Phillips Petroleum Co. v. Liberty Services, Inc.

657 So. 2d 405, 95 La.App. 3 Cir. 124, 1995 La. App. LEXIS 1401, 1995 WL 323174
Louisiana Court of Appeal·Decided May 31, 1995·No. 95-124·Published·Cited by 11 cases

Opinion

657 So.2d 405 (1995)

PHILLIPS PETROLEUM COMPANY, Plaintiff-Appellant,
v.
LIBERTY SERVICES, INC., Defendant-Appellee.

No. 95-124.

Court of Appeal of Louisiana, Third Circuit.

May 31, 1995.

*406 Michael R. Mangham, Lisa H. Sevier, Lafayette, for Phillips Petroleum Co.

Jeffrey Allen Raines, New Orleans, for Liberty Services, Inc.

Before DOUCET, C.J., and THIBODEAUX and PETERS, JJ.

PETERS, Judge.

This appeal arises from a suit brought by the plaintiff, Phillips Petroleum Company, to enforce an indemnification provision in a contract with the defendant, Liberty Services, Inc. Each party filed a motion for summary judgment. The district court denied the plaintiff's motion and granted the defendant's thereby dismissing Phillips' suit. Phillips appeals this judgment.

DISCUSSION OF THE RECORD

Phillips Petroleum Company owned and operated an offshore production platform approximately ninety miles off the southwestern coast of Louisiana. On February 26, 1987, Phillips entered into a contract with Liberty Services, Inc., in which Liberty agreed to provide labor services to Phillips for specified jobs on an as-needed basis. The contract contained a provision in which Liberty agreed to indemnify Phillips for any and all claims and expenses incurred by Phillips arising as a result of damage to Liberty's property or injury to Liberty's employees.[1]

On April 12, 1989, two employees of Liberty, Jeffrey Laurent and Millard Buras, filed suit against Phillips and other defendants to recover damages for injuries allegedly sustained as a result of their exposure to fumes, smoke, and asbestos dust encountered while they were removing insulation from equipment located on Phillips' production platform. At the time they filed suit, Laurent and Buras were receiving benefits under the Longshoremen and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. § 901 et seq. In defense of these claims, Phillips filed a motion for summary judgment contending (1) that Laurent and Buras sustained no injury and (2) that they were borrowed servants which precluded them from recovering anything from Phillips other than LHWCA benefits. Phillips' motion for summary judgment was granted by the trial court. However, the trial court did not assign reasons for the decision.

Phillips then filed this action against Liberty pursuant to the indemnification provision of their contract. Specifically, Phillips seeks to recover all expenses, court costs, and attorney fees incurred in defending the suit filed by Laurent and Buras. The indemnification *407 provision of the contract itself is the basis for Phillips' motion for summary judgment. Liberty answered the motion with one of its own contending that La.R.S. 9:2780, the Louisiana Oilfield Indemnity Act, requires a judicial determination that Phillips is free from fault before the indemnification provision can be invoked. The trial court agreed with Liberty and dismissed plaintiff's suit. Phillips then perfected this appeal.

LEGAL ANALYSIS

A motion for summary judgment is properly granted when the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La.Code Civ.P. art. 966 and Schroeder v. Board of Supervisors of La. State Univ., 591 So.2d 342 (La.1991). On appeal, this court's review of a summary judgment is de novo and the court must use the same criteria as the trial court in determining whether summary judgment is proper. Id.

Resolution of the litigation depends on the interpretation of La.R.S. 9:2780(A) which provides:

The legislature finds that an inequity is foisted on certain contractors and their employees by the defense or indemnity provisions, either or both, contained in some agreements pertaining to wells for oil, gas, or water ... to the extent those provisions apply to death or bodily injury to persons. It is the intent of the legislature by this Section to declare null and void and against public policy of the state of Louisiana any provision in any agreement which requires defense and/or indemnification, for death or bodily injury to persons, where there is negligence or fault (strict liability) on the part of the indemnitee, or an agent or employee of the indemnitee, or an independent contractor who is directly responsible to the indemnitee.
(Emphasis added).

In Meloy v. Conoco, Inc., 504 So.2d 833 (La.1987), the Louisiana Supreme Court was called on to interpret this statute pursuant to certification of the question from the United States Fifth Circuit Court of Appeals. In Meloy, the plaintiff was an employee of Oilfield Services, Inc., which had contracted with Conoco, Inc. to provide labor for various jobs on Conoco's offshore production platform. The plaintiff filed suit against Conoco for injuries allegedly sustained while working on its platform. Conoco filed a third party demand against Oilfield Services, Inc., for defense of the litigation and indemnity pursuant to an indemnity provision in their service agreement. The employer filed a motion for summary judgment contending that the Louisiana Oilfield Indemnity Act barred Conoco's claim. The Federal District Court granted the motion for summary judgment and Conoco appealed. The Fifth Circuit Court of Appeals then certified the following questions of law to our supreme court pursuant to La.R.S. 13:72.1 and Rule XII of the Supreme Court of Louisiana:

(1) Under Louisiana law, is an indemnitor's obligation to defend a suit against the indemnitee for personal injuries sustained by an employee of the indemnitor determined entirely by the allegations of the complaint against the indemnitee? That is, if the petition against the indemnitee alleges only that the indemnitee was at fault, does the indemnitor have a duty to defend (assuming the indemnity agreement is interpreted to include costs of defense)?
(2) If the indemnitor does not have a duty to defend the suit, but if, after trial on the merits, the indemnitee is found free from fault and the injury is found to have resulted in whole or in part from the fault of the indemnitor, is the indemnitee entitled to recover its cost of defense?
(3) If an indemnity agreement is covered by the Louisiana Oilfield Indemnity Act of 1981, La.Rev.Stat.Ann. § 9:2780, does the Act nullify completely an indemnity contract that obligates the indemnitor to indemnify the indemnitee regardless of which party is at fault? Or is the agreement valid to the extent it requires indemnification for damages attributable to the comparative fault of the indemnitor?

Id. at 835.

In response to those questions, our court held:

*408 The Act only prohibits indemnity for cost of defense where there is "negligence or fault (strict liability) on the part of the indemnitee." The Act does not apply where the indemnitee is not negligent or at fault. An agreement providing for cost of defense in the event of a meritless suit against the indemnitee is outside the scope of the Act.

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

Phillips Petroleum Co. v. Liberty Services, Inc., 657 So. 2d 405, 95 La.App. 3 Cir. 124, 1995 La. App. LEXIS 1401, 1995 WL 323174 (La. Ct. App. 1995).

657 So. 2d 405 (Phillips Petroleum Co. v. Liberty Services, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

La. United Bus. Ass'n Cas. Ins. Co. v. J & J Maint., Inc.
328 F. Supp. 3d 563 (W.D. Louisiana, 2018)
Hefren v. Murphy Exploration & Prod. Co.,USA
34 F. Supp. 3d 651 (W.D. Louisiana, 2014)
Duet v. Falgout Offshore, LLC
757 F. Supp. 2d 598 (E.D. Louisiana, 2010)
Sonat Exploration Co. v. Cudd Pressure Control, Inc.
271 S.W.3d 228 (Texas Supreme Court, 2008)
AMC Liftboats, Inc. v. APACHE CORPORATION
622 F. Supp. 2d 355 (E.D. Louisiana, 2008)
American Home Assurance Co. v. Chevron, USA, Inc.
400 F.3d 265 (Fifth Circuit, 2005)
Ridings v. Danos & Curole Marine Contractors, Inc.
723 So. 2d 979 (Louisiana Court of Appeal, 1998)
In Re Orso
219 B.R. 402 (M.D. Louisiana, 1998)
Phillips Petroleum Co. v. Liberty Services, Inc.
704 So. 2d 890 (Louisiana Court of Appeal, 1997)
Kerr v. Smith Petroleum Co.
889 F. Supp. 898 (E.D. Louisiana, 1995)