Opinion ID: 777761
Heading Depth: 2
Heading Rank: 1

Heading: Premiere's Agreement to Indemnify Santa Fe for Contractual and Other Legal Duties

Text: 9 Premiere contends that our decision in Corbitt v. Diamond M. Drilling Co., 654 F.2d 329 (5th Cir.1981), in which we denied indemnification to a contractor situated similarly to Santa Fe, controls the instant case and thus that the district court erred in finding that Premiere must indemnify Santa Fe. In Corbitt, we explained that a contract of indemnity should be construed to cover all losses ... which reasonably appear to have been within the contemplation of the parties, but it should not be read to impose liability for those losses ... which are neither expressly within its terms nor of such character that it can be reasonably inferred that the parties intended to include them within the indemnity coverage. Id. at 333. A close reading of Corbitt, however, indicates that the indemnification provision at issue in that case was less broadly drafted than, and thus is distinguishable from, the indemnification provision outlining Premiere's obligation to Santa Fe, which provision appears as Section 15.1 of the Premiere-Santa Fe contract. See id. at 331-34. 4 Moreover, recent decisions by this court in cases involving provisions more analogous to Section 15.1, and which build on our reasoning in Corbitt, indicate that the district court correctly determined that Premiere owes indemnification to Santa Fe based on their agreement in Section 15.1. 10 In Corbitt, Shell Oil contracted with two companies, Diamond M. and Sladco, to work on a drilling operation. Id. at 331. When an injured employee of Sladco sued Diamond M. in tort, Diamond M. sought indemnification from Shell Oil pursuant to their contract. Id. Shell Oil then filed a third-party action seeking indemnification in turn from the employer of the injured plaintiff, Sladco, pursuant to their contract. Id. Thus, in Corbitt, Shell Oil was situated similarly to Santa Fe in the instant case. Likewise, defendant Diamond M. and the injured plaintiff's employer, Sladco, which maintained no contract between them, were situated similarly to Ensco and Premiere. In Corbitt, we agreed with the district court that Shell Oil was not entitled to indemnification from its contractor, Sladco, because the indemnification provision in the contract between Shell and employer Sladco restricted the scope of Sladco's duty to indemnify solely to those obligations sounding in tort. Id. at 333. 5 We reasoned that, although the underlying claim creating the obligation for which Shell Oil sought indemnification from Sladco sounded in tort, the obligation for which Shell sought indemnification itself was contractual in nature, as it arose from the agreement between Shell and Diamond M. Id. We declined to interpret the phrase all claims in the Corbitt provision to include such contractual obligations. See id. We noted that the language of the indemnification provision at issue in Corbitt made no mention of a duty to defend for obligations arising in contract, and thus we read the scope of that provision by its express terms, stating: 11 .... Shell's liability to Diamond M is not on account of personal injury. Rather, it is on account of its agreement to indemnify Diamond M under [the drilling contract between them]. Since the [indemnification agreement] between Shell and Sladco does not specifically provide that Sladco assumes claims arising from Shell's own separate contractual obligations, such indemnification is not required. Id. We further indicated that 12 [t]he contract need not contain any special words to evince an intention to create a right of indemnity for independent contractual liabilities. We hold only that it must clearly express such a purpose. In this case, there is nothing in the contractual language itself or in the realities of the situation in which the parties executed [the indemnification agreement] which reflects any such intention. 13 Id. at 334. 14 In contrast, the language of Section 15.1 of the contract between Santa Fe and Premiere indicates that the scope of employer Premiere's duty to indemnify Santa Fe is broader than was the scope of employer Sladco's duty to indemnify Shell Oil in Corbitt. 6 Section 15.1 does include language similar to that in the provision at issue in Corbitt, by which Premiere owes a duty to indemnify for obligations arising in favor of Premiere employees due to bodily injury or death. However, unlike the provision at issue in Corbitt, Section 15.1 also includes language that clearly and expressly indicates Premiere's intent to indemnify Santa Fe for obligations whether arising in ... tort or contract. Moreover, Section 15.1 includes additional, rather expansive, language that broadens Santa Fe's entitlement to indemnification for all claims ... of whatsoever nature or character ... whether or not caused by the ... legal duty of [Santa Fe] .... (emphasis added). Thus, Section 15.1 is distinguishable from the more narrowly drafted provision in Corbitt, and our reading of the more narrow provision in Corbitt does not control. Moreover, our reasoning in Corbitt suggests that Premiere owes indemnification to Santa Fe in the instant case for Santa Fe's contractual or legal duty to indemnify Ensco against Sumrall's injury claim. 15