Brown v. Sea Mar Management, LLC

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 11, 2008
No. 07-30112 Charles R. Fulbruge III
Clerk
JERAMIE BROWN, et al.,
Plaintiffs,
v.
SEA MAR MANAGEMENT, LLC, ETC; et al.,
Defendants,
SEA MAR MANAGEMENT, LLC, formerly known as Sea Mar Management,
Inc.,
Third-Party Plaintiff-Appellee,
v.
OFFSHORE OIL SERVICES, INC.,
Third-Party Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 6:04-CV-1486
Before REAVLEY, BENAVIDES, and ELROD, Circuit Judges.
PER CURIAM:*
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
No. 07-30112
This case involves the interpretation and application of a defense and
indemnification clause in a maritime contract. Appellant Offshore Oil Services,
Inc. (“OOSI”) seeks reversal of: (1) the district court’s grant of summary
judgment in favor of Appellee Sea Mar Management, LLC (“Sea Mar”); and (2)
the district court’s denial of OOSI’s motion for summary judgment. We affirm.
I. BACKGROUND
Williams Field Services Company (“Williams”) hired OOSI to provide
utility vessels for painting and sandblasting operations. On March 6, 2002,
OOSI and Sea Mar entered into a Master Time Charter Agreement (“Charter
Agreement”), pursuant to which OOSI chartered the M/V CAPE COOK from Sea
Mar in order to meet Williams’s requirements. Williams hired L&L
Sandblasting to provide painting and sandblasting services, and employees of
L&L Sandblasting worked, ate, and slept aboard the CAPE COOK during
offshore operations. Pursuant to the Charter Agreement, Sea Mar provided a
master and crew to operate the CAPE COOK. At no time did OOSI have
personnel aboard the vessel.
In July 2003, Plaintiff Jeramie Brown, an employee of L&L Sandblasting,
injured his ankle while swinging from a fixed platform onto the jump deck of the
CAPE COOK. After Brown and his wife brought a personal injury action against
Sea Mar and others, Sea Mar filed a Third-Party Complaint against OOSI
demanding defense and indemnity pursuant to the Charter Agreement. OOSI
and Sea Mar thereafter filed cross-motions for summary judgment on the issue
of contractual indemnity. The district court granted Sea Mar’s motion and
denied OOSI’s motion. OOSI appeals.
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II. STANDARD OF REVIEW
We review the district court’s grant of summary judgment de novo. United
States v. Lawrence, 276 F.3d 193, 195 (5th Cir. 2001). Summary judgment is
proper when the record shows “that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(c).
III. DISCUSSION
The Charter Agreement contains reciprocal indemnity provisions requiring
each party to provide a defense and indemnification for claims made by its
“invitees” against the other party. The operative paragraph provides as follows:
Charterer’s [OOSI’s] Indemnities.
Neither Owner [Sea Mar] [nor] its officers . . . shall have any
responsibility or liability . . . for any injury, illness, disease or death
of employees, agents or representatives of Charterer, Charterer’s
other subcontractors, Charterer’s customers or invitees[,] and
Charterer shall defend, indemnify, and hold harmless Owner . . . .
The parties dispute whether L&L Sandblasting’s employee Brown qualifies as
an “invitee” of OOSI.
Because the term “invitee” is not defined in the Charter Agreement, the
district court applied the Louisiana common law definition of “invitee” as set
forth in Blanks v. Murco Drilling Corp., 766 F.2d 891, 894 (5th Cir. 1985). The
Blanks court defined “invitee” as “a person who goes onto premises with the
expressed or implied invitation of the occupant, on business of the occupant or
for their mutual advantage.” Id. OOSI claimed that it was not an “occupant” of
the CAPE COOK because its employees were never aboard the vessel and
because it turned control of the vessel over to Williams. OOSI further argued
that Brown was Williams’s invitee and that Sea Mar obtained the “mutual
advantage” from the work Brown performed. On summary judgment, however,
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No. 07-30112
the district court found that Brown was an invitee of OOSI and that OOSI thus
owed a defense and indemnity to Sea Mar.
A. Interpretation of Indemnity Provision
The parties agree that the Charter Agreement controlled the relationship
between Sea Mar and OOSI on the date of Brown’s alleged accident and that the
Charter Agreement is a maritime contract. We apply federal maritime law in
interpreting and applying the contract.1 See Corbitt v. Diamond M. Drilling Co.,
654 F.2d 329, 332 (5th Cir. Unit A Aug. 1981) ("The interpretation of an
indemnity clause in a maritime contract is ordinarily governed by federal
maritime law rather than by state law."). A maritime contract “should be read
as a whole and its words given their plain meaning unless the provision is
ambiguous.” Weathersby v. Conoco Oil Co., 752 F.2d 953, 955 (5th Cir. 1984).
Further, indemnity agreements “should be construed to cover all losses,
damages, or liabilities which reasonably appear to have been within the
contemplation of the parties . . . .” Corbitt, 654 F.2d at 333.
OOSI contends that Brown was not its “invitee” because OOSI was never
an “occupant” of the CAPE COOK. In the alternative, OOSI argues that if we
find that Brown was an invitee of OOSI, we must find that Brown was also an
invitee of Sea Mar, resulting in circular indemnity.
1
Generally, the common law distinction between an invitee and a licensee does not
apply in maritime law. See Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625,
630–32 (1959). The Supreme Court chose to adopt “a single duty of ‘exercising reasonable care
under the circumstances of each case,’ rather than to incorporate in the maritime law the
complexities of the common law of invitee and licensee.” Scindia Steam Navigation Co. v. De
Los Santos, 451 U.S. 156, 163 n.10 (1981) (quoting Kermarec, 358 U.S. at 632); see also Smith
v. Southern Gulf Marine Co. No. 2, 791 F.2d 416, 419 (5th Cir. 1986). Cases applying these
principles concern the duty of care that arises by operation of law in the maritime context, and
federal maritime law thus determined the framework of direct tort liability for Brown’s
injuries. The instant case, however, is solely a contractual indemnity matter. The parties
chose to incorporate the concept of an “invitee” to contractually define the circumstances under
which the indemnification provision would apply.
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No. 07-30112
B. Whether Brown is an Invitee of OOSI
OOSI first contends that Brown cannot be its invitee because OOSI was
not an “occupant” of the CAPE COOK. See Blanks, 766 F.2d at 894 (defining
“invitee” in part as someone invited by the “occupant”). According to OOSI,
occupancy requires physical presence on or actual use of the vessel, and OOSI
merely chartered the CAPE COOK for Williams’s use, immediately turned the
vessel over to Williams, and never had any personnel aboard the vessel. Sea
Mar, on the other hand, asserts that OOSI was an occupant of the CAPE COOK
because as the charterer of the vessel, OOSI had control and command of the
vessel, including where the vessel was to go and for what the vessel was to be
used.
Blanks does not define “occupant,” and Louisiana case law recognizes that
the term is “susceptible of different meanings.” Reed v. Employers Mut. Cas. Co.,
741 So. 2d 1285, 1288 (La. Ct. App. 1999). Consequently, both parties follow
Reed in using the customary meaning of “occupant” as set forth in Black’s Law
Dictionary: “[o]ne who has possessory rights in, or control over, certain property
or premises.” BLACK’S LAW DICTIONARY 1108 (8th ed. 2004). Contrary to OOSI’s
assertions, this definition does not require than an occupant actually use or be
physically present on the premises. Control of or a possessory right in the
property or premises is sufficient.
OOSI contends that it gave up the right to control the vessel when it
turned the vessel over to Williams, from whom Sea Mar was taking direction at
the time of the alleged injury. Pursuant to the Charter Agreement, however, the
vessel was under the control of OOSI; the master of the CAPE COOK was
obligated to follow the direction of OOSI and allow on board those persons or
parties that OOSI requested.2 If OOSI instructed Sea Mar to stop taking
2
Section 5(a) of the Charter Agreement provides: “The whole of the vessel shall be at
Charterer’s [OOSI’s] disposal[,] reserving proper and sufficient space for the vessel’s master,
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No. 07-30112
direction from Williams, Sea Mar was required to comply. As the district court
correctly concluded, the CAPE COOK was under the ultimate direction, control,
and command of OOSI, which could decide where the vessel went and who could
come on board. OOSI was therefore an “occupant” of the vessel.
The Blanks definition of “invitee” also requires an “expressed or implied
invitation” and that the invitee be present “on business of the occupant or for
their mutual advantage.” Blanks, 766 F.2d at 894. Blanks cites Arcement v. S.
Pac. Transp. Co., 517 F.2d 729 (5th Cir. 1975), a diversity suit in Louisiana. In
Arcement, one man was killed and another injured when their truck crossed a
railroad trestle, which collapsed. Id. at 731. The trestle and adjacent wharf had
been leased to the National Molasses Company by Southern Pacific, which the
court noted retained considerable control over the premises. Id. at 733 n.6. The
master of a molasses boat lying alongside Southern Pacific’s wharf had
requested a delivery of lube oil, and the men were delivering that lube oil on
behalf of their employer when they attempted to cross the trestle. Id.The jury found liability against Southern Pacific, and we held on appeal
that the jury properly determined that the men were invitees of Southern
Pacific. We explained:
Neither party contends that [the men] had Southern Pacific's actual
invitation (or permission) to drive their truck onto the trestle. . . .
Southern Pacific of course argues that it did not benefit from vehicle
deliveries made over the trestle to ships tied at the wharf, but even
if it did, that the usual inference of invitation was rebutted by its
sporadic attempts to keep cars and trucks off the structure. We
disagree. Under Louisiana law it is enough to create invitee status
(1) that the injured person was never specifically warned to stay off
the property and (2) that he was present for some purpose connected
officers, crew . . . .” Section 5(c) provides: “The master, although appointed by the Owner, shall
be under the general direction of the Charterer [OOSI] in regards to the employment of the
vessel, agencies, or other arrangements, and shall not unreasonably refuse any request to
undertake operations or carry out any order or direction specified by Charterer.”
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No. 07-30112
with the defendant's business. There is no requirement of a
tangible, immediate gain by the owner or occupier.
Id. at 734 (emphasis added) (citations and footnote omitted). The Arcement case
is helpful to our application of the Louisiana common law definition of “invitee.”
Here, OOSI provided the CAPE COOK to Williams specifically so that
Williams could use it for painting and sandblasting operations. Brown was an
employee of L&L Sandblasting, the company Williams hired to perform painting
and sandblasting operations. OOSI therefore extended an implied invitation
to—or at the very least did not countermand Williams’s invitation to—L&L
Sandblasting and its employees to come aboard the CAPE COOK to perform that
work. The fact that Williams may have also extended an invitation to Brown
does not alter this analysis. In addition, Brown boarded the vessel to the mutual
advantage of Brown (and L&L Sandblasting) and OOSI—Brown’s work was
clearly “connected with” OOSI’s business of providing a vessel that would carry
painting and sandblasting workers. The fact that Brown’s presence may have
also been to Williams’s advantage and to Sea Mar’s advantage likewise does not
alter this analysis. Consistent with Arcement, therefore, we hold that the
district court correctly found that Brown was an invitee of OOSI.
C. Whether Brown was an Invitee of Sea Mar
OOSI also claims that if Brown is its invitee under the Blanks definition,
then Brown is also an invitee of Sea Mar, resulting in circular indemnity. Sea
Mar, however, did not hold the right to direct the activities of the vessel.
Pursuant to the Charter Agreement, the master of the CAPE COOK was
obligated to follow the direction of OOSI and allow on board those persons or
parties that OOSI requested. Because Sea Mar did not expressly or impliedly
invite Brown or L&L Sandblasting aboard the vessel, there is no basis for
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No. 07-30112
circular indemnity here. The plaintiff in the underlying case was an invitee of
OOSI, not of Sea Mar.
IV. CONCLUSION
Because the district court correctly determined that Brown was an invitee
of OOSI under the Charter Agreement and that OOSI is contractually obligated
to indemnify Sea Mar for defending and settling Brown’s claim, its judgment is
AFFIRMED.
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