Grand Isle Shipyards, Inc. v. Black Elk Offshore Operations, L.L.C. et al

Filing 339

ORDER: IT IS HEREBY ORDERED that 256 Motion for Partial Summary Judgment is GRANTED to strike Contested Issue of Law No. 7 from the Proposed Pretrial Order. The Motion is DENIED in all other aspects as set forth in document. Signed by Judge Wendy B Vitter on 2/22/2021. (Reference: All Cases)(jeg) Modified text on 2/22/2021 (mmv).

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

GRAND ISLE SHIPYARDS, INC.

CIVIL ACTION

VERSUS

NO. 15-129
C/W 15-154; 15-153;
15-905; 19-11825;
19-11826; 19-11827

BLACK ELK ENERGY OFFSHORE
OPERATIONS, LLC

SECTION D (5)

ORDER
Before the Court is Black Elk Energy Offshore Operations’ Motion for Partial
Summary Judgment Regarding Contractual Provisions Breached by Grand Isle
Shipyards, Inc. 1 The Motion is fully briefed. 2 After careful consideration of the
parties’ memoranda, the record, and the applicable law, the Court grants the Motion
in part and denies it in part.
I.

BACKGROUND
Grand Isle Shipyards, Inc. (“GIS”) alleges that Black Elk Energy Offshore

Operations, LLC (“BEEOO”), 3 breached an agreement between the parties to pay for
services rendered in connection with BEEOO’s drilling and production operations on

R. Doc. 256.
R. Doc. 274 (Response in Opposition); R. Doc. 315 (Reply).
3 The Court recognizes that the Honorable Richard Schmidt (Ret.), as BEEOO’s liquidating trustee, is
the proper party to this litigation. See R. Doc. 42. For ease of reference and consistency, the Court
refers to this party as BEEOO.
1
2

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various oil and gas wells. 4 BEEOO filed an Answer and Counterclaim, alleging that
GIS’s work on Black Elk’s West Delta 32 oil platform resulted in millions of dollars
in damages to BEEOO. 5 Specifically, BEEOO alleges that GIS is responsible for an
explosion that took place at the West Delta 32 platform on November 16, 2012. 6 That
explosion has been the subject of extensive litigation in this district, including
Tajonera v. Black Elk Energy Offshore Operations, LLC, 7 United States v. Black Elk
Energy Offshore Operations, LLC, 8 United States v. Don Moss, 9 and United States v.
Chris Srubar. 10 BEEOO’s tort and fraud claims have been dismissed as prescribed,
but it continues to assert a breach of contract claim. 11
BEEOO contends that in causing the explosion at the West Delta 32 platform,
GIS breached three agreements between the parties. First, BEEOO argues that GIS,
through its subcontractors, breached the parties’ Master Service Agreement. 12 That
agreement allegedly required, among many other things, that GIS comply and cause
its employees and subcontractors to comply with BEEOO’s safety rules. 13 Second,
BEEOO argues that GIS breached the parties’ Bridging Agreements, which provided
that GIS’s subcontractors “will be knowledgeable and experienced in work practices

See generally R. Doc. 20 (Second Amended Complaint). GIS also brought a series of other claims,
including claims under the Louisiana Oil Well Lien Act. See id.
5 See generally R. Doc. 76 (Answer and First Amended and Supplemental Counterclaim).
6 See id. at 10 ¶ 16.
7 Civil Docket No. 13-366.
8 Criminal Docket No. 15-197-1.
9 Criminal Docket No. 15-197-2.
10 Criminal Docket No. 15-197-6.
11 R. Doc. 70; R. Doc. 76.
12 R. Doc. 356-2.
13 See R. Doc. 256-2 at 3. The Court acknowledges that in addition to a dispute over whether the MSA
was even breached, GIS also contests whether BEEOO was even a party to the MSA.
4

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necessary to perform their job in a safe and environmentally sound manner” 14 and
also allegedly required GIS to conform to BEEOO’s hot work procedures. 15 The
parties also entered into a Business Alliance Agreement. 16
In the parties’ proposed Pretrial Order, Contested Issue of Law No. 7 is listed
as “[w]hether BEEOO must prove a breach by GIS of any specific contract provision
to prove a breach of contract claim.” 17 Further, Contested Issue of Law No. 8 is listed
as “[w]hether BEEOO’s claims against GIS are prescribed tort claims masquerading
as contract claims.” 18
BEEOO now moves for partial summary judgment, seeking an order striking
Contested Issues of Law Nos. 7 and 8 from the parties’ Proposed Pretrial Order. 19
BEEOO readily acknowledges that under Louisiana law, a plaintiff is required to
allege a breach of a specific contractual provision in order to prove a breach of contract
claim, as listed in Contested Issue of Law No. 7. BEEOO presses that it has identified
specific contractual provisions in various contracts that it alleges GIS has breached.
BEEOO also argues that its claims are clearly not prescribed tort claims
masquerading as contract claims as it has alleged breaches of specific provisions of
the parties’ purported contracts which breaches have been further clarified by
discovery in this matter.

R. Doc. 256-4 at 5 (Bridging Agreement).
Id. See also R. Doc. 256-5 (Hot Work Procedures).
16 R. Doc. 256-3.
17 R. Doc. 171 at 22.
18 Id.
19 R. Doc. 256.
14
15

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GIS has filed an Opposition to BEEOO’s Motion. 20 GIS argues that BEEOO’s
breach of contract claim is truly just a tort claim in disguise. It points to the broad
damages that BEEOO seeks, which it argues are closer akin to those for a tort claim
than a breach of contract claim. It also argues that BEEOO’s legal theory for GIS’s
liability is essentially that GIS “blew up” West Delta 32, which it argues is a claim
that sounds in tort as it boils down to “but for” causation. GIS also repeats arguments
(made elsewhere) that Don Moss and Chris Srubar, BEEOO employees who pleaded
guilty to criminal charges following the explosion, are to blame for the explosion, and
that their fault as BEEOO’s indirect employees is attributable to BEEOO.
In its Reply, 21 BEEOO reiterates its argument that it has identified specific
contractual terms which are at play.

It further admonishes GIS for discussing

negligence and tort principles in this breach of contract action, and takes issue with
GIS’s legal theory for attributing Moss’s and Srubar’s fault to BEEOO. Finally,
BEEOO argues that its damages were clearly foreseeable under Louisiana Civil Code
article 1996 because explosive hydrocarbons are common in piping in offshore
platforms, and an explosion of such a platform can cause catastrophic damage.
II.

LEGAL STANDARD
Summary judgment is appropriate where there is no genuine disputed issue as

to any material fact, and the moving party is entitled to judgment as a matter of
law. 22 When assessing whether a dispute regarding any material fact exists, the

R. Doc. 274
R. Doc. 315.
22 Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247 (1986).
20
21

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Court considers “all of the evidence in the record but refrain[s] from making
credibility determinations or weighing the evidence.” 23

While all reasonable

inferences must be drawn in favor of the nonmoving party, a party cannot defeat
summary judgment with conclusory allegations, unsubstantiated assertions or “only
a scintilla of evidence.” 24 Instead, summary judgment is appropriate if a reasonable
jury could not return a verdict for the nonmoving party. 25
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.” 26 The
non-moving party can then defeat summary judgment by either submitting evidence
sufficient to demonstrate the existence of a genuine dispute of material fact, or by
“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.” 27 If, however,
the nonmoving party will bear the burden of proof at trial on the dispositive issue,
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. 28 The burden then shifts to the nonmoving party who must go beyond
the pleadings and, “by her own affidavits, or by the ‘depositions, answers to

Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008)
(citations omitted).
24 Id. (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)) (internal quotation marks
omitted).
25 Delta & Pine Land Co., 530 F.3d at 399 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. at 248).
26 International Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991).
27 Id. at 1265.
28 See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
23

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interrogatories, and admissions on file,’ designate ‘specific facts showing that there
is a genuine issue for trial.’” 29
III.
A.

ANALYSIS
Contested Issue of Law No. 7

As discussed above, Contested Issue of Law No. 7 is listed as: “[w]hether
BEEOO must prove a breach by GIS of any specific contract provision to prove a
breach of contract claim.” 30 It is black-letter law in Louisiana that a party asserting
a breach of contract must prove a breach of a specific contractual provision. 31 Indeed,
BEEOO concedes this proposition of law. 32 Although there exist disputes about what
contracts the parties entered into, whether those terms were breached, or whether
BEEOO’s breach of contract claim truly sounds in tort, it is clear that BEEOO has at
least identified specific contractual provisions that it contends GIS breached. By way
of example, BEEOO argues that GIS violated Article 5.3 of the MSA because its
contractor did not comply with BEEOO’s safety rules. 33 It also alleges that GIS
violated the terms of the parties’ Bridging Agreement which required GIS’s
subcontractors to “be knowledgeable and experienced in work practices necessary to
perform their job in a safe and environmentally sound manner.” 34 In short, although

Celotex Corp., 477 U.S. at 324 (quoting Fed. R. Civ. P. 56(e)).
R. Doc. 171 at 22.
31 Blackstone v. Chase Manhattan Mortg. Corp., 802 F. Supp. 2d 732, 738 (E.D. La. 2011) (citing Louque
v. Allstate Ins. Co., 314 F.3d 776, 782 (5th Cir. 2003)); Richard v. Wal-Mart Stores, Inc., 559 F.3d 341,
345 (5th Cir. 2009) (“Even when a contract exists, unless a specific contract provision is breached,
Louisiana treats the action as tort.” (emphasis in original)).
32 See R. Doc. 256-1 at 7-8 (“[I]f GIS is contending that an issue of law exists as to whether or not a
party who is asserting a breach of contract claim must prove the violation of a specific provision of the
contract before recovering on said claim, this is not an issue contested by Black Elk.”).
33 R. Doc. 256-1 at 3; R. Doc. 256-2 at 2-3 (Article V of the MSA).
34 R. Doc. 256-1 at 4; R. Doc. 256-4 at 5 (Bridging Agreement).
29
30

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there remains much that is disputed about BEEOO’s breach of contract claim, that
BEEOO must identify specific contractual provisions is not a contested issue of law. 35
Accordingly, the Court will grant BEEOO’s Motion insomuch as it seeks to strike
Contested Issue of Law No. 7.
B.

Contested Issue of Law No. 8

Contested Issue of Law No. 8 is listed as “[w]hether BEEOO’s claims against
GIS are prescribed tort claims masquerading as contract claims.” 36 BEEOO seeks
summary judgment striking this issue from the Proposed Pretrial Order and an order
stating that its breach of contract claims do not, in fact, sound in tort. 37
There appears to be, at least, some support for GIS’s position. “The correct
prescriptive period to be applied in any action depends on the nature of the action; it
is the duty breached that should determine whether an action is in tort or contract.” 38
“The classical distinction between contractual and delictual damages is that the
former flow from an obligation contractually assumed by the obligor, whereas the
latter flow from a violation of a general duty to all persons.” 39 “[A] breach of contract
may well give rise to actions both ‘ex contractu’ and ‘ex delicto’ and . . . when such
occurs, the party injured may elect which action to be pursued.” 40 But “even when a

The Court notes that BEEOO does not identify a specific provision of the Business Alliance
Agreement that was breached by GIS. To the extent that BEEOO’s breach of contract claim at trial
will turn on a breach of that Business Alliance agreement, it must specify the specific provision
breached.
36 Id.
37 The Court notes that the Motion for Partial Summary Judgment is made by BEEOO, not GIS.
Therefore, even if the Court were convinced that BEEOO’s claims did sound in tort rather than
contract, the Court could not grant summary judgment in GIS’s favor.
38 Terrebonne Parish School Bd. v. Mobil Oil Corp., 310 F.3d 870, 886 (5th Cir. 2002).
39 Id.
40 Davis v. LeBlanc, 149 So. 2d 252, 254 (La. 1963).
35

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tortfeasor and victim are bound by contract, Louisiana courts usually apply delictual
prescription to actions that are really grounded in tort.” 41
The primary question, then, is whether the duty breached by GIS is one that
was a special obligation contractually assumed by GIS, or one that is a general duty
owed to all persons. 42 At the heart of this dispute is the parties’ characterization of
GIS’s purported duty and actions.

GIS stresses that the Court should look at

BEEOO’s claim through an ex delicto lens (because GIS characterizes its duty as one
of reasonable care not to contribute to the explosion of the oil platform); BEEOO, on
the other hand, stresses that the Court should look at its claim through an ex
contractu lens (because BEEOO characterizes its claim as based on GIS purported
contractual duties, such as complying with BEEOO’s safety rules and ensuring that
their workers were knowledgeable about the necessary safety procedures).
On this record, and at this stage of the proceedings, the Court will not find that
as a matter of law BEEOO’s breach of contract claims do not sound in tort. This
question will turn on what contractual terms bound the parties, and how (if at all)
GIS breached a specific contractual provision to BEEOO. These are issues that are
still hotly disputed between the parties. In short, depending on the facts established
at trial regarding the explosion, the Court could find that the duty breached by GIS
was one that arose independent from the parties’ contracts, and therefore sounded in
tort and is therefore prescribed. Based on the disputes regarding facts surrounding
the contracts and the explosion, as well as the parties’ vigorous dispute about what

41
42

Terrebonne Parish School Bd. 310 F.3d at 886.
Harrell v. Fidelity Sec. Life Ins. Co., No. 07-1439, 2008 WL 170269, at * 4 (E.D. La. Jan 16, 2008).

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exact contractual provisions may have been breached (and even which contracts
applied), the Court finds determination of this issue premature. Contested Issue of
Law No. 8 therefore remains a contested issue, and summary judgment is
inappropriate at this time.
The Court further notes that the BEEOO seems to assert in its Reply that as
a matter of law, the damages it claims are foreseeable. “An obligor in good faith is
liable only for the damages that were foreseeable at the time the contract was
made.” 43 BEEOO states “the consequences of the actions of GIS in this instance, or
inactions as the case may be, constituting breaches of multiple specific contractual
provisions, were very foreseeable and very predictable.” 44 GIS contends that the
damages BEEOO seeks are so significant that they would not be available even if
BEEOO’s action sounded in tort. Importantly, the question of whether BEEOO’s
damages were a foreseeable consequence of GIS’s breach is a question of fact to be
determined at trial. 45 BEEOO has formerly recognized as much. 46

La. Civ. Code art. 1996. The Court also notes that unforeseeable damages could be awarded if a
contract is breached in bad faith. See La. Civ. Code art. 1997.
44 R. Doc. 315.
45 Volentine v. Raeford Farms of Louisiana, LLC, 201 So. 3d 325, 349 (La. App. 2 Cir. 2016); National
Hispanic Circus, Inc. v. Rex Trucking, Inc., 414 F.3d 546, 551 (5th Cir. 2005).
46 R. Doc. 105 at 21-22 (“The question of whether or not such damages are foreseeable is a question of
fact for the jury—or in this case, the judge.”).
43

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IV.

CONCLUSION
IT IS HEREBY ORDERED that Black Elk Energy Offshore Operations’

Motion for Partial Summary Judgment is GRANTED to strike Contested Issue of
Law No. 7 from the Proposed Pretrial Order. The Motion is DENIED in all other
aspects. New Orleans, Louisiana, February 22, 2021.

______________________________________
WENDY B. VITTER
UNITED STATES DISTRICT JUDGE