PER CURIAM:
Defendant-Appellant Continental Insurance Co. ("Continental") appeals the district court's final judgment in favor of Plaintiffs-Appellees Tetra Technologies, Inc. ("Tetra") and Maritech Resources, Inc. ("Maritech"), requiring Continental and its co-defendant insured, Vertex Services ("Vertex"), to indemnify them.
This dispute arises from injuries sustained by a platform worker, Abraham Mayorga, employed by Vertex. Mayorga sued Tetra and Maritech (hereinafter collectively "Tetra" unless separately identified) for personal injury, and Tetra sought indemnity from Vertex and its insurer, Continental, pursuant to certain agreements and an insurance policy. On cross motions for summary judgment, the district court concluded that Tetra is entitled to indemnity from Continental and Vertex. Continental appeals.
Tetra and Vertex entered into a Master Service Agreement (the "MSA"), under which Vertex's employees would perform work for Tetra. The MSA required Vertex to indemnify Tetra for injuries sustained by Vertex's employees while working for Tetra. Pursuant to the MSA, Vertex was also required to list Tetra as an additional insured under its general liability insurance policy issued by Continental (the "Policy").
Tetra entered into an agreement (the "Salvage Plan") with Maritech to salvage a decommissioned oil production platform located at Eugene Island 129 ("EI129"). Tetra retained Vertex to perform at least some aspects of the salvage operation. Mayorga served as a rigger for the project, working from a Tetra-owned barge, the D/B Arapaho. On May 22, 2011, Mayorga was assigned to assist in removing a bridge connecting two sections of the EI129 platform. In his complaint, Mayorga alleged that he was injured when the bridge collapsed, causing him and other workers on it to fall 70-80 feet into the Gulf of Mexico. Mayorga filed suit against Tetra, alleging that it had been negligent in performing the salvage operation.
Tetra filed this indemnity action against Vertex and Continental. Tetra and Continental filed cross motions for summary judgment. Continental asserted that it was not required to indemnify Tetra, because (1) the Outer Continental Shelf Lands Act ("OCSLA") made Louisiana law applicable as surrogate federal law; (2) the indemnity agreement was void under the Louisiana Oilfield Indemnity Act ("LOIA"); and (3) in any event, Tetra's claims were excluded under Exclusion d of the Policy. Tetra argued that neither LOIA nor the Policy precluded recovery against Continental or Vertex. On the initial cross motions for summary judgment, the district court found that Continental and Vertex are required to indemnify Tetra because LOIA did not apply and that Exclusion d did not preclude coverage. Continental appealed, but that appeal was dismissed for lack of jurisdiction.
On remand, the parties entered stipulations as to the two issues that prevented resolution of the prior appeal. Tetra also claimed that it was entitled to additional attorneys' fees, while Continental re-urged its motion for summary judgment. The district court denied both Tetra's motion for additional fees (which Tetra does not appeal) and Continental's re-urged motion for summary judgment, entering a final judgment against Continental and Vertex. Continental appeals the grant of summary judgment in favor of Tetra and the denial of its own motion for summary judgment.
This court "review[s] the district court's judgment on cross motions for summary judgment de novo, addressing each party's motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party."
OCSLA is important to this dispute because Continental contends that LOIA applies as surrogate federal law and voids the MSA's indemnity agreement. LOIA renders void, under certain conditions relating generally to the petroleum industry, any agreement that purports to indemnify a party for damages resulting from death or bodily injury caused by the indemnitee's own negligence or fault.
Accordingly, we must address three issues: (1) whether OCSLA requires the court to adopt Louisiana law as surrogate federal law; (2) if (or assuming, as did the district court) Louisiana law must be adopted as surrogate federal law, whether LOIA voids the indemnity agreement here; and (3) if LOIA does not void the indemnity agreement, whether the Policy excludes coverage.
"Under Union Texas Petroleum Corp. v. PLT Engineering, Inc. [("PLT")], three requirements must be met for state law to apply as surrogate federal law under the OCSLA."
Under the first requirement of the PLT test, "the controversy at issue must arise on an OCSLA situs, namely the
As this court has discussed, "it is a common practice for companies contracting for work in the oilfield to enter into contracts in two stages," first signing a blanket contract and then "issu[ing] work orders for the performance of specific work."
Continental argues that the evidence in the record—namely the MSA, the Salvage Plan, and Mayorga's deposition testimony—establishes that the controversy arose on an OCSLA situs. Continental also asserts that the "entire goal" of the work Tetra hired Vertex to perform was the deconstruction, decommissioning, and salvaging of parts of the platform on the OCS. Tetra counters that there is no record evidence as to where the majority of Vertex's work for Tetra was to be performed but contends that most of the work was to be performed on lift barges and material barges—not on an OCS platform.
Tetra's specific work order to Vertex that resulted in Mayorga's assignment to the job is absent from the record. However, the absence of a specific work order is not fatal to Continental's assertion that the controversy arose on an OCSLA situs.
Continental also points to the MSA to show that the controversy arose on an OCSLA situs. However, the terms of the MSA provide little guidance in helping to determine where the majority of the work was to be performed under the contract.
Finally, Continental argues that the Salvage Plan is "especially relevant" in determining where the majority of the work was to be completed. First, the Salvage Plan is captioned "Bridge and Bridge Support Salvages, Eugene Island 129 Complex." Next, the work described in the Salvage Plan does largely relate to the EI129 platform. For example, a barge was to be set up at the EI129 Complex and attached to the EI129 platform, and the removed bridges were, of course, on the EI129 Complex and platform. Based on these descriptions of the work and the plan itself, Continental contends that every portion of the work to be completed was located at, adjacent to, or on the platform on the outer Continental Shelf.
The problem with Continental's argument is that the Salvage Plan explains the work that Tetra was to perform for Maritech. As the district court observed, the Salvage Plan contains no information related to what services Tetra retained Vertex to perform. While Mayorga was injured deconstructing a bridge platform on the EI129 complex, it does not follow that the majority of Vertex's work was performed in that location. Rather, that one "snapshot" does not explain what the entire work order might have contemplated. In fact, the Salvage Plan itself (which relates to the work Tetra would perform for Maritech) also describes a number of tasks that would be performed on the barge—not on the platform.
Viewing Mayorga's deposition testimony, the MSA, and the Salvage Plan together does suggest that much of Tetra's work was to be performed on the EI129 platform. The relevant question, however, is where a majority of Vertex's performance was to occur under the contract, as the district court explained.
Under PLT's second requirement, in order for the OCSLA choice of law provision to apply, "[f]ederal maritime law must not apply of its own force."
Continental argues that PLT's second prong is met because the work at issue involved decommissioning, deconstructing, or salvaging a fixed platform used for oil and gas exploration on the OCS. Such contracts are not "historically treated" as maritime contracts, and maritime law thus generally would not apply of its own force.
Continental points out that work primarily performed on a fixed platform is not maritime in nature. While true, Continental's overstates what can be gleaned from the Salvage Plan. That agreement between Tetra and Maritech does relate in large part to a fixed platform. However, there are aspects of the Salvage Plan that would not be performed on the EI129 platform.
Moreover, the critical question is the nature of the contract between Tetra and Vertex. There appears to be no evidence that Tetra hired Vertex solely to perform the Salvage Plan for Maritech, nor any evidence that Vertex's performance related to only, or even mostly, platform-specific tasks. Because the scope of the work Vertex performed for Tetra is unclear, we may not say whether the "particular work order" was maritime or non-maritime in nature.
The only Davis factor for which there is clear record evidence is the sixth—the work the injured worker was actually doing at the time of injury. Here, Mayorga was assisting in removing a bridge connecting two platforms at the EI129 complex. The evidence is insufficient or inconclusive as to the other five factors.
As to the first two factors—the nature of the specific work order and the actual work done by the crew—the evidence is inconclusive as to whether the contract was non-maritime. Continental relies on the Salvage Plan, Mayorga's deposition testimony, and the complaints filed in the underlying lawsuit, but those sources do not describe the nature of the entire work order. They merely show the work that Mayorga and others were performing at the time.
Continental faces a similar problem with the third, fourth, and fifth factors—the relationship to a navigable vessel, the nature of the actual work, and the injured worker's primary work. Continental concedes that Mayorga partially worked on the D/B Arapaho but contends that his
In sum, we conclude that the evidence is insufficient to determine whether federal maritime law does not apply of its own force. Accordingly, neither party is entitled to summary judgment on PLT's second prong.
Finally, under PLT's third prong, "[t]he state law must not be inconsistent with Federal law."
Because the summary judgment evidence is insufficient to determine the first two PLT prongs, neither party is entitled to summary judgment as to whether LOIA must be adopted as surrogate federal law under OCSLA. That was not a problem under the district court's analysis because it concluded that if Louisiana law did apply, LOIA would not void the indemnity agreement under these circumstances, and if Louisiana law did not apply, the Policy would not exclude coverage. Because the outcome would be the same either way under the district court's interpretation, it was unnecessary for it to resolve the OCSLA issue. Because, as explained below, we conclude below that LOIA would void the indemnity agreement but the Policy itself would not exclude coverage, we remand for the district court to determine the now dispositive issue of whether Louisiana law must be adopted as surrogate federal law.
If OCSLA requires the adoption of Louisiana law as surrogate federal law, the next question is whether LOIA applies to this dispute. LOIA provides, in relevant part:
Thus, if LOIA applies, it will void not only Vertex's indemnity obligation but also Continental's insurance obligation under the Policy to Tetra as an additional named insured.
This court has adopted a two-part test to determine if LOIA applies. "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."
If the agreement "has the required nexus to a well," the court examines "the contract's involvement with operations related to the exploration, development, production, or transportation of oil, gas, or water."
Although the inquiry is usually fact intensive, the question before us here is one of law. The district court seems to have concluded that the salvage of a fully decommissioned production platform does not have the "required nexus to a well" because the well is not in use. Thus, the question before us is whether salvaging a
Continental contends that this court's decision in Verdine, which considered the extent of LOIA's nexus to a well requirement, shows the district court's error. There, Ensco agreed to provide a fixed platform rig to Amerada Hess Corporation for use on wells located off the Louisiana coast.
The court first noted that at the time Centin's employees worked on the platform, it sat idle in a fabrication yard and "was not participating in in-field exploration, production, or transportation of oil or gas."
Continental argues that under Verdine, a platform salvaging operation has the required nexus to a well. This court has not yet considered the extent of Verdine's holding, and Verdine itself does not answer this question. The Verdine court found it "difficult to find a sufficient geographical and functional nexus between the [platform] and a well or wells" where the platform was not being used for infield exploration, production, or transportation and instead was sitting idle.
That does not end our inquiry, however. Continental argues that salvaging a platform from a decommissioned well necessarily has the required nexus to a well, relying on district court cases that have interpreted Verdine broadly: Wilcox v.
Howell involved an agreement to cut and pull casings from the wellbores on an oil platform as part of a plan to "plug and abandon" the oil well.
Similarly, in Teaver, the plaintiffs argued that the relevant agreement did not pertain to a well because the work related to dismantling a platform crane and because the well itself had been dry for several years.
In Wilcox, the district court found that an agreement to, inter alia, "provide welding services in connection with the decommissioning of oil and gas platforms" pertained to a well because it was an "agreement to perform an act that is collateral to plugging the well."
We conclude that these cases properly interpret LOIA. Each case involved agreements to perform work in connection with "plugging and abandoning" the wells at issue. Accepting the argument that LOIA could never apply to a nonproducing well would have required the district courts to interpret LOIA in such a manner as to exclude an expressly covered activity.
Tetra argues that this case is distinguishable because the wells at issue were decommissioned long before the Salvage Plan came into effect. Tetra asserts that salvaging a decommissioned platform is not collateral to plugging or decommissioning the well but is effectively one step further removed. We reject that argument because it ignores the fact that regulations generally require the removal of an oil platform in connection with a decommissioning operation.
Based on all the above, we conclude that a contract for salvaging a platform from a decommissioned oil well has a sufficient nexus to a well under LOIA. Thus, LOIA would void Vertex's indemnity obligation as well as Continental's obligation to indemnity Tetra as an additional insured. Consequently, if the district court determines on remand that Louisiana law must be adopted as surrogate federal law, Tetra will not be entitled to indemnity from Continental or Vertex. If the district court instead determines that Louisiana law does not apply, then the outcome depends on whether the Policy itself excludes coverage.
"Texas courts interpret insurance policies according to the rules of contract construction."
"If policy language is worded so that it can be given a definite or certain legal meaning, it is not ambiguous,"
Exclusion d, at issue here, provides:
The district court found that Exclusion d is ambiguous because it is subject to multiple reasonable interpretations. Specifically, the district court concluded that Exclusion d is ambiguous because of: (1) the "any similar law" language; (2) the limiting clause in another provision, Exclusion e; and (3) the seeming illusoriness of coverage under Continental's interpretation. We conclude that Exclusion d is ambiguous because of the "any similar law" language.
As the district court observed, the inclusion of the phrase "any similar law" prompts the court to ask how the enumerated laws are similar. Tetra argues that each of the enumerated laws in Exclusion d contains elements of employers' liability, so "any similar law" should be reasonably read to refer to employers' liability. We agree that the employer/employee relationship is the "similar" thread throughout each enumerated law.
Continental argues on appeal that the laws contained in Exclusion d are not merely employers' liability laws. Specifically, Continental contends that the Policy excludes Tetra's coverage because Mayorga's complaint for damages invoked "General Maritime Law," and Exclusion d explicitly includes the phrase "General Maritime Law." Though superficially plausible, that argument is inadequate. We are required to "examine the policy as a whole, seeking to harmonize all provisions and render none meaningless."
Because we find that Exclusion d's "any similar law" language suffices to render the exclusion ambiguous, we need not reach the two alternative or additional grounds for finding ambiguity, namely the effect of certain limiting language in Exclusion e, and whether or not Continental's construction of the Policy renders coverage illusory. "In light of this ambiguity, the court must interpret the [provision] so that it does not exclude coverage."
In sum, we REVERSE with respect to the district court's interpretation of LOIA, AFFIRM with respect to the Policy interpretation, and REMAND for a determination of whether Louisiana law applies as surrogate federal law under OCSLA. On remand, if the district court concludes that Louisiana law applies to this dispute, LOIA will void the indemnity agreement, and Continental and Vertex will be entitled to judgment. If the district court concludes that Louisiana law does not apply, then Tetra and Maritech will be entitled to judgment against Continental and Vertex because the Policy does not exclude coverage.