Gulf States Airgas v. Amer Marine Const

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 99-30544
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GULF STATES AIRGAS, INC.,
Plaintiff-Appellee,
versus
AMERICAN MARINE CONSTRUCTION, INC.;
AMERICAN OILFIELD DIVERS, INCORPORATED,
Defendants-Appellants.
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Appeal from the United States District Court for the
Eastern District of Louisiana
(98-CV-821)
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April 10, 2000
Before POLITZ, JOLLY, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Gulf States Airgas, Inc. leased welding equipment to American
Oilfield Divers, Inc. and its wholly-owned subsidiary, American
Marine Construction, Inc. (collectively “AOD/AMC”). This equipment
was lost at sea. The district court held that AOD/AMC was liable
for the loss. For the reasons stated herein, we affirm.
I
*
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this opinion should not be published and is not precedent except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.
In 1997, Airgas leased welding equipment and gas cylinders to
AOD/AMC. The equipment invoices had a bailment contract on the
back, and the gas cylinder invoices had a rental agreement on the
back. Both the contract and the rental agreement contained
indemnity clauses purporting to obligate the lessee for various
types of loss or damage. The equipment and cylinders were loaded
on a ship, and when the ship later capsized, the equipment and
cylinders were lost. Airgas sent AOD/AMC an invoice for this
equipment for $53,134.10.
Before this issue was resolved, AOD/AMC sent Airgas a vendor
service agreement that included an indemnity clause purporting to
generally relieve AOD/AMC of liability for losses incidental to
performance of the service agreement. Airgas later agreed to sign
the service agreement with a retroactive date of March 1, 1996.
AOD/AMC then refused to pay for the lost equipment. Airgas then
filed suit.
On summary judgment, the district court initially concluded
that the AOD/AMC service agreement governed, and that the agreement
relieved AOD/AMC of liability. But on a motion for
reconsideration, the district court vacated its earlier judgment
and ruled for Airgas instead. As part of that decision, the
district court held that the AOD/AMC service agreement only applied
to services onshore.
II
2
Interpretation of the terms of a contract is a matter of law.
Weathersby v. Conoco Oil Co., 752 F.2d 953, 956 (5th Cir. 1984).
We review a district court’s legal conclusions on a grant of
summary judgment de novo, and view the facts in the light most
favorable to the non-movant. In re Millette, 186 F.3d 638, 641
(5th Cir. 1999). Summary judgment is proper if there is no genuine
issue of material fact and the moving party is entitled to judgment
as a matter of law. Id.
Under Gaspard v. Offshore Crane and Equipment, Inc., 106 F.3d
1232, 1236 (5th Cir. 1997), indemnity clauses are to be construed
narrowly based on their specific language. After examining the
service agreement in this case, including Exhibit A attached
thereto, we agree with the district court that the service
agreement does not govern liability for the lost equipment and
cylinders. For that reason, the judgment in favor of Airgas is
A F F I R M E D.
3