Skip to main content

Insurer Wins Dec Judgment Action in 5th Circuit on Indemnity Provisions in Contract

In Ace American Ins. Co. v. M-I, L.L.C., Case No. 12-20080, (5th Cir. Oct. 19, 2012), the Fifth Circuit Court of Appeals affirmed the district court's grant of partial summary judgment on behalf of an insurer, finding that the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. 1333(a), applied to the parties' contractual dispute. As a result, the court found that pursuant to the OCSLA choice of law provision, Louisiana law applied, under which the Louisiana Oilfield Indemnity Act ("LOIA"), La. Rev. Stat. 9:2780(B), invalidated the indemnity provisions.

The dispute concerned a Master Service Agreement ("MSA") between BP and a service company. Contained within the MSA was an indemnification provision, which contained an insurance agreement supporting the service company's indemnification obligations. An employee of the service company was injured, sued BP and the service company, BP tendered the employee's claims to the service company, which in turn settled all claims with the employee. The service company's insurer then filed an action for declaratory judgment, seeking a declaration that it did not owe coverage payments to the service company. The service company countersued the insurer for breach of contract.

At issue in the case was whether Louisiana law governed the indemnity provisions. The Fifth Circuit agreed with the district court that in order for the OCSLA indemnity provision in the MSA to apply, maritime law must not apply upon its own force. The court agreed that the employee's work on a oil field platform was not maritime in nature. Therefore, Louisiana law applied, invalidating the indemnity provisions in the MSA.

If you are interested in receiving a copy of the complete decision, please feel free to contact me at mov@chaloslaw.com.  

Comments

Popular posts from this blog

Maritime Law--U.S. Crewmember Required to Arbitrate Claims Applying Norwegian Law

In Alberts v. Royal Caribbean Cruises, Ltd., No. 15-14775 (11th Cir. Aug. 23, 2016), the U.S. Court of Appeals for the Eleventh Circuit held that a U.S. citizen, working aboard a Royal Caribbean cruise ship is required to arbitrate his claims against Royal Caribbean.
Plaintiff, a United States citizen, worked as the lead trumpeter on a passenger Royal Caribbean cruise ship. The ship is a Bahamian flagged vessel with a home port in Fort Lauderdale, Florida. Royal Caribbean, the operator of the vessel, is a Liberian corporation with its principal place of business in Florida. After plaintiff became ill while working for Royal Caribbean, he filed suit alleging unseaworthiness, negligence, negligence under the Jones Act, maintenance and cure, and seaman’s wages and penalties. Royal Caribbean moved to compel arbitration, and the district court granted the motion. This appeal presented an issue of first impression: Whether a seaman’s work in international waters on a cruise ship that calls o…

Maritime Law--Jury Hits Royal Caribbean Cruises With $20.3M Verdict for Officer's Hand Injury

In Spearman v. Royal Caribbean Cruises, Case No. 2011-023730-CA-01, a Miami-Dade County, Florida jury has awarded $20.3 million to a former crewmember of Royal Caribbean Cruises, whose hand was crushed while coming to the aid of a fellow worker during an emergency test in 2008. After a three-week trial, the jury found the Miami-based cruise company negligent in operating an unseaworthy ship and 100 percent liable for the injuries suffered by Lisa Spearman, who was working an officer on Royal Caribbean’s Voyager of the Seas.



Spearman sued the company in 2011, three years after her right hand was caught in a watertight power door during a fire-safety drill. According to her lawyers, Spearman was trying to prevent the door from closing on the ship’s nurse when her hand was pulled into a recess pocket of the sliding door and crushed. The nurse allegedly breached the company’s safety protocol when she stumbled through the door, prompting the response from Spearman.
According to allegations m…

Maritime Law--Tour Boat Captain Implicated in Tragedy Off Nicaragua

As reported in the Daily Business Review on January 25, 2016, Nicaragua's police, army and navy will investigate the captain of a tourist boat and his assistant for the deaths of 13 Costa Rican passengers killed on January 23rd when the vessel capsized in bad weather. The Reina del Caribe, Spanish for "Caribbean Queen," was carrying 33 people when it went down Saturday amid rain and strong winds as it ferried between the Corn Islands, a popular tourist destination, off Nicaragua's Caribbean coast. The Daily Business Review article can be accessed here=> Daily Business Review article.

The government clarified on the 24th that the boat was carrying 25 Costa Ricans, two Americans, two British citizens, a Brazilian and three Nicaraguans. Previous reports had said there were 32 people on board, including four Americans. All the dead were Costa Ricans.

Nicaragua's naval commander for the southern Caribbean region said the boat's captain was detained because the …