ENSCO Offshore, LLC v. Cantium, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

ENSCO OFFSHORE LLC CIVIL ACTION

VERSUS NO. 24-371

CANTIUM, LLC SECTION M (4)

ORDER & REASONS

Before the Court is a motion for summary judgment filed by plaintiff Ensco Offshore LLC

(“Ensco”).1 Defendant Cantium, LLC (“Cantium”) responds in opposition,2 and Ensco replies in

further support of its motion.3 Having considered the parties’ memoranda, the record, and the

applicable law, the Court issues this Order & Reasons granting the motion as to Ensco’s

indemnification claim and denying it as to Ensco’s breach-of-contract and equitable claims.

I. BACKGROUND

This case involves a contractual dispute. Ensco, a drilling contractor, provides equipment,

personnel, supplies, and services for offshore drilling operations.4 Cantium owns and operates

offshore oil-and-gas platforms.5 The parties entered into a master services contract (“MSC”) and

one or more service orders.6 Ensco filed suit against Cantium, alleging that Cantium failed to pay

nearly $9 million invoiced for services performed under the MSC and service order, and asserting

claims for breach of contract, quantum meruit, and promissory estoppel.7 Cantium filed an answer

and counterclaim alleging that Ensco breached the MSC by failing to provide adequate equipment,

1 R. Doc. 55.

2 R. Doc. 64.

3 R. Doc. 67.

4 R. Docs. 1 at 2; 35 at 2.

5 R. Doc. 14 at 13.

6 R. Docs. 1 at 2; 14 at 13; 35 at 2; 40 at 3-4, 10-11.

7 R. Doc. 1.

failing to deliver and maintain Ensco’s rig in working order, failing to provide qualified personnel,

failing to provide competent management and proper financial support, and failing to perform

drilling operations in a workmanlike manner.8 Cantium’s counterclaim sought over $28 million

in damages for losses allegedly caused by Ensco’s various failures to perform.9 Ensco moved for

partial summary judgment on Cantium’s counterclaim, arguing that, under the terms of the MSC,

Cantium was not entitled to the damages it sought.10 On July 25, 2024, the Court granted Ensco’s

motion for partial summary judgment and dismissed Cantium’s counterclaim with prejudice.11

Ensco subsequently amended its complaint to include an indemnification claim under section

15.22 of the MSC for litigation expenses Ensco incurred in defending against Cantium’s

counterclaim.12 Ensco now urges that it is entitled to summary judgment on all of its claims.

II. PENDING MOTION

Ensco first argues that it should prevail on its breach-of-contract claim because the MSC

and service order are both “valid and binding contracts,” and Cantium’s “[n]on-payment of

invoices issued pursuant to a contract constitutes a breach,” which resulted in approximately $9

million in damages to Ensco.13 In the alternative, Ensco argues that it is entitled to judgment on

its quantum meruit claim because Ensco provided valuable services and materials to Cantium, who

accepted those services and materials with reasonable notice that Ensco expected compensation,

but failed to pay.14 Ensco also argues that it should prevail on its alternative claim for promissory

estoppel because Cantium represented in the MSC and service order that it would pay for Ensco’s

8 R. Doc. 14.

9 Id. at 26.

10 R. Doc. 37.

11 R. Doc. 49.

12 R. Doc. 35.

13 R. Doc. 55-1 at 10.

14 Id. at 12.

services, and Ensco foreseeably relied, to its detriment, on Cantium’s representation.15 Ensco then

contends that it is entitled to summary judgment on its indemnification claim for attorney’s fees

and costs incurred in defending against Cantium’s counterclaim because it sought “the categories

of damages [Cantium had contractually waived and] that trigger Cantium’s obligation to indemnify

Ensco” under section 15.22.16 Finally, Ensco argues that Cantium’s asserted affirmative defenses

lack sufficient evidence.17

In opposition, Cantium first argues that the motion is premature because Ensco has not yet

had the opportunity to conduct adequate discovery.18 Next, Cantium argues that Ensco is not

entitled to summary judgment on its breach-of-contract claim because there are genuine issues of

material fact as to whether Ensco’s performance “fell below the industry standard and violated the

express terms of the [MSC],” excusing Cantium from making further payments.19 Cantium also

disputes certain amounts of Ensco’s alleged damages.20 Cantium then argues that, because “the

claims for which Ensco seeks indemnification and attorneys’ fees arise[] out of the gross

[negligent] conduct of its senior supervisory personnel,” section 15.16’s gross negligence

exception applies to foreclose Ensco’s claim for indemnification under section 15.22.21 Finally,

Cantium argues that Ensco’s quantum meruit and promissory estoppel claims are barred as a matter

of law because they seek recovery for matters falling squarely within the scope of a valid,

enforceable, and binding contract (the MSC and service order).22

15 Id. at 12-13.

16 Id. at 14.

17 Id. at 15.

18 R. Doc. 64 at 16-17.

19 Id. at 17-19 (quotation at 18).

20 Id. at 19.

21 Id. at 19-22 (quotation at 22).

22 Id. at 22-24.

In reply, Ensco contends that “[t]he bottom line in this case is that Ensco performed

services under its contract, properly invoiced Cantium for those services, but Cantium refused to

pay Ensco.”23 Ensco argues that, even had Ensco breached the MSC and service order (which it

denies), Cantium would still not be excused from its obligation to pay, because Cantium declined

to terminate the contract.24 Ensco further argues that the alleged breaches were immaterial because

“Cantium substantially received the benefit of its bargain.”25 Ensco also contends that none of

Cantium’s disputes of the invoice amounts raises a fact issue.26 Ensco next argues that Cantium

is not entitled to additional discovery because it failed to provide an affidavit or declaration

supporting its need for further discovery as required by Rule 56(d) of the Federal Rules of Civil

Procedure.27 Ensco then argues that section 15.16’s gross negligence exception “has no bearing”

on Ensco’s indemnification claim because it seeks the fees and costs Ensco incurred in defending

against Cantium’s counterclaim, not losses caused by Ensco’s own negligence or willful

misconduct.28 Next, Ensco maintains that it is entitled to relief on its equitable claims despite the

existence of a valid contract because it made these claims in the alternative to its breach-of-contract

claim, and because “courts have applied an exception” to the general rule barring recovery in

quantum meruit when an express contract exists to prevent unjust enrichment.29 Finally, Ensco

reiterates that Cantium has not provided sufficient evidence to raise a fact question as to its

affirmative defenses.30

23 R. Doc. 67 at 1 (emphasis omitted).

24 Id. at 2-3.

25 Id. at 3.

26 Id. at 4-6.

27 Id. at 6-7.

28 Id. at 7-8.

29 Id. at 8-10.

30 Id. at 10.

III. LAW & ANALYSIS

A. Summary Judgment Standard

Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a judgment as a matter of law. Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986). “Rule 56(c) mandates the entry of summary judgment,

after adequate time for discovery and upon motion, against a party who fails to make a showing

sufficient to establish the existence of an element essential to that party’s case, and on which that

party will bear the burden of proof at trial.” Id. A party moving for summary judgment bears the

initial burden of demonstrating the basis for summary judgment and identifying those portions of

the record, discovery, and any affidavits supporting the conclusion that there is no genuine issue

of material fact. Id. at 323. If the moving party meets that burden, then the nonmoving party must

use evidence cognizable under Rule 56 to demonstrate the existence of a genuine issue of material

fact. Id. at 324.

A genuine issue of material fact exists if a reasonable jury could return a verdict for the

nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The substantive

law identifies which facts are material. Id. Material facts are not genuinely disputed when a

rational trier of fact could not find for the nonmoving party upon a review of the record taken as a

whole. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); EEOC

v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014). Unsubstantiated assertions, conclusory

allegations, and merely colorable factual bases are insufficient to defeat a motion for summary

judgment. See Anderson, 477 U.S. at 249-50; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th

Cir. 1994); Hopper v. Frank, 16 F.3d 92, 97 (5th Cir. 1994). In ruling on a summary-judgment

motion, a court may not resolve credibility issues or weigh evidence. See Delta & Pine Land Co.

v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). Furthermore, a court

must assess the evidence, review the facts, and draw any appropriate inferences based on the

evidence in the light most favorable to the party opposing summary judgment. See Tolan v. Cotton,

572 U.S. 650, 656-57 (2014); Daniels v. City of Arlington, 246 F.3d 500, 502 (5th Cir. 2001). Yet,

a court only draws reasonable inferences in favor of the nonmovant “when there is an actual

controversy, that is, when both parties have submitted evidence of contradictory facts.” Little, 37

F.3d at 1075 (citing Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990)).

After the movant demonstrates the absence of a genuine issue of material fact, the

nonmovant must articulate specific facts showing a genuine issue and point to supporting,

competent evidence that may be presented in a form admissible at trial. See Lynch Props., Inc. v.

Potomac Ins. Co., 140 F.3d 622, 625 (5th Cir. 1998); Fed. R. Civ. P. 56(c)(1)(A), (c)(2). Such

facts must create more than “some metaphysical doubt as to the material facts.” Matsushita, 475

U.S. at 586. When the nonmovant will bear the burden of proof at trial on the dispositive issue,

the moving party may simply point to insufficient admissible evidence to establish an essential

element of the nonmovant’s claim in order to satisfy its summary-judgment burden. See Celotex,

477 U.S. at 322-25; Fed. R. Civ. P. 56(c)(1)(B). Unless there is a genuine issue for trial that could

support a judgment in favor of the nonmovant, summary judgment must be granted. See Little, 37

F.3d at 1075-76.

B. Analysis

1. Cantium is not entitled to additional discovery.

Cantium argues that Ensco’s motion is premature because Cantium has not had the

opportunity to conduct adequate discovery. But Cantium has not requested relief under Rule 56(d)

of the Federal Rules of Civil Procedure, which permits a party opposing a motion for summary

judgment to show “by affidavit or declaration that, for specified reasons, it cannot present facts

essential to justify its opposition.” Cantium has filed no affidavit or declaration. Because Cantium

has not complied with Rule 56(d), it is not entitled to further discovery before the Court decides

the motion for summary judgment.

2. Ensco is not entitled to summary judgment on its quantum meruit claim.

Under Texas law,31 “[q]uantum meruit is an equitable remedy that is ‘based upon the

promise implied by law to pay for beneficial services rendered and knowingly accepted.’” Hill v.

Shamoun & Norman, LLP, 544 S.W.3d 724, 732 (Tex. 2018) (quoting In re Kellogg Brown &

Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005)). To recover in quantum meruit, a plaintiff must

prove that “it provided valuable services or materials to the [d]efendant sought to be charged for

them; that they were rendered under circumstances that reasonably notified the [d]efendant that

the [p]laintiff expected payment; and that the [d]efendant accepted, used and enjoyed them without

paying for them.” Malin Int’l, 2014 WL 12616099, at *2. “A party generally cannot recover under

a quantum-meruit theory where there is a valid contract covering the services or materials

furnished.” Hill, 544 S.W.3d at 737; see also Black Lake Pipe Line Co. v. Union Constr. Co., 538

S.W.2d 80, 86 (Tex. 1976) (“If a valid express contract covering the subject matter exists there

can be no recovery upon a contract implied by law.”), overruled on other grounds by Sterner v.

31 The MSC is governed by general maritime law “for matters governed by this law and for all other matters,

this Contract is governed by and interpreted under the laws of the State of Texas.” R. Doc. 1-1 at 68. It appears there

is no general maritime law as to quantum meruit. See Martin Energy Servs., LLC v. M/V Bravante IX, 733 F. App’x

503, 506 (11th Cir. 2018) (citing Sea Byte, Inc. v. Hudson Marine Mgmt. Servs., Inc., 565 F.3d 1293, 1298 (11th Cir.

2009)); Sea Byte, 565 F.3d at 1305 n.8 (“Based upon our review of the case law, we do not believe federal admiralty

law provides a rule on this [i.e., the availability of quantum meruit damages] – thus, we will look to Florida law.”);

Malin Int’l Ship Repair & Drydock, Inc. v. Oceanografia, S.A. de C.V., 2014 WL 12616099, at *2 (S.D. Tex. Nov.

24, 2014) (applying Texas law to a quantum meruit claim in a maritime case), aff’d 817 F.3d 241 (5th Cir. 2016).

Without conducting any choice-of-law analysis, the parties appear to rely on Texas law for the most part, probably

given the MSC’s alternative designation of Texas law. Thus, the Court will apply Texas law.

Marathon Oil Co., 767 S.W.2d 686 (Tex. 1989). It is uncontested that the MSC and service order

constitute a valid express contract and that the services and materials Ensco provided Cantium are

covered by this contract.32 Thus, Ensco “must look to the contract[] for compensation.” Black

Lake, 538 S.W.2d at 86, quoted in Diamond Servs. Corp. v. RLB Contracting, Inc., 113 F.4th 430,

443 (5th Cir. 2024). And, indeed, it has done so by bringing a claim for breach of contract.

Ensco argues in its reply that “courts have applied an exception” permitting recovery in

quantum meruit despite the existence of a valid contract “where the other party accepted and

retained some benefit as a result of a contractor’s performance,” as Ensco claims Cantium did

here.33 It is true that “Texas recognizes an exception to this general rule in the construction

context.” D2 Excavating, Inc. v. Thompson Thrift Constr., Inc., 973 F.3d 430, 436 (5th Cir. 2020)

(holding, however, that the exception did “not fit this case” where the work was within the scope

of the contract). Assuming arguendo that this exception did apply to the MSC, there would still

be an issue of material fact as to the amount Ensco may recover. Recovery in quantum meruit is

not based on the contract price, but on the reasonable “value of [the plaintiff’s] services.” Id.

(citing Murray v. Crest Constr., Inc., 900 S.W.2d 342, 345 (Tex. 1995)). Therefore, even if this

exception applies, Ensco is not entitled to summary judgment on its quantum meruit claim.

3. Ensco is not entitled to summary judgment on its promissory estoppel claim.

Promissory estoppel is an equitable remedy that “operates to enforce an otherwise

unenforceable promise.” Superior Laminate & Supply, Inc. v. Formica Corp., 93 S.W.3d 445, 449

(Tex. App. 2002) (observing that promissory estoppel “‘cannot replace an enforceable contract’”

(quoting Vogel v. Travelers Indem. Co., 966 S.W.2d 748, 754 (Tex. App. 1998))). To prevail on

32 See R. Docs. 55 at 6; 64 at 2.

33 R. Doc. 67 at 9.

a promissory estoppel claim under Texas law,34 a plaintiff must show “‘(1) a promise, (2)

foreseeability of reliance thereon by the promisor, and (3) substantial reliance by the promisee to

his detriment.’” MetroplexCore, L.L.C. v. Parsons Transp., Inc., 743 F.3d 964, 977 (5th Cir. 2014)

(quoting English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983)). Like quantum meruit, promissory

estoppel is available “only in the absence of a valid and enforceable contract.” Drs. Hosp. 1997,

L.P. v. Sambuca Houston, L.P., 154 S.W.3d 634, 636 (Tex. App. 2004) (emphasis in original)

(collecting cases), cited in Williams v. Colonial Bank, N.A., 199 F. App’x 399, 403 (5th Cir. 2006)

(upholding dismissal of promissory estoppel claim given “[t]he existence of a valid, express

contract that covers the subject matter of the parties’ dispute”). Ensco has not claimed that any

exception to this general rule applies here. Therefore, Ensco is not entitled to summary judgment

on its promissory estoppel claim either.

4. Ensco is not entitled to summary judgment on its breach-of-contract claim.

a. Ensco’s performance

The elements of a breach-of-contract claim under federal maritime law are (1) a contract

between the parties; (2) a breach of that contract; and (3) damages. FEC Heliports, LLC v.

Hornbeck Offshore Operators, LLC, 2016 WL 5678557, at *5 (E.D. La. Oct. 3, 2016) (citing 17A

AM. JUR. 2d Contracts § 702 (2016)). “Prior material breach is a defense to a suit for breach of

contract.” Lytal Enters., Inc. v. Newfield Expl. Co., 2007 WL 1239130, at *7 (E.D. La. Apr. 27,

2007) (citing Motiva Enters., L.L.C. v. St. Paul Fire & Marine Ins. Co., 445 F.3d 381, 386 (5th

34 It appears there is no general maritime law on the cause of action of promissory estoppel either. See RSDC

Holdings, LLC v. M.G. Mayer Yacht Servs., Inc., 429 F. Supp. 3d 246, 259 (E.D. La. 2019) (applying Louisiana law

to detrimental reliance claim); Norfolk Shipbuilding & Dry Dock Corp. v. Seabulk Transmarine P’ship, Ltd., 1993

WL 432335, at *3 (E.D. La. Oct. 13, 1993) (applying New York law to promissory estoppel claim); Regions Equip.

Fin. Corp. v. AT 2400, 2010 WL 11531292, at *8 (E.D. Tex. Sept. 2, 2010) (applying Alabama law to promissory

estoppel claim), aff’d, 640 F.3d 124 (5th Cir. 2011). And, again, without conducting a choice-of-law analysis, the

parties cite to Texas cases, presumably given the MSC’s alternative designation of Texas law as the governing law.

The Court will therefore also apply Texas law here.

Cir. 2006)). Cantium argues that its nonpayment of the invoices was not a breach because its

obligation to pay was excused by Ensco’s prior material breaches of the MSC and service order.35

But Ensco asserts that Cantium has no right to withhold payment because it allowed Ensco to

continue performance despite Ensco’s alleged breaches.36 “This is significant,” says Ensco,

“because the [MSC] includes a specific termination provision, which Cantium did not invoke.”37

The termination provision, found in section 3.2 of the MSC, states that Cantium “may” terminate

the MSC and service order if Ensco “materially breaches any of its obligations” or “fails to perform

the [s]ervices as required” under the MSC and service order.38 But section 3.2 does not restrict

Cantium’s recourse for breach solely to termination. In fact, section 11.2.2 specifically provides

that Cantium “may withhold payment for all or such portion of any invoice … about which there

is a bona fide dispute but shall pay all other amounts as prescribed.”39 Thus, Cantium’s decision

not to terminate the contract does not necessarily foreclose its right to withhold payment in

response to Ensco’s alleged breaches under the MSC, as Ensco contends.

There are genuine issues of material fact regarding whether Ensco materially breached the

MSC and service order. Ensco claims that it “performed its obligations under the contracts by

furnishing equipment, personnel, and services to Cantium.”40 But Cantium has presented

sufficient evidence to raise an issue of fact as to whether Ensco breached its contractual obligations

to provide services in a workmanlike manner, maintain its equipment in good working order, and

provide trained personnel. For example, Cantium specifically avers, based in part upon the

declaration of its drilling manager,41 that the rig was delivered by Ensco with components that

35 R. Doc. 64 at 17-19.

36 R. Doc. 67 at 2-3.

37 Id. at 3.

38 R. Doc. 1-1 at 22-23.

39 Id. at 45.

40 R. Doc. 55-1 at 7.

41 R. Doc. 75-6.

were “not fit for service,”42 that several operational and mechanical failures resulted from Ensco’s

failure to provide, maintain, and timely repair faulty equipment,43 and that the incompetence of

Ensco’s crew caused other performance issues.44 Ensco claims that these alleged breaches are

immaterial because “Cantium substantially received the benefit of its bargain [in that] Cantium

employed Ensco to drill a well, and Ensco did so.”45 However, the analysis is not that simple, and

Cantium has come forward with sufficient summary-judgment evidence to place in dispute the

question whether Ensco’s performance “fell below the industry standard and violated the express

terms of the [MSC].”46 Therefore, because issues concerning whether Ensco materially breached

the MSC and service order are genuinely in dispute, Ensco is not entitled to summary judgment

on its breach-of-contract claim.

b. Calculation of damages

There are also genuine issues of fact regarding the calculation of the damages claimed by

Ensco. Cantium, again relying on the declaration of its drilling manager,47 disputes several

amounts, including a 15% handling fee, credits allegedly owed to Cantium, reimbursement

allegedly owed to Cantium for emergency medical evacuation of Ensco’s personnel, and

miscalculation of downtimes and contract rates.48 In response, Ensco points to several credit

memos and invoices, asserting that these amounts were either already credited to Cantium, agreed

upon by the parties, properly charged to Cantium under the service order, or not billed to Ensco

directly.49 The resolution of these issues is for the factfinder, not the Court at this juncture. Hence,

42 R. Doc. 64 at 5.

43 Id. at 5-8, 10-13.

44 Id. at 8-10.

45 R. Doc. 67 at 3.

46 R. Doc. 64 at 18.

47 R. Doc. 75-6.

48 R. Doc. 64 at 19.

49 R. Doc. 67 at 4-6.

given these disputed issues of material fact regarding the damages sought, Ensco is not entitled to

summary judgment on its breach-of-contract claim on this additional ground.

5. Ensco is entitled to summary judgment on its indemnification claim.

“Maritime disputes generally are governed by the ‘American Rule,’ pursuant to which each

party bears its own [attorney’s fees and] costs,” unless a controlling statute or contractual provision

allows for such recovery. Tex. A&M Rsch. Found. v. Magna Transp., Inc., 338 F.3d 394, 405 (5th

Cir. 2003). “The Fifth Circuit has frequently found that when indemnity provisions apply, they

include costs and attorney’s fees.” Cantium, LLC v. FDF Energy Servs., LLC, 2024 WL 3551126,

at *7 (E.D. La. June 7, 2024) (citing Olsen v. Shell Oil Co., 595 F.2d 1099, 1103 (5th Cir. 1979)).

“Under federal maritime law, ‘a contract of indemnity should be construed to cover all losses,

damages, or liabilities which reasonably appear to have been within the contemplation of the

parties.’” Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1214 (5th Cir. 1986) (alteration

omitted) (quoting Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 333 (5th Cir. 1981)).

Ensco asserts a contractual right to attorney’s fees and costs under section 15.22 of the

MSC. This section states in pertinent part:

15.22 OPERATOR [Cantium] SHALL INDEMNIFY CONTRACTOR GROUP

[Ensco] … FROM AND AGAINST ALL CLAIMS OR CAUSES OF

ACTION LISTED IN SECTIONS 15.21(A) AND 15.21(B) WHICH ARE

SUFFERED BY THE RELEVANT INDEMNIFYING PARTY OR ITS

GROUP [in this instance, Cantium] ARISING OUT OF OR IN

CONNECTION WITH THIS CONTRACT.50

Sections 15.21(A) and 15.21(B) state:

15.21 LIMITATION ON CLASSES OF DAMAGES. OPERATOR [Cantium]

AND CONTRACTOR [Ensco] MUTUALLY WAIVE AND RELEASE,

ON BEHALF OF THEMSELVES AND THEIR RESPECTIVE GROUP,

ALL OF THE FOLLOWING CLAIMS FOR DAMAGES ARISING OUT

OF THIS CONTRACT, WHETHER SUCH CLAIMS ARE MADE IN

CONNECTION WITH AN INDEMNITY SPECIFIED IN THIS SECTION

50 R. Doc. 1-1 at 59.

15, A BREACH OF ANY OBLIGATION UNDER THIS CONTRACT OR

ANY OTHER CLAIM:

(A) CONSEQUENTIAL LOSS UNDER APPLICABLE LAW

(WHETHER DIRECT OR INDIRECT) AND ALL OF THE

FOLLOWING (WHETHER OR NOT CONSIDERED

CONSEQUENTIAL LOSS UNDER APPLICABLE LAW):

(1) LOST PROFITS.

(2) LOSS OF PRODUCTION, INCLUDING PRODUCTION OF

PETROLEUM OR PETROLEUM PRODUCTS.

(3) LOSS OF PROSPECTIVE ECONOMIC ADVANTAGE OR

BENEFIT.

(4) LOSS OF BUSINESS OPPORTUNITY.

(5) COSTS OF PERSONS HIRED BY EITHER PARTY TO

PROVIDE VESSELS, MATERIALS, AND SERVICES OR

WORK IN SUPPORT OF THE SERVICES, INCLUDING

THOSE COSTS THAT ARE SOMETIMES REFERRED TO

AS “SPREAD COSTS”, BUT NOT INCLUDING

INCREMENTAL COSTS INCURRED BY OPERATOR

[Cantium] FOR THE BENEFIT OF CONTRACTOR [Ensco]

AND AT CONTRACTOR’S [Ensco’s] REQUEST, SUCH AS

FUEL OR OTHER LOGISTICAL SUPPORT THAT

OPERATOR [Cantium] IS NOT EXPLICITLY REQUIRED

TO PROVIDE UNDER THIS CONTRACT.

(B) PUNITIVE OR EXEMPLARY DAMAGES.

Cantium’s counterclaim sought “damages incurred as a result of Ensco’s breaches of the [MSC],

including, but not limited to, damages incurred as a result of extended day rate charges, extended

periods of non-productive time, loss of the Kings Hill well and associated redrill expenses, and all

other amounts to be proven at trial but totaling no less than $28.5 Million.”51 The claimed damages

expressly included “spread costs.”52 Because these are the types of consequential damages listed

in section 15.21(A), and consequently waived by the parties, the Court granted Ensco’s previous

51 R. Doc. 14 at 26.

52 R. Doc. 37-1 at 243-46.

motion for partial summary judgment and dismissed Cantium’s counterclaim.53 Ensco now argues

that Cantium’s counterclaim “triggers Cantium’s indemnity obligations to Ensco under 15.22.”54

Ensco does not explain how section 15.22 works, except to pronounce that “Cantium ‘shall

indemnify’ Ensco ‘from and against all claims or causes of action listed in [s]ection[] 15.21(A).’”55

The Court’s reading of the MSC is consistent with this conclusion as applied here. Section 15.22

imposes an indemnification obligation for any of the listed claims as may be asserted between

Ensco and Cantium, rather than by a third-party. Section 15.22’s phrase “claims or causes of

action [waived in section 15.21] which are suffered by the relevant indemnifying party” refers to

claims for such damages asserted by that indemnifying party – in this instance, Cantium, by means

of the counterclaim. The structure of the MSC supports this interpretation. Because section 15.22

is immediately preceded by section 15.21’s waiver of certain claims, section 15.22 is reasonably

construed as imposing a contractual penalty on a party who brings one or more of those waived

claims, as Cantium did here. As a result, Cantium owes Ensco indemnity for having brought the

counterclaim. And because contractual indemnification provisions are read to permit the recovery

of litigation expenses, including attorney’s fees and costs, Ensco would be entitled under section

15.22 to recover the litigation expenses it incurred to defend against Cantium’s counterclaim,

failing some other exception.

Cantium urges just such an exception. Thus, while Cantium admits that section 15.22

“provides that Cantium will indemnify Ensco from and against all claims or causes of action

seeking, among other things[,] consequential damages and spread costs,” it contends that its

indemnity obligation “does not extend to claims arising out of gross negligence and/or willful

53 R. Doc. 49.

54 R. Doc. 67 at 8.

55 Id.

misconduct on the part of Ensco supervisory personnel,” pursuant to section 15.16.56 This section

states:

15.16 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS

AGREEMENT, OPERATOR [Cantium] SHALL HAVE NO

OBLIGATION UNDER THIS AGREEMENT TO DEFEND, PROTECT,

INDEMNIFY AND HOLD HARMLESS CONTRACTOR GROUP

[Ensco] FOR ANY LOSSES AS A RESULT OF ANY MEMBER OF

CONTRACTOR GROUP [Ensco] SENIOR SUPERVISORY

PERSONNEL’S GROSS NEGLIGENCE AND/OR WILLFUL

MISCONDUCT ARISING OUT OF THE PERFORMANCE OR NON-

PERFORMANCE OF ANY OBLIGATION AND/OR OF SERVICES

UNDER THIS CONTRACT OR ANY SERVICE ORDER. THE TERM

“SENIOR SUPERVISORY PERSONNEL” SHALL MEAN, FOR THE

CONTRACTOR [Ensco], THE OFFSHORE INSTALLATION

MANAGER, THE VICE PRESIDENT OF THE APPLICABLE

BUSINESS UNIT AND/OR ANY INDIVIDUAL HIGHER IN THE

CHAIN OF THE CONTRACTOR’S [Ensco’s] FORMAL

ORGANIZATIONAL STRUCTURE, INCLUDING THE INDIVIDUALS

TO WHOM SUCH REPRESENTATIVES FORMALLY REPORT.57

But Ensco is not seeking indemnification for losses suffered by anyone “as a result of” the gross

negligence of its own supervisory personnel. Instead, Ensco seeks indemnification for losses it

incurred in defending against Cantium’s improperly asserted counterclaim for damages it

contractually waived. Cantium, though, contends that its counterclaim was predicated on the gross

negligence of Ensco’s supervisory personnel, so the gross negligence exception to section 15.16

applies to bar Ensco’s indemnification claim. This is a bridge too far. Cantium’s interpretation

would allow a party to bring claims for damages expressly waived by section 15.21 against the

other without consequence, so long as the claimed damages are alleged to be “a result of” the

defending party’s gross negligence or willful misconduct – even though the damages waived by

section 15.21 include those arising out of gross negligence or willful misconduct.58 The Court has

56 R. Doc. 64-34 at 3-4.

57 R. Doc. 1-1 at 57-58.

58 R. Doc. 49 at 8.

already rejected this argument and found that there is no gross negligence exception to the waiver

of damages set out in section 15.21.59 Thus, the gross negligence exception in section 15.16 cannot

reasonably apply to relieve Cantium of its indemnification obligation under section 15.22.

Therefore, Ensco is entitled to summary judgment on its indemnification claim.

IV. CONCLUSION

Accordingly, for the foregoing reasons,

IT IS ORDERED that Ensco’s motion for summary judgment (R. Doc. 55) is GRANTED

as to its indemnification claim and DENIED as to its breach-of-contract and equitable claims.

New Orleans, Louisiana, this 20th day of September, 2024.

________________________________

BARRY W. ASHE

UNITED STATES DISTRICT JUDGE

59 Id.