Opinion ID: 2750362
Heading Depth: 2
Heading Rank: 1

Heading: Fluor’s Contracts with MMR

Text: In July 2005, Fluor contracted with FEMA to provide emergency housing assistance following natural disasters. Pursuant to its contract with FEMA, Fluor contracted with various subcontractors, including MMR, following Hurricanes Katrina and Rita. The general terms of the agreement between Fluor and MMR were contained in a document titled the “Blanket Ordering 2 Case: 13-30541 Document: 00512832743 Page: 3 Date Filed: 11/11/2014 No. 13-30541 Agreement” (the “BOA”), which went into effect on September 16, 2006. Under the BOA, MMR agreed to haul and install FEMA trailers for Fluor. The BOA provided that “[p]erformance of the Work under this Contract will be authorized and funded through Individual Task Order Releases (hereinafter ‘Releases’).” The BOA described the “scope of work” as supplying “all services, things, and items of expense necessary to perform the Work” but noted that “[e]ach Release will contain a specific Scope.” Under Part III of the BOA, which described the “general terms” of the BOA—but not under Part I, which described the scope of work—MMR was obligated to “inspect all materials, supplies and equipment which are to be incorporated in the Work.” Additionally, Part III permitted Fluor to “require additional inspections and tests.” 1 The BOA also included an indemnity provision, which is at issue in this case, under which MMR agreed to defend and indemnify Fluor for injuries “arising directly or indirectly out of [the BOA] or out of any acts or omissions of [MMR]”: 28.1 [MMR] agrees to defend, indemnify and hold harmless [Fluor] and Owner, the affiliated companies of each, and all of their directors, officers, employees, agents and representatives, from and against any claim, demand, cause of action, liability, loss or expense arising: . . . 28.1.3 From injury to or death of persons (including employees of [Fluor], Owner, [MMR] and [MMR]’s subcontractors) or from damage to or loss of property (including the property of 1 An attachment following the BOA—titled “Quality Assurance and Control”— provided that “[MMR] has primary responsibility for quality” and was obligated “to implement the measures necessary to build quality into the work in accordance with the contract, drawings, and specifications.” However, these obligations appeared under a heading describing “inspection and / or testing by [Fluor].” Moreover, the first provision stated that “[Fluor]-provided testing and inspection of [MMR]’s work will be identified in each Individual Release as applicable.” 3 Case: 13-30541 Document: 00512832743 Page: 4 Date Filed: 11/11/2014 No. 13-30541 [Fluor] or Owner) arising directly or indirectly out of this Contract or out of any acts or omissions of [MMR] or its subcontractors. [MMR]’s defense and indemnity obligations hereunder include claims and damages arising from non-delegable duties of [Fluor] or Owner or arising from use by [MMR] of construction equipment, tools, scaffolding or facilities furnished to [MMR] by [Fluor] or Owner. . . . The indemnity provisions were to apply “regardless of whether the party to be indemnified was concurrently negligent.” The BOA also obligated MMR to obtain several different types of insurance naming Fluor as an additional insured. The BOA’s choice-of-law provision stated that the BOA must be interpreted in accordance with California law. Although the BOA was the overarching base contract defining the rights and obligations of the parties with respect to MMR’s work, MMR was neither authorized nor required to perform specific work until Fluor issued an Individual Release that contained a specific scope. On January 7, 2006, Fluor issued the Release describing MMR’s haul-and-install work: [MMR] shall supply all supervision, labor, equipment, tools, materials, protective equipment and all items of expense necessary to perform the Work described below: 1.1 Hauling and Installation services of Manufactured Homes, Travel Trailers, and Park Models as directed by [Fluor]’s representative throughout the state of Louisiana. The Release incorporated certain exhibits, which set forth the specific tasks that MMR was required to complete. Those tasks included exterior installation, such as blocking and leveling the trailer, anchoring and strapping it, and installing it to sewer lines and gas lines. Additionally, MMR was required to make the trailer ready for occupancy, which included a duty to test certain appliances and appurtenances: 4 Case: 13-30541 Document: 00512832743 Page: 5 Date Filed: 11/11/2014 No. 13-30541 (a) Activate, test and make any necessary minor repairs to the refrigerator, range, furnace, air conditioner, and water heater for proper operations. Adjust pilots and burners, change orifices, water heater elements, etc., as needed; (b) Test smoke detector and replace if faulty. Defective smoke detectors provided by FEMA or manufacturer upon receipt of damaged one; and (c) Test exhaust fans for proper operation, repair as need.