Certain Underwriters at Lloyd's v. Sea-Lar Management, Inc.

787 So. 2d 1069, 2001 WL 540772, 00 La.App. 4 Cir. 1512
CourtLouisiana Court of Appeal
DecidedMay 9, 2001
Docket2000-CA-1512
StatusPublished
Cited by13 cases

This text of 787 So. 2d 1069 (Certain Underwriters at Lloyd's v. Sea-Lar Management, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Certain Underwriters at Lloyd's v. Sea-Lar Management, Inc., 787 So. 2d 1069, 2001 WL 540772, 00 La.App. 4 Cir. 1512 (La. Ct. App. 2001).

Opinion

787 So.2d 1069 (2001)

CERTAIN UNDERWRITERS AT LLOYD'S, LONDON, and Certain Institute of London Underwriters Subscribing to Certificate No. 5469
v.
SEA-LAR MANAGEMENT, INC., d/b/a Contract Lease Operators.

No. 2000-CA-1512.

Court of Appeal of Louisiana, Fourth Circuit.

May 9, 2001.

*1071 J. Michael Grimley, Jr., James M. Tompkins, James R. Guidry, Galloway, Johnson, Tompkins, Burr & Smith, New Orleans, Counsel for Plaintiff/Appellee.

Ronald A. Johnson, Bettye A. Barrios, Johnson, Johnson, Barrios & Yacoubian, New Orleans, Counsel for Defendant/Appellant.

Robert P. McCleskey, Jr., Thomas Kent Morrison, Phelps Dunbar LLP, New Orleans, Counsel for Appellee.

Court composed of Chief Judge WILLIAM H. BYRNES III, Judge CHARLES R. JONES, Judge PATRICIA RIVET MURRAY.

BYRNES, Chief Judge.

For the reasons hereinafter set forth, we find that the defendant-appellant Sea-Lar Management, Inc., D/B/A Contract Lease Operators breached an implied contractual duty to supply a qualified lease operator.

This action was instituted by insurers of Graham Energy, Ltd. to recover sums which they were required to pay on behalf of their insured arising out of an oil spill which occurred on February 2-3, 1992.

Certain Underwriters at Lloyds, London and Certain Institute of London Underwriters Subscribing to Certificate No. 5469 filed the original petition initiating this action on January 28, 1994, almost two years after the spill had occurred and the clean-up was completed. On October 31, 1994, Certain Underwriters at Lloyd's, London and Certain Institute of London Underwriters subscribing to Certificate No. 7863 filed a petition for intervention alleging that they were insurers of Graham concurrent with the original plaintiffs. The original plaintiffs and intervenors may *1072 be hereinafter referred to collectively as "plaintiffs" or "appellees" or "Lloyd's."

The original petition[1], which named as defendant Sea-Lar Management, Inc., d/b/a Contract Lease Operators, alleges that:

... Graham commenced remediation operations which were completed to the satisfaction of government officials on February 6, 1992.

Sea-Lar's original Answer raised the issue of prescription.[2]

By agreement of the parties and the trial court, this case was submitted to the trial court on briefs, depositions, exhibits and Cross Motions for Summary Judgment. We infer from the record that what the parties really intended was a trial on the merits with deposition testimony in lieu of that of live witnesses. As the parties and the trial court proceeded along these lines, we shall conduct our review as one involving a trial on the merits, rather than one involving a de novo review of a summary judgment.[3] In spite of the lack of a separate, discrete exception of prescription, all parties at all times, both below and in this Court, have treated the issue as being properly before the court. The trial judge adjudicated the issue in his written reasons for judgment, deciding that the ten-year prescriptive period for contracts applies, not the one-year prescriptive period for torts or delictual actions, and we consider the question to be properly before this Court.

The trial court denied Sea-Lar's Motion for Summary Judgment and granted Lloyd's Cross Motion for Summary Judgment. On January 5, 2000, the lower court ruled that the settling defendant, D.R. Lease, was responsible for 75% of the damages, with Sea-Lar responsible for the remaining 25% of the damages.[4]

Sea-Lar filed a Motion for New Trial and Lloyd's filed a Motion to Amend Judgment. The trial court entered a revised judgment, again finding the settling defendant, D.R. Lease, 75% at fault and defendant, Sea-Lar, 25% at fault. However, the *1073 lower court determined that it had improperly applied the $30,000.00 settlement with D.R. Lease as a dollar-for-dollar credit for damages. The damage award was amended increasing the amount that Sea-Lar was to pay.[5]

Sea-Lar filed a suspensive appeal. Lloyd's did not file an answer to the appeal.

There is really no dispute as to the underlying facts. In June of 1987 Sea-Lar Management, Inc. entered into a written Lease Operating Contract with Graham Energy, Ltd., for the operation of Graham's Well No. 2 in the Big Apple Field, Plaquemines, Louisiana. The contract required that:

Sea-Lar will provide a Lease Operator A to perform the following services:
1. Make two daily well equipment inspection [sic] in order to maintain production at a maximum efficient rate. Past experience indicates that the Lease operator will be on location for four (4) hours each day.
2. Perform preventative maintenance on production process equipment.
3. Gauge and load oil sales barge.
4. Prepare and transmit production, equipment maintenance, well test, and safety inspection reports as required by Graham.
5. Maintain good housekeeping.

Sea-Lar entered into a non-specific oral subcontract with D.R. Lease to perform the duties called for in its contract with Graham.

Subsequently, Graham requested David Rouse, president of D.R. Lease, to do work in connection with the removal of a sump pump and the installation of a water barge at Graham's Well No.2. This work was outside of the work subcontracted to D.R. Lease for Graham through Sea-Lar. In the process of doing this work, a safety system that would prevent an oil spill was disconnected and D.R. Lease did not reconnect it when the water barge was installed. It is not contested that D.R. Lease was negligent when it disconnected the safety system pursuant to its separate direct contract with Graham.

It is also not contested that Bobby Prout, a D.R. Lease employee, subsequently improperly tied the gas regulator back into the safety system, thereby disabling the safety system from performing properly, resulting in the oil spill that gives rise to this litigation.

Sea-Lar's first contention is that the one-year liberative prescriptive period for delictual actions should apply. The trial court held that the ten-year prescriptive period applicable to contracts applies:

The decision to pursue a tort or contract claim was clearly elective on [the] part of plaintiff and Underwriters. In Louisiana, it is well established that a party damaged by conduct arising out of contract may have a right to seek damages in tort and for breach of contract. State e[x] rel. Guste v. Chemical Applicators of Lafayette, Inc., 379 So.2d 1199, 1201 (La.App. 3rd Cir.1980). Further, it is well settled that the same acts or omissions may constitute a breach of both *1074 general duties and contractual duties and may give rise to both actions in tort and actions in contract. Ridge Oak Development, Inc. v. Murphy, 641 So.2d 586 (La.App. 4th Cir.1994) (citation omitted). The case at bar involves the negligent breach of a contract. Sea Lar contracted to provide lease operating services for Graham's well, which included minor repairs and maintenance of the production process equipment. Bobby Prout, the employee of D.R. Lease, admitted to improperly tying the gas regulator back into the safety system, which ultimately resulted in the system malfunction and the subsequent oil spill of February 2, 1992.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Stone v. Kaefer L L C
W.D. Louisiana, 2020
Fie, LLC v. New Jax Condo Ass'n, Inc.
241 So. 3d 372 (Louisiana Court of Appeal, 2018)
Robertson v. Sun Life Financial
187 So. 3d 473 (Louisiana Court of Appeal, 2013)
Mentz Construction Services, Inc. v. Poche
87 So. 3d 273 (Louisiana Court of Appeal, 2012)
Professional Divers of New Orleans, Inc. v. William G. Helis Co.
861 So. 2d 245 (Louisiana Court of Appeal, 2003)
Terrebonne Parish School Board v. Mobil Oil Corp.
310 F.3d 870 (Fifth Circuit, 2002)
Corbello v. Iowa Production
806 So. 2d 32 (Louisiana Court of Appeal, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
787 So. 2d 1069, 2001 WL 540772, 00 La.App. 4 Cir. 1512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/certain-underwriters-at-lloyds-v-sea-lar-management-inc-lactapp-2001.