Simar v. Tetra Technologies Inc et al

Filing 169

MEMORANDUM RULING denying 130 Motion for Summary Judgment; denying 148 Cross Motion for Summary Judgment. Signed by Magistrate Judge Carol B Whitehurst on 4/1/2019. (crt,Chicola, C)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION
Simar

Civil Action No. 15-CV-01950

versus

Magistrate Judge Carol B Whitehurst

Tetra Technologies Inc et al

By Consent of the Parties

MEMORANDUM RULING
Before the Court is a Motion For Summary Judgment filed by Plaintiff,
Wendell Simar, [Rec. Doc. 130] and an Opposition Memorandum filed by
Intervenors, Chicago Bridge and Iron Company (“CB&I”) and American Longshore
Mutual Association, Ltd. (“ALMA”) [Rec. Doc. 147]. Also before the Court is a
Cross Motion For Summary Judgment filed by Intervenors, CB&I and ALMA [Rec.
Doc. 148] and an Opposition Memorandum filed by Plaintiff [Rec. Doc. 155]. For
the reasons that follow, the cross motions for summary judgment will be denied.
I.Background
Plaintiff, Wendell Simar, was employed by CB&I on June 24, 2014, when he
was involved in an accident that resulted in injuries to his lower back. Plaintiff filed
suit against Tetra Technologies, Inc. (“Tetra”) and Maritech Resources, LLC
(“Maritech”) as the owner/operator of the platform (referred to as “Tetra/Maritech”),
alleging that the accident was caused by the fault of Tetra/Maritech.

Plaintiff received indemnity benefits and medical expenses from CB&I and
its workers’ compensation carrier, ALMA, pursuant to the Longshore and Harbor
Workers’ Compensation Act (“LHWCA”), 33 U.S.C. §901, et seq. CB&I and
ALMA intervened in this lawsuit (sometimes referred to as “Intervenors”) claiming
a right to reimbursement of all LHWCA benefits paid to and/or on behalf of Plaintiff,
together with all expenses, attorney’s fees, costs, and the present value of all future
benefits payable to Plaintiff, if any.
Plaintiff filed a motion for summary judgment, R. 130, contending that
pursuant to the written Master Service Agreement (“MSA”) dated March 22, 2013,
between Tetra and CB&I,1 both parties: (1) contractually agreed to defend and
indemnify the other from claims for injury brought by their respective employees;
(2) agreed to secure certain enumerated insurance coverages, including Longshore
and Harbor Workers’ Compensation coverage; and, (3) ensure that all insurance
certificates/policies contain a provision waiving any and all rights of
reimbursement/subrogation by the respective carriers against the other contracting
party, its agents, servants, invitees, employees or co-lessees, affiliated companies,
contractors, subcontractors and their insurers. R. 130-2.

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Effective February 10, 2014, the MSA was expressly amended “to be between Tetra, its subsidiaries and affiliates,
and CB&I or CB&I Offshore Services, Inc. and any and all references to Shaw or ‘Contractor’ shall here forward
mean CB&I or CB&I Offshore Services, Inc.” R. 130-3, Amendment No. 1 to MSA.

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Plaintiff argues in its motion that Intervenors have no right to reimbursement
of LHWCA benefits paid to and/or on behalf of Plaintiff, as a matter of law, because
there exist valid, enforceable defense and indemnity and waiver of subrogation
agreements in this matter. Plaintiff moves the Court to dismiss CB&I and ALMA’s
intervention at Intervenor’s cost.
Intervenors filed an opposition memorandum, R. 147, and cross motion for
summary judgment, R. 148, opposing Plaintiff’s motion. They argued that none of
the applicable contracts result in Intervenors’ waiver of their subrogation rights, and
their intervention should be maintained.
II. Law and Analysis
A. The Summary Judgment Standard
Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment
is appropriate when there is no genuine dispute as to any material fact, and the
moving party is entitled to judgment as a matter of law. A fact is material if proof of
its existence or nonexistence might affect the outcome of the lawsuit under the
applicable governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986); Sossamon v. Lone Star State of Tex., 560 F.3d 316, 326 (5th Cir. 2009). A
genuine issue of material fact exists if a reasonable jury could render a verdict for
the nonmoving party. Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008) (citing
Anderson, 477 U.S. at 252.
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The party seeking summary judgment has the initial responsibility of
informing the court of the basis for its motion and identifying those parts of the
record that demonstrate the absence of genuine issues of material fact. Washburn v.
Harvey, 504 F.3d 505, 508 (5th Cir. 2007) (citing Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986). If the moving party carries its initial burden, the burden shifts to
the nonmoving party to demonstrate the existence of a genuine issue of a material
fact. Washburn, 504 F.3d at 508. All facts and inferences are construed in the light
most favorable to the nonmoving party. Brumfield v. Hollins, 551 F.3d at 326 (citing
Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)).
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 pointing out that
there is insufficient proof concerning an essential element of the nonmoving party's
claim. Norwegian Bulk Transport A/S v. Internat'l Marine Terminals P'ship, 520
F.3d 409, 412 (5th Cir. 2008) (citing Celotex, 477 U.S. at 325. The motion should
be granted if the nonmoving party cannot produce evidence to support an essential
element of its claim. Condrey v. Suntrust Bank of Ga., 431 F.3d 191, 197 (5th Cir.
2005).
B. Whether CB&I and ALMA Waived Subrogation Against Plaintiff’s
Worker’s Compensation/LHWCA Recovery
Tetra and Shaw Global Offshore Services, Inc. (“Shaw”) entered into an MSA
dated March 22, 2013. R. 130-2, 148-3. The MSA was amended on February 10,
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2014 to replace Shaw with its successor, CB&I. R. 130-3, 148-4. The parties agree
that the MSA between Tetra and CB&I contains contractual defense and indemnity
obligations and requirements for insurance and waivers of subrogation. R. 130-2,
148-3. The MSA stated in pertinent part that Contractor (CB&I) shall obtain and
maintain during the term of the Agreement certain types of insurance, including
workers’ compensation and employers’ liability insurance with coverage for
statutory workmen’s compensation in compliance with the jurisdiction where the
work is performed and also for coverage under the Longshore and Harbor Workers’
Compensation Act (sometimes collectively referred to as “worker’s compensation”).
(R. 130-2, 148-3, p. 8, § 10.1). The MSA also stated:
All policies, except worker’s compensation policies hereinabove, shall,
but only to the extent of the indemnity and release obligations expressly
assumed by Contractor herein, name Company Group as an additional
insured, with such additional insured coverage including coverage for
the sole, joint or concurrent negligence of the additional insured, with
such insurance being primary to any insurance of Company Group that
may apply to any such occurrence accident of claim, and shall contain
full waivers of subrogation in favor of Company Group.
R. 130-2, 148-3, p. 9, §10.4.
Pursuant to the terms of the MSA, a Certificate of Membership No.
ALMA00644-04 was issued, effective from February 1, 2014 to February 1, 2015,
indicating that CB&I obtained worker’s compensation and LHWCA coverage
through ALMA. R. 148-6. Effective February 10, 2014, a General Change
Endorsement, #2014-001, was issued which amended the Certificate of
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Membership—changing the Member’s Name from Shaw to CB&I. R. 148-7, p. 1.
Also, a Waiver of Subrogation Endorsement issued by ALMA, effective 12:01 a.m.,
February 1, 2014, formed part of Certificate No. ALMA00644-04. R. 148-7, p. 2.
The Waiver of Subrogation Endorsement stated:
The Association waives its rights of subrogation against other
individuals, firms, organizations or corporations but only when
required by written contract and only to the extent required by that
contract. This waiver shall apply only in respect to the specific contract
existing between the Member and such other operations of such
individual, firm, organization or corporation in which the Member has
no contractual interest.
Id.
Also pursuant to the MSA, a Certificate of Liability Insurance
(“Certificate”) was issued identifying Tetra as the Certificate holder. R. 1304, 148-8, Certificate of Liability Insurance. The Certificate indicates the
effective date of the Insurance is February 1, 2014. The Certificate states, “If
subrogation is waived, subject to the terms and conditions of the policy,
certain policies may require an endorsement. A statement on this certificate
does not confer rights to the certificate holder in lieu of such endorsements.”
Page 2 of the Certificate of Insurance

lists “Workers Compensation/

Employer’s Liability” and “U.S. Longshore and Harbor Workers”: Blanket
Waiver of Subrogation.” Id.

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In his motion, Plaintiff contends that, pursuant to the March 22, 2013
MSA, both parties contractually agreed to secure insurance coverage,
including worker’s compensation coverage and ensure that all insurance
policies contain a waiver of all rights of reimbursement/subrogation. In
support of his position, Plaintiff cites the Certificate of Insurance providing
an endorsement to ALMA’s Policy for “a blanket waiver of subrogation.”
The Intervenors point to the specific language in section 10.4 of the
March 22, 2013 MSA which refers to CB&I’s coverage obligations of Tetra
as an additional insured, including waivers of subrogation. Intervenors argue
that the lead-in statement in section 10.4, “All policies, except workers
compensation policies,” negates the waiver of subrogation obligation as to
CB&I’s worker’s compensation insurance. They argue that the language of
the March 22, 2013 MSA controls despite the representations in the
Certificate of Insurance and the Waiver of Subrogation Endorsement effective
February 1, 2014.
Plaintiff alleges in his Complaint, and Intervenors do not dispute, that
Louisiana law applies in this case. R. 1, 106. Louisiana law generally upholds
waivers of subrogation and interprets them under the same rules applied to
other contracts. See, e.g., Fontenot v. Chevron U.S.A. Inc., 676 So.2d 557, 565
(La. 1996); Beslin v. Anadarko Petroleum Corp., 175 So. 3d 1134, 1136-40
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(La. 3d Cir. 2015). When the language of a contract is clear and unambiguous,
a reasonable interpretation consistent with the obvious meaning and intent of
the contract must be given. Beslin, 175 So. 3d at 1136.
Intervenors initially argue that section 10.4 of the MSA excludes the
worker’s compensation policy from the terms of that section, but then argue
that the terms of section 10.4 apply to the worker’s compensation policy. The
Court finds that the language in section 10.4 is neither clear nor unambiguous.
Intervenors interpret the language to mean that the term—“except worker’s
compensation”—completely excludes the worker’s compensation policy from
the terms of the section, including the provision requiring “full waivers of
subrogation.” The language of section 10.4, however, can also be interpreted
as applying only to CB&I’s indemnity and release obligations related to
naming Tetra as an additional insured, and not the waiver of subrogation
requirement as it relates to the worker’s compensation obligation. In addition,
the terms of the MSA were originally drafted on March 22, 2013 between
Tetra and Shaw, while the Certificate of Insurance and Blanket Waiver of
Subrogation Endorsement which specifically refers to CB&I’s obligation to
secure worker’s compensation liability, are dated February 1, 2014.
The Court finds a genuine issue of material fact exists as to whether or
not the MSA precluded the waiver of subrogation under the worker’s
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compensation policy such that Plaintiff and Intervenors are not entitled to
summary judgment on the issue of subrogation.
III. Conclusion
Accordingly,
IT IS ORDERED that the Motion For Summary Judgment filed by Plaintiff,
Wendell Simar, [Rec. Doc. 130] is DENIED.
IT IS FURTHER ORDERED that the Cross Motion For Summary
Judgment filed by Intervenors, Chicago Bridge and Iron Company and American
Longshore Mutual Association, Ltd., [Rec. Doc. 148] is DENIED.
THUS DONE AND SIGNED this 1st day in April, 2019.

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