Court Opinion

ID: 4859
Source: CourtListenerOpinion
Date Created: 2010-04-25 04:59:54+00
Date Added: 2024-06-11T08:28:11.789939
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                      FOR THE FIFTH CIRCUIT

                         _______________

                            No. 91-4801
                         Summary Calendar
                          _______________

                      GEORGE PIERCE DUPONT,

                                      Plaintiff,

                              VERSUS

                SANDEFER OIL & GAS, INC., et al.,

                                      Defendants.

                       * * * * * * * * * *

                TELEDYNE MOVIBLE OFFSHORE, INC.,

                                      Defendant-Appellee,

                              VERSUS

                SANDEFER OFFSHORE OPERATING CO.,

                                      Defendant-Appellant.

                    _________________________

          Appeal from the United States District Court
              for the Western District of Louisiana
                    _________________________
                          (June 2, 1992)

Before JOLLY, DAVIS, and SMITH, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

                                 I.

     This case arises from an injury sustained by a Tetra Technolo-

gies, Inc. (Tetra), employee.    The plaintiff was injured in the
course of his employment on a jackup drilling rig that was engaged

in completing a well on the outer continental shelf.            Teledyne

Movible Offshore, Inc. (Teledyne), Sandefer Offshore Operating Co.

(Sandefer), and Applied Drilling Technologies, Inc. (ADTI), were

all named as defendants.     Teledyne moved for summary judgment on a

claim that it was entitled to indemnity from Sandefer.

       Sandefer originally contracted with ADTI to drill and complete

a well; ADTI then contracted with Teledyne to provide a jackup

drilling rig and to drill and complete the well.        The ADTI/Teledyne

contract contained reciprocal indemnity provisions requiring each

party to indemnify the other for personal injury claims brought by

their respective employees.        After the well had been drilled,

Sandefer, by way of a letter agreement, assumed "all responsibili-

ties and obligations" of ADTI under the ADTI/Teledyne contract for

the completion phase of the contract. Sandefer then hired Tetra to

assist in the completion of the well.

       Teledyne argues that it is entitled to contractual indemnity

from   Sandefer   pursuant   to   the   ADTI/Teledyne   contract,   which

Sandefer assumed. If the contract is governed by maritime law, the

indemnity provision will be enforced.       Sandefer contends that the

Louisiana Oilfield Indemnity Act of 1981, La. Rev. Stat. 9:2780

(LOIA), applies as surrogate federal law under the Outer Continen-

tal Shelf Lands Act, 43 U.S.C. §§ 1331-1356 (OCSLA), and forbids

enforcement of the indemnity provision.

       The district court found that the contract was maritime,

granted summary judgment in favor of Teledyne, and ordered that

Sandefer defend and indemnify Teledyne in accordance with the
indemnity and insurance provisions contained the ADTI/Teledyne

contract. The district court entered a final judgment, pursuant to

Fed. R. Civ. P. 54(b), which Sandefer appeals.

                                II.

     Sandefer contends that Louisiana law applies to this accident

through OCSLA;   Teledyne argues that maritime law controls.   OCSLA

provides, in relevant part, as follows:

     To the extent that they are applicable and not inconsis-
     tent with this Act or with other Federal laws and
     regulations of the Secretary now in effect or hereafter
     adopted, the civil and criminal laws of each adjacent
     State now in effect or hereafter adopted, amended, or
     repealed are hereby declared to be the law of the United
     States for that portion of the subsoil and seabed of the
     outer Continental Shelf, and artificial islands and fixed
     structures erected thereon, which would be within the
     area of the State if its boundaries were extended seaward
     to   the   outer   margin   of  the   outer   Continental
     Shelf . . . .

43 U.S.C. § 1333(a)(2)(A).

     In deciding whether a case is governed by OCSLA, this court

has articulated the following test:

     [F]or adjacent state law to apply as surrogate federal
     law under OCSLA, three conditions are significant.
     (1) The controversy must arise on a situs covered by
     OCSLA (i.e. the subsoil, seabed, or artificial structures
     permanently    or    temporarily    attached    thereto).
     (2) Federal maritime law must not apply of its own force.
     (3) The state law must not be inconsistent with Federal
     law.

Union Texas Petroleum Corp. v. PLT Eng'g, 895 F.2d 1043, 1047 (5th

Cir.), cert. denied, 111 S. Ct. 136 (1990);   see also Rodrigue v.

Aetna Cas. & Surety Co., 395 U.S. 352, 355-66 (1969).     Since we

find that maritime law applies of its own force to this maritime

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contract, we do not address any other issue.

     "[I]n the context of oil and gas exploration on the Outer

Continental Shelf, admiralty jurisdiction and maritime law will

only apply if the case has a sufficient maritime nexus wholly apart

from the situs of the relevant structure on navigable waters."

Laredo Offshore Constr. v. Hunt Oil Co., 754 F.2d 1223, 1230 (5th

Cir. 1985).    In Smith v. Penrod Drilling Corp., 1992 U.S. App.

LEXIS 8725 (5th Cir. Apr. 30, 1992), modified, 1992 U.S. App. LEXIS

11868 (May 29, 1992), we held that a contract for the supply and

use of a vessel for drilling, completion, and workover services was

maritime.   We therefore hold that the instant   contract, requiring

Teledyne to supply a vessel and use it for drilling and workover

services, is maritime.

     Sandefer relies upon Thurmond v. Delta Well Surveyors, 836

F.2d 952, 955 (5th Cir. 1988), and Domingue, 923 F.2d at 397, for

the proposition that the use of a jackup rig is incidental to the

completion of the well.   In finding that the use of a jackup rig

was incidental, however, both Thurmond and Domingue relied heavily

upon the fact that the contracts at issue did not explicitly

provide for the supply and equipping of a vessel;         thus, the

furnishing of a vessel could not have been a principal obligation

of the contract.

     The Domingue court distinguished the maritime contract in

Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313 (5th Cir. 1990),

because that contract required the contractor to supply a vessel.

Domingue, 923 F.2d at 395.      In Thurmond, 836 F.2d at 955, we

                                 4
similarly distinguished Theriot v. Bay Drilling Corp., 783 F.2d 527

(5th       Cir.   1986).      Since   the   ADTI/Teledyne        contract     required

Teledyne to provide and equip a vessel, Thurmond and Domingue are

not controlling, and the contract is maritime.                   See Smith v. Penrod

Drilling Corp.,1992 U.S. App. LEXIS 11868 at *1-2; Lewis v. Glendel

Drilling Co., 898 F.2d 1083, 1086 (5th Cir. 1990), cert. denied,

112 S. Ct. 171 (1991).

       Sandefer next argues that even if a contract for drilling and

completion in Louisiana territorial waters might be maritime, an

identical contract would not be maritime if it were to be executed

on the outer continental shelf.                   There is no merit to this

contention.        The principal obligation of a contract, not the situs

of its execution, determines whether it is maritime. Davis & Sons,

919 F.2d at 316.             Since we have determined that the principal

obligation,        the    provision   of    a   jackup    boat    for    drilling   and

completion of a well, is maritime, the location of performance of

the contract does not alter its maritime status.1

       Finally, Sandefer contends that it assumed only the non-

maritime portions of the ADTI/Teledyne contract.                   Under Sandefer's

analysis,         the    contract   contained     three    separate       obligations:

provision of a vessel, drilling, and completion.                        Sandefer urges

       1
         Sandefer relies upon Lewis, 898 F.2d at 1087, which criticizes "the
rather absurd inconsistency . . . between applying maritime law to certain
mineral exploration contracts when the drilling occurs in state territorial
waters . . . while state law governs precisely the same contractual
relationship a few miles further offshore pursuant to OCSLA." Sandefer
misinterprets this comment as a holding. Instead, it is part of a discussion
criticizing the inconsistencies in Fifth Circuit law in this area. See also
Smith v. Penrod Drilling Corp., 1992 U.S. App. LEXIS 8725, at *10-11 & n.3
(describing the same legal inconsistencies).

                                            5
that it assumed the contract at the completion phase, used the

jackup rig as a work platform, and assumed no part of the portion

of   the    contract   requiring    provision   of    a    vessel   or   drilling

services.      The contract may not be artificially divided in this

manner.

      The    provision   of   the   jackup   rig     was   necessary     for   the

completion phase as well as the drilling phase.                Sandefer cannot

argue that the contract is not maritime because the jackup rig had

already arrived at its destination.          Sandefer assumed all of the

obligations of ADTI;          these included any indemnity obligations

incurred by virtue of the ADTI/Teledyne contract.                   Moreover, it

would be absurd to hold that Teledyne would have been indemnified

if Sandefer had not assumed the contract, but that, by virtue of

the assignment of the contract, the indemnity provision will not be

enforced.

      The summary judgment in favor of Teledyne is AFFIRMED.2

      2
         We deny, as moot, the motion to consolidate this appeal with the
appeal in Smith v. Penrod Drilling Corp.

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