REVISED
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 96-30255
RAYMOND GASPARD, ET AL.,
Plaintiffs,
versus
OFFSHORE CRANE AND EQUIPMENT, INC.,
a Unit of Amclyde Engineered Products, Inc.,
Defendant;
SEACOR MARINE, INC.,
Defendant-Appellee,
ANGLO-AMERICAN INSURANCE
COMPANY, LIMITED,
Third Party Defendant-Appellee,
versus
CHEVRON, U.S.A., INC.,
Defendant-Third Party Plaintiff-Appellant.
Appeal from the United States District Court
for the Eastern District of Louisiana
February 25, 1997
Before HIGGINBOTHAM, SMITH, and BARKSDALE, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
Chevron appeals dismissals granted in favor of defendant
Seacor Marine and third-party defendant Anglo-American Insurance.
In order to resolve Chevron’s appeals, we must scrutinize the
meanings of two troublesome phrases in maritime contracts. First,
we hold that the inclusion of the words “loading or unloading” in
the indemnification agreement between Chevron and Seacor requires
Seacor to indemnify Chevron for damage caused by a platform crane
that malfunctioned during unloading. Second, we conclude that the
“causal operational relation” test does not apply when the parties
to a protection and indemnity insurance policy omit the words “as
owner”; the omission in this case means that Anglo-American
Insurance Company was not entitled to summary judgment on Chevron’s
third-party claim that the policy covers vessel-related liability
that is based on Chevron’s negligence as a platform operator.
I.
Raymond Gaspard worked for Nabors Drilling Company as a
roustabout. In September of 1993, he was performing drilling
services on a Chevron oil platform in the Gulf of Mexico. As part
of his duties, he boarded the M/V Long Island, a cargo vessel tied
up next to the platform, to help unload drill pipe. He was to rig
a sling from the arm of a crane located on the platform. While Mr.
Gaspard was on the deck of the Long Island, the crane
malfunctioned, its fastline broke, and the headache ball fell on
him. He lost both of his legs in the accident.
Chevron had leased the Long Island from Seacor Marine. The
blanket time charter agreement between Chevron and Seacor contained
an indemnification provision that protected Chevron against
all liabilities . . . for personal injury or death
. . . arising out of or in any way directly or
indirectly connected with the performance of
service under this agreement or the . . . carrying
of cargo [or] loading or unloading of cargo [or]
loading or unloading of passengers . . . , and
whether or not caused or contributed to by the
2
negligence, strict liability or fault of Charterer
. . . .
The contract also required Seacor to purchase protection and
indemnity insurance and to name Chevron as an additional insured.
Ordinarily, such policies limit the lessor’s coverage to damages
incurred “as owner of the vessel.” According to the contract,
however, the policy purchased by Seacor would omit such language.
Seacor purchased the required policy from Anglo-American Insurance
Company. According to the policy, “[t]he so-called Other than
Owner, as Owner and/or Other Insurance Clauses contained in this
Policy shall be deemed deleted as may be required by contract.”
Anglo-American agreed to cover personal injuries, “[h]owsoever
caused and occurring during the period of this Policy, arising out
of, or having relation to the Assured’s chartering, brokering,
towing, berthing, servicing, operating, maintenance and/or use of
vessels (including loading and/or unloading).”
Mr. Gaspard filed suit in Louisiana state court against a
variety of defendants, including Seacor and Chevron. The petition
alleged that the platform crane “constitute[d] a ‘ruin’ caused by
vices in its construction, and improper design, and/or failure to
repair it, all within the meaning of La. Code Civ. Art. 2322 so as
to make defendant, Chevron, responsible for the loss . . . .” The
record shows and the parties agree that any negligence occurred in
the course of operating the platform crane and did not take place
on board the Long Island. The defendants removed the case to
federal court. Chevron filed a cross-claim against Seacor for
contribution, indemnity, costs, and fees. Chevron also filed a
3
third-party complaint against Anglo-American to establish coverage
under the protection and indemnity policy.
On March 31, 1995, the district court denied Chevron’s motion
for partial summary judgment against Seacor. The court held that
the time charter agreement did not obligate Seacor to indemnify
Chevron for injuries caused by a platform crane while the Long
Island was being unloaded. Three weeks later, the court dismissed
all claims against Seacor. On February 14, 1996, the court granted
summary judgment to Anglo-American. The court’s order explained
that the omission of the “as owner” clause from Anglo-American’s
insurance policy did not extend Anglo-American’s coverage to
Chevron’s operation of the platform crane.
In March of 1996, Mr. Gaspard settled with Chevron and the
other defendants. Chevron agreed to pay Gaspard $100,000. Because
they had already been dismissed, Seacor and Anglo-American did not
participate in the settlement. Chevron appeals both the district
court’s March, 1995, ruling that the time charter agreement does
not require Seacor to indemnify Chevron and also the court’s
February, 1996, ruling that the Anglo-American insurance policy
does not cover Chevron’s liability.
II.
We begin by asking whether the inclusion of the words “loading
or unloading” in Seacor’s indemnification agreement makes Seacor
liable for Mr. Gaspard’s injuries. The district court’s denial of
Chevron’s motion for partial summary judgment is subject to review
de novo. Chevron argues simply that the indemnification provision
4
included injuries arising out of the unloading of cargo from the
Long Island, even if Chevron was negligent. We agree with Chevron
that the agreement’s language is broad enough and explicit enough
to encompass liability for injuries such as the one sustained by
Mr. Gaspard.
Seacor prevailed below by convincing the court to apply the
rule that even broadly worded indemnification clauses that refer to
claims “directly or indirectly connected with the possession,
management, navigation, and operation” of a vessel are insufficient
to create a duty to indemnify for injuries caused by a platform
crane during unloading. In Lanasse v. Travelers Ins. Co., 450 F.2d
580 (5th Cir. 1971), cert. denied, 406 U.S. 921 (1972), we
confronted remarkably similar facts and a similarly expansive
indemnification agreement. A crew member aboard a utility tender
was nearly crushed to death when the operator of a Chevron platform
crane negligently allowed a welding machine to swing against the
vessel’s railing. We held that the vessel owner’s promise to
indemnify did not contemplate injuries caused by the negligent acts
of a platform crane operator during unloading. “As broad as those
terms are to comprehend injuries caused by the operation of the
vessel in a practical sense, they do not comprehend an occurrence
in which the vessel’s sole contribution is to be there as the
carrier from which the cargo is being removed.” Id. at 583.
Accord Smith v. Tenneco Oil Co., 803 F.2d 1386, 1388-89 (5th Cir.
1986) (holding that indemnification for any claim that “arises out
of or is incident to performance” of a time charter agreement does
5
not apply to liability for a platform crane operator’s negligence
in lowering a worker to the vessel’s deck); Hobbs v. Teledyne
Movible Offshore, Inc., 632 F.2d 1238, 1241 (5th Cir. 1980).
The district court reasoned that the plain language in the
indemnity agreement in this case is already broad enough to include
activities such as unloading cargo; therefore, specifically adding
“loading or unloading cargo” to the indemnity agreement does not
add anything new. On this view, if the broadest possible
provisions, such as the ones in Lanasse, do not apply when the
negligence is due to a platform crane, then these provisions cannot
apply here, in spite of their explicit reference to unloading.
Chevron encouraged the court to follow Clement v. Marathon Oil
Co., 724 F. Supp. 431 (E.D. La. 1989). In Clement, an empty
personnel basket struck an engineer while it was being lowered to
the deck of a chartered vessel from a platform crane. As in this
case, the time-charter indemnity agreement specifically referred to
“loading and unloading.” The court distinguished the Lanasse line
of cases and held that the owner of the vessel had a duty to
indemnify the charterer. Id. at 434. Cf. Lavergne v. Chevron
U.S.A., 782 F. Supp. 1163, 1171 (W.D. La. 1991) (distinguishing
Clement because “[t]here is no reference to Chevron being
indemnified against its own fault in the charter agreement, nor
does indemnification extend to loading and unloading operations”),
aff’d, 980 F.2d 1444 (5th Cir. 1992) (mem.). But Chevron’s
invocation of Clement in this case failed to persuade the district
court, which explained that the phrase “loading or unloading” is
6
merely “a redundancy that does not broaden the scope of the
clause.”
In our view, the inclusion of “loading or unloading” worked a
definite change in the scope of the indemnity arrangement.
According to the district court’s reasoning, it does not matter
that the contract says explicitly that Chevron’s negligence in
unloading the vessel will trigger the indemnification clause; so
long as the contract includes indemnification for liability
“arising out of or in any way directly or indirectly connected with
the performance” of the contract, the Lanasse line of cases
precludes indemnification for injuries caused by a platform crane.
But denying indemnity here would make it impossible for parties to
a time charter contract to agree that the owner will indemnify the
charterer for any liabilities caused by the owner’s negligence in
the course of loading or unloading the vessel.
The district court’s syllogistic logic misapprehends the
spirit of the rule we announced in Lanasse. The question there was
whether the expansive language agreed upon by the vessel owner and
the charterer was explicit enough to allow the conclusion that the
parties meant to cover events such as a crane operator’s negligence
in unloading the vessel. We concluded that “the operation of the
crane was not even remotely related to the operation, navigation,
or management of the vessel.” 450 F.2d at 583. Cognizant of the
principle that courts should construe indemnification agreements
narrowly, we refused to adopt “the fullest meaning which
lexicography would permit.” Id. at 583-84 (quoting Batson-Cook Co.
7
v. Industrial Steel Erectors, 257 F.2d 410, 413 (5th Cir. 1958)).
But the Lanasse court did not hold that more specific
indemnification contracts must be construed to exclude damages
caused by a platform crane during unloading. Nor did it hold that
damages caused by a platform crane during unloading can never be
subject to indemnification when the contract mimics the language in
Lanasse by reciting that indemnification extends to any claim
“arising out of or in any way directly or indirectly connected with
the performance of service under this agreement.” It merely held
that indemnity for injuries caused by platform cranes during
unloading requires “the plainly expressed intention of the parties,
manifested by language couched in unmistakable terms.” Id. at 584.
In response to Fifth Circuit case law, Chevron went out of its
way to include “loading or unloading” in the indemnification
agreement. It also went out of its way to state unambiguously that
Chevron’s own negligence would not stand in the way of
indemnification. See Theriot v. Bay Drilling Corp., 783 F.2d 527,
540 (5th Cir. 1986) (holding that indemnification “‘without regard
to . . . the negligence of any party,’ clearly and unequivocally
provided Bay Drilling with indemnification for its own
negligence”). The contract, then, said that if Chevron was
negligent while unloading the Long Island, Seacor would have to
provide indemnification. We decline the invitation to use Lanasse,
8
which contained a different indemnification agreement, to frustrate
the calculated reference to “unloading” in this agreement.1
The indemnification agreement applies only to activities that
have some relation to the Long Island. According to Seacor,
Chevron’s negligence had nothing to do with unloading the Long
Island because the defects in the platform crane were general.
Seacor contends that unless Chevron acted negligently specifically
during the unloading operations, the indemnification agreement does
not apply. Of course, we agree that the contract does not burden
Seacor with liability for defects in the platform crane generally.
But we disagree that the crane’s failure was not “connected with
the performance of service . . . [or the] loading or unloading of
cargo” under the time charter agreement. Even if the platform
crane malfunctioned because of long-term inattention to
maintenance, the injury “arose out of” or was “directly or
indirectly connected with” Chevron’s use of the crane during
unloading. The indemnification agreement is not limited to
situations in which Chevron’s negligence takes place on board the
Long Island. Nor is it limited to breaches of care that could only
cause harm during the platform’s interaction with a cargo vessel.
The fact that the crane could just as easily have caused an injury
1
Chevron also argues that “loading or unloading” adds
something to the more general “ownership, maintenance, management,
operation,” etc. language because the entire list is governed by
the disjunctive “or.” Both parties cite Black’s Law Dictionary
concerning the force of “or” as opposed to “and.” These arguments
are not helpful. The fact that elements in a list are disjunctive
does not prevent one element from duplicating other elements in the
list.
9
on the platform after the time charter agreement expired does not
take this particular injury outside of the indemnification
provision.
Vessel owners can continue to obtain the protection of Lanasse
by making use of the broad indemnity language at issue in that
case. But once a vessel owner explicitly agrees to indemnify a
charterer for liabilities that arise from negligent unloading
operations, it can no longer hide behind the rationale in Lanasse
and its progeny. We approve of the Clement decision and hold that
Seacor’s agreement to indemnify Chevron embraces Chevron’s
liability for the negligent operation of its platform crane while
unloading the Long Island. The district court erred when it denied
Chevron’s motion for summary judgment against Seacor.
III.
We turn now to the question of whether Anglo-American’s policy
covers Chevron’s liability. Again, we review de novo the district
court’s grant of summary judgment in favor of Anglo-American. Our
case law has elucidated the meaning of an “as owner” clause in
insurance policies that cover charterers’ liability. Based on that
case law, we hold that the omission of the “as owner” clause
creates at least a genuine issue of material fact as to whether
Anglo-American extended coverage to Chevron’s actions as a platform
operator. Because the policy could be construed to cover liability
that arises from the negligent operation of the platform crane, we
reverse Anglo-American’s summary judgment.
10
Once again, Lanasse is the seminal case. We concluded in
Lanasse that Chevron caused the injury as a platform operator
rather than as an “owner” of the chartered tender. The protection
and indemnity policy, however, covered Chevron only for liabilities
incurred “as owner” of the tender. Consequently, we affirmed the
district court’s judgment in favor of the insurer. We held
specifically that a policy that covers a charterer’s liability
incurred “as owner” of the chartered vessel does not provide
coverage unless there is “some causal operational relation between
the vessel and the resulting injury.” 450 F.2d at 584. “[W]here
injury is done through nonvessel operations, the vessel must be
more than the inert locale of the injury.” Id. Accord Randall v.
Chevron U.S.A., 13 F.3d 888, 907-09 (5th Cir.), modified on other
grounds, 22 F.3d 568 (5th Cir.), cert. dismissed, 115 S. Ct. 5,
cert. denied, 115 S. Ct. 498 (1994); Stockstill v. Petty Ray
Geophysical Div., 888 F.2d 1493, 1496-97 (5th Cir. 1989); Texas
Eastern Transmission Corp. v. McMoRan Offshore Exploration Co., 877
F.2d 1214, 1228 (5th Cir.), cert. denied, 110 S. Ct. 332 (1989).
If the policy had retained the “as owner” language, Anglo-
American would have no responsibility to provide coverage for
injuries caused by Chevron’s actions as a platform operator. But
omitting the “as owner” language can make Lanasse’s “causal
operational relation” test inapplicable. In Helaire v. Mobil Oil
Co., 709 F.2d 1031, 1041-42 (5th Cir. 1983), we held that omitting
the words “as owner” can expand coverage to include injuries
inflicted as a platform operator rather than merely as the operator
11
of the vessel. The plaintiff in Helaire was injured while
attempting to unload casing onto a platform during bad weather. We
affirmed the district court’s holding that the relevant protection
and indemnity insurance covered the platform operator because the
negligence pertained to operating the chartered vessel in spite of
the high seas. As an alternative holding, we pointed out that the
parties had omitted the “as owner” clause from the policy, so there
would be coverage even if the charterer’s negligent conduct had not
been “as owner” of the vessel:
Moreover, even assuming that Mobil’s liability
may have arisen from its status as platform
operator, indemnification was still properly
awarded. . . . The words “as owner of the vessel
named herein” were deleted from the policy. The
district court found that this deletion was
intended to provide coverage for Mobil regardless
of the capacity in which Mobil was sued. Certainly
this finding was not clearly erroneous. . . .
Consequently, the court’s indemnification order is
proper regardless of whether Mobil incurred
liability as a “vessel owner” or as a “platform
operator.”
709 F.2d at 1042 (footnote omitted). See also Randall, 13 F.3d at
908 (“[W]e also noted [in Helaire] that the words ‘as owner of the
vessel’ had been deleted from the policy, so the time charterer was
entitled to coverage regardless of the capacity in which it was
sued.”).
Anglo-American’s primary response to the Helaire opinion is
simply to assert that its alternative holding is dicta. But we are
bound by Helaire’s second rationale just as firmly as if it were
the only reason offered by the Helaire court. See Oncale v.
Sundowner Offshore Services, Inc., 83 F.3d 118, 120 (5th Cir.
12
1996), petition for cert. filed, 65 U.S.L.W. 3432 (U.S. Dec. 16,
1996) (No. 96-568). In contrast to the procedural posture of
Helaire, we do not have the benefit of a fact-finder’s
determination that the parties intended for the deletion to extend
coverage to Chevron’s vessel-related liabilities incurred as
platform owner. But Helaire at least demonstrates that our law is
consistent with Chevron’s argument that we should construe the
policy to cover Mr. Gaspard’s injury. Its very existence means
that there is at least a genuine issue of material fact as to
whether Chevron’s interpretation is accurate.2
Anglo-American also argues that Helaire conflicts with
McMoRan. But McMoRan concerned an indemnity provision in which the
vessel owner agreed that “[a]ny language in the policies . . .
which limits the coverage afforded to an assured who is not a
shipowner or who is not entitled to the rights of limitation to
which a shipowner is entitled shall be deleted.” 877 F.2d at 1226.
The McMoRan decision, then, dealt with a charterer who wanted to
make sure merely that its coverage would be no less than what it
would have been if it were the owner of the vessel. By contrast,
Chevron in this case wanted to make sure that its coverage would
2
If the contract is unambiguous, no question of fact remains,
and Chevron is entitled to summary judgment on remand. Employers
Ins. of Wausau v. Occidental Petroleum, 978 F.2d 1422, 1430 (5th
Cir. 1992), cert. denied, 510 U.S. 813 (1993). Because the
district court did not have occasion to rule on the question of the
contract’s ambiguity, we do not reach it. The Helaire Court,
considering the effect of the deletion of an “as owner” clause as
a matter of first impression, apparently concluded that the
resulting policy retained ambiguities that required a factual
inquiry into the parties’ intentions. We leave it to the district
court to decide whether this policy is similarly ambiguous.
13
not be limited to what it would have been if it were actually the
owner of the vessel. Randall discussed both Helaire and McMoRan
and found no conflict between them. See 13 F.3d at 908, 908-09.
The district court recognized that Anglo-American’s policy
would ordinarily be governed by Helaire rather than by the Lanasse
line of cases. Its summary judgment in favor of Anglo-American was
based on the policy’s declaration that “if claim is made by anyone
other than the owner and/or operator of the vessel(s) insured
hereunder, such person or entity shall not be entitled to a broader
scope of coverage than would the owner and/or operator had claim
been made by the owners and/or operator as an Assured hereunder.”
The district judge analyzed this sentence to mean that “[i]f
Chevron makes a claim as owner of the platform, as opposed to as
owner/operator of the vessel, the clause still limits the scope of
coverage to that otherwise available under the policy. The policy
provides coverage for an accident arising from the use of one of
Seacor’s vessels.” In other words, the court understood this
sentence to accomplish the same thing that the “as owner” clause
would have accomplished had it been included in the policy.
We disagree with the district court’s reading of the policy.
The sentence it relied on applies only if a party other than Seacor
or Chevron, the owner and operator of the vessel respectively, were
to bring a claim. In that event, coverage is limited to what
Seacor or Chevron could have obtained under the policy. The
language cited by the district court has no application to this
litigation.
14
The Lanasse court’s reasoning turned on the “as owner” clause
in the policy involved in that case. As Helaire demonstrates,
Lanasse’s “causal operational relation” test does not necessarily
apply when the parties omit this clause from a protection and
indemnity policy. When Chevron went out of its way to omit the
clause, and when Anglo-American consented to including Chevron as
an additional insured without limiting coverage to Chevron’s
liabilities sustained “as owner” of the Long Island, the parties
created a protection and indemnity policy that could be interpreted
to extend coverage to Chevron’s vessel-related negligence committed
as platform operator.
IV.
We hold that the indemnification agreement required Seacor to
indemnify Chevron for its liability to Mr. Gaspard. Consequently,
the district court erred when it denied Chevron’s motion for
summary judgment against Seacor. On remand, the district court
must calculate the damages Seacor owes to Chevron.
The district court also erred when it granted summary judgment
in favor of Anglo-American. The deletion of the “as owner” clause
created at least a genuine issue of material fact as to whether
Anglo-American’s policy covered vessel-related liabilities
involving Chevron’s negligence in its capacity as a platform
operator. Because of the procedural posture of the case, the
district court still has the task of deciding in the light of our
opinion whether Chevron should prevail in its third-party claim
against Anglo-American.
REVERSED AND REMANDED.
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