor)

against a member of Contractor Group (Deep Marine). But the same is not true

of Duval’s claim against Underwriters. Under the plain language of the MSA,

BHP’s indemnification and defense obligations only ran to members of the

“Contractor Group.” The parties could have included the Contractor’s insurers

within the definition of “Contractor Group,” as parties in other cases have done,11

11 See, e.g., Mid-Continent Cas. Co. v. Swift Energy Co., 206 F.3d 487, 494 (5th Cir.

2000); Magee v. Ensco Offshore Co., No. 11-1351, 2012 WL 1825274, at *3 (E.D. La. May 18,

2012); BJ Serv’s Co., USA v. Thompson, No. 6:08-510, 2010 WL 2024725, at *6 (W.D. La. May

14, 2010).

5

 Case: 12-31102 Document: 00512297630 Page: 5 Date Filed: 07/05/2013
No. 12-31102

but they did not do so. In turn, BHP owes no duty to Underwriters, and we find

Underwriters’ arguments to the contrary unpersuasive. 

Underwriters argue that BHP waived any potential defenses to its

contractual obligations by accepting Deep Marine’s tender of Duval’s claim and

defending Deep Marine in the matter. But waiver is simply inapplicable here. 

Even though BHP accepted Deep Marine’s tender of Duval’s claim, it never

indicated it had any obligation to Underwriters. Instead, its defense arises out

of an unknowable change in factual circumstances—specifically Deep Marine’s

discharge in bankruptcy, the bankruptcy court’s order permanently enjoining

Duval from proceeding against Deep Marine, and Underwriters’ subsequent

claim against BHP.

Underwriters also make four substantive arguments in favor of their

interpretation of the MSA. First, Underwriters attack BHP’s characterization

of the MSA as an indemnity agreement requiring that Deep Marine make

payment to Duval before BHP’s indemnification obligation becomes

enforceable.12 They argue that the MSA requires BHP to indemnify Deep

Marine against liability, so BHP’s indemnification obligation becomes

enforceable once Deep Marine’s liability is established, not when Deep Marine

eventually makes payment on that liability.13 Underwriters point out that,

under Louisiana’s Direct Action Statute, Deep Marine must be found liable in

12 Underwriters also attack BHP’s general characterization ofthe MSA as an indemnity

agreement. They contend that an indemnity agreement must contain a pre-payment

provision, requiring payment of claims by the indemnitee, and argue that because the MSA

contains no language requiring pre-payment of claims by Deep Marine, it is not an indemnity

agreement. We disagree. The cases Underwriters rely on to argue that an indemnity

agreement requires pre-payment are insurance cases in which the policies at issue were

characterized as indemnity policies because they required pre-payment as a prerequisite to

the insurer’s liability. The MSA does not purport to be a liability insurance policy, and

Underwriters cite no authority indicating that the MSA’s indemnification language should be

interpreted to require anything other than indemnification as it is typically understood.

13 See 42 C.J.S. § 27, § 28.

6

 Case: 12-31102 Document: 00512297630 Page: 6 Date Filed: 07/05/2013
No. 12-31102

order for Underwriters to be held liable.14 Therefore, they contend, even though

Deep Marine will never pay damages to Duval, BHP’s indemnification obligation

will become enforceable once liability is established. But even assuming

arguendo that the MSA requires indemnification against liability and that Deep

Marine will eventually be held liable, Underwriters still cannot prevail because

BHP’s indemnification obligation—whatever its scope—runs only to Deep

Marine.

Second, Underwriters contend that summary judgment in favor of BHP

was improper because, upon their payment of any judgment or settlement to

Duval, they will become subrogated to all of Deep Marine’s rights, including its

rights against BHP under the MSA. This argument also fails to persuade. 

Assuming arguendo that payment by Underwriters would give rise to

subrogation, Underwriters would nevertheless have no claim against BHP

because “a subrogee can obtain no greater rights than its subrogor had.”15 Deep

Marine would not, and could not, incur any loss in the Duval action, so

Underwriters could not seek indemnification from BHP. And, because BHP has

agreed to continue providing Deep Marinewith a nominal defense, Underwriters

would not have a breach of contract claim against BHP. 

Third, Underwriters argue that BHP agreed to become Deep Marine’s

primary insurer against liability to members of Company Group. They point to

the MSA’s requirements (1) that BHP support its indemnification obligations

with self-insurance, a liability insurance policy, or a combination thereof and (2)

that the insurance coverage BHP obtains name Deep Marine as an additional

insured and serve as primary insurance, without the right of contribution from

any insurance policies maintained by Deep Marine. We find the argument

inapplicable here because BHP chose to self-insure for claims under $1 million

14 See Descant v. Adm’rs of Tulane Educ. Fund, 639 So. 2d 246, 249 (La. 1994).

15 Complaint of Admiral Towing & Barge Co., 767 F.2d 243, 250 (5th Cir. 1985).

7

 Case: 12-31102 Document: 00512297630 Page: 7 Date Filed: 07/05/2013
No. 12-31102

and the parties agree that Duval’s claim is not for more than $1 million. We

conclude that the additionalinsured and primary insurance requirements do not

apply to BHP’s self-insurance. For one, the MSA focuses on “insurance coverage”

and “policies of insurance” when describing both the additional insured and

primary insurance requirements, leading us to believe that those requirements

only apply when BHP chooses to support its indemnity obligation with a liability

insurance policy. When a company self-insures, by contrast, “there is no contract

with an insurance company.”16 We find further support for our reading in Texas

case law. In Hertz Corp. v. Robineau, the Texas Court of Appeals explained that

“the term ‘self-insurance’ is a misnomer” because “in effect, a self-insurer does

not provide insurance at all.”17It went on to make clear that a self-insurer does

not “assume[] all the duties and burdens of an insurer,” unless the parties have

expressly contracted for “liability coverage.”18“To say that a self-insurer will pay

the same judgments and in the same amounts as insurance company would have

had to pay is one thing; while it is obvious that to assume all the obligations that

exist under a [liability policy] is quite another thing.”19 We therefore conclude

that the additional insured and primary insurance requirements do not apply

BHP’s self-insurance. 

Fourth, Underwriters argue that because “discharge of the debtor does not

affect the liability of any other entity on, or the property of any other entity for,

such debt,”20 we should enforce BHP’s contractual obligations. Otherwise, they

contend, BHP will receive a windfall. This argument, too, misses the point. It

is true that Deep Marine’s bankruptcy does not affect the liability of any other

16 BLACK’S LAW DICTIONARY 819 (8th ed. 2004).

17

6 S.W.3d 332, 336 (Tex. Ct. App. 1999) (emphasis in original).

18

Id.

19

Id. (internal quotations omitted).

20

11 U.S.C. § 524(e).

8

 Case: 12-31102 Document: 00512297630 Page: 8 Date Filed: 07/05/2013
No. 12-31102

entity, such as Underwriters, to Duval. But Duval has not alleged that BHP has

any potential liability for his claims. That makes sense because BHP’s only

obligation is an indemnification obligation to Deep Marine; unlike Underwriters,

it has no secondary liability to injured tort victims, like Duval. 

Before concluding, we pause briefly to address Underwriters’ contention

that they could tender BHP directly to Duval under Federal Rule of Civil

Procedure 14(c). Such tender was improper because Duval has no claim against

BHP. The MSA only obligates BHP to indemnify members of the “Contractor

Group.” As an employee of Wood Group (a BHP contractor), Duval is only a

member of “Company Group,” not “Contractor Group,” so BHP’s contractual

obligations do not run to him. And, even if they did, because no claims have

been asserted against Duval, BHP would have no obligation to indemnify and

defend him.21 Moreover, as we have previously explained, Underwriters did not

agree to act as the primary insurer of Deep Marine against Duval’s claim, so

Duval could not bring suit directly against BHP under Louisiana’s Direct Action

Statute. 

IV.

For the reasons set forth above, we AFFIRM the judgment of the district

court.

21

It is worth noting that Duval neither opposed BHP’s motion for summary judgment

(which expressly sought dismissal of the tendered claim) nor appealed the district court’s

dismissal of the tendered claim.

9

 Case: 12-31102 Document: 00512297630 Page: 9 Date Filed: 07/05/2013