Court Opinion

ID: 19030
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:20:49+00
Date Added: 2024-06-11T15:04:41.555845
License: Public Domain

UNITED STATES COURT OF APPEALS
                           FOR THE FIFTH CIRCUIT

                                   No. 98-30169

MURPHY LeBLANC,
                                                                           Plaintiff,
MARINE DRILLING MANAGEMENT CO.,
                                                      Third-Party Plaintiff-Appellant,
                                      versus
GLOBAL MARINE DRILLING CO.,
                                                                          Defendant,
FRANK’S CASING CREW & RENTAL TOOLS, INC.,
                                                     Third-Party Defendant-Appellee.

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

                                 October 22, 1999
Before REYNALDO G. GARZA, POLITZ, and BARKSDALE, Circuit Judges.
POLITZ, Circuit Judge:

      This litigation involves a contractual dispute which requires a determination

whether Marine Drilling Management Co. is entitled to assured status under its
contract with Frank’s Casing Crew & Rentals Tools, Inc. For the reasons assigned

we conclude and hold in the affirmative.

                                BACKGROUND
      Marine entered into a contract with Shell Offshore, Inc. requiring Marine to

perform certain drilling services. In turn, Shell contracted with Frank’s for the

performance of casing operations in connection with Shell’s contract with Marine.
Marine, as contractor, and Frank’s, as subcontractor, executed a master service
agreement (MSA) which covered the drilling/casing work. Paragraph 7.2 of the

MSA obligated Frank’s to indemnify Marine, and paragraph 6.3 required Frank’s

to list Marine as an additional assured in its insurance policies. Paragraph 7.1
limited these obligations to injuries “arising out of the performance of [the MSA].”

       Murphy LeBlanc, a Frank’s employee, was injured while performing work

for Shell on a rig owned by Marine. LeBlanc sued Marine which filed a third-party

complaint against Frank’s, seeking assured status under paragraph 6.3 of the MSA.
       The trial court granted summary judgment to Frank’s, holding that the
assured clause was not triggered by the injury, reasoning that LeBlanc’s injury
arose out of the contract between Shell and Frank’s, and not out of the MSA. This

appeal followed.
                                    ANALYSIS

       Summary judgment is appropriate if the evidence establishes “that there is
no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law.”1 We review a summary judgment ruling de novo,

applying the same criteria employed by the trial court.2

       This appeal involves a contractual interpretation. The trial court found the
MSA inapplicable. We do not agree. The pertinent provision of the MSA

prescribes:

   1
    Fed. R. Civ. P. 56(c).
   2
    Conkling v. Turner, 18 F.3d 1285 (5th Cir.1994).
                                          2
       With respect to work or service performed by Subcontractor [Frank’s]
       pursuant to contracts or work orders with other parties as aforesaid on
       or for any drilling barges, vessels, platforms, installations or other
       property of any kind owned by, leased to, chartered to, under the
       control of, or upon which Contractor [Marine] may be performing
       services or operations, paragraphs 6 [under which Frank’s must list
       Marine as an assured in certain insurance policies], 7, 8, 9, 10, 12 and
       16 shall be applicable as between Contractor and Subcontractor.3

       We view this language as reflecting a clear contemplation that Frank’s would

work for a third party on a rig owned by Marine, and that paragraph 6 -- which
contains the clause regarding assured status -- would apply in such a situation.
Paragraph 7.1, limiting liability to injuries “arising out of the performance of [the

MSA],” is not to the contrary.

       Frank’s advances an alternative basis for the trial court’s holding. Relying
on a provision in the Longshore and Harbor Workers’ Compensation Act,4 Frank’s

contends that the agreement with respect to assured status is invalid because it is
tied to the statutorily-barred agreement to indemnify.
       The specific statutory section upon which Frank’s relies, 33 U.S.C. § 905(b),

provides that an employer shall not be liable for any injury to a covered employee

caused by the negligence of a vessel, and that any agreement “to the contrary shall
be void.”    In Voisin v. O.D.E.C.O. Drilling Co.,5 under virtually identical

circumstances as the case at bar, we held that § 905(b) does not invalidate an

agreement requiring an employer to list a vessel owner as an additional assured.

   3
    Paragraph 1.2.
   4
    33 U.S.C. § 901 et seq.
   5
    744 F.2d 1174 (5th Cir. 1984).
                                          3
We concluded that “[n]either the [LHWCA] nor its legislative history suggest[s]
that additional assured clauses such as the one before us are a proscribed form of

indirect liability.”6 Although we affirmed the trial court’s invalidation of the

indemnity clause, we reversed its determination that the assured clause similarly
was void.

       Frank’s seeks to distinguish the case before us from Voisin, suggesting that,

unlike the contract in Voisin, the MSA conditions the enforceability of the assured

clause upon the enforceability of the indemnity clause. Frank’s focuses upon the
following language:
       [T]o the extent Subcontractor [Frank’s] assumes liability hereunder,
       and agrees to indemnify Contractor [Marine], Contractor shall be
       named an additional insured in [certain] insurance policies.7

The emphasized phrasing, Frank’s insists, specifically makes contingent the
validity of the assured clause upon that of the indemnity clause. Continuing,

Frank’s maintains that if the indemnity clause is invalid the assured clause also
must fall.8
       We are not persuaded that any provision in the MSA, or any language

excerpted above, intends such a result. The contractual interpretation advanced by

Frank’s would have significant force if the MSA required a valid indemnity
agreement as a precondition to one obtaining assured status. Such is not the

   6
    Id. at 1177.
   7
    Paragraph 6.3 (emphasis added).
   8
    Marine now concedes that the indemnity clause is invalid.
                                           4
situation before us. The MSA merely states that as Frank’s agrees to indemnify
Marine, it concomitantly agrees to list it as an additional assured on its policies.

Consequently, we conclude that Frank’s obligation to list Marine as an additional

assured automatically arose upon its agreement to indemnify Marine in
paragraph 7.2. The language of indemnification defines the parameters of the

agreement regarding assured status. If the parties had determined to condition

Marine’s assured status upon the legal enforceability of the indemnity agreement,

they very easily could have done so. Under the contractual language as agreed to,
however, the MSA may not reasonably be construed as Franks’s proposes.
       Frank’s next maintains that the MSA must fail for lack of consideration.
Once again, the teachings of Voisin guide our resolution. We therein dismissed this

contention in a footnote:
       In regard to the general validity of the agreement, Rig Hammers [the
       employer] suggests that the [Contract] is void for lack of
       consideration. . . . [H]owever, “[t]he economic burden of the
       premiums can be allocated as the parties wish.” The record reflects
       that Odeco [the vessel owner] and Rig Hammers had an ongoing
       business relationship. On some occasions, Rig Hammers would be
       performing its services for Odeco; in other cases, Rig Hammers would
       be on board the Odeco vessel, but working under contract for a third
       party. . . . In either situation, the [Contract] was the operative
       agreement establishing the rights and liabilities of the parties. In all
       likelihood, the cost of Rig Hammers’ services was effected by its
       contractual obligation to name Odeco as an additional assured on its
       liability insurance policies. Under these circumstances, we cannot
       accept Rig Hammers’ contention that the agreement was not supported
       by sufficient consideration.9

       Frank’s seeks to neuter this effective holding by pointing to purported factual

   9
    Voisin, 744 F.2d at 1177-78 n.2 (citations omitted).
                                            5
differences between Rig Hammers’ relationship with Odeco and its relationship
with Marine. A close reading reflects, however, that the facts upon which Frank’s

heavily relies were of little relevance to the rationale of the Voisin court and

likewise have little relevance in today’s resolution. The factors significant to the
Voisin decision are those identified by the court. Those factors are present in the

instant action. The record compels a rejection of Frank’s claim that the MSA fails

for want of consideration.

         Finally, Frank’s claims in this litigation that Shell is the real party in interest
because it has assumed Marine’s defense and has agreed to indemnify Marine
under their contract. Based on this, Frank’s insists that Shell is seeking contractual
benefits from it and attempting to recover for Shell’s own contractual obligations

to Marine. Neither result, Frank’s contends, is permissible under the MSA. We are
not persuaded. Shell is not a party to this action and its purported backstage

maneuvering is wholly inapposite to the focused issue of contractual interpretation
we face. The agreement between Shell and Marine is not in the record before us.
The cases cited by Frank’s in support of this contention bespeak their own

inapplicability; none addresses the factual situation at bar.10 The burden to be

borne by Shell, if any, is not an issue that can be resolved on this appeal.
         The summary judgment appealed is VACATED and the matter is

REMANDED for further proceedings not inconsistent herewith.

    10
      Frank’s cites Foreman v. Exxon Corp., 770 F.2d 490 (5th Cir. 1985); Corbitt v.
Diamond M. Drilling Co., 654 F.2d 329 (5th Cir. 1981); Campbell v. Sonat Offshore
Drilling, Inc., 27 F.3d 185 (5th Cir. 1994); and Hobbs v. Teledyne Movible Offshore, Inc.,
632 F.2d 1238 (5th Cir. Unit A 1980).
                                              6