Opinion ID: 777761
Heading Depth: 1
Heading Rank: 4

Heading: reciprocity of the indemnification agreement

Text: 24 Premiere contends that its obligation to indemnify Santa Fe is more onerous than Santa Fe's corresponding obligation. Premiere thus argues that its indemnification agreement with Santa Fe is not reciprocal and therefore is unenforceable under the Longshore and Harbor Workers Compensation Act (the LHWCA), 33 U.S.C. § 905 (1999), which governs the agreement. Subsection 905(b) of the LHWCA prohibits indemnification by the employer of a longshoreman for a claim due to bodily injury brought by the employee against a vessel owner. 33 U.S.C. § 905(b). 7 Subsection 905(c) provides an exception, however, allowing indemnification by such an employer, in this case Premiere, so long as there is reciprocal agreement by the vessel owner, in this case Santa Fe, to indemnify the employer. 33 U.S.C. § 905(c). 8 Examination of the indemnification agreement between Premiere and Santa Fe indicates that the agreement is sufficiently reciprocal to satisfy the subsection 905(c) exception. Thus, the agreement is enforceable against Premiere pursuant to subsection 905(b). 25 Premiere first argues that Section 15.3 of its agreement with Santa Fe impermissibly enlarges Premiere's burden to indemnify beyond Santa Fe's burden in return. Premiere notes that in Section 15.3, Premiere agrees to indemnify Santa Fe against any claims arising on behalf of employees of Premiere, as well as against claims on behalf of employees of Premiere subcontractors. Premiere contends, however, that there is no similar provision obligating Santa Fe to indemnify Premiere on account of Santa Fe's third-party contractors or subcontractors. 9 Contrary to Premiere's assertion, however, the language of the indemnification agreement, as outlined in Section 15.2, reveals that Santa Fe expressly and unconditionally agreed to indemnify Premiere against any claims arising on behalf of employees of Santa Fe's third-party contractors. Section 15.2 reads in relevant part: 26 15.2 [Santa Fe] agrees to protect, defend, indemnify, hold, and save Contractor [Premiere] ... harmless from and against all claims ... and which are asserted by or arise in favor of [Santa Fe's] employees or [Santa Fe's] contractors or their employees, other than those parties identified in sub-clause 15.1, due to bodily injury.... 27 (emphasis added). Thus, both Premiere and Santa Fe agreed to indemnify each other for claims brought on behalf of the employees of their respective third-party contractors (or in the case of Premiere, its subcontractors). 10 28 Premiere further contends, however, that Section 15.3 creates an additional obligation because it contains an undertaking by Premiere to obtain an express contractual undertaking by any Premiere subcontractor to indemnify Santa Fe. Premiere argues that because Santa Fe is not likewise required to obtain the same contractual undertaking by Santa Fe's contractors to indemnify Premiere and Premiere subcontractors, then Premiere's obligation to Santa Fe is more onerous. We fail to see how this undertaking creates any additional indemnification obligation on the part of Premiere. 29 We do see how Section 15.3 may result in an additional obligation on the part of a subcontractor of Premiere. However, regardless of whether Premiere obtains an additional agreement by any of its subcontractors to indemnify Santa Fe pursuant to Section 15.3, Santa Fe is already entitled to look to Premiere for — and Premiere is obligated to provide — indemnification against claims by employees of Premiere subcontractors pursuant to Section 15.1. Consequently, Section 15.3 in no way alters or enlarges Premiere's obligation to indemnify Santa Fe (or Santa Fe's contractors), and both Premiere and Santa Fe are entitled to look to each other for indemnification for claims brought by the employees of the respective third-party entities with which each might contract in turn. 30 We likewise reject Premiere's argument that the reciprocity of its indemnification agreement with Santa Fe is destroyed by the fact that Ensco did not agree in its contract with Santa Fe to indemnify any contractors of Santa Fe, such as Premiere. By the terms of Section 15.2, Premiere is entitled to indemnification from Santa Fe against claims brought against Premiere by Ensco employees. Thus, the fact that any contractor of Santa Fe such as Ensco does not agree to indemnify other contractors of Santa Fe has no effect on the reciprocity of the indemnification obligations running between Santa Fe and Premiere. 11 31 In support of its argument that the indemnification agreement is not reciprocal, Premiere relies on a single, unpublished district court decision, Falcon Operators, Inc. v. P.M.P. Wireline Servs., Inc., Nos. Civ.A. 97-825, 97-2586, 1997 WL 610825, at - (E.D.La. Sept.30, 1997). We note that Falcon Operators is not binding on this court. Moreover, we agree with Santa Fe that the provisions at issue in that case are distinguishable in that the groups of constituents affiliated with the parties that each agreed to indemnify were in greater disparity than is the case here. Likewise, the parties in that case agreed to indemnify against claims brought on behalf of groups of their affiliated constituents that were in greater disparity than is the case here. See id. Falcon Operators is thus distinguishable, and Premiere's reliance upon that case is unavailing. 12 32 We find that the indemnification provisions of the Premiere-Santa Fe contract are sufficiently reciprocal that their agreement is enforceable under the LHWCA. The district court did not err, therefore, in finding as a matter of law that Premiere's agreement to indemnify Santa Fe is enforceable.