Brown v. Sea Mar Management, LLC

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT United States Court of Appeals

Fifth Circuit

FILED

August 11, 2008

No. 07-30112 Charles R. Fulbruge III

Clerk

JERAMIE BROWN, et al.,

Plaintiffs,

v.

SEA MAR MANAGEMENT, LLC, ETC; et al.,

Defendants,

SEA MAR MANAGEMENT, LLC, formerly known as Sea Mar Management,

Inc.,

Third-Party Plaintiff-Appellee,

v.

OFFSHORE OIL SERVICES, INC.,

Third-Party Defendant-Appellant.

Appeal from the United States District Court

for the Western District of Louisiana

USDC No. 6:04-CV-1486

Before REAVLEY, BENAVIDES, and ELROD, Circuit Judges.

PER CURIAM:*

*

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

No. 07-30112

This case involves the interpretation and application of a defense and

indemnification clause in a maritime contract. Appellant Offshore Oil Services,

Inc. (“OOSI”) seeks reversal of: (1) the district court’s grant of summary

judgment in favor of Appellee Sea Mar Management, LLC (“Sea Mar”); and (2)

the district court’s denial of OOSI’s motion for summary judgment. We affirm.

I. BACKGROUND

Williams Field Services Company (“Williams”) hired OOSI to provide

utility vessels for painting and sandblasting operations. On March 6, 2002,

OOSI and Sea Mar entered into a Master Time Charter Agreement (“Charter

Agreement”), pursuant to which OOSI chartered the M/V CAPE COOK from Sea

Mar in order to meet Williams’s requirements. Williams hired L&L

Sandblasting to provide painting and sandblasting services, and employees of

L&L Sandblasting worked, ate, and slept aboard the CAPE COOK during

offshore operations. Pursuant to the Charter Agreement, Sea Mar provided a

master and crew to operate the CAPE COOK. At no time did OOSI have

personnel aboard the vessel.

In July 2003, Plaintiff Jeramie Brown, an employee of L&L Sandblasting,

injured his ankle while swinging from a fixed platform onto the jump deck of the

CAPE COOK. After Brown and his wife brought a personal injury action against

Sea Mar and others, Sea Mar filed a Third-Party Complaint against OOSI

demanding defense and indemnity pursuant to the Charter Agreement. OOSI

and Sea Mar thereafter filed cross-motions for summary judgment on the issue

of contractual indemnity. The district court granted Sea Mar’s motion and

denied OOSI’s motion. OOSI appeals.

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II. STANDARD OF REVIEW

We review the district court’s grant of summary judgment de novo. United

States v. Lawrence, 276 F.3d 193, 195 (5th Cir. 2001). Summary judgment is

proper when the record shows “that there is no genuine issue as to any material

fact and that the moving party is entitled to judgment as a matter of law.” Fed.

R. Civ. P. 56(c).

III. DISCUSSION

The Charter Agreement contains reciprocal indemnity provisions requiring

each party to provide a defense and indemnification for claims made by its

“invitees” against the other party. The operative paragraph provides as follows:

Charterer’s [OOSI’s] Indemnities.

Neither Owner [Sea Mar] [nor] its officers . . . shall have any

responsibility or liability . . . for any injury, illness, disease or death

of employees, agents or representatives of Charterer, Charterer’s

other subcontractors, Charterer’s customers or invitees[,] and

Charterer shall defend, indemnify, and hold harmless Owner . . . .

The parties dispute whether L&L Sandblasting’s employee Brown qualifies as

an “invitee” of OOSI.

Because the term “invitee” is not defined in the Charter Agreement, the

district court applied the Louisiana common law definition of “invitee” as set

forth in Blanks v. Murco Drilling Corp., 766 F.2d 891, 894 (5th Cir. 1985). The

Blanks court defined “invitee” as “a person who goes onto premises with the

expressed or implied invitation of the occupant, on business of the occupant or

for their mutual advantage.” Id. OOSI claimed that it was not an “occupant” of

the CAPE COOK because its employees were never aboard the vessel and

because it turned control of the vessel over to Williams. OOSI further argued

that Brown was Williams’s invitee and that Sea Mar obtained the “mutual

advantage” from the work Brown performed. On summary judgment, however,

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No. 07-30112

the district court found that Brown was an invitee of OOSI and that OOSI thus

owed a defense and indemnity to Sea Mar.

A. Interpretation of Indemnity Provision

The parties agree that the Charter Agreement controlled the relationship

between Sea Mar and OOSI on the date of Brown’s alleged accident and that the

Charter Agreement is a maritime contract. We apply federal maritime law in

interpreting and applying the contract.1 See Corbitt v. Diamond M. Drilling Co.,

654 F.2d 329, 332 (5th Cir. Unit A Aug. 1981) ("The interpretation of an

indemnity clause in a maritime contract is ordinarily governed by federal

maritime law rather than by state law."). A maritime contract “should be read

as a whole and its words given their plain meaning unless the provision is

ambiguous.” Weathersby v. Conoco Oil Co., 752 F.2d 953, 955 (5th Cir. 1984).

Further, indemnity agreements “should be construed to cover all losses,

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

contemplation of the parties . . . .” Corbitt, 654 F.2d at 333.

OOSI contends that Brown was not its “invitee” because OOSI was never

an “occupant” of the CAPE COOK. In the alternative, OOSI argues that if we

find that Brown was an invitee of OOSI, we must find that Brown was also an

invitee of Sea Mar, resulting in circular indemnity.

1

Generally, the common law distinction between an invitee and a licensee does not

apply in maritime law. See Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625,

630–32 (1959). The Supreme Court chose to adopt “a single duty of ‘exercising reasonable care

under the circumstances of each case,’ rather than to incorporate in the maritime law the

complexities of the common law of invitee and licensee.” Scindia Steam Navigation Co. v. De

Los Santos, 451 U.S. 156, 163 n.10 (1981) (quoting Kermarec, 358 U.S. at 632); see also Smith

v. Southern Gulf Marine Co. No. 2, 791 F.2d 416, 419 (5th Cir. 1986). Cases applying these

principles concern the duty of care that arises by operation of law in the maritime context, and

federal maritime law thus determined the framework of direct tort liability for Brown’s

injuries. The instant case, however, is solely a contractual indemnity matter. The parties

chose to incorporate the concept of an “invitee” to contractually define the circumstances under

which the indemnification provision would apply.

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No. 07-30112

B. Whether Brown is an Invitee of OOSI

OOSI first contends that Brown cannot be its invitee because OOSI was

not an “occupant” of the CAPE COOK. See Blanks, 766 F.2d at 894 (defining

“invitee” in part as someone invited by the “occupant”). According to OOSI,

occupancy requires physical presence on or actual use of the vessel, and OOSI

merely chartered the CAPE COOK for Williams’s use, immediately turned the

vessel over to Williams, and never had any personnel aboard the vessel. Sea

Mar, on the other hand, asserts that OOSI was an occupant of the CAPE COOK

because as the charterer of the vessel, OOSI had control and command of the

vessel, including where the vessel was to go and for what the vessel was to be

used.

Blanks does not define “occupant,” and Louisiana case law recognizes that

the term is “susceptible of different meanings.” Reed v. Employers Mut. Cas. Co.,

741 So. 2d 1285, 1288 (La. Ct. App. 1999). Consequently, both parties follow

Reed in using the customary meaning of “occupant” as set forth in Black’s Law

Dictionary: “[o]ne who has possessory rights in, or control over, certain property

or premises.” BLACK’S LAW DICTIONARY 1108 (8th ed. 2004). Contrary to OOSI’s

assertions, this definition does not require than an occupant actually use or be

physically present on the premises. Control of or a possessory right in the

property or premises is sufficient.

OOSI contends that it gave up the right to control the vessel when it

turned the vessel over to Williams, from whom Sea Mar was taking direction at

the time of the alleged injury. Pursuant to the Charter Agreement, however, the

vessel was under the control of OOSI; the master of the CAPE COOK was

obligated to follow the direction of OOSI and allow on board those persons or

parties that OOSI requested.2 If OOSI instructed Sea Mar to stop taking

2

Section 5(a) of the Charter Agreement provides: “The whole of the vessel shall be at

Charterer’s [OOSI’s] disposal[,] reserving proper and sufficient space for the vessel’s master,

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No. 07-30112

direction from Williams, Sea Mar was required to comply. As the district court

correctly concluded, the CAPE COOK was under the ultimate direction, control,

and command of OOSI, which could decide where the vessel went and who could

come on board. OOSI was therefore an “occupant” of the vessel.

The Blanks definition of “invitee” also requires an “expressed or implied

invitation” and that the invitee be present “on business of the occupant or for

their mutual advantage.” Blanks, 766 F.2d at 894. Blanks cites Arcement v. S.

Pac. Transp. Co., 517 F.2d 729 (5th Cir. 1975), a diversity suit in Louisiana. In

Arcement, one man was killed and another injured when their truck crossed a

railroad trestle, which collapsed. Id. at 731. The trestle and adjacent wharf had

been leased to the National Molasses Company by Southern Pacific, which the

court noted retained considerable control over the premises. Id. at 733 n.6. The

master of a molasses boat lying alongside Southern Pacific’s wharf had

requested a delivery of lube oil, and the men were delivering that lube oil on

behalf of their employer when they attempted to cross the trestle. Id.

The jury found liability against Southern Pacific, and we held on appeal

that the jury properly determined that the men were invitees of Southern

Pacific. We explained:

Neither party contends that [the men] had Southern Pacific's actual

invitation (or permission) to drive their truck onto the trestle. . . .

Southern Pacific of course argues that it did not benefit from vehicle

deliveries made over the trestle to ships tied at the wharf, but even

if it did, that the usual inference of invitation was rebutted by its

sporadic attempts to keep cars and trucks off the structure. We

disagree. Under Louisiana law it is enough to create invitee status

(1) that the injured person was never specifically warned to stay off

the property and (2) that he was present for some purpose connected

officers, crew . . . .” Section 5(c) provides: “The master, although appointed by the Owner, shall

be under the general direction of the Charterer [OOSI] in regards to the employment of the

vessel, agencies, or other arrangements, and shall not unreasonably refuse any request to

undertake operations or carry out any order or direction specified by Charterer.”

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with the defendant's business. There is no requirement of a

tangible, immediate gain by the owner or occupier.

Id. at 734 (emphasis added) (citations and footnote omitted). The Arcement case

is helpful to our application of the Louisiana common law definition of “invitee.”

Here, OOSI provided the CAPE COOK to Williams specifically so that

Williams could use it for painting and sandblasting operations. Brown was an

employee of L&L Sandblasting, the company Williams hired to perform painting

and sandblasting operations. OOSI therefore extended an implied invitation

to—or at the very least did not countermand Williams’s invitation to—L&L

Sandblasting and its employees to come aboard the CAPE COOK to perform that

work. The fact that Williams may have also extended an invitation to Brown

does not alter this analysis. In addition, Brown boarded the vessel to the mutual

advantage of Brown (and L&L Sandblasting) and OOSI—Brown’s work was

clearly “connected with” OOSI’s business of providing a vessel that would carry

painting and sandblasting workers. The fact that Brown’s presence may have

also been to Williams’s advantage and to Sea Mar’s advantage likewise does not

alter this analysis. Consistent with Arcement, therefore, we hold that the

district court correctly found that Brown was an invitee of OOSI.

C. Whether Brown was an Invitee of Sea Mar

OOSI also claims that if Brown is its invitee under the Blanks definition,

then Brown is also an invitee of Sea Mar, resulting in circular indemnity. Sea

Mar, however, did not hold the right to direct the activities of the vessel.

Pursuant to the Charter Agreement, the master of the CAPE COOK was

obligated to follow the direction of OOSI and allow on board those persons or

parties that OOSI requested. Because Sea Mar did not expressly or impliedly

invite Brown or L&L Sandblasting aboard the vessel, there is no basis for

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No. 07-30112

circular indemnity here. The plaintiff in the underlying case was an invitee of

OOSI, not of Sea Mar.

IV. CONCLUSION

Because the district court correctly determined that Brown was an invitee

of OOSI under the Charter Agreement and that OOSI is contractually obligated

to indemnify Sea Mar for defending and settling Brown’s claim, its judgment is

AFFIRMED.

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