UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 00-31119
PETER J. DAHLEN; et al.,
Plaintiffs,
PETER J. DAHLEN,
Plaintiff - Appellant-Cross-Appellee,
VERSUS
GULF CREWS, INC.; GULF BOAT MARINE SERVICES,
INC.;
Defendants - Cross-Defendants-Appellees,
UNIVERSAL OGDEN SERVICES,
Defendant - Appellee,
FOREST OIL CORP.,
Defendant - Cross-Claimant - Third Party
Plaintiff -
Appellee-Cross-Appellant,
VERSUS
SECURITY INSURANCE COMPANY OF HARTFORD,
Third Party Defendant - Appellee.
Appeals from the United States District
Court
For the Western District of Louisiana
February 4, 2002
Before JONES and DeMOSS, Circuit Judges, and
LIMBAUGH,(1) District Judge.
DeMOSS, Circuit Judge:
On July 6, 1995, Peter Dahlen injured his
back aboard an oil platform while unloading groceries from an eight-foot
square metal grocery box. The platform is owned and operated by Forest
Oil Corporation ("Forest"). Dahlen sued Forest, as well as the grocery
supplier, Universal Ogden Services ("Universal"), and the chartered ship
owner, Gulf Crews, Inc. and Gulf Marine Services, Inc. ("collectively,
"Gulf") for negligence. The district court granted Universal's and Gulf's
motions for summary judgment on the basis that they owed no duty to Dahlen.
At trial, a jury found that Forest was not negligent and Dahlen now appeals.
On appeal, Dahlen claims: (1) the jury charge was erroneous as to
the legal standard of negligence it set forth; (2) the jury charge was
erroneous as to the duty that was owed by Forest as the time charterer;
(3) the jury's findings were erroneous; and (4) it was error to grant Universal's
motion for summary judgment.
BACKGROUND
Forest Oil Company is the owner and operator
of several platforms producing oil and gas in the Gulf of Mexico, including,
for the purposes of this suit, West Cameron 44, High Island 116 and High
Island 820. All three of these artificial islands are located approximately
one and a half hours by boat from each other and are on the Outer Continental
Shelf adjacent to the State of Louisiana. In July 1995, the plaintiff,
Peter Dahlen, was an employee of Island Operating, but was assigned to
work for Forest on Forest's production platforms in the Gulf of Mexico.
Dahlen was employed as a barge operator. At the time of his employment,
Dahlen had no physical restrictions and was in good health.
Forest purchased groceries for their offshore
platforms from Universal Ogden Services. On July 5, 1995, Forest made a
grocery order for West Cameron 44, High Island 116 and High Island 820
from Universal. Universal transported the groceries by truck to a dock
in Sabine Pass, Louisiana, and loaded them into an eight-foot square metal
blue cube or "grocery box." The grocery box was loaded via crane by Grasso
Production Management onto the M/V BILLY JAY, a supply boat owned by Gulf
and time chartered by Forest, for transport offshore.
On July 6, 1995, Forest operator, Greg Sweet,
instructed Dahlen to go by helicopter to the West Cameron 44 platform and
perform routine maintenance and take readings. Sweet also told Dahlen that
the M/V BILLY JAY would be arriving with groceries and supplies, which
Dahlen should unload. When the BILLY JAY arrived, Dahlen offloaded the
grocery box using a crane. When Dahlen opened the box, he found that it
had been loaded in such a manner that the supplies for West Cameron 44
were in the back of the box. Because the box only had a single door by
which to access its contents, in order to unload the supplies for West
Cameron 44, Dahlen had to take everything out of the box, set aside
the supplies for his platform, and then reload the other platforms' supplies
into the box. This whole process took approximately one hour.
Dahlen claims this activity caused him to
suffer a back injury and he had to fly back to shore the next day due to
the pain he was experiencing. He had extensive conservative treatment,
which proved ineffective. Eventually, Dahlen had to undergo a posterior/anterior
two-level lumbar fusion surgery, using hardware to stabilize his back.
Dahlen claims that he has not worked since the incident, and that he continues
to suffer from pain and depression and that his medications cost $509 per
month.
On May 2, 1996, Dahlen filed suit for negligence
in the 38th Judicial District Court, for the Parish of Cameron, State of
Louisiana. Made defendants were: Gulf, Universal, and Forest. Dahlen maintained
that it was negligent, on the part of the defendants, to load the groceries
in the order that they did. Dahlen asserted that there was a duty to load
the groceries according to a "first in, last out" rule so that he would
not have had to unload the groceries destined for the other platforms.
On May 28, 1996, the defendants timely removed the action to federal court,
invoking federal question jurisdiction via the Outer Continental Shelf
Lands Act ("OCSLA"), 43 U.S.C. § 1331, et seq. All three defendants
filed motions for summary judgment. Universal and Gulf were granted their
motions on the grounds that they owed no legal duty to Dahlen. Forest was
granted its motion for summary judgment as to liability as the platform
owner because Dahlen did not premise his claim on platform liability, but
rather on Forest's duty as the time charterer of the BILLY JAY. Forest's
motion to dismiss the claim against it as time charterer was denied and
the claim went to trial. A jury found that Forest was not
negligent and Dahlen appealed. Forest also appealed a refusal by
the court to grant Forest indemnity under the charter contract between
it and Gulf.
DISCUSSION
The district court's application of the
Admiralty Extension Act
Forest contends that the district court erred
in its finding that the Admiralty Extension Act applied, making maritime
law also applicable. Forest is under the misconception, however, that this
error would deprive the district court of jurisdiction. Forest then goes
on to state that the district court allowed liability premised on 33 U.S.C.
§ 905(b) of the Longshore and Harbor Workers' Compensation Act ("LHWCA"),
which was grounded in admiralty jurisdiction. Forest therefore seems to
argue that, had the district court not used the Admiralty Extension Act,
the court would lack subject-matter jurisdiction. The plaintiff responds
simply by endorsing the district court's application of the Extension Act.
Neither party nor the district court thought
about determining whether jurisdiction could be premised in the OCSLA.
The West Cameron 44 platform is a fixed production platform, or artificial
island, located on the Outer Continental Shelf (OCS). As such, injuries
that occur on the platform are subject to Federal jurisdiction. 43 U.S.C.
§§ 1333(a)(1) and 1349(b).(2)
The district court clearly found that the claim is governed by the OCSLA;
the apparent confusion over jurisdiction seems to arise from the court's
statement that "when an event occurs on an OCSLA situs, and maritime law
is also applicable, then maritime law controls." What the parties fail
to notice is that the court used the word "also" in referring to the applicability
of maritime law and cited Smith v. Penrod Drilling Corp.,
960 F.2d 456, 459 (5th Cir. 1992). The district court was premising its
decision on Smith, which relied, in part, on Union
Texas Petroleum Corp. v. PLT Engineering, Inc., 895 F.2d 1043 (5th
Cir. 1990), to determine whether to apply state law or federal maritime
law to an action pursuant to § 1333(a)(2)(A) of the OCSLA. PLT
stated that:
[F]or adjacent state law to apply as surrogate
federal law under OCSLA, three conditions are significant. (1) The controversy
must arise on a situs covered by OCSLA (i.e. the subsoil, seabed, or artificial
structures permanently or temporarily attached thereto). (2) Federal maritime
law must not apply of its own force. (3) The state law must not be inconsistent
with Federal law.
Id.
at 1047. We assume the district court was focusing on the second prong
of PLT when it decided that the Admiralty Extension Act was
applicable and so maritime law applied of its own force. The decision to
apply maritime law, however, has nothing to do with whether or not a federal
court has jurisdiction. It clearly does. See § 1349(b).
Satisfied that the district court had subject-matter
jurisdiction of this controversy and that the case was properly removed
from state court, we turn to the issue raised by Forest of whether it was
error to apply the Admiralty Extension Act to the present case. We review
the district court's conclusions of law de novo. Dow Chem.
Co. v. M/V Roberta Tabor, 815 F.2d 1037, 1042 (5th Cir. 1987).
The district court found that maritime law controls the instant case by
way of 46 U.S.C. § 740, The Admiralty Extension Act, which states,
in relevant part:
The admiralty and maritime jurisdiction of
the United States shall extend to and include all cases of damage or injury,
to person or property, caused by a vessel on navigable water, notwithstanding
that such damage or injury be done or consummated on land.
In reaching this conclusion, we think the
district court erred.
In order to invoke maritime jurisdiction under
the Extension Act, a plaintiff injured on shore must allege that the injury
was caused by "a defective appurtenance of a ship on navigable waters."
Margin v. Sea-Land Services, Inc., 812 F.2d 973, 975 (5th
Cir. 1987). The district court relied on Supreme Court cases that have
held that a defective cargo container is considered an appurtenance of
a ship to hold that the grocery box was also an appurtenance. See Victory
Carriers, Inc. v. Law, 404 U.S. 202, 210-211 (1971) (endorsing
the concept that an appurtenance of a ship falls under the Extension Act);
Gutierrez v. Waterman Steamship Corp., 373 U.S. 206 (1963)
(applying maritime law when a longshoreman was injured on a dock by defectively
bagged beans). The district court felt that Dahlen's injury was due to
an allegedly improperly loaded and/or negligently transported cargo container
and that this was not significantly distinguishable from the loading of
beans in inadequate containers as alleged in Gutierrez. We
disagree.
In Gutierrez, the Supreme Court
applied the Extension Act to provide compensation for a longshoreman who
was injured on a dock by defective cargo containers being unloaded from
a ship located on navigable waters. Gutierrez, 373 U.S. at
209-10. The Supreme Court warned, however, in Victory Carriers, Inc.
v. Law, that when deciding to extend admiralty jurisdiction under
the Act, the courts should act with caution. 404 U.S. at 212;
R.O.
Bennett v. Faircape Steamship Corp., 524 F.2d 979, 981 (5th Cir.
1975). In Victory, the Court was faced with whether to extend
admiralty jurisdiction to a man who was injured on the dock while operating
a forklift machine to load cargo onto a ship. Victory, 404
U.S. at 203. The Court declined to extend admiralty jurisdiction, reasoning
that state law traditionally governed accidents such as the one with which
they were faced. Id. at 211-212. The Victory
Court also specifically noted that
State Industrial Commission v.
Nordenholt Corp., 259 U.S. 263 (1922), had not been overruled.
Victory, 404 U.S. at 210. In
Nordenholt, the
Supreme Court held that compensation for a longshoreman, who was injured
when he slipped on a dock while stacking bags of cement that had been unloaded
from a ship, was governed by local law, not federal maritime law. Nordenholt,
259 U.S. at 275-76. Most recently, this Circuit interpreted the two Supreme
Court decisions in Victory and Gutierrez stating
that the Extension Act is meant to apply to the vessel and her appurtenances
"and does not include those performing actions for the vessel." Egorov,
Puchinsky, Afanasiev & Juring v. Terriberry, Carroll & Yancy,
183 F.3d 453, 456 (5th Cir. 1999). This Circuit has also noted that, since
the Gutierrez ruling, the LHWCA has been amended "to cover
employees working on those areas of shore customarily used in loading,
unloading, repairing, or building a vessel." R.O. Bennett,
524 F.2d at 980.
At least three factors, therefore, mitigate
against the application of Gutierrez. First, Gutierrez
is factually distinguishable. Gutierrez involved a plaintiff
who was injured when he slipped on some beans that spilled out of a defective
bag while it was being unloaded (not after it had been placed on
the dock). Also, at the time Gutierrez was decided, the LHWCA
did not contain the provisions it does today extending coverage to activities
of loading and unloading ships while on the the adjacent dock or pier.
Second, no case cited by either party or the court deals with the use of
the Extension Act in conjunction with the OCSLA, which has its own provisions
concerning the application of state law. If the reasoning of Victory
holds true, then state law concerns should mitigate against application
of the Extension Act. Furthermore, the OCSLA specifically regards the artificial
islands on the OCS as areas where state law should apply unless there is
a conflict with federal law. See Rodrigue v. Aetna Cas. & Sur.
Co., 395 U.S. 352, 363 (1969) (stating that the application
of maritime law is inapposite to fixed structures on the OCS). Third, the
holding of this Circuit in Egorov makes it clear that for
the Extension Act to apply, the defect must be in the appurtenance and
not be due to the personnel performing services for the vessel. Egorov,
183 F.3d at 456. What is alleged in the present case is not a defect in
the grocery box but in the manner in which groceries were loaded into the
box. Egorov clearly indicates that the Extension Act should
not apply to such a case. This Court, therefore, holds that the Admiralty
Extension Act was improperly applied in the present case and that Louisiana
state law, not federal maritime law, should have applied to this negligence
action. As it turns out, however, whether Louisiana state substantive law
is applied or not does not affect the outcome of the case.
The district court's instructions to the
jury as to the applicable standard for negligence
This Court reviews challenges to jury instructions
for abuse of discretion and will reverse a judgment "only if the charge
as a whole creates a substantial doubt as to whether the jury has been
properly guided in its deliberations." C.P. Interests, Inc. v. California
Pools, Inc., 238 F.3d 690, 700 (5th Cir. 2001) (quoting FDIC
v. Mijalis, 15 F.3d 1314, 1318 (5th Cir. 1994) (internal citation
omitted)). However, even if the jury instructions were erroneous, "we will
not reverse if we determine, based upon the entire record, that the challenged
instruction could not have affected the outcome of the case." Johnson
v. Sawyer, 120 F.3d 1307, 1315 (5th Cir. 1997). Under Rule 51 of
the Federal Rules of Civil Procedure, "No party may assign as error the
giving or failure to give an instruction unless that party objects thereto
before the jury retires to consider its verdict, stating distinctly the
matter objected to and the grounds of the objection." A failure to object,
however, will not act as a jurisdictional bar to review and this court
will entertain tardy objections to jury instructions under the plain error
standard of review. Tompkins v. Cyr, 202 F.3d 770, 783 (5th
Cir. 2000). "In reviewing jury instructions for plain error, we are exceedingly
deferential to the trial court." Id. at 784.
Prior to the jury's deliberations, Dahlen
requested the following jury charge, which was given by the court:
A tortfeasor takes the victim as he finds
him and is responsible in damages for consequences of his tort even though
the damages are greater because of the victim's prior condition. When the
defendant's negligent act aggravates a preexisting condition or injury,
the victim is entitled to compensation for the full extent of the aggravation.
This charge was meant to inform the jury of
the "eggshell skull" doctrine. After deliberations began, the jury asked
the district judge to further define "an unreasonable risk of foreseeable
injury," which appeared in one of the jury issues or instructions regarding
negligence. The district judge instructed the jury to refer to Section
V (entitled applicable law), of the jury charge in its entirety. Dahlen
contends that the district court should have given the jury further instructions,
informing the jury that the defendants could be found negligent even if
the injury that resulted was unforeseeable. Dahlen now appeals this failure
as error. Dahlen admits that he did not object to the jury instructions
as to this aspect prior to deliberations, but contends that this was only
because it was not clear, until the jury questioned the charge, that further
instructions were needed.
The "eggshell skull" doctrine requires a defendant
to compensate a plaintiff for unforeseeable injuries flowing from some
pre-existing physical condition. Munn v. Algee, 924 F.2d
568, 576 (5th Cir. 1991) (citing Rest. 2d of Torts § 461 (1977)).
Section 461 of the Restatement Second of Torts defines the doctrine more
specifically as follows:
The negligent actor is subject to liability
for harm to another although a physical condition of the other which is
neither known nor should be known to the actor makes the injury greater
than that which the actor as a reasonable man should have foreseen as a
probable result of his conduct.
§ 461 (emphasis added). This definition,
therefore, requires that the actor be negligent first, before the doctrine
can come into play. This is supported by the heading under which §
461 is listed, i.e., "Causal Relation Affecting the Extent of Liability
But Not Its Existence."
As stated above, under PLT,
once we have determined that the harm occurred on the OCS and that federal
maritime law does not apply of its own force, we must still determine whether
substantive state law is in conflict with existing federal law. PLT,
895 F.2d at 1047. A review of Louisiana case law reveals that § 461
of the Restatement Second is relied upon by their courts as well. See
Thames v. Zerangue, 411 So. 2d 17, 19 (La. 1982) (holding that
a tortfeasor is responsible for the consequences of his tort even if the
damages are increased due to a pre-existing condition); Reck v. Stevens,
373 So. 2d 498, 502 (La. 1979) (quoting Rest.2d of Torts 461); Burnaman
v. Risk Mgmt., Inc., 97-250 (quoting Reck, 373 So.
2d at 502). Louisiana courts have consistently held that "[w]hen the defendant's
tortious conduct aggravates a pre-existing condition, the defendant
must compensate the victim for the full extent of the aggravation." Lasha
v. Olin Corp., 625 So. 2d 1002, 1006 (La. 1993) (emphasis added);
see also Aisole v. Dean, 574 So. 2d 1248, 1253 (La. 1991);
Bush v. Arrow Int'l, 94-373 (La. App. 3 Cir. 11/23/94), 646
So. 2d 1173, 1178 (La. Ct. App. 1994); Thibodeaux v. Winn-Dixie of
La., Inc., 608 So. 2d 673, 675 (La. Ct. App. 1992) ("Where a defendant's
negligent action aggravates a preexisting injury or condition, he must
compensate the victim for the full extent of the aggravation."). Therefore,
Louisiana law requires that a defendant be negligent before the "eggshell
skull" doctrine can take effect and this is not in conflict with any federal
law.
Appellant Dahlen would have this Court believe
that the "eggshell skull" doctrine applies before liability is found, but
even the cases cited in support of this contention actually go to damages
and not liability. The rule, as applied to the present case, merely states
that if a further unforeseeable injury occurs to a victim with a pre-existing
condition due to a torteasor's negligence, that tortfeasor will
still be held liable for the increased damages. Perniciaro v. Brinch,
384 So. 2d 392, 396 (La. 1980) ("Where the defendant's negligent action
aggravates a pre-existing injury, he must compensate the victim for the
full extent of this aggravation."). The defendant must be negligent first,
however. We therefore conclude that the district court's instructions to
the jury were not erroneous.
The district court's instructions to the
jury as to the duty owed by Forest
In addition to the above claim, Dahlen also
contends that the district court erred in its instruction to the jury regarding
the duty owed by a time charterer. The jury charge complained of states:
The vessel charterer has the legal duty to
exercise only reasonable care to have the vessel and cargo in such condition
that the platform owner and its employees and workers would be able by
the exercise of reasonable care to carry on the work of unloading the cargo
with reasonable safety to persons and property.
The charterer has no duty to supervise or
inspect the loading or unloading of the cargo or to warn of open and obvious
conditions.
Dahlen claims that this charge was based erroneously
on Scindia Steam Navigation Co. v. De Los Santos, 451 U.S.
156 (1981). Dahlen contends that the standard that should apply was enunciated
in Hodgen v. Forest Oil Corp., 87 F.3d 1512 (5th Cir. 1996).
Forest contends that Scindia and Howlett v. Birkdale
Shipping Co., 512 U.S. 92 (1994) enunciate the appropriate standard
because Hodgen only applies when a vessel charterer sends
a boat into perilous weather conditions. In the alternative, Forest argues
that the district court's instruction is harmonious with the Hodgen
court's standard.(3)
Hodgen states that "a time charterer
owes a hybrid duty arising from tort law to exercise the control the charter
affords it(4) over the timing, route, and
cargo of a vessel's journey in a reasonably prudent manner." Hodgen,
87 F.3d at 1517. Dahlen relies on this statement in his contention that
this imposes a duty on the time charterer to order that the groceries be
loaded into the box in accordance with the "first in-last out" principle.
The Hodgen court went on to state the duty owed in more specificity
later on in the opinion, stating that case law "establish[es] that the
traditional spheres of activity in which a time charterer exercises control
and thus owes a duty include choosing a vessel's cargo, route, and general
mission, as well as the specific time in which the vessel will perform
its assignment." Id. at 1520. Hodgen, and the
cases it relied on, however, all involved situations where a plaintiff
was hurt while transferring from a vessel to a platform, or vice versa,
and almost always involved perilous weather conditions or rough seas. Dahlen
wishes to extend the reasoning of Hodgen to a set of circumstances
wholly unforeseen by the Hodgen court. We are unwilling to
do so in the present situation.(5)
Though we do not accept Dahlen's contention
that Hodgen applies, we also note that the standard articulated
in Scindia
and Howlett does not explicitly
apply to time-charterers. Kerr-McGee Corp. v. MA-JU Marine Servs.,
Inc., 830 F.2d 1332, 1340 n.8 (5th Cir. 1987) (suggesting that
the duties prescribed in Scindia only apply to true owners
or other parties with similar dominion over the boat); but see Woods
v. Sammisa Co., 873 F.2d 842, 847 n.6 (5th Cir. 1989) (recognizing
Kerr-McGee but applying Scindia nonetheless
because the time-charterer may have similar duties under the time-charter
agreement and the time-charterer before the Court assessed its own liability
under the Scindia standard). Howlett, a case
based on the reasoning in Scindia, involved the duty owed
by a shipowner to a longshoreman who was injured while discharging bags
of cocoa beans from the cargo hold of a vessel. Howlett,
512 U.S. at 94. The Supreme Court in Howlett stated that
a vessel's duty to warn of latent defects in the cargo stow and area is
a narrow one, and that the duty only attaches to "hazards that are not
known to the stevedore and that would be neither obvious to nor anticipated
by a skilled stevedore in the competent performance of its work." Id.
at 105. The Court also stated that the duty would only encompass hazards
that are known, or should be known to the vessel through the exercise of
reasonable care. Id. (citing Scindia Steam,
451 U.S. at 167). Under the standard enunciated in Howlett,
the jury instructions would not be erroneous. Though Howlett
deals with the relationship between a longshoreman and a vessel owner,
the circumstances involved in
Howlett are more akin to the
present situation than the circumstances involved in Hodgen.(6)
As we can find no other case articulating the duty owed by a time-charterer
in such a situation, we hold that the district court did not abuse its
discretion by issuing the jury instructions that it did, and that the instructions
given by the district court did not create a substantial doubt as to whether
the jury was properly guided in its deliberations as required by the standard
of review.
The jury's findings
Dahlen further alleges that the jury and district
court erred in finding no liability on the part of Forest in its capacity
as time charterer, and that the district court improperly denied his motion
for a new trial. This Court grants great deference to a jury's verdict
and will reverse only if, when viewing the evidence in the light most favorable
to the verdict, the evidence points so strongly and overwhelmingly in favor
of one party that the court believes that reasonable jurors could not arrive
at any contrary conclusion. Baltazor v. Holmes, 162 F.3d
368, 373 (5th Cir. 1998). A motion for a new trial should not be granted
unless the verdict is against the great weight of the evidence, not merely
against the preponderance of the evidence. Carter v. Fenner,
136 F.3d 1000, 1010 (5th Cir. 1998).
Dahlen contends that the jury could not have
found against him because the evidence clearly established a duty to load
the groceries in a "first in-last out" manner or to direct the route in
accordance with how the groceries were loaded. Many of Dahlen's arguments
simply rely on the fact that the jury instructions were erroneous and ignores
the many factors that come into play when a jury is deliberating over the
existence of negligence, such as proximate cause. Dahlen's conclusory allegations
do not overcome the extremely high burden placed on him and so the jury's
findings are affirmed. See Vadie v. Mississippi State Univ.,
218 F.3d 365, 372 (5th Cir. 2000) (quoting Fed.R.Civ.P. 50(a)(1), stating
that "[a] jury verdict must be upheld unless 'there is no legally sufficient
evidentiary basis for a reasonable jury to find' as it did.").
The district court's granting of Universal's
motion for summary judgment
Dahlen's final issue on appeal is that the
district court erred in granting Universal's motion for summary judgment.
The district court granted Universal's second motion after initially denying
a first motion for summary judgment. In granting the motion, the district
court cited to Chavez v. Noble Drilling Corp., 567 F.2d 287
(5th Cir. 1978), to support its conclusion that Universal owed no duty.
This Court reviews a grant of summary judgment
in the trial court de novo, applying the same standard used by the
trial court in ruling on the motion under Rule 56 of the Federal Rules
of Civil Procedure. Hirras v. Nat'l R.R. Passenger Corp.,
95 F.3d 396, 399 (5th Cir. 1996). Dahlen contends that the district court
erred in applying Chavez in the manner it did and, in the
alternative, that it should have applied Couch v. Cro-Marine Transport,
Inc., 44 F.3d 319 (5th Cir. 1995). Universal contends that the
district court was correct in its application of Chavez and
that it also owes no duty under Louisiana law. We find the Chavez
opinion to be controlling.
In Chavez, the plaintiff, Anthony
Chavez, suffered a back injury on an oil platform located on the OCS. Chavez
injured his back when he lifted an unlabeled box of groceries weighing
over one hundred pounds. Chavez, 567 F.2d at 288. Chavez
sued the platform owner for failing to provide him with assistance and
the grocery supplier for failing to label the box as to weight. Id.
The grocer was granted its motion for summary judgment and Chavez appealed.
This Court stated that it was faced with choosing between Louisiana law
and federal maritime law as to what standard of negligence to apply. Id.
The court stated that under the Louisiana law, the courts were to apply
a "duty/risk" analysis to determine whether a defendant's conduct was the
legal cause of the plaintiff's injury. Id. (citing Hill
v. Lundin & Assoc., Inc., 256 So.2d 620 (La. 1972). Under this
analysis, the court decided that the grocer owed no duty to Chavez to label
the boxes as to weight, stating that the only duty owed was to properly
pack the groceries. Id. at 289. The court did not end its
analysis there, however, as it went on to determine whether the grocer
would have been negligent under federal maritime law. The court noted that
in federal maritime law, the courts have adopted the Restatement Second
of Torts approach of "legal cause." Id. at 289. The court
thus concluded that this standard involves a concept of duty or a legally-protected
interest. Id. Having already found no duty to exist, the
court therefore found that the grocer was not negligent under either standard.
Dahlen contends that because the Chavez
court stated that there was a duty to properly pack the groceries, the
district court should have found that there was a similar duty to pack
them in the order of the deliveries. This is an incorrect application of
the "duty/risk" analysis, however, which avoids the realities of the situation
and imposes artificial and unrealistic standards. Chavez,
567 F.2d at 289. The record does not establish that Universal had any affirmative
duty to find out what order the deliveries were to be made in. Also, the
record fails to establish that the "first in-last out" rule that Dahlen
cites to is anything more than a rule of convenience rather than one of
safety. As the district court pointed out, any duty that would be owed
did not encompass the harm in this situation. Summary judgment was therefore
properly granted to Universal.(7)
The district court's dismissal of Forest's
cross-claim for indemnity
The final issue on appeal is a cross-appeal
brought by Forest arguing that it was error for the district court to deny
its indemnity claim. The interpretation of indemnity clauses is a matter
of law that is reviewable de novo on appeal. Smith v. Tenneco
Oil Co., 803 F.2d 1386, 1388 (5th Cir. 1986) (citing
Kemp
v. Gulf Oil Corp., 745 F.2d 921, 924 (5th Cir. 1984)). District
court interpretations of insurance policies are also reviewed de novo.
Harbor Ins. Co. v. Urban Constr. Co., 990 F.2d 195, 199 (5th
Cir. 1993).
Security contends that in order for Forest
to prevail, it must overcome two obstacles. First, Forest must prove that
the injury to Dahlen arose out of or was related to the performance of
the vessel charter. Second, Forest must prove that Dahlen, already deemed
a borrowed servant of Forest, was not a Forest employee for the purposes
of the insurance clause in the vessel time charter. Forest contends that
because it was sued in its capacity as the time charterer of the vessel,
they are entitled to coverage under the Gulf charter agreement. Forest
also contends that, though it was found to be the borrowing employer for
the purposes of liability to Dahlen, it is not his employer under the insurance
policy, citing Johnson v. Amoco Prod. Co., 5 F.3d 949 (5th
Cir. 1993) and Melancon v. Amoco Prod. Co., 834 F.2d 1238
(5th Cir. 1988) as support.
Security's first argument that Forest cannot
claim indemnity because the injury did not relate to the performance of
the vessel is correct. Gulf's charter agreement states, in clear and unambiguous
language, that indemnification under Gulf's insurance policy is triggered
when an injury arises out of or is related to the performance of the vessel
during the charter. The agreement states, in part:
Owner agrees to indemnify, defend and save
harmless Forest Group . . . from and against any and all claims, demands,
judgments, defense costs, or suits . . . by any vessel, entity or person
(other than the employees of the CHARTERER) in any way arising out of or
related to the performance of this contract . . ..
The district court found that the present
case did not arise out of or relate to the performance of the vessel during
the charter and that Forest, therefore, had no claim. We agree. The present
injury in no way related to the performance of the charter contract. The
grocery box was not loaded by Gulf but rather by Universal. The box was
not put on board the BILLY JAY by Gulf but was loaded via a crane located
at the Sabine Pass dock by a third party, Grasso Production Management.
Also, the box was not unloaded from the BILLY JAY by Gulf but rather by
Dahlen himself using a crane located on the Forest platform. Dahlen never
boarded the BILLY JAY and no crew members of the BILLY JAY ever went on
the platform to assist Dahlen in taking the groceries out of the grocery
box. Therefore, under the terms of the charter agreement itself, Forest
is not entitled to indemnification.
Security's second argument equally justifies
a finding in its favor. The insurance policy states, in relevant part:
The Assurer hereby undertakes to make good
to the Assured [Forest] . . . all such loss and/or damage and/or expense
as the Assured shall as owners of the vessel named herein have become liable
to pay and shall pay on account of the liabilities, risks, events and/or
happenings herein set forth:
(1) Liability for loss of life of, or personal
injury to . . . any person, excluding however, unless otherwise agreed
by endorsement hereon, liability under any Compensation Act to any employee
of the Assured.
As Forest is being sued under the LHWCA, the
only question becomes whether Dahlen was its employee for purposes of the
indemnity provision.(8) Forest tries to
distinguish the finding that it is Dahlen's borrowing employer on the grounds
that
Johnson and Melancon both allowed the
platform owner to be considered the borrowing employee for the purposes
of the LHWCA but not for the purposes of indemnity between the borrower
and the borrowee, i.e., the entity that lent the employee to Forest. As
Security points out, however, Forest is not seeking indemnity from the
company that it borrowed Dahlen from (in this case Island), but is instead
seeking indemnity from a third party that for all accounts is unrelated
in any way to Dahlen.(9) The reasoning of
the district court that Forest was the borrowing employer should therefore
be upheld.
CONCLUSION
Having heard the oral arguments of the parties,
and having carefully reviewed the record of this case and the parties'
respective briefs and for the reasons set forth above, we conclude that
the district court's jury instructions were not erroneous and that the
jury's verdict should remain undisturbed. We also conclude that the district
court did not err in granting Universal's motion for summary judgment or
in dismissing Forest's cross-claim for indemnity. We therefore AFFIRM the
district court's decision.
AFFIRMED.
1. District Judge of the
Eastern District of Missouri, sitting by designation.
2. 43 U.S.C. § 1349(b)
states, in relevant part:
[T]he district courts of the United States
shall have jurisdiction of cases and controversies arising out of, or in
connection with (A) any operation conducted on the outer Continental Shelf
which involves exploration, development, or production of the minerals,
of the subsoil and seabed of the outer Continental Shelf.... Proceedings
with respect to any such case or controversy may be instituted in the judicial
district in which any defendant resides or may be found, or in the judicial
district of the State nearest the place the cause of action arose.
3. There is no need to
examine separately Louisiana law as Louisiana courts' have relied on Fifth
Circuit precedent to determine the liability of a time charterer. Wall
v. Progressive Barge Line, Inc., 97-0665 (La.App. 4 Cir. 10/29/97),
703 So.2d 681, 685-688 (La.App. 1997) (finding that federal substantive
maritime law often applies to such issues).
4. The charter agreement
states, in relevant part:
The vessel shall prosecute its trips and perform
its services as requested by CHARTERER, but sole responsibility for management,
navigation and operation of the vessel (and all decisions as to whether
the vessel can operate safely in various sea and weather conditions) shall
remain at all times with the OWNER, same as when trading for the OWNER's
account.
5. Even if we accept Dahlen's
contention that Hodgen should apply, the standard charged by the
court in the present case does not vary significantly from the standard
stated in Hodgen and certainly doesn't rise to the level of demonstrating
that "the charge as a whole create[ed] substantial and eradicable doubt"
that the jury had been properly guided in its deliberations as the standard
of review requires. Johnson, 120 F.3d at 1315. The Hodgen
standard includes a duty in choosing the cargo, but not in how groceries
should be loaded into a box that will become cargo. Therefore the district
court's charge was not erroneous even under Hodgen.
6. We do not intend, however,
to indicate that Dahlen is a longshoreman or stevedore or that Forest is
the vessel owner. We only hold that the situation involved is more compatible
with the duty enunciated in Howlett.
7. Even under the language
that Dahlen contends should control in this case, i.e., the Couch
standard, no duty is owed by Universal. In Couch, the court
stated:
We hold that a loading stevedore must load
the cargo so that an expert and experienced stevedore will be able to discharge
the cargo with reasonable safety by exercising reasonable care.
Couch, 44 F.3d at 327. Even
if this standard is used, Universal met its duty. Nothing in the record
indicates that the way the groceries were loaded made it so that an experienced
stevedore could not unload the cargo with reasonable safety.
8. As stated above, the
charter agreement also contains a similar provision providing indemnity
to any employee other than employees of the charterer.
9. Dahlen was never employed
by Gulf and was never even aboard a ship at any time during the relevant
events. He unloaded the grocery box with a crane and was not injured until
the box was on the platform. |