Court Opinion

ID: 26027
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:47:07+00
Date Added: 2024-06-11T14:56:01.135168
License: Public Domain

UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT

                           No. 01-30791
                         Summary Calendar

                   PHILLIPS PETROLEUM COMPANY,

                                              Plaintiff-Appellant,

                              versus

  PRODUCTION SYSTEMS, INC.; BUZZY P. INC.; WILLIAM LYNN KELLEY;
  KELLEY CONSULTING, INC.; PRODUCTION SERVICES GROUP/PRODUCTION
                          SYSTEMS, INC.,

                                            Defendants-Appellees.
_________________________________________________________________

           Appeal from the United States District Court
               for the Eastern District of Louisiana
                           (00-CV-3010-R)
_________________________________________________________________
                         November 29, 2001

Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.

PER CURIAM:*

     Claiming that the Louisiana Oilfield Indemnity Act (LOIA) does

not prohibit an agreement requiring Production Systems, Inc. (PSI),

to indemnify Phillips Petroleum, Inc. for its vicarious liability

resulting from the negligence of a joint employee of PSI and

Phillips, Phillips contests the summary judgment awarded PSI.

AFFIRMED.

     *
      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this opinion should not be published and is not precedent except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.
                               I.

     This action relates to a Phillips well.      Under a temporary

labor agreement, PSI agreed to lease employees to Phillips.     The

agreement contained the following indemnity provision:

          [PSI] warrants that each leased employee shall
          fully comply with all laws, rules, regulations
          and/or ordinances of all governments and all
          agencies thereof while performing work for
          [Phillips] as a leased employee, and [PSI]
          shall indemnify and hold [Phillips] harmless
          from all costs, fines, penalties, expenses
          (including attorney’s fees), and damages that
          may directly or indirectly arise as a result
          of said leased employee’s failure or alleged
          failure to comply with any of same.

     One of the leased employees, Kelly Lee, while operating

Phillips’ vessel, injured a third party.      In an action separate

from this one, it was determined:   that Lee was negligent in his

operation of the vessel, Barthelemy v. Phillips Petroleum Co., No.

96-2226, 1999 WL 65024, at *4 (E.D. La. 9 Feb. 1999), aff’d, 211

F.3d 594 (5th Cir. 2000)(table); and that Phillips and PSI were

both vicariously liable for the actions of their joint employee,

Lee, id. at *3 n.9, *6.

     Phillips brought this action, claiming that, under the above

quoted portion of the temporary labor agreement, PSI was obligated

to indemnify Phillips for Lee’s negligence.    On cross-motions for

summary judgment and PSI’s was granted, on the basis that the LOIA

prohibited Phillips from requiring that PSI indemnify it for the

negligence of Lee, a Phillips employee.

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                                 II.

     A summary judgment is reviewed de novo, applying the identical

standard used by the district court.    E.g., Stewart v. Murphy, 174

F.3d 530, 533 (5th Cir.), cert. denied, 528 U.S. 906 (1999).     Such

judgment should be granted if “the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment

as a matter of law.”   FED. R. CIV. P. 56(c).   “We view the pleadings

and summary judgment evidence in the light most favorable to the

nonmovant.”   Stewart, 174 F.3d at 533.

     We must determine whether, under Louisiana Law, Phillips may

enforce the indemnity provision against PSI where Phillips, as a

joint employer, is vicariously liable for Lee’s negligence.      Along

this line, the purpose of the LOIA is “to protect Louisiana

oilfield contractors from over[-]reaching principals who force the

contractors through indemnity agreements to bear the risk of the

principal’s negligence”.    Roberts v. Energy Dev. Corp., 104 F.3d

782, 784 (5th Cir. 1997); see LA. REV. STAT. ANN. § 9:2780(A).    The

LOIA provides:

          Any provision contained in, collateral to, or
          affecting an agreement pertaining to a well
          for oil, gas, or water, or drilling for
          minerals which occur in a solid, liquid,
          gaseous,   or  other   state,  is   void  and
          unenforceable to the extent that it purports
          to or does provide for defense or indemnity,
          or either, to the indemnitee against loss or

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               liability for damages arising out of or
               resulting from death or bodily injury to
               persons, which is caused by or results from
               the sole or concurrent negligence or fault
               (strict liability) of the indemnitee, or an
               agent, employee, or an independent contractor
               who is directly responsible to the indemnitee.

LA. REV. STAT. ANN. § 9:2780(B) (West Supp. 2001)(emphasis added).

       Phillips contends:            (1) because it was a joint employer of

Lee,    the    LOIA    does    not    apply,      and     (2)   because   it    was    only

vicariously liable, the indemnity agreement does not run counter to

the    LOIA,    as    Phillips       would   not    be    indemnified     for    its    own

negligent acts.

       As for the first contention, Phillips admits it was a joint

employer of Lee; restated, it does not contend that Lee should not

be    considered      its     employee.           Accordingly,     Phillips      has   not

demonstrated that Lee, although a joint employee, was not its

employee within the contemplation of the LOIA.

       Phillips’ second contention fares no better.                       The LOIA is

meant to prohibit an entity, such as Phillips, from passing, to

another entity, liability resulting from, inter alia, the acts of

the first entity’s employee.                 When an employee is negligent, the

employer’s      liability      will     most      often    arise   through      vicarious

liability.       To accept the distinction proposed by Phillips would

render the LOIA         useless, because the liability of the employer

seeking indemnity is many times vicarious in nature.

                                              4
     Accordingly, because Lee was an employee of Phillips, Phillips

cannot escape the provisions of the LOIA based on the nature of its

liability.   In the light of our holding, we need not reach the

alternative reasons to affirm proposed by PSI.

                               III.

     For the foregoing reasons, the judgment is

                                                         AFFIRMED.

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