1

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 05-30614

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ST. PAUL SURPLUS LINES INSURANCE COMPANY,

Plaintiff-Appellant, 

v.

HALLIBURTON ENERGY SERVICES, INC.,

Defendant-Appellee.

__________________

Appeal from the United States District Court

For the Eastern District of Louisiana

__________________

Before HIGGINBOTHAM, DAVIS and STEWART, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

This case presents the legal issue whether the undertaking

of Halliburton Energy Services, Inc. (“Halliburton”) to indemnify

the well owner LLOG Exploration Company (“LLOG”) in this case

included an obligation by Halliburton to reimburse LLOG for sums

LLOG was required to pay under a separate contract to a third

party, R&B Falcon Drilling USA, Inc. (“Falcon”). Based on our

case law and the language of the indemnity provisions included in

the relevant contracts, we answer this question in the

affirmative and reverse the judgment of the district court.

I.

United States Court of Appeals

Fifth Circuit

F I L E D

April 10, 2006

Charles R. Fulbruge III

Clerk
1 The Service Contract was accompanied by a Rider executed by the

parties which modified portions of its indemnity provisions.

2

LLOG develops and operates oil and gas properties, and was

provided contractual liability insurance coverage for operation

of its wells by St. Paul. In March of 2001, LLOG contracted with

Falcon to provide a drill barge to drill an LLOG well off the

coast of Venice, Louisiana. The contract between LLOG and Falcon

(“Drilling Contract”) provided that LLOG would hold Falcon

harmless inter alia for any personal injury claims asserted

against Falcon by LLOG’s employees or invitees. The Drilling

Contract also required that LLOG provide a number of services

usually provided by third parties required to drill the well.

Relatedly, LLOG and Halliburton entered into a Master Service

Contract (“Service Contract”) for the performance of some of

those services. The LLOG/Halliburton Service Contract required

Halliburton to indemnify LLOG and its invitees, which included

Falcon, against claims by Halliburton employees.1

Gilbert Goldman, a Halliburton engineer and LLOG invitee,

was injured at the well site onboard the Falcon barge when it

capsized in March of 2001. Goldman sued LLOG and Falcon to

recover damages for those injuries, and Falcon demanded that LLOG

defend and indemnify Falcon for this claim pursuant to the

Drilling Contract. LLOG initially rejected Falcon’s demand and

also requested that Halliburton defend and indemnify LLOG against
2 LLOG initially rejected Falcon’s demand for indemnity on the

grounds that the Drilling Contract failed the “express negligence

test,” which provided that a party cannot be indemnified for its

own negligence when the indemnity contract does not so provide

expressly. Although LLOG and St. Paul initially refused to

reimburse Falcon, they relented after this court concluded that the

express negligence test would not operate to preclude claims

asserted against Falcon based upon Falcon’s negligence in East v.

Premier, Inc., a case involving an identical contract between

Falcon and LLOG. See 98 Fed. Appx. 317, 2004 WL 1114441 (5th Cir.

May 12, 2004).

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Goldman’s claims pursuant to the indemnity provisions of the

Service Contract. Halliburton expressed some doubt about the

scope of the indemnity provision, but in two separate letters in

September and October of 2001, Halliburton counsel reaffirmed

that Halliburton would “undertake the defense of LLOG in

accordance with the agreement terms,” and that it would “defend

and indemnify LLOG in this lawsuit as per the contract.”

In January of 2002, Falcon instituted a limitation of

liability proceeding in the Eastern District of Louisiana, and

included a contractual indemnity claim against LLOG and St. Paul.

Halliburton answered on behalf of LLOG, denying responsibility on

Falcon’s contractual indemnity claim.

Falcon settled Goldman’s claims in January 2003 for

$550,000, and sought reimbursement from LLOG and St. Paul under

the indemnity provisions of the Drilling Contract. St.Paul and

LLOG withdrew their earlier denial of liability and reimbursed

Falcon the $550,000 paid to Goldman.2 After LLOG and St. Paul
3 St. Paul also argues that Halliburton is estopped from

withholding reimbursement due to its representations and action in

defending LLOG in the litigation. Because we conclude that

Halliburton is obligated to indemnify LLOG under the Service

Contract, we need not address the estoppel claim.

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agreed to reimburse Falcon, St. Paul made demand under the terms

of the LLOG/Halliburton Service Contract for Halliburton to pay

the settlement sum on behalf of LLOG to Falcon. Halliburton

rejected that demand, asserting that the Service Contract did not

obligate Halliburton to indemnify LLOG against Falcon’s

contractual claims. St. Paul then filed suit against Halliburton

seeking reimbursement of the $550,000 settlement on the basis

that Halliburton was contractually obligated to indemnify LLOG

and LLOG’s invitees, including Falcon, for sums paid on account

of injuries to Halliburton employees.3

Both Halliburton and St. Paul filed motions for summary

judgment. The District Court granted the motion filed by

Halliburton and denied St. Paul’s motion. The District Court

observed that the Service Contract did not expressly require

Halliburton to indemnify LLOG against third party contract

liability. Because Halliburton did not expressly agree to

indemnify LLOG for contractual claims, the District Court

concluded that Halliburton was not responsible for the defense or

indemnity obligations assumed by LLOG in its separate contracts

with third parties. This appeal followed.
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II.

The parties agree that the interpretation of the contract at

issue in this case is governed by general maritime law. A

district court’s grant or denial of summary judgment is reviewed

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

Gowesky v. Singing River Hospital System, 321 F.3d 503, 507 (5th

Cir. 2003). Summary judgment is appropriate if “there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.” FED. R. CIV. PRO.

56.

III.

The contractual relationship between LLOG and Halliburton is

governed by two documents: (1) the Service Contract, and (2) the

Service Contract Rider. The Service Contract begins by defining

the parties:

THIS CONTRACT, made and entered into on the above date

by and between LLOG EXPLORATION COMPANY (hereinafter

referred to as “LLOG”) and HALLIBURTON COMPANY, its

divisions HALLIBURTON SERVICE and HALLIBURTON RESERVOIR

SERVICES, and its subsidiaries HALLIBURTON LOGGING

SERVICE, INC., and OTIS ENGINEERING COMPANY

(hereinafter referred to as “Contractor”).

The indemnity provision, however, begins by stating that the

references to LLOG in that section shall include certain other

parties. Paragraph 4(a) provides:
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For the purposes of this Section any reference to LLOG

shall include LLOG and any or all co-lessees of LLOG

who wholly or partially bear the cost of operations

hereunder and any or all agents, directors, officers,

employees or invitees of LLOG or such co-lessees, or

any or all of such parties.

Although Paragraph 4(a) was not modified by the Rider, the

remainder of the indemnity provision was replaced with revised

and additional language. Paragraph 4 of the Rider provides, in

pertinent part:

Section 4. IMDEMNITY, paragraphs (b) and (c) shall be

amended and paragraphs (d), (e), (f), (g), (h) and (i)

added to read:

(b) Contractor shall be responsible, and LLOG shall

never be liable, for property damage or personal injury

to or death of Contractor’s employees or the employees

of Contractor’s subcontractors and Contractor agrees to

indemnify and hold LLOG harmless against any and all

such claims, demands or suits which may be brought

against LLOG by any such party, or the legal

representative or successor of any such employee, in

anywise arising out of or incident to the work to be

performed under this contract by Contractor, or

Contractor’s subcontractors, irrespective of whether

such claims, demands, or suits are based on the

relationship of master and servant, third party, or

otherwise, the unseaworthiness or unairworthiness of

vessels or craft, or the negligence or strict

liability, in whole or in part, of LLOG.

St. Paul and LLOG argue that this provision obligates Halliburton

to indemnify LLOG for sums LLOG paid pursuant to its contractual

indemnity obligations to Falcon. According to St. Paul, this is

required because LLOG’s payment was occasioned by (1) the injury

to Goldman, a Halliburton employee, and (2) LLOG’s required

payment to an LLOG invitee within the meaning of Paragraph 4(a).
4 Halliburton also argues that the Service Contract Rider modified

the contract to effectively remove “invitee” from Paragraph 4(a) of

the Service Contract. However, the Service Contract Rider

specifically enumerates which subsections of Paragraph 4 are to be

modified, and leaves 4(a) untouched. The district court refused to

read the Service Contract Rider as impliedly removing a class of

potential indemnities from the Service Contract, and we agree with

that reading.

5 The conclusion that phrases such as “for injury to or death or

illness of persons” is limited to tortious injuries is in apparent

conflict with our decision in Lirette. In that case, we noted that

“[s]ince indemnity is triggered by claims or suits ‘resulting from

injury or damage to [Popich’s] employees,’ the contractual

obligation is operationally prescribed with no distinction being

made between so-called contractual or so-called tortious

liability.” Lirette, 699 F.2d at 728. However, because we

conclude that Halliburton’s indemnity obligation arises from the

inclusion of invitees in the indemnity provision, we need not

resolve this apparent conflict.

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Halliburton does not dispute Falcon’s invitee status, but instead

argues that the indemnity provision does not provide express

notice that Halliburton would be obligated to indemnify LLOG

against indemnity claims owed as a result of LLOG’s contracts.4

The district court granted summary judgment in favor of

Halliburton, relying on our decisions in Foreman v. Exxon Corp.

and Corbitt v. Diamond M. Drilling Co., both of which held that

“express notice is required where a party seeks to shift his

contractual liability to indemnify a third party,” and that

contractual language creating an indemnity obligation “for injury

to or death or illness of persons” gave notice only of claims

based on tortious, not contractual, injuries. Foreman v. Exxon

Corp., 770 F.2d 490, 496-97 (5th Cir. 1985); Corbitt v. Diamond

M. Drilling Co., 654 F.2d 329, 333-34 (5th Cir 1981).5 Because
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the Halliburton/LLOG Service Contract required indemnification

for “property damage or personal injury to or death of

[Halliburton’s] employees,” and does not specifically include

liability arising from contract, the district court found that

the Service Contract did not require Halliburton to indemnify

LLOG against Falcon’s claims, despite the fact that Falcon’s

claims were, in turn, based on a personal injury to a Halliburton

employee.

In addition to our decisions in Foreman and Corbitt, we have

addressed the legal issue presented in today’s case on at least

four occasions. See Sumrall v. ENSCO Offshore Co., 291 F.3d 316

(5th Cir. 2002); Campbell v. Sonat Offshore Drilling, Inc., 27

F.3d 185 (5th Cir. 1994); Mills v. Zapata Drilling Co., 722 F.2d

1170 (5th Cir. 1983), overruled on other grounds, Kelly v. Lee's

Old Fashioned Hamburgers, Inc., 908 F.2d 1218 (5th Cir.1990)(per

curiam); Lirette v. Popich Bros. Water Transport, Inc., 699 F.2d

725 (5th Cir. 1983).

In Lirette, Popich Bros. Water Transport, Inc. (“Popich”),

owned and operated a vessel time-chartered to Otto Candies, Inc.

(“Candies”). The contract between Popich and Candies required

that Popich indemnify Candies, as well as its “affiliated

companies and anyone for whom the vessel may be working” against
6 The charter between Popich and Candies provided:

Owner [Popich] agrees to indemnify and hold Charterer

[Candies], its affiliated companies [Exxon], and anyone

for whom the vessel may be working harmless from any

claims or suits resulting from injury or damage to

Owner's [Popich's] employees, Charterer's [Candies']

employees or third persons or property arising out of, or

in any way connected to the operation of the vessel under

this charter, unless caused by the sole negligence of

Charterer [Candies], its agents or employees.

Lirette, 699 F.2d at 726 n. 4.

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personal injury claims made by Popich employees.6 Candies in

turn time-chartered the vessel to Exxon for transportation

between shore and various drilling platforms. The contract

between Candies and Exxon required that Candies indemnify Exxon

against personal injuries made by either Candies or Popich

employees. Lirette, a Popich employee, was the captain of the

vessel and was injured in an accident. Lirette brought suit

against Exxon and Candies seeking damages for those injuries.

Candies was obligated to indemnify Exxon under the Candies/Exxon

contract, and sought reimbursement of those sums paid to Exxon

from Popich under the Popich/Candies contract.

The language describing the claims covered by the provision

in Lirette is substantially similar to the language in the

indemnity provision in Corbitt. Both refer to “all claims”

resulting from or on account of injury, death, or property

damage. The one significant difference, however, is that the

provision in Lirette expressly included “affiliated companies and

anyone for whom the vessel may be working,” including Exxon, as
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third-party indemnitees. Popich argued that this meant that

Popich might have an indemnity obligation directly to Exxon for

its own liability to Lirette, but that the provision did not

require Popich to indemnify Candies for its own contractual

obligation to Exxon, which arose out of the separate charter

between Candies and Exxon, and not the charter between Popich and

Candies. This court disagreed. We concluded:

Popich was not, as in Corbitt, being subjected to a

liability arising from and imposed by a completely

separate contract between two outsiders. Rather, it

was called upon to make good its contractual obligation

to hold Candies (and Exxon) harmless from claims, suits

or damage “arising out of, or in any way connected

[with] the operation of the vessel under this charter.”

Popich's obligation to reimburse Candies for amounts

due Exxon arose, not because of the separate agreement

Candies had with Exxon, but because of Popich's express

undertaking to make good to Exxon all such losses.

Candies acting as a conduit did not alter that

obligation.

Id. at 728. Because Exxon was a member of the class of

“affiliated companies” named in the indemnity provision, Popich

was obligated to indemnify Exxon, and Popich could not escape its

obligation merely because Candies acted as a “conduit” for

indemnification.

We subsequently applied Lirette’s conduit principle in

Mills, 722 F.2d at 1175, Campbell, 27 F.3d at 187-88, and

Sumrall, 291 F.3d at 320. In particular, Mills addressed a

factual and legal scenario essentially identical to this case,

including the language in the relevant contract provisions
7 The contract between CNG and Louisiana provided:

Contractor [Louisiana] shall be responsible, and CNG

shall never be liable, for personal injury to or death of

any of Contractor's employees or the employees of

Contractor's subcontractors, and Contractor agrees to

indemnify and hold harmless CNG, any or all co-lessees of

CNG who wholly or partially bear the cost of operations

hereunder and any or all agents, directors, officers,

employees, invitees, or servants of CNG or such colessees, against any and all claims, demands or suits

(including, but not limited to, claims, demands or suits

for bodily injury, illness, disease, death or loss of

services, property or wages) which may be brought against

CNG ... by any employee of Contractor, subcontractor of

Contractor, or by any employee of subcontractor of

Contractor, or the legal representative or successor of

any such employee, in anywise arising out of or incident

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identifying invitees as indemnitees and describing the covered

claims. In Mills, CNG Producing Co. hired the Zapata Drilling

Co. to furnish drilling equipment to drill CNG’s wells. CNG also

hired Louisiana Casing Crew and Rental Tool Corp., to furnish

casing services. Zapata and Louisiana did not contract with each

other. Mills, a Louisiana employee, was killed by the negligent

act of a driller employed by Zapata, and his estate brought suit

against Zapata. Zapata filed a third-party action against CNG

seeking indemnity under the terms of its contract, and CNG then

brought its own third-party action against Louisiana, seeking

indemnification against its obligation to indemnify Zapata.

The indemnity provision at issue in Mills was unlike the

provision in Corbitt, and like the provision at issue in this

case, in that it specifically includes CNG’s invitees as

indemnitees.7 Moreover, the language describing the types of
to the work to be performed under this Contract,

irrespective of whether such suits are based on the

relationship of master and servant, third party, or

otherwise.... 

Mills, 722 F.2d at 1172-73 (emphasis added).

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suits, i.e., “irrespective of whether such suits are based on the

relationship of master and servant, third party, or

otherwise...,” is identical to the provision in this case.

Mills, 722 F.2d at 1172-73. The court concluded in Mills, as it

had concluded in Lirette, that Zapata was an invitee of CNG

within the meaning of the indemnity provision, and therefore,

“Louisiana is by contract an indemnitor of CNG and is by

operation of law under the circumstances described in this

opinion an indemnitor of Zapata....” Id. at 1175.

LLOG’s claim for indemnity from Halliburton under the

Service Contract is functionally indistinguishable from CNG’s

claim for indemnity in Mills. Because Halliburton is obligated

to indemnify both LLOG and Falcon for injuries to Halliburton

employees, Halliburton’s obligation to Falcon flows through LLOG

where LLOG has already indemnified Falcon. Halliburton is

therefore required to reimburse LLOG, and its insurer St. Paul,

for the indemnity paid by LLOG to Falcon. Because this case is

controlled by our decisions in Lirette, Mills, Campbell, and

Sumrall, we reverse the judgment of the district court and render

summary judgment in favor of St. Paul.
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REVERSED and RENDERED.