Fifth Circuit Upholds Indemnity For Rig Fire
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A new Fifth Circuit opinion that may be of interest for civil practitioners in Texas. In The Offshore Drilling Co. v. Gulf Copper & Manufacturing Corp. (pdf) the Fifth Circuit upheld the summary judgment granting indemnity for the contractor whose "hot work" the rig owner blamed for starting a fire on its jack up rig.
The portion of the indemnity provision quoted by the Fifth Circuit -- odd in its lack of "express negligence" type language ordinarily required under Texas law -- read:
Owner shall indemnify Contractor . . . against any and all losses [to Owner’s property] . . . (unless such property is under the control of Contractor at the time at which such loss or damage occurs), which arise from, are incident to, connected with, or result directly or indirectly from the performance of the work . . . .
The parties disputed control, and according to the Fifth Circuit, came up with additional arguments on their way to the appellate court. The Court found those to be waived (about which I hope to write more later). The Court relied on analogies to Texas premises liability law in finding that the "hot work" contractor was not in "control of the property" even though the rig was located at its dock, primarily because it was one of many subcontractors whose access to the rig was controlled and monitored by the rig's owner:
While no Texas court has analyzed “control” in these circumstances, at least one Texas appellate court has applied this definition in a similar context. See Rendleman v. Clarke, 909 S.W.2d 56, 60 (Tex. App. – Houston [14th Dist.] 1995). Rendleman addressed an issue of premises liability, but its discussion of control is still instructive. Specifically, the Rendleman court found that a subcontractor did not control a construction site when multiple other subcontractors were also at work on it, and the contractor performed substantial coordinating functions. Id. at 60-61.
. . . Although TODCO presents evidence demonstrating Gulf Copper’s duties on the vessel, most of these facts pertain only to control over Gulf Copper’s specific project. . . .
. . . As in Rendleman, the evidence showed that TODCO directed and coordinated the bulk of the work performed by the many unrelated contractors also on board.
Judge Southwick wrote the opinion and was joined by Judge Garwood in all respects. Judge Owen agreed with the result on liability but dissented on the question of whether indemnitee was entitled to attorneys' fees under the language of the contract.
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