Oceaneering International, Inc. v. Cross Logistics, Inc. et al
Filing
49
MEMORANDUM AND ORDER denying 33 MOTION for Summary Judgment. (Signed by Judge Ewing Werlein, Jr) Parties notified.(kcarr, )
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
OCEANEERING INTERNATIONAL, INC.,§
§
§
Plaintiff,
§
§
§
§
§
v.
CIVIL ACTION NO. H-11-3447
CROSS LOGISTICS, INC., NATIONAL
UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA, HOUSTON
F
2
CASUALTY COMPANY, NATIONAL
§
LIABILITY & FIRE INSURANCE
§
COMPANY, NORTHERN ASSURANCE
§
COMPANY, MARKEL INSURANCE
§
COMPANY, ZURICH AMERICAN
Ti
INSURANCE COMPANY, and
§
NAVIGATORS INSURANCE COMPANY.
§
§
§
Defendants.
MEMORANDUM AND ORDER
Pending is Cross Logistics, Inc.'s Motion for Summary Judgment
(Document No. 33) .
After
carefully considering the motion,
response, reply, sur-reply, and applicable law, the Court concludes
for the reasons that follow that the motion should be denied.
Oceaneering International, Inc. ("Oceaneering") seeks recovery
from Cross Logistics, Inc. ("Cross") of money it paid to replace a
subsea umbilical that allegedly was damaged by Cross's barge, the
CROSSMAR 14.'
Oceaneering had an Offshore Master Service Contract
(the "Main contract")' and a Purchase Order3 with Mariner Energy,
Document No. 1 (Orig. Cmplt . ) .
Document No. 34, ex. A.
Document No. 34, ex. B.
Inc.
("Mariner") to perform
work
for Mariner
in the Garden
Banks area, offshore L ~ u i s i a n a . ~
Oceaneering and Cross entered a
"Back to Back" Subcontract Agreement (the "Back-to-Back"),pursuant
to which Cross was to provide vessel, equipment, and personnel in
support of Oceaneeringts work for Mariner.
that work at the time of the incident.
determined
to
belong
to
Cross was performing
The umbilical was later
Enterprise
Field
Services
LLC
("Enterprise").' Enterprise replaced the umbilical, at a cost of
$4,679,639.88.6
reimbursement
of
Enterprise made
the
replacement
a
demand
cost;
upon
Mariner
Mariner
then
for
sought
indemnification from Oceaneering; Oceaneering sought indemnificaOceaneering, Mariner, and Enterprise entered
tion from C r ~ s s . ~
into an agreement wherein Oceaneering paid
the $4,679,639.88
demanded by Enterprise, and Mariner and Enterprise agreed to
release Oceaneering from any further obligation for the umbilical
and to assign to Oceaneering any rights that Mariner and Enterprise
had regarding the replacement of the umbilical.'
Oceaneering
brings this suit against Cross, alleging claims of negligence,
Document No. 34, ex. C at 49.
5
I . ex. G.
d,
I . ex. G.
d,
I . exs. D-G.
d,
'
Document No. 34, ex. H.
contractual indemnity, and breach of c ~ n t r a c t . ~Cross counterclaimed, alleging breach of contract for failure to indemnify.''
Cross moves for summary judgment on all of Oceaneering's claims.
Cross agrees that "[tlhe facts regarding whether and to what
extent Cross did, or even could have, damaged a working umbilical
(as opposed to catching an umbilical that already was severed and
damaged on January 9, 2009) are very much in dispute."ll
Cross
contends, however, that these fact issues are irrelevant because
the assignment of rights from Enterprise and Mariner to Oceaneering
was invalid under a line of Fifth Circuit cases applying the
proportionate liability rule established in McDermott, Inc. v.
AmClvde, 114 S. Ct. 1461 (1994). These cases hold that a settling
tortfeasor
cannot
recover
contribution
from
a
non-settling
tortfeasor, unless the settling tortfeasor pays more than he owes
to the injured party and obtains a full release for all parties for
the tortious act.
LLC
I
Combo Mar., Inc. v. U.S. United Bulk Terminal,
615 F.3d 599, 603 (5th Cir. 2010); Lexington Ins. Co. v.
S.H.R.M. Catering Servs., Inc., 567 F.3d 182, 186 (5th Cir. 2009);
Ondimar Trans~ortes
Maritimos v. Beatty St. props., Inc., 555 ~ . 3 d
184, 187 (5th Cir. 2009).
-
Document No. 1.
Document No. 22.
Document No. 33 at 2.
3
Cross has not shown as a matter of law that Oceaneering, the
settling party, was in fact a tortfeasor, especially given the
absence
of
any
evidence
showing
involvement in the accident.
that
Oceaneering
had
any
Oceaneering' s summary judgment
evidence is that it was contractually bound by the Purchase Order
from Mariner to indemnify Mariner for property damage "arising out
of acts or omissions to act" of its contractors without limitation
on whether the acts or omissions were tortious.
Cross cites no
case law applying McDermott and its progeny to a situation in which
its contractual
a party--not shown to be a co-tortfeasor--satisfies
obligation to pay for damages and seeks recovery from the alleged
tortfeasor based on subrogation and/or assignment; and cites no
authority for the proposition that the assignment of a property
damage tort--outside of "the context of McDermott's proportionate
fault network," Ondimar, 555 F.3d at 188--is invalid.
at
187
(I
't
See
id.,
is unnecessary for us to determine whether the
assignment of property damage tort claims are generally prohibited,
although our research suggests that most state courts which have
considered the question permit such assignments." ) (citing cases) .
Accordingly,
Cross's
motion
is
denied
as
to
Oceaneering' s
negligence claim.
Cross also moves for summary judgment that Oceaneering is not
entitled to indemnification from Cross for claims made by third
parties, in this instance, Mariner.
"When interpreting maritime
contracts, federal admiralty law rather than state law applies."
Int'l Marine, L.L.C. v. Delta Towinq, L.L.C., 704 F.3d 350, 354
(5th Cir. 2013) (citation omitted).
"A maritime contract con-
taining an indemnity agreement should be read as a whole and its
words given their plain meaning unless the provision is ambiguous."
Breaux v. Halliburton Enerqv Servs., 562 F.3d 358, 364 (5th Cir.
2009) (quotation marks and ellipses omitted).
See also Chembulk
Tradinq LLC v. Chemex Ltd., 393 F.3d 550, 555 (5th Cir. 2004) ("A
basic principle of contract interpretation in admiralty law is to
interpret, to the extent possible, all the terms in a contract
without
rendering any
of
them meaningless
or
superfluous.")
(citations omitted) .
The Back-to-Back mutually confers upon Oceaneering and Cross
all of the corresponding rights, obligations, and liabilities t.hat
Mariner and Oceaneeering have with respect to each other in the
Main Contract.
Cross and Oceaneering agree that the Back-to-Back
incorporates both the Main Contract and the Purchase Order between
Oceaneering and Mariner.''
Cross contends, however, that paragraph
three of the Back-to-Back limits Cross's contractual indemnity
obligations to only the reciprocal indemnification obligations
described therein, while Oceaneering contends that paragraph two
l2 Document No. 22 at 4 (Cross Counterclaim) ("By its terms,
the Back to Back Agreement incorporates the Main Contract and the
Purchase Order. " ) (emphasis added); Document No. 37 at 3 ; Document
No. 34 at 21.
obligates Cross to indemnify Oceaneering in the same way that
Oceaneering is obligated to indemnify Mariner under the Purchase
Order.
The Back-to-Back states that:
1.
Owner [Cross] will act as a subcontractor to
Charterer [Oceaneering] in accordance with the
relevant terms and conditions of the Main Contract
(as contained within Appendix A hereto) on a "back
to back" principle.
2.
"Back to Back" shall mean that the Charterer and
Owner shall have the same rights, obligations,
liabilities and limitations with respect to each
other
as
Company
[Mariner] and
Contractor
[Oceaneering] have to each other under the Main
Contract, including any amendments thereto, applied
Mutatis Mutandis with the substitutions of
" Company,
"
"Owner"
for
"Charterer"
for
'Contractor. "
3.
FOR THE AVOIDANCE OF DOUBT, CHARTERER SHALL EXTEND
TO OWNER THE BENEFITS OF INDEMNITIES AND HOLD
HARMLESS PROVIDED BY COMPANY UNDER THE MAIN
CONTRACT AND EACH PARTY HERETO SHALL INDEMNIFY AND
HOLD THE OTHER HARMLESS (TO INCLUDE PARENT OF OR
SUBSIDIARY COMPANIES, SUBCONTRACTORS OF ANY TIER
AND THEIR RESPECTIVE EMPLOYEES AND FROM AND AGAINST
LIABILITY FOR INJURY TO, OR DEATH OF THEIR
PERSPECTIVE [sic] PERSONNEL AND FOR LOSS OF, OR
DAMAGE TO THEIR RESPECTIVE PROPERTY TO INCLUDE ALL
CLAIMS, DEMANDS, PROCEEDINGS AND CAUSES OF ACTION
RELATING THERETO, ARISING OUT OF, OR IN CONSEQUENCE
OF, THE PERFORMANCE OF THE WORK REGARDLESS OF
WHETHER CAUSED OR CONTRIBUTED TO IN WHOLE OR IN
PART, BY THE SOLE OR CONCURRENT NEGLIGENCE, STRICT
LIABILITY OR FAULT OF EITHER PARTY.'^
Cross contends that paragraph three would be rendered meaningless
if the Back-to-Back were interpreted to obligate Cross to indemnify
Oceaneering for a situation not included in the language of
l3
Document No. 34, ex. C. (emphasis in original) .
6
paragraph three. However, paragraph three, which begins with "for
the avoidance of doubt," may well be construed not as limiting
liability but as clarifying language only with respect to the
reciprocal indemnity obligations, which clarification may have been
considered
necessary
given
that
the
reciprocal
indemnity
obligations subjects each party to possible liability for the other
party' s negligent acts.
See Corbitt v. Diamond M. Drillins Co. ,
654 F.2d 329, 333 (1981) ( " [I] is widely held that a contract of
t
indemnity will not afford protection to an indemnitee against the
consequences of his own negligent act unless the contract clearly
expresses such an obligation in unequivocal terms."). Accordingly,
Cross has not shown itself entitled to summary judgment on the
contractual indemnity claim.
Further,
genuine
issues
of
material
fact
remain
on
Oceaneeringls breach of contract claim, which precludes summary
judgment from Cross on that claim.
For the foregoing reasons, it is
ORDERED that Cross Logistics, Inc . ' s Motion
for Summary
Judgment (Document No. 33) is DENIED.
The Clerk will enter this Order, providing a correct copy to
all parties of record.
SIGNED at Houston, Texas, on this
day of June, 2013.
UNIT~TATES
DISTRICT
f m ~ ~
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