Solstice Oil & Gas I LLC v. OBES Inc. et al

Filing 131

ORDER & REASONS: granting 115 Third-Party Defendant New Tech Global Ventures, L.L.C.'s Motion for Summary Judgment. Signed by Judge Carl Barbier on 10/29/14. (sek)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

SOLSTICE OIL & GAS I LLC

CIVIL ACTION

VERSUS

NO: 12-2417

OBES INC. ET AL.

SECTION: "J” (5)
ORDER AND REASONS

Before the Court is Third-Party Defendant New Tech Global
Ventures, L.L.C. (New Tech)’s Motion for Summary Judgment (Rec.
Doc. 115), Defendant OBES Inc. (Ole Brook)’s opposition thereto
(Rec. Doc. 124), and New Tech's reply. (Rec. Doc. 129) Having
considered the motion and memoranda of counsel, the record, and
the applicable law, the Court finds that New Tech’s motion should
be GRANTED for the reasons set forth below.
PROCEDURAL HISTORY AND BACKGROUND FACTS
This action arises out of the drilling of the ML Mann et al.
No. 1 Well in West Avondale Field, St. Charles Parish, Louisiana.
On August 15, 2011, JAM Petroleum, L.L.C. (JAM) and Solstice Oil
& Gas, LLC (Solstice) entered into a Joint Operating Agreement
(JOA) regarding the establishment of oil and gas leases. The JOA
provides that JAM is the Operator of leases formed under the
agreement, and Solstice is a non-operating interest-holder. In
its role as Operator, JAM contracted with Ole Brook to provide
JAM

and

Solstice

with

a

directional

driller

and

directional

driller services. Ole Brook alleges that JAM also entered into an
agreement with New Tech under which New Tech was to provide
independent consultants to assist with supervising operations at
the Well.
The drilling of the Well did not go as planned, however, and
on October 1, 2012, Solstice filed suit against Ole Brook. (Rec.
Doc. 115-1, p. 2) Solstice alleges that Ole Brook did not drill
the Well according to specifications. Id. Consequently, Solstice
claims that Ole Brook breached its obligations under the MSA,
industry standards, and the standard of performance warranted in
the MSA. Id. Solstice further asserts that Ole Brook breached the
MSA by failing to protect it from liens filed against the Well.
Id. at 3. Solstice subsequently filed a First Amended Complaint
asserting a negligence claim against Ole Brook based on the same
conduct described in the original complaint. Id.
Ole Brook denied the allegations in Solstice's complaint and
filed

third-party

complaints

alleging

that

the

third-party

defendants named therein are liable to it for all or part of the
claims asserted by Solstice. Ole Brook's original Third-Party
Complaint named six third-party defendants, including JAM, two
members of JAM, and two insurers of JAM. (Rec. Doc. 31) Ole Brook
subsequently filed a First Amendment to Third-Party Complaint

2

naming St. Paul Fire & Marine Insurance Company in its capacity
as alleged insurer of JAM (Rec. Doc. 63). Ole Brook filed a
Second Amendment to Third-Party Complaint naming New Tech. Ole
Brook alleges that New Tech's negligence while supervising the
Well operations caused Solstice's damages and, consequently, New
Tech is liable to Ole Brook under theories of tort contribution,
negligence, and pursuant to the agreement between JAM and New
Tech. (Rec. Doc. 85)
New Tech filed the instant Motion for Summary Judgment with
this Court on September 8, 2014. (Rec. Doc. 115) On September 30,
2014, Ole Brook filed an Opposition to New Tech’s Motion for
Summary Judgment. (Rec. Doc. 124) New Tech filed a Reply in
Support of its Motion for Summary Judgment on October 8, 2014.
(Rec. Doc. 129)
THE PARTIES’ ARGUMENTS
A. Tort Contribution, Legal Indemnity, and Direct Negligence
Third-Party Defendant New Tech argues that it is entitled to
summary

judgment

on

Ole

Brook’s

negligence

and

contribution

claims because these are not legal claims available to Ole Brook
under Louisiana law. First, absent a contractual relationship
between the parties or intentional acts committed by tortfeasors
in concert, a contribution action is not an independent cause of

3

action in Louisiana under Louisiana Civil Code article 2324.
Specifically, New Tech stresses that New Tech and Ole Brook never
entered into a contractual relationship, and Ole Brook has only
asserted non-intentional tort claims against New Tech. Therefore,
New

Tech

contends

that

Ole

Brook

“has

no

right

to

any

contribution claim against New Tech.” (Rec. Doc. 115-1, p. 6)
Second,

New

Tech

contends

asserted a separate

that

although

Ole

Brook

may

have

negligence cause of action against New Tech,

“Ole Brook’s negligence claim is merely a contribution claim in
disguise.” Specifically, because Ole Brook seeks to recover for
“Solstice’s
damages,”

alleged

New

Tech

damages
urges

and

this

not

Ole

Brook’s

own

alleged

Court

to

analyze

Ole

Brook’s

negligence claim as a contribution claim. (Rec. Doc. 115-1, p.
7)(emphasis omitted). Finally, New Tech argues that Ole Brook did
not state a claim for tort indemnity and should not be permitted
to construe its negligence claim as such. Even if the Court were
to consider the tort indemnity claim, however, New Tech argues
that such claim is without merit because Solstice's allegations
against Ole Brook could not give rise to a finding of liability
on

the

part

of

Ole

Brook

that

derivative in nature.

4

is

entirely

constructive

or

Ole Brook asserts that New Tech is not entitled to summary
judgment. Ole Brook argues that, to the extent its contribution
claim is not recognized under Louisiana law, it has nonetheless
alleged sufficient facts showing it is entitled to relief under a
legal or tort indemnity theory. (Rec. Doc. 124, p. 4) Ole Brook
reasons that it has set forth a legal basis for a finding of
legal or tort indemnity because evidence at trial will show that
Solstice’s alleged damages were caused by the fault of JAM and
New Tech. Ole Brook also maintains that Rule 8(a) of the Federal
Rules of Civil Procedure only requires a complaint to provide the
court’s jurisdictional bases and “a short and plain statement of
the claim showing the pleader is entitled to relief.” As such,
Ole Brook’s complaint was not required to identify a legal theory
in its Second Amendment to Third-Party Complaint against New Tech
and, regardless, “specifying an incorrect theory is not fatal.”
(Rec.

Doc.

124,

p.

4)

(quoting

Bartholet

v.

Reishauer

A.G.

(Zurich), 953 F.2d 1073,1078 (7th Cir. 1992)). Accordingly, New
Tech’s Motion for Summary Judgment should be denied.
B. Prescription
In the alternative, New Tech contends that even if this
Court finds that Ole Brook’s negligence claim against New Tech is
a separate claim, Ole Brook’s claim has prescribed. New Tech
argues that Louisiana's prescription laws apply to this case
5

because when Louisiana substantive law applies, as here, "the
prescription and preemption of [Louisiana] applies" according to
Louisiana Code of Civil Procedure article 3549. Thus, the oneyear prescriptive period provided by Louisiana Code of Civil
Procedure article 3492 for delictual actions applies. New Tech
argues that prescription began running from the day Solstice
sustained injury or damage, that is, on or before January 3,
2012. Therefore, Old Brook’s claims had prescribed by the time
Old Brook filed its third-party complaint against New Tech on
March 20, 2014.
New Tech also contends that if this Court finds Louisiana
Code of Civil Procedure article 1153 applicable to Ole Brook’s
claims due to the amended complaint filed by Solstice on June 26,
2013, Ole Brook failed to meet the procedural requirements set
forth in that article because Ole Brook did not file the thirdparty complaint against New Tech within ninety days of the date
of service of Solstice’s main demand. Article 1153 provides that
“[w]hen the action or defense asserted in the amended petition or
answer arises out of the conduct, transaction, or occurrence set
forth or attempted to be set forth in the original pleading, the
amendment
pleading.”

relates
New

back

Tech

to

the

insists

date
that

of
Ole

filing
Brook’s

the

original

third-party

complaint against New Tech does not “relate back” to Ole Brook’s
6

original third-party complaint against JAM because the “relate
back” doctrine under article 1153 does not apply to third-party
demands.

As

such,

Ole

Brook’s

claim

against

New

Tech

had

prescribed at the time Ole Brook filed its Second Amendment to
Third-Party Complaint against New Tech.
Ole Brook counter argues that federal procedural law applies
in this case. Thus, because the Federal Rules of Civil Procedure
would permit Ole Brook to bring its third-party claim against New
Tech, this Court cannot find that such claim has prescribed.
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.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing FED.
R. CIV. P. 56(c)); 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,

7

but

a

party

cannot

defeat

summary

judgment

allegations or unsubstantiated assertions.

with

conclusory

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 at 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
showing

or

that

referring
a

genuine

to

evidence,

issue

exists.
8

set
See

out
id.

specific
at

324.

facts
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
A. Tort Contribution, Negligence, and Legal Indemnity
"Contribution permits a tortfeasor who has paid more than
his share of a solidary obligation to seek reimbursement from the
other torfeasors for their respective shares of the judgment,
which shares are proportionate to the fault of each." Hamway v.
Braud, 2001-2364, p. 5 (La. App. 1 Cir. 11/8/02); 838 So. 2d 803,
807. Thus, contribution applies only when joint tortfeasors are
solidarily

liable.

See

id.

However,

the

1996

amendments

to

Louisiana Civil Code article 2324 "abolish[ed] solidary liability
among joint tortfeasors except in the case of intentional torts."
Farbe v. Casualty Reciprocal Exchange, 2000-0076, p. 3 n.3 (La.
7/6/00); 765 So. 2d 994, 996 n.3. Today, absent such intentional
or willful conduct, "[a] joint tortfeasor shall not be liable for
more than his degree of fault and shall not be solidarily liable
with any other person for damages attributable to the fault of
such other person." LA. CIV. CODE ANN. art. 2324. Here, Ole Brook
has not alleged claims of intentional tort against New Tech. The

9

Court

therefore

finds

that

New

Tech

is

entitled

to

summary

judgment on Ole Brook's claim for contribution.
Next,

the

Court

addresses

Ole

Brook's

negligence

claim

against New Tech. Because Ole Brook asserts the negligence claim
against New Tech for damages suffered by Solstice, the Court
construes Ole Brook's claim as one for legal or tort indemnity.
"Indemnity, which is based in the concept of unjust enrichment,
may lie when one party discharges a liability, which another
rightfully should have assumed." Hamway, 838 So. 2d at 806. Legal
indemnity "arises only when the fault of the person seeking
indemnification

is

solely

constructive

or

derivative,

from

failure or omission to perform some legal duty, and may only be
had

against

one

who,

because

of

his

act,

has

caused

such

constructive liability to be imposed." Id. Thus, a party who is
at all at fault does not have a claim for legal indemnity. Id.
"[B]ecause

the

party

seeking

indemnification

must

be

without

fault, a weighing of the relative fault of tortfeasors has no
place in the concept of indemnity." Nassif v. Sunrise Homes,
Inc., 98-3193 (La. 6/29/99); 739 So. 2d 183, 185. A court must
analyze the "nature, not the quantum, of the fault, if any, of
the

party

seeking

indemnity."

Lombard

v.

New

Orleans

Naval

Support Activity, No. Civ.A.03-3020, 2004 WL 2988483, at *6 (E.D.
La. Dec. 10, 2004)(Africk, J.). As such, the question before the
10

Court is whether Ole Brook's fault is wholly constructive or
derivative in nature, and therefore, Ole Brook is without actual
fault.
In analyzing whether a defendant's fault could be entirely
constructive or derivative in nature, a court will look to the
plaintiff's complaint against the defendant seeking indemnity.
"If the facts alleged by a plaintiff against the party seeking
indemnity do not show that a defendant's liability could be
predicated

upon

mere

constructive

or

derivative

fault,

such

defendant cannot state a cause of action for indemnity." Lombard,
2004 WL 2988483, at *6. For example, in Romero v. Witherspoon,
the U.S. District Court for the Western District of Louisiana
held that a defendant did not have a claim for indemnity when the
plaintiffs' allegations against him were for active negligence. 7
F. Supp. 2d 808, 812 (W.D. La. May 7, 1998)(applying Louisiana
law). Specifically, the plaintiffs alleged that three doctors
negligently failed to diagnose their daughter's brain tumor. Id.
at 810, 812. One doctor alleged that the other doctors were in
fact responsible for the failure to diagnose. Id. at 812. The
court reasoned that the claim of negligent failure to diagnose
was not "passive, technical, or vicarious" in nature. Id. Thus,
the Court noted that if the doctor seeking indemnity were found

11

to be liable for the plaintiffs' injuries, then it would be for
his actual fault. Id.
Similarly, in Hamway, the Louisiana Court of Appeal for the
First Circuit held that a claim for indemnity could not lie where
the party seeking indemnity actually committed the acts leading
to the plaintiff's injuries. See 838 So. 2d at 805-06. There, the
plaintiff brought his car to Hamway's garage for repairs to the
transmission, but a dispute arose. Id. at 805. Consequently, the
plaintiff hired a tow truck to take his car elsewhere. Id. During
the

relocation,

the

car's

upholstery

was

damaged

by

the

transmission parts that Hamway's employees had placed inside the
car. Id.

Hamway brought an action for indemnity against the

towing company, alleging that they instructed Hamway's employees
to place the parts in the car. Id. at 806. However, because
Hamway's employees actually placed the parts in the car, Hamway's
fault

was

not

constructive

or

derivative.

Id.

Additionally,

judgment had been rendered against Hamway, finding him to be at
fault for the plaintiff's damages. Id.
The Court finds that the allegations contained in Solstice's
complaint would not support a finding of liability based entirely
upon constructive or derivative fault. As in Romero, Solstice
alleges that Ole Brook engaged in active negligence when it
alleges

that,

for

example,

Ole
12

Brook

negligently

failed

to

properly steer the Well when it furnished faulty tools, relied on
inaccurate data, or failed to verify the functionality of its
tools. Ole Brook would not be held liable for these acts or
omissions unless Ole Brook performed or failed to perform them.
Thus, Ole Brook's fault could not be constructive or derivative.
Moreover,

Ole

Brook

cannot

state

a

claim

for

indemnity

by

alleging that New Tech's site supervisors instructed them to do
the acts that caused Solstice's injuries. Like the garage in
Hamway, Ole Brook still performed acts that allegedly caused
Solstice's injuries. Ole Brook therefore is similarly unable to
state a claim for indemnity. Although this case differs from
Hamway in that a judgment has not issued against Ole Brook, the
Court

nevertheless

concludes

that

Ole

Brook's

role

was

not

entirely passive.1 Thus, any finding of fault would not be purely
constructive or derivative in nature. Ole Brook will not be
required to pay any portion of Solstice's damages that may be
attributable to New Tech's fault, however, Ole Brook is not
entitled to indemnity. See, e.g., Manthos v. Jefferson Parish
Library Dept., No. 07-1302, 2008 WL 2510573, at *3 (E.D. La. June
17, 2008)(Africk, J.); St. Martin v. Quintana Petroleum Corp.,

1

The Court would like to clarify that it does not conclude here that Ole
Brook's actions constitute negligence, and thus that its "active role"
necessarily renders it liable to any party. The Court makes no finding as to
liability. Rather, the Court finds that Ole Brook played an active role at the
Well.

13

No. CIV. A. 98-2095, 2001 WL 121900, at *1 (E.D. La. Feb. 9,
2001)(Berrigan, J.). Thus, the Court finds that New Tech is
entitled to judgment as a matter of law on Ole Brook's legal
indemnity claim.
B. Prescription
The Court will not address New Tech's assertions that Ole
Brook's negligence claim has prescribed. As explained above, the
Court construes Ole Brook's negligence claim as one for legal
indemnity because Ole Brook asserts that New Tech is liable for
Solstice's damages. The Court finds, however, that New Tech is
entitled to judgment as a matter of law on Ole Brook's legal
indemnity claim because Solstice's allegations against Ole Brook
could not give rise to a finding of liability that is entirely
constructive or derivative in nature. Because Ole Brook's legal
indemnity claim is without merit, the Court need not address any
arguments regarding prescription. Accordingly,
IT IS HEREBY ORDERED that New Tech’s motion is GRANTED.
New Orleans, Louisiana this 29th day of October, 2014.

____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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