Sidney Page v. Gulf Oil Corporation, Third-Party v. Bilco Tools, Inc., Third-Party

775 F.2d 1311, 1985 U.S. App. LEXIS 24574
CourtCourt of Appeals for the Third Circuit
DecidedNovember 5, 1985
Docket84-3869
StatusPublished
Cited by20 cases

This text of 775 F.2d 1311 (Sidney Page v. Gulf Oil Corporation, Third-Party v. Bilco Tools, Inc., Third-Party) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sidney Page v. Gulf Oil Corporation, Third-Party v. Bilco Tools, Inc., Third-Party, 775 F.2d 1311, 1985 U.S. App. LEXIS 24574 (3d Cir. 1985).

Opinion

OPINION

JOHN R. BROWN, Circuit Judge:

This case presents issues concerning the scope of the Louisiana Oil field Indemnity Act. 1 Specifically, we are asked to determine whether the indemnity provision in a blanket agreement between Bilco Tools, Inc. (Bilco) and Gulf Oil Corporation (Gulf) falls within the Act’s coverage. We deter *1313 mine that it does because the agreement was not executed before the effective date of the Act. La.Rev.Stat.Ann. § 9:2780(1) (West 1985). We therefore remand the case to the District Court for the determination of the other issues presented upon which the record is insufficient to meet the demands of Article III.

HOW IT ALL HAPPENED

Sidney Page, an employee of Bilco Tools, Inc. (Bilco), was injured while working on a fixed offshore drilling platform that was owned by Gulf Oil Corporation (Gulf). Page sued Gulf and others seeking compensation for his injuries. Gulf impleaded Bilco as a third-party defendant seeking defense and indemnity against the costs it would incur in the course of contesting Page’s suit. Bilco’s obligation to indemnify Gulf arose from the terms of a blanket contract, sometimes referred to as a master service agreement, that had been executed between Gulf and Bilco.

Bilco moved for summary judgment against Gulf’s claim for indemnity. The grounds stated were that the indemnity obligation relied upon by Gulf was void under the provisions of the Oilfield Indemnity Act. Gulf responded that its blanket agreement with Bilco had been executed prior to the effective date of the Act. Thus, it reasoned, the indemnity provision in the blanket agreement was valid notwithstanding the enactment of the Oilfield Indemnity Act.

The District Court, without opinion, entered summary judgment in favor of Bilco. After finding that there was no just reason for delaying appeal, the Court below also executed a certificate of final judgment pursuant to F.R.Civ.P. 54(b), and this appeal followed. 2

We believe that the contract entered into between Bilco and Gulf was executed after the effective date of the Oilfield Indemnity Act. We hold, therefore, that the Act governs the interpretation of the rights and liabilities arising between the parties to the contract. To the extent that that was the judgment of the Court below, the judgment is affirmed. The fact that the Act applies, however, is not dispositive of the case as a whole. There remains to be decided a seriously contended legal question which depends for its resolution upon a number of material issues of fact. These issues have been neither determined nor established without controversy. The grant of summary judgment in favor of Bilco was, therefore, improper and that portion of the decision below is reversed.

AN ACCIDENT ON MARLIN RIG 10

Bilco Tools is an oilfield supplier — it provides tools, personnel, and equipment to companies who operate offshore drilling rigs off the coast of Louisiana. Bilco signed a “blanket contract” with Gulf, a large offshore operator, which set out the terms upon which Bilco might be called upon to supply equipment to Gulf’s fixed platforms offshore. That “contract” was entered into on August 17,1979 and provided that Bilco would

protect, indemnify and save Gulf harmless from and against all claims, demands, and causes of action, suits or other litigation (including defending all causes of action, suits or other litigation, or indemnifying and holding Gulf harmless from and against all costs, expenses, and attorney’s fees incurred by Gulf in the defense of such causes of action, suits or other litigation brought against *1314 it on account of any obligation which [Bilco] is bound for hereunder) of every kind and character arising in favor of [Bilco] or third parties, including but not limited to personnel furnished by [Bilco], on account of personal injuries or death or damage to property, whether arising out of negligence on the part of Gulf or otherwise.

Blanket indemnity clauses of the type contained in the Bilco/Gulf agreement have been the subject of recent legislation in the state of Louisiana as well as elsewhere. In enacting the Louisiana Oilfield Indemnity Act, the legislature found that such clauses were an inequity foisted upon contractors and declared them to be “null and void and against [the] public policy of the state of Louisiana.” La.Rev.Stat.Ann. § 9.2780(A) (West 1985). It then went on to declare any blanket indemnity clause

... void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages arising out of or resulting from death or bodily injury to persons which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee____

Id. at § 9:2780(B) (emphasis added).

By its terms, the Act is applicable to master service contracts such as the agreement involved in this case. Id. at § 9:2780(1). It does not, however, apply to contracts governing a specific terminable performance which were executed prior to the Act’s effective date of September 11, 1981. Id.

During the two years following the signing of the blanket agreement between Bilco and Gulf, Bilco was never called upon to perform work for Gulf. Then, on November 11,1981, Bilco received a telephone call from a Gulf employee requesting that certain equipment be provided to Gulf’s MARLIN RIG 10, a fixed platform located on the Outer Continental Shelf. Bilco agreed and sent its employees out to the rig on November 20, 1981. One of those employees was Sidney Page.

On December 5, 1981, Page was working on MARLIN RIG 10. He was using a set of power tongs owned by Bilco to “torque down” a section of tubing in the well. The tongs were held stable by a chain snubbing line. They had reached maximum torque when the throttle jammed; as Page reached up to try to manually disengage the throttle the tongs began to spin, dragging the snub line behind them. The tongs spun twice, trapping Page’s hand and arm between the tubing and the chain. Page sustained serious injuries and sued Gulf and several other defendants to recover $950,000 in damages.

Gulf filed a third-party complaint against Bilco shortly after being named as a defendant in Page’s suit. Gulf asserted that under the indemnity clause of the blanket agreement it was entitled to recover from Bilco all costs, legal fees and expenses incurred in connection with the defense of Page’s suit. Bilco moved for summary judgment on the grounds that recovery under the contractual clause was barred by the Oilfield Indemnity Act. The District Court initially denied the motion, but later granted it without an opinion. It is from this decision which Gulf appeals.

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Bluebook (online)
775 F.2d 1311, 1985 U.S. App. LEXIS 24574, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sidney-page-v-gulf-oil-corporation-third-party-v-bilco-tools-inc-ca3-1985.