In Re: Natures Way Marine, LLC
ORDER finding Flexicrew's 178 Motion for Summary Judgment is moot as to Natures Way's claims against it and granted as to Apex's claims against it. It is further ordered that USES' 190 Motion for Summary Judgment is moot as to Natures Way's claims against it and denied at this time as to Apex's claim against it. Signed by Judge Kristi K. DuBose on 11/25/2013. (cmj)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
IN THE MATTER OF THE COMPLAINT )
OF NATURES WAY MARINE, LLC, Owner )
of the Tank Barge NWM 431 or AO 431
(Hull No. D 557753) for Exoneration from or )
Limitation of Liability
CIVIL ACTION NO. 12-00390-KD-N
This matter is before the Court on Flexicrew Staffing, Inc. (“Flexicrew”)’s Motion for
Summary Judgment against Natures Way Marine, LLC (“Natures Way”) and Apex, LLC, d/b/a
FCC Oilfield Services (“Apex”) (Docs. 178-180), Natures Way’s Response (Doc. 200), Apex’s
Response (Doc. 201), Flexicrew’s Replies (Docs. 205-206) and Apex’s Sur-Reply (Doc. 224);
and U.S. Environmental Services, LLC (“USES”)’s Motion for Summary Judgment against
Natures Way and Apex (Docs. 190-192), Apex’s Responses (Doc. 216), Natures Way’s
Response (Doc. 217), and USES’ Reply (Docs. 225, 226).
A personal injury lawsuit filed by temporary laborer Charles Brunson (“Brunson”),
regarding his alleged exposure to toxic chemicals while cleaning a barge on the Theodore
Industrial Canal in Mobile County, Alabama, spawned a number of claims, cross-claims, and
counter-claims among five (5) parties.
As a result of this limitation of liability action filed by
Natures Way, Apex filed a cross-claim against Flexicrew for indemnity/contribution (contractual
and otherwise), alleging negligence within the indemnity claims, asserting it is a third party
beneficiary to the August 13, 2010 labor staffing contract (“the contract”)1 executed between
1 The contract contains a choice of law provision which specifies: “[t]his Agreement will be interpreted in
accordance with the laws of the State of Louisiana” and “[t]his Agreement is to be governed by and construed
USES2 and Flexicrew.3 (Doc. 175).
Additionally, Apex filed a separate suit for declaratory
judgment against Flexicrew, CV 12-00507-WS-N, regarding its claim for indemnity which was
consolidated, for all purposes, into the present case.
(Doc. 58 at 2).
The relevant factual background is as follows.
On September 6, 2011, barge4 owner
Natures Way Marine, LLC (“Natures Way”) executed a charter agreement with Apex; Natures
Way was the owner and Apex was the charterer.
to transport “rainwater/wastewater” cargo.
Apex planned to use the barge
A condition of the agreement was that Apex
would return the barge to Natures Way in a “gas free” and clean condition.
transferring the rainwater/wastewater from its facility to the barge tanks and back out for
processing, Apex hired USES to remove the rainwater and clean the barge – i.e., to provide a
clean and “gas free” barge.
Specifically, pursuant to a previously executed August 13, 2010
contractual agreement for temporary labor between USES and Flexicrew, USES hired Flexicrew
in September 2011 to provide two (2) laborers to clean the barge’s tanks.
The USES-Flexicrew contract provides, in relevant part, as follows:
This Agreement…..between…..USES or “contractor” and Flexicrew…… “subcontractor”
concerns services and work to be provided by you [Flexicrew] as a subcontractor to us [USES],
regarding a project to be performed for our client.
….This Agreement describes the work that you [Flexicrew] will do for us [USES], and the terms
of our relationship. This Agreement may be used for a single project, or may serve as a master
services agreement for a series of projects. You [Flexicrew] agree to work as an independent
contractor, and not as an employee of us.
according to the laws of the State of Louisiana.”
(Doc. 187-3 at 7).
2 USES is a company that provides environmental, industrial, and marine cleaning and safety services to a
broad range of customers, including maritime customers. (Doc. 191-1 (Aff. T.Bayham)).
3 Flexicrew is a staffing company which provides skilled/unskilled laborers to other entities. (Doc. 179-1
at 2 (Dep. A.March)).
4 Tank Barge NWM 431 or AO 431-Hull NO. D 557753.
You [Flexicrew] agree to provide the services described as follows, and referred to as the Work:
certified job specific supervisors, foreman and field techs…Administration Personal [sic]…job
specific necessary transportation equipment…It is specifically agreed that for purposes of
workers compensation, we [USES] are a statutory employer of you [Flexicrew], your
[Flexicrew’s] employees, subcontractors and suppliers and that you [Flexicrew] will maintain
workers compensation insurance…
You [Flexicrew] will indemnify us [USES], as provided in Section 8.
To the full extent permitted by law, subcontractor [Flexicrew] agrees to defend, indemnify and
save harmless contractor [USES], owner and any other party which contractor is required to
defend, indemnify and save harmless under any project related contract, including but not limited
to their officers, agents, servants and employees, from and against any claim, allegation, cost,
expense, or liability (including pre-suit and post suit attorneys' fees, interest, investigative or any
other expense related in any way to the claim or allegations), attributable to bodily injury,
sickness, disease, death, damage to destruction of property (including loss of use thereof),
resulting from, occurring in connection with or connected in anyway to the subcontractor's
[Flexicrew’s] work, its subcontractors, sub-subcontractors, materialmen, or agents of any tier,
their officers, directors, agents, or employees, whether or not caused in part, directly, indirectly,
by the active or passive negligence or any other fault of a party indemnified hereunder provided,
however, subcontractor's [Flexicrew’s] duty hereunder shall not arise if such injury, sickness,
disease, death, damage, or destruction is caused by the sole negligence of a party indemnified
Subcontractor's [Flexicrew’s] obligation hereunder shall not be limited by the provisions of any
worker's compensation or similar act.
Subcontractor's [Flexicrew’s] obligations under this provision continue after final payment and
acceptance of the work and are applicable to the operations and completed operations of the
…This Agreement will be interpreted in accordance with the law of the State of Louisiana….
Choice of Law/Venue: This Agreement is to be governed by and construed according to the laws
of the State of Louisiana….
From September 26-29, 2011, USES performed the work of removing rainwater from the
barge and cleaning the barge, for Apex, by having workers pressure wash the interior of its tanks
and pump out excess rainwater.
(Docs. 1, 50).
Brunson, hired by Flexicrew on September 4,
2011, was one of the workers assigned to clean the barge’s tanks.
(Id.; Doc. 179-2 at 10, 11
(Dep. Brunson at 277, 279)).
Brunson cleaned the tanks in the barge, located on the Theodore
Industrial Canal, until September 29, 2011 (about 29.5 hours of cleaning over 3 days.
50; Doc. 179-2 at 14-20 (Dep. Brunson at 284-287, 295-297)).
was suffering hair loss, skin irritation, nausea, and vomiting.
Thereafter; he reported that he
As alleged, on October 7,
2011, Brunson sought medical treatment and was diagnosed with chemical exposure injuries
including permanent injuries.
(Docs. 1, 50). Brunson underwent surgery, the insertion of a
J-tube, was placed on a liquid diet, and continues to suffer from the effects of the alleged
In 2011, Brunson filed a compensation claim under the Longshore and Harbor Workers’
Compensation Act (“LHWCA”), 33 U.S.C. § 901 et seq., against Flexicrew. On December 27,
2011, Flexicrew’s insurance carrier denied Brunson’s claims.
Flexicrew has not paid any LHWCA benefits to Brunson.
Standard of Review
“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED.
R. CIV. P. 56(a) (Dec. 2010).
Rule 56(c) provides as follows:
(1) Supporting Factual Positions. A party asserting that a fact cannot be or is genuinely
disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including depositions,
documents, electronically stored information, affidavits or declarations, stipulations
(including those made for purposes of the motion only), admissions, interrogatory
answers, or other materials; or
(B) showing that the materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce admissible evidence to support
(2) Objection That a Fact Is Not Supported by Admissible Evidence. A party may object
that the material cited to support or dispute a fact cannot be presented in a form that
would be admissible in evidence.
(3) Materials Not Cited. The court need consider only the cited materials, but it may
consider other materials in the record.
(4) Affidavits or Declarations. An affidavit or declaration used to support or oppose a
motion must be made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to testify on the matters
FED.R.CIV.P. Rule 56(c) (Dec. 2010).
The party seeking summary judgment bears the “initial
responsibility of informing the district court of the basis for its motion, and identifying those
portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue
of material fact.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).
If the nonmoving party fails to make “a
sufficient showing on an essential element of her case with respect to which she has the burden
of proof,” the moving party is entitled to summary judgment.
Celotex, 477 U.S. at 323. “In
reviewing whether the nonmoving party has met its burden, the court must stop short of
weighing the evidence and making credibility determinations of the truth of the matter.
the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in
his favor.” Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998-999 (11th Cir. 1992) (internal
citations and quotations omitted).
Flexicrew and USES’ motions as to Natures Way’s claims against them
On October 1, 2013, this Court granted Natures Way’s motion for summary judgment as
to Brunson’s negligence claims against it.
In so doing, Brunson’s remaining
claim against Natures Way for wantonness, was rendered moot.
(Id. at 1 at note 1).
result, and per Natures Way’s own representations (Doc. 242 at 1 at note 1), said ruling moots
Natures Way’s claims against Flexicrew (Doc. 25) and USES (Doc. 124).
Natures Way’s counterclaims against Flexicrew (Doc. 25) and USES (Doc. 124) are
DISMISSED and those portions of both Flexicrew and USES’ respective motions for summary
judgment relating to same (Docs. 178-180, 190-192) are DENIED as MOOT.
USES’ motion as to Apex’s claims against it
USES moved for summary judgment on Apex's claims against it for indemnity and
contribution (Apex alleged that to the extent it is held liable to Brunson for his injuries, it has a
right to indemnity/contribution from USES as a third party beneficiary to the 2010
(Docs. 36, 53, 175). Specifically, USES asserts that as Brunson’s
“employer” it is immune from his suit under 1) Section 905(a); and 2) Section 905(b) because
(assuming Apex’s status as a vessel), USES is Brunson’s “borrowing employer” and Brunson’s
claims are thus barred.
Upon consideration, it appears that genuine issues of material fact exist
as to the Langfitt v. Federal Marine Terminals, Inc., 647 F.3d 1116 (11th Cir. 2011) borrowing
employer factors, and thus, USES’ status as a “borrowing employer.” As such, it is ORDERED
that the portion of USES’ motion for summary judgment relating to Apex’s claims against it
(Docs. 190-192) -- is DENIED at this time.5
Flexicrew’s motion as to Apex’s claims against it
The LHWCA establishes a comprehensive federal workers' compensation program that
provides covered employees and their families with medical, disability, and survivor benefits for
work-related injuries and death.
Howlett v. Birkdale Shipping Co., 512 U.S. 92, 96 (1994).
Section 904 of the LHWCA allows maritime employees to recover compensation from their
5 USES did not move for summary judgment on the basis that Apex is not a third party beneficiary to the
employers for certain injuries “irrespective of fault as a cause for the injury.”
33 U.S.C. §
904(b). Because the employer is subject to liability to compensate the employee regardless of
fault, the LHWCA, by its express terms, makes this recovery the exclusive liability of an
employer (to an employee) per Section 905(a):
The liability of an employer prescribed in section 904 of this title shall be exclusive and
in place of all other liability of such employer to the employee…except that if an
employer fails to secure payment of compensation as required by this chapter, an injured
employee…may elect to claim compensation under the chapter, or to maintain an action
at law or in admiralty for damages on account of such injury…
“Employees covered by the LHWCA are thus statutorily barred from suing their employers for
injuries incurred in the course of their employment.”
Curry v. Boh Bros. Const. Co., L.L.C.,
2006 WL 517650, *2 (N.D. Fla. Mar. 2, 2006). However, Section 905(b) provides, in relevant
part, that a covered employee may also sue the vessel, in a separate action, as a third party if his
injury was caused by the negligence of a vessel:
In the event of injury to a person covered under this chapter caused by the negligence of a
vessel, then such person, or anyone otherwise entitled to recover damages by reason
thereof, may bring an action against such vessel as a third party in accordance with the
provisions of section 933 of this title, and the employer shall not be liable to the vessel
for such damages directly or indirectly and any agreements or warranties to the contrary
shall be void. If such person was employed by the vessel to provide stevedoring services,
no such action shall be permitted if the injury was caused by the negligence of persons
engaged in providing stevedoring services to the vessel. If such person was employed to
provide shipbuilding, repairing, or breaking services and such person's employer was the
owner, owner pro hac vice, agent, operator, or charterer of the vessel, no such action shall
be permitted, in whole or in part or directly or indirectly, against the injured person's
employer (in any capacity, including as the vessel's owner, owner pro hac vice, agent,
operator, or charterer) or against the employees of the employer….The remedy provided
in this subsection shall be exclusive of all other remedies against the vessel except
remedies available under this chapter.
See also Curry, 2006 WL 517650, *2. Thus, vessels are liable for negligence to maritime
employees who are injured while on the vessel.
However, because an employer is liable to the maritime employee regardless of fault, the
LHWCA immunizes the employer from suits for contribution or indemnity by the vessel.
noted supra, the Act expressly provides that where an injured employee brings an action against
a vessel for damages, “the employer shall not be liable to the vessel for such damages directly or
indirectly and any agreements or warranties to the contrary shall be void.”
33 U.S.C. § 905(b).
As the Supreme Court has stated, “§ 905 permits the injured longshoreman to sue the vessel and
exempts the employer from any liability to the vessel for any damages that may be recovered.”
Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 268 (1979).6
“the 1972 Amendments make quite clear that ‘the employer shall not be liable to the vessel for
such damages directly or indirectly.’”
Id. at 270 (emphasis in original).
See also Pippen v.
Shell Oil Co., 661 F.2d 378, 386 (5th Cir. 1981) (stating that § 905(b) “expressly forbids an
action by the vessel against the employer for damages for an injury caused by the negligence of
the vessel” and “Section 905(b) of the [Act] cuts off the right of a vessel ... to recover
contribution or indemnity from the employer”); In re Knudsen, 710 F.Supp.2d 1252, 1268 at
note 9 (S.D. Ala. 2010) (stating that “§ 905(b) explicitly prohibits indemnity action by vessels
against an employer and does not differentiate between contractual or tort indemnity”). “[A]
principal purpose [of the 1972 amendments] was to free maritime employers of indemnity claims
by vessels on which their employees were injured, and thus to assure that an employer’s
compensation liability under the Act ‘shall be exclusive and in place of all other liability’ for an
employment-related injury...The express legislative intent was to immunize employers of
amphibious workers injured on a vessel from indemnity claims...” Boudreaux v. American
6 In Edmonds, the Supreme Court cited a Senate Report stating, “[i]t is the Committee’s intention to
prohibit such recovery under any theory including, without limitation, theories based on contract or tort.” 443 U.S.
at 270 n.28.
Workover, Inc., 680 F.2d 1034, 1052 (5th Cir. 1982).
Thus, it is well settled that “under the
Act, the employer is immune to suit for indemnity or contribution by the vessel.”
Empresa Lineas Maritimas Argentinas, 573 F.2d 884, 888 (5th Cir. 1978).
As such, if Brunson is a statutory employee, Flexicrew is a statutory employer, and Apex
is a vessel, Apex’s indemnity, defense and contribution claims against Flexicrew are prohibited,
as a matter of law, under Section 905(b) the LHWCA, as Flexicrew is immune from said claims.
The LHWCA extends coverage to Brunson because he is a statutory “employee.”
an employee and receive compensation under the LHWCA: 1) the person must be injured in the
course of employment, 33 U.S.C. § 902(2); 2) the employer must have employees engaging in
maritime employment, 33 U.S.C. § 902(4); 3) the injured person must have “status,” that is, be
engaged in maritime employment, 33 U.S.C. § 902(3);7 and 4), the injury must occur “upon the
navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal,
building way, marine railway, or other adjoining area customarily used by an employer in
loading, unloading, repairing, dismantling, or building a vessel,” 33 U.S.C. § 903(a)).
7 Section 902(3) provides as follows:
The term “employee” means any person engaged in maritime employment, including any longshoreman or
other person engaged in longshoring operations, and any harbor-worker including a ship repairman,
shipbuilder, and ship-breaker, but such term does not include-- (A) individuals employed exclusively to
perform office clerical, secretarial, security, or data processing work; (B) individuals employed by a club,
camp, recreational operation, restaurant, museum, or retail outlet; (C) individuals employed by a marina
and who are not engaged in construction, replacement, or expansion of such marina (except for routine
maintenance); (D) individuals who (i) are employed by suppliers, transporters, or vendors, (ii) are
temporarily doing business on the premises of an employer described in paragraph (4), and (iii) are not
engaged in work normally performed by employees of that employer under this chapter; (E) aquaculture
workers; (F) individuals employed to build any recreational vessel under sixty-five feet in length, or
individuals employed to repair any recreational vessel, or to dismantle any part of a recreational vessel in
connection with the repair of such vessel; (G) a master or member of a crew of any vessel; or (H) any
person engaged by a master to load or unload or repair any small vessel under eighteen tons net; if
individuals described in clauses (A) through (F) are subject to coverage under a State workers'
Chesapeake and Ohio Ry. Co. v. Schwalb, 493 U.S. 40, 46 (1989).
Employee status “can be based upon the maritime nature of the employment as a whole”
or on the maritime nature of the claimant’s activity at the time of the injury.” Browning v. B.F.
Diamond Const. Co., 676 F.2d 547, 548-549 (11th Cir. 1982) (citing Hullinghorst Indus., Inc. v.
Carroll, 650 F.2d 750, 754 (5th Cir. 1981) and Thibodaux v. Atlantic Richfield Co., 580 F.2d
841, 844 (5th Cir. 1978)). As set forth by Director v. Perini North River Assoc., 459 U.S. 297,
323-324 (1983) (footnote omitted): “when a worker is injured on the actual navigable waters in
the course of his employment on those waters, he satisfies the status requirement in §
2(3),…providing, of course, that he is the employee of a statutory ‘employer,’ and is not
excluded by any other provision of the Act. [ ] We consider these employees to be “engaged in
maritime employment” not simply because they are injured in a historically maritime locale, but
because they are required to perform their employment duties upon navigable waters.” See also
e.g., Herb’s Welding, Inc. v. Gray, 470 U.S. 414, 423 (1985) (discussing the expansion of the
requirement that the LHWCA’s prior application only to injuries sustained on the navigable
waters of the United States, to now include large shoreside areas, necessitating an affirmative
description of the particular employees working in those areas who would be covered – “[t]his
was the function of the maritime employment requirement”); Brockington v. Certified Elec.,
Inc., 903 F.2d 1523, 1527 (11th Cir. 1990) (noting that the LHWCA was expanded to cover
workers who are not actually physically on the water at the time of injury).
First, there is no dispute that Brunson was injured “in the course of his employment” and
was not merely “transiently or fortuitously” on the barge.
Brunson was specifically hired to
clean the barge and so was on the barge on the navigable waters (for about 29.5 hours over 3
days) when he received his alleged injuries (either topside as hole watch on down inside the
(Doc. 179-2 (Dep. Brunson at 159-160, 285-286, 295-297, 299-300).
not merely taking the barge to and from his jobsite, but instead, the barge was his jobsite and
where he spent almost all of his workday.
Because almost all of Brunson’s workday was spent
“actually performing job responsibilities on navigable waters”, on the barge, he was acting “in
the course of his employment.” See, e.g., Bienvenu v. Texaco, Inc., 164 F.3d 901, 906-908 (5th
Cir. 1999) (footnote omitted) (stating that “[w]e believe that all Perini requires is that the
claimant show that he was injured on navigable waters while in the course of his employment”
and “[w]e therefore hold that a worker injured in the course of his employment on navigable
waters is engaged in maritime employment and meets the status test  only if his presence on the
water at the time of injury was neither transient or fortuitous”); Perini, 459 U.S. at 324 (finding
that “when a worker is injured on the actual navigable waters in the course of his employment on
those waters, he satisfies the status requirement....”).
Second, there is no dispute that Brunson’s employer, Flexicrew, has employees engaging
in maritime employment.
Approximately 65% of Flexicrew’s employees are employed in
longshore positions such as working in shipyards, performing repair work on vessels and
loading/unloading vessels. (Doc. 179-1 (Aff. March)).
Third, Brunson was engaged in maritime employment as defined in Section 902(3) at the
time of his injuries because he was hired to assist in unloading the barge’s cargo
See, e.g., Browning, 676 F.2d at 549-550 (finding that traditional
longshoring activities such as unloading a vessel and handling (loading/unloading) cargo are
Further, Brunson qualifies as a statutory employee under Section
902(3) due to being hired to clean the tanks on the barge.
See, e.g., Hite v. Maritime Overseas
Corp., 375 F. Supp. 233, 235 (E.D. Tex. 1974) (holding that an employee of land-based
employer engaged in cleaning rust from walls of a cargo tank of a vessel undergoing changeover
from hauling of petroleum products to transportation of wheat was engaged in work in the nature
of shipbuilding or ship repairing and therefore was “employee” under the LHWCA); Perez v.
Marine Transp. Lines, Inc., 160 F. Supp. 853, 854 (E.D. La. 1958) (finding that where a seaman
was hired not to serve as a regular crew on the vessel but to clean the vessel's tanks under
supervision of ship's officers and with ship's equipment, he was not a member of the crew and
his exclusive remedy was under the LHWCA).
Fourth, the parties do not dispute that Brunson was working on a barge located on the
navigable waters of the United States – the Theodore Industrial Canal – when he was allegedly
(Doc. 179 at 12; Doc. 175 at 1; Doc. 179-2 (Dep. Brunson at 287)).
times, the barge was actually in the water.
At all pertinent
(Doc. 179-2 (Dep. Brunson at 287)).
The LHWCA extends coverage to Flexicrew because it is a statutory employer under
902(4).8 As defined in Section 902(4), a statutory “employer” is “an employer any of whose
employees are employed in maritime employment, in whole or in part, upon the navigable waters
of the United States (as described in 33 U.S.C. s 903(a)).”
As noted supra, 65% of Flexicrew’s
employees are employed in longshore positions upon the navigable waters of the United States.
(Doc. 179-1 (Aff. March)).
Additionally, when an injured worker meets the employee
8 Section 902(4) provides: “The term ‘employer’ means an employer any of whose employees are
employed in maritime employment, in whole or in part, upon the navigable waters of the United States (including
any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily
used by an employer in loading, unloading, repairing, or building a vessel).”
definition, his employer automatically qualifies as a statutory employer under Section 902(4).
See, e.g., Hullinghorst Indus., Inc. v. Carroll, 650 F.2d 750, 758 (5th Cir. 1981).9
Whether Apex is a Vessel
Flexicrew’s motion for summary judgment as to Apex’s claims against it are premised on
Apex’s presumed status as a “vessel” for purposes of the LHWCA, 33 U.S.C. § 905(b).
However, Apex’s vessel status has not yet been determined.
Upon consideration, the Court
now concludes that Apex is a “vessel” as a matter of law.
Section 905(b) of the LHWCA provides a right of action to longshoremen injured due to
negligence of a vessel.
The LHWCA defines “vessel” broadly: “[u]nless the context requires
otherwise, the term ‘vessel’ means any vessel upon which or in connection with which any
person entitled to benefits under this chapter suffers injury or death arising out of or in the course
of his employment, and said vessel's owner, owner pro hac vice, agent, operator, charter or
bare boat charterer, master, officer, or crew member.” 33 U.S.C. § 902(21) (emphasis added).
See also Stewart v. Dutra Const. Co., 543 U.S. 481 (2005) (providing that Section 902(21) “lists
the parties liable for the negligent operation of a vessel[”); Mallard v. Aluminum Co. of
Canada, Ltd., 634 F.2d 236, 242 n. 5 (5th Cir. 1981) (discussing liability of time charterer).
Natures Way is the owner of the barge (vessel) and Apex is the charterer of the barge
This is not disputed and is clear from the Natures Way-Apex charter agreement.
To skirt being deemed a “vessel,” Apex claims it is “simply the adjoining
premises owner” (Doc. 201 at 21-24), and endeavors to characterize itself as a time charter
(versus a demise/bareboat charterer) with no responsibility or control over the barge, as there are
9 The Eleventh Circuit has adopted as precedent all of the decisions of the former Fifth Circuit decided
prior to October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
different liability consequences for these types of charters under Section 905(b).10 However,
Apex’s characterization ignores its charter status and the LHWCA’s clear definition of vessels
which specifically includes a “charter.”
See, e.g., Helaire v. Mobil Oil Co., 709 F.2d 1031 (5th
Cir. 1983) (finding owner and charter are vessels); Butcher v. Dravo Corp., 2009 WL 799746
(W.D. Pa. 2009) (same); M-I L.L.C v. Masse Contracting, Inc., 2008 WL 754849 (E.D. La.
2008) (same); Sea Calm Shipping Co., S.A. v. Cooks, 565 So.2d 212, 215 (Ala. 1990) (same).
While charter or bare boat charterer is expressly mentioned in Section 902(21), and “time
charterer” is not, courts have held that a time charterer is likewise amenable to suit under Section
905(b). See, e.g., Hendricks v. Earling Shipping Co., Ltd., 1998 WL 684206 (S.D. Ga. May 4,
The rule in the Eleventh Circuit is that “[a] time charterer who has no control over a
vessel assumes no liability for negligence of the crew or unseaworthiness of the vessel absent an
agreement to the contrary.”
Hayes v. Wilh Wilhelmsen Enters., Ltd., 818 F.2d 1557, 1559 (11th
Cir. 1987) (citing Mallard, 634 F.2d at 242 n. 5) (emphasis added).11 As such, this Court must
determine whether Apex had control over the vessel.
There are essentially two types of charters: a voyage/time charter, and a bareboat/demise
10 Additionally, Apex previously contended that it satisfies the exception under 902(21), as this case
“requires a finding otherwise” that it is not a vessel, because it is “simply the adjoining premises owner” and it
“defies common sense to convert a premises owner into a vessel[.]” (Doc. 201 at 23). See also Doc. 216 at
14-17. However, a premises liability claim is not before the Court as Brunson did not allege as such against Apex.
As such, this “finding otherwise” argument is irrelevant to the claims at issue in this case.
11 While the Eleventh Circuit has cast some doubt on the continued validity of this rule, it has stopped
short of overruling it. Id. at 1559 n. 1 (stating “it is unclear whether the holding of D/S Ove Skou is still good law
and binding precedent in this circuit. The 1972 amendments, which afford an injured longshoreman a right of action
against a charterer for negligence, undercuts the rationale of D/S Ove Skou v. Hebert. At an appropriate time, the en
banc court must address the continued vitality of that case”). “The law of this circuit is ‘emphatic’ that only the
Supreme Court or this court sitting en banc can judicially overrule a prior panel decision.” Cargill v. Turpin, 120
F.3d 1366, 1386 (11th Cir. 1997). “Because the Eleventh Circuit in Hayes applied the existing rule in the face of the
1972 amendments to the LHWCA, this Court is bound by that decision.” Berry v. Mi-Das Line SA, 2009 WL
3112028 (S.D. Ga. Sept. 28, 2009).
See, e.g., Walker v. Braus, 995 F.2d 77 (5th Cir. 1993) (explaining the difference as
being “[i]n a time charter the vessel owner retains possession and control of the vessel…provides
whatever crew is needed and is responsible for normal operating expenses…the owner fully
equips and maintains the vessel, makes repairs as needed and provides insurance on the vessel”
but “[u]nder a bareboat or demise charter…the full possession and control of the vessel is
transferred to the charterer…the vessel is transferred without crew, provisions, fuel or supplies,
i.e. ‘bareboat’ and when, and if, the charterer operates the vessel he must supply also such
essential operating expenses. Because the charter's personnel operate and man the vessel during a
demise charter, the charterer has liability for any and all casualties resulting from such operation
and therefore provides insurance for such liability”).
With the typical time charter, the vessel
remains under the possession and control of the vessel’s owners; however, with a bareboat or
demise charter, full or complete possession and control of a vessel is transferred to a charterer for
the duration specified in the charter contract (thus, full control of the vessel for a certain period
of time, controlling its schedule, crew, navigation, etc., is the primary character of this type of
A vessel charter need not be in writing to constitute a bareboat charter; control is the
critical issue to determine whether such a charter exists. See, e.g., McAleer v. Smith, 57 F.3d
109, 112-113 (1st Cir. 1995) (explaining the demise/bareboat charter is a type of owner pro hac
vice status – “[a] demise charterer is ‘one who contracts for the vessel itself and assumes
exclusive possession, control, command and navigation thereof for a specified period’”); U.S.
v. West Indies Transport Co., Inc., 57 F.Supp.2d 198 (D.V.I. 1999) (describing the difference
between charters – “[a] demise [or bare boat] charterer is ‘one who contracts for the vessel itself
and assumes exclusive possession, control, command and navigation thereof for a specified
period’…in contrast to a time or voyage charterer who ‘contracts not for the vessel itself but for
a specific service of the vessel, such as carriage of goods, which is rendered by the owner's
master and crew’”); Walker v. Braus, 861 F. Supp. 527, 530 (E.D. La. 1994) (discussing the
nature of a demise or bareboat charter – “the vessel is transferred to the charterer without crew,
fuel, or supplies. Because the charterer's personnel operate and man the vessel while the charter
is in existence, the charterer is responsible for the negligence of the vessel or its crew”).
The September 6, 2011 Natures Way-Apex Charter Agreement (Doc. 179-4) does not
include any provisions specifying for Apex, as charterer, to have or not have control over the
barge or its crew during the charter period.
The charter agreement is silent in that regard.12
However, the charter does require Apex to clean the barge tanks before returning the vessel to
Additionally, facts surrounding the resulting division of responsibility, as
between Natures Way and Apex, clearly show that Natures Way turned the barge completely
over to Apex when the charter commenced and relinquished all of its control when doing so.
While docked in the navigable waters on the Theodore Industrial Canal, there is no evidence to
contradict that Apex had 100% control over the barge, the crew, the loading/unloading of the
rain/wastewater cargo, etc.
The evidence indicates that Natures Way did not have any
involvement with Apex and/or the barge -- until it retrieved the barge at the conclusion of the
Indeed, according to Natures Way, once Apex chartered the barge on September 6th,
12 The Court is aware of the rule in the Eleventh Circuit is that “[a] time charterer who has no control over
a vessel assumes no liability for negligence of the crew or unseaworthiness of the vessel absent an agreement to the
contrary.” Hayes v. Wilh Wilhelmsen Enters., Ltd., 818 F.2d 1557, 1559 (11th Cir. 1987). See also Mallard v.
Aluminum Co. of Can., Ltd., 634 F.2d 236, 242 n. 5 (5th Cir. 1981); Kerr-McGee Corp. v. Ma-Ju Marine Servs.,
Inc., 830 F.2d 1332, 1343 (5th Cir. 1987). However, these cases are distinguishable as they presuppose a time
charterer with no control over a vessel. Here, the actions of Apex make clear that it, as the charter, had 100%
control over the barge.
Natures Way relinquished control of the barge to Apex (no crew were assigned by Natures Way
and all care, custody and control of the barge rested with Apex), and Natures Way only later
returned to the barge, after the completion of the charter period, to inspect it.
J.Spencer at 15-17); Doc. 242-7 (Dep. G.Hayes at 27, 30-31)).
(Doc. 242-2 (Dep.
Natures Way asserts and Apex
has not contradicted, that at no point did any of its employees/agents have operation/control over
the barge while under charter with Apex.
(Doc. 242-2 (Dep. J.Spencer at 16)).
had the right to use the barge for its own purposes and Apex assumed responsibility for the
command and operation of the barge (including movement of cargo).
These facts support a finding that Apex had control of the vessel and -- through its
actions -- assumed the rights and obligations of the owner during the charter, such that Apex is,
as a matter of law, the “vessel” during the relevant timeframe (the days Brunson was allegedly
Section 905(b) & Apex’s Indemnity and Contribution Claims
Section 905(b) of the LHWCA expressly prohibits indemnity and contribution claims
whether made “directly or indirectly” and “any agreements or warranties to the contrary shall be
void.” Courts in the Eleventh Circuit universally dismiss indemnity and contribution claims
made by vessels, such as Apex, against employers, such as Flexicrew, regardless of whether the
claims seek damages directly or indirectly in contract or tort.13 See, e.g., Smith v. United States,
980 F.2d 1379, 1381 (11th Cir. 1993) (providing that although 33 U.S.C. § 905(a) has been
interpreted by the Eleventh Circuit as not barring contract indemnity actions, § 905(b) explicitly
prohibits indemnity action by vessels against an employer and does not differentiate between
13 Also, employers cannot even indemnify non-vessels through a contractual waiver where the proceeds
would indirectly indemnify a vessel. See, e.g., M-I L.L.C., 2008 WL 754849 at *5; Gaudet v. J.Ray McDermott &
Co., Inc., 568 F. Supp. 795, 798 (E.D. La. 1983).
contractual or tort indemnity); Knudsen, 710 F. Supp.2d at 1368 at note 9 (same).
Apex’s indemnity claim is prohibited.
Further, Apex contends that Flexicrew waived its LHWCA immunity per the terms of the
August 13, 2010 labor staffing contract with USES.14 As stated, Section 905(b) specifies that
an employer cannot waive immunity by any agreements or warranties to support a contrary
Flexicrew retains Section 905(a) immunity as it “Secured Payment”
Apex contends that Flexicrew’s denial of Brunson’s claim destroys immunity.
Specifically, Apex argues that the maintenance of insurance coverage is insufficient to satisfy the
Section 905(a) requirement to “secure payment” of compensation and that Flexicrew must pay
Brunson’s claim in order to be immune.
Flexicrew asserts that it is immune from Apex’s
claims because it is a statutory employer which “secured payment” as required by the statute by
maintaining insurance (United States Longshore and Harbor Workers Act (“USL&H”) insurance
(Doc. 179-1 at 2 (Aff. March at 2)).
Relying on case law from other circuits, Apex mischaracterizes the clear language of the
statute and overlooks precedent.
The LHWCA provides that the employer must secure payment
of compensation, and binding case law explains this as the long-range method whereby the
employer satisfies the Department of Labor that it can, that is, it has the potential, to pay
compensation payments when/if required to do so under the Act.
The LHWCA does not place
14 Apex cites Tran v. Manitowoc Eng. Co., for the proposition that LHWCA employer immunity may be
waived by an indemnity contract with a third party other than the vessel owner. (Doc. 201 at 20). Tran v.
Manitowoc Eng. Co., 767 F.2d 223, 226-227 (5th Cir. 1985) held that “[i]f the vessel owner and the…employer are
the same entity…the injured employee may still bring an action to recover damages-but only for vessel owner
negligence, not for stevedoring negligence.” Apex overlooks the key distinguishing facts of that case – namely,
that the employer (Becker) was also the vessel owner. Here, Flexicrew is only the employer, not also the vessel
owner, such that this case is inapposite.
any additional burden on the employer to immediately and actually make compensation
payments to individual injured employees.
In other words, Flexicrew must “secure” payment,
not actually make payment of benefits.
Specifically, in Thibodeaux v. J. Ray McDermott & Co., 276 F.2d 42 (5th Cir. 1960),15 a
welder fell to his death while working on an unmanned barge.
His relatives sued his employer
seeking damages and asserted, in part, that the employer was liable for failing to secure payment
under the LHWCA.
The Fifth Circuit explained the meaning of “secure payment:”
…On the theory that the Employer failed ‘to secure payment of compensation,’ the
plaintiffs exercised their statutory election provided in § 905 of the Longshoremen's Act
to sue ‘for damages on account of such injury or death.’
The District Court held that this claim for damages was unfounded since the record
demonstrated conclusively that the Employer had secured payment of compensation. We
…By the structure of the Act, the reference in § 905 to an employer who ‘fails to secure
payment of compensation as required by this chapter’ relates to the specific provision in
932 which prescribes how and in what manner an employer shall comply with the
obligation to secure payment of compensation.FN5
FN5. 33 U.S.C.A. § 932 reads: '(a) Every employer shall secure the payment of
compensation under this chapter (1) By insuring ***: or (2) (By securing approval
as a self insurer) to pay such compensation directly ***.'
Thibodeaux, 276 F.2d at 46 (emphasis added). Section 932 provides, in relevant part, that:
“[e]very employer shall secure the payment of compensation under this chapter - (1) By insuring
and keeping insured the payment of such compensation with any stock company or mutual fund
company or association, or with any other person or fund, while such person or fund is
authorized (A) under the laws of the United States or of any State, to insure workmen's
compensation, and (B) by the Secretary, to insure payment of compensation under this
15 The Eleventh Circuit has adopted as precedent all of the decisions of the former Fifth Circuit decided
prior to October 1, 1981. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc).
33 U.S.C.A. § 932.
As explained in Jefferson v. S.S. BONNY TIDE, 281 F.
Supp. 884, 885-886 (E.D. La. 1968) (emphasis added):
…Clearly, the reference in § 5 to an employer's failure to ‘secure payment’ relates to the
long-range method whereby the employer satisfies the Department of Labor that it can,
that is, it has the potential, to pay compensation payments when and if required to do so
under the Compensation Act. The language of § 5 does not place any additional burden
on the employer who has secured his ability to discharge his burden under the Act to
immediately and actually make compensation payments to individual injured employees at
the risk, if he fails to do so, of creating an election in the employee to maintain an action
at law or in admiralty. The Act clearly and specifically permits the employer to contest
liability for compensation by following certain procedures designed to insure a speedy
determination by the Deputy Commissioner of any issues raised. 33 U.S.C. § 914(a), (d),
(h), and (i).
Additionally, in Reichert v. Chemical Carriers, Inc., 794 F.2d 1557, 1559 (11th Cir.
1986), the Eleventh Circuit stated that Congress provided that an employer which provides
compensation coverage may not be sued.
Binding case law also indicates that an employer’s
payment of insurance premiums have been found to cover compensation liability.
Johnson v. American Mut. Liab. Ins. Co., 559 F.2d 382, 392 (5th Cir. 1977) (finding that “[t]he
quid pro quo expected from the employer in return for the grant of immunity from tort liability
is, in the case of the self-insurer, the payment of compensation, and in the case of the insured
employer, the payment of insurance premiums adequate to cover compensation liability not the
payment of insurance premiums adequate to cover unlimited tort liability, either of the employer
or of the compensation insurer”). Other courts have also stated that when an employer
maintains insurance coverage, the employer is entitled to LHWCA immunity.
See, e.g., Martin
v. Halliburton, 808 F.Supp.2d 983, 990 (S.D. Tex. 2011) (stating that under the Act “an
employer has secured payment of compensation if the employer obtained insurance on the
payment of compensation…Defendants had the requisite insurance. Therefore, Defendants
secured payment of compensation”); Colon Colon v. United States Dep’t of Navy, 223 F.
Supp.2d 368, 370 (D.P.R. 2002) (providing that courts “have uniformly held that an employer
that secures insurance coverage for its employees…is entitled to immunity under the
Here, Flexicrew’s securing of insurance with USL&H amounts to “securing payment” of
compensation under the LHWCA.
The fact that USL&H, Flexicrew’s insurance carrier, has
contested Brunson’s claim to benefits under the LHWCA does not mean that Flexicrew failed to
secure compensation under the Act.
Because Flexicrew discharged its statutory obligation for
compensating Brunson by maintaining insurance coverage through an insurance carrier,
Flexicrew retains its immunity under the LHWCA.
Accordingly, based on the foregoing, it is ORDERED that Flexicrew’s Motion for
Summary Judgment (Docs. 178-180) is MOOT as to Natures Way’s claims against it and
GRANTED as to Apex’s claims against it.
It is further ORDERED that USES’ Motion for
Summary Judgment (Docs. 190-192) is MOOT as to Natures Way’s claims against it and
DENIED at this time as to Apex’s claim against it.16
DONE and ORDERED this the 25th day of November 2013.
/s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE
16 Apex’s claim against USES for contractual indemnity will be merged with 12-651 for trial.
proposed pre-trial order in 12-651 should reflect this merger.
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