Magee v. Ensco Offshore Company

Filing 46

ORDERED that Tobias, Inc.'s 31 Motion for Summary Judgment is DENIED and that Ensco Offshore Company's 33 Cross-Motion for Summary Judgment is GRANTED, DISMISSING WITH PREJUDICE Tobias's crossclaim against Ensco. Signed by Judge Carl Barbier. (gec, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

MAGEE

CIVIL ACTION

VERSUS

NO: 11-1351

ENSCO OFFSHORE COMPANY

SECTION: “J”(2)

ORDER AND REASONS
Before the Court are Tobias, Inc.’s Motion for Summary
Judgment (Rec. Doc. 31), Ensco Offshore Co.’s opposition thereto
(Rec. Doc. 35), and Tobias, Inc.’s reply (Rec. Doc. 45); and
Ensco Offshore Co.’s Cross-Motion for Summary Judgment (Rec. Doc.
33), Tobias, Inc.’s opposition thereto (Rec. Doc. 36), and Ensco
Offshore Co.’s reply (Rec. Doc. 43).

The motions are before the

Court on supporting memoranda and without oral argument.

Having

considered the motions and legal memoranda, the record, and the
applicable law, the Court now issues its ruling.

PROCEDURAL HISTORY AND BACKGROUND FACTS
The claim at issue is a crossclaim filed by defendant
Tobias, Inc. (“Tobias”) against co-defendant Ensco Offshore Co.
1

(“Ensco”).

Tobias seeks indemnity and defense from Ensco for any

amount for which Tobias may be liable to the plaintiff, Kendall
K. Magee.

Magee, Ensco’s employee, allegedly was injured during

a slip and fall on or about March 12, 2011 while he was back
loading Tobias’s vessel, the M/V MS. CHRISTINE.

Both Tobias and

Ensco had contracts with Chevron U.S.A., Inc. (“Chevron”)
pertaining to Chevron’s oil and gas operations on the Outer
Continental Shelf in the Gulf of Mexico.

Chevron is not a party

to this litigation.
Pertinent to the work being performed at the time of Magee’s
alleged slip and fall, Ensco was operating the jack-up rig ENSCO
82, which it owned, under a Master Drilling Contract (“MDC”) that
it had with Chevron.

Tobias was operating the MS. CHRISTINE as a

work/supply vessel under a Master Time Charter (“MTC”) with
Chevron.

While back loading the MS. CHRISTINE from the ENSCO 82,

plaintiff Magee allegedly was injured, and he filed his complaint
with this Court on June 8, 2011, pursuant to the Jones Act and
general maritime law.

Tobias tendered its defense to Ensco,

seeking indemnity and defense.

When Tobias received no

confirmation that Ensco would undertake Tobias’s defense, Tobias
filed a crossclaim against Ensco and a third party demand against
Ensco’s unidentified insurer.

It is Tobias’s crossclaim against

2

Ensco that is the subject of the co-defendants’ cross-motions for
summary judgment.
The MDC, which was signed by Chevron as “Company” and Ensco
as “Contractor,” contains a Schedule G, “Agreement for Mutual
Indemnity and Waiver of Recourse,” which provides for reciprocal
indemnity agreements among parties who qualify as “Signatories”
under the MDC.

Tobias’s crossclaim asserts that Tobias is a

“Signatory” to whom Ensco owes an indemnity and insurance
obligation under the MDC with respect to Ensco’s employee’s
(Magee’s) personal injury claim levied against Tobias in this
lawsuit.

Tobias and Ensco have both moved for summary judgment

on Tobias’s crossclaim.

THE PARTIES’ ARGUMENTS
Tobias argues that the MDC obligates Ensco, as Chevron’s
contractor, to indemnify and defend Tobias, as another contractor
of Chevron.

Tobias asserts that as a result of Ensco’s negligent

failure to defend and indemnify Tobias, the latter has incurred
attorney’s fees and costs in defending itself against Magee’s
lawsuit.

It asserts that it is entitled to all costs, interest,

expenses, attorney’s fees, settlements, judgments, or other
amounts it may incur arising from this litigation.

3

Ensco argues several reasons why it does not owe indemnity
to Tobias under the MDC.

First, Tobias is not a part of the

“Company Group” to whom Ensco owes an indemnity obligation
because the fact that Tobias’s vessel was operating under a time
charter invokes an exclusionary clause with respect to the
“Company Group” definition.

Second, Schedule G, which permits

entities not parties to the MDC to become “Signatories” to whom
Ensco may owe an indemnity obligation, excludes indemnification
with respect to “transportation services,” in which Magee was
involved at the time of his alleged injury.

Third, Tobias cannot

invoke the benefit of indemnity under Schedule G because it is
not a “Signatory,” for several reasons.
G.

It did not sign Schedule

It entered a “formal contract” with Chevron, so as to invoke

an exclusionary clause that is an exception to the indemnity
provided in Schedule G.

Tobias did not sign a “substantially

similar agreement” in signing its MTC with Chevron.
Tobias argues, first, that it need not fit within the
“Company Group” definition because Schedule G overrides that
provision.

It also argues that even if it needs to invoke that

definition, the time charter exclusion only applies to vessels
properly speaking, rather than to Tobias, who is a vessel owner.
Second, Tobias argues that the Schedule G exclusion pertaining to

4

alleged Signatories engaged in “transportation services” does not
apply to the back loading in which Magee was engaged at the time
of his alleged injury.

Third, Tobias argues that it is a

“Signatory” under Schedule G and thus can claim indemnity from
Ensco.

Specifically, it argues that it need not have signed

Schedule G, but rather its signing of a substantially similar
agreement makes it a Signatory.

LEGAL STANDARD
Summary judgment is appropriate when “the pleadings, the
discovery and disclosure materials on file, and any affidavits
show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(c)(2); Celotex Corp. v. Catrett, 477 U.S. 317,
322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075
(5th Cir. 1994).

When assessing whether a dispute as to any

material fact exists, the Court considers “all of the evidence in
the record but refrains from making credibility determinations or
weighing the evidence.”

Delta & Pine Land Co. v. Nationwide

Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008).

All

reasonable inferences are drawn in favor of the nonmoving party,
but a party cannot defeat summary judgment with conclusory

5

allegations or unsubstantiated assertions.

Little, 37 F.3d at

1075. A court ultimately must be satisfied that “a reasonable
jury could not return a verdict for the nonmoving party.”

Delta,

530 F.3d 399.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’”

Int’l

Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263-64 (5th
Cir. 1991) (citation omitted).

The nonmoving party can then

defeat the motion by either countering with sufficient evidence
of its own, or “showing that the moving party’s evidence is so
sheer that it may not persuade the reasonable fact-finder to
return a verdict in favor of the moving party.”

Id. at 1265.

If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in
the record is insufficient with respect to an essential element
of the nonmoving party’s claim.

See Celotex, 477 U.S. at 325.

The burden then shifts to the nonmoving party, who must, by
submitting or referring to evidence, set out specific facts
showing that a genuine issue exists.

6

See id. at 324.

The

nonmovant may not rest upon the pleadings, but must identify
specific facts that establish a genuine issue for trial.

See,

e.g., id. at 325; Little, 37 F.3d at 1075.

DISCUSSION
The parties do not dispute that both the MTC and the MDC are
governed by maritime law.1

Furthermore the MTC and MDC both

contain general maritime law choice-of-law clauses.
31-4, at 14; Rec. Doc. 31-5, at 38.

Rec. Doc.

Generally, indemnity

agreements in maritime contracts are enforceable.

See Theriot v.

Bay Drilling Corp., 783 F.2d 527, 540 (5th Cir. 1986) (applying
federal maritime law to interpret indemnity clauses of drilling
contract).

Ensco does not argue that the indemnity provisions at

issue are legally null—only that they are inapplicable.

“The

interpretation of a contractual indemnity provision is a question
of law.”
2009).

Becker v. Tidewater, Inc., 586 F.3d 358, 369 (5th Cir.

“A maritime contract containing an indemnity agreement .

. . should be read as a whole and its words given their plain
meaning unless the provision is ambiguous.”

1

Id. (quotation marks

Tobias argues that the parties chose to be governed by maritime law
and that the MDC and MTC are maritime contracts. Rec. Doc. 31-1, at 6-8.
Ensco, in its response to Tobias’s statement of uncontested material facts,
admits that “[b]oth the [MTC] and the [MDC] are maritime contracts, such that
Federal law applies to the exclusion of state law.” Rec. Doc. 35-4, at 3.

7

omitted).

“Disagreement as to the meaning of a contract does not

make it ambiguous, nor does uncertainty or lack of clarity in the
language chosen by the parties.”

Breaux v. Halliburton Energy

Servs., 562 F.3d 358, 364 (5th Cir. 2009) (quoting Weir v. Fed.
Asset Disposition Ass’n, 123 F.3d 281, 286 (5th Cir. 1997)).

The

Court turns to the contracts at issue.
A.

Does the Schedule G Exclusion of “Transportation Services”

Apply to Tobias?
Based on the focus of the arguments in the parties’ briefs,
Schedule G appears to be the primary basis for Tobias’s indemnity
claim.

Schedule G is expressly incorporated into the main body

of the drilling contract.2

It is an “Agreement for Mutual

Indemnity and Waiver of Recourse.”

Rec. Doc. 31-8, at 1.

Its

essence is to permit Chevron’s contractors, who otherwise lack
privity with respect to the Ensco-Chevron MDC, to obtain
indemnity among each other if they qualify as “Signatories” under
MDC Schedule G:
In consideration of the premises and the reciprocal
covenants of the other Signatories, the Signatories
agree as follows:
1.

Each Signatory shall be liable and shall release,

2

“The following schedules are attached hereto and made a part hereof
for all purposes. . . . Schedule G - Agreement for Mutual Indemnity and Waiver
of Recourse.” Rec. Doc. 31-5, at 8.

8

defend, indemnify and hold harmless all the other
Signatories and their respective parent,
subsidiary and affiliated companies, agents,
employees, directors, officers, servants, vessels
and insurers, from and against any and all costs,
expenses (including reasonable attorneys’ fees)
and liabilities incident to claims, demands or
causes of action of every kind and character,
whether in personam or in rem, brought by any
person or party, for injury to, illness or death
of any employee, contractor, agent or invitee of
said Signatory or for damage to or loss of
equipment or property owned by said Signatory or
its contractors (or in possession of said
Signatory by virtue of an arrangement made with an
entity which is not a Signatory) which injury,
illness, death, damage or loss arises out of or is
incident to the Operations, regardless of the
cause of such injury, illness, death, damage or
loss even though caused in whole or in part by a
pre-existing defect, the sole or concurrent
negligence (either active or passive), strict
liability or other legal fault of Chevron, or
other Signatories.
Rec. Doc. 31-8, at 1 (emphasis added).

Focusing on the

emphasized language, which is potentially relevant to the instant
case, if both Tobias and Ensco qualify as “Signatories,” then
Signatory Ensco must indemnify Signatory Tobias for any liability
incident to a personal injury claim brought by Ensco’s employee,
Magee, to the extent the injury arises out of the Operations.
Tobias argues that it is a Signatory and thus is entitled to
indemnity from Ensco according to the terms of Schedule G.

A

“Signatory” is defined as a contractor of Chevron who signs a
counterpart of the Schedule G agreement or a substantially
9

similar agreement relating to the “Operations.”

Id.

Tobias must

prove that it meets this definition to prevail on its indemnity
crossclaim under Schedule G.
Pretermitting for the moment whether Tobias has otherwise
proven that it is a Signatory, Ensco argues that even if Tobias
is a Signatory, an exclusion for transportation services bars
Tobias’s claim.
11.

That provision of Schedule G provides:

The release, hold harmless, and defense and
indemnity provisions contained herein with respect
to each Signatory are not applicable in connection
with any transportation services of any kind,
whether via helicopter, vessel (excluding drilling
vessels of any type), airplane, fan boat or
otherwise, unless caused by the sole negligence of
Signatory.

Rec. Doc. 31-8, at 3 (emphasis added).

Ensco argues that the

effect of this provision is that even if Tobias is a Signatory,
Schedule G’s indemnity provisions do not apply because Tobias was
a company providing transportation services.

Ensco argues that

because Magee alleges that he was back loading the MS. CHRISTINE
at the time of the accident, his claim is connected with the
provision of transportation services, and the exclusion in
Paragraph 11 applies.

Tobias argues that “transportation

services” only refers to the carriage of passengers.

10

The phrase “transportation services” is not defined in
Schedule G.

The parties do not point to any part of the MDC that

defines it.

Resorting to general contractual interpretive

principles, a contract’s words should generally be given their
plain meaning.

Becker, 586 F.3d at 369.

The phrase

“transportation services” literally includes loading cargo from a
jack-up rig to a vessel that is used to transport goods to and
from the rig.

It is undisputed that “Magee has alleged that he

was injured while performing cargo back loading services aboard
the M/V MS. CHRISTINE.”

Rec. Doc. 35-4, at 2.

Therefore, under

a plain reading of the phrase “transportation services,” that
phrase would apply to Magee’s loading of cargo onto a vessel that
is under time charter for Chevron’s use.
Tobias cites Schedule D of the MDC to argue that it was not
performing “transportation services” at the time of the accident.
Schedule D is a “Drilling Order” between Chevron and Ensco.
Doc. 31-6, at 1.

Rec.

Part B concerns “Equipment, Supplies, and

Services to be Furnished” and allocates responsibility for these
items between Chevron and Ensco.

Id. at 8.

“No. 300” addresses

items pertaining to “Marine Requirements, Transportation Issues.”
Id. at 9 (emphasis added).

This section has a couple items

addressing specific transportation issues:

11

306

Supply/anchor handing vessels and crews for anchor
handling and for transporting CONTRACTOR’s and
COMPANY’s equipment and supplies between the Drilling
Unit and Operations Base.

***
311

Labor and equipment at Operations Base and dockside to
load and unload CONTRACTOR’s and COMPANY’s supplies and
equipment from supply vessels.

312

Labor required aboard supply vessel when along side of
the Drilling Unit to unload or load CONTRACTOR’s and/or
COMPANY’s supplies and equipment under normal operating
conditions. COMPANY to provide labor to unload or load
supplies other than normal support at the drilling
site.

Id. at 10 (emphasis added).

Even if “transportation services”

may refer to the carriage of passengers, it also refers to the
carriage of goods or supplies.

The above-quoted items in

Schedule D, under the heading “Transportation Issues,” read
together, show that the loading and unloading of vessels
pertaining to Chevron’s operations on the ENSCO 82 pertain to
“transportation” as that term is commonly understood and as it is
used in Schedule D of the MDC.

The Court finds that the activity

in which Magee alleges he was engaged on the date of the incident
constitutes “transportation services” under the meaning of
Schedule G’s exclusionary clause.
Because of the connection, or relationship, of the instant
claim to transportation services, Schedule G, Paragraph 11
12

provides that a Signatory does not owe indemnity with respect to
such services.

This raises the issue of whether Ensco—a

contracting party to the MDC—would also qualify as a “Signatory”
such that its potential indemnity obligation under Schedule G
would fall under the transportation services exclusion.

Who is a

“Signatory” to Schedule G is defined in the prefatory premises to
the Schedule G indemnity agreement:
(a)

Chevron U.S.A. Inc. (“Chevron”) and its contractors
have entered into Master Service Orders and Agreements,
Drilling Contracts, Time Charters and other similar
contracts regarding the performance of work or services
in connection with Chevron’s operations in the Gulf of
Mexico (“Operations”);

(b)

The contractors have signed, or may sign, counterparts
of this Agreement or
substantially similar agreements relating to the
Operations (hereinafter individually called “Signatory”
or collectively called “Signatories”); . . . .

Rec. Doc. 31-8, at 1 (emphasis added).

The Court concludes that

even though Ensco is also the party in immediate contractual
privity with Chevron under the MDC, Ensco also is a “Signatory”
to Schedule G.

Ensco is a “contractor” of Chevron who has signed

a “counterpart of the Agreement” in Schedule G—namely, one of the
many Schedule G agreements that the MDC contemplates will be
signed by the various contractors with whom Chevron contracts
with respect to its Gulf of Mexico operations.

13

Because Ensco is

a Signatory, it generally does not owe indemnity to Tobias
pursuant to Schedule G under the facts of this case due to the
transportation services exclusion.
There is, however, an important exception to the exclusion:
“unless caused by the sole negligence of Signatory.”
31-8, at 3.

Rec. Doc.

Under this exception, if the loss for which

indemnity is sought was caused by Signatory Ensco’s sole
negligence, the result is that even if transportation services
are involved, Ensco’s indemnity obligation extends to Tobias
(assuming Tobias is a Signatory).

Put succinctly, (1) the

general rule of Schedule G would permit Tobias’s recovery if it
is a Signatory; (2) the transportation services exclusion of
Paragraph 11 applies to apparently eviscerate Tobias’s indemnity
recovery; but (3) exception gets us back to the general rule, if
Ensco is solely negligent.3

There has been no briefing on the

issues of fault allocation between the two defendants in this
case.

Neither defendant argues that there is no factual issue

regarding the sole negligence of either party.
3

As a result,

Additionally, the Court notes that Schedule G, Paragraph 11 of the
MDC, as written, does not make sense. It states that the indemnity provisions
are not applicable in connection with transportation services, “unless caused
by the sole negligence of Signatory.” Rec. Doc. 31-8, at 3. As written, the
“unless caused by sole negligence” clause modifies “transportation services.”
It is unclear how negligence could cause transportation services. The only
reasonable interpretation is that Paragraph 11 means that where the injury is
caused by sole negligence, this scenario provides an exception to the
transportation services exclusion.

14

there is a genuine dispute of fact as to whether the
transportation services exclusion applies, and therefore whether
Tobias could recover against Ensco on its crossclaim.

Unless it

is shown that as a matter of law, Ensco was solely negligent,
Tobias cannot avoid the transportation services exclusion, and
therefore cannot recover under Schedule G.

For that reason,

Tobias’s motion for summary judgment must be denied.

However,

the analysis with respect to Ensco’s motion for summary judgment
continues.

Namely, if Ensco can point to some other aspect of

the MDC that shows no genuine dispute that the indemnity claim
fails as a matter of law, its motion may be granted.
B.

Must Tobias Have Signed Schedule G to Be a “Signatory”?
As stated previously, to recover under Schedule G, Tobias

must be a “Signatory” to Schedule G, as that term is defined
therein.

Thus, the next logical step is to address Ensco’s

arguments that as a matter of law, Tobias is not a Signatory.
Ensco argues that because Tobias has not signed a Schedule G, it
is not a Signatory.

It avers that Tobias has not produced a

signed copy of Schedule G in discovery.

Ensco’s argument is

contradicted by the plain language of Schedule G, which defines a
“Signatory” as a contractor who has signed, or who may sign, a
counterpart of the agreement in Schedule G or a “substantially

15

similar” agreement related to the “Operations.”
at 1.

Rec. Doc. 31-8,

Although there is no evidence in the record of Tobias

having signed its own counterpart of Schedule G, Schedule G
states that a contractor’s execution of a substantially similar
agreement makes it a Signatory.

Tobias need not have signed a

Schedule G to qualify as a Signatory.
C.

Was Tobias a Signatory to Schedule G?
Because there is no evidence in the record showing that

Tobias executed a counterpart of the Schedule G agreement, in
order to avoid dismissal of its crossclaim for indemnity, it must
at least raise a genuine issue of fact as to whether it has
signed a substantially similar agreement relating to the
“Operations.”
agreement.

Tobias argues that its MTC with Chevron is such an

This raises two issues:

(1) whether the MTC relates

to the Operations, and (2) whether the MTC is “substantially
similar” to the agreement in Schedule G of the MDC.
The parties do not appear to dispute that the MTC relates to
the Operations.

Ensco does not advert to any evidence

contradicting Tobias’s evidence that Magee was back loading the
MS. CHRISTINE at the time of alleged injury.4

It is undisputed

4
See Rec. Doc. 36-2 (Ensco “Employee Injury and Illness Report,”
stating that Magee “was back loading Ms. Christine”).

16

that the MS. CHRISTINE transported goods and materials to and
from the ENSCO 82, which was servicing Chevron’s drilling
operations on the date of the incident.5

Therefore, the back

loading that was being performed on the date of the incident fits
the broad definition of “Operations” because it was “the
performance of work or services in connection with Chevron’s
operations in the Gulf of Mexico.”

Rec. Doc. 31-8, at 1.

Furthermore, the MTC states that it is related to Chevron’s
operations in the Gulf of Mexico.6

The Court finds that the MTC

relates to Chevron’s “Operations” within the meaning of MDC
Schedule G’s definition of “Signatory.”
The second, more involved issue is whether the MTC is
substantially similar to the indemnity agreement in Schedule G of
the MDC.

As an initial matter, the Court is not persuaded by

Ensco’s argument that Tobias may not “bypass the ‘signatory

5

See Rec. Doc. 36-1, at 1-2 (where Ensco stated as uncontested that the
MS. CHRISTINE was used to transport goods and materials to the rig for
Chevron, Tobias denied this assertion as written, but admitted that the MS.
CHRISTINE was used to transport goods and materials to and from the ENSCO 82);
Rec. Doc. 35-4, at 2 (uncontested that on the date in question, the ENSCO 82
was providing drilling services to Chevron pursuant to the MDC).
6

See Rec. Doc. 31-4, at 2 (MTC stating in the recitals that Chevron
desires “to hire watercraft to service ChevronTexaco’s operations in the Gulf
of Mexico”).

17

requirement’” through invoking Paragraph 7 of Schedule G.7
Paragraph 7 provides:
7.

Any contractor, consultant, subcontractor, etc.,
performing work or service for Chevron or other
Signatory in connection with the Operations which
has not entered into a formal contract for the
performance of such work or service may
nevertheless become a Signatory by signing a
counterpart of this Agreement or a substantially
similar agreement which shall govern, as to the
subject of this Agreement, the relationship
between such new Signatory and the other
Signatories and also by extension of its relations
with Chevron.

Rec. Doc. 31-8, at 2 (emphasis added).

Tobias has entered into a

formal contract for performance of its work for Chevron because
it entered into the MTC.

However, Paragraph 7 does exclude from

the definition of “Signatory” those who have not entered into
formal contracts with Chevron.

It expresses no deviation from

the rule that a contractor may become a Signatory through signing
a “substantially similar agreement.”

Rather, it states that even

a contractor with no formal contract with Chevron may become a
Signatory through signing an agreement that is substantially

7
To a certain extent, the Paragraph 7 argument is a case of two ships
passing in the night. Ensco states that “Tobias argues that it qualifies as a
signatory to Schedule G through an exception to the ‘signatory requirement’ in
Paragraph 7.” Rec. Doc. 35, at 4. However, Tobias did not characterize
Paragraph 7 as an exception, but rather stated that “Section 7 of Schedule G
further supports the intent of the parties to include any contractor who was
performing work or service for Chevron or other Signatories . . . .”. Rec.
Doc. 36, at 7.

18

similar to the indemnity agreement of Schedule G.

Paragraph 7 is

not applicable in this case.
Turning to the dispositive arguments, the Court considers
whether the MTC contains an indemnity agreement that is
substantially similar to the indemnity agreement in Schedule G of
the MDC.

Tobias argues that the MDC and MTC contain

substantially similar agreements.

It argues that the MDC between

Ensco and Chevron contains “knock for knock” indemnity
agreements, and that the MTC between Tobias and Chevron similarly
contains reciprocal indemnity agreements that require a minimum
of $5 million in insurance coverage and contain the same general
maritime law choice-of-law clause.

Ensco argues that the

agreements are not substantially similar because the MTC does not
have knock-for-knock indemnity provisions, but only requires
Tobias to indemnify “Indemnitees,” defined under MTC Section 1.4
to exclude contractors of Chevron.

Schedule G does not define

the phrase “substantially similar.”

The Court concludes that,

for the reasons that follow, as a matter of law, the agreements
are not substantially similar.
The quintessential interpretive choice is the subject matter
of the comparison.
similar.

There is a requirement that two contracts be

Which two contracts?

Tobias’s interpretation is that

19

the two contracts to be compared are the Schedule G agreement
among contractors, and a time charter or other contract between
Chevron and a contractor.

Another possible interpretation is

that for two contracts to be compared as “similar” as that term
is used, they must both be contracts among contractors.

Based

upon a reading of Schedule G as a whole, the Court is persuaded
that the latter interpretation is the correct one.

Tobias’s

contrary assertion is that Schedule G and the MTC are similar in
that they both have indemnity provisions.

But Schedule G as a

whole envisions something else—that for a contractor of Chevron
to become a Signatory, it must do something other than sign an
agreement with Chevron that contains an indemnity with wording
akin to that in Schedule G.
As previously discussed, the methodology for becoming a
Signatory is for a Chevron contractor to sign an agreement that
is substantially similar to Schedule G.

Schedule G is an

indemnity agreement among contractors of Chevron, not among
Chevron and its contractors.8

Accordingly, a requirement for

8
Paragraph 10 demonstrates this. Although Schedule G is an attachment
to a contract to which Chevron is a party, Paragraph 10 recognizes that the
undersigned Signatory (Ensco in this case) has a “Drilling Contract” that
“shall govern the allocation of risk, defense, and indemnity between Chevron
and the undersigned Signatory.” Rec. Doc. 31-8, at 2. Paragraph 10 then
states that Schedule G is not intended to modify or supplement the contract in
effect between Chevron and the Signatory (Ensco in this instance). Id. at 23.

20

Schedule G and the comparable other agreement to be
“substantially similar” is that both agreements are between and
among contractors.

Schedule G makes this distinction between

Chevron-contractor contracts on the one hand, and contractorcontractor contracts on the other hand:
5.

Chevron shall use all reasonable endeavors to have
those of its contractors whom are involved in the
Operations become Signatories.

Rec. Doc. 31-8, at 2.
Paragraph 5 cannot be squared with Tobias’s interpretation
that its contract with Chevron is substantially similar to
Schedule G.

Paragraph 5 requires Chevron to endeavor to get its

contractors to become Signatories, and by extension, to get them
to sign agreements substantially similar to Schedule G.

Tobias’s

interpretation would imply that Chevron could comply with
Paragraph 5 by endeavoring to get its contractor to sign a
contract with itself which would contain an indemnity agreement.
This is an absurd result.

If a contractor, like Tobias, could

become a Signatory through signing an indemnity agreement with
Chevron, Chevron would be forced to comply with Paragraph 5
through use of its reasonable endeavors to get its contractor—who
by definition already has a contract with it—to become a
Signatory through signing a contract with it.

21

This would make

Paragraph 5 not only absurd, but also superfluous and an illusory
obligation, which would violate at least one principle of
contractual interpretation.9
One might make the counterargument that Tobias’s suggested
reading does not necessarily conflict with Paragraph 5.

One

could argue that some of Chevron’s contractors might not have
initially contracted for indemnity provisions with respect to
Chevron, and that Paragraph 5 provides that Chevron should
endeavor to sign indemnity agreements with its contractors, in
order to create agreements substantially similar to Schedule G,
in order to make those contractors Signatories.

Even ignoring

the potential implausibility as a matter of practice that Chevron
and its contractors would not already have indemnity agreements
in their contracts, such an argument flies in the face of
Paragraph 10’s recognition that an indemnity agreement that
Chevron has with a Signatory is separate from an indemnity
agreement between two Signatories, i.e., a Schedule G-type
agreement:
10.

The undersigned Signatory has a Master Service
Order and Agreement, Drilling Contract, Time
Charter or other similar contract in effect with

9

All the provisions of a contract should be read together. Breaux, 562
F.3d at 364. This should be done so as to avoid making any one provision a
superfluity. 11 Williston on Contracts § 32:5 (4th ed.).

22

Chevron, which shall govern the allocation of
risk, defense and indemnity between Chevron and
the undersigned Signatory. Nothing contained
herein is intended to modify, amend or supplement
the contract in effect between Chevron and each
party that becomes a Signatory hereto.
Rec. Doc. 31-8, at 2-3 (emphasis added).

In Tobias’s case, it

has a “Time Charter” with Chevron—the MTC.

Paragraph 10 suggests

that if Tobias becomes a Signatory, the time charter (MTC)
continues to govern the allocation of indemnity between Chevron
and Tobias, and nothing in Schedule G is intended to modify that
indemnity already in effect.

This paragraph contemplates that a

Signatory will have two separate contracts:

an indemnity

agreement in its contract with Chevron, and a separate agreement
that is substantially similar to Schedule G.

Therefore, the

separate agreement that is “substantially similar” cannot be the
indemnity agreement with Chevron, as Tobias argues.10
Although the foregoing plain language suffices to make the
point, it is also important that the Court’s construction accords
with the stated purpose for which Schedule G was crafted.

First,

the premises recognize (a) Chevron-contractor contracts and (b)

10
The language at the end of Paragraph 10 is the strongest: “Nothing
[in Schedule G] is intended to modify, amend or supplement the contract in
effect between Chevron and each party that becomes a Signatory hereto.” Rec.
Doc. 31-8, at 3 (emphasis added). This implies that a party “that becomes a
Signatory” will have a preexisting contract with Chevron “in effect.”
Therefore, one cannot become a Signatory by signing an agreement with Chevron
that one has already signed—one that is already “in effect.”

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contractor-contractor contracts among Signatories as two
different things:
(a)

Chevron U.S.A. Inc. (“Chevron”) and its contractors
have entered into Master Service Orders and Agreements,
Drilling Contracts, Time Charters and other similar
contracts regarding the performance of work or services
in connection with Chevron’s operations in the Gulf of
Mexico (“Operations”);

(b)

The contractors have signed, or may sign, counterparts
of this Agreement or
substantially similar agreements relating to the
Operations (hereinafter individually called “Signatory”
or collectively called “Signatories”); . . . .

Rec. Doc. 31-8, at 1 (emphasis added).

The contractor-contractor

agreement in part (b) is the one that makes a contractor a
Signatory.

Second, the premises recite that the purpose of

Schedule G and other substantially similar agreements is to
create a scheme of indemnity among contractors, not among Chevron
and its contractors:
(d)

The Signatories wish to modify their relationship
at law and avoid entirely disputes as to their
liabilities for damage or injuries to their
respective equipment, property or employees by
providing for a system of mutual indemnity between
the Signatories with respect to their respective
personnel, equipment and property.

Id. (emphasis added).

It would not advance the purpose of this

mutual indemnity scheme among contractors for Tobias to contract
with Chevron, rather than with other contractors, in order to

24

obtain the benefits of the scheme.

In light of the purpose of

Schedule G, and according to its plain language, it was not
enough for Tobias to contract for an indemnity scheme between
itself and Chevron.

It would have had to execute an agreement of

indemnity with other contractors.

It did not.

It has submitted

no evidence to genuinely dispute that it signed neither a
counterpart to Schedule G nor a substantially similar agreement.
Based on the foregoing analysis, the Court holds that for an
agreement to be “substantially similar” to Schedule G, it must
essentially duplicate what Schedule G attempts to accomplish.
Schedule G attempts to accomplish an indemnity scheme among
contractors of Chevron, with respect to Chevron’s operations in
the Gulf of Mexico.

Because the MTC is a contract between

Chevron and Tobias rather than between Tobias and another
contractor of Chevron, it is not an attempt to achieve Schedule
G’s mutual indemnity scheme and thus is not substantially similar
to Schedule G.

Because the MTC and Schedule G are not

substantially similar, and because Tobias has introduced no
evidence that it executed a Schedule G, Tobias is not a
Signatory.

Because Tobias is not a Signatory, it may not obtain

the benefit of indemnity under Schedule G of the MDC.

Its claim

for indemnity under Schedule G fails as a matter of law.

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D.

Does the Exclusion of Time Charters from the “Company Group”

Defeat Tobias’s Indemnity Claim?
Even though Tobias’s claim under Schedule G does not survive
summary judgment, Tobias also sues pursuant to the main body of
the MDC.11

Ensco argues that because of an exclusion pertaining

to vessels under time charter, Tobias may not claim indemnity
under the MDC.

Article 8 of the MDC, entitled “Liability and

Indemnity,” provides, in pertinent part:
801

LOSS OF CONTRACTOR’S DRILLING EQUIPMENT

[ ] CONTRACTOR shall hold harmless, indemnify,
release, and defend COMPANY, its subsidiary, affiliated
and related companies and its and their working
interest owners, co-lessees, co-owners, joint
venturers, contractors and subcontractors of any tier
(but excluding vessels under Time Charter to COMPANY)
and any others for whom any of the foregoing may be
acting and the agents, directors, officers, employees
of any of them (hereinafter collectively referred to as
“COMPANY GROUP”) and shall assume sole responsibility
and liability at all times for any and all damage to or
loss or destruction of CONTRACTOR GROUP’s (as defined
below) equipment . . . .
Rec. Doc. 31-5, at 28 (emphasis added).
and “COMPANY” is Chevron.

“CONTRACTOR” is Ensco,

Rec. Doc. 31-5, at 7.

Therefore, the

MDC provides that Ensco must indemnify Chevron and its

11

See Complaint, Rec. Doc. 24, at 3, ¶ 8 (alleging that Ensco agreed in
its contract with Chevron to indemnify Chevron’s contractors, including
Tobias); id. ¶ 9 (separately alleging that Tobias is a Signatory pursuant to
the agreement in Schedule G).

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contractors—excluding vessels under Time Charter to Chevron—as
part of the “COMPANY GROUP” that Ensco must hold harmless for any
damage or loss to its own equipment.

This indemnity provision,

therefore, is of little relevance per se because Tobias seeks
indemnification for loss due to personal injury, rather than
damage to equipment.

However, Section 801 is relevant to the

extent it defines the “Company Group,” which is a term used
subsequently in the MDC.

Specifically, Section 801 states that

although a contractor of Chevron, such as Tobias, could be part
of the “Company Group” as a general matter, the exception is that
a vessel under Time Charter to Chevron is not part of the
“Company Group.”

Whether this distinction makes a difference in

this case requires a turn to other more pertinent indemnity
provisions that use the term “Company Group” to define the scope
of indemnity that may be applicable to Tobias.
Section 807.1 of the MDC, which Ensco cites, uses the term
“Company Group” to delimit the scope of indemnity.

It provides,

in pertinent part:
807

GENERAL INDEMNITY
807.1

CONTRACTOR shall hold harmless,
release, indemnify, and defend,
COMPANY GROUP from and against all
claims, liabilities, and expenses
(including reasonable attorneys’
fees and expenses incurred in
27

defense of such claims) for
personal injury, illness, disease
or death to CONTRACTOR GROUP’s
personnel which are in any way
connected with the performance of
the work . . . .
Rec. Doc. 31-5, at 31-32 (emphasis added).

Section 807.1, put

simply and interpreted literally to apply to the present facts,
states that Ensco must hold the Company Group harmless from
liability for personal injury to Contractor Group’s personnel,
which would include Magee,12 to the extent the claim is connected
with performance of the work.

Accordingly, to the extent Tobias

sues as Chevron’s contractor, and therefore, part of the Company
Group receiving indemnity under Section 807.1’s general indemnity
provision with respect to any tort liability for Magee’s alleged
injury, Tobias would have to demonstrate that the aforementioned
Section 801 Company Group exclusionary clause pertaining to
vessels under time charter does not apply.
Ensco argues that Tobias’s recovery does hinge upon the
definition of “Company Group.”

It avers that MDC Section 801’s

exclusionary clause states that it does not apply to vessels
under time charter; that Tobias’s vessel, the MS. CHRISTINE, was

12

“CONTRACTOR GROUP” is defined to include Ensco’s (“Contractor’s”)
employees. Rec. Doc. 31-5, at 29, Section 803 of MDC. Magee is an Ensco
employee.

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under time charter; and therefore that Ensco does not owe
indemnity to Tobias under the MDC.
overrides Section 807.

Tobias argues that Schedule G

Tobias correctly points out that Schedule

G, by its terms, does not make any reference to “Company Group”
in defining any party’s indemnity rights and obligations.
However, this does not necessarily mean that Schedule G voids any
Company Group definition that a party must meet in order to sue
under Section 807’s indemnity provisions.

Indeed, Section 106 of

the MDC states that “[i]n the event that there are any conflicts
between the body of this Contract and the schedules attached
hereto, the provisions in the body of this Contract will
prevail.”

Rec. Doc. 31-5, at 8.

Accordingly, to avoid summary

judgment with respect to any claim for indemnity under the
general indemnity provision of Section 807.1, Tobias must at
least raise a genuine issue of fact regarding whether it falls
within the time charter exclusion from the definition of “Company
Group.”

This it cannot do.

As previously stated, excluded from Ensco’s Section 807.1
indemnity obligation to the “Company Group” are “vessels under
Time Charter to COMPANY.”

Rec. Doc. 31-5, at 28.

Tobias argues

that it is not a “vessel under Time Charter”; it is a vessel
owner and operator.

Rec. Doc. 36-1, at 1.

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Tobias suggests that

the parties to the MDC specifically chose to refer to vessels,
rather than vessel owners.13

However, an indemnity contract must

be read as a whole,14 and a literal reading—that “vessel” only
refers to the thing, not the owner—makes no sense within the
context of the sentence containing the exclusion.

The

exclusionary clause follows a list of entities that have distinct
juridical personality, rather than a list of things:
COMPANY, its subsidiary, affiliated and related
companies and its and their working interest owners,
co-lessees, co-owners, joint venturers, contractors and
subcontractors of any tier (but excluding vessels under
Time Charter to COMPANY) . . . .
Rec. Doc. 31-5, at 28 (emphasis added).

The exclusionary clause

applies to a situation where a party charters its vessel to
Chevron, as is suggested by the list of juridical persons
immediately prior to the exclusionary phrase.

Reading Article

801 as a whole, it is unreasonable that Chevron and Ensco would
have stated the parenthetical exclusion for a situation involving

13

For example, Tobias posits that maritime law recognizes the
distinction between a vessel owner and a vessel as an entity separate from its
owner, and that the MDC implicitly recognizes this difference through the
subject clause’s applicability only to vessels as things. However, Tobias
does not explain how this “in rem” principle would make sense as applied to
the subject exclusionary clause. Further, although Tobias points out that
Schedule G acknowledges that Chevron’s contractors have entered into time
charters with Chevron, this acknowledgment does not lead to the conclusion
that a vessel owner must be entitled to indemnity under a separate part of the
MDC—Section 807.1.
14

Becker, 586 F.3d at 369.

30

time charters, for that carve-out only to apply to vessels as
“things.”

Tobias’s vessel was under time charter to Chevron

during the events in question.

Therefore, the Court finds as a

matter of law that the exclusion of vessels under time charter
from the “Company Group” defeats Tobias’s indemnity claim under
the general indemnity provisions of the MDC.

As a matter of law,

Tobias cannot recover under MDC Article 807.1.

Therefore, Ensco

is entitled to judgment as a matter of law.

CONCLUSION
Tobias is not a Signatory entitled to indemnity under
Schedule G of the MDC, and it may not recover under the general
indemnity provisions of the MDC.

Accordingly,

IT IS ORDERED that Tobias’s Motion for Summary Judgment
(Rec. Doc. 31) is hereby DENIED, and that Ensco’s Cross-Motion
for Summary Judgment (Rec. Doc. 33) is hereby GRANTED, DISMISSING
WITH PREJUDICE Tobias’s crossclaim against Ensco (Rec. Doc. 24).
New Orleans, Louisiana, this 18th day of May, 2012.

____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

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