Campbell v. Sonat Offshore Drilling, Inc.

United States Court of Appeals,
Fifth Circuit.
No. 93-4893.
Felix J. CAMPBELL, Jr., et al., Plaintiffs,
v.
SONAT OFFSHORE DRILLING, INC., Defendant.
UNION TEXAS PETROLEUM CORP., Third Party Plaintiff-Appellee,
v.
FRANK'S CASING CREWS & RENTAL TOOLS, INC., et al., Third Party
Defendants-Appellants.
Aug. 3, 1994.
Appeal from the United States District Court for the Western
District of Louisiana.
Before WOOD,1 SMITH and DUHÉ, Circuit Judges.
DUHÉ, Circuit Judge:
Adjudged to owe indemnity to Appellee (Union Texas Petroleum),
and a third party (Sonat Offshore Drilling Company), Appellants
(Frank's Casing Crews and its insurers) have cross claims against
Appellee as an alleged coindemnitor liable for contribution on the
obligation to the third party. The district court summarily
dismissed the cross claims. We affirm.
I.
The plaintiff, an employee of third-party defendant/cross
claimant Frank's Casing Crews and Rental Tools, was injured while
transferring onto defendant Sonat Offshore Drilling's jack-up
1
Circuit Judge of the Seventh Circuit, sitting by
designation.
1
drilling vessel on the outer continental shelf. Defendant Union
Texas Petroleum (UTP) had chartered the vessel and had a drilling
contract with Sonat (the "UTP/Sonat contract"), in which UTP agreed
to defend and indemnify Sonat against claims such as plaintiff's.2
UTP dutifully undertook the defense of Sonat, and, on behalf of
itself and Sonat, impleaded the plaintiff's employer, Frank's.
UTP had engaged Frank's to provide casing supplies and
services on the vessel via a contract (the "UTP/Frank's contract")
under which Frank's promised to indemnify UTP and its
contractors—including Sonat—for personal injury to Frank's
employees. This Court previously enforced Frank's indemnity
obligation under the UTP/Frank's contract, affirming a ruling
requiring Frank's to defend and indemnify Sonat and UTP. Campbell
v. Sonat Offshore Drilling, Inc., 979 F.2d 1115 (5th Cir.1992)
("Campbell I ").
Frank's and its insurers, certain Underwriters at Lloyds,
have now filed cross claims for contribution against UTP for any
amount adjudged owed to Sonat by Frank's in indemnity. Appellants'
cross claims seek a declaration that UTP was a coindemnitor of
Sonat based on the UTP/Sonat contract (under which UTP has been
providing a defense to Sonat). Stated another way, Appellants
effectively contend that they owe only contribution, not full
2
UTP promised to "defend, indemnify, and hold [Sonat]
harmless from and against all claims, demands and causes of
action of every kind and character without limit and without
regard to the cause(s) thereof ... arising in connection
herewith, for injury to ... employees of [UTP's] other
contractors." UTP/Sonat contract, para. 23.6.
2
indemnity, to UTP for UTP's indemnity obligation to Sonat. On
cross motions for summary judgment, the court granted UTP's motion
for summary dismissal of Frank's and Underwriters' cross claims.
Frank's and Underwriters appeal.3
II.
Frank's and Underwriters (jointly "Appellants") claim that
UTP is jointly liable for the indemnity Frank's owes Sonat, as
evidenced by UTP's acknowledged obligation to indemnify Sonat under
the UTP/Sonat contract. Appellants contend that as coindemnitors
Frank's and UTP are solidarily obligated to Sonat but, as between
themselves, each is liable for only half, relying on Hobbs v.
Teledyne Movible Offshore, Inc., 632 F.2d 1238, 1241 (5th Cir. Unit
A 1980).
Appellants' reliance on Hobbs is misplaced. Hobbs applied the
former Louisiana Civil Code articles on contribution among solidary
obligors to two indemnitors who each agreed to indemnify Chevron in
separate contracts with Chevron. By contrast Frank's and UTP did
not each contract with Sonat. In the UTP/Frank's contract Frank's
3
We agree with the parties that we have appellate
jurisdiction. This Court has jurisdiction over an appeal from an
"[i]nterlocutory decree[ ] ... determining the rights and
liabilities of the parties to admiralty cases in which appeals
from final decrees are allowed." 28 U.S.C. § 1292(a)(3). The
interlocutory order in this admiralty case determines the "rights
and liabilities" of UTP vis a vis Frank's and Underwriters by
dismissing Frank's and Underwriters' cross claims for coindemnity
from UTP. See Gloria Steamship Co. v. Smith, 376 F.2d 46, 47
(5th Cir.1967) (dismissal of petition for impleader was
appealable interlocutory order); cf. Hollywood Marine, Inc. v.
M/V Artie James, 755 F.2d 414 (5th Cir.1985) (no interlocutory
appellate jurisdiction over order refusing to dismiss claim
against insurer).
3
agreed to indemnify and hold UTP harmless "for injury to ...
[Frank's] employees, whether or not caused by the sole or
concurrent negligence of Seller [Frank's] or Buyer [UTP]."
UTP/Frank's contract para. 12(a). The UTP/Frank's contract also
includes as indemnitees contractors engaged by UTP, such as Sonat.
Id., para. 12(d). Thus in the UTP/Frank's contract Frank's agreed
to indemnify both UTP and Sonat "for injury to [Frank's]
employees." Application of Hobbs would overlook the fact that
Frank's duty to indemnify Sonat flows from its contract with UTP.
Frank's also relies on Corbitt v. Diamond M. Drilling Co., 654
F.2d 329 (5th Cir. Unit A Aug. 1981). Corbitt's employer, Sladco,
argued (like Frank's herein) that its obligation to indemnify Shell
"against all claims ... on account of personal injury" did not
require it to reimburse for amounts Shell owed on account of
Shell's own agreement to indemnify Diamond M. Id. at 333. Frank's
maintains that because UTP independently contracted to indemnify
Sonat, Frank's need not reimburse UTP for UTP's own contractual
obligation to Sonat.
The Corbitt court accepted Sladco's similar argument, but,
notably, Sladco had not agreed with Shell to indemnify both Shell
and Diamond M.4 By contrast, Frank's agreed with UTP to indemnify
4
A provision in an indemnity agreement adding a
subcontractor as indemnitee has been interpreted as providing
indemnity of another's contractual indemnity exposure in Foreman
v. Exxon Corp., 770 F.2d 490, 498 n. 13 (5th Cir.1985) (by
implication) (discussing Mills v. Zapata Drilling Co., 722 F.2d
1170 (5th Cir.1983), overruled on other grounds, Kelly v. Lee's
Old Fashioned Hamburgers, Inc., 908 F.2d 1218, 1221 (5th
Cir.1990)). We do not consider the indemnity provision herein
broad enough to indemnify against contractual obligations,
4
both UTP and Sonat. Frank's cannot insulate itself from paying its
full indemnity obligation on the basis that UTP's liability to
Sonat is contractual. See Lirette v. Popich Bros. Water Transport,
Inc., 699 F.2d 725 (5th Cir.1983). In Lirette, both Otto Candies
and Popich had been adjudged liable to indemnify Exxon: Candies,
because of its contract with Exxon; and Popich, because of its
agreement with Candies to indemnify both Candies and Exxon.
Candies, like UTP in Campbell I, sought indemnity from Popich.
Like Appellants, Popich argued that it was insulated from
indemnifying Candies for any payments to Exxon based on Candies'
contractual obligation to Exxon. The Court noted, first, that
Popich undertook to indemnify not only Candies but Exxon as well.
In Candies' claim against Popich, the Court explained,
Popich was not, as in Corbitt, being subjected to a liability
arising from and imposed by a completely separate contract
between two outsiders. Rather, it was called upon to make
good its contractual obligation to hold Candies (and Exxon)
harmless from claims, suits or damage "arising out of, or in
any way connected [with] the operation of the vessel under
this charter." Popich's obligation to reimburse Candies for
amounts due Exxon arose, not because of the separate agreement
Candies had with Exxon, but because of Popich's express
undertaking to make good to Exxon all such losses. Candies[']
acting as a conduit did not alter that obligation.
despite the inclusion of Sonat as an indemnitee. Compare
Corbitt, 654 F.2d at 333 (finding no intent to indemnify against
contractual obligations in Sladco-Shell agreement to indemnify
"against all claims, suits, liabilities and expenses on account
of personal injury") with UTP/Frank's contract, para. 12(a)
(indemnifying "for injury to [Frank's] employees"). The promise
to indemnify against personal injuries is plainly intended to
encompass tortious, not contractual, injuries. Accordingly, we
disagree with the district court's holding that Frank's expressly
agreed to indemnify UTP for UTP's contractual obligations to
Sonat. We reach the same result, however, as we also conclude
that Frank's contribution claim fails.
5
699 F.2d at 728. Similarly, Frank's duty to indemnify UTP fully
for amounts UTP owes Sonat for the plaintiff's claims arises from
Frank's express undertaking to indemnify both UTP and Sonat such
losses. The Corbitt argument fails.
III.
Frank's and Underwriters have not demonstrated that reversible
error occurred. The judgment of the district court is
AFFIRMED.
6