-1-

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-31259

In Re: In the Matter of the complaint: T.L. JAMES & COMPANY INC.,

as owner of the Crane Barge ALROAR, praying for Exoneration from or

Limitation of Liability; T.L. JAMES & COMPANY INC., as owner of the

Crane Barge BILL JOHNSON, praying for Exoneration from or

Limitation of Liability 

Petitioners

TEXACO TRADING AND TRANSPORTATION, INC.; TEXACO PIPELINE

INCORPORATED; TEXACO INC.; EQUILON PIPELINE CO., LLC; EQUILON

ENTERPRISES, LLC

 Plaintiffs - Appellants

VERSUS

LAINE CONSTRUCTION COMPANY INC.; ET AL

Defendants

T.L. JAMES & COMPANY INC.

Defendant - Appellee

T.L. JAMES & COMPANY INC., as owner of the Crane Barge ALROAR

 Petitioner - Appellee

VERSUS

LAINE CONSTRUCTION COMPANY INC.; ET AL

 Claimants

TEXACO PIPELINE INC.; TEXACO INC.
*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opinion should not be published and is not precedent except under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.

1Equilon Pipeline Company LLC is the successor-in-interest to

Texaco Pipeline Incorporated.

-2-

Claimants - Appellants

EQUILON PIPELINE COMPANY, LLC, successor-in-interest to Texaco

Pipeline, Inc.; EQUILON ENTERPRISES, LLC, successor-in-interest to

Texaco Trading and Transportation Inc. and Texaco Inc.

Movants - Appellants

T.L. JAMES & COMPANY INC., as owner of the Crane Barge BILL JOHNSON

Petitioner - Appellee

VERSUS

LAINE CONSTRUCTION COMPANY INC.; ET AL

 Claimants

TEXACO PIPELINE INC; TEXACO INC.; EQUILON PIPELINE COMPANY, LLC, as

successor-in-interest to Texaco Pipeline Inc. and Texaco Inc.

Claimants-Appellants

Appeal from the United States District Court

For the Eastern District of Louisiana

(98-CV-2683-D)

February 25, 2002

Before EMILIO M. GARZA, PARKER and DENNIS, Circuit Judges.

PER CURIAM:*

Texaco Pipeline Incorporated1 (hereinafter “Texaco Pipeline”)

and Texaco Inc. (collectively hereinafter “Texaco Plaintiffs”)

appeal the district court’s: (1) dismissal of their motion for
2Equilon Enterprises LLC is the successor-in-interest to Texaco

Trading and Transportation Inc. Texaco Inc. is a part-owner of

Equilon Enterprises LLC.

-3-

partial summary judgment; (2) dismissal of their declaratory

judgment action; and (3) grant of summary judgment dismissing their

contract claims. For the reasons that follow, we reverse the

district court’s ruling: (1) dismissing the Texaco Plaintiffs’

motion for partial summary judgment; (2) dismissing the Texaco

Plaintiffs’ declaratory judgment action; and (3) granting summary

judgment dismissing the Texaco Plaintiffs’ contract claims. We

remand this case to the district court for further proceedings

consistent with this opinion.

BACKGROUND

In February of 1997, Laine Construction Company, Inc.

(hereinafter “Laine”) and Texaco Trading and Transportation, Inc.2

(hereinafter “Texaco Trading”) entered into a written agreement

(hereinafter “Master Contract”) whereby Laine would perform certain

services in connection with Texaco Trading’s construction of a 24-

inch crude oil pipeline (hereinafter “Poseidon Pipeline”) running

through Lake Barre, Louisiana. Laine and Texaco Trading were the

only signatories to the Master Contract. In March of 1997, T.L.

James and Company, Inc. (hereinafter “T.L. James”) entered into a

written agreement (hereinafter “Subcontract”) with Laine to perform

a portion of Laine’s obligations under the Master Contract.

Specifically, T.L. James agreed to install navigation marker signs

and perform pipe ditch excavation and backfill. T.L. James and

Laine were the only signatories to the Subcontract. In addition to

the terms of the Subcontract, T.L. James also accepted all of the

terms of the Master Contract between Laine and Texaco Trading with

respect to the work to be performed under the Subcontract. On or
333 U.S.C.A. §§ 2701-2761 (West 2001).

446 U.S.C.A. app. §§ 181-196 (West Supp. 2001).

-4-

about May 16, 1997, a few weeks after the T.L. James Crane Barge

ALROAR completed a trench for the Poseidon Pipeline, Texaco

Pipeline’s 16-inch crude oil pipeline (hereinafter “Existing

Pipeline”), in the immediate vicinity of the trenching work

performed by the ALROAR, ruptured causing approximately 6,500

barrels of oil to spill into Lake Barre. 

The Texaco Plaintiffs and Texaco Trading filed suit in

district court against Laine and T.L. James asserting a total of

seven causes of action for: (1) contractual indemnity; (2)

statutory remedies under the Oil Pollution Act of 19903

(hereinafter “OPA”); (3) indemnity-contribution-subrogation; (4)

negligence; (5) quasi-contract; (6) unseaworthiness; and (7)

declaratory judgment. T.L. James filed two separate limitation of

liability actions, one each, in its capacity as owner of the Crane

Barges ALROAR and BILL JOHNSON. The district court consolidated

these actions with the plaintiffs’ suit. Laine was dismissed from

the suit and the district court then: (1) granted T.L. James’s

motion for summary judgment dismissing all claims by Texaco

Trading; (2) granted T.L. James’s motion for partial summary

judgment dismissing all contract related claims; (3) granted in

part T.L. James’s motion for summary judgment dismissing Texaco

Inc.’s claims for contractual indemnity, unseaworthiness,

negligence, relief under the OPA, and declaratory judgment but

deferred ruling on the indemnity-contribution-subrogation claim and

quasi-contract claim; and (4) denied as moot, Texaco Trading and

the Texaco Plaintiffs’ motion for partial summary judgment seeking

a ruling that the Limitation of Liability Act4 does not apply to
5Texaco Trading is not a party in this appeal and the district

court’s deferred rulings are not before this court on appeal.

-5-

their indemnity and breach of contract claims. 

The district court’s rulings dismissing the Texaco Plaintiffs’

contract claims were limited to questions of contract

interpretation based on the contract documents themselves and no

factual determinations on the merits of the claims were made.

Although all of the plaintiffs asserted claims for relief under the

OPA and for negligence, the district court found that only Texaco

Pipeline, as owner of the Existing Pipeline, has viable causes of

action against T.L. James under the OPA and for negligence. On

appeal, the Texaco Plaintiffs5 assert that the district court erred

in: (1) finding their motion for summary judgment moot; (2)

granting summary judgment against them on their contract claims;

and (3) holding that they were not entitled to maintain a

declaratory judgment action.

STANDARDS OF REVIEW

We review a district court’s grant of summary judgment de

novo. See Taita Chem. Co., Ltd. v. Westlake Styrene Corp., 246

F.3d 377, 385 (5th Cir. 2001). Summary judgment is appropriate “if

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that

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.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-26,

106 S. Ct. 2548, 2552-55, 91 L. Ed. 2d 265 (1986). The

interpretation of contract terms is a question of law and is also

reviewed de novo. See Liberty Mut. Ins. Co. v. Pine Bluff Sand &

Gravel Co., Inc., 89 F.3d 243, 246 (5th Cir. 1996). We review a
-6-

district court’s declaratory judgment decision for abuse of

discretion. See Torch, Inc. v. LeBlanc, 947 F.2d 193, 194 (5th

Cir. 1991) (citation omitted).

ANALYSIS

The Texaco Plaintiffs assert that the district court erred in:

(1) granting summary judgment on their contract claims in favor of

T.L. James; (2) holding that they were not entitled to maintain a

declaratory judgment action; and (3) holding that their motion for

summary judgment was moot because they had no enforceable contract

rights. We review each of these arguments separately.

A. Contractual Indemnity Claims

The district court held that the beneficiaries clause in the

Subcontract between Laine and T.L. James did not create a right of

contractual indemnity for the Texaco Plaintiffs. The district

court reasoned that the beneficiaries clause in the Subcontract was

a restrictive clause that limited any parent companies, affiliates

and subsidiaries of Texaco Trading to asserting only those rights

determined to be owed to Texaco Trading under the Subcontract. The

district court further reasoned that because Texaco Trading

suffered no damages as a result of the oil spill and did not have

a right of contractual indemnity, neither Texaco Inc. or Texaco

Pipeline had the right to assert independent claims for direct

damages. 

The Texaco Plaintiffs maintain that the district court’s

holding is in error because they are third-party beneficiaries of

the Subcontract and T.L. James agreed to be bound by the terms of

the Subcontract which were designed to protect them from the type

of damage that resulted from the rupture of the Existing Pipeline.

The Texaco Plaintiffs argue that notwithstanding an absence of

damages on the part of Texaco Trading, under both maritime law and
-7-

Louisiana law, they are entitled, as expressly named and intended

third-party beneficiaries under the terms of the Subcontract, to

independently assert indemnity claims for damages resulting from

T.L. James’s breach of its contractual commitments and demand

performance from T.L. James.

T.L. James contends that the Master Contract and Subcontract

are governed by maritime law and that the objectively determined

intent of the parties is the relevant guide to determining whether

the Texaco Plaintiffs are third-party beneficiaries who can assert

independent claims for damages. Specifically, T.L. James argues

that the parties intended to restrict any parent or subsidiary

companies from asserting independent claims when Texaco Trading had

no right to assert a claim. Furthermore, T.L. James contends that

maritime law requires strict construction of the indemnity

provisions of Exhibit 3 to the Subcontract which clearly express

that T.L. James is not obligated to indemnify anyone because Texaco

Trading, Texaco Inc. and Texaco Pipeline’s negligence was alleged

to be responsible for the oil spill in its Answer to their Second

Amended Complaint. 

The Master Contract provides that the agreement is to be

“governed by and interpreted in accordance with the General

Maritime Laws of the United States, and where not applicable, the

laws of the State of Louisiana shall apply.” In the instant case,

the Master Contract and Subcontract are maritime contracts because

they “did not merely touch incidentally on a vessel,” but

specifically required the use of a vessel in a navigable waterway

to install navigation marker signs and perform pipe ditch

excavation and backfill. See Dupre v. Penrod Drilling Corp., 993

F.2d 474, 477 (5th Cir. 1993). 

Section 1 of the Subcontract contains T.L. James’s agreement
6Pursuant to Section 9(a), the indemnity provisions of Exhibit

3 apply subject to the provisions of Section 9. Section 9(g)

provides for indemnity in the event of environmental pollution and

Section 9(k) extends T.L. James’s indemnity obligations to apply in

the event of a breach of any provision of the Subcontract. Because

the provisions of Exhibit 3 apply subject to the provisions of

Section 9 and we find that the provisions in Section 9 and

elsewhere throughout the Subcontract, exclusive of Exhibit 3,

indicate that the Texaco Plaintiffs are intended beneficiaries

entitled to assert a claim for indemnity, T.L. James’s argument

that the Texaco Plaintiffs’ claims are barred by an allegation of

negligence fails. 

-8-

to the terms of the Subcontract and the Master Contract with

respect to the work to be performed thereunder. Section 1 also

states that except as otherwise provided in the Subcontract, it is

the intent and purpose of the parties to have T.L. James assume the

“obligations, indemnities and liabilities of CONTRACTOR [Laine]

with regard to the work to be done . . . [t]hereunder, that

CONTRACTOR [Laine] has with respect to COMPANY [Texaco Trading].”

Section 9(a) of the Subcontract, reads in relevant part as follows:

“Subject to the other provisions of this section, and to the

maximum extent permitted by applicable law SUBCONTRACTOR [T.L.

James] shall abide by the terms of the Liability-Indemnity

provisions as set forth in Exhibit 3.”6 The only reasonable

interpretation is that the parties intended to have T.L. James

assume only the obligations, indemnities and liabilities that Laine

had with Texaco Trading except as otherwise provided in the

Subcontract. 

Under maritime law, third-party beneficiary status is

determined by looking to the intent of the parties. “A promise

must be made directly for the benefit of a third party to support

a claim by that third party under the contract.” Atl. & Gulf

Stevedores, Inc. v. Revelle Shipping Agency, Inc., 750 F.2d 457,
7 The beneficiaries clause, Section 19 of the Subcontract, reads

as follows: “Beneficiaries of the rights granted to COMPANY [Texaco

Trading] and CONTRACTOR [Laine] hereunder, include their parent

companies, affiliates, subsidiaries and coventurers, if any, and

all of their directors, officers, employees and agents.”

-9-

459 n.3 (5th Cir. 1985). See also RESTATEMENT (SECOND) OF CONTRACTS §

302(1)(b) (1981)(“Unless otherwise agreed between promisor and

promisee, a beneficiary of a promise is an intended beneficiary if

recognition of a right to performance in the beneficiary is

appropriate to effectuate the intention of the parties and . . .

the circumstances indicate that the promisee intends to give the

beneficiary the benefit of the promised performance.”). 

The Texaco Plaintiffs contend that the beneficiaries clause in

Section 19 of the Subcontract gives them, as the parent and

subsidiary companies of Texaco Trading, the right to independently

assert an indemnity claim for damages under the Subcontract.7

Although reliance on boilerplate beneficiary provisions, in and of

themselves, is often misplaced when attempting to demonstrate that

the parties contemplated and intended to confer the right sought to

be exercised by the third party, examination of the entire

Subcontract reveals that Texaco Inc. and Texaco Pipeline are

intended beneficiaries. 

In Section 9(g) of the Subcontract, T.L. James agreed to

“exercise due diligence at all times and to conduct its operations

in a manner that will prevent environmental pollution . . . and

shall, at its own expense, clean up any pollution caused by it in

the performance of the work.” This language does not restrict T.L.

James’s obligations to those that Laine had with respect to Texaco

Trading. Rather, the language in Section 9(g) serves to broaden

T.L. James’s obligations to include “any pollution caused by it in
-10-

the performance of the work.” 

In Section 9(k) of the Subcontract, T.L. James agreed to

indemnify Laine and Texaco Trading and “hold them harmless from any

and all loss, damage, penalties, costs, expenses and attorney’s

fees suffered or incurred on account of any breach of the aforesaid

obligations and covenants, and any other provisions or covenants of

this subcontract.” The second paragraph of Section 15 of the

Subcontract reads as follows: “Subcontractor [T.L. James] shall

exercise extreme care at all time to avoid damage or injury to

existing facilities of Company [Texaco Trading], or others,

including, but not limited to, pipelines, sewers, water or gas

mains, electric or telephone installations and fiber optics

cables.” Pursuant to Section 15, T.L. James was obligated to

exercise extreme care to avoid damage or injury to existing

facilities owned not just by Texaco Trading, but also existing

facilities owned by others. The Existing Pipeline owned by Texaco

Pipeline is precisely the type of existing facility contemplated by

the parties and provided for in Section 15. 

“A promise in a contract creates a duty in the promisor to any

intended beneficiary to perform the promise, and the intended

beneficiary may enforce the duty.” RESTATEMENT (SECOND) OF CONTRACTS §

304 (1981). 

[R]ecognition of a duty to the beneficiary means

that the beneficiary has available for his own

benefit the usual remedies for breach of contract.

An action by the beneficiary is commonly a

convenient way to enforce the right of the promisee

as well as to redress any injury to the beneficiary.

Id. cmt. d. 

Although the Existing Pipeline which ruptured was not the

subject of the work contracted for in the Subcontract and the
-11-

Texaco Plaintiffs were not signatories to either the Master

Contract or Subcontract, Section 15 created a duty for T.L. James

to exercise extreme care to avoid damaging the Existing Pipeline.

Section 9(g) of the Subcontract created a duty for T.L. James to

clean up, at its own expense, any pollution caused by it in the

performance of the trenching work. Section 9(k) of the

Subcontract, unquestionably created a right of indemnity in Texaco

Trading and Laine for breach of the provisions of the Subcontract

by T.L. James and Section 19 extends to the Texaco Plaintiffs, the

rights granted to Texaco Trading. 

Inclusion in the Subcontract of the provisions in Sections

9(g), 9(k), 15 and 19 indicate that the parties were cognizant of

the potential dangers to existing facilities in the area where the

trenching work was to be performed and intended for T.L. James’s

obligations not to be limited only to those that Laine had with

Texaco Trading but extend for the benefit of other parties as well.

The Texaco Plaintiffs were not merely incidental beneficiaries of

the Subcontract but intended beneficiaries and are therefore

entitled to assert a claim for performance by T.L. James for breach

of the provisions of the Subcontract. Upon a showing of proof of

cause in fact and breach of T.L. James’s duty to exercise extreme

care, the Texaco Plaintiffs shall be entitled to indemnification,

including clean up costs. 

B. Declaratory Judgment

The Texaco Plaintiffs sought a declaration: (1) of their

contractual rights; (2) that T.L. James was responsible for the oil

spill and the resulting damages; and (3) that Texaco Inc. and

Texaco Pipeline are third-party beneficiaries under the

Subcontract. After dismissing all of the Texaco Plaintiffs’

contract claims, the district court dismissed their declaratory
-12-

judgment claim upon a finding that the Texaco Plaintiffs had no

viable claims against T.L. James which could form the basis of a

declaratory judgment. We have found that the Texaco Plaintiffs’

are intended third-party beneficiaries and as such are entitled to

assert independent contractual indemnity claims. Accordingly, we

find that the district court abused its discretion in dismissing

the Texaco Plaintiffs’ declaratory judgment claim.

C. Summary Judgment

The district court denied as moot, the Texaco Plaintiffs’

motion for partial summary judgment after dismissing all of their

contract claims. Because the Texaco Plaintiffs are entitled to

assert independent contractual indemnity claims, we reverse the

district court’s denial of the Texaco Plaintiffs’ motion for

partial summary judgment and remand to the district court for

further consideration but in doing so, we express no opinion of the

merits of such claims.

CONCLUSION

For the reasons discussed above, the district court’s

dismissal of the Texaco Plaintiffs’ motion for partial summary

judgment and declaratory judgment action and the grant of summary

judgment dismissing the Texaco Plaintiffs’ contract claims are

reversed and remanded for further proceedings consistent herewith.

REVERSED AND REMANDED.
8T.L. James assumed the tasks of installing navigation marker

signs and performing pipe ditch excavation and backfill. 

-13-

EMILIO M. GARZA, Circuit Judge, dissenting:

In this case, Texaco Pipeline and Texaco Inc. seek

indemnification for damages suffered and attorneys’ fees incurred

on account of T.L. James’s alleged breach of its subcontract with

Laine Co. The majority seems to assume that simply because Texaco

Pipeline and Texaco Inc. may enjoy third-party beneficiary status

under the subcontract with respect to one or more of T.L. James’s

heightened duties of care, they are necessarily entitled to seek

indemnification for breach of those duties. Because I believe

Texaco Inc. and Texaco Pipeline are not intended third-party

beneficiaries of indemnification rights under the subcontract, I

respectfully dissent. 

Simply stated, the background facts of this case are as

follows: Texaco Trading, as a member of the Poseidon Oil Pipeline

Co. LLC, was charged with managing the construction of a new oil

pipeline (“the Poseidon Pipeline”). Texaco Trading entered into a

contract with Laine Co. (“the Master Contract”) to perform most of

the work involved in constructing the new pipeline. Texaco Trading

and Laine Co. were the only signatories to the Master Contract.

Laine Co. then subcontracted a portion of its work obligations to

T.L. James.8 Under the terms of the subcontract, T.L. James

assumed the “obligations, indemnities and liabilities” that Laine

Co. owed to Texaco Trading under the Master Contract with regard to
-14-

the work to be done. T.L. James also assumed additional

obligations to Laine Co., Texaco Trading, and other parties under

the subcontract. Laine Co. and T.L. James were the only

signatories to the subcontract. 

Shortly after T.L. James completed a trench for the

Poseidon Pipeline, a nearby crude oil pipeline owned by Texaco

Pipeline, a subsidiary of Texaco Trading, ruptured, causing a

substantial oil spill. As a result, Texaco Pipeline and Texaco

Inc., the parent company of Texaco Trading, incurred significant

clean-up costs and were named in several lawsuits asserting damages

as a result of the spill. Texaco Pipeline and Texaco Inc. now seek

indemnification from T.L. James on account of T.L. James’s alleged

breach of its duties under the subcontract with Laine Co. 

The only way that Texaco Pipeline and Texaco Inc. can

succeed on an indemnification claim vis-a-vis the subcontract is if

they are both intended third-party beneficiaries of the

subcontract’s indemnification provisions. Under maritime law,

“third-party beneficiary status is determined by looking to the

intent of the parties.” Maj. Op. at 8. The mere fact that a

particular contract right may benefit a third party is not

sufficient to establish the intent necessary to confer beneficiary

status. “A promise must be made directly for the benefit of a

third party to support a claim by that third party under the

contract.” Atl. & Gulf Stevedores, Inc. v. Revelle Shipping
9The majority focuses on Sections 9(g) and 15 of the subcontract.

Section 9(g) provides: 

SUBCONTRACTOR shall exercise due diligence at all times

and to conduct its operations in a manner that will

prevent environmental pollution. . . . SUBCONTRACTOR

agrees to . . . take all reasonable measures to prevent

pollution and shall, at its own expense, clean up any

pollution caused by it in the performance of the work[.]

Section 15 reads: 

SUBCONTRACTOR shall exercise extreme care at all time

[sic] to avoid damage or injury to existing facilities of

COMPANY, or others, including, but not limited to,

pipelines, sewers, water or gas mains, electric or

telephone installations and fiber optics cables.

-15-

Agency, Inc., 750 F.2d 457, 459 n.3 (5th Cir. 1985). 

The majority implicitly concludes that Texaco Pipeline

and Texaco Inc. are intended third-party beneficiaries of the

subcontract’s indemnification provisions based on a combination of

three factors. First, the majority notes that Laine Co. and T.L.

James, when drafting the subcontract, clearly contemplated the

risks of environmental pollution and damage to existing facilities.

Specifically, the majority focuses on two of the subcontract’s

provisions under which T.L. James is held to a heightened standard

of care when performing the excavation and backfill work.9 One of

these two provisions expressly names Texaco Trading as a third

party benefitted by the provision. Second, the majority notes that

Section 19, the subcontract’s beneficiaries clause, lists as

beneficiaries of Texaco Trading’s rights under the subcontract its
10Section 19 reads:

Beneficiaries of the rights granted to COMPANY [Texaco

Trading] and CONTRACTOR [Laine Co.] hereunder, include

their parent companies, affiliates, subsidiaries and

coventurers, if any, and all of their directors,

officers, employees and agents.

-16-

parent company and subsidiaries.10 Third, the majority notes that

Section 9(k) of the subcontract broadly states that T.L. James

shall indemnify Texaco Trading for “any and all loss, damage,

penalties, costs, expenses and attorneys’ fees suffered or incurred

on account of any breach [of the subcontract’s provisions].” The

majority reads these provisions of the subcontract together to

conclude that Laine Co. and T.L. James intended to extend for the

benefit of Texaco Pipeline and Texaco Inc. not only T.L. James’s

heightened duties of care, but also its obligation to indemnify

Texaco Trading. 

As a threshold matter, I agree with the majority’s

conclusion that Laine Co. and T.L. James intended Texaco Trading to

be a third-party beneficiary of T.L. James’s heightened duties of

care and indemnification obligations under the subcontract. Where

I part ways with the majority, however, is in determining the

significance Section 19 has for additional third-party

beneficiaries. Specifically, I disagree with the majority’s

apparent conclusion that Section 19 somehow creates third-party

beneficiary rights in Texaco Pipeline and Texaco Inc. in every

instance in which Texaco Trading has a third-party right. On the
-17-

contrary, Section 19 does not create new beneficiaries of the

rights granted to Texaco Trading, but rather identifies more

specifically those additional third parties already intended to be

benefitted by the subcontract’s individual provisions. 

For example, on its face, Section 15’s requirement that

T.L. James exercise extreme care to avoid damage to existing

facilities contemplates the protection of third parties in addition

to Laine Co. and Texaco Trading. Section 15, however, does not

specify those additional parties by name. Any doubt about the

identity of those additional beneficiaries, however, is cleared up

by Section 19. At the very least, the parent and subsidiary of

Texaco Trading, to the extent they own existing facilities in the

vicinity of the excavation site, have a right to enforce this

provision. 

In contrast to Section 15, the language of Section 9(k)

makes no suggestion that the parties intended it to protect parties

beyond Laine Co. and Texaco Trading. On the contrary, the

provision states only that T.L. James shall indemnify Laine Co. and

Texaco Trading. The fact that the parties did not extend

indemnification rights to additional third parties makes sense

considering the apparent purpose of the provision. When drafting

the subcontract, Laine Co. logically would want to ensure that it,

and in certain instances Texaco Trading, would be shielded from any

possibility liability resulting from the improper actions of a

subcontractor. Both Laine Co. and Texaco Trading had a stake in
11Because Texaco Pipeline and Texaco Inc. are not intended third-party beneficiaries of Section

9(k)’s indemnification provision, we do not need to reach the issue of whether Exhibit 3’s exception

to indemnification applies in this case. 

-18-

the proper completion of the construction project. Neither T.L.

James nor Laine Co. had any reason, however, to make T.L. James the

all-risk insurer for others when neither Laine Co. nor Texaco

Trading are exposed to liability themselves. It defies reason to

assume that T.L. James, when subcontracting to perform a relatively

small portion of the construction of the Poseidon Pipeline, would

expose itself to such far-reaching liability. 

Despite the clarity of the language set forth in Section

9(k), the majority concludes that Section 19 somehow broadens T.L.

James’s indemnification obligations by naming additional

beneficiaries. Yet, the majority itself concedes that “reliance on

boilerplate beneficiary provisions, in and of themselves, is often

misplaced when attempting to demonstrate that the parties

contemplated and intended to confer the right sought to be

exercised by a third party.” Maj. Op. at 9. Because the

unambiguous language of Section 9(k) includes no suggestion that it

extends Texaco Trading’s indemnification rights for the benefit of

Texaco Pipeline and Texaco Inc., Section 19, a laundry list of

possible beneficiaries, has no bearing on its meaning.11 

In sum, I believe Texaco Inc. and Texaco Pipeline are not

intended third-party beneficiaries of indemnification rights under

the subcontract. As a result, I would affirm the district court’s
12Texaco Pipeline and Texaco Inc. have only asked this court to

determine whether they are entitled to indemnification under

Section 9(k) of the subcontract. Thus, any arguments they could

have raised for breach of Sections 15 and 9(g) of the subcontract

are deemed waived. See Carmon v. Lubrizol Corp., 17 F.3d 791, 794

(5th Cir. 1994).

-19-

rulings dismissing Texaco Pipeline’s and Texaco Inc.’s contract

claims, denying as moot their motion for partial summary judgment,

and dismissing their declaratory judgment action.12