Court Opinion

ID: 40067
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:39:36+00
Date Added: 2024-06-11T14:56:52.131003
License: Public Domain

United States Court of Appeals
                                                                    Fifth Circuit
                                                                   F I L E D
               IN THE UNITED STATES COURT OF APPEALS
                                                                  November 17, 2005
                         FOR THE FIFTH CIRCUIT
                         _____________________                  Charles R. Fulbruge III
                                                                        Clerk
                              No. 04-31243
                            Summary Calendar
                         _____________________

SAU DINH,

                                                                 Plaintiff,

LOUISIANA COMMERCE AND TRADE ASSOCIATION
SELF INSURER FUND,

                                              Intervenor - Appellant,

                                versus

AMERICAN FREEDOM VESSEL; ET AL.,

                                                                Defendants,

KYE INC.,

                                            Defendant - Appellee.
_________________________________________________________________

           Appeal from the United States District Court
       for the Eastern District of Louisiana, New Orleans
                       USDC No. 2:03-CV-3013
_________________________________________________________________

Before JOLLY, DAVIS, and OWEN, Circuit Judges.

PER CURIAM:1

     The Louisiana Commerce and Trade Association Self Insurer Fund

(“LCTA”) appeals   the   summary   judgment   in   favor   of    KYE,    Inc.

(“KYE”).2

     1
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
     2
      Appellee KYE is no longer represented by counsel and did not
file a brief. A July 15, 2005 letter to KYE from the clerk of this
     LCTA was the workers’ compensation carrier for Structure

Services Ltd.     Pursuant to an “Out Source Agreement”, Structure

Services provided laborers, including plaintiff Sau Dinh, to work

at KYE’s shipyard.      Dinh was injured while performing repair work

aboard a vessel at KYE’s shipyard. LCTA paid workers’ compensation

benefits    to   Dinh   under   the    Longshore   and     Harbor   Workers’

Compensation Act.

     The district court held that Dinh was KYE’s borrowed employee,

but that the indemnity clause in the contract between KYE and

Structure    Services     barred      LCTA’s   claim     against    KYE   for

reimbursement of the LHWCA benefits LCTA had paid to and on behalf

of Dinh.

     On appeal, LCTA argues that the district court erred by ruling

that the indemnity clause in the Structure Services/KYE contract

bars or defeats LCTA’s reimbursement claim.            LCTA’s claim is based

on Total Marine Services, Inc. v. Director, OWCP, 87 F.3d 774, 779

(5th Cir. 1996), in which this court stated that “a borrowing

employer is required to pay the compensation benefits of its

borrowed employee, and, in the absence of a valid and enforceable

indemnification agreement, the borrowing employer is required to

reimburse an injured worker’s formal employer for any compensation

benefits it has paid to the injured worker.”

court was returned with the following notation:              “Box Closed No
Forwarding Order on File”.

                                       2
      The contract between Structure Services and KYE provides:

“Structure Services, Ltd. agrees to indemnify and hold [KYE]

harmless from any claim due to negligence or injuries of their

employees or by any governmental claim for withholding taxes,

F.I.C.A. taxes and unemployment taxes attributable to covered

workers.”    The district court held that this language constitutes

a “valid and enforceable indemnification agreement” under Total

Marine that relieves KYE of its obligation to reimburse LCTA for

compensation benefits LCTA paid to Dinh.

      LCTA    argues   that   this    provision      should   not   bar    its

reimbursement claim because the provision is ambiguous and does not

expressly    provide   indemnity     for   LHWCA   liabilities.     It    also

contends that reference to other portions of the Agreement supports

its   contention   that   indemnity    for   LHWCA    liabilities   was    not

mutually intended by the indemnity language.            Specifically, LCTA

notes that the contract does not require a waiver of the right of

any insurer of Structure Services to recover from KYE.              Finally,

LCTA contends that any arguable indemnity obligation to KYE on the

part of Structure Services should not bind LCTA because it is not

a party to the contract.

      The district court considered and rejected all of LCTA’s

contentions, reasoning, in its ruling from the bench:

                  [T]he contract, although it could have
             been more artfully written, ... must [be]
             give[n] its plain and common sense meaning.
             Clearly, this is an arrangement where a labor
             pool employer is providing employees to KYE

                                      3
          and, as part of that arrangement, the labor
          pool employer provides the Workers’ Comp
          insurance, among others.    That’s one of the
          reasons for the agreement.     So, they would
          administer the Workers’ Compensation claims as
          set forth in the contract and be responsible
          for the insurance.

               It would be sheer folly to go through
          this arrangement and then to be open to ...
          paying the claim without insurance.

                   ....

               [T]he   Court   interprets    the   word
          “injuries” in that [indemnity] clause, in
          general, as an indemnification clause, as
          contemplated by Total and its progeny. And,
          that’s the only way it really makes any sense
          in this context.

     Based on our de novo review of the summary judgment record in

this case,    we    agree   with   the       district   court’s   reasoning   and

conclusion.   The summary judgment is, therefore,

                                                                      AFFIRMED.

                                         4