Filed: Feb. 22, 2005
Latest Update: Feb. 21, 2020
Summary: United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS February 22, 2005 FOR THE FIFTH CIRCUIT Charles R. Fulbruge III Clerk No. 04-30003 CURTIS CALLAIS WELDING, INC., Plaintiff-Appellant, versus STOLT COMEX SEAWAY HOLDINGS, INC., Defendants-Appellees. Appeal from the United States District Court for the Eastern District of Louisiana (02-CV-3595) Before JONES, SMITH, and STEWART, Circuit Judges. PER CURIAM:* This is a suit for contractual defense and indemni
Summary: United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS February 22, 2005 FOR THE FIFTH CIRCUIT Charles R. Fulbruge III Clerk No. 04-30003 CURTIS CALLAIS WELDING, INC., Plaintiff-Appellant, versus STOLT COMEX SEAWAY HOLDINGS, INC., Defendants-Appellees. Appeal from the United States District Court for the Eastern District of Louisiana (02-CV-3595) Before JONES, SMITH, and STEWART, Circuit Judges. PER CURIAM:* This is a suit for contractual defense and indemnif..
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
February 22, 2005
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 04-30003
CURTIS CALLAIS WELDING, INC.,
Plaintiff-Appellant,
versus
STOLT COMEX SEAWAY
HOLDINGS, INC.,
Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of Louisiana
(02-CV-3595)
Before JONES, SMITH, and STEWART, Circuit Judges.
PER CURIAM:*
This is a suit for contractual defense and indemnification by Curtis Callais Welding, Inc.
(“Callais Welding”) against Stolt Comex Seaway Holdings, Inc. (“Stolt Holdings”). This suit arose
following Brian Laine’s filing of a negligence claim in a Louisiana court against the president of
Callais Welding, Curtis Callais, Sr. (“Curtis, Sr.”), in his individual capacity. Laine filed the state
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
court suit after sustaining serious injuries during the course and scope of his employment with Big
Inch Marine Systems, Inc. (“Big Inch”), a subsidiary of Stolt Offshore.
Callais Welding, the plaintiff-appellant, now appeals from the decision of the district court
granting a cross-motion for summary judgment in favor of Stolt Holdings, the defendant-appellee.
On appeal, Callais Welding asserts ten claims of error. Notwithstanding, the single dispositive issue
is whether the district court erred in enforcing the choice-of-law provision in the Master Service
Agreement (“service agreement”)1 between Callais Welding and Stolt Offshore. If the district court
was correct in enforcing the choice-of-law provision, we need not address Callais Welding’s other
claims of error. Under general maritime law, the terms of the service agreement must be construed
narrowly. The application of maritime law led to the district court’s conclusion that Stolt Offshore
was only required to defend and indemnify Callais Welding, the entity, not its employees and affiliates.
Because we find that the district court was correct in enforcing the choice-of-law provision in the
service agreement and in properly interpreting the provisions therein, the order of summary judgment
in favor of Stolt Holdings is hereby AFFIRMED.2
1
“A master service agreement is a blanket contract (whether or not so labeled) which covers
any kind of work the independent contractor might be requested to perform for the principal and
which renews automatically or continues in effect until either party gives notice of termination.”
Stoot v. Fluor Drilling Serv., Inc., 851 F.2d 1514, 1519 (5th Cir. 1988).
2
Stolt Comex Seaway Holdings, Inc. is an affiliate of Stolt Offshore, Inc. (“Stolt Offshore”).
Although Stolt Holdings was named as the defendant in Callais Welding’s suit for defense and
indemnification, Stolt Offshore is the official parent company of Stolt Holdings. Moreover, it is not
altogether clear from the record why Callais Welding sued the affiliate company instead of the parent
company.
2
BACKGROUND
A. The Service Agreement
Callais Welding is a Louisiana corporation with its principal place of business in Louisiana.
Curtis, Sr. is the president and chief executive officer of Callais Welding. On September 15, 1995,
Callais Welding entered into a Master Service Agreement with American Oilfield Divers, Inc.
(“American Oilfield”). As the president and CEO, Curtis, Sr. was a signatory to the agreement,
acting as the entity’s agent. At the time the service agreement was executed, American Oilfield was
also a foreign corporation, with its principal place of business in Louisiana.3
The district court found that the provisions under the service agreement required Callais
Welding to provide services and equipment to American Oilfield for American Oilfield’s offshore
drilling and production business. The service agreement also contained a choice-of-law provision
which provided that, if a dispute between any of the parties arose concerning the service agreement,
then general maritime law would be used to resolve the disagreement.
Prior to the incident giving rise to this suit, American Oilfield became Stolt Offshore. As a
result of the change, the service agreement was amended. The amendment provided that Stolt
Offshore, American Oilfield’s successor in interest, and all of Stolt Offshore’s subsidiaries and
affiliates, including Stolt Holdings, would become signatories to the original service agreement
between Callais Welding and American Oilfield. As it pertains to this dispute, the district court found
that the service agreement required Callais Welding to defend and indemnify Stolt Offshore in the
3
Through acquisition and name change, American Oilfield became Stolt Offshore. For the
purposes of diversity, the district court determined that by the time Callais Welding filed this suit for
defense and indemnification, Stolt Offshore had pulled its charter from Louisiana and thereby severing
any nexus to Louisiana.
3
event that claims were brought by Callais Welding against Stolt Offshore, its employees, affiliates or
subsidiaries, or their employees.
Conversely, the service agreement was conspicuously silent as to whether Stolt Offshore
would be required to defend and indemnify Callais Welding’s employees, subsidiaries or affiliates, and
any of their employees, if a suit was brought against Callais Welding by Stolt Offshore, its employees,
subsidiaries or affiliates, or any of their employees. As a result of this silence, the district court
concluded that the amendment required Stolt Offshore and its subsidiaries and affiliates to defend and
indemnify only Callais Welding from suits brought by Stolt Offshore, its employees, subsidiaries or
affiliates, or any of their employees.
B. Underlying Facts and Proceedings
On August 31, 2001, while in the course and scope of his employ with Big Inch, another
Stolt Offshore subsidiary, Brian Laine was injured at an onshore work site, in Houma, Louisiana. It
can be gleaned from the record that, while Laine was inspecting a spool assembly, a crane that was
lifting heavy objects capsized. As a result of the capsize, the heavy piece of tubing or piping being
carried by the crane, i.e., t he jumper, disconnected and fell onto the scaffolding where Laine was
standing. The jumper struck Laine across his head and shoulders which resulted in Laine receiving
severe injuries.
At the time of the accident, Curtis, Sr. was supervising the operation of the crane. Timothy
Sutterfield, a supervisor for Triple C. Fabricators, Inc. (“Triple C”), another company working at
the Houma site, was responsible for connecting the jumper assembly.4
4
It should be noted that the record indicates that, at the time of the incident, Curtis, Sr. was
the director and an officer of Triple C. He was also one of the two incorporators of Triple C.
4
On August 9, 2002, just prior to the filing of their petitions in state court, Laine and his wife,
Kimberly Laine, entered into a Mary Carter settlement agreement (“settlement agreement”) with the
following parties concerning Laine’s claims arising from the accident: (1) Big Inch, (2) Stolt
Offshore, and (3) both Big Inch’s and Stolt Offshore’s insurers and underwriters. The settlement
agreement provided that the Laines would receive $350,825, in exchange for a release of all their
claims against Big Inch, Stolt Offshore and their insurers and underwriters.
The settlement agreement specifically allowed for the release of Stolt Offshore and Callais
Welding, the entity, and further provided the Laines with the right to subrogate their claims and to
reserve all their rights against any non-settling defendants. The Laines specifically excluded Triple
C and Triple C’s insurers and underwriters from the release agreement.
On August 30, 2002, Brian Laine, Kimberly Laine, and Big Inch all filed separate petitions
for damages in the 32nd Judicial District Court, in the Parish of Terrebonne, Louisiana. The Laines
named as defendants, Curtis, Sr., individually, Triple C and its insurer. The Laines did not name
Callais Welding, the entity. The Laines’ petitions alleged that Curtis, Sr. was liable for negligence
because he ordered the use of an inappropriate crane to rig the jumper assembly. Their petitions
alleged that Triple C was liable for negligence because Sutterfield, Triple C’s employee, improperly
connected the jumper assembly to the crane.
In response to the state court claims, Callais Welding requested Stolt Holdings to indemnify
and defend it in the state court proceeding even though Callais Welding was never named a party to
the state court suit. Callais Welding contended that Stolt Holdings, as Stolt Offshore’s affiliate, was
obligated to defend and indemnify it pursuant to the terms of the service agreement. Stolt Holdings,
however, refused Callais Welding’s request for protection, contending that Callais Welding was not
5
a party to the lawsuit. Stolt Holdings further argued that the Laines’ lawsuits were brought against
Curtis, Sr.–in his individual capacity–and also that it was only obligated to defend and indemnify
Callais Welding, the entity, not the entity’s agents or employees.
In response, Callais Welding filed this defense and indemnification suit against Stolt Holdings
in the United States District Court for Eastern District of Louisiana. Callais Welding’s complaint
alleged that Stolt Holdings, as an affiliate of Stolt Offshore, breached its contractual obligation under
the service agreement by failing to defend and indemnify Callais Welding in the state court
proceeding.
On November 6, 2003, Callais Welding moved for summary judgment, contending there was
no genuine issue of material fact as to whether Stolt Holdings was required to defend and indemnify
Callais Welding, its employees, subsidiaries and affiliates, and any of their employees in the state court
proceeding. Callais Welding essentially argued that although the language under the service
agreement did not expressly expand Stolt Holdings’ duty to Callais Welding’s agents and employees,
or further, it must be implied from the language of the service agreement that Stolt Offshore’s duty
to Callais Welding was more expansive.
In its answer, Stolt Holdings argued that there were genuine issues of material fact
concerning Callais Welding’s claim of entitlement to defense and indemnification of Callais Welding’s
agents and employees, particularly with regard to its duty to defend and indemnify Curtis, Sr. Stolt
Holdings specifically contended that because the claims in the state court proceeding were brought
against Curtis, Sr., in his individual capacity, and not against the Callais Welding, the entity, or against
Curtis, Sr., as agent of the entity, the indemnity provision under the service agreement was not
triggered. Stolt Holdings, therefore, argued that it, as an affiliate of Stolt Offshore, had no duty to
6
protect Callais Welding from the claims raised against Curtis, Sr. in the state court proceeding. Stolt
Holdings maintained that its only obligation under the service agreement was to Callais Welding, the
entity.
On November, 18, 2003, Stolt Holdings filed a cross-motion for summary judgment, now
contending that there was no genuine issue of material fact that Stolt Holdings was not contractually
obligated to defend and indemnify Callais Welding, based on the plain language of the service
agreement. Stolt Holdings further contended that, under rules of general maritime law, the terms of
the service agreement and all the provisions therein had to be construed narrowly. If read narrowly,
Stolt Holdings argued, the district court necessarily had to disallow coverage to Callais Welding’s
employees since the agreement did not specifically provide for coverage of them.
In considering the opposing motions, the district court determined that a conflict of laws
dispute existed. Callais Welding contended that under the language of the service agreement the
dispute between it and Stolt Holdings should be resolved under Louisiana law, and therefore, the
doctrine of respondeat superior should be applied. Callais Welding principally relied on Reliance Ins.
Co. v. Bernard & Burke, Inc. 428 So. 2d 1097 (La. App. 1 Cir. 1983) (observing that indemnity
agreements will cover an entity’s employees regardless of whether provisions in the contractual
agreement specifically provide for coverage of the entity’s agents, employees, or officers), for the
proposition that an entity can only be liable through its agents or
employees. 428 So. 2d at 1102.
Stolt Holdings conversely argued that the language under the service agreement required the
dispute to be resolved pursuant to general maritime law because the choice-of-law provision under
the service agreement specifically required the parti es to do so. To resolve the matter, the court
interpreted the following pertinent language of the agreement:
7
6. INDEMNIFICATION (a) For purposes of this Agreement, the term “Company
Indemnities” shall mean [Stolt Holdings] and all of its affiliated or parent or subsidiary
companies or corporations (including, without limitation, the subsidiary signatories
to this Agreement and all of the aforesaid entities’ agents, officers, directors,
employees, representatives and insurers, and all of the aforesaid entities’ customers
for whom Services under this Agreement are directly or indirectly provided during the
term of this Agreement.
(b) CONTRACTOR’S Indemnification. Contractor assumes sole responsibility for
and shall protect, defend, indemnify and hold the Company Indemnities harmless from
and against any an all loss, damage, injury, liability, . . .
....
(d) COMPANY’S Indemnification. Except as expressly set forth in Sections 6(a)
through (c) above, the COMPANY [Stolt Holdings] assumes sole responsibility for
and shall protect, defend, indemnify and hold CONTRACTOR [Callais Welding]
harmless from and against any and all Losses arising out of, connected with . . . any
injury, . . . to the COMPANY’s [Stolt Holdings] employees and personnel or for loss
of and/or damages to COMPANY’S [Stolt Holdings] property, vessels or equipment,
by whomever brought, whether based on statute, tort, contract or quasi contract, and
whether or not resulting from the contractual obligations assumed by the
CONTRACTOR [Callais Welding]. Except as set forth in Sections 6(a) through (c)
above, such indemnity shall apply whether or not the CONTRACTOR [Callais
Welding] was or is claimed to be passively, concurrently or actively negligent or
expressly negligent and regardless whether liability without fault (including but not
limited to claims for unseaworthiness of vessels) is imposed or sought to be imposed
on the CONTRACTOR [Callais Welding].
On December 15, 2003, the district court found that the choice-of-law provision in the
agreement was valid and enforceable. Because the court determined that the application of general
maritime law was not contrary to Louisiana’s public policy, it thereby gave effect to the choice-of-
law provision, thus obligating the parties to resolve the matter under general maritime law. The
district court applied the rules under general maritime law, and consequently, interpreted the language
under the agreement in favor of Stolt Holdings. The court relied on this court’s prior holding in
Babcock v. Continental Oil Co., wherein we stated that under general maritime law an indemnity
8
clause in a contract is to be interpreted narrowly and that the words of the contract are to be given
their plain meaning. 792 F.2d 1346 n.5 (5th Cir. 1986).
Based on Babcock, the district court concluded that the plain language of the service
agreement provided that Stolt Offshore, and thereby Stolt Holdings, was obligated to defend and
indemnify only Callais Welding, not Callais Welding’s agents or employees, including Curtis, Sr.
Because Callais Welding was not a party to the state court proceeding, the court concluded that Stolt
Holdings was not obligated to defend or indemnify Curtis, Sr. For this reason, the court granted
Stolt Holdings’ cross-motion for summary judgment and issued a memorandum of order and reasons
to explain its decision. This appeal by Callais Welding ensued.
On appeal, Callais Welding contends that, at the time of the accident, Curtis, Sr. was in the
course and scope of his employ for Callais Welding. Based on this contention, Callais Welding argues
that Curtis, Sr. is covered for the negligence claims filed against him in the state court proceeding
because Curtis, Sr. was acting as an agent or employee of Callais Welding.
Stolt Holdings conversely argues that Curtis, Sr. was working in his individual capacity, or,
that he was in the course and scope of his employ for Triple C. Moreover, Stolt Holdings contends
that under the plain language of the service agreement its duty to defend and indemnify only extended
to Callais Welding, not its agents or employees. Based on this argument, Stolt Holdings maintains
that the indemnity provision in the service agreement was never triggered because Callais Welding
was never named a party to the state court suit, and further, was specifically released from any
liability by the settlement agreement.
9
JURISDICTION
Although the district court properly concluded that the service agreement was not a maritime
contract, the court nevertheless determined that diversity jurisdiction existed because at the time that
Callais Welding filed this lawsuit, Stolt Holdings was a foreign corporation with its principal place
of business outside the state of Louisiana. The court also noted that Callais Welding admitted in its
complaint that diversity jurisdiction existed. We find no error. Also, we have jurisdiction over this
matter pursuant to 28 U.S.C. § 1291, as this appeal is from a final judgment of the district court.
STANDARD OF REVIEW
We review de novo a district court’s grant of a motion for summary judgment, applying the
same standard as the district court did in the first instance. See Burge v. Parish of St. Tammany, 187
F.3d 452, 465 (5th Cir. 1999). Summary judgment is appropriate where the moving party establishes
“there is no genuine issue of material fact and that [it] is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56 (c). The moving party must show that if the evidentiary material of record were
reduced to admissible evidence in court, it would be insufficient to permit the nonmoving party to
carry its burden. Celotex v. Catrett,
477 U.S. 317, 327 (1986).
Once the moving party has carried its summary judgment burden, the opposing party must
set forth specific facts showing a genuine issue for trial and may not rest upon the mere allegations
or denials of its pleadings. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). This
showing requires more than some metaphysical doubt as to the material facts. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 584-86 (1986).
10
DISCUSSION
Concluding that the district court correctly gave effect to the choice-of-law provision in the
service agreement, we accordingly apply the rules of contract interpretation under general maritime
law to construe the meaning of the service agreement. The question becomes whether the service
agreement can–under general maritime law–be construed to require Stolt Holdings to indemnify
Curtis, Sr. on the basis that he is an employee of Callais Welding. Because we do not answer this
question in the affirmative, we hold that the district court’s order of summary judgment in favor of
Stolt Holdings was proper.
1. Conflict of Laws
Since the parties continue to dispute the validity of choice-of-law provision, we first address
the conflict of laws dispute.
In a federal diversity case, the conflict of laws of the forum state governs.5 Roberts v. Energy
Dev. Corp., 104 F.3d 782, 786 (5th Cir. 1997). The rules governing Louisiana’s conflict of laws
are delineated under Louisiana Civil Code Articles 3540,6 3537,7 and 3515. 8 “Louisiana generally
5
Callais Welding cites to Reliance Ins. Co., supra, for the proposition that there is no conflict
of laws between Louisiana law and general maritime law because under the doctrine of respondeat
superior, an entity can only be liable through its agents or employees. We reject this argument based
on prior precedent in Babcock, discussed infra.
6
Article 3540 states as follows:
All other issues of conventional obligations [, i.e., contracts] are governed by
the law expressly chosen or clearly relied upon by the parti es, except to the extent
that law contravenes the public policy of the state whose law would otherwise be
applicable under Article 3537.
7
Article 3537 reads as follows:
That state is determined by evaluating the strength and pertinence of the
relevant policies of the involved state in light of: (1) the pertinent contracts of each
11
allows parties to select the law that will determine the outcome of the disputes arising from a
contract.” Verdine v. Ensco Offshore Co., 255 F.3d 246, 250 (5th Cir. 2001). Thus, Louisiana has
no general prohibition against choice-of-law provisions. Indeed, under Article 3540 a choice-of-law
provision is presumed valid and enforceable, until the provision is proven invalid. Delhomme Indus.,
Inc. v. Houston Beechcraft, Inc.,
669 F.2d 1049, 1058 (5th Cir. 1982); Cherokee Pump & Equip.,
Inc. v. Aurora Pump,
38 F.3d 246, 250 (5th Cir. 1994) (stating that Article 3540 “generally gives
contracting parties the freedom to choose which state’s laws will govern disputes arising out of the
contract”).
Under article 3540, Louisiana courts typically will not invalidate a choice-of-law provision
agreed upon between parties, unless the chosen law violates a strong public policy of the state. See
Delhomme, 669 F.2d at 1058 (citing Wilson v. Sawyer,
106 So. 2d 831, 833 (La. Ct. App. 1958));
see also Roberts v. Energy Dev. Corp.,
235 F.3d 935, 938 (5th Cir. 2000). Cf. Matte v. Zapata
state to the parties and the transaction, including the place of negotiation, formation,
and performance of the contract, the location of the object of the contract, and the
place of domicile, habitual residence, or business of the parties; (2) the nature, type,
and purpose of the contract; and (3) the policies referred to in Article 3515, as well
as the policies of facilitating the orderly planning of transactions, of promoting
multistate commercial intercourse, and of protecting one party from undue imposition
by the other.
8
Article 3515 reads as follows:
Except as otherwise provided in this Book, an issue in a case having contracts
with other states is governed by the law of the state whose policies would be most
seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the
relevant policies of all involved states in the light of: (1) the relationship of each state
to the parties and the dispute; and (2) the policies and needs of the interstate and
international systems, including the policies of upholding the justified expectations of
parties and of minimizing the adverse consequences that might follow from subjecting
a party to the law of more than one state.
12
Offshore Co., 784 F.2d 628, 631 (5th Cir. 1986) (refusing to give effect to a choice-of-law provision
as a violation of Louisiana public policy because the parties attempted to contract around Louisiana
Oilfield Indemnification Act (“LOIA”)). The party seeking to invalidate the choice-of-law provision
bears the burden of proving invalidity. Delhomme Indus.,
Inc., 669 F.2d at 1058. Moreover, “[o]ne
state’s law does not violate another st ate’s public policy merely because the law of the two states
differ.”
Id. (citing Restatement (Second) of Conflict of Laws § 90 comment b (1969)); see also
Cherokee Pump & Equip.,
Inc. 38 F.3d at 252.
The provisions under Article 3537 essentially guide us in determining which of the competing
laws, here federal maritime law or Louisiana general contract laws, is applicable, and Article 3515
guides courts in balancing the policies of the competing laws.
As the district court correctly concluded, but for the choice-of-law provision in the service
agreement, it is clear that Louisiana’s law would apply.9 In addition, because Curtis, Sr.’s work was
performed entirely on land, there is no need for concern that application of the choice-of-law
provision will contravene any national interest in maintaining uniformity of maritime laws. See
Foremost Ins. Co. v. Richardson, 457 U.S. 668 (1982); see also Green v. Vermillion Corp.,
144 F.3d
332, 341 (5th 1998) (instructing that one of the fundamental premises of admiralty jurisdiction is that
“uniformity is not to be sacrificed to accommodate state law”) (citing Grant Gilmore Charles L.
Black, Jr., The Law Admiralty § 6-58 to § 6-61 (2d Ed. 1975)); Corbitt v. Diamond M. Drilling Co.,
654 F.2d 329, 333 5th Cir. Unit A Aug. 1981) (observing that a party’s contract to indemnify an
indemnitee against the consequences of his own negligence does not violate any fundamental policy
9
Louisiana is the only state whose policies could be impaired by enforcement of the choice-of-
law provision in the defense and indemnity clauses of this service agreement and all of the injuries and
transaction took place in Louisiana.
13
of maritime law); but cf. Stoot, 851 F.2d at 1518 (stating that “application of the [Louisiana Oilfield]
Anti-Indemnity Statute does not conflict with any fundamental purpose of maritime law”). All that
is required in order to not violate admiralty jurisdiction is that “the contract clearly express[] such an
obligation in unequivocal terms.”
Corbitt, 654 F.2d at 333. Because we conclude that the indemnity
clause under the service agreement is unambiguous and unequivocal as to the intent of the parties,
Article 3537 is not at issue for this analysis.
The question becomes whether the choice-of-law provision violates a strong public policy
of Louisiana. “Louisiana contract law generally ‘allows a principal to be indemnified against his own
negligence so long as that intent is clearly expressed.’” Verdine, 255 F.3d at 250 (quoting Rodrigue
v. LeGros,
563 So. 2d 248, 254 (La. 1990). Notwithstanding, “[t]he [Louisiana] Oilfield Anti-
Indemnity Act [(“LOIA”)]creates a public policy exception to the general rule.” Id.; LA. REV. STAT.
9:2780. “The Louisiana legislature adopted the act to eliminate defense and indemnity provisions
forced on Louisiana oilfield contractors.”
Id. at 250. Thus, if LOIA applies to the provisions in this
service agreement, the indemnity agreement must be invalidated as being in contravention of
Louisiana’s public policy.
Notwithstanding this exception, however, a panel of this court in Transcontinental Gas Pipe
Line Corp. v. Transp. Ins. Co., specifically limited the scope of LOIA’s application. 953 F.2d 985,
991 (5th Cir. 1992); see also
Verdine, 255 F.3d at 251. To determine whether the provisions of
LOIA were applicable, the court fashioned a two-part inquiry:
First, there must be an agreement that “pertains to” an oil, gas or water well. If the
contract does not pertain to a well, the inquiry ends. Only if we determine that the
contract has the required nexus to a well may we proceed to the second step of the
process, [i.e.,] examination of the contract’s involvement with “operations related to
the exploration, development, production, or transportation of oil, gas, or water”...
Therefore, if (but only if) the agreement (1) pertains to a well and (2) is related to
14
exploration, development, production, or transportation of oil, gas, or water, will the
Act invalidate any indemnity provision contained in or collateral to that agreement.
Transcon. Gas Pipe Line Corp., 953 F.2d at 991; accord Fontenot v. Chevron U.S.A., Inc.,
676 So.
2d 557, 564 (La. 1996) (adopting the two-part test articulated in Transcontinental).
We have carefully reviewed the language under the service agreement at issue and do not find
that it pertains to an oil, gas, or water well. Accordingly, our inquiry concerning LOIA ends.
Moreover, Callais Welding’s dependence on Reliance for the proposition that a maritime contract in
Louisiana must extend coverage to a company’s agents and employees, even when the agreement
does not expressly provide for such coverage, is of no avail. While it is true that the district court’s
ruling under the holding in Reliance would be contrary to Louisiana’s public policy, the holding in
Reliance, as the district court noted, is not public policy. Reliance is merely Louisiana law that differs
from general maritime law with regard to how interpretation of indemnity should be done. As Judge
Alvin Rubin so aptly noted in Delhomme Indus., Inc., one set of laws “does not violate another state’s
public policy merely because the [competing] laws . . . differ.” 669 F.2d at 1058. Because Callais
Welding’s argument that the indemnity agreement contravenes Louisiana public policy, principally
relies on the holding in Reliance, we find that Callais Welding has no t met its burden sufficient to
invalidate the choice-of-law provision. As such, we move on to address the substantive issues of
coverage as set out under the service agreement.
2. Interpretation of the Service Agreement
The district court determined that this court’s prior decision in Babcock was dispositive of
the issues of coverage in this dispute. We agree.
“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, . . .” Corbitt, 654 F.2d
15
at 333. This court has consistently held that when interpreting a contract under general maritime law,
“a court may not look beyond the written language of the document to determine the intent of the
parties unless the disputed contract provision is ambiguous.”
Id. at 332-33 (citing Hicks v. Ocean
Drilling and Exploration Co.,
512 F.2d 817, 825 (5th Cir. 1975)); see also Fontenot v. Mesa
Petroleum,
791 F.2d 1207, 1214 (5th Cir. 1986). This court cannot look to extrinsic or parol
evidence to construe the intent of the parties.
Corbitt, 654 F.2d at 333. Moreover, the contract must
be read as a whole and the words must be given their plain meaning.
In Babcock, this court addressed a dispute concerning an indemnity provision that was
strikingly similar to the one in the instant case. 792 F.2d at 1349-51. The panel in that case held that
the indemnification agreement between a company and a contractor did not entitle the contractor’s
employees to indemnification for personal injury claims because the agreement did not expressly
provide for coverage of the contractor’s agents or employees, even though it expressly provided for
coverage of the company’s agents and employees.
Id. at 1350-51. Moreover, the panel rejected
arguments that failing to extend coverage to the entity’s agents and employees where the agreement
did not expressly do so would result in a “ludicrous result” on the basis that “an agreement to
indemnify an employer without indemnifying its employees is meaningless.”
Id. at 1351.
Like the district court, we find that the language of the service agreement is unambiguous.
We, therefore, need not look beyond the plain language of the service agreement to determine the
intent of the parties. Thus, our task becomes to discern whether, under the plain language of the
service agreement, the agreement can be construed to expand Stolt Holding’s duty of defense and
indemnification to Callais Welding’s agents or employees, or further. We are restrained by
controlling precedent to read narrowly the provision under this agreement. After careful review, we
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conclude that the service agreement in this case cannot be read to expand coverage beyond the scope
of Callais Welding.
Section 6(a) of the agreement expressly states Stolt Offshore is inclusive of all of its “affiliated
or parent or subsidiary companies [, including Stolt Holdings,] . . . and all of the aforesaid entities’
agents, officers, directors, employees. . . .” There is no such provision stating that the definition of
Callais Welding is similarly expansive.
Likewise, section 6(b) of the service agreement calls for Callais Welding to defend and
indemnify Stolt Offshore, as understood in section 6(a). It is clear from the plain language that
section 6(a) intended to expand the meaning of Stolt Offshore beyond the mere limits of the entity.
Yet, section 6(d) of the service agreement, delineating the obligations between the parties, cannot be
read to suggests that the parties intended Stolt Offshore’s duty of defense and indemnification was
to expand beyond the limits of Callais Welding, the entity.
This court has previously stated that “[a] contract to indemnify another for his own
negligence imposes an extraordinary obligation . . . [and that] an indemnitor [, here Stolt Offshore,]
is entitled to express notice that under [its] agreement, and through no fault of [its] own, [it] may be
called upon to pay damages caused solely by the negligence of [its] indemnitee. Corbitt, 654 F.2d
at 333. This service agreement clearly does not provide Stolt Offshore with express notice that it will
be called upon to defend and indemnify Callais Welding’s agents or employees or its affiliates or
subsidiaries. We find it highly persuasive of the parties’ intent that one portion of the service
agreement expressly includes coverage for Stolt Offshore’s agents, employees, subsidiaries and
affiliates, and yet, the other portion of the agreement remains conspicuously silent with regards to
a more expansive duty of coverage to Callais Welding. Thus, it is clear from our reading of the plain
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language of the service agreement that the parties did not intend for Stolt Offshore’s duty of defense
and indemnification to expand beyond the coverage of Callais Welding, the entity. Curtis, Sr., in his
individual capacity, or as agent to the entity, is not covered under this service agreement.10 Callais
Welding’s argument that the district court’s granting of Stolt Holdings’ cross-motion for summary
judgment was improper is therefore without merit.
CONCLUSION
Because we conclude that the district court’s granting of Stolt Holdings’ cross-motion for
summary judgment was proper, the final judgment and order dismissing Callais Welding’s claims
against Stolt Holdings are therefore affirmed.
AFFIRMED.
10
Although the record is not clear whether Triple C is an affiliate or subsidiary of Callais
Welding, we for the same reasons hold that Triple C is not covered under the plain language of the
service agreement.
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