IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 91-3022

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JAY OLAN WILSON, Plaintiff,

versus

JOB, INC., ET AL., Defendants.

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FUGRO MCCLELLAND MARINE GEOSCIENCES, INC., Defendant-Appellant,

versus

EDISON CHOUEST OFFSHORE, Defendant-Appellee.

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Appeal from the United States District Court

for the Eastern District of Louisiana

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Before POLITZ. Chief Judge, BROWN AND SMITH, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

In a battle between vessel owner and time charterer to

determine the appropriate share of the plaintiff's settlement to be

borne by each of them, the district court entered summary judgment

and later a final judgment in favor of vessel ow ner and against

charter er because plaintiff's injuries were found to have been

caused during an activi ty "arising out of charterer's actual

drilling operations" and thus, according to the charter's

reciprocal indemnity agreement, charterer was held liable and was,1 The denial of a Rule 56 motion is an interlocutory order from which

no appeal is available until the entry of judgment. Since the district court

followed the denial of Charterer's motion for summary judgment with a Final Order

dismissing Charterer's cross-claim, Charterer has the right to argue on appeal

that the district court erroneously denied its Rule 56 motion. 10 C. Wright, A.

Miller & M. Kane, Federal Practice and Procedure: Civil 2d § 2715 at 636, 638

(1983).

2 McClelland is in the business of extracting and analyzing core

samples taken from the seabed. In addition, McClelland's business entails

preparing topographical surveys of the ocean floor. These core samples and

topographical surveys are used by oil companies to determine if a drilling rig or

a fixed platform can be anchored at a given location. McClelland obtains core

samples by using a drilling rig, which has a small derrick and drawwork. The

rig, along with equipment necessary to analyze the core samples and topographic

equipment designed to survey the ocean floor, are normally placed semipermanently on the stern deck of an offshore vessel. McClelland followed this

normal procedure during its use of the R/V R.L. PERKINS.

2 therefore, unable to recover from the P & I policy in which it was

expressly an additional assured. Charterer appealed the denial of

its motion for summary judg ment maintaining that plaintiff was

engaged in the "operation of the vessel" when he was injured. 1 It

also appealed from the grant of summary judgment in favor of owner

against the charterer. Finding no error, we affirm in favor of

owner.

The Injury

This litigation arises out of an injury sustained by plaintiff

Jay Wilson (Wilson) on October 9, 1989, while he was working aboard

the R/V R.L. PERKINS (vessel). The vessel was owned by Edison

Chouest Offshore, Inc. (C houest), and on the date of Wilson's

acci dent, was under time charter to Fugro-McClelland Marine

Geoscience, Inc. (McClelland). The vessel was working pursuant to

a written charter party which had been in effect between Chouest

and McClelland since 1978.

McClelland chartered the vessel to act as a movable base from

which it would conduct studies of the ocean floor. 2 Wilson was an3 At the time of the accident, the vessel was going back to the dock

to get chemicals and mud to go back out on another McClelland job.

4 Wilson was familiar with the force of the pressure washer as he had

been using it for "a couple of hours" prior to his accident.

3 employee of JOB Labor Contractors, Inc. (JOB), a company which

occasionally provided contract labor to McClelland.

Wilson's accident occ urred halfway through his twelve hour

shift at 0630 hours while he was working atop an elevated

McClelland equipment shack or "doghouse" located on the stern deck

of the vessel. This shack was part of the McClelland core sampling

equipment placed aboard the vessel by McClelland. In the course of

McClelland's drilling activities, their drilling equipment

habitually became muddy, and Wilson, just as he had done "every

time we finished a hole," was rinsing off the equipment. In fact,

Wilson had be en instructed by Darryl Lindquist, a McClelland

employee, that "everything on the back deck had to be cleaned, it

all had to be rinsed down, just in case big shots from the office

showed up." 3 Wilson had never before been on top of the doghouse,

but on this occasion Lindquist "told [Wilson] specifically to get

up on top of the dogh ouse and rinse it down." Wilson washed the

doghouse with a high pressure wash wand, similar to the sort used

at a car wash, that was hooked up to a compressor and an airtank. 4

Wilson climbed on a hundred-gallon water tank to reach the top of

the doghouse and, once on top of it, he began washing the doghouse

platform while holding the wash wand in one hand. He described the

weather as "pretty rough, windy. I would say seven-foot seas." He

approximated the winds to be at 30 to 40 miles per hour and stated4

tha t the boat was constantly rolling from side to side. Wilson

finished cleaning the doghouse platform and then, from his perch on

the platform, he began to clean an adjoining McClelland mud tank

two to three feet away. As he squatted or bent down to reach the

sides of the mud tank wit h the wash wand, with only his toes in

contact with the doghouse platform floor, the boat rolled to one

side causing the plaintiff to lose his balance. Wilson tried to

direct his fall to an "opening spot" by grabbing on to the mudtank

for balance. He failed to keep his grip and fell approximately

seven feet from the doghouse platform, down the side of the

mudtank, on to some circulation pipes injuring his leg.

Navigating Chartered Territory

The charter party between McClelland and Chouest anticipated

such an accident and addressed fixation of any resulting liability.

Two relevant portions of the charter party form the basis of this

particular dispute. By the "OWNER'S HOLD HARMLESS" provision,

found at paragraph 18 of the charter, Chouest agreed

t o indemnify and hold harmless CHARTERER [McClelland]

from and against all suits, claims, action s, demands,

fines, penalties, and forfeitures . . . arising from or

incurred as a result of the manning, navigating,

operating, maintaining, victualin g, supplying, and

managing of the vessel....

McClelland, in the reciprocal "CHARTERER'S HOLD HARMLESS"

provision, paragraph 19, correspondingly agreed

to hold harmless and indemnify OWNER [Chouest] from and

against any suits, claims, actions, and demands arising

directly out of CHARTERER's actual drilling5 Likewise, the charter party obligates each party to acquire

insurance and to designate the other as an additional assured. Referring to the

various insurance that Chouest was obligated to obtain, paragraph 13 (E) states:

"All policies shall name CHARTERER, OWNER, and any additional parties designated

by CHARTERER or OWNER, as coassureds." Similarly, Paragraph 19 provides:

"CHARTERER'S Comprehensive General Liability Insurance shall name OWNER, and its

affiliated or subsidiary companies as additional assureds[.]"

6 Indeed, an employee of a contractor doing the ship's work could be a

seaman; however, the relative liability of the charterer or the owner, the real

issue here, will be determined not by the plaintiff's seaman status, but by the

charter party which spells out the responsibilities of the charter parties. As a

charter agreement for a vessel, the McClelland-Chouest charter is a maritime

contract and the reciprocal indemnity clauses which it contains are to be

construed according to maritime law. Lirette v. Popich Bros. Water Transport,

Inc. , 699 F.2d 725, 728 n. 11 (5th Cir. 1983); Transcontinental Gas Pipe Line

Corp., v. Mobile Drilling Barge , 424 F.2d 684, 691 (5th Cir.), cert. denied sub

nom. Ocean Drilling & Exploration Co. v. Signal Oil & Gas Co. , 400 U.S. 832, 91

S.Ct. 65, 27 L.Ed.2d 64 (1970).

5 operations.... 5

Each party claims that the other is bound under the terms of their

r espective "hold harmless" obligations. The question before us,

the n, comes down to this: Did Wilson's injury arise from "the

manning, navigating, operating, maintaining, victualing, supplying,

[or] managing of the vessel," or did his injury arise "directly out

of [McClelland's] actual drilling operations." Our answer,

however, does not turn on whether Wilson was a seaman. Therefore,

despite McClelland's proffer, we decline to determine Wilson's

seaman status. 6

Likewise, the district court found Wilson's seaman status to

be an irrelevant issue. In its order denying McClelland's and

granting Chouest's motion for summary judgment, the district court,

instead, cons idered the relevant portions of the charter and

determined that "[t]he drilling and other equipment associated with

the coring was owned and operated by McClelland, and the obligation

of the Chouest crew did not e x tend to the operation of the7 In appealing from the district court's final judgment, McClelland

appeals both the district court's granting of Chouest's motion for summary

judgment and the court's denial of McClelland's own motion for summary judgment.

The procedural history of McClelland's appeal is as follows: After Wilson

initiated suits against JOB, McClelland, Chouest and their respective liability

carriers as direct party defendants, Chouest filed a cross-claim against

McClelland seeking contractual defense/indemnity, and a third-party demand for

coverage as an additional assured against Americas Insurance Co. (AIC), the

comprehensive general liability insurer of McClelland.

McClelland and its primary maritime employer's liability insurer, the

Hartford Accident and Indemnity Co, (Hartford), responded by filing a cross-claim

against Chouest and its P & I carrier Standard Steamship Owners' Protection and

Indemnity Association (Bermuda), Ltd. (Standard.) That cross-claim, which is the

6 McClelland equipment." Rejecting McClelland's argument that

Chouest was obligated to indemnify McClelland becau se Wilson's

injury arose out of the operation of the vessel, the district

court, instead, held in favor of Chouest, the owner:

Article 19 of the Time Ch arter provides that the

Charterer [McClelland] will hold harmless and indemnify

the Owner [Chouest] 'against any suits, claims, actions,

and dem a nds arising directly out of the Charterer's

actual drilling operations

. . . .' Although drilling

was not taking place at the time of the accident, the

word 'actual' is not to be interpreted in its restrictive

sense, but it i s broad enough to encompass the

plaintiff's activities at that time. Moreover, plaintiff

was not engaged in the operation of the vessel; rather,

he was engaged in the special activities of the vessel,

core sampling. Since plaintiff's alleged injuries really

arise out of McClelland's core sampling activities, the

onus of providing insurance and indemnification properly

falls on McClelland.

Minute entry of October 24, 1990 at p. 2.

In reviewing the district court's grant of summary judgment in

favor of Chouest and its denial of McClelland's motion for summary

judgment, we review all issues de novo , applying the same test as

the district court. L eJeune v. Shell Oil Co.

, 950 F.2d 2 67, 268

( 5th Cir. 1992). Summary judgment is proper if "there is no

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

entitled to judgment as a matter of law." F.R.Civ.P. 56(c). 7core of this appeal, sought coverage for McClelland as an additional assured

under the P & I insurance provided to Chouest by Standard.

After the plaintiff settled for $130,000.00, to which Chouest contributed

$32,500.00, and all other parties' related claims were either dismissed or

settled, both Chouest's and McClelland's cross-claims and Chouest's third party

demand were taken under submission by the district court on motions for summary

judgment. By a Minute Entry dated October 24, 1990, the district court granted

summary judgment in favor of Chouest providing for indemnity adverse to

McClelland and AIC. The district court correspondingly denied McClelland's

motion for summary judgment against Chouest and Standard. The district court's

Final Judgment dismissed the cross-claim of McClelland and Hartford against

Chouest and Standard, and entered judgment in favor of Chouest on its cross-claim

and third-party demand against McClelland and AIC. Specifically, the court held

McClelland and AIC liable in solido to Chouest "in the amount of $32,500.00, plus

attorney's fees and costs of defense incurred in defending plaintiff's claim in

the main demand, and court costs incurred in prevailing on its motion for summary

judgment." McClelland and AIC, and McClelland and Hartford, filed their

respective notices of appeal separately. AIC, however, later successfully moved

for dismissal of its appeal as to Chouest. Thus, only McClelland/Hartford's

appeal of the denial of their motion for summary judgment and of the granting of

Chouest's motion for summary judgment remains.

8 In accordance with 46 U.S.C. § 2101(18), the R/V R.L. PERKINS was

designated as an oceanographic research vessel on July 6, 1989, such designation

remained in effect until July 6, 1991. The vessel's designation was confirmed in

a letter from J.P. Wysocki, Commander, U.S. Coast Guard, Officer in Charge,

Marine Inspection.

7 In the struggle to determine the source of Wilson's injuries

and the liability resulting therefrom, the confusion perhaps stems

from the fact that the vessel was designated by the United States

Coast Guard as an oceanographic research vessel performing

geotechnical surveying work. 8 The vessel's unique status as a

registered coring and research vessel thus begs the question: Did

McClelland's coring/drilling operations (which, by necessity,

caused mud to cover the doghouse and thereby created the need to

clean the doghouse) constitute "operation" of the research vessel

by the owner under paragr a ph 18 of the charter or did they

constitute "actual dr illing operations" of the charterer under

paragraph 19? In fact, both McClelland and Chouest attached

affidavits and deposition excerpts to their respective motions for

and responses in opposition to summary judgment. These affidavits8

and deposition excerpts, which were submitted by both par ties as

compelling evidence of the actual intent of the signatories to the

charter, were wisely not pursued by the district court in its

minute entry granting summary judgment in favor of Chouest and

against McClelland. The district court recognized, and we agree,

that a clear reading of the unambiguous, relevant portions of the

charter party, namely clauses 18 and 19, resolves this dispute.

When inter preting unambiguous provisions of a time charter, the

charter party should be read as a whole, and a court may not look

beyond the written language of the charter to determine the intent

of the parties. H ardy v. Gulf Oi l Corp. , 949 F.2d 826, 834 (5th

Cir. 1992); Atlantic Lines, Ltd. v. Narwhal, Ltd. , 514 F.2d 726,

730 (5th Cir. 1975); Hicks v. Ocean Drilling and Exploration Co.

,

512 F.2d 817, 825 (5th Cir. 1975), cert. d enied sub nom. H.B.

Buster Hughes, Inc. v. Ocean Drilling and Exploration Co.

, 423 U.S.

1050, 96 S.Ct. 777, 46 L.Ed.2d 639 (1976).

Reading The Charter As A Whole

The charter's apportionment of the "mirror-image" indemnity

obligations in paragraphs 18 and 19 is entirely consistent with

McClelland's and Chouest's division of responsibility in the dayto-day operation of the vessel: McClelland was responsible for

operating, manning, repairing, maintaining and cleaning its

equipment, and, according to paragraph 7(a) of the charter, OWNER'S

RESPONSIBILITY, Chouest

agree[d] to operate and navigate the Vessel for trips

involving CHARTERER's operations, to transport, berth,

and carry such personnel, material and/or e quipment as

CHARTERER may direct, and to handle, co ntrol, operate,9

maintain and repair the said mooring spread including all

safe anchor placing and retrieving, for which OWNER shall

be solely responsible.

Paragraph 12(a) of the charter, CREW, provides that "[t]he primary

duties of the [Chouest] crew of the Vessel shall be to operate,

navigate, and maintain the Vessel, including the mooring spread,

and the crew shall not be required to load or unload [McClelland's]

supplies or car go." Finally, paragraph 14 of the charter,

RESPONSIBILITY FOR CARGO, provides that "[t]he CHARTE RER will be

responsible for damage or loss of their cargo regardless of

whosoever caused." The charter, therefore, is unambiguously clear

that the obligations of Chouest as owner and McClelland as

charterer were separate and distinct: Chouest did not operate the

McClelland equipment, and McClelland did not operate the vessel.

Thus, McClelland is incorrect in characterizing its core sampling

activity as a "vessel" operation simply because the R /V R.L.

PERKINS provided the base from which McClelland's core sampling was

performed. L anasse v. Travelers Insurance Co.

, 450 F.2d 580, 583-

584 (5th Cir. 1971), cert. denied sub nom. Chevron Oil Co.,

California Co. Division v. Royal Insurance Co.

, 406 U.S. 921, 92

S.Ct. 1779, 32 L.Ed.2d 120 (1972). In fact, under McClelland's

interpretation of Chouest's protection and indemnity obligations,

the charter ends up as an absurdity: According to McClelland,

Chouest would be entitled to

defense/contribution/indemnity/additional insured status under

Clause 19, yet it also would have to provide protection and

indemnity coverage to McClelland for those identical liabilit ies10

(claims arising out of McClelland's core sampling operation). This

is not what the parties b argained for. The charter must be

construed to make sense and to reflect the intent of the

contracting parties. S ee Lirette v. Popich Bros. Water Transport,

Inc.

, 699 F.2d 725, 728 n. 11 (5th Cir. 1983); M.O.N.T. Boat Rental

v. Union Oil Co. , 613 F.2d 576, 579 (5th Cir. 1980).

Furthermore, we have broadly construed language similar to the

"arising out of charterer's actual drilling operations" language in

clause 19 of the McClelland/Chouest time charter "to unambiguously

encompass all activities reasonably incident or anticipated by the

principal activity of the contrac t." F ontenot v. Mesa Petroleum

Co.

, 791 F.2d 1207, 12 14 (5th Cir. 1986). In F ontenot

, the

namesake plaintiff, an oil rig worker, wa s injured after

disembarking from a helicopter when he lost his balance on a

slippery heliport surface. In the ensuing multi-party donnybrook,

the rig owner, Rowandrill, sought indemnity for paying its share

of Fontenot's settled claim from the charterer, Mesa, on the basis

of reciprocal indemnity agreements in the Rowandrill-Mesa charter.

Under the charter, Mesa agreed

to protect, defend, indemnify and save [Rowandrill] from

and against all claims, demands and causes of action of

every kind and character, wit h out limit and without

regard to the cause or causes thereof or the negligence

of any party, arising in connection herewith in favor of

[Mesa]'s employees, [Mesa]'s contractors or their

employees other than [Rowandrill's employees or its

subcontractors or their employees] on account of bodily

injury, death or damage to property.

Id. at 1213 (emphasis added).

In denying indemnity to Rowandrill under this provision, the9 The charter provision in Fontenot applied to any claim "arising in

connection herewith", whereas the charter provision in the present case applies

to claims "arising directly out of [McClelland]'s actual drilling operations."

This is a distinction without a substantial difference. See Smith v. Tenneco Oil

Co., Inc. , 803 F.2d 1386, 1388 (5th Cir. 1986).

11 District Court held that Fontenot's claim was not one "arising in

c onnection herewith" because the use of the heliport was only

incidental to the business of drilling a well or wells, the stated

purpose of the contract. I d. The Fifth Circuit reversed,

construing the charter broadly, and held:

where the presence of the injured person at the scene of

the injury is attributable to or might reasonably be

anticipated by his employment responsibilities, then his

injuries occur "in connection with" those

responsibilities. It is irrelevant that the person is

not at that moment performing services or that the injury

results from an activity not enc ompassed by the

employer's contractual undertakings.

Id. at 1215. 9

Likewise, for purposes of McClelland's hold harmless agreement

in Clause 19 of the McClelland/Chouest charter, Wilson' s injury,

sustained while cleaning McClelland equipment under McClelland's

orders, was attributable to and reasonably anticipated by his

employment responsibilities as a McClelland contractor employee.

In fact , Paragraph 19 of the charter, CHARTERER'S HOLD HARMLESS,

quite clearly designates those instances where McClelland will not

hold Chouest harmless, and cleaning of McClelland equipment is NOT

one of them:

CHARTERER'S Comprehensive General Liability Insurance

shall name OWNER, and its affilia ted or subsidiary

companies as additional assureds, but only with respect

to actual drilling operations of the CHARTERER, and not

with respect to the handling, operation, maintenance and

control of the moor ing spread, including placing and10 For example, if McClelland improperly directed Chouest in the

placement of the vessel's anchors, then, McClelland's improper direction

notwithstanding, such a mistake, if a covered risk, would constitute a vessel

liability to which Chouest's protection and indemnity coverage would respond.

12 retrieving of all anchors, for which OWNER shall be fully

responsible, including liabilities, claims, and damages

to third parties fr om which OWNER shall hold CHARTERER

harmless.

Had McClelland specifically intended that Chouest b e responsible

for liability arising from cleaning th e McClelland equipment on

Chouest's vessel, then McClelland surely could have indicated as

such. Indeed, McClelland, the author of the charter (according to

Chouest's brief), explicitly provided that Chouest would be solely

responsible for liability arising from the operation of the mooring

spread and the placement of the ve ssel's anchors. 1 0 With such

specificity as its norm, McClelland failed to a ssign Chouest the

responsibility of cleaning, or for that matter, maintaining

McClelland's equipment. It is equally clear that the charter party

does not require Chouest, a s the vessel owner-operator, to

indemnify McClelland for liabi lity arising from the cleaning of

McCl elland's equipment. Therefore, such cleaning, a McClelland

responsibility, w as an activity "arising directly out of"

McClelland's "actual drilling operations. " After all, "[a]

contract of indemnity should be construed to cover all losses,

damages, or liabilities which reasonably appear to have been within

the contemplation of th e parties . . . ." C orbitt v. Diamond M.

Drilling Co.

, 654 F.2d 329, 333 (5th Cir. U nit A Aug. 1981).

Wilson's claim arose directly out of McClelland's actual drilling11 We do not reach the question, as we did in Lanasse v. Travelers

Insurance Co. , 450 F.2d 580 (5th Cir. 1971), cert. denied sub nom. Chevron Oil

Co., California Co. Division v. Royal Insurance Co. , 406 U.S. 921, 92 S.Ct. 1779,

32 L.Ed.2d 120 (1972), of whether a P & I underwriter could recover against its

own additional assured in the face of an explicit policy provision waiving

subrogation. Lanasse , 450 F.2d at 585.

13 operations. 11

Wrapping It Up

Because no genuine issue exists as to any material fact

concerning the application of clauses 18 and 19 of the McClellandChouest charter, McClelland is not entitled to be held harmless for

Wilson's accident under Chouest's P & I policy as a matter of law,

and, conversely, Chouest is entitled to be held harmless by

McClelland.

The judgment of the district court is AFFIRMED.