Thomas v. ABC Insurance Company et al

Filing 100

ORDER AND REASONS: IT IS ORDERED that Rain CII's 91 Motion for Indemnity and Reimbursement for Attorneys' Fees and Costs is GRANTED. IT IS FURTHER ORDERED that AOA's 93 Motion for Indemnity and Reimbursement is GRANTED IN PART AND DENIED IN PART, as set forth in document. Signed by Judge Ivan L.R. Lemelle on 3/27/2019. (am)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JAMAL THOMAS

CIVIL ACTION

VERSUS

NO. 17-6097

ABC INSURANCE COMPANY, ET. AL.

SECTION: “B”(3)

ORDER AND REASONS
Before the Court are Third-Party Plaintiff Rain CII Carbon
LLC’s (“Rain CII”) Motion for Indemnity and Reimbursement of
Attorneys’ Fees and Costs (Rec. Doc. 91), Third-Party Defendant
AOA Services, Inc.’s (“AOA”) Response in Opposition (Rec. Doc.
94), and Rain CII’s Reply (Rec. Doc. 98). The Court also takes
into consideration AOA’s Brief Regarding Third-Party Claims (Rec.
Doc. 93) and Third-Party Defendant Paulina Contractors, Inc.’s
(“Paulina”) Response in Opposition (Rec. Doc. 95). 1 Accordingly,
IT

IS

ORDERED

that

Rain

CII’s

Motion

for

Indemnity

and

Reimbursement for Attorneys’ Fees and Costs is GRANTED.
IT IS FURTHER ORDERED that AOA’s Motion for Indemnity and
Reimbursement is GRANTED IN PART AND DENIED IN PART.
FACTS AND PROCEDURAL HISTORY
This contractual indemnity dispute arises out of a personal
injury lawsuit.
Rain CII is the owner and operator of a calcining plant in
Gramercy, Louisiana. See Rec. Doc. 93. Rain CII contracted with
1

The Court construes AOA’s Brief as a Motion for Indemnity and Reimbursement.
1

AOA, pursuant to Service Contract, where AOA agreed to haul and
transport coke at Rain CII’s facility. See Rec. Doc. 91-1 at 2.
The Service Contract contemplated AOA using subcontractors. See
Rec. Doc. 93 at 1. AOA subcontracted its work to Paulina, who
employed Plaintiff Jamal Thomas. See Rec. Doc. 91-1 at 2. On May
26, 2016, plaintiff filed a lawsuit against Rain CII in state
court, alleging that he was severely injured while unloading
petroleum coke at Rain CII’s facility. 2 See id. On June 23, 2017,
Rain CII removed the lawsuit to this Court on the basis of
diversity jurisdiction. See id. at 3.
After one year of litigation, plaintiff agreed to dismiss his
claims with prejudice, without Rain CII having to pay any money to
him. See id. at 5. On May 21, 2018, all parties filed a joint
motion to dismiss plaintiff’s claims with prejudice. See id. On
May 24, 2018, this Court issued an Order dismissing plaintiff’s
claims, with prejudice, and ordering Rain CII and AOA to submit
briefs on their respective third-party claims. See Rec. Doc. 91.
The third-party claims are Rain CII’s third-party claim for defense
and

indemnity

against

AOA

and

AOA’s

third-party

defense

and

indemnity claim against Paulina. See Rec. Doc. Nos. 9, 21, 91, 93,
94, 95, 98.

2 The dump-truck that plaintiff was operating flipped on its side. See Rec. Doc.
93 at 2.
2

On June 6, 2018, Rain CII filed a motion for indemnity and
reimbursement for attorneys’ fees and costs. See Rec. Doc. 91. On
June 13, 2018, AOA filed an opposition memorandum. See Rec. Doc.
94. On June 26, 2018, Rain CII replied. See Rec. Doc. 98. AOA also
filed a motion regarding its third-party claims on June 6, 2018.
See Rec. Doc. 93. Paulina filed an opposition memorandum on June
13, 2018. See Rec. Doc. 95.
LAW AND ANALYSIS
A. General Principles
There is no dispute that Louisiana law governs this matter.
Under

Louisiana

law,

the

language

in

an

indemnity

agreement

dictates the obligation of the parties. See Bollinger Marine
Fabricators, LLC v. Marine Travelift, Inc., 2015 U.S. Dis. LEXIS
48182 *1, *11 (E.D. La. 2015). The indemnity provision language is
construed in accordance with general rules governing contract
interpretation. See id. If the terms of a contract are unambiguous
and lead to no absurd result, the court must interpret the terms
as a matter of law. See id. If the terms are ambiguous, the court
must look to the intent of the parties. See id. “In determining
whether an indemnitor is obligated to tender a defense or reimburse
the costs of successfully defending an action, the court's inquiry
turns

entirely

upon

the

allegations

in

the

precipitating

pleadings.” Id. at *12. Louisiana courts look exclusively to the
pleadings in light of the indemnity provisions. See id. at *11.
3

B. Rain CII is Entitled to Indemnification
Rain CII’s Third-Party Complaint arises out of two provisions
of the Service Contract. The two provisions state:
Section 8(a)
[AOA Services] shall fully indemnify, save harmless and
defend [Rain CII], its agents and employees including
subsidiaries and its affiliated companies from and
against all suits, actions, legal proceedings, claims
demands, damages, cost and expenses of whatsoever kind
or character (including but not limited to attorneys
fees’ and expenses) caused by wrongful acts or any
omission, fault, or negligence of [AOA Services], or
anyone acting on [AOA Services]’s behalf (including, but
not limited to, subcontractors and vendors, their
subcontractors and subvendors, and the employees and
agent of any of the foregoing), in connection with or
incident to the Contract or the Work to be performed
hereunder, except to the extent caused by [Rain CII]’s
negligence. See Rec. Doc. 9 at 4-5.
Section 8(b)
Without limiting the foregoing, [AOA Services] shall
fully indemnify, save harmless, release and defend [Rain
CII] and its subsidiaries, its affiliated companies, and
the employees and agents, of any of the foregoing, from
and against any and all suits, actions, and legal
proceedings, claims demands, damages, costs and expenses
of whatsoever kind or character (including but not
limited to attorneys’ fees and expenses) arising out of
or by reason of any injury (including death) or damage
to any person or entity employed by or acting on [AOA
Services]’s behalf (including, but not limited to,
subcontractors and vendors, their subcontractors and
subvendors, and the employees and agents of any of the
foregoing) under this Contract, including where caused
in whole or in part by [Rain CII]’s negligence or strict
liability. See id.

4

These provisions indicate that AOA assumes liability for the
defense of or costs relating to injuries suffered by an employee
in connection with the contracted work. The provisions here are
not like the provisions in Palmer v. General Health, Inc., 552 So.
2d 750 (La. App. 1 Cir. 1989). The provisions here are broad in
scope and intend to cover situations irrespective of negligence on
the part of either party. See White v. Dietrich Metal Framing,
2007 U.S. Dist. LEXIS 99122 *1, *9 (E.D. Tex. 2007)(stating that
while the language “indemnify and save harmless” does not create
an affirmative duty to defend, it implies a duty to reimburse for
costs of defense, whether successful or not). The provisions in
Palmer v. General Health, Inc. include limiting language. 552 So.
2d 750, 755 (La. App. 1 Cir. 1989)(stating that the provisions do
not provide for indemnity without a finding of fault on the part
of

the

indemnitor

or

a

party

for

whom

the

indemnitor

is

responsible). It is clear that attorneys’ fees and costs are within
the

scope

of

the

indemnity

provisions

here

because

the

two

provisions expressly provide for “attorneys’ fees and expenses.”
See Bollinger Marine Fabricators, LLC, 2015 U.S. Dis. LEXIS 48182
at *12 citing to Naquin v. Louisiana Power & Light Co., 951 So. 2d
228, 232 (La Ct. App. 1 Cir. 2006) (“The law in Louisiana is wellsettled that attorney fees in indemnity contracts are recoverable
when specifically provided for by the contract . . ..”).

5

AOA highlights the fact that the provisions here do not
provide that AOA would indemnify Rain CII for is sole fault. See
Rec. Doc. 94 at 2. It is the majority view that unless the intention
is unequivocally expressed, the law will consider that the parties
did not undertake to indemnify one against the consequences of its
own negligence. See Williams v. California Co., 289 F. Supp. 376,
379 (E.D. La. 1968). However, in this case, the attorneys’ fees
and costs were not incurred as a result of Rain CII’s negligence;
rather the outcome of the lawsuit was that Rain CII had not been
negligent. See Rec. Doc. 90. Courts have rejected the argument
that a party cannot recover its defense costs under an indemnity
provision because the party was not been found liable to the
plaintiff. See e.g., O’Neal v. International Paper Co., 715 F.2d
199, 203 (5th Cir. 1983); White, 2007 U.S. Dist. LEXIS 99122 at
*9. AOA argues that it is not obligated to indemnify Rain CII
because AOA was not, and cannot, be found liable. See Rec. Doc. 94
at 6. To state that AOA would only be liable if it were negligent,
at least in part, would be to read into the contract a limitation
which is not present. See Williams, 289 F. Supp. 376, 379 (E.D.
La. 1968). Therefore, after reviewing the indemnity provision
language and the pleadings, this Court finds that AOA is obligated
to indemnify Rain CII for it attorneys’ fees and costs as the plain
language of the two provisions here unambiguously entitle Rain CII

6

to recover the attorneys’ fees and costs incurred in defending
against plaintiff’s claims.
Having

established

that

Rain

CII

is

entitled

to

indemnification, the Court now turns to the reasonableness of Rain
CII’s attorneys’ fees. “A fee award is governed by the same law
that serves as the rule of decision for the substantive issues in
the case.” Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir.
2002). There is no dispute that Louisiana law governs the Service
Contract. Accordingly, Louisiana law governs Rain CII’s claim for
attorneys’ fees. See Bollinger Marine Fabricators, LLC, 2015 U.S.
Dist. LEXIS 48182 at *12. To determine the reasonableness of a fee
award, a court may consider, amongst other things, the ultimate
result obtained; attorneys’ legal knowledge and skill; number of
appearances made; intricacies of the facts involved; and diligence
and skill of counsel. See id. at *10. Rain CII maintains that these
factors weigh in its favor as Rain CII, amongst other things,
ultimately

prevailed;

its

counsel

has

year

of

experience

in

personal injury litigation; its counsel filed a multitude of
motions; its counsel attended one hearing before the Magistrate
Judge and deposed plaintiff; and its counsel undertook reasonable
and thorough efforts to craft arguments to obtain dismissal of
plaintiff’s claims. See Rec. Doc. 91-1 at 11-13, Rec. Doc. 98 at
4-5.

AOA

does

not

dispute

the

reasonableness

of

Rain

CII’s

attorneys’ fees. Therefore, AOA shall pay Rain CII’s attorneys’
7

fees in the amount of $58,470.00 and court costs and expenses in
the amount of $7,4417.83 for a total of $65,887.83 with interest
from the date of the judgment.
C. AOA is Partially Entitled to Indemnification
AOA contends that in contracting with Paulina it made certain
the

indemnity

language

was

clear

and

unambiguous

regarding

Paulina’s obligation to defend and indemnify AOA for claims brought
against AOA directly or by Rain CII. See Rec. Doc. 93 at 4. AOA’s
Third-Party Complaint arises out of its Hauling Contract with
Paulina. The indemnity provision states:
a. TO THE FULLEST EXTENT PERMITTED BY LAW, COMPANY
[PAULINA] AGREES TO HOLD HARMLESS AND UNCONDITIONALLY
INDEMNIFY
CONTRACTOR
[AOA]
AGAINST
AND
FOR
ALL
LIABILITY,
COSTS,
EXPENSES,
CLAIMS
AND
DAMAGES,
INCLUDING COSTS OF DEFENSE WHICH CONTRACTOR MAY AT ANY
TIME SUFFER OR INCUR, OR BECOME LIABLE FOR BY REASON OF
ANY ACCIDENTS, DAMAGES OR INJURIES SUSTAINED EITHER TO
THE PERSONS OR PROPERTY OF COMPANY AND/OR ITS EMPLOYEES,
OR OF THE CONTRACTOR AND/OR ITS EMPLOYEES, OR TO ANY
THIRD PARTY, IN ANY MANNER ARISING OUT OF THE WORK
PERFORMED BY COMPANY UNDER THIS AGREEMENT, REGARDLESS OF
WHETHER SUCH INJURY OR DAMAGE WAS CAUSED IN WHOLE OR
PART, TO ANY DEGREE, BY THE COMPANY OR THE CONTRACTOR.
IT IS THE EXPRESS INTENT OF THE PARTIES TO THIS AGREEMENT
THAT THE INDEMNITY OBLIGATIONS ARISING HEREUNDER INURE
TO THE BENEFIT OF THE CONTRACTOR, REGARDLESS OF WHETHER
THE INJURY OF DAMAGE SUSTAINED AROSE OUT OF THE
CONTRACTOR’S SOLE OR CONCURRENT NEGLIGENCE. IT IS ALSO
THE EXPRESS INTENT OF THE PARTIES TO THIS AGREEMENT THAT
THE INDEMNITY OBLIGATIONS HEREUNDER APPLY TO INJURY OR
DAMAGE SUSTAINED TO ANY PERSON. INCLUDING THE EMPLOYEES
OF THE CONTRACTOR OR THE COMPANY, AND THAT NO REMEDY
PROVIDED TO THE COMPANY’S EMPLOYEES UNDER ANY APPLICABLE
WORKERS’ COMPENSATION ACT SHALL OPERATE TO CIRCUMVENT
THE OBLIGATIONS AS REFERENCED HEREIN. See id.

8

This provision indicates that Paulina assumes liability for
the defense fees of or costs relating to injuries suffered by an
employee in connection with the contracted work. Paulina offers an
argument similar to the argument AOA offered in its opposition to
Rain CII’s Motion. See Rec. Doc. 95 at 2. Specifcally, Paulina
argues that AOA wants indemnity for negligence of Rain CII. See
Rec. Doc. 95 at 3. However, the attorneys’ fees and costs that AOA
are now liable for were not incurred as a result of Rain CII’s
negligence; rather the outcome of the lawsuit was that Rain CII
had not been negligent. See Rec. Doc. 90. The indemnity provision
states “FOR ALL LIABILITY, COSTS, EXPENSES, . . . INCLUDING COSTS
OF DEFENSE WHICH [AOA] MAY AT ANY TIME . . . BECOME LIABLE FOR BY
REASON OF ANY ACCIDENTS, DAMAGES OR INJURIES SUSTAINED EITHER TO
THE PERSONS OR PROPERTY OF [Paulina] AND/OR ITS EMPLOYEES.” AOA
has become liable for Rain CII’s attorneys’ fees and costs by way
of alleged injuries to an employee of Paulina. Therefore, Paulina
is obligated to indemnify AOA for it attorneys’ fees and costs as
the plain language of the indemnity provision requires that result.
See Bollinger Marine Fabricators, LLC, 2015 U.S. Dis. LEXIS 48182
at *11.
This

provision

does

not

indicate

that

Paulina

assumes

liability for AOA’s expense of proving indemnification. Paulina
argues that such recovery is outside of the scope of the indemnity
provision. See Rec. Doc. 95 at 5. AOA cites no law to advance its
9

position that it is entitled said expense and did not challenge
the precedent Paulina cites. AOA has the burden to show that it is
entitled to indemnity, but has offered no support for its position,
AOA fails to carry its burden. See Bollinger Marine Fabricators,
LLC, 2015 U.S. Dis. LEXIS 48182 at *25. Therefore, Paulina is not
obligated to pay AOA the attorneys’ fees and costs it incurred in
enforcing the Service Contract indemnity provisions against Rain
CII. See id. at *26.
New Orleans, Louisiana, this 27th day of March, 2019.

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

10