Court Discusses how Section 905(b) of the Longshore Act Affects Contractual Indemnity
In Int'l Offshore Servs., LLC v. Linear Controls Operating, Inc., CIV.A. 13-4852, 2014 WL 31655 (E.D. La. Jan. 3, 2014), the Louisiana District Court discussed how § 905(b) of the LHWCA affected a contractual indemnity arrangement amongst the litigants.International Marine LLC and International Offshore Services LLC, were the owners of a vessel that allided with a platform owned by defendant, Linear Controls, Inc., in December 2011. Jake Bergeron, an employee of the defendant, filed suit within plaintiffs’ Rule F limitation action.Under a Master Time Charter Agreement between plaintiffs and Apache Corporation, Apache—as contractor-- was to defend and indemnify plaintiffs against any claims brought by employees of Apache or the employee’s of Apache’s agents or subcontractors, regardless of plaintiffs’ negligence or fault.A separate Master Service Agreement between Apache and Linear required Linear to defend and indemnify Apache’s “Company Group”—which included the plaintiffs--against any claims brought by Linear’s employees. Further, the policy stipulated that Louisiana law would govern any disputes. Pursuant to the MSA with Apache, Linear purchased a Comprehensive General Liability policy from Caitlin Insurance.Apache then paid Linear’s insurance brokers a premium to activate the CGL policy between October 11, 2011 and October 11, 2012. However, for some reason, the request sent from the insurance brokerage to Caitlin stated that the effective start date was January 13, 2012.Before the court was Caitlin’s motion for judgment on the pleadings.Caitlin first argued that the effective start date of the policy was January 13, 2012, which meant that Apache was not covered under the policy in December 2011, (the date of Bergeron’s injury). Because the applicable law had not yet been identified at this point in the suit, the court found that Apache could present extrinsic evidence of a mistake regarding the policy’s effective start date if Louisiana law applied. Thus, there was an issue of fact as to the parties’ intent with regard to coverage, thus precluding judgment on the pleadings on this issue.Second, the Caitlin argued that the Outer Continental Shelf Lands Act’s (OCLSA) choice of laws provision required Louisiana law to apply and that Louisiana law precluded indemnity agreements. The court denied the motion on this issue as well. It found that there was not enough facts in the pleadings to know what law would actually apply in the case because this was a fact intensive issue and was not proper at this point in the proceedings. Thus, it could not definitely find that Louisiana law applied.Finally, Caitlin argued that § 905(b) of the LHWCA voided the indemnity agreement between Apache and Linear because § 905(b) voids any indemnity agreement between a longshoreman’s employer and the vessel. Because Linear Marine, (plaintiffs), owned the vessel and because Linear, (defendants), employed Bergeron, Caitlin argued that the indemnity agreement would indirectly benefit the vessel owner, International Marine.The court disagreed with Caitlin. § 905(c) provides that when a longshoreman—designed by OCSLA--is injured through vessel negligence, hemay bring an action against the vessel as a third-party under § 905(b), and "[n]othing contained in subsection (b) of this section shall preclude the enforcement according to its terms of any reciprocal indemnity provision whereby the [longshoreman's employer] and the vessel agree to defend and indemnify the other for cost of defense and loss or liability for damages arising out of or resulting from death or bodily injury to their employees."Thus, the court found that § 905(c) was applicable, which precluded Caitlin’s motion for judgment on the pleadings.
