Robert K. Christofferson and Oleta L. Christofferson v. Halliburton Company v. Phillips Petroleum Company

617 F.2d 403, 1980 U.S. App. LEXIS 15697
CourtCourt of Appeals for the Fifth Circuit
DecidedJuly 15, 1980
Docket78-1022
StatusPublished
Cited by6 cases

This text of 617 F.2d 403 (Robert K. Christofferson and Oleta L. Christofferson v. Halliburton Company v. Phillips Petroleum Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Robert K. Christofferson and Oleta L. Christofferson v. Halliburton Company v. Phillips Petroleum Company, 617 F.2d 403, 1980 U.S. App. LEXIS 15697 (5th Cir. 1980).

Opinions

LEWIS R. MORGAN, Circuit Judge.

Robert Christofferson was seriously injured in an accident on the offshore jackup drilling rig where he worked on August 24, 1973. After filing a lawsuit against the many parties involved in the incident, he settled with each of the defendants and withdrew from the litigation. The district court then proceeded to a trial of the case to determine the rights of the defendants to indemnity and contribution inter se. Phillips Petroleum Company appeals from a judgment granting indemnity from Phillips to Diamond M Company and denying indemnity to Phillips from other defendants.

[405]*405Christofferson’s injury occurred on Diamond M Company’s rig No. 99, which at the time of the accident was situated in the Gulf of Mexico 100 miles off the coast of Louisiana. Phillips Petroleum had contracted with Diamond M for the drilling of a well at that location. The well proved to be dry, and a second contractor, Halliburton Company, was engaged by Phillips for a plug and abandon operation. In a plug and abandon operation, a retainer is inserted into the well and cement is pumped below the retainer, sealing the well opening.

Christofferson was a petroleum engineer employed by Phillips to observe and inspect the operations on rig No. 99, and was Phillips’ sole representative on the rig on the day of the accident. The plug and abandon operation was performed jointly by the personnel of Halliburton and Diamond M under the supervision of John Rogers, of Diamond M and Don Terrell, of Halliburton.

The operation required the use of two very durable hoses, one to carry cement from Halliburton’s squeeze manifold to the casing and another from the squeeze manifold to the drill pipe. It is standard industry practice to use steel “chicksan” hoses for this purpose. However, an employee of Diamond M suggested the use of steel reinforced flexible hoses that were stored on the rig, and none of the other personnel present dissented.

The plug and abandon exercise was expected to produce a maximum pressure of 2.000 pounds on the hoses. Hence, Rogers and Christofferson agreed to test all lines at 3,000 pounds before commencing the operation. The lines on the standpipe side of the pipehead were tested at 3,000 pounds as ordered, but for some unknown reason, the lines on the casing side were tested at only 1.000 pounds. As fate would have it, the hose on the casing side had become frail with age and overuse. During the “reversing out” stage of the plug and abandon operation, the hose was ruptured by a surge of pressure, causing the manifold to strike Christofferson.

I. THE PHILLIPS-DIAMOND M INDEMNITY AGREEMENT.

Prior to the trial of the case, the district court granted summary judgment for Diamond M against Phillips for indemnity allegedly owed by Phillips under the terms of an indemnity agreement. The contract between Phillips (Owner) and Diamond M (Contractor) provided as follows:

16.8 Indemnity by Owner; Owner agrees to protect, indemnify, and save harmless the Contractor from and against all claims, demands, and causes of action made against Contractor, or in which Contractor may be named party defendant, by Owner’s employees, agents, or invitees on account of personal injury or death . . . arising out of work performed by Owner, Owner’s employees, agents, or invitees, and contractors or subcontractors (other than the Contractor under this contract) or equipment furnished in connection therewith, irrespective of whether such claims are occasioned in whole or in part by the negligence of Contractor, its employees, agents, or invitees, or by the negligence of Contractor’s subcontractors or any party for which Contractor is performing services, or the employees, agents, or invitees of such party or subcontractor, or by the unseaworthiness of vessels or craft.

(emphasis added).

Diamond M contends, and the district court agreed, that the above clause clearly establishes Phillips’ obligation to reimburse Diamond M for claims made by Christoffer-son. Phillips counters that the parenthetical “(other than the Contractor under this contract)” limits the coverage of the indemnity agreement to claims for injuries resulting from work performed by persons other than Diamond M. In the same breath, Phillips asserts that the work which led to Christofferson’s injury “was that of Diamond M (together with Halliburton).”

Phillips’ emphasis on Diamond M as a party involved in the work is misplaced. Admittedly, the plug and abandon operation involved the participation of employees [406]*406of both Halliburton and Diamond M. It was essential that Diamond M cooperate since Diamond M owned, operated and maintained the rig from which the plug and abandon operation was performed. These facts are not disputed. But Halliburton was under contract with Phillips, and was brought to the rig by Phillips specifically for the plug and abandon operation. Thus, Halliburton was a party whose work was a cause within the coverage of the Phillips-Diamond M indemnity agreement.

Phillips interprets the indemnity clause parenthetical “(other than the Contractor under this contract)” as excepting from coverage any claim based on an injury resulting from work involving Diamond M. Under the circumstances of the agreement, such a translation might nullify all indemnification, since the parties must have foreseen that any work on the rig would involve Diamond M. Viewing the clause in its context, we are compelled to affirm the interpretation rendered by the district court, that the parenthetical in question is not an exception to defeat coverage but only a limitation on the types of contractors whose performance may result in an indemnified claim. Thus, Phillips is obligated to indemnify Diamond M for any claims made by Phillips’ personnel, provided that the work which caused the injury was done at least in part by any party other than Diamond M. This interpretation is confirmed by the last portion of the indemnity clause, which provides that Phillips shall indemnify Diamond M “irrespective of whether such claims are occasioned in whole or in part by the negligence of Contractor” (Diamond M). Moreover, other relevant clauses of the agreement indicate that the parties intended to make each responsible for the injuries of its own personnel.

The undisputed facts of the case match these terms, and we cannot accept Phillips’ proffered interpretation as a reasonable alternative creating a triable issue. Summary judgment on this issue was proper. Ral-li-Coney, Inc. v. Gates, 528 F.2d 572 (5th Cir. 1976).

Phillips’ second defense against the indemnity claim is that Phillips was relieved of its duty to indemnify by Diamond M’s breach of the contract prior to Christoffer-son’s accident. Phillips cites paragraph 16.6 which provides:

Inspection of Materials Furnished by Owner: Contractor agrees to inspect all materials furnished by Owner before using same, and to notify Owner of any apparent defects therein; and Contractor’s use of such materials without notifying Owner shall be conclusive evidence that such materials were free from apparent defects. Contractor shall not be liable for any loss or damage resulting from the use of materials furnished Owner containing latent defects.

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Bluebook (online)
617 F.2d 403, 1980 U.S. App. LEXIS 15697, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robert-k-christofferson-and-oleta-l-christofferson-v-halliburton-company-ca5-1980.