Channette v. Evans Operating Co et al

Filing 85

MEMORANDUM RULING re 65 MOTION for Summary Judgment filed by Seneca Resources Corp, 66 MOTION for Hearing re 65 MOTION for Summary Judgment, 61 Memorandum in Opposition to Motion, MOTION for Hearing re 65 MOTION for Summary Judgment, 61 M emorandum in Opposition to Motion, filed by Seneca Resources Corp, 75 MOTION to Exclude and not consider evidence submitted by Neches Gulf Marine in support of their MSJ filed by Seneca Resources Corp, 56 MOTION for Summary Judgment filed by Neches Gulf Marine Inc, M/V Goliad. Signed by Judge Tucker L Melancon on 8/6/10. (crt,Jordan, P)

- P J H Channette v. Evans Operating Co et al

Do c. 85

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF LOUISIANA L A F A Y E T T E DIVISION C h a n n e tte v e rs u s E v a n s Operating Co., et al M E M O R A N D U M RULING B e fo re the Court is a Motion for Summary Judgment filed by defendants Neches Gulf M a rin e , Inc. and the M/V Goliad ("Neches Gulf") [Rec. Doc. 56], a memorandum in o p p o s itio n filed by third-party defendant Seneca Resources Corporation ("Seneca") [Rec. D o c . 61], a reply memorandum filed by Neches Gulf [Rec. Doc. 68] and a sur-reply filed by S en ec a [Rec. Doc. 74]. Also before the Court is Seneca's Cross Motion for Summary C iv il Action No. 09-0202 J u d g e Tucker L. Melançon M a g is tra te Judge Hanna

Ju d g m en t [Rec. Doc. 65], Neches Gulf's memoranda in opposition thereto [Rec. Docs. 77], a n d a reply memorandum filed by Seneca [Rec. Doc. 78] For the following reasons, Neches G u lf's motion will be denied and Seneca's motion will be granted. I. Background T h is is a personal injury action filed by Michael Channette, and his spouse, Sandra A n n Channette, against Evans Operating, LLP ("Evans"), Neches Gulf Marine, Inc. ("Neches G u lf" ), and the M/V GOLIAD, following an alleged workplace accident that occurred on M a y 10, 2008 while he was transferring via personnel basket from the deck of the M/V G O L IA D to an offshore platform in East Cameron Block 205(A) in the Gulf of Mexico. R. 1 ; 24; 28. At the time of the alleged accident, Channette was employed by Roclan Services & Supply, Inc.; the crane being used for the transfer was being operated by an employee of E v a n s Operating, LLP; and, the M/V GOLIAD, an offshore supply vessel, was owned and o p e ra te d by Neches Gulf. Seabright Insurance Company, the workers' compensation carrier fo r plaintiff's employer, filed a complaint in intervention seeking recovery of benefits it paid

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to and on behalf of plaintiff as a result of the alleged incident. R.38. Neches Gulf and the M /V GOLIAD filed a third-party complaint claiming that Seneca is required to provide it w ith a defense and indemnity. R. 36. Neches Gulf filed a motion for summary judgment against Seneca asserting that S e n e c a owes it defense and indemnity. R.56. Seneca filed a cross motion for summary ju d g m e n t to dismiss Neches Gulf's third-party claims against it because there is no evidence o f a contract in place at the time of plaintiff's alleged injuries which would require Seneca to defend and indemnify Neches Gulf. R. 65. I I. Summary Judgment Standard A motion for summary judgment shall be granted if the pleadings, depositions and a ffid a v its show that there is no genuine issue as to any material fact and that the moving p a r ty is entitled to judgment as a matter of law. Fed. R. Civ. P. 56; Little v. Liquid Air C o r p . , 37 F.3d 1069 (5th Cir. 1994)(en banc). Initially, the party moving for summary ju d g m e n t must demonstrate the absence of any genuine issues of material fact. When a party se e k in g summary judgment bears the burden of proof at trial, it must come forward with e v id e n c e which would entitle it to a directed verdict if such evidence were uncontroverted a t trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). As to issues which the nonm o v i n g party has the burden of proof at trial, the moving party may satisfy this burden by d e m o n s tra tin g the absence of evidence supporting the non-moving party's claim. Id. If the m o v ing party fails to carry this burden, his motion must be denied. If he succeeds, however, th e burden shifts to the non-moving party to show that there is a genuine issue for trial.1 Id.

Where the nonmoving party has the burden of proof at trial, the moving party does not have to produce evidence which would negate the existence of material facts. It meets its burden by simply pointing out the absence of evidence supporting the non-moving party's case. Celotex Corp., 477 U.S. at 325. To oppose the summary judgment motion successfully, the non-moving party must then be able to establish elements essential to its case on which it will bear the burden

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a t 322-23. Once the burden shifts to the respondent, he must direct the attention of the court to e v id e n c e in the record and set forth specific facts sufficient to establish that there is a genuine is s u e of material fact requiring a trial. Celotex Corp., 477 U.S. at 324; Fed.R.Civ.Pro. 56(e). T h e responding party may not rest on mere allegations or denials of the adverse party's p lea d in g s as a means of establishing a genuine issue worthy of trial, but must demonstrate b y affidavit or other admissible evidence that there are genuine issues of material fact or law. A n d e rs o n v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986); Adickes v. S.H. Kress & Co., 3 9 8 U.S. 144. 159 (1970); Little, 37 F.3d at 1075. There must be sufficient evidence favoring th e non-moving party to support a verdict for that party. Anderson, 477 U.S. at 249; Wood v . Houston Belt & Terminal Ry., 958 F.2d 95, 97 (5th Cir. 1992). There is no genuine issue o f material fact if, viewing the evidence in the light most favorable to the non-moving party, n o reasonable trier of fact could find for the non-moving party. Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 178 (5th Cir.1990). If no issue of fact is presented and if the mover is entitled to judgment as a matter of law , the court is required to render the judgment prayed for. Fed. R. Civ. P. 56(c); Celotex C o r p ., 477 U.S. at 322. Before it can find that there are no genuine issues of material fact, h o w e v e r, the court must be satisfied that no reasonable trier of fact could have found for the n o n -m o v in g party. Id. III. Analysis T h e parties do not dispute that general maritime law applies to the agreements at issue. A n agreement to transport people and supplies in a vessel to and from an offshore drilling

of proof at trial. A complete failure of proof by the non-moving party of these essential elements renders all other facts immaterial. Id. at 322.

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rig is a maritime contract and the construction of a maritime contract is governed by maritime la w . Great Lakes Reinsurance (UK) PLC v. Durham Auctions, Inc., 585 F.3d 236, 243 (5 th C ir.,2 0 0 9 ) (citing Hale v. Co-Mar Offshore Corp., 588 F.Supp. 1212, 1215 (W.D. La.,1984) (J. Shaw); See also, Theriot v. Bay Drilling Corp., 783 F.2d 527, 538 (5 th Cir.,1986). Under f e d e ra l maritime law, "[a] contract of indemnity should be construed to cover all losses, d a m a g e s, or liabilities which reasonably appear to have been within the contemplation of the p arties, but it should not be read to impose liability for those losses or liabilities which are n e ith e r expressly within its terms nor of such a character that it can be reasonably inferred th a t the parties intended to include them within the indemnity coverage." Bross v. Chevron U .S .A ., Inc., 2009 WL 2579097, 5 (W.D.La.,2009) (J. Doherty) (citing Fontenot v. Mesa P e tr o le u m Co., 791 F.2d 1207, 1214 (5th Cir.1986). A maritime contract containing an i n d e m n i ty agreement should be read as a whole and its words given their plain meaning u n l e s s the provision is ambiguous. Becker v. Tidewater, Inc., 586 F.3d 358, 369 (5 th C ir.,2 0 0 9 ). The duty to indemnify and hold harmless includes the payment of costs and a tto rn e y 's fees. Lirette v. Popich Bros. Water Transport, Inc., 699 F.2d 725, 728 (5 th C ir .,1 9 8 3 ). In its motion for summary judgment, Neches Gulf contends that under the Master T im e Charter Agreement dated November 1, 1993 ("1993 Master Time Charter A g re e m e n t" ), Seneca agreed to defend, indemnify and hold Neches Gulf harmless for "any c la im s , demands or lawsuits brought by or on behalf of employees of Seneca or employees o f Seneca's subcontractors ... and whether caused in whole or in part by the joint or c o n c u rre n t negligence or strict liability, statutory or otherwise, of Neches Gulf or by the e q u ip m e n t of Neches Gulf." R. 36. Neches Gulf also contends that Seneca agreed to " p ro c u re and continuously maintain in full force and effect throughout the term of the

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a g re e m e n t, comprehensive general liability insurance, including contractual liability i n s u r a n ce covering Seneca's obligations under the agreement." Id. at 2. Alternatively, N e c h e s Gulf claims that an agreement between Kevin Gros Consulting & Marine Services, In c . and Seneca ("Gros-Seneca Time Charter"), in which Seneca agreed to indemnify, d e fe n d , and hold harmless the "owner and the vessel," provides Neches Gulf defense and in d e m n ity through its ownership of the M/V GOLIAD. Id. Seneca argues in its cross motion for summary judgment that the 1993 Master Time C h a rte r Agreement expired by its own terms in 1993, and therefore, is not applicable to the c h a rte r of the M/V GOLIAD or in effect on May 10, 2009, the date of the alleged accident. A s to Neches Gulf's alternative argument, Seneca argues that there is no evidence to e sta b lis h that the Gros-Seneca Time Charter requires Seneca to defend or indemnify Neches G u l f. A . The 1993 Master Time Charter Agreement T h e record provides that Neches Gulf and Seneca entered into a Master Time Charter A g re e m e n t on November 1, 1993 ("Master Agreement"). The Master Agreement states in p e rtin e n t part: " A R T IC L E 1 - CANCELLATION" This Master Time Charter Agreement (" Master Agreement") shall control and govern e a c h short Form Time Charter Agreement `Short Form', (attached hereto as Exhibit " A " ) entered into between CHARTERER and OWNER which incorporates this M a ste r Agreement by reference...." "ARTICLE 2 - CHARTER" This Master Agreement does not obligate OWNER to charter its vessels to C H A R T E R E R , nor does it obligate CHARTERER to hire any vessel of [sic] v e ss e ls owned by OWNER, but it, together with any short Form between O W N E R and CHARTERER of even or later date herewith, shall govern the re s p e c tiv e rights and duties of OWNER and CHARTERER. ...

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" A R T IC L E 14 - CHARTER'S INDEMNITIES" Neither OWNER, its officers, directors, employees, joint venturers, the v e ss e l, her owners, operators, master, and crew...shall have any responsibility o r liability for any claim involving damages to or loss of any cargo and/or e q u ip m e n t carried by the vessel, or for any injury, illness, disease, loss of s e rv i c e s or wages, or death or employees of CHARTERER, its subcontractors, jo in t ventures or their employees or agents, arising out of or connected with th is Master Agreement, and CHARTERER shall defend, indemnify and hold h a r m le s s OWNER, its officers, directors, employees, the vessel, its owners, o p e ra to rs , master, and crew, and the underwriters of each of the foregoing fro m and against any such claim, whether groundless or not, and whether c a u se d in whole or in part by the joint or concurrent negligence or strict lia b ility , statutory or otherwise, faults of indemnities or by unseaworthiness of th e vessel or by the equipment of the OWNER, OWNER's property and O W N E R 's sub-contractors' property, but excluding such loss or damage which re su lts from the sole or gross negligence or willful misconduct of the i n d e m n i tie s . It is expressly understood that CHARTERER shall insure its o b lig a tio n s assumed under this paragraph. R . 56, Exh. D. "Exhibit A, Short Form," attached to the Master Agreement provides the work order for the c h a rte r of the M/V GOLIAD. The Short Form states that the Neches Gulf agreed to time c h a rte r or perform towing services for Seneca and Seneca agreed to hire the M/V GOLIAD b e g in n in g on November 4, 1993 for a period of 7 to 14 days. Id. The "Cancellation Terms" s ta te that the agreement was terminated "[o]n completion of work." Id. Seneca points the Court to the June 10, 2010 affidavit of its Deputy General Counsel, D o n Butler. Id., Exh. C. Butler states that the Master Agreement requires an unexpired Short F o r m to be effective. Id. Butler further states that because was no Short Form agreement, n o r any other agreement, between Neches Gulf and Seneca which was applicable to this case o n May 10, 2008 or applied to the work in question," Neches Gulf is not entitled to defense a n d indemnity based on the 1993 Master Agreement and the attached Short Form. In support o f its position that the 1993 Master Agreement applies to the accident in question, Neches G u lf points to correspondence between Butler and HUB International South Limited dated

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fr o m November 12, 2009 to December 4, 2009. R. 70, Exhs. H-J. Neches Gulf contends t h a t the correspondence establishes that "Seneca believes the 1993 [Master Agreement] is in full force and effect, and governs this situation." R. 68. Charter party agreements are essentially contracts and they are subject to the general ru le s of contract law. Marine Overseas Services, Inc. v. Crossocean Shipping Co., Inc., 791 F .2 d 1227, 1234 (5 th Cir.,1986) (citing G. Gilmore & C. Black, The Law of Admiralty § 4-1 at 196 (2d ed. 1975) ("since most points of charter law involve construction of the charter, th e principles are much the same as those of ordinary contract law")). The interpretation of a n indemnity provision in a maritime contract is ordinarily governed by federal maritime law. C o r b itt v. Diamond M. Drilling Co., 654 F.2d 329, 332 (5 th Cir., 1981). Under federal m a ritim e law a court may not look beyond the written language of the document to d e te rm in e the intent of the parties unless the disputed contract provision is ambiguous. Id. a t 332 -333 (The district court properly refused to consider parol evidence of the parties' in te n tio n s and focused solely on the unambiguous language of the Purchase Order). Based o n the clear and unambiguous language of the 1993 Master Agreement and the Short Form, w h ic h was attached and made a part thereof, the terms and obligations under the Master A g re e m e n t terminated in November 1993 on completion of the work contracted under the A g re e m e n t.2 Neches Gulf has provided no evidence in support of its contention that the 1993 M a ste r Agreement continued to be in effect on the date of the alleged accident, May 10, 2 0 0 8 , more than 14 years after it terminated by its own terms. Accordingly, the 1993 Master

Seneca filed an opposition to the use of parole evidence in interpreting the Agreements in this case. R. 75. As the Court finds that the pertinent language in the 1993 Master Agreement, and attached Short Form is unambiguous, evidence to establish the intent of the Agreement may not be considered by the Court, and therefore, the correspondence between Butler and HUB In te rn a tio n a l South Limited will not be considered.

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A g re e m e n t does not require Seneca to defend and indemnify Neches Gulf for the alleged in ju ry in this case. T h e Gros-Seneca Time Charter N e c h es Gulf contends alternatively that Seneca owes it defense and indemnity under a Master Time Charter Agreement entered into on September 11, 2006 between Kevin Gros C o n s u ltin g & Marine Services, Inc. and Seneca ("the Gros-Seneca Time Charter"). R. 56, E x h . A. Page 1 of the Gros-Seneca Time Charter states that the "Master Agreement" is "by a n d between Kevin Gros Consulting & Marine Services, Inc. (Hereinafter referred to as `O W N E R ') and Charterer `Seneca Resources Corporation' Attn: Don Butler ... (hereinafter re fe rre d to as `CHARTERER.')." The Gros-Seneca Time Charter provides in pertinent part: 1. C A N C E L L A T IO N . This Master Agreement shall control and govern e a c h Short Form Time Charter Agreement ("Short Form") entered into b e tw e e n CHARTERER and OWNER which incorporates this Master A g re e m e n t by reference. Either party may cancel the Master Agreement u p o n the giving of thirty (30) days prior written notice to the other; p ro v id e d , however, that any unexpired Short Form shall continue in e ffe c t subject to the terms and conditions thereof until expiration of the te rm specified in such Short Form. ... C H A R T E R . This Master Agreement does not obligate OWNER to c h a rte r its vessels to CHARTERER, nor does it obligate CHARTERER to hire any vessel or vessels owned by OWNER, but it, together with a n y Short Form between OWNER and CHARTERER, of even date or d a ted subsequent to the date hereof, shall govern the respective rights a n d duties of OWNER and CHARTERER. If a Short Form is entered into between CHARTERER and an affiliate o f OWNER, then it shall be considered for all purposes that such a ffilia te is a party to this Master Agreement and that it has adopted, ra tifie d , and confirmed all the terms and provisions of this Master A g re e m e n t, insofar as it is applicable to the vessel chartered under such S h o rt Form.

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T h is Master Agreement and the Short Form contemplated herein (E x h ib it "A") ... shall constitute the entire agreement between the p a rtie s of the charter of vessels by OWNER to CHARTERER, in the a b se n c e of a separate time charter on a specific vessel and the terms and p ro v isio n s hereof shall ipso facto apply to the charter of any vessel to C H A R T E R E R by OWNER in the absence of any such separate time c h a rte r on a specific vessel. The terms and provisions of this Master A g re e m e n t shall not, however, be applicable to the charter of any vessel u p o n which such a separate time charter is executed. ... 23. C H A R T E R E R 'S INDEMNITY OBLIGATIONS TO OWNER. C H A R T E R E R shall indemnity, defend and hold OWNER and the V e ss e l harmless from and against any and all claims, demands, causes o f action or suits, and damages, including attorneys' fees and costs, for p e rs o n a l injury or death (including any survivor's action) brought by o r on behalf of any agents, employees, or representatives of C H A R T E R E R , or any subcontractor of CHARTERER, or any thirdp a r t y invited aboard the Vessel by CHARTERER. All of the a fo re m e n tio n e d shall apply whether occasioned, caused or brought a b o u t in whole or in part by the negligence, fault or strict liability of O W N E R , its agents or employees, or by any condition or u n se a w o rth in e ss of the Vessel.

O n May 8, 2008, a Short Form "Charter Agreement" was signed by Kevin Gros in w h ich the M/V GOLIAD, the subject vessel owned by Neches Gulf, was chartered to work fo r Seneca. R. 56, Exh. B, Charter Agreement. Neches Gulf contends that Seneca is required to indemnify Neches Gulf under the Gros-Seneca Time Charter based on the following p ro v isio n s: 1) Article 2 which states, "in the absence of a separate time charter on a specific v e ss e l and the terms and provisions hereof shall ipso facto apply to the charter of any vessel to CHARTERER by OWNER in the absence of any such separate time charter on a specific v e ss e l;" and 2) Article 23, the indemnity provision, which states that "CHARTERER shall in d e m n ity , defend and hold OWNER and the Vessel harmless." R. 56, Exh. A, Arts. 2; 23. N e c h es Gulf argues that the foregoing language "clearly shows that the indemnity by Seneca i s in favor of the actual owner of the vessel chartered" and that if the Gros-Seneca Time

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C h a rte r was not intended to apply to all vessels chartered by Gros, regardless of whether o w n e d by Gros or a third party, then the language is redundant and meaningless. Neches G u lf also cites the May 21, 2010 affidavit of Byron Allemand, the Vice-President and Chief F in a n c ia l Officer of Kevin Gros Consulting & Marine Services, Inc., who states,"the in d e m n ity from Seneca Resources Corporation, as provided for in the Agreement, was s u p p o s e d to `pass through' to the actual Owner of the vessel." R. 77, Exh. E, Aff. Of A lle m a n d . Initially, the Court finds, and the parties agree, that the language in the pertinent p ro v is io n s of the Gros-Seneca Time Charter is unambiguous, obviating the need for parol e v id e n c e.3 Corbitt, 654 F.2d at 332-33 (citing Hicks v. Ocean Drilling and Exploration Co., 512 F.2d 817, 825 (5th Cir. 1975)). The Gros-Seneca Time Charter clearly states and identifies the " C H A R T E R E R " as Seneca and the "OWNER" as Kevin Gros Consulting & Marine S e rv ic e s, Inc. Neches Gulf is neither identified in the agreement, nor is there language s ta tin g that Neches Gulf is a party to the agreement. Contrary to Neches Gulf's contention th a t the language clearly shows Seneca owes it indemnity as the "actual owner" of the M/V G O L IA D , the term "actual owner" is not used in the agreement. Article 2 of the Agreement d o e s provide, however, that "an affiliate of OWNER" is considered a party to the Master A g re e m e n t. If "OWNER" means the actual owner of any vessel, there would be no reason to specifically provide that the "OWNER" under the agreement may be an affiliate of Kevin G ro s Consulting & Marine Services, Inc. In Ray v. Global Industries, Ltd., 2006 WL 305964, 1 (W.D.La.,2006) (J. Tremble)

Seneca filed an opposition to the use of parole evidence in interpreting the Agreements in this case. R. 75. As the Court finds that the pertinent language in the Gros-Seneca Time Charter is unambiguous, evidence to establish the intent of the Agreement may not be considered by the Court, and therefore, the affidavit of Allemand will not be considered.

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th e court considered a Charter Agreement between Kevin Gros Consulting & Marine S e rv ic e s, Inc., identified as "CHARTERER," and the owner of the vessel at issue, Global In d u s trie s Ltd., identified as "OWNER." As in this case, the Master Time Charter

a g re e m e n t in Ray provided that CHARTERER was to defend and indemnify OWNER. Gros a rg u e d that the Charter Agreement did not apply to it because Gros had functioned as a "boat b ro k e r" rather than a "charterer" with respect to the vessel. In holding that the Charter A g re e m e n t and its provisions were applicable, the court stated, The indemnity provisions unequivocally obligate Kevin Gros Consulting to d e f e n d and indemnify Global for claims asserted by anyone other than G lo b a l's own employees ... there is nothing in the Charter Agreement that o b lig a te s anyone other than Kevin Gros Consulting to indemnify and defend G lo b a l. Id . at 2. Similarly in this case, the Gros-Seneca Time Charter solely identifies Gros as the owner and th e re is an absence of language identifying any other party being covered under the terms of th e contract. Thus, Neches Gulf has no claim against Seneca under the Gros-Seneca Time C h a rte r Agreement. Conclusion B a se d on the clear, unambiguous language in the 1993 Master Agreement and the a tta c h e d Short Form as well in as the Gros-Seneca Time Charter, Seneca does not owe d e fe n se and indemnity to Neches Gulf. Accordingly, Neches Gulf's motion will be denied a n d Seneca's motion will be granted.

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