11 F.3d 563
Jeffrey J. MARCEL, et al., Plaintiffs-Appellees,
Jeffrey J. Marcel, Plaintiff-Appellee Cross-Appellant,
v.
PLACID OIL COMPANY, Defendant-Appellant Cross-Appellee.
PLACID OIL COMPANY, Third Party Plaintiff-Appellant,
v.
SEE INC., A subsidiary of Wedge Energy Group, Inc., Third
Party Defendant-Appellee.
No. 91-3788.
United States Court of Appeals,
Fifth Circuit.
Jan. 14, 1994.
S. Daniel Meeks, Lynn L. White and Terrence Kent Knister, Abbott, Best & Meeks, New Orleans, LA, for Placid Oil Co.
Norman A. Mott, III, New Orleans, LA, for intervenor.
J. Mac Morgan, New Orleans, LA, for Marcels.
J. Daniel Picou, Leininger, Larzelere & Picou, Metairie, LA, for SEE Inc.
Appeals from the United States District Court for the Eastern District of Louisiana.
Before REYNALDO G. GARZA and GARWOOD, Circuit Judges and WERLEIN, District Judge.
GARWOOD, Circuit Judge:
Plaintiffs Jeffrey and Penny Marcel, individually and on behalf of their three minor children, filed this action in Louisiana state court against defendant Placid Oil Company (Placid), seeking damages for an injury sustained by Mr. Marcel (Marcel) while working on an offshore platform operated by Placid. Placid removed to the United States District Court for the Eastern District of Louisiana and filed a related third party claim against SEE, Inc. (SEE) for alleged breach of an insurance agreement. The district court granted summary judgment for SEE. A jury rendered a verdict in favor of plaintiffs, which the district court amended to increase the award to Marcel. The award to Mrs. Marcel was decreased upon Placid's motion for new trial and/or motion for remittitur. Placid appeals, and Marcel cross-appeals.
Facts and Proceedings Below
At the time of his accident, Marcel worked as a maintenance man for SEE, on the South Marsh Island 281-C (the platform), a fixed platform located on the outer continental shelf in the Gulf of Mexico off the coast of Louisiana. Placid operated the platform for mineral lease holders; SEE provided workover services for several oil and gas wells on the platform.
On January 3, 1990, Marcel was injured in a slip-and-fall accident on the platform. He and a SEE roustabout, Clarence Etheridge, were walking along the deck of the platform on their way to repair a mud pump; as Marcel turned a corner and ducked under a platform beam, he looked back over his shoulder to see if Etheridge were still behind him. As he turned back around, Marcel slipped on the deck, landing on his lower back. He testified that he had slipped in a puddle of oil on the deck measuring six feet by four feet and one inch deep; the source of the puddle was a nearby trough drain. Marcel claimed that he did not see the puddle because the light in the area was not operating.
Following this accident, Marcel was treated by Dr. Walker, an orthopedic surgeon who performed a laminectomy and diskectomy on him in May 1990. Dr. Walker advised him to avoid continuous work on a vibrating surface and work requiring continuous standing or frequent bending and stooping. Marcel had not returned to work at the time of the trial.
Plaintiffs filed suit against Placid in Louisiana state court on July 5, 1990, raising claims of strict liability and negligence. Placid timely removed the action to the United States District Court for the Eastern District of Louisiana on grounds of diversity of citizenship and claims involving the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. Sec. 1331, et seq. The Travelers Insurance Company intervened, seeking reimbursement for payments it had made to Marcel under the Longshore and Harbor Workers' Compensation Act.
An October 1989 agreement between Placid and SEE provided that SEE would perform workover services on fixed platforms operated by Placid, including the platform on which Marcel was working. As part of the agreement, SEE agreed to obtain insurance indemnifying Placid and identifying Placid as a named insured. Placid was to be billed directly by the insurance brokers for its share of the insurance premiums. Although Schedule E of the contract stated that SEE had "already negotiated the premium," it is undisputed that SEE did not procure the insurance for Placid. Placid discovered only after Marcel's accident that SEE had never obtained this coverage.
Placid filed a third-party complaint against SEE, alleging breach of contract arising out of SEE's failure to provide Placid with insurance coverage as provided in the agreement between the two parties. SEE filed a motion for summary judgment, claiming that the agreement to procure insurance coverage for Placid violated the Louisiana Oilfield Indemnity Act (LOIA), La.Rev.Stat. Sec. 9:2780. The district court initially denied this motion but later reconsidered the motion, sua sponte, and granted summary judgment for SEE.
A jury trial in May 1991 resulted in a verdict for the plaintiffs; the jury found Placid negligent but not strictly liable for the injuries sustained by Marcel and awarded $313,800 to Marcel, $40,000 to Mrs. Marcel, and $15,000 to each of the three children. The district court amended the judgment to increase the award to Marcel to $332,188.83, adding in the amount stipulated for past medical expenses.
Placid filed a motion for new trial and/or motion for remittitur. Without a hearing, the district court denied the motion for new trial on the issues of negligence and comparative fault and denied the motion for remittitur on the children's damages; the court granted the motion for new trial on the issue Mrs. Marcel's claim for loss of consortium, subject to acceptance of a remittitur from $40,000 to $25,000. Mrs. Marcel accepted the remittitur, and final judgment was entered, as amended, on August 15, 1991. Placid appeals this judgment and the grant of summary judgment in favor of SEE. Marcel appeals the finding that Placid was not strictly liable for his injuries and the award of damages calculated by net (after tax) rather than gross wage loss.
Discussion
I. Jury Verdict
Placid contests the jury's findings that Marcel's injuries were caused by Placid's negligence. It argues that the district court erred in denying its motion for a directed verdict on the issue of negligence and that the evidence does not support the jury's findings that Placid was negligent and that Marcel was not. A jury verdict "must be upheld unless the facts and inferences point so strongly and so overwhelmingly in favor of one party that reasonable men could not arrive at any verdict to the contrary." Granberry v. O'Barr, 866 F.2d 112, 113 (5th Cir.1988) (quoting Western Co. of North America v. United States, 699 F.2d 264, 276 (5th Cir.), cert. denied, 464 U.S. 892, 104 S.Ct. 237, 78 L.Ed.2d 228 (1983)). See Hinojosa v. City of Terrell, 834 F.2d 1223, 1228 (5th Cir.1988), cert. denied, 493 U.S. 822, 110 S.Ct. 80, 107 L.Ed.2d 46 (1989) (more restrictive standard of review where issue raised only by motion for new trial and not by proper motion for directed verdict).
After reviewing the record before us, we conclude that there is sufficient evidence to support the verdict.
The district court did not err in denying Placid's motion for a directed verdict on the issue of its negligence or in denying its motion for new trial on the issue of Marcel's contributory negligence.
II. Evidentiary Rulings
Evidentiary rulings are reviewed for an abuse of discretion and may be reversed only if the ruling affects a substantial right of a party. Seidman v. American Airlines, Inc., 923 F.2d 1134, 1138-1139 (5th Cir.1991).
A. Plaintiffs' Experts
Placid contests the district court's denial of its motions in limine to exclude the testimony of plaintiffs' expert economist, Dr. Randolph Rice, and plaintiffs' vocational evaluator, Allen Simmons. This testimony concerned Marcel's lost future wages. Placid did not object to the testimony of Dr. Rice at trial and thus may not contest the district court's ruling with regard to the economist's testimony. Fed.R.Evid. 103(a)(1). The general rule in this Circuit is that "an overruled motion in limine does not preserve error on appeal." Rojas v. Richardson, 703 F.2d 186, 189 (5th Cir.1983); see also Collins v. Wayne Corp., 621 F.2d 777, 784 (5th Cir.1980).
Placid contends that Marcel's current injury should not result in a loss of future wages because he was subject to the same physical restrictions before and after the accident at issue here, due to his prior injury, which did not prevent his returning to work without loss of income. Placid's argument is based solely upon the testimony of Dr. Cenac, the physician who treated Marcel following his 1983 injury. There was other medical evidence, however, indicating that Marcel is now under a disability that did not exist prior to the 1990 accident. Because this evidence supports the allowance of testimony regarding the effect of the injury on Marcel's future wages, the district court did not abuse its discretion in respect to the testimony of Mr. Simmons.
B. Placid's Expert Economist
The district court excluded testimony of Placid's expert economist, Dr. Boudreaux, upon plaintiffs' motion in limine. The proposed testimony concerned the worklife expectancy of an oilfield worker and was based on a study by Richard Camus & Associates on this subject (Camus study). Placid contends that the testimony based on the study was admissible as data upon which an expert bases an opinion:
"The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence." Fed.R.Evid. 703.
Plaintiffs criticized the Camus study and the testimony based upon it, claiming that it was outdated, statistically suspect, and untrustworthy and that evidence presented at trial regarding longer worklives contradicted the study's conclusions. "[T]he Rules of Evidence ... assign to the trial judge the task of ensuring that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand." Daubert v. Merrell Dow Pharmaceuticals, Inc., --- U.S. ----, ----, 113 S.Ct. 2786, 2799, 125 L.Ed.2d 469 (1993). "[T]he trial judge must ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable." Id. --- U.S. at ----, 113 S.Ct. at 2795. Further, the district court may exclude evidence if its probative value is substantially outweighed by the danger of unfair prejudice. Id. --- U.S. at ----, 113 S.Ct. at 2798. Fed.R.Evid. 403.
In presenting the proposed testimony of Dr. Boudreaux, Placid did not tender any evidence comparing the worklife in the oilfield with the national average or with the worklife of any other occupation. Placid attempted to introduce the specific statistics in the Camus study without reference to any other information which would show that Marcel would likely have a shorter worklife and thus should not receive damages based on an average worklife.
Had Placid adequately developed Dr. Boudreaux' discussion of the Camus study in the context of relevant general economic evidence, it might be a closer question whether the district court abused its discretion in excluding his testimony. Without some indication of how the oilfield worklife differs from that of other occupations, however, there are several bases upon which the district court could have excluded the evidence, for example, a finding that the probative value of the Camus study did not outweigh the prejudice to the plaintiffs of its admission or that it was not sufficiently reliable in the present context. Upon the record before us, we cannot hold that it was an abuse of discretion to exclude the tendered evidence.
III. Remittitur of Awards to Children
Placid claims that the district court should have granted its motion for remittitur regarding the awards of $15,000 to each of the three minor children for past and future losses of their father's society because the awards were excessive and were not supported by the evidence. Plaintiffs attempted to show that Marcel was no longer able to play with the children as he had before the accident, that he was short-tempered, and that the children were too young to understand the reasons for their father's change.
We review the denial of a motion for new trial or motion for remittitur for an abuse of discretion. Brunnemann v. Terra Int'l, Inc., 975 F.2d 175, 177 (5th Cir.1992). Where a damage award is excessive or so large as to appear contrary to right reason, the award is generally subject to remittitur, not a new trial. Id. at 178.
We review a claim of excessiveness by comparing the awards at issue with rulings in other factually similar cases decided under controlling law, here Louisiana law. Douglass v. Delta Air Lines, Inc., 897 F.2d 1336, 1339 (5th Cir.1990); see also In re Air Crash Disaster Near New Orleans, 767 F.2d 1151, 1156 (5th Cir.1985) ("[f]or what rough guidance they provide, we examine past awards for similar injuries").
Upon an examination of the awards for loss of a parent's society allowed by Louisiana courts, we conclude that the awards to plaintiffs' minor children in this case were excessive. In cases where the loss sustained by the child is similar to that in the case before us, Louisiana awards are uniformly between one and five thousand dollars per child. See LeBaron v. Allstate Ins. Co., 572 So.2d 174 (La.App. 1st Cir.1990) (noting unchallenged awards of $2,000 to each child for loss of consortium), writ denied, 575 So.2d 827 (La.1991); Savoy v. Martiny Warehouse, Inc., 539 So.2d 884 (La.App. 4th Cir.1989) (affirming awards of $1,000 and $2,000 where father no longer played with children for fear of re-injury); Peterson v. Western World Ins. Co., 536 So.2d 639 (La.App. 1st Cir.1988) (affirming awards of $5,000 to each child where father was short-tempered and no longer participated in activities with children), writ denied, 541 So.2d 858 (La.1989).
Only in exceptional circumstances has a larger award been upheld. In Trahan v. Thomas, 544 So.2d 695 (La.App.3d Cir.1989), the court affirmed an award of $35,000. There, however, the child was physically and mentally disabled prior to his mother's accident and to an unusual extent relied on her for his special needs. The loss of the mother's care in that extraordinary situation is not factually analogous to our case and has no tendency to justify the awards in question.
We conclude that the district court abused its discretion in denying Placid's motion for a new trial or for remittitur of the children's awards. We direct a remittitur of the awards to each child from $15,000 to $7,000.00 under application of the maximum recovery rule. Should plaintiffs refuse to accept this remittitur, we direct the district court to grant a new trial on this issue.
IV. Summary Judgment for SEE
Placid challenges the district court's grant of summary judgment for SEE, claiming that its agreement with SEE does not violate the LOIA because it falls within the exception created in Patterson v. Conoco, Inc., 670 F.Supp. 182 (W.D.La.1987).
The LOIA voids oilfield agreements to the extent the agreements contain provisions for indemnification for losses caused by negligence or fault of the indemnitee. Under the agreement at issue in Patterson, the employer of the injured plaintiff was required to provide insurance coverage indemnifying a third party, an arrangement within the reach of the LOIA and similar to the terms agreed to by Placid and SEE. The agreement provided, however, that the indemnitee would reimburse the employer for the insurance premiums. The indemnitee produced evidence documenting its payment of these premiums over a period of approximately eighteen months. Based upon this reimbursement, the court concluded that the agreement was not void because the indemnitee had paid for its own insurance.
Although this Court has not ruled directly on the Patterson exception, we tacitly approved it in Davis v. Mobil Oil Exploration & Producing Southeast, Inc., 864 F.2d 1171, 1176 (5th Cir.1989) (affirming dismissal, without indicating disapproval of Patterson, because request to court for inquiry into payment of premiums was untimely).
We now adopt the exception created in Patterson as law of this Circuit and find that it has potential application here. The LOIA is aimed at preventing the shifting of the economic burden of insurance coverage or liability onto an independent contractor. If the principal pays for its own liability coverage, however, no shifting occurs. We see no need to prevent such an arrangement in order to give effect to the LOIA. Indeed, agreements such as the one in Patterson may be economically desirable in situations where it is less expensive for the independent contractor to add the principal as an additional insured than for the principal to obtain its own insurance on a particular operation.
In approving this exception, however, we stress that the exception does not apply if any material part of the cost of insuring the indemnitee is borne by the independent contractor procuring the insurance coverage.
SEE, as the party requesting summary judgment, had the burden of demonstrating that the insurance agreement was void under the LOIA and that there was no fact issue regarding any economic burden on SEE. It is not clear from the record, however, that this is true. Amendments to the agreement between Placid and SEE provide that Placid was to pay one-half of the premium paid by SEE
"for this Contract to perform these services which shall be 0.675% of Daily Revenue. Insurance premiums will be over and above the contract rates and will be in consideration for insurance supplied, not consideration paid to or for the benefit of SEE, Inc. Essentially, this means that over the life of the job Placid would be paying approximately $34-$36/day to be named as an additional insurer [sic] under the policy. Monthly billings will be transmitted to Placid by our Brokers after the revenues for the previous month have been determined." Amendment to Exhibit E of the Workover Contract.
Although Placid's payment is to be one-half the premium paid by SEE, our analysis does not end without knowing how much of the insurance cost is attributable to insuring Placid. The burden to show this was on SEE, the summary judgment movant that was to procure the insurance. Because it is not clear from the record before us whether SEE paid for any cost of insuring Placid, we cannot determine that this contract does not fall within the Patterson exception.
We reverse the district court's summary judgment for SEE and remand Placid's third-party claims for reconsideration in light of Patterson. If Placid was responsible for the full cost of obtaining its insurance, the agreement is similar to that in Patterson and is not void under the LOIA; if SEE paid any material part of the cost of Placid's insurance, however, the district court should reinstate its summary judgment in favor of SEE.
Cross-Appeal
V. Calculation of Damages
Marcel contends on cross-appeal that the district court erred in awarding damages for past and future wage loss in net, after-tax dollars rather than gross, pre-tax dollars. He questions the court's ruling that when a state-created remedy is borrowed in a case arising under the OCSLA, the remedy is borrowed in its entirety, except that part of the remedy which calls for gross wages as the proper measure of damages.
The OCSLA provides that the laws of the adjacent state apply in the place of federal law "[t]o the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws." 43 U.S.C. Sec. 1333(a)(2)(A); Rodrigue v. Aetna Casualty and Surety Co., 395 U.S. 352, 355-358, 89 S.Ct. 1835, 1837-1839, 23 L.Ed.2d 360 (1969).
The Supreme Court has addressed the applicability of state law and federal law for the purpose of determining the measure of damages in the context of the Federal Employers' Liability Act (FELA). In Norfolk & Western Ry. Co. v. Liepelt, 444 U.S. 490, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980), the Court held that questions concerning the measure of damages in a FELA action are a matter of federal law and that it was error to refuse a jury instruction on the nontaxability of personal injury awards. The Court stated that net, after-tax wages were the appropriate measure of damages for loss of future earnings under federal law. Id., 444 U.S. at 492, 100 S.Ct. at 757.
In Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 101 S.Ct. 2870, 69 L.Ed.2d 784 (1981), the Court was faced with the same question concerning jury instructions in an action arising under the OCSLA. The Court declined to reach this issue and remanded for the lower court to determine what the law of Louisiana was on the issue and to decide, if there were an inconsistency with federal law, whether Liepelt displaced the Louisiana rule. On remand, the Texas Court of Appeals, applying Louisiana law, held that Louisiana law did not require such an instruction. The court concluded that "when OCSLA borrowed the [state law] remedy, it borrowed the remedy in its entirety. In other words, OCSLA made the entire state cause of action applicable federal law, enforceable as federal law." Gulf Offshore Co. v. Mobil Oil Corp., 628 S.W.2d 171, 174 (Tex.App.--Houston [14th Dist.], writ ref'd n.r.e.) (emphasis in original), cert. denied, 459 U.S. 945, 103 S.Ct. 259, 74 L.Ed.2d 202 (1982). We approved this holding in Olsen v. Shell Oil Co., 708 F.2d 976, 983 (5th Cir.1983) (adopting the state rule on inflation), cert. denied, 464 U.S. 1045, 104 S.Ct. 715, 79 L.Ed.2d 178 (1984).
Although Placid cites Rodrigue v. Aetna Casualty and Surety Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969), for the general rule that state law applies only if not inconsistent with federal law, this Court has accepted the reasoning that the state cause of action becomes federal law for the purpose of an OCSLA case. See Olsen, 708 F.2d at 983 ("We think the Texas Court of Civil Appeals reached the result required by Rodrigue....").
The majority rule in Louisiana is that the remedy for past and future wage loss in personal injury actions is gross, pre-tax wages. See Harris v. Tenneco Oil Co., 563 So.2d 317, 324-326 (La.App. 4th Cir.), writ denied, 568 So.2d 1062 (1990). Applying the reasoning of Gulf Offshore here, it was error for the district court to award damages calculated on net, after-tax wages.
We reverse the judgment of the district court regarding the award of damages to Marcel for the loss of past and future wages to the extent that this award was based upon net, rather than gross, wages. The form for the interrogatories to the jury provided spaces for calculation of both gross and net past and future wage loss. The jury responded with both figures, and the district court calculated the judgment using the net wage loss amount. Based upon the jury's responses, we are able to determine that the proper award to Marcel, based upon gross wage loss, is $375,388.83. We do not fault the district judge. An award based on gross rather than net wages has little to recommend it as a matter of either economics or justice. Nevertheless, that appears to be the law of Louisiana adopted as federal law under OCSLA, and we are bound to comply.
VI. Strict Liability
Marcel's second contention on cross-appeal is that the jury erred in not finding Placid strictly liable for his injuries. This contention is immaterial, as Marcel received damages for his injury under the jury's finding that Placid was negligent.
Conclusion
We sustain Placid's appeal against plaintiffs only on the issue of the awards to the children; we reverse the award of summary judgment in favor of SEE on Placid's third party claims; and we sustain Marcel's cross-appeal on the issue of calculation of wage loss and render judgment in his favor in the sum of $375,388.83 (with interest as specified in the district court's judgment). We affirm all other issues before us.
The judgment of the district court is
AFFIRMED in Part; REVERSED and REMANDED in Part.