Opinion ID: 50249
Heading Depth: 3
Heading Rank: 2

Heading: Maxum has a Duty to Defend and Indemnify Axxis

Text: The district court found on summary judgment that the MSA required Maxum to defend and indemnify Axxis. “We review the district court’s legal conclusions, including its interpretation of contracts, de novo.” Texaco Exploration & Prod., Inc. v. AmClyde Engineered Prods. Co., Inc., et al., 448 F.3d 760, 777 (5th Cir. 2006). The MSA’s language is perfectly clear. It provides that Maxum will defend and indemnify Axxis against all claims brought by Maxum employees in connection with the MSA. It is undisputed that Silva is a Maxum employee, that he was assigned to work for Axxis as contemplated by the MSA, and that his claim arises from that work. Despite MSA’s clear language, Maxum argues that (1) the contract is invalid because error vitiated Maxum’s consent, and (2) it is unclear whether maritime law applies, and if it does not, then the indemnity clause is unenforceable under the Louisiana Oilfield 7 Indemnity Act. See LA. REV. STAT. 9:2780. Neither of Maxum’s arguments give us much cause for concern.
Maxum’s only argument as to why its consent to the MSA was invalid is that Exhibit A, which set forth the insurance requirements and was referenced throughout the MSA, was not attached to the MSA during negotiations. Without Exhibit A, Maxum allegedly did not realize it could be held liable under the Jones Act. It argues that this mistake vitiates its consent to the contract. One party’s error may vitiate consent to a contract “only when it concerns a cause without which the obligation would not have been incurred and that cause was known or should have been known to the other party.” LA. CIV. CODE art. 1949. Assuming Maxum’s allegations are true, which requires overlooking a number of the MSA’s provisions suggesting that maritime law will apply, the district court pointed out that Maxum only argues that it did not have Exhibit A during contract negotiations. It “does not argue that Exhibit ‘A’ was absent from the final version of the contract [its president] signed.” The MSA, as signed, is explicit that Maxum must provide coverage for Jones Act liability. Assuming Maxum misunderstood this point, it provides no evidence that Axxis knew or should have known about this mistaken reading of the contract’s plain terms. 8 “In the context of contract interpretation, only when there is a choice of reasonable interpretations of the contract is there a material fact issue concerning the parties' intent that would preclude summary judgment.” Gonzalez v. Denning, 394 F.3d 388, 392 (5th Cir. 2004). Given the plain terms of the signed MSA, any misunderstanding was attributable solely to Maxum’s carelessness and cannot serve to vitiate its consent.
Maxum’s final argument is that Louisiana law should apply to strike down the MSA’s indemnity clause. However, if the MSA is a maritime contract governed by maritime law, as Axxis argues, Louisiana law is inapplicable and the parties agree that the indemnity provision is enforceable. See Demette v. Falcon Drilling Co., 280 F.3d 492, 500 (5th Cir. 2002). There is no bright-line rule used to determine whether a contract is maritime in nature. Id. at 500 (describing it as “a perplexing affair”); Theriot v. Bay Drilling Corp., 783 F.2d 527, 538 (5th Cir. 1986). Determining whether the MSA is a maritime contract governed by maritime law depends partly on “its historical treatment in the jurisprudence,” and partly on a six-pronged “factspecific inquiry.” Demette, 280 F.3d at 500 (discussing Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313, 316 (5th Cir. 1990)). It is uncontested that the FREEDOM is an inland drilling barge, and personnel contracts for such barges are historically treated as 9 maritime contracts. Demette, 280 F.3d at 500–01. As for the fact-specific inquiry, we need not consider each of the six prongs listed in Demette individually.2 Axxis points out that the undisputed evidence shows that all six of these factors militate in favor of finding that this was a maritime contract and Maxum never makes any allegation disputing that. Maxum only makes a conclusory statement that there are insufficient facts to find that maritime law applies. But Maxum cannot defeat a motion for summary judgment merely by claiming “some metaphysical doubt” as to the material facts. Matsushita Elec. Indus. Co., Ltd v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “[T]he mere existence of some alleged factual dispute between parties will not defeat an otherwise properly supported motion for summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). Axxis’s argument is strengthened by the MSA’s choice-of-law provision stating that general maritime law is applicable. 2 The six prongs are as follows: 1. What does the specific work order in effect at the time of the injury provide? 2. What work did the crew assigned under the work order actually do? 3. Was the crew assigned to do work aboard a vessel in navigable waters? 4. To what extent did the work being done relate to the mission of the vessel? 5. What was the principal work of the injured worker? 6. What work was the injured worker actually doing at the time of injury? 10 The district court properly found that the MSA is governed by maritime law and Maxum has failed to point to any concrete factual dispute that could alter that finding. Under maritime law, it is undisputed that the indemnity provision at issue is valid, so we affirm the district court’s judgment.