*Pursuant to 5TH CIR. R. 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

1

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NO. 97-31081

Summary Calendar

ANTOINE J. HAWKINS, ET AL., 

Plaintiffs

ERNEST SMITH

Plaintiff-Appellant

VERSUS

AM/GROWMARK RIVER SYSTEM, INC., 

Defendant/Third-Party Plaintiff/Appellee

VERSUS

QUALITY FAB AND MECHANICAL CONTRACTORS, INC., 

Third-Party Defendant/Appellant Appellee

Appeal from the United States District Court

for the Eastern District of Louisiana

(94-CV-2210-D)

August 21, 1998

Before JOLLY, BENAVIDES and PARKER, Circuit Judges.

PER CURIAM*

I.

FACTS & PROCEDURAL HISTORY

In June of 1993, ADM/Growmark River System, Inc., (hereinafter

“ADM”) needed someone to demolish and remove two grain dryer units
 

2Quality Fab subcontracted with Kelly Teel to perform the demolition.

Plaintiffs Smith and Hawkins were employed by Teel.

 

3ADM also joined International Indemnity Company, Quality Fab’s

liability carrier, as third-party defendant. International Indemnity was

later dismissed on summary judgment for lack of coverage of this incident.

That dismissal is not challenged and therefore, International Indemnity is

not a party to this appeal.

2

at its Destrehan, Louisiana, facility. Quality Fab & Mechanical

Contractors, Inc., (hereinafter “Quality Fab”), which had regularly

performed fabrication and maintenance services at ADM’s Destrehan

facility, submitted a written proposal and price quotation

($23,500) for the demolition project. Quality Fab was orally

awarded the job.

During the course of the demolition on June 3, 1993, a flash

fire occurred, injuring Ernest Smith and Antoine Hawkins.2 Smith

and Hawkins sued ADM. ADM filed a third-party complaint against

Quality Fab based on an indemnification agreement signed on behalf

of Quality Fab by its President, a Mr. Bourgeois, on April 27,

1992.3 By that agreement, Quality Fab agreed in pertinent part to:

Indemnify, defend, and hold Company .... harmless from

and against any and all claims, suits, causes of action,

liability, damages, judgments or expenses including, but

not limited to, reasonable attorneys’ fees and litigation

costs, for personal injuries, death and/or property

damage, suffered by employees of either party or third

parties arising out of or in any way connected with

Independent Contractor’s activities at the site or the

performance of its obligations under this Agreement or

any contract with Company, even if caused by the sole or

concurrent negligence or fault of Company, or whether

based on strict liability, unseaworthiness, warranty, or

otherwise.

Paragraph One of the agreement describes its scope as “apply[ing]

to all work currently being performed by Independent Contractor for
3

Company and all existing and future work orders and purchase orders

entered into between the parties.” 

The case went to trial. Thereafter, while the matter was

under submission, ADM settled with Hawkins. The district court

then entered judgment in favor of ADM, dismissing Smith’s claim.

The district court then granted summary judgment in favor of ADM on

its third-party complaint against Quality Fab, based on the

indemnification agreement, and entered judgment in the amount of

$35,000, the stipulated amount of ADM’s attorneys’ fees and costs

incurred in defense of the claims by Smith and Hawkins. The

district court held, as a matter of law, that the indemnity

agreement met the requirements of a binding contract under

Louisiana law. The district court also held that the agreement was

not ambiguous as to its terms, that those terms contemplated the

demolition work performed by Quality Fab’s subcontractor on June 3,

1993, and therefore, there was no unresolved question of material

fact as to the intent of the parties. Quality Fab appeals from the

summary judgment against it for ADM’s attorneys’ fees and costs,

arguing that the indemnification agreement is not a valid contract

under Louisiana law and in any event does not cover the work

performed by it on June 3, 1993.

II.

LAW & ANALYSIS

This Court reviews a district court decision to grant summary

judgment de novo, applying the same standard as the district court.

Wynn v. Washington National Insurance Company, 122 F.3d 266, 268
4

(5th Cir. 1997), citing Bodenheimer v. PPG Indus., Inc., 5 F.3d

955, 956 (5th Cir. 1993).

“A contract is an agreement by two or more parties whereby

obligations are created, modified, or extinguished.” La. Civ. Code

Ann. art. 1906. (West 1987). “Four elements are required for a

valid contract: (1) the parties must possess the capacity to

contract; (2) the parties’ mutual consent must be freely given; (3)

there must be a certain object for the contract; and (4) the

contract must have a lawful purpose.” Wallace v. Shreve Memorial

Library, 79 F.3d 427, 430 n. 4 (5th Cir. 1996), citing Keller v.

Sisters of Charity, 597 So.2d 1113, 1115 (La. Ct. App. 1992), and

La. Civ. Code Ann. arts. 1918, 1927, 1966, 1977. Whatever the

differences might be between Louisiana Civil Law and the common law

in other jurisdictions, both require mutuality of obligation to

form a contract. Leger v. Tyson Foods, Inc., 670 So.2d 397, 401

(La. App. 3 Cir. 1996).

Quality Fab argues that the indemnity agreement does not

specify a certain object, because the operation of its terms

depended upon the formation of a future contract which might or

might not be formed depending solely upon the will of ADM. In

other words, the indemnification agreement is not a valid contract,

because the indemnification provision will not become operative,

unless ADM hires Quality Fab to provide some future service, which

may or may never occur, depending solely on the whim of ADM.

It is true that Louisiana law recognizes the enforceability of

clear and unambiguous indemnity contracts. See Soverign Ins. Co.
5

v. Texas Pipe Line Co., 488 So.2d 982, 984 (La. 1986); Polozola v.

Garlock, Inc., 343 So.2d 1000, 1003 (La. 1977); Commander v. BASF

Wyandotte Corporation, 978 F.2d 924, 926 (5th Cir. 1992). However,

in the cases cited the indemnity agreement was part of a larger

contract for the performance of a specific object. In

contradistinction, this case involves a stand-alone indemnity

agreement, wherein the indemnification will be part of the

indemnitor’s obligation under some unspecified future contract that

may or may not be awarded. The difference is that in the Louisiana

cases the agreement to indemnify is given as part of an ongoing

bargain (i.e., A agrees to do Y for B in return for X number of

dollars and in addition A will indemnify B for any harm caused

while A is doing Y for B), while in this case the agreement to

indemnify is given independently in connection with no specific

future act which might give rise to the duty to indemnify (i.e., A

agrees to indemnify B for any harm caused while A is performing any

duty under some future contract with B, assuming that B ever enters

into a contract with A in the future, which of course, B is under

no obligation to do).

The real problem with this indemnity contract is not the lack

of a specific object but its lack of mutual obligation. Quality

Fab’s obligation is apparent, i.e., it must indemnify ADM if ADM

ever contracts with Quality Fab in the future. However, in return

for that promise, ADM has taken on no corresponding obligation

(e.g., a promise to use Quality Fab exclusively for maintenance or

demolition services at the Destrehan facility). The prologue of
6

the contract states that Quality Fab’s promise to indemnify is

given 

“[i]n consideration of the work orders and purchase

orders issued and to be issued by the Company to

Independent Contractor, the agreements set forth herein

and other good and valuable consideration, the receipt

and sufficiency whereof are hereby acknowledged ....”

The problem with this recitation is that it does not indicate that

ADM actually gave Quality Fab anything new in response to or as

inducement for its promise to indemnify. Any past purchase orders,

work orders or other consideration cannot provide the necessary

cause for a subsequent contract, because past consideration was

given as inducement for past performance. Any future work orders

or purchase orders are not cause for Quality Fab’s promise to

indemnify, because there is no obligation on ADM’s part to ever

contract with Quality Fab again. In short, ADM promised nothing at

all in the future and made no contemporaneous promise which would

amount to a mutual obligation under the indemnity agreement, and

therefore, that agreement is not a valid contract. Hence the

judgment of the district court must be reversed. ADM alleged no

basis for indemnification other than the above indemnification

agreement, therefore, we reverse and remand for entry of judgment

in favor of Quality Fab on ADM’s third-party complaint against

Quality Fab.

REVERSED and REMANDED.