Opinion ID: 777761
Heading Depth: 1
Heading Rank: 3

Heading: premiere's agreement to indemnify santa fe

Text: 8
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
16 Additional language in Section 15.1, which language did not appear in the provision at issue in Corbitt, even more compellingly indicates that Premiere owes indemnification to Santa Fe in the instant case. Specifically, Section 15.1 expressly indicates Premiere's intent to indemnify not only Santa Fe, but also Santa Fe's contractors and subcontractors for the covered obligations. Contrary to Premiere's assertion that Premiere owes no duty to indemnify for obligations arising due to Santa Fe's contractual relationships with third parties, prior decisions by this court interpreting analogous indemnification provisions in like circumstances indicate that such language in Section 15.1 expresses clear intent by Premiere to indemnify Santa Fe for amounts paid due to an injury claim filed against Santa Fe's third-party contractor, Ensco. In six cases since Corbitt, we confronted circumstances indistinguishable from those in Corbitt and the instant case in all material respects except that the indemnification provisions at issue — unlike the provision in Corbitt but like Section 15.1 — included agreement by a party such as Premiere to indemnify third-party contractors, subcontractors, and/or invitees of a party such as Santa Fe. In all six cases, we found based on such language that the party situated similarly to Premiere owed indemnification to the party such as Santa Fe. See Demette v. Falcon Drilling Co., Inc., 280 F.3d 492 (5th Cir.2002); Campbell v. Sonat Offshore Drilling, Inc., 27 F.3d 185 (5th Cir.1994) ( Campbell II ); Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115 (5th Cir.1992) ( Campbell I ); Babcock v. Cont'l Oil Co., 792 F.2d 1346 (5th Cir.1986) (per curiam); Mills v. Zapata Drilling Co., Inc., 722 F.2d 1170 (5th Cir.1983), overruled on other grounds, Kelly v. Lee's Old Fashioned Hamburgers, Inc., 908 F.2d 1218 (5th Cir.1990) (per curiam); Lirette v. Popich Bros. Water Transp., Inc., 699 F.2d 725 (5th Cir.1983). 17 In Campbell I & II, for example, after an employee of a casing services contractor was injured on a drilling operation, the employee sued the owner of the drilling vessel. See Campbell II, 27 F.3d at 186-87. The vessel owner and the casing services employer maintained no direct contractual relationship. Id. A party situated similarly to Santa Fe, Union Texas Petroleum (UTP), contracted separately with the casing services employer and the vessel owner for each to supply services on the UTP drilling operation. Id. Thus, the casing services employer of the injured plaintiff was situated similarly to Premiere, and the vessel owner was situated similarly to Ensco. 18 Pursuant to the contract between UTP and the defendant vessel owner, in which UTP agreed to indemnify and defend the vessel owner, UTP undertook defense of the vessel owner. UTP further impleaded the casing services employer. Id. at 187. In the contract between the casing services employer and UTP, the employer agreed to indemnify not only UTP, but also  contractors engaged by UTP, such as [the vessel owner,] `for injury to... [the casing services employer's] employees....' Id. (emphasis added). In Campbell I, we had enforced [the casing services employer's] indemnity obligation under the UTP/[employer] contract, affirming a ruling requiring [the employer] to defend and indemnify [both the vessel owner] and UTP. See Campbell II, 27 F.3d at 187 (describing Campbell I, 979 F.2d at 1115). 19 In Campbell II, however, the casing services employer contended that it did not owe full, but only half, indemnity under the circumstances and that UTP owed the other half. Id. The employer thus filed for contribution from UTP. Id. In rejecting that claim in Campbell II, and thus affirming our decision in Campbell I, we reasoned that the employer's duty to indemnify [the vessel owner] flows from its contract with UTP because the employer expressly agreed to indemnify contractors of UTP. Id. We further rejected an argument by the employer based on Corbitt, which is similar to the argument made by Premiere, contending that the employer owed no reimbursement of UTP because UTP independently contracted to indemnify the vessel owner. Id. In so doing, we noted that unlike in Corbitt, the employer in Campbell I & II agreed with UTP to indemnify both UTP and [its contractor, the vessel owner]. See id. (emphasis added). We stated that the employer cannot insulate itself from paying its full indemnity obligation on the basis that UTP's liability to [the vessel owner] is contractual. Id. at 188 (citing Lirette, 699 F.2d at 725). We concluded that [s]imilarly to the employer of the injured plaintiff in Lirette, the employer's duty to indemnify UTP fully for amounts UTP owes [the vessel owner] for the [injured employee's] claims arises from [the employer's] express undertaking to indemnify both UTP and [the vessel owner] [for] such losses. The Corbitt argument fails. Id. (citing Lirette, 699 F.2d at 728). Like the employer in Campbell I & II, Premiere expressly agreed to indemnify not only Santa Fe, but also Santa Fe's contractors and subcontractors, thus including Ensco, for obligations that arise due to claims of injury brought by Premiere employees. Consequently, under the consistent reasoning of this court, as in Campbell I & II, we conclude that Premiere is obligated to indemnify, and thus to reimburse, Santa Fe for any amounts owing for indemnification and defense provided by Santa Fe to Ensco on account of Sumrall's tort claim. See also Demette, 280 F.3d at 504; Babcock, 792 F.2d at 1351-53; Mills, 722 F.2d at 1174-75; Lirette, 699 F.2d at 725. 20 In an unusually poor alternative argument, Premiere contends that even if it has a duty to indemnify Santa Fe for tortious, contractual or any other type of obligations, the language by which it agrees to indemnify from and against all claims ... which are asserted by or arise in favor of [Premiere] or any of its ... employees  limits its duty to indemnify. (emphasis added). Premiere contends that it owes indemnification for only those obligations flowing from actions filed directly against Santa Fe by Premiere or Premiere employees. Premiere thus asserts that any contractual obligation arising from Santa Fe's indemnification of Ensco is not included in Premiere's duty because neither Premiere nor any Premiere employee was party to any contractual claim filed directly against Santa Fe. 21 None of the indemnification provisions at issue in our Lirette line of decisions contains precisely the same in favor of language as that relied on by Premiere for this argument. The corresponding relevant language in the provision at issue in Lirette, for example, reads: `Owner... agrees to indemnify ... Charterer ... from any claims or suits resulting from injury or damage to Owner's ... employees....' 699 F.2d at 726 n. 4. However, the presence of language that is similar, if not identical, to the in favor of language of Section 15.1 in the provisions at issue in Lirette and its progeny did not alter our findings in favor of the parties situated similarly to Santa Fe in those materially indistinguishable decisions. See, e.g., Lirette, 699 F.2d at 729; Campbell II, 27 F.3d at 186-88. Consequently, we reject Premiere's preferred reading of the in favor of language in Section 15.1 as wholly specious. 22 The district court did not err in finding as a matter of law that Premiere owes indemnification to Santa Fe in the instant case based on the express language of their agreement in Section 15.1. 23