Court Opinion

ID: 50957
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:00:30+00
Date Added: 2024-06-11T17:18:59.554252
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
                  UNITED STATES COURT OF APPEALS
                       For the Fifth Circuit                  August 1, 2007

                                                         Charles R. Fulbruge III
                                                                 Clerk
                           No. 06-30992

                           JASON SMITH,

                                                           Plaintiff,

                              VERSUS

             SEACOR MARINE LLC; SEACOR OFFSHORE LLC,

                    Defendants-Third Party Plaintiffs-Appellants,

                               VERSUS

                         AMEC-GREYSTAR LLC,

                                   Third Party Defendant-Appellee,

          Appeal from the United States District Court
              For the Eastern District of Louisiana

Before HIGGINBOTHAM, DAVIS and BARKSDALE, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

     This is an appeal from the district court’s order dismissing

the third party complaint of Seacor Marine LLC seeking contractual

indemnity for sums it may owe to Jason Smith, who was      injured in

an oilfield accident which occurred on the Outer Continental Shelf

off the coast of Louisiana.   Because the contract under which the

appellant seeks indemnity is a non-maritime contract, Louisiana law
applies and the district court correctly held that the Louisiana

Oilfield    Indemnity    Act    precludes      appellant’s       recovery.       We

therefore AFFIRM.

                                      I.

     At    the   time   the    accident    occurred     giving    rise   to    this

litigation, BP America Production Company (BP) was engaged in

drilling an oil well on the Outer Continental Shelf (OCS) off the

coast of Louisiana.      BP engaged a number of contractors to assist

in this endeavor. It contracted with SEACOR Marine, LLC and SEACOR

Offshore, LLC (Seacor) for vessel transportation.                BP entered into

a separate contract with AMEC-Greystar LLC (Greystar) to provide

labor services on its platform.

     Jason Smith, an employee of Greystar, filed this admiralty

action alleging that he sustained personal injuries during a

personnel basket transfer from Seacor’s vessel to BP’s platform.

Smith received Longshore and Harbor Worker’s Compensation Act

(LHWCA) benefits from Greystar and also filed a damage action

against Seacor for alleged vessel negligence under 33 U.S.C. §

905(b).    Smith did not sue BP or Greystar.                Seacor then filed a

third party complaint against Greystar seeking indemnity for any

sums it might be required to pay Smith.               The indemnity request is

based on Greystar’s contract with BP, in which Greystar agreed to

indemnify BP’s contractors (along with BP), for liability visited

on them as a result of injury to Greystar employees.

     The   indemnity     provisions       in   both   the   BP/Seacor    and   the

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BP/Greystar contracts are identical.1                 In its contract with BP,

Seacor agrees that it will indemnify BP and BP’s contractors for

any    liability     resulting   from          injuries   to     Seacor   employees.

Similarly, Greystar, in its contract with BP, agrees that it will

indemnify BP and BP’s contractors for any liability resulting from

injuries to Greystar’s employees.

       The district court accepted Greystar’s argument that the

BP/Greystar contract was a non-maritime contract, governed by

Louisiana    law,     and   therefore          the   indemnity     provisions   were

unenforceable under the Louisiana Oilfield Indemnity Act, (LOIA).

The    district    court    entered   a    Rule      54(b)     judgment   dismissing

Seacor’s complaint and Seacor lodged this appeal.

                                          II.

  1
      Cross Indemnity Provision

  In accordance with the provisions of this Article 14,
  Contractor agrees to defend, indemnify, release, and hold
  Company’s other contractors, with the exception of helicopter
  transportation contractor(s), harmless (to the extent such
  other contractors execute cross indemnification provisions
  substantially similar to those contained in this Section
  14.04) from and against all Claims, Losses, and Expenses,
  including without limitation those occurring during ingress,
  egress, loading or unloading, or during transportation to or
  from the Asset, irrespective of insurance coverages for the
  following:

  14.04.01     (I)    all injuries to, deaths, or illnesses of
                      persons in Contractor Group; and

            (ii) all   damages  to   or  losses                   of
                 Contractor’s Equipment . . .

                                           3
       Seacor agrees that Greystar’s contract with BP to furnish

labor    services     to    work   aboard      BP’s     platform     on     the   Outer

Continental Shelf is a non-maritime contract governed by Louisiana

law.     This contract creates Greystar’s indemnity obligation to

Seacor    since     the    Greystar/BP       contract     requires        Greystar   to

indemnify Seacor as a BP contractor. Seacor also agrees that if

Smith had sued BP instead of Seacor and BP had sought indemnity

from Greystar under this same contract, the Louisiana Oilfield

Indemnity Act would preclude BP’s indemnity claim.                   Seacor argues

it is nevertheless entitled to enforce the indemnity provision in

the BP/Greystar contract because Smith’s suit against it under 33

U.S.C. § 905(b) triggers the application of § 905(c) and Louisiana

law does not apply.

       Section 905(b) permits a person such as Smith covered under

the LHWCA to bring an action for damages against a vessel for

vessel negligence.         Section 905(b) also provides that the employer

of such injured person “shall not be liable to the vessel for such

damages directly or indirectly and any agreements or warranties to

the contrary shall be void.”

       Under limited circumstances, § 905(c) removes §                        905(b)’s

declaration of the non-liability of the injured employee’s employer

to reimburse the shipowner for sums the shipowner is required to

pay the employee.         It provides

       Nothing contained in subsection (b) of this section shall
       preclude the enforcement according to its terms of any

                                         4
     reciprocal indemnity provision whereby the employer of a
     person entitled to receive benefits under this Act by
     virtue of section 4 of the Outer Continental Shelf Lands
     Act (43 USC 1333) and the vessel agreed to defend and
     indemnify the other for cost of defense and loss or
     liability for damages arising out of or resulting from
     death or bodily injury to their employees.

33 U.S.C.S. § 905(c).          Thus, § 905(b) bars vessel owners from

obtaining indemnity from an LHWCA employer whether based on implied

warranty    or    express   contract.       Section   905(c)       then   partially

restores the vessel owner’s right to seek indemnity from the LHWCA

employer for injuries occurring on the OCS when the vessel’s claim

is based on reciprocal indemnity provisions in its contract with

the employer.

     Our decision in Wagner v. McDermott, 79 F.3d 20 (5th Cir.

1996), controls the outcome in this appeal. In Wagner, McDermott

contracted with Capital to perform welding work in the construction

of a platform.      McDermott also furnished a vessel for use in the

platform construction. Wagner, an employee of Capital, was injured

on McDermott’s vessel allegedly due to vessel negligence and sued

McDermott under § 905(b).             McDermott’s contract with Capital

contained a reciprocal indemnity agreement where each agreed to

indemnify   the    other    for   injuries     to   their    own    employees   and

McDermott sought indemnity from Capital based on that reciprocal

indemnity agreement.        We concluded that because McDermott engaged

Capital    to    perform    welding   work     on   the     platform,     McDermott

contracted with Capital in its capacity as platform owner and not

as vessel owner.

                                        5
     To trigger § 905(c), we held that the indemnity agreement must

be between “the employer . . . and the vessel.”          We stated:

     Here, McDermott entered into a contract for welders to
     work on a fixed platform it was constructing. McDermott
     was not acting in its capacity as vessel owner but only
     as a contractor who incidentally utilized a vessel to
     accomplish its work. The fact that McDermott happens to
     own the vessel does not place the contract within §
     905(c). McDermott argues that because Plaintiff asserted
     a § 905(b) claim, § 905(c) must govern the contract
     dispute. While § 905(b) liability is a requisite for §
     905(c) applicability, the contract must be of the type
     covered by § 905(c). It must be with a vessel. The
     McDermott-Capital/Landry contract is not.
79 F.3d at 22, 23.      Because the accident occurred off the coast of

Louisiana, we concluded that the indemnity provisions of the

McDermott/Capital contract were governed by state law and therefore

barred by the Louisiana Oilfield Indemnity Act.

     Similarly,    BP   contracted    with   Greystar   to   provide   labor

services on BP’s platform under a non-maritime contract governed by

Louisiana law.    As we held in Wagner, an action against the vessel

owner under § 905(b) does not trigger the application of § 905(c).

Rather, the non-maritime nature of the contract under which the

vessel seeks indemnity requires application of state law.          Because

Louisiana law, including the LOIA applies to the BP/Greystar

contract,   the   court   correctly   dismissed   Seacor’s     third   party

demand.

     AFFIRMED.

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