Oceaneering International, Inc. v. Cross Logistics, Inc. et al
Filing
79
FINDINGS OF FACT AND CONCLUSIONS OF LAW. It is ORDERED that Plaintiff Oceaneering International, Inc. shall have and recover from Defendant Cross Logistics, Inc. the total sum of TWO MILLION THREE HUNDRED THIRTY-THREE THOUSANDTHIRTY-SEVEN and 73/100 DOLLARS ($2,333,037.73). A separate Final Judgment will be entered.(Signed by Judge Ewing Werlein, Jr) Parties notified.(gkelner, 4)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
OCEANEERING INTERNATIONAL, INC.,§
§
Plaintiff,
§
§
v.
§
§
CROSS LOGISTICS, INC.,
§
§
Defendant.
§
CIVIL ACTION NO. H-11-3447
FINDINGS OF FACT AND CONCLUSIONS OF LAW
TABLE OF CONTENTS
Title
Page
Findings of Fact
. . . . . . . . . . . . . . . . . . . .
Enterprise’s Subsea Umbilical 10923
1
. . . . . . . .
1
Mariner’s Project at the Garden Banks 72 Platform. .
3
Commencement of the Work . . . . . . . . . . . . . .
6
The Events of January 9, 2009
. . . . . . . . . . .
7
How and Where the 10923 Umbilical Was Fouled . . . .
12
Cross’s Negligence . . . . . . . . . . . . . . . . .
15
Enterprise’s Response to its Maritime Tort Loss
. .
21
Enterprise’s Recoverable Damages for its Maritime
Tort Loss Caused by Cross . . . . . . . . . . . . .
24
Oceaneering’s Negligence Claim (Second Cause
of Action) . . . . . . . . . . . . . . . . . . . . .
26
Oceaneering’s Contractual Claim for Defense and
Indemnity (First Cause of Action) . . . . . . . . .
28
The Platform Processing Agreement
. . . . . . . . .
28
The Main Contract, the Back to Back Contract,
and Purchase Order on This Job . . . . . . . . . . .
33
(1)
The Main Contract
. . . . . . . . . . . .
(2)
The Back to Back Contract
. . . . . . . .
36
(3)
The Purchase Order . . . . . . . . . . . .
38
Enterprise Asserts a Claim Against Mariner
Instead of Cross . . . . . . . . . . . . . . . . . .
39
Reasons Oceaneering Paid the $4,679,639.88
Demanded by Enterprise . . . . . . . . . . . . . . .
46
i
33
Oceaneering’s Breach of Contract Claim (Third
Cause of Action) . . . . . . . . . . . . . . . . . .
49
Cross’s Counterclaims
. . . . . . . . . . . . . . .
50
. . . . . . . . . . . . . . . . . . .
51
Negligence (Oceaneering’s Second Cause of Action). .
52
Oceaneering and Mariner Have No Vicarious
Liability . . . . . . . . . . . . . . . . . . . . .
53
Damages for Negligence . . . . . . . . . . . . . . .
55
The Validity of Enterprise’s Assignment of its
Negligence Claim to Oceaneering . . . . . . . . . .
59
Contractual Indemnity (Oceaneering’s First Cause of
Action) . . . . . . . . . . . . . . . . . . . . . .
62
Breach of Contract (Oceaneering’s Third Cause of
Action) . . . . . . . . . . . . . . . . . . . . . .
66
Prejudgment Interest . . . . . . . . . . . . . . . .
69
Conclusions of Law
Conclusion and Order
. . . . . . . . . . . . . . . . . .
ii
72
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
OCEANEERING INTERNATIONAL, INC.,§
§
Plaintiff,
§
§
v.
§
§
CROSS LOGISTICS, INC.,
§
§
Defendant.
§
CIVIL ACTION NO. H-11-3447
FINDINGS OF FACT AND CONCLUSIONS OF LAW
After approximately five days of trial, all parties rested and
closed the evidence, and the Court having considered the evidence,
the trial briefs, and the oral arguments and authorities of
counsel, now makes the following Findings of Fact and Conclusions
of Law pursuant to FED. R. CIV. P. 52.
Findings of Fact
The Findings of Fact are made from a preponderance of the
evidence,
both
direct
evidence
and
a
significant
amount
of
circumstantial evidence, after having heard and considered all
witnesses and judged their credibility, plus the testimony of
additional witnesses received in evidence by depositions, together
with numerous exhibits received at trial.
Enterprise’s Subsea Umbilical 10923
1.
Plaintiff Oceaneering International, Inc. (“Oceaneering”)
seeks to recover from Defendant Cross Logistics, Inc. (“Cross”)
damages for the severance of a subsea umbilical 10923 on January 9,
2009, during Defendant Cross’s offshore retrieval of its barge’s
port
stern
No.
4
anchor.
The
subsea
umbilical
belonged
to
Enterprise Products Partners, L.P., Enterprise Field Services
L.L.C. (“Enterprise Field Services”), and Flextrend Development
Company L.L.C. (collectively, “Enterprise”).
Enterprise subse-
quently sold and transferred to Oceaneering all rights of action,
“whether in tort, contract or otherwise,” that Enterprise had
against Defendant Cross arising out of the “damage and cost of
replacement” of the umbilical.
2.
Enterprise is the leaseholder and/or operator of Outer
Continental Shelf (“OCS”) Lease No. 12631, and the owner and/or
operator of wells and facilities in the Garden Banks 72 area in the
Gulf of Mexico.
Enterprise Field Services was in the owner group
that owned the Garden Banks 72 platform with its processing
facilities and, as well, was the operator of the platform itself.
3.
The Garden Banks 72 platform was affixed to the sea floor
in approximately 514 feet of water.
Garden Banks 117 wells Nos. 1
and 2, of which Enterprise was owner and/or operator, were located
approximately 3.96 miles to the southeast of the Garden Banks 72
platform, in 915 feet of water.
2
4.
Those two wells were serviced by control umbilicals laid
on the sea floor for that distance of about 3.96 miles from the
Garden Banks 72 platform to subsea umbilical termination assemblies
(“SUTAs”) at the respective well sites.
5.
The
foregoing
two
umbilicals
were
identified
umbilicals 10923 (to Well No. 2) and 10929 (to Well No. 1).
as
They
were laid within a 200-feet wide right-of-way on either side of an
18" flow pipeline, and their as-laid positions were plotted and on
file with the Bureau of Ocean Energy Management Regulation and
Enforcement.
6.
Umbilical 10923 was laid new in or about 1993 and had a
design life of approximately eight years.
It was composed of
various materials including numbers of steel tubes that fulfilled
various functions such as communications, chemical injection, and
the like.
7.
At least one of the tubes used for paraffin in the 10923
had failed by 2008 and could not be used, and new umbilicals had
since been manufactured that were twice as strong and far more
corrosion-resistant but, even after approximately 15 years of use,
Enterprise still had its 10923 umbilical in service as of late
August or early September, 2008, when it closed down operations in
advance of Hurricanes Gustav and Ike.
Mariner’s Project at the Garden Banks 72 Platform
3
8.
Apache Deepwater L.L.C. (successor by merger to Mariner
Energy, Inc.) (“Mariner”), a company separate from Enterprise, also
had operations on the Garden Banks 72 platform in connection with
is own offshore facilities producing in a separate OCS lease of
which Mariner was the leaseholder and/or operator.
9.
Mariner was not in the Garden Banks 72 platform owner
group, but was a producer that contracted to use the owner group’s
processing facilities on the platform.
10.
Mariner planned to install an 8" oil riser and 12" pull
tube at the Garden Banks 72 platform for use in connection with
production from its own wells.
Mariner had in force and effect an
offshore master service contract (“Main Contract”) with Plaintiff
Oceaneering dated July 31, 1998.
In March, 2008, Oceaneering
delivered to Mariner a day rate proposal for diving services to
perform the installation work pursuant to the Main Contract.
11.
After receiving from Mariner a purchase order for the
work, Oceaneering entered into a back-to-back subcontract agreement
(“Back to Back”) with Defendant Cross Logistics, Inc. (“Cross”)
dated July 31, 2008, to procure from Cross the utilization of one
of its barges to support Oceaneering’s work for Mariner at the
platform. The Back to Back mutually conferred upon Oceaneering and
Cross all of the corresponding rights, obligations, and liabilities
that Mariner and Oceaneering had with respect to each other in the
Main Contract.
4
12.
To perform its work as Oceaneering’s subcontractor, Cross
utilized its barge, the Crossmar 14, with a 4-point anchoring
system for mooring offshore alongside the Garden Banks 72 platform.
It is from the Crossmar 14 that Oceaneering’s divers would conduct
their subsea installation work for Mariner.
13.
Cross hired Fugro Chance, Inc. (“Fugro”) to perform,
among other services, specialized offshore survey services to
identify various subsea assemblies, structures, and equipment,
including pipelines, flowlines, umbilicals, and others, to provide
data to Cross to facilitate the designation of anchor drop zones
for the Crossmar 14 anchors, and to generate real time GPS data in
support of Crossmar 14’s deployment and recovery of her anchors.
14.
Fugro provided maps showing the charted subsea assets in
the vicinity of Garden Banks 72, including the right-of-way where
Enterprises’s 10923 umbilical, 10929 umbilical, and the 18" flow
line were all charted as having been laid.
15.
Cross chartered an anchor handling tug, Miss Jessica, to
tow the Crossmar 14 to and from the work site at the platform and
to assist Crossmar 14 with anchor handling operations.
The
Crossmar 14 was not a self-propelled vessel and therefore was
dependent on the Miss Jessica for its navigation.
16.
Cross
had
anchoring
handling
procedures
for
the
Crossmar 14, which provided for an anchor exclusion zone with
respect to subsea pipelines.
The policy provided for an exclusion
5
zone of 500 feet if the vessel and its anchor were on the same side
of the pipeline.
If the anchor was dropped on the other side of
the pipeline from the location of the vessel, however, then the
exclusion zone between the anchor and the right-of-way was to be
1,000 feet.
17.
Cross’s policy provided that an anchor should not be
permitted to enter the anchor exclusion zone after the anchor has
been deployed.
Commencement of the Work
18.
Cross mobilized the Crossmar 14 to the designated work
site at Garden Banks 72 platform on August 19, 2008.
About ten
days later operations were closed down as Hurricane Gustav, the
second most destructive Atlantic hurricane of 2008, entered the
Gulf of Mexico, and the Crossmar 14 recovered her anchors and was
towed back to shore.
19.
Up until the end of August and early September, when
operations were closed down, there is no evidence that Enterprise’s
10923 umbilical was not still functioning.
20.
Hurricane Gustav made landfall near Cocodrie, Louisiana,
on September 1, and already Hurricane Ike was moving across the
Atlantic Ocean.
A massive storm with a huge wind field, Hurricane
Ike entered the Gulf of Mexico on September 9, finally making
landfall near Galveston, Texas on September 13.
6
21.
Dozens
of
offshore
platforms
suffered
damages
from Hurricane Ike, including the Garden Banks 72 platform.
On
September 17, the Crossmar 14 was returned to the Garden Banks 72
platform, but by September 23 Oceaneering concluded that the
topside damages to the platform were so severe that its diving services could not be resumed.
The Crossmar 14 was towed back to
shore, and operations did not resume until on or about December 6.
22.
Crossmar 14 was again mobilized to the Garden Banks 72
platform on December 6-7, December 16-20, December 29-January 3,
2009, and January 8-9, and thereafter as Oceaneering continued its
work for Mariner.
23.
On or about March 23, 2009, when Enterprise attempted to
operate its 10923 umbilical, it found that it was inoperative.
24.
The parties subsequently determined that Enterprise’s
10923 umbilical had been severed and was, in fact, the umbilical
that had been raised to the surface on the Crossmar 14 port stern
anchor No. 4 on January 9, 2009, and which, at the time, all
parties thought was simply trash from off the sea floor.
The Events of January 9, 2009
25.
When
on
location
at
Garden
Banks
72
platform
on
January 9, 2009, the Crossmar 14 was starboard to the south face of
the platform; her bow to the west; her starboard stern No. 3 anchor
was set to the northeast; her starboard bow No. 2 anchor was set to
7
the northwest; her port bow No. 1 anchor was set to the southwest;
and her port stern No. 4 anchor was set to the southeast, and on
the east side of the designated 200 feet right-of-way.
26.
weather
The weather forecast for January 9 called for heavy
from
the
south-southeast,
which
meant
that
diving
operations would need to be suspended and the Crossmar 14 moved to
shore.
27.
The Crossmar 14 logs show at 0900 hours winds were out of
the southeast at 15-20 knots, seas were 2-4 feet; at 1500 hours
winds were out of the southeast at 15-20 knots, seas were 3-4 feet;
by 1800 hours winds were out of the southeast at 20-25 knots, seas
were 4-6 feet; and by 2100 hours winds were out of the southeast at
25-30 knots, seas were 5-7 feet, with occasional 9 feet.
28.
Oceaneering ended its diving operations in mid-afternoon
on January 9 and its diving bell was secured on the Crossmar 14 by
1746 hours. The Crossmar 14 instructed the Miss Jessica to recover
in sequence the starboard stern No. 3 anchor, the starboard bow No.
2 anchor, and the port bow No. 1 anchor.
29.
The Crossmar 14 at all times planned to recover the port
stern No. 4 anchor by winching to the anchor on the seabed and not
to use the Miss Jessica to recover the anchor.
30.
The Miss Jessica recovered the starboard stern No. 3
anchor and returned it to the Crossmar 14, and then did the same
with the starboard bow No. 2 anchor.
8
31.
Close to the time that the Miss Jessica picked up the
port bow No. 1 anchor, the Crossmar 14 began winching the barge in
a south-southeasterly direction toward the port stern No. 4 anchor
and into the prevailing seas and wind.
32.
The anchor recovery plan required the Crossmar 14 to
continue on that course--to back down over the port stern No. 4
anchor--and then lift the anchor from the seabed vertically,
recovering the port stern anchor to the barge.
33.
At approximately 2020 hours, the No. 4 anchor began to
slip on the sea floor, causing the Crossmar 14, which was at that
time well east of the right-of-way, to begin drifting in a northnorthwesterly direction under the influence of the prevailing winds
and sea.
34.
drifted
The Crossmar 14 over the next 15 minutes, more or less,
some
1,800
feet
generally
in
a
north-northwesterly
direction and back across the right-of-way to its westerly side.
35.
At approximately 2035 hours, and due to unknown forces
which the parties variously argue was either the No. 4 anchor
snagging the 10923 umbilical laying outside of its right-of-way, or
the 10923 umbilical already snagged by the No. 4 anchor from within
the right-of-way and now recoiling from the stresses imposed on it
after it was fouled, or a sudden calming or reversal of winds and
seas, or a combination of some such factors, the Crossmar 14's
direction of drift changed and it began moving in an easterly
9
direction for a distance of about 550 feet, crossing the right-ofway again over to its easterly side.
36.
Throughout the time that the Crossmar 14 drifted to the
north-northwest, and then to the east, the Crossmar 14 continued to
winch in her No. 4 anchor.
During this time the Crossmar 14 still
was not under the effective control of the Miss Jessica.
37.
At 2040 hours, the Crossmar 14 was approximately 200 feet
to the east of the right-of-way when the No. 4 anchor neared the
surface, enabling Cross’s crew to observe that the anchor had
ensnared something, and later--with the aid of a small remotely
operated vehicle (ROV)--to see a “bird’s nest” of cables and
material tangled in the flukes and shank of the anchor.
38.
Cross’s personnel, as well as Oceaneering’s personnel
onboard the Crossmar 14, believed at the time that the “bird’s
nest” was trash from off the ocean floor.
39.
The
event
was
reported,
and
Mariner
commissioned
Oceaneering to survey the area and search for damage.
Three days
after the accident, Oceaneering set out with a new vessel, the
Ocean Intervention II, and on January 13 and 14, Oceaneering made
a
subsea
umbilical
survey
along
the
eastern
side
of
the
right-of-way--the side closest to where the No. 4 anchor had been
dropped--to determine if the umbilical on the eastern side of the
18" pipeline had been disturbed or snagged by the anchor.
This
survey tract was about one mile along in the exact vicinity where
10
the Crossmar 14 snagged the “bird’s nest,” and examined the 3"
umbilical 10929, which was charted to lay on the eastern side
of the 18" pipeline.
The 10929 was found to be in place and
undisturbed.
40.
The
surveyors
did
discover
at
about
600-700
feet
southeast of the platform an unidentified umbilical crossing the
10929, which Oceaneering followed to the east until they reached
its tattered end. Oceaneering then retraced this umbilical remnant
back toward the platform until it disappeared under a new pipeline
that had been laid by Mariner.
The surveyor did not suspect at the
time that this was the 10923 umbilical, which some months later was
determined to be the fact.
41.
Assuming at the time that the only umbilical that could
have been fouled was Enterprise’s 10929 laid to the east of the
pipeline, Oceaneering did not survey the west side of the pipeline,
where the 10923 was charted.
42.
The same subsea survey showed some sea floor disturbance
about 1,700 feet to the northwest of where the No. 4 anchor had
been dropped and about 350 feet to the west-northwest of where the
Crossmar 14 was located at 2020 hours when it began drifting to the
north-northwest.
43.
umbilical
Months later, after Enterprise discovered the 10923
was
not
operative,
it
11
was
determined
that
it
was
Enterprise’s 10923 that was snagged and brought to the surface on
the Crossmar 14's No. 4 anchor on the night of January 9.
12
How and Where the 10923 Umbilical Was Fouled
44.
The subsea survey made on January 14 established that the
10929 umbilical was within the right-of-way and to the east of the
18" pipeline as it had been charted, and that it was not damaged by
the events of January 9.
45.
There is no direct evidence that prior to the incident on
January 9 the 10923 umbilical was not located where it had been
laid and charted within the right-of-way.
46.
When the No. 4 anchor began slipping along the ocean
floor, causing the Crossmar 14 to begin an involuntary reversal of
course and drift to the north-northwest under the influence of the
winds and seas from the southeast, the Crossmar 14 continued to
reel in the anchor.
47.
The Crossmar 14 drifted under the influence of the sea
and winds across and to the west of the right-of-way.
At the
approximate time when the anchor was about to be raised off of the
ocean floor, the confluence of surface and subsea forces, including
the heaves and pitch experienced by the barge while reeling in the
anchor in seas with swells of up to eight feet, enabled the anchor
fortuitously to pass over the 10929 umbilical and 18" pipeline but
then, unfortunately, to foul the 10923 umbilical before being
winched in sufficiently to remove the anchor from the sea floor.
48.
As the Crossmar 14 continued to winch in the No. 4
anchor, the stresses upon the 10923 umbilical became severe.
13
The
stress and friction caused the umbilical to begin to fray and
caused various cables within the umbilical to become entangled
further in and between the flukes and shaft of the anchor, forming
a tangled “bird’s nest” out of the umbilical, but not severing the
umbilical in two.
49.
At 2035 hours, whether from an unexpected change in the
seas and wind or from a recoil of the now severely stressed 10923
umbilical, or some combination thereof, the barge moved in an
easterly direction for a distance of approximately 550 feet where,
at 2040 hours, the barge winched the No. 4 anchor almost to the
surface. Cross’s personnel onboard the Crossmar 14 then barely saw
the shank of the anchor with its ensnared “bird’s nest,” which was
the 10923 umbilical.
50.
crew
After the Miss Jessica took control of the barge, the
inspected
the
umbilical
with
an
ROV,
and
attempted
unsuccessfully to raise the ensnared anchor with the barge’s crane.
Finally, at about 2206 hours, the Miss Jessica began to tow the
barge toward port in a north-northeasterly direction, which caused
the 10923 umbilical to sever completely.
The “bird’s nest” fell
from the anchor, and the Crossmar 14 was able to recover its No. 4
anchor.
51.
The Miss Jessica then returned the Crossmar 14 to harbor.
Subsequent surveys of the sea floor in early June located
both of the two severed ends of the 10923 umbilical on the sea
floor, both positioned consistent with the umbilical having been
14
completely severed far to the east of the right-of-way and in an
area consistent with where the Miss Jessica assumed control over
the Crossmar 14 and began towing it in a north-northeasterly
direction.
52.
The subsea surveys showed that more than one mile of
severed umbilical had been pulled out from the right-of-way in the
direction of where the Crossmar 14 raised the 10923 umbilical to
the surface.
The tension on the southern portion of the 10923
umbilical was sufficient to pull the umbilical taut over its entire
length, dragging and burying the SUTA, which was more than three
miles away, and suspending the umbilical above a dip in the ocean
floor for a span of more than 270 feet at its southern end.
53.
The improbability of the anchor while being winched-in
not to have snagged the 10929 umbilical and the pipeline before
fouling the 10923 umbilical on the west side of the pipeline is not
so great as the improbability of the 10923 umbilical somehow having
been previously moved by unknown forces from out of the charted
right-of-way and over to the east of both the 18" pipeline and the
10929 umbilical, especially given the absence of any reported
allisions
Enterprise
or
fouling
had
last
events
used
during
the
10923
the
several
umbilical
months
in
since
production
operations at the end of August or early September, 2008.
54.
Hurricane Ike, as vast as that storm was and as close as
the eye came to Garden Banks 72 platform (30-50 miles), did not
15
cause the umbilical 10923 to be moved to the other side of both the
18" pipeline and the sister umbilical 10929 at a depth of more than
500 feet of water, while at the same time leaving umbilical 10929
undisturbed in the right-of-way.
55.
On January 8, when the Crossmar 14 dropped its anchors to
set up at the Garden Banks 72 platform, and the next day on January
9, when it began to retrieve those anchors in the late afternoon,
the 10923 umbilical was within the charted right-of-way and lay on
the west side of the 18" pipeline.
56.
The 10923 umbilical was in its charted position when it
was fouled by the No. 4 anchor of the Crossmar 14.
57.
Cross
had
knowledge
of
the
location
of
the
10923
umbilical and has not rebutted the presumption of negligence that
arose when Cross’s drifting vessel allided with the stationary
umbilical.
Cross’s Negligence
58.
At the time of the accident, Mike Sampey, Jr. was Cross’s
barge superintendent on duty aboard the Crossmar 14, and he was
responsible for ensuring the safety of the operations and of all
persons onboard.
Thus, as superintendent, Sampey owed a duty of
care to the crew and passengers of the Crossmar 14, including the
Oceaneering divers and other workers. Sampey was also responsible,
in behalf of Cross, to ensure that the Crossmar 14 did not damage
16
nearby surface or subsea assets, including the fixed platform and
the related umbilicals and pipelines in the Garden Banks 72 area.
59.
Robert Aucoin was Cross’s deck foreman on duty aboard the
Crossmar 14, but on the evening of January 9 he was in the tower,
as tower operator--operating the anchor winch.
60.
Alan Charlson was Oceaneering’s superintendent onboard,
in charge of Oceaneering’s diving operations and work for Mariner
on installing the 8" oil riser and 12" pull tube.
Charlson was
aware of 15 pipelines and seven umbilicals that came into this
site at the Garden Banks 72 platform.
Charlson also knew that
Oceaneering’s work needed to be performed from the south side of
the platform, which is why the Crossmar 14 when on location was
always anchored to the south face of the platform.
61.
On the morning of January 9, with a forecast of heavy
weather approaching, Sampey desired to retrieve anchors and return
to shore, but Oceaneering’s Charlson wanted to complete a dive,
which is not unusual given the date rate of $70,000 per day that
Oceaneering paid to Cross for use of the barge, whether it was
onsite at the platform or not.
62.
Sampey was in command of the vessel and the final
decision-maker on when to retrieve anchors and return to shore, but
desiring to accommodate Cross’s customer Oceaneering, he acquiesced
to Charlson’s preference and Oceaneering’s dive continued until
about 1500 hours, when Charlson decided to cease diving operations.
17
The “bell,” which is the pressurized capsule in which the divers
are lowered to the required depths, was secured back on the
Crossmar 14 at about 1746 hours.
63.
Mark Dean, Fugro’s survey party chief who was onboard the
Crossmar 14 on January 9, monitored and operated Fugro’s survey
equipment and received the real time GPS monitoring on the location
and movement of the Crossmar 14 and the Miss Jessica.
Dean was in
the
the
tower
discharging
that
responsibility
during
anchor
retrieval process on January 9.
64.
Cross’s Aucoin was also in the tower to operate the
anchor winches.
65.
During anchor retrieval operations, Superintendent Sampey
customarily was in the control tower to give oversight and to
command retrieval operations.
The Crossmar 14 was shorthanded on
the evening of January 9, however, which required the deck foreman
Aucoin--instead
of
acting
as
foreman
the tower to operate the anchor winch.
on
the
deck--to
be
in
Superintendent Sampey,
therefore, instead of providing command from the tower, was down on
the deck substituting for Aucoin as deck foreman to monitor
visually the anchor retrievals.
66.
Sampey had been employed by Cross for about four years.
He worked as a welder for Cross and then became a deck foreman on
the Crossmar 14. After two years as a deck foreman, Cross promoted
Sampey to superintendent in command of the vessel.
18
He received
anchoring training by watching others, and had had experience with
numerous successful anchor drops and retrievals during the time of
his employment.
67.
Sampey, however, had no prior experience with an anchor
slipping on the Crossmar 14, and Cross had not specifically trained
him on what to do in the event that an anchor began slipping while
backing down on it across valuable, charted subsea assets, as
happened in this case.
68.
The appropriate response--to avoid fouling subsea assets
by dragging an anchor across the seabed and into subsea assets--is
to “come out from under the wire,” that is, to let out the anchor
wire and thereby leave the anchor where it is on the seabed, rather
than to imperil the subsea assets.
69.
Had Superintendent Sampey known that the anchor was
slipping, he testified that he would have called an all-stop and
started to let out the anchor wire as just described to safeguard
the subsea assets.
70.
Superintendent Sampey, however, was not in the control
tower to monitor the real time GPS screen displaying the Crossmar
14's location and movement, and he was therefore unaware that the
anchor was slipping.
71.
Robert Aucoin, Cross’s winch operator in the tower, saw
on the screen the GPS data showing that the barge was drifting away
from the anchor drop location, which meant the anchor had slipped,
19
but there is no evidence that Aucoin called Sampey to report that
fact, and Sampey does not recall having received any such call from
Aucoin.
72.
When the anchor began slipping on the seabed about 2020
hours, the Miss Jessica was about a half mile distant from the
Crossmar 14 and, while the Miss Jessica had lifted the port bow
No. 1 anchor to the tug and secured it, the approximately half mile
of No. 1 anchor wire extending from the tug to the barge gave the
Miss Jessica virtually no effective control over the Crossmar 14,
which was then in an anchorless drift.
73.
Had Superintendent Sampey ordered Aucoin not to begin
winching in the No. 4 anchor until the port bow No. 1 anchor wire
was reeled in to or near the barge, the Miss Jessica then would
have been in proximity to the Crossmar 14 so that if the No. 4
anchor began to slip, the Miss Jessica could control the Crossmar
14 to prevent it from drifting into and across the right-of-way
while dragging the No. 4 anchor and risking an allision with the
subsea assets.
74.
Instead of waiting for the Miss Jessica to approach the
Crossmar 14 while reeling in the anchor wire on the No. 1 anchor,
however, Sampey began the process of backing down on the No. 4
anchor while the Miss Jessica was still well more than a half mile
away.
20
75.
Had Superintendent Sampey maintained his command position
in the tower, he would have seen the real time GPS data showing the
No. 4 anchor was slipping and, in the exercise of ordinary care,
would have called an all-stop, and ordered the anchor wire let out
to avoid the fouling of Enterprise’s subsea assets.
76.
The
Crossmar
14
and
its
Superintendent
Sampey
were
negligent in executing the anchoring retrievals on January 9, 2009,
and Defendant’s negligence was the proximate cause of the Crossmar
14's
No.
4
anchor
fouling
the
subsea
umbilical
10923,
and
Enterprise’s resulting property damages.
77.
Mariner had a company man onboard, Kip Harzman, to give
oversight to Oceaneering’s diving work when the Crossmar 14 was
anchored at the platform and installation work was in progress.
78.
There is no evidence that Harzman was on deck or involved
in any manner with Cross’s attempted anchor retrieval of the port
stern No. 4 anchor.
79.
Oceaneering’s superintendent onboard, Alan Charlson, was
in charge of its diving operations and all installation work when
the Crossmar 14 was anchored at the platform.
80.
Charlson was inside his room on the Crossmar 14 and not
involved in any manner with Cross’s attempted anchor retrieval of
the No. 4 anchor.
Charlson knew of no problem until Sampey came to
Charlson’s room, told him that the anchor---then just below the
water’s surface--had fouled something, and asked if an Oceaneering
21
diver could go in to see what had been snagged.
Charlson said the
sea was too rough to send his diver into the water, and suggested
that Sampey use an ROV to inspect, which was done.
81.
At
no
time
did
Harzman
or
Charlson,
or
any
other
personnel of Mariner or Oceaneering, either have or assert any
control over Cross’s efforts to retrieve the Crossmar 14's anchors
on January 9, 2009.
82.
Oceaneering, which neither had nor asserted any control
over Cross’s anchoring retrieval practices employed by the Crossmar
14,
was
not
negligent
with
respect
thereto
and
was
not
a
contributing cause of the fouling of the 10923 umbilical.
83.
Mariner, which neither had nor asserted any control over
Cross’s anchoring retrieval practices employed by the Crossmar 14,
was not negligent with respect thereto and was not a contributing
cause of the fouling of the 10923 umbilical.
Enterprise’s Response to its Maritime Tort Loss
84.
Upon receiving the results of the subsea surveys of the
severed 10923 umbilical, which included photographs and descriptive
reports of the extreme stresses that had been inflicted upon the
umbilical before it was finally severed, Enterprise soon determined
not to attempt a repair of the severed umbilical but rather to
replace it with a new umbilical, fabricated with better materials
and much stronger, and with a much longer design life of 20 years.
22
85.
a
new
The factors considered by Enterprise in choosing to lay
umbilical
included
the
reserves
of
oil
and
gas
that
Enterprise expected to recover in Well No. 2 in coming years; the
advanced age of the 10923 umbilical, which already had far exceeded
its design life and had suffered a failure of at least one paraffin
tube; and the high expense of repairing the 10923 umbilical, which
would not be substantially different than the expense of acquiring
a new umbilical but which would entail greater risks given the
extraordinary stresses to which the 10923 umbilical had been
subjected and the possibility that ultimately it might prove to be
incapable of being restored to serviceable condition.
86.
It was reasonable for Enterprise to replace the 10923
umbilical rather than to attempt to repair it.
87.
The 10923 umbilical was a distinct subsea asset used to
facilitate the operation of the subsea Garden Banks 117 Well No. 2
from the Garden Banks 72 platform nearly four miles away.
It was
not an integral part of the platform itself nor of the wellhead,
and would not have to be replaced even if (hypothetically) either
the platform or the equipment at the wellhead required replacement.
88.
Enterprise preferred to abandon the old umbilical in
place, which would have reduced its damages, but that option was
denied
by
the
United
States
Mineral
Management
Service.
Enterprise’s damages therefore included the cost of removal and
disposal of the severed remnants of the 10923 umbilical.
23
89.
Enterprise
contracted
with
Plaintiff
Oceaneering
to
recover the damaged umbilical from the ocean floor, which it did.
It disposed of the shorter segment, and rolled up and delivered to
a storage yard in Florida the longer segment, but did not save the
frayed, unraveled ends of either remnant where the umbilical had
been severed.
90.
Neither the shorter segment that was destroyed nor the
longer segment that was maintained on a reel in storage has any
salvage value beyond the additional cost required finally to
dispose of the materials as scrap.
91.
Enterprise acted reasonably to mitigate its losses.
92.
Enterprise issued requests for proposals to replace the
umbilical, but did not issue a uniform set of specifications upon
which each of those parties submitting proposals was able to bid.
The three or four proposals Enterprise received therefore had
variations in scope and other details and could not be compared in
the way that side-by-side bids on a common set of specifications
can be compared.
93.
Enterprise
subjectively
decided
that
Oceaneering’s
proposal was the most competitive received, and there is no
evidence to the contrary.
94.
Enterprise therefore chose Oceaneering to furnish and
install a new umbilical from the platform to Well No. 2, which it
did, and, from November 2009 through October 2010, Enterprise paid
24
to Oceaneering a total of $3,795,340 for its work, which included
removal of the damaged 10923 umbilical from the ocean floor and
fabrication and installation of its replacement.
95.
Oceaneering’s customary profit margin for its work was
approximately 15%, and Oceaneering earned a profit of approximately
$569,000.00 on this replacement project.
96.
In addition to the sums paid to Oceaneering, Enterprise
calculated that it incurred another $884,299.00 in expenses for
various consultants, engineering firms, the use of a helicopter,
the ROV umbilical inspection survey done by McMoRan, and even for
salaries paid to its own regular employees.
When that sum was
added to the amount paid separately to Oceaneering, Enterprise
claimed total damages in the amount of $4,679,639.88.
97.
When the work was completed and the new umbilical placed
into service, Enterprise had a brand new umbilical fabricated with
improved materials, which was much stronger, and with a design life
of 20 years. Hence, the new replacement of the old 10923 umbilical
was a betterment in that it substantially extended the expected
useful life of Enterprise’s subsea umbilical.
Enterprise’s Recoverable Damages for its
Maritime Tort Loss Caused by Cross
98.
As a distinct subsea asset and with evidence of its age
and that one tube already had failed, depreciation of the 10923
umbilical is a factor properly considered in connection with
25
determination of Enterprise’s damages caused by Cross’s maritime
tort.
99.
The major documented cost of acquiring and installing the
new umbilical in place of the severed 10923 umbilical, including
the required removal of the old umbilical from the ocean floor,
was $3,795,340, which Enterprise paid to Oceaneering. Enterprise’s
claim for additional damages of $884,299 incurred to acquire and to
place in service the new umbilical was not refuted in the evidence.
100. The percentage of useful life extension--the betterment
Enterprise
received
be
to
applied
with
Enterprise’s
its
new
total
umbilical--must
proven
calculated
therefore
costs
of
$4,679,639.
101. According to Oceaneering’s expert damages witness, whose
opinion on this point is credible, the 10923 umbilical had an
expected useful life of 25 years when it was installed in 1993.
When it was severed as a result of Cross’s negligence in January,
2009, it had been in service for 16 years.
The 10923 umbilical
therefore had a pre-severance remaining expected useful life of 9
years.
102. The much-improved new umbilical has a design life of
20 years, which would support an inference of a longer useful life
based on the 10923 umbilical having had a longer expected useful
life than its design life of only 8 years.
Nonetheless, in the
absence of direct evidence of a longer expected useful life for the
26
new umbilical, its expected useful life is found to be at least
equal to its design life of 20 years.
103. As a result of the replacement umbilical, the remaining
expected useful life of this subsea asset was extended from 9 years
to 20 years, an extension of 11 years, which was a material and the
principal betterment received by Enterprise.
The percentage of
useful life extension is thus 11/20, or 55%, which--even in this
very conservative analysis--is a very substantial betterment. (See
COL Nos. 21-24, below at pp. 57, 58).
104. Applying the percentage of useful life extension (55%) to
Enterprise’s total replacement cost of $4,679,639 nets the sum of
$2,573,801 as the value of the new umbilical’s extended useful life
for the benefit of Enterprise.
(See COL No. 21).
105. Deducting the value of the extended useful life of the
new umbilical ($2,573,801) from Enterprise’s total damages of
$4,679,639, establishes Enterprise’s recoverable damages caused by
Cross’s negligent fouling and destruction of Enterprise’s 16 years
old umbilical: $2,105,838.
(See COL Nos. 22, 28).
Oceaneering’s Negligence Claim
(Second Cause of Action)
106. In a three-party (Enterprise, Oceaneering, and Mariner)
Settlement Agreement with Grant of Subrogation and Assignment dated
November 15, 2010 (“Settlement Agreement”), Enterprise did “convey,
sell and transfer to Oceaneering . . . all rights, claims, causes
27
of action and/or rights of action . . . in tort . . . that may or
could be alleged . . . [against] Cross and/or the CROSSMAR 14, her
appurtenances, engines, gear, and tackle, in respect of the damage
and cost of replacement of the Garden Banks [10923] umbilical.”
107. The Settlement Agreement recites that Oceaneering agreed
to
pay
to
Enterprise
simultaneously
with
execution
of
the
Settlement Agreement, “in cash, in lump sum, without discount” the
total sum of $4,679,639.88 for the releases given and assignments
made by Enterprise to Oceaneering.
108. Oceaneering,
as
the
purchaser
and
transferee
of
Enterprise’s maritime tort claim against Cross, alleges in its
Second Cause of Action that it is entitled to recover from Cross
the full sum of $4,679,639.88, plus interest, as a “result of the
negligence and/or fault of Cross and the Crossmar 14 and/or
unseaworthiness of the Crossmar 14 as a consequence of the improper
retrieval of the port stern anchor.”
109. Enterprise’s recoverable maritime tort damages sustained
as
a
proximate
cause
of
Cross’s
$2,105,838, plus prejudgment interest.
110. Oceaneering,
as
the
negligence,
however,
are
(FOF Nos. 98-105).
purchaser/transferee/assignee
of
Enterprise’s maritime tort cause of action against Cross, is
entitled to recover from Cross no greater amount of damages than
Enterprise was entitled to recover from Cross.
28
111. Oceaneering is entitled to recover from Cross on the
assigned negligence claim the sum of $2,105,838, plus prejudgment
interest.
Oceaneering’s Contractual Claim for Defense and Indemnity
(First Cause of Action)
112. Cross had no contractual relationship with Enterprise,
and Enterprise had no breach of contract claims against Cross to
“convey, sell and transfer” to Oceaneering in the Settlement
Agreement.
113. Oceaneering alleges a right to contractual indemnity from
Cross, however, pursuant to the Purchase Order issued by Mariner to
Oceaneering and the Back to Back between Oceaneering and Cross.
114. Oceaneering’s breach of contract for indemnity claim
requires examination not only of the Main Contract (between Mariner
and Oceaneering and Mariner’s Purchase Order with the indemnity
clause issued to Oceaneering), and the Back to Back between
Oceaneering and Cross, but also of the contractual arrangements
between Enterprise--whose umbilical was damaged--and Mariner.
The Platform Processing Agreement
115. Enterprise and Mariner, among others, had in force and
effect a Platform Processing and Limited Right of Use Agreement
dated effective December 1, 2008 (hereinafter “Platform Processing
Agreement”),
which
contractually
29
governed
their
commercial
relationship relevant to the Garden Banks Block 72 platform and
processing facilities on the platform.
Oceaneering introduced in
evidence excerpts from the Platform Processing Agreement--but not
the
entire
contract--and
the
Findings
of
Fact
that
follow
necessarily rely on the excerpts in evidence.
116. Enterprise
individually
and
Field
Services
collectively,
are
Processing Agreement as “Owners.”
and
other
described
third
in
the
parties,
Platform
Mariner was not an owner of the
platform but paid Owners for certain services and processing of its
production on the platform, and is identified as one of the
“Producers.”
117. Section 11.2(b) of the Platform Processing Agreement,
inserting the names of the parties involved here, provides:
(b)
OWNER PROPERTY.
NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN, OWNERS [Enterprise] RELEASE,
DISCHARGE AND ACQUIT THE PRODUCER GROUP [Mariner
and its contractors and subcontractors] AND OWNERS
[Enterprise] WILL FULLY DEFEND, FULLY INDEMNIFY AND
HOLD THE PRODUCER GROUP [Mariner, Oceaneering,
Cross] HARMLESS FROM AND AGAINST ALL LOSSES, BY
WHOMEVER BROUGHT, BASED ON PROPERTY DAMAGE OR LOSS
OF TANGIBLE PROPERTY, INCLUDING THE PLATFORM, OWNER
FACILITIES, PROCESSING FACILITIES, AND OTHER
FACILITIES OWNED BY OWNERS [Enterprise] AND LOCATED
ON GARDEN BANKS BLOCK 72, WHENEVER OCCURRING,
SUFFERED
OR
INCURRED
BY
THE
OWNER
GROUP
[Enterprise] ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT, IN WHOLE OR IN PART, REGARDLESS OF
WHETHER SUCH LOSS IS OCCASIONED BY OR THE RESULT IN
WHOLE OR IN PART OF THE NEGLIGENCE OR FAULT OR
STRICT LIABILITY, WHETHER SOLE, CONCURRENT, JOINT,
ACTIVE, OR PASSIVE, OF THE PRODUCER GROUP [Mariner,
Oceaneering, Cross], EXCEPT TO THE EXTENT SUCH
PROPERTY DAMAGE OR LOSS IS CAUSED BY THE GROSS
30
NEGLIGENCE OR WILLFUL MISCONDUCT OF PRODUCER GROUP
[Mariner, Oceaneering, Cross]. NOTWITHSTANDING THE
FOREGOING, WITH RESPECT TO THE ABOVE-DESCRIBED
PROPERTY DAMAGE OR LOSS THAT IS IN CONNECTION WITH
INSTALLATION OR START-UP ACTIVITIES OF PRODUCER
GROUP [Mariner, Oceaneering, Cross] UNDER THIS
AGREEMENT (WHETHER NOW OR HEREAFTER OCCURRING), AND
TO THE EXTENT SUCH PROPERTY DAMAGE OR LOSS IS
CAUSED OR ARISES OUT OF THE FAULT OR NEGLIGENCE OF
ANY MEMBER OF PRODUCER GROUP [Mariner, Oceaneering,
Cross], THE OBLIGATIONS OF OWNERS [Enterprise]
DESCRIBED IN THIS PARAGRAPH SHALL NOT BE APPLICABLE
AS TO THE FIRST $10,000,000 OF PROPERTY DAMAGE OR
LOSS.
118. In the foregoing section 11.2(b), Enterprise releases
Mariner,
its
contractors
and
subcontractors,
and
agrees
to
indemnify them for all property losses and damage sustained by
Enterprise, arising out of or in connection with the Platform
Processing Agreement, including damage to the platform located in
Garden Banks Block 72, which is defined in Exhibit A of the
Agreement, to include “the equipment, facilities, and fixtures
. . . located on or affixed to such structure and owned by
[Enterprise].”
The foregoing release and indemnification clause
expressly excepts from its coverage, however, the first $10 million
of Enterprise’s losses caused by or arising out of the fault or
negligence
of
Mariner,
its
contractors
and
subcontractors
in
connection with installation activities.
119. Enterprise’s 10923 umbilical terminated at the Garden
Banks Block 72 platform and, necessarily, was affixed thereto, and
the
loss
sustained
by
Enterprise
31
from
the
severance
of
its
umbilical arose out of or in connection with Mariner’s installation
activities to add an 8" oil riser and a 12" pull tube and subsea
spool at the Garden Banks Block 72 platform.
120. Because it is uncontroverted that Enterprise’s property
damage
to
its
10923
umbilical
was
occasioned
by
Mariner’s
installation operation and the damages did not exceed the amount of
$10
million,
Enterprise’s
release
and
indemnification
under
§ 11.2(b) does not apply to release Mariner, Mariner’s contractor
Oceaneering, or the latter’s subcontractor Cross, from liability
for Enterprise’s property loss or damage “caused by or arising out
of the fault or negligence” of Mariner, Oceaneering, or Cross.
121. Hence, Enterprise did not release Cross from liability
for
Enterprise’s
property
loss
caused
by
Cross’s
fault
and
negligence in its attempted retrieval of the Crossmar 14's No. 4
anchor on January 9, 2009, and Cross’s tort liability has been
found above in Findings of Fact Nos. 1 through 105.
122. There is no evidence that the fouling of Enterprise’s
10923 umbilical during Mariner’s installation activity was caused
by or arose out of any fault or negligence on the part of Mariner
or its contractor, Oceaneering.
123. Mariner did not negligently cause damage to Enterprise’s
umbilical or commit any maritime tort for which it was liable to
Enterprise.
(See also FOF Nos. 77, 78, 81, 83).
32
124. Oceaneering
did
not
negligently
cause
damage
to
Enterprise’s umbilical or commit any maritime tort for which it was
liable to Enterprise.
125. As
found
(See also FOF Nos. 79-82).
above
(FOF
No.
112),
because
Cross,
an
independent subcontractor of Oceaneering, had no contract with
Enterprise and hence no contractual liability to Enterprise for
having caused property damage to Enterprise’s 10923 umbilical,
Cross’s liability to Enterprise is founded solely in tort.
126. Oceaneering had no contract with Enterprise to indemnify
or hold harmless Enterprise for any property loss or damage
sustained by Enterprise during installation work that was caused by
the fault or negligence of an independent subcontractor, in this
instance, Cross.
127. Although the $10 million exclusion under § 11.2(b) of the
Platform Processing Agreement excepts Mariner from § 11.2(b)’s
release and indemnity for Enterprise’s property losses and damages
(see
FOF
Nos.
117-120),
Mariner
in
the
Platform
Processing
Agreement assumes no liability or obligation to hold harmless or to
indemnify Enterprise for Enterprise’s property losses and damages
arising in connection with the Platform Processing Agreement that
are caused by the negligence or fault of a third party, an
independent
contractor,
or
an
independent
subcontractor,
without any fault or negligence on the part of Mariner.
33
and
128. Mariner had no contract with Enterprise to indemnify
Enterprise for any property loss or damage sustained by Enterprise
during installation work that was caused by the fault or negligence
of an independent contractor or its independent subcontractor, in
this instance, Cross.
129. There is no evidence that Enterprise has or had any
cognizable claim against Mariner--either in contract or in tort-based upon the tortious conduct of Cross which acted at all times
as an independent subcontractor.
The Main Contract, the Back to Back Contract,
and Purchase Order on This Job
(1) The Main Contract
130. Mariner had in force and effect an OFFSHORE MASTER
SERVICE CONTRACT (“Main Contract”) with Oceaneering dated July 31,
1998.
(See also FOF Nos. 10, 11).
In March 2008, Oceaneering
submitted a day rate proposal to Mariner to perform diving services
pursuant to the Main Contract for Mariner’s installation of an 8"
oil riser and 12" pull tube and subsea spool at the Garden Banks
Block 72 platform.
On award of the work, Mariner issued Purchase
Order No. 2113-2199 dated March 27, 2008 to Oceaneering.
131. To provide vessel support for Oceaneering to perform its
obligations under the Main Contract and Purchase Order, Oceaneering
34
entered into a Back to Back Subcontract Agreement (“Back to Back”)
with Cross dated July 31, 2008.
132. Pursuant to the Back to Back, Oceaneering and Cross have
the same rights, obligations, and limitations with respect to each
other as Mariner and Oceaneering have to each other under the Main
Contract and Purchase Order.
133. Section 8 of the Main Contract states that Oceaneering
“shall be an independent contractor with respect to the performance
of all work provided and services rendered hereunder, and . . .
Mariner shall have no direction or control over [Oceaneering] or
its employees, agents, contractors, or subcontractors except in the
results to be obtained.”
134. Correspondingly, under the Back to Back, Cross was an
independent contractor with respect to all work provided and
services rendered by Cross, and Oceaneering had no direction or
control over Cross except in the results to be obtained.
135. The Main Contract, as amended July 26, 1999, includes
Section
13,
Obligations.”
B.
entitled:
“Release,
Hold
Harmless
and
Indemnity
Sections 13.B and 13.D, read as follows:
LIABILITY FOR CONTRACTOR’S PROPERTY
CONTRACTOR [Oceaneering] RELEASES THE MARINER GROUP
FROM ANY LIABILITY TO CONTRACTOR FOR, AND
CONTRACTOR SHALL DEFEND, INDEMNIFY, AND HOLD THE
MARINER GROUP HARMLESS FROM AND AGAINST ALL SUITS,
ACTIONS, CLAIMS, AND DEMANDS, BY WHOMEVER BROUGHT,
BASED ON PROPERTY DAMAGE OR LOSS, WHENEVER
OCCURRING, SUFFERED OR INCURRED BY CONTRACTOR, AND
35
THE OFFICERS, EMPLOYEES, AGENTS, AND REPRESENTATIVES OF CONTRACTOR, ARISING FROM OR RELATED IN
ANY WAY TO PERFORMANCE OF THE WORK HEREUNDER,
REGARDLESS OF HOW SUCH DAMAGE OR LOSS IS CAUSED,
AND EVEN IF CAUSED BY THE NEGLIGENCE, WHETHER SOLE
OR CONCURRENT, OR ACTIVE OR PASSIVE, OR OTHER LEGAL
FAULT, INCLUDING STRICT LIABILITY, OF THE MARINER
GROUP.
* * *
D.
LIABILITY FOR MARINER’S PROPERTY
MARINER RELEASES THE CONTRACTOR GROUP [Oceaneering
and its subcontractors] FROM ANY LIABILITY TO
MARINER FOR, AND MARINER SHALL DEFEND, INDEMNIFY,
AND HOLD THE CONTRACTOR GROUP HARMLESS FROM AND
AGAINST, ALL SUITS, ACTIONS, CLAIMS, AND DEMANDS,
BY WHOMEVER BROUGHT, BASED ON PROPERTY DAMAGE OR
LOSS, WHENEVER OCCURRING, SUFFERED OR INCURRED BY
MARINER, AND THE OFFICERS, EMPLOYEES, AGENTS, AND
REPRESENTATIVES OF MARINER, ARISING FROM OR RELATED
IN ANY WAY TO PERFORMANCE OF THE WORK HEREUNDER,
REGARDLESS OF HOW SUCH DAMAGE OR LOSS IS CAUSED,
AND EVEN IF CAUSED BY THE NEGLIGENCE, WHETHER SOLE
OR CONCURRENT, OR ACTIVE OR PASSIVE, OR OTHER
LEGAL FAULT, INCLUDING STRICT LIABILITY, OF THE
CONTRACTOR GROUP.
136. In the foregoing quoted clauses, Oceaneering releases and
agrees to indemnify Mariner from any liability for claims and
demands based on property damage or loss suffered by Oceaneering
arising
from
work
done
under
the
Main
Contract,
even
if
Oceaneering’s property loss or damage is caused by the negligence
of Mariner itself.
137. Likewise,
Mariner
releases
and
agrees
to
indemnify
Oceaneering and its subcontractors--in this case, Cross--from any
liability for claims and demands based on property loss or damage
36
suffered by Mariner arising from work done under the Main Contract,
even if Mariner’s damage or loss is caused by the negligence of
Oceaneering or its subcontractors--in this case, Cross.
138. There is no evidence that Mariner suffered any property
loss or damage arising from or related to any work performed by
Oceaneering or its subcontractor Cross under the Main Contract.
139. Mariner sustained no property loss or damage from work
performed by Oceaneering and Cross under the Main Contract in
connection with installation of the 8" oil riser and 12" pull tube,
and subsea spool at Garden Banks 72.
140. If Mariner had sustained any such property loss or damage
caused by Oceaneering or it subcontractor Cross, Mariner released
Oceaneering and Cross from all liability for such.
(See FOF
Nos. 135, 137).
(2) The Back to Back Contract
141. The Back to Back Contract between Oceaneering and Cross
states:
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
[Oceaneering] and Owner [Cross] shall have the
same rights, obligations, liabilities and
limitations with respect to each other as
Company [Mariner] and Contractor [Oceaneering]
37
have to each other under the Main Contract,
including any amendments thereto, applied
Mutatis Mutandis with the substitutions of
“Charterer”
for
“Company,”
“Owner”
for
“Contractor.”
3.
FOR
THE
AVOIDANCE
OF
DOUBT,
CHARTERER
[Oceaneering] SHALL EXTEND TO OWNER [Cross]
THE BENEFITS OF INDEMNITIES AND HOLD HARMLESS
PROVIDED BY COMPANY [Mariner] 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.
142. The foregoing clauses of the Back to Back adopt the
identical release and indemnity concept found in the Main Contract.
143. Hence,
under
Section
13.D
of
the
Main
Contract--as
applied in the Back to Back--Oceaneering released Cross and its
subcontractors for all claims of property loss or damage suffered
by
Oceaneering
caused
by
the
negligence
of
Cross
and
its
subcontractors related to the performance of the work under the
Main Contract for installation of an 8" oil riser and 12" pull tube
and subsea spool.
144. There
is
no
evidence
that
Oceaneering
suffered
any
property loss or damage arising from or related to performance of
38
work by Cross or its subcontractors under the Back to Back and Main
Contract.
145. Oceaneering sustained no property loss or damage from the
work performed by Cross and its subcontractors to provide vessel
support under the Back to Back and Main Contract.
146. If Oceaneering had sustained any such property loss or
damage caused by Cross or its subcontractors, Oceaneering released
Cross and its subcontractor from all liability for such.
(See FOF
Nos. 141-143).
(3) The Purchase Order
147. The Purchase Order dated March 27, 2008, issued by
Mariner to Oceaneering, included the following clause:
9.
Indemnity:
Seller [Oceaneering] does hereby indemnify and
save harmless Buyer [Mariner] . . . from and
against all liability to others and all
claims, causes of action and suits of other,
. . . for . . . property damage, arising out
of acts or omissions to act of employees,
contractors,
or
agents
of
Seller
[Oceaneering]. . . .
148. The parties are agreed that the Purchase Order was
mutually accepted by Oceaneering and Cross as a part of the Back to
Back Contract to which they agreed on July 31, 2008.
149. Under
Oceaneering
the
covenants
Indemnity
to
Clause
indemnify
39
of
and
the
save
Purchase
harmless
Order,
Mariner
against “all liability to others” for property damage arising out
of the act of Oceaneering or its contractors, in this case, Cross.
150. Under the Back to Back, the Purchase Order’s Indemnity
Clause binds Cross to indemnify and save harmless Oceaneering
against all liability to others for property damage arising out of
the acts of Cross.
Enterprise Asserts a Claim Against Mariner Instead of Cross
151. Enterprise had a cognizable maritime tort claim for
$2,105,838 against Cross for the property damage it sustained as a
result of Cross’s negligence.
(See FOF Nos. 1-105, 109).
152. Instead of lodging a claim against the tortfeasor Cross,
however, Enterprise made demand upon Mariner to compensate it for
the damages caused by the negligence of Cross.
153. Mariner did not negligently cause Enterprise’s property
damage.
(See FOF Nos. 77, 78, 81, 83, 123).
154. The Platform Processing Agreement--although not releasing
Mariner from liability for property damage or loss to Enterprise
caused by Mariner or a subcontractor (see FOF Nos. 117-120, 127,
128)--discloses no covenant or promise by Mariner to indemnify
Enterprise for maritime tort damages done to Enterprise’s property
by an independent subcontractor, such as occurred here.
40
155. Mariner had no cognizable indemnity or other contractual
obligation to pay Enterprise for damages arising from Cross’s
negligent conduct that ruptured Enterprise’s umbilical.
156. Nonetheless,
incurred
costs
related
over
to
a
period
the
of
months
replacement
of
as
Enterprise
its
umbilical,
Enterprise sent to Mariner a series of invoices for reimbursement
of its expenditures.
157. Mariner, in turn, made demand upon Oceaneering.
By
letter dated August 27, 2009, Mariner’s Special Counsel advised
Oceaneering that Enterprise had made a claim against Mariner for
replacement of the severed umbilical 10923 and, citing Paragraph 9
of the Purchase Order, made formal demand on Oceaneering to
indemnify Mariner for “all liability incident to the damaged . . .
umbilical.”
158. A week later, Oceaneering’s General Counsel sent a letter
to Cross demanding that Cross, pursuant to the Main Contract,
Purchase Order, and Back to Back, indemnify Oceaneering and Mariner
for the damages.
159. On July 15, 2010, according to Enterprise, a Mariner
representative had told Enterprise that the accumulated invoices-which
evidently
included
some
invoices
unrelated
to
the
new
umbilical--had been expedited for approval, but nearly two and a
half months later--understandably--Mariner still had not paid them.
41
160. By letter dated September 27, 2010, Enterprise ratcheted
up its demand on Mariner by stating that by October 8 it must pay
invoices that then totaled $2,176,811, most of which pertained to
replacement of Enterprise’s 10923 umbilical, mentioned “the Owners’
right to shut-in production and/or exercise of termination rights
under Section 8.2(a)” of the Platform Processing Agreement when
payments are 60 days past due, and stated that if payment was not
received, “Enterprise shall consider Mariner to be in Default under
the [Platform Processing] Agreement.”
161. In the foregoing demand letter to Mariner, Enterprise
cited clauses in the “Statements and Billings” and “Payments”
sections of the Platform Processing Agreement, but Enterprise did
not refer to any clause in the Platform Processing Agreement or any
other agreement that bound Mariner to pay to Enterprise property
damages resulting from a maritime tort committed by an independent
subcontractor and for which Mariner was not liable.
162. After receiving Enterprise’s letter threatening to shutin Mariner’s production, Mariner’s outside counsel by letter dated
October 1, 2010, demanded that Oceaneering pay $1,276,237.90 in
damages
sought
by
Enterprise
for
replacement
of
Enterprise’s
umbilical, specifically relying on and quoting from paragraph 9 of
the Purchase Order, as follows:
9. Indemnity: [Oceaneering] does hereby indemnify
and save harmless [Mariner] and [Mariner’s]
Customer from and against all liability to others
42
and all claims, causes of action and suits of other
. . . for personal injury (including death) or
property damage, arising out of acts or omissions
to act of employees, contractors or agents of
[Oceaneering] . . . .
163. Mariner’s October 1, 2010 demand letter to Oceaneering
further asserted that “Oceaneering agreed to indemnify and save
harmless Mariner from claims for property damage arising out of the
acts or omissions of Oceaneering’s employees, contractors, or
agents.”
Mariner’s lawyers enclosed with their demand letter a
copy of Enterprise’s letter dated four days earlier demanding a
total sum of $2,176,811 from Mariner.
164. A
month
after
the
October
8,
2010
“Default”
date
specified by Enterprise, Enterprise wrote a new demand letter,
dated November 9, 2010, this time addressed not only to Mariner
but also to Oceaneering and, for the first time, to Cross.
The
November 9 letter demanded from all three parties “immediate
payment of amounts previously expended by Enterprise” to repair
“damages to the umbilical when an anchor of the Crossmar 14 became
fouled,” which damages now were claimed to be $4,679,639.88.
The
November 9 demand letter no longer threatened to shut-in Mariner’s
production or to declare Mariner in Default of the Platform
Processing Agreement.
165. Similar to its September 27 demand letter to Mariner,
however, Enterprise’s November 9 demand letter again failed to cite
any contractual covenant or legal theory as to why either Mariner
43
or Oceaneering should be liable to Enterprise for maritime tort
damages caused by the third party independent subcontractor, Cross.
166. Cross was the sole party responsible for conducting the
anchor retrieval operations on January 9, 2009, and it was the
negligent conduct of Cross’s barge superintendent Sampey and tower
winch operator Aucoin that was the sole cause of the damages to
Enterprise’s 10923 umbilical.
167. Cross at all times acted as an independent contractor
when it conducted those anchor retrieval operations.
168. Neither Mariner nor Oceaneering exercised or asserted any
control over Cross’s anchor retrieval operations on January 9,
2009.
169. Neither Mariner nor Oceaneering is vicariously liable for
the maritime tort damage to Enterprise’s umbilical caused by Cross.
170. There
is
no
evidence
of
any
negligent
conduct
by
Oceaneering that gave rise to Oceaneering having any maritime tort
liability to Enterprise or to Mariner.
171. Oceaneering had no liability under contract or tort law
to either Enterprise or Mariner for the damage to Enterprise’s
umbilical
caused
by
the
negligence
of
its
independent
subcontractor, Cross.
172. If Enterprise and Mariner had pursued their putative
claims against Oceaneering, they would have been unable to prove
44
any damages sustained by either of them from any maritime tort
committed by Oceaneering.
173. The Indemnity Clause in the Purchase Order, adopted in
the Back to Back Agreement, does not require Cross to hold harmless
or to indemnify Oceaneering for payments made by Oceaneering to
settle claims for which there is no potential basis for the
indemnitee’s (Mariner’s) liability.
174. Nonetheless, on November 15, the fourth business day
after Enterprise signed its November 9 demand letter, Enterprise,
Mariner, and Oceaneering all executed a Settlement Agreement of
17 pages pursuant to which Oceaneering paid to Enterprise on the
spot--even to the last 88 cents--Enterprise’s full demand of
$4,679,639.88.
175. The circumstances of the November 9 demand letter--no
longer threatening to shut-in Mariner’s production or to declare
Mariner in default of the Platform Processing Agreement (see FOF
No. 164) followed by an almost instantaneous 17 pages long threeparty Settlement Agreement excluding the tortfeasor Cross but
paying in full the newly stated total demand of nearly $4.7
million--leads to the inevitable finding that the “settlement” was
actually reached by Enterprise, Mariner, and Oceaneering before
Enterprise ever served its November 9 demand letter on Cross.
176. As found below (FOF Nos. 185-192), there were compelling
commercial reasons for Oceaneering’s generous payment to Enterprise
45
that evidently obviated in Oceaneering’s judgment any need to
conduct careful liability and maritime tort damages analyses as to
whether Mariner and Oceaneering were actually liable to Enterprise
and the amount of maritime tort damages for which the tortfeasor
Cross was actually liable.
177. Although the Indemnity Clause requires Oceaneering to
“indemnify and save harmless [Mariner] . . . from and against all
claims, . . .” to discharge that covenant Oceaneering is not
required to pay to or on behalf of an indemnitee an unreasonable
demand made under circumstances where the claim made against
Mariner was one for which Mariner had no potential liability.
178. When an indemnitor pays to or in behalf of an indemnitee
an unreasonable sum to settle a claim for which the indemnitee has
no potential liability, the indemnitor acts as a volunteer.
179. Likewise, under the Back to Back, to discharge its
indemnity covenant to Oceaneering under paragraph 9 of the Purchase
Order,
Cross
is
not
required
to
indemnify
Oceaneering,
its
indemnitee, for Oceaneering’s payment “in cash, in lump sum,
without discount” of the full amount of Enterprise’s demand made
against its indemnitee, Mariner, under circumstances where Mariner
had no potential liability to Enterprise for the severed umbilical.
180. Alternatively, if Oceaneering had a reasonable basis to
anticipate liability to Mariner under paragraph 9 of the Purchase
Order (and the evidence shows none), then for Oceaneering to
46
recover as an indemnitee from its indemnitor, Cross, Oceaneering
was required to act reasonably, that is, to settle the claim in
light of the risk of exposure.
181. Oceaneering’s payment to Enterprise, which had sustained
maritime
tort
damages
of
approximately
$2.1
million,
of
Enterprise’s full demand of approximately $4.7 million “in cash, in
lump sum, without discount,” was an unreasonable payment bearing no
relation to any reasonable expectation of liability exposure.
182. Oceaneering’s
settlement
payment
to
Enterprise
of
$4,679,639.88 was unreasonable.
183. Cross has no duty under paragraph 9 of the Purchase Order
to indemnify Oceaneering for an unreasonable payment made by its
indemnitee, Oceaneering, to Enterprise.
184. Oceaneering has not proven itself entitled to recover any
damages on its contractual indemnity claim.
Reasons Oceaneering Paid the
$4,679,639.88 Demanded by Enterprise
185. Mariner “lawyered up” with threats of litigation against
Oceaneering on October 1, 2010, after Mariner received Enterprise’s
threat to shut-in Mariner’s offshore production and declare Mariner
in default of the Platform Processing Agreement.
186. Mariner knew that it was not liable to Enterprise for
maritime tort damages committed by an independent subcontractor,
but Enterprise had immense commercial leverage that it brought to
47
bear against Mariner by reason of Enterprise Field Services being
not only an owner but also the operator of the Garden Banks Block
72 platform under the Platform Processing Agreement.
Mariner, on
the other hand, was only a producer, dependent upon the Owners’
processing facilities to continue its own production.
187. Enterprise freely employed this leverage against Mariner
simply by “billing” Mariner for claimed tort damages inflicted
by Cross in the manner that the Platform Processing Agreement
evidently authorized Enterprise to bill Mariner for processing and
related services on the platform.
And then, when the tort damages
inflicted by the independent subcontractor Cross were not paid by
Mariner, Enterprise threatened Mariner with the draconian action of
shutting in its production just as if Mariner had defaulted on
contractual obligations to pay for processing under the Platform
Processing Agreement.
188. Mariner, in turn, was motivated to ramp up its pressure
on Oceaneering, which was the beneficiary of the ten years old Main
Contract with Mariner, pursuant to which Oceaneering from time to
time received from Mariner profitable purchase orders.
Mariner
also invoked and relied upon the Indemnity Clause in paragraph 9 of
the Purchase Order, asserting that Oceaneering was obligated to
hold harmless Mariner from “all claims” and Enterprise had made a
claim.
48
189. Oceaneering enjoyed highly profitable business relationships not only with Mariner but also with Enterprise. For example,
Enterprise chose Oceaneering to recover from the seabed the severed
two segments of the 10923 umbilical, and to provide and install the
new replacement umbilical, for which work Oceaneering was paid
approximately $3.8 million, with a profit margin of well more than
a half million dollars--all for repairing the damage done by its
own subcontractor, Cross.
190. Oceaneering’s senior vice president of subsea services
testified
that
Oceaneering
annually
received
approximately
$10 million in gross revenues from sales to Enterprise.
191. Oceaneering
had
compelling
commercial
reasons
to
accommodate its long-time customers, both Mariner and Enterprise,
by paying “in cash, lump sum, without discount” Enterprise’s full
demand,
notwithstanding
an
absence
of
legal
basis
either
in
contract or in tort for Enterprise to make such a demand against
Mariner or against Oceaneering.
192. Thus, six days after Enterprise made its ostensible
demand (see FOF Nos. 174, 175), Oceaneering wrote a check for the
full $4,679,639.88, took an assignment of claims, and sued Cross in
this case to recover the full sum.
49
Oceaneering’s Breach of Contract Claim
(Third Cause of Action)
193. Oceaneering claims that Cross breached the Back to Back,
which adopted the Main Contract, by failing to perform its services
in a safe and workmanlike manner during retrieval of its anchors on
January 9, and that Oceaneering is entitled to damages in the sum
of $4,679,639.88.
194. Paragraph 10 of the Main Contract, as incorporated by the
Back to Back Contract, provides:
All work performed and services provided hereunder
by or on behalf of [Cross] shall be done in a safe
and workmanlike manner. [Cross] warrants that it
has trained each of its employees, agents and
subcontractors to perform his work in a safe and
competent manner and has taken all reasonable steps
to assure that each person’s actions do not
endanger the safety of himself or others.
195. Pursuant
obligated
to
to
the
Oceaneering
Back
to
to
perform
Back
its
Contract,
work
in
Cross
a
was
safe
and
workmanlike manner.
196. Based upon the same Findings above with regard to Cross’s
negligence,
Cross
failed
to
perform
its
work
in
a
safe
and
workmanlike manner in retrieving the Crossmar 14's port stern No. 4
anchor on January 9, 2009.
(See FOF Nos. 58-76).
197. Cross at all times acted as an independent subcontractor
when its unsafe and unworkmanlike anchor retrieval caused property
damage to Enterprise’s property.
50
198. Cross’s failure to perform its work in a safe and
workmanlike manner caused no damages to Oceaneering.
199.
If Oceaneering did sustain any loss or damage to its
property from Cross’s unsafe and unworkmanlike anchor retrieval,
Oceaneering
in
the
Back
to
Back,
and
its
incorporated
Main
Contract, released and agreed to hold Cross harmless from liability
for such.
(See FOF Nos. 135, 137, 141-146).
200. To the extent that Oceaneering contends that its November
15,
2010
payment
of
$4,679,639.88
to
Enterprise
constitutes
economic damages to Oceaneering based on Cross’s failure to perform
in a safe and workmanlike manner, that payment--voluntarily made by
Oceaneering without any showing of Oceaneering’s liability for
Enterprise’s loss--was not a foreseeable result of Cross’s breach
of contract 22 months earlier.
Cross’s failure to perform in a
safe and workmanlike manner did not proximately cause Oceaneering
to pay nearly $4.7 million to Enterprise.
(See also FOF Nos. 175,
176, 185-192).
201. Oceaneering is entitled to no recovery on its breach of
contract claim against Cross.
Cross’s Counterclaim
202. Cross counterclaims against Oceaneering for breach of
contract, alleging that the Purchase Order, incorporated into the
Back to Back, requires Oceaneering to indemnify and hold harmless
51
Cross “from and against any and all claims, losses or damages
arising
from
uncharted
debris
or
pipelines
not
located
in
accordance with the latest survey data during the performance of
the work.”
203. As previously found, the 10923 umbilical was in its
charted location when it was snagged by Cross’s anchor.
(See FOF
Nos. 55-57).
204. None of the property loss or damage proven in this case
arose “from uncharted debris or pipelines.”
205. Oceaneering did not breach the Back to Back or Purchase
Order with respect to indemnifying or holding harmless Cross from
uncharted debris or pipelines not located in accordance with the
latest survey data.
Conclusions of Law
The Court makes the following conclusions of law:
1.
The Court has jurisdiction of the parties and of the
subject matter of this case pursuant to 28 U.S.C. § 1333.
2.
As Enterprises’s subrogee/transferee/assignee, and in its
own right, Oceaneering alleges causes of action against Cross for
negligence
(“Second
Cause
of
Action”),
contractual
indemnity
(“First Cause of Action”), and breach of contract (“Third Cause of
Action”).
Cross counter-claims against Oceaneering, alleging
breach of contract for failure to indemnify.
52
Negligence (Oceaneering’s Second Cause of Action)
3.
To
establish
maritime
negligence,
a
plaintiff
must
demonstrate that there was a duty owed by the defendant to the
plaintiff,
the
defendant
breached
that
duty,
the
plaintiff
sustained injury, and there was a causal connection between the
defendant’s conduct and the plaintiff’s injury.
Canal Barge Co.,
Inc. v. Torco Oil Co., 220 F.3d 370, 376 (5th Cir. 2000).
4.
“Determination
of
the
tortfeasor’s
duty,
and
its
parameters, is a function of the court.
That determination
involves
most
a
number
of
factors,
including
notably
the
foreseeability of the harm suffered by the complaining party.”
Consol. Aluminum Corp. v. C.F. Bean Corp., 833 F.2d 65, 67 (5th
Cir. 1987) (citations omitted).
5.
Duty is measured by the scope of the risk that negligent
conduct foreseeably entails.
6.
Id.
The Louisiana Rule creates a rebuttable presumption that
in allisions involving a drifting vessel, the drifting vessel is at
fault. The Louisiana, 70 U.S. 164 (1865); Combo Mar., Inc. v. U.S.
United Bulk Terminal, LLC, 615 F.3d 599, 602 (5th Cir. 2010).
7.
The
presumption
of
the
Louisiana
Rule
applies
to
allisions with sunken stationary objects only when the party in
control of the vessel “knew or should have known” of the existence
of the stationary object.
Contango Operators, Inc. v. United
States, 965 F. Supp. 2d 791, 812 (S.D. Tex. 2013) (Lake, J.)
53
(citing Delta Transload, Inc. v. Motor Vessel, Navios Commander,
818 F.2d 445, 451 (5th Cir. 1987)).
presumption
knowledge.
8.
15,
has
the
burden
of
The party invoking the
proving
either
visibility
or
Id. (citing Delta Transload, 818 F.2d at 450-51).
The Louisiana Rule applies in this case (see FOF Nos. 13,
53-57),
and
Defendant
Cross
failed
to
present
evidence
sufficient to rebut the presumption.
9.
The common law negligence doctrine of proximate causation
applies in admiralty.
Stolt Achievement, Ltd. v. Dredge B.E.
LINDHOLM, 447 F.3d 360, 367 (5th Cir. 2006) (citing Exxon Co.,
U.S.A. v. Sofec, Inc., 116 S. Ct. 1813, 1817-18 (1996)).
Cross’s
negligence was the sole proximate cause of the Crossmar 14's No. 4
anchor
fouling
Enterprise’s
subsea
umbilical
Enterprise’s resulting property damages.
10923,
and
of
(See FOF Nos. 58-83).
Oceaneering and Mariner Have No Vicarious Liability
10.
Applying the general maritime law, the Fifth Circuit “has
consistently
held
that
a
principal
who
hires
independent
contractors over which he exercises no operational control has no
duty to discover and remedy hazards created by its independent
contractors,” and accordingly cannot be held vicariously liable for
the torts of the independent contractors.
Wilkins v. P.M.B. Sys.
Eng’g, Inc., 741 F.2d 795, 800 (5th Cir. 1984) (citing Wallace v.
Oceaneering Int’l, 727 F.2d 427 (5th Cir. 1984); Moser v. Texas
54
Trailer Corp., 623 F.2d 1006, 1014-15 (5th Cir. 1980); W. Prosser,
The Law of Torts § 71 (4th ed. 1971); Restatement (Second) of Torts
§§ 409, 414, comment at 388 (1965)).
11.
An exception to this general rule occurs only where the
principal, despite the independent contractor arrangement, actually
retains some degree of control over the manner or methods by which
the contractor does his work.
12.
Id.
In determining whether the principal retained control
over the independent contractor’s work methods,
[i]t is not enough that he has merely a general
right to order the work stopped or resumed, to
inspect its progress or to receive reports, to make
suggestions or recommendations which need not
necessarily
be
followed,
or
to
prescribe
alterations and deviations. Such a general right
is usually reserved to employers, but it does not
mean that the contractor is controlled as to his
methods of work, or as to operative detail. There
must be such a retention of a right of supervision
that the contractor is not entirely free to do the
work in his own way.
Id. (quoting Restatement (Second) of Torts § 414, comment c).
Compare Wallace, 727 F.2d at 436-37 (no vicarious liability where
principal’s “company man” on site “had no actual control over or
responsibility for the details of the drilling and diving work, but
merely
inspected
the
progress,”
independent
contractors
had
separate supervisors who “called the shots,” and principal’s agent,
despite having authority to order the work stopped for safety
reasons, did not control the operation of the particular procedure
55
in which plaintiff was injured), with Texas E. Transmission Corp.
v. McMoRan Offshore Exploration Co., 877 F.2d 1214, 1222 (5th Cir.
1989) (principal’s agent assumed “actual operational control over
the work of the independent contractor” when he intervened in
anchor raising operation and then directed resumption of retrieval
with
as
much
information
about
the
situation
as
independent
contractors, despite contract provision that principal had “no
operational control” over independent contractor).
13.
Cross at all times acted as an independent subcontractor,
neither Oceaneering nor Mariner assumed any operational control
over Cross’s anchor retrieval operations on January 9, 2009, and
neither
Oceaneering
nor
Mariner
has
vicarious
liability
to
Enterprise for the damages caused to Enterprise’s umbilical by
Cross’s negligence.
(See FOF Nos. 77-83, 166-169).
Damages for Negligence
14.
The purpose of compensatory damages in tort cases is to
place the injured person as nearly as possible in the condition he
would have occupied if the wrong had not occurred.
Freeport
Sulphur Co. v. S/S Hermosa, 526 F.2d 300, 304 (5th Cir. 1976).
15.
The plaintiff bears the burden of proof to show the
amount, as well as the fact, of damages.
Pizani v. M/V Cotton
Blossom, 669 F.2d 1084, 1088 (5th Cir. 1982).
56
16.
Damages need not be proved with an exact degree of
specificity.
Mitsui O. S. K. Lines, K. K. v. Horton & Horton,
Inc., 480 F.2d 1104, 1106 (5th Cir. 1973).
It suffices if a state
of facts is shown from which a court can find with reasonable
certainty
that
the
damages
claimed
were
actually
or
may
be
reasonably inferred to have been incurred as a result of the
collision.
17.
Id.
When there is a tortious injury to property and the
market value of that property is unknown, the amount of damages
must be determined by the cost of repairs to or replacement of the
property.
Freeport Sulphur, 526 F.2d at 304; Pillsbury Co. v.
Midland Enters., Inc., 715 F. Supp. 738, 764 (E.D. La. 1989)
(“Where the owner had used the property for a special use or where
there otherwise may be no true market, replacement costs may be the
most accurate basis for determining damages.”), aff’d and remanded
904 F.2d 317 (5th Cir. 1990) (citing King Fisher Marine Serv., Inc.
v. NP Sunbonnet, 724 F.2d 1181, 1185-87 (5th Cir. 1984)).
18.
The new-for-old rule provides that a party suffering
injury is entitled to recover only that which is necessary to
restore his damaged property to the same condition as existed
immediately before the delict.
City of New Orleans for Use &
Benefit of Sewerage & Water Bd. of New Orleans v. Am. Commercial
Lines, Inc., 662 F.2d 1121, 1124 (5th Cir. 1981).
This rule is
designed
windfall
to
avoid
giving
the
injured
57
person
a
by
furnishing something entirely new for that which was old and
depreciated and would in the normal course of things have to be
replaced in any event.
Id. (citing State Highway Comm’n v. Tug
Go-Getter, 468 F.2d 1270, 1273 (9th Cir. 1972)).
19.
Thus, where repair or replacement costs form the basis of
the damage award, the Court must determine whether the repair or
replacement adds new value to or extends the useful life of the
property; if so, an appropriate reduction from the full repair or
replacement costs should be made.
Pillsbury, 715 F. Supp. at 764
(citations omitted); Gulf States Utilities Co. v. M/V SS Chilbar,
986 F.2d 1418, at *2 (5th Cir. 1993) (unpublished) (no depreciation
where repair of damaged wall would not add value or extend useful
life) (citing Pizani, 669 F.2d at 1088; Freeport Sulphur, 526 F.2d
at 304).
20.
When the repair or replacement of the damaged property
extends the useful life of the property, but to a different degree
from the expected useful life of the property when it was first
acquired by the plaintiff, the percentage of useful life extension
is required to be determined.
Freeport Sulphur, 526 F.2d at 306;
Pillsbury, 715 F. Supp. at 764.
21.
The “percentage of useful life extension” is the portion
of the total useful life of the repaired property that the useful
life extension constitutes.
Freeport Sulphur, 526 F.2d at 306.
58
The allocable cost of the useful life extension may be derived by
multiplying this percentage by the total repair expenses.
22.
cost
Id.
“If this allocable cost is then deducted from the total
of
repairs,
the
resulting
damages
award
will
precisely
compensate the plaintiff for the cost of restoring his property to
its precollision condition.”
23.
Id.
This formula applies--as in this case--when the principal
or only betterment to the plaintiff’s property is the extension of
its useful life.
24.
entire
Id.
(See FOF Nos. 97, 103, 104).
Depreciation under the new-for-old rule applies to the
cost
of
replacement,
including
surveying
incidental costs associated with replacement.
F.
Supp.
at
768-69
(deduction
for
and
other
See Pillsbury, 715
depreciation
applies
to
engineering and surveying costs, which, like construction costs,
“help provide plaintiffs with two structures that will presumably
have useful lives that extend further into the future than would
have the two present structures without the allisions.”).
25.
Where the repairs do not extend the useful life of the
property as it existed just before the collision, there should be
no deduction for depreciation.
Brunet v. United Gas Pipeline Co.,
15 F.3d 500, 505 (5th Cir. 1994); Cargill, Inc. v. Kopalnia
Rydultowy Motor Vessel, 304 F. App’x 278, 280 (5th Cir. 2008).
26.
Repairs do not extend the useful life of an integral part
of a structure if that part would have to be replaced when the
59
entire structure is replaced.
See Brunet, 15 F.3d at 505-506 (no
depreciation applied to damaged pipeline crossing because new
crossing would have to be replaced when the pipeline is replaced);
Cargill, 304 F. App’x at 281 (damaged walkway was essential part of
wharf,
and
would
most
likely
be
replaced
when
the
wharf
is
replaced).
27.
A tortfeasor bears the burden to show that the victim of
its tortious conduct failed to mitigate damages.
The tortfeasor
must demonstrate (1) that the injured party’s conduct after the
accident was unreasonable and (2) that the unreasonable conduct had
the consequence of aggravating the harm. Marathon Pipe Line Co. v.
M/V Sea Level II, 806 F.2d 585, 592 (5th Cir. 1986).
28.
526
F.2d
Applying the Fifth Circuit’s rule (Freeport Sulphur Co.,
300,
301)
for
the
calculation
of
depreciation
in
connection with the substantial betterment received by Enterprise
when its damaged umbilical was replaced, results in recoverable
damages of $2,105,838 to Enterprise as a result of Cross’s maritime
tort.
(See FOF Nos. 98-105).
The Validity of Enterprise’s Assignment of
Its Negligence Claim to Oceaneering
29.
Oceaneering
transferee/assignee
brings
and
its
negligence
conventional
subrogee
claim
of
as
Enterprise,
pursuant to the Settlement Agreement made by them and Mariner.
60
the
30.
Under the general maritime law, “the assignment of tort
claims from the injured party to one tortfeasor permitting the
settling defendant to proceed against a co-tortfeasor is invalid.”
Ondimar Transportes Maritimos v. Beatty St. Properties, Inc., 555
F.3d 184, 189 (5th Cir. 2009).
31.
The Fifth Circuit regarded its holding in Ondimar as a
corollary to the proportionate fault rule on partial settlements
announced by the Supreme Court in McDermott, Inc. v. AmClyde, 114
S. Ct. 1461 (1994). The McDermott rule applies only to settlements
involving joint tortfeasors.
See Westinghouse Credit Corp. v. M/V
New Orleans, 39 F.3d 553, 555 (5th Cir. 1994) (McDermott rule
“applies only to cases in which there has been a settlement by a
joint tortfeasor”); Boykin v. China Steel Corp., 73 F.3d 539, 544
(4th Cir. 1996) (McDermott rule does not apply where “Bergesen and
the steel defendants are not joint tort-feasors.
Even in the face
of a claim that they might have been, Bergesen has been found not
a tort-feasor as a matter of fact and not guilty of any fault.”).
32.
The rationale of Ondimar was premised on settlements made
by joint tortfeasors.
See Ondimar, 555 F.3d at 188 (“We see no
advantage in allowing defendants responsible for the plaintiff’s
injuries a right to, in effect, buy the plaintiff’s claims and
prosecute the other jointly responsible parties.”) (emphasis added)
(quoting Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19 (Tex.
1987)).
61
33.
On the other hand, while finding it unnecessary to
determine under the facts of Ondimar, the Fifth Circuit stated that
“our research suggests that most state courts which have considered
[whether
the
assignment
of
property
damage
generally prohibited] permit such assignments.”
at 187 (citing numerous state cases).
tort
claims
are
Ondimar, 555 F.3d
“We look to the common law
as a ‘guide to interpretation of federal admiralty principles.’”
Id., at 187 n.2 (citation omitted).
34.
Enterprise’s sale, assignment, and transfer of its tort
claim against Cross to Oceaneering, which was not a co-tortfeasor
with Cross, was valid.
35.
anchor
Cross’s negligence in retrieving the port stern No. 4
on
January
9,
2009,
was
the
Enterprise’s property damage and loss.
sole
proximate
cause
of
(See FOF Nos. 58-83).
Cross was an independent contractor and neither Oceaneering nor
Mariner was vicariously liable to Enterprise for Enterprise’s
damages.
(See FOF Nos. 77-83, 166-169; COL Nos. 10-13).
prise’s damages from the tort were $2,105,838.
105).
Enter-
(See FOF Nos. 98-
By reason of Enterprise’s sale, assignment, and transfer of
its tort claim to Oceaneering, Oceaneering is entitled to recover
from Cross $2,105,838, plus prejudgment interest from the date of
the injury.
62
Contractual Indemnity (Oceaneering’s First Cause of Action)
36.
A maritime contract containing an indemnity agreement
should be read as a whole and its words given their plain meaning
unless the provision is ambiguous.
Becker v. Tidewater, Inc., 586
F.3d 358, 369 (5th Cir. 2009) (citing Weathersby v. Conoco Oil Co.,
752 F.2d 953, 955 (5th Cir. 1984)).
37.
Under federal maritime law,
[a] contract of indemnity should be construed to
cover all losses, damages, or liabilities which
reasonably appear to have been within the
contemplation of the parties, but it should not be
read to impose liability for those losses or
liabilities which are neither expressly within its
terms nor of such a character that it can be
reasonably inferred that the parties intended to
include them within the indemnity coverage.
Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1214 (5th Cir. 1986)
(quoting Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 333 (5th
Cir. 1981)).
38.
Although the general rule requires an indemnitee to show
actual liability on his part to recover against an indemnitor, “a
defendant need only show potential (rather than actual) liability
to recover indemnity where . . . the defendant’s claim is based on
a
written
contract
of
insurance
settlement is reasonable.
(settling
defendant
had
or
indemnification”
and
the
Fontenot, 791 F.2d at 1216-17 & n.12
“reasonable
apprehension
of
its
own
liability” and was entitled to indemnity under agreement, where no
63
party had suggested settlement was unreasonable) (citing Terra
Resources, Inc. v. Lake Charles Dredging & Towing, Inc., 695 F.2d
828, 832 (5th Cir. 1983)).
39.
“should
A court confronted with a valid indemnification agreement
insure
that
the
claim
was
not
frivolous,
that
the
settlement was reasonable, that it was untainted by fraud or
collusion, and that the indemnitee settled under a reasonable
apprehension of liability.”
Id. at 1218; Bourg v. Chevron U.S.A.
Inc., 91 F.3d 141, at *3 (5th Cir. 1996) (unpublished) (quoting
Fontenot, 791 F.2d at 1218).
40.
owed.”
“[A] settlement must be reasonable before indemnity is
Conoco Inc. v. Boh Bros. Const. Co., 191 F.R.D. 107, 114
(W.D. La. 1998) (citing Parfait v. Jahncke Service, Inc., 484 F.2d
296, 301 (5th Cir. 1973) (indemnitee bears the burden of showing
that it “acted in accordance with equitable indemnity principles in
making the settlement and had not spent its indemnitor’s money too
freely.”)).
534
F.
See also S. California Gas Co. v. Syntellect, Inc.,
App’x
637,
639
(9th
Cir.
2013)
(“The
settlement
is
presumptive evidence of liability of the indemnitee and the amount
of liability, but it may be overcome by proof from the indemnitor
that the settlement was unreasonable”) (citing Peter Culley &
Assocs. v. Superior Court, 10 Cal. App. 4th 1484, 1497 (1992));
Tokio Marine & Fire Ins. Co. v. Rosner, 206 F. App’x 90, 95 (2d
Cir. 2006) (“To procure indemnification for an underlying claim
64
that was voluntarily settled, the indemnitee must demonstrate,
inter alia, that the settlement amount was reasonable.”); Hitt v.
Cox, 737 F.2d 421, 426 (4th Cir. 1984) (insurer not liable to
indemnify for unreasonable portion of settlement).
41.
Reasonableness ordinarily is to be measured by the extent
of financial exposure the settling party faces in the court where
he will have to litigate if he does not settle.
Mathiesen v.
Panama Canal Co., 551 F.2d 954, 957 (5th Cir. 1977) (settlement
accepting liability for 70% of damages was reasonable where Dutch
court would probably have assigned 75% liability); Molett v. Penrod
Drilling
Co.,
919
F.2d
1000,
1006
(5th
Cir.
1990)
(citing
Mathiesen, 551 F.2d at 957); see also Damanti v. A/S Inger, 314
F.2d
395,
397
(2d
Cir.
1963)
(reasonableness
of
settlement
evaluated “in view of the size of possible recovery and degree of
probability of claimant’s success”) (quoted in Mathiesen, 551 F.2d
at 957).
42.
When the parties differ sharply in their contentions
about liability and damages, it may be “impossible to fix a
reasonable settlement amount with anything approaching mathematical
precision,” such that “[t]he calculation of a reasonable settlement
amount necessarily must be resolved by an exercise in judgment.”
Molett, 919 F.2d at 1009 (district court’s finding of reasonableness not clearly erroneous).
65
43.
indemnitor
Once the indemnitee shows it is potentially liable, the
bears
the
burden
settlement was unreasonable.
Chem
300,
settlement
546
F.2d
1125,
is
reasonable,
to
show
that
the
amount
of
the
Wisconsin Barge Line, Inc. v. Barge
1129-30
the
(5th
Cir.
indemnitor
1977).
must
If
the
indemnify
the
indemnitee for the settlement amount.
44.
Mariner had no potential liability to Enterprise in
contract or in tort for Enterprise’s property damage caused by an
independent subcontractor.
153-155, 166-169).
(See FOF Nos. 77, 78, 81, 83, 127-129,
Oceaneering knew or upon inquiry should have
known that Enterprise’s claim against Mariner had no basis in
contract or tort, and Oceaneering knew that it had no liability to
Enterprise in contract or in tort for the tort committed by
its independent subcontractor Cross.
45.
Oceaneering’s payment to Enterprise to satisfy a claim
against Mariner for which Mariner had no potential liability was
not reasonable.
46.
Alternatively, if Oceaneering as indemnitee of Cross had
shown that it was potentially liable to Mariner--presumably to
indemnify and hold harmless Mariner from Enterprise’s claim, which
claim against Mariner had no basis either in tort or contract--then
Oceaneering’s payment “in cash, in lump sum, without discount” of
$4,679,639.88
to
Enterprise--far
66
more
double
the
amount
of
Enterprise’s $2,105,838 tort damages that it could have recovered
from Cross--was a wholly unreasonable indemnity payment.
47.
Oceaneering
made
the
payment--unreasonable
under
an
indemnity proviso--for separate commercial reasons related to its
own ongoing lucrative business relationships with both Enterprise
and Mariner.
48.
(See FOF Nos. 185-192).
Cross did not breach its contractual indemnity covenant
under the Back to Back and Purchase Order by refusing to pay to
Oceaneering $4,679,639.88.
Breach of Contract (Oceaneering’s Third Cause of Action)
49.
The interpretation of both the Back to Back and the Main
Contract is governed by principles of the general maritime law and
the admiralty and maritime laws of the United States. In the event
the laws of any state otherwise may apply, the Main Contract and
the Back to Back are governed by Texas law to the extent not
inconsistent with or superseded by the general maritime law.1
50.
The core principles of Texas contract law are consistent
with the general maritime law with respect to Oceaneering’s breach
of contract claim.
See N. Ins. Co. of New York v. Pelican Point
Harbor, Inc., 3:05CV184MCR/MD, 2006 WL 1285078, at *5 (N.D. Fla.
May 5, 2006) (looking to “not inconsistent” Florida law for
1
Main Contract, ¶ 36.
67
elements of breach of contract claim governed by general maritime
law).
51.
“[T]he essential elements of a breach of contract action
are: (1) the existence of a valid contract; (2) performance or
tendered performance by the plaintiff; (3) breach of the contract
by the defendant; and (4) damages sustained by the plaintiff as a
Smith Int’l, Inc. v. Egle Grp., LLC, 490
result of the breach.”
F.3d 380, 387 (5th Cir. 2007) (quoting Valero Mktg. & Supply Co. v.
Kalama Int’l, LLC, 51 S.W.3d 345, 351 (Tex. App.-Houston [1st
Dist.] 2001)).
52.
“Where a [maritime] contract expressly refers to and
incorporates another instrument in specific terms which show a
clear intent to incorporate that instrument into the contract, both
instruments are to be construed together.”
at 282.
Contract,
Cargill, 304 F. App’x
Thus, the Back to Back is construed just as the Main
and
proof
of
damages
is
an
essential
element
to
warranty
of
Oceaneering’s breach of contract claim against Cross.
53.
Admiralty
law
recognizes
an
implied
workmanlike service which arises from contractual relationships,
Employers Ins. of Wausau v. Suwannee River Spa Lines, Inc., 866
F.2d 752, 763 n.17 (5th Cir. 1989) (citing Ryan v. Pan-Atlantic
S.S. Corp., 76 S. Ct. 232, 237-38 (1956)), which “means that the
obligor in a service contract has the duty to perform his services
with reasonable care, skill, and diligence.”
68
Kevin Gros Offshore,
LLC v. Max Welders, Inc., CIV.A.07-7340, 2009 WL 152134, at *4
(E.D. La. Jan. 22, 2009).
54.
In an action for breach of contract, damages are not
recoverable for loss that the party in breach did not have reason
to foresee as a probable result of the breach when the contract
was made.
Restatement (Second) of Contracts § 351 (1981).
The
requirement of foreseeability in a breach of contract case “is a
more severe limitation of liability than is the requirement of
substantial or ‘proximate’ cause in the case of an action in tort
or for breach of warranty.”
Migerobe, Inc. v. Certina USA, Inc.,
924 F.2d 1330, 1338 (5th Cir. 1991) (citing Restatement (Second) of
Contracts § 351, comment a).
55.
In
admiralty,
“the
guilty
party
is
liable
for
all
foreseeable and proximately caused losses incurred by the innocent
party” as a result of breach of the warranty of workmanlike
performance.
1 Admiralty & Mar. Law §5-9 (5th ed.) (citing Fed.
Barge Lines, Inc. v. Granite City Steel, Div. of Nat. Steel Corp.,
608 F. Supp. 142, 149 (E.D. Mo. 1985) (“A breach of the stevedore’s
warranty extends liability for all foreseeable and proximate losses
incurred as a result of the stevedore’s negligence”)).
56.
Oceaneering did not sustain damages to its own property
as a result of Cross not performing in a good and workmanlike
manner
during
January 9, 2009.
Cross’s
fateful
anchor
(See FOF Nos. 198, 199).
69
retrieval
efforts
on
57.
Cross, when it breached its contractual duty to perform
its anchor retrieval work in a safe and workmanlike manner and
caused $2.1 million in damages to Enterprise’s umbilical, had no
reason to foresee that a probable result of its breach would be for
Oceaneering about two years later--driven by significant business
and commercial reasons of its own--to purchase for nearly $4.7
million Enterprise’s maritime tort claim and seek to recover that
sum from Cross as breach of contract damages.
(See FOF Nos. 185-
192, 200).
58.
Oceaneering is entitled to no recovery from Cross for
breach of contract because Oceaneering did not sustain damages as
a result of Cross’s failure to perform its work in a safe and
workmanlike manner.
Prejudgment Interest
59.
It is a “bedrock premise” in maritime tort actions under
the general maritime law that an award for prejudgment interest is
the rule rather than the exception; prejudgment interest must be
awarded unless unusual circumstances make an award inequitable.
Ryan Walsh Stevedoring Co., Inc. v. James Marine Servs., Inc., 792
F.2d 489, 492 (5th Cir. 1986).
60.
Admiralty courts have broad discretion in setting the
prejudgment interest rate.
Platoro Ltd., Inc. v. Unidentified
Remains of a Vessel, Her Cargo, Apparel, Tackle, & Furniture, in a
70
Cause of Salvage, Civil & Mar., 695 F.2d 893, 907 (5th Cir. 1983)
(“[w]e cannot . . . instruct the district court to use any
particular rate; the decision in the first instance must lie with
the district court after it evaluates the circumstances of the
case.”); Todd Shipyards Corp. v. Auto Transp., S.A., 763 F.2d 745,
753
(5th
Cir.
1985)
(affirming
use
of
state
interest
rate
compounded daily to account for uncommonly high rate of return
during that period); see also Complaint of M/V Vulcan, 553 F.2d
489, 491 (5th Cir. 1977) (affirming award of interest at rate
equivalent to injured party’s actual cost of borrowing); Reeled
Tubing, Inc. v. M/V Chad G, 794 F.2d 1026, 1029 (5th Cir. 1986)
(affirming prejudgment interest at federal statutory post-judgment
interest rate).
61.
The years since the subject maritime tort occurred on
January 9, 2009, have been an unprecedented prolonged period of low
interest rates. No evidence was presented at trial by either party
as to a reasonable rate of prejudgment interest, and the Court
therefore
benchmarks.
has
taken
judicial
notice
of
several
published
The Texas post-judgment interest statute--which also
applies to prejudgment interest--is premised on a benchmark rate of
interest that a money judgment creditor might have to pay to borrow
the unpaid amount of the judgment. See TEX. FINANCE CODE, §§ 304.003,
304.103 (Vernon 2006).
The Texas statute adopts as its standard
the prime rate as published by the Board of Governors of the
71
Federal Reserve System, but with a floor of 5%.
Id.
According to
the Federal Reserve, the prime rate has been 3.25% throughout this
period since 2009.
On the other hand, the federal post-judgment
interest statute is premised on the interest rate that a money
judgment creditor might earn on the money if he had the money in
hand. Thus, during the past nearly five and one-half years, the 1year constant maturity Treasury yield, which Congress adopted for
the federal post-judgment rate, see 28 U.S.C. § 1961(a), has
overall had a weekly average of less than 0.25%, and today is
0.09%.
The 5-year Treasury Bond yield rate compiled by the
Department of the Treasury, appears overall to have had a daily
rate average of less than 1.75% during this period.
The 5-year
“Jumbo CD” interest rate, for CDs of at least $100,000, according
to data compiled from commercial banks by the Federal Deposit
Insurance Corporation, appears overall to have averaged less than
1.5%.
62.
Having considered a range of interest data and, as well,
the circumstances of this case, the Court finds that a simple rate
of interest of 2% per annum from the date of injury to the date of
judgment is fair and just.
63.
On Enterprise’s maritime tort damages of $2,105,838.00,
Plaintiff as purchaser and assignee of Enterprise’s claim is
entitled
to
recover
prejudgment
interest
in
the
amount
of
$227,199.73, which results in a total judgment of $2,333,037.73.
72
Conclusion and Order
64.
If any of the foregoing Findings of Fact constitute
Conclusions of Law, they are adopted as such; and if any of the
foregoing Conclusions of Law constitute Findings of Fact, they are
adopted as such.
65.
Based on the foregoing Findings of Fact and Conclusions
of Law, it is ORDERED that Plaintiff Oceaneering International,
Inc. shall have and recover from Defendant Cross Logistics, Inc.
the total sum of TWO MILLION THREE HUNDRED THIRTY-THREE THOUSAND
THIRTY-SEVEN and 73/100 DOLLARS ($2,333,037.73).
A separate Final
Judgment will be entered.
The Clerk shall notify all parties and provide them with a
true copy of these Findings of Fact and Conclusions of Law.
SIGNED at Houston, Texas, on this 2nd day of June, 2014.
____________________________________
EWING WERLEIN, JR.
UNITED STATES DISTRICT JUDGE
73
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