Reciprocal Indemnity Clause Gives Rise to Competing Indemnity Claims – Who Invited Claimant or a Dual Invitee?

Reciprocal Indemnity Clause Gives Rise to Competing Indemnity Claims – Who Invited Claimant or a Dual Invitee?

By: Nick Bergeron

Edited by: Andrew Lifsey

Grogan v. W & T Offshore Inc., No. 15-30369, 2016 U.S. App. LEXIS 1313; 2016 WL 336543 (5th Cir. Jan. 27, 2016)W&T Offshore (“W&T”), a pipeline and platform operator in the Gulf of Mexico, was sued for damages by Jakarta Grogan (“Grogan”), a technician employed by Tiger Safety (“Tiger”) in federal district court  as a result of injuries Grogan sustained onboard a dive support vessel (“DSV”). The DSV, TRITON ACHIEVER, was captained, crewed, and operated by Triton Diving Services (“Triton”), which had been hired by W&T to participate in an offshore pipeline recommissioning project. Triton was also party to the suit filed by Grogan.While performing this service, Triton noticed potentially unsafe levels of hydrogen sulfide (“H2S”) and suspended its operations in accordance with its safety manual. Upon recommendation by a W&T facilities engineer, Triton planned to hire Tiger to resolve the problem. To avoid paying “cost plus 10%” to Triton, W&T opted to pay for Tiger’s services directly.Eventually, Grogan, with other Tiger personnel, came aboard the ACHIEVER to provide monitoring and training.  After the work was performed, Grogan fell on the deck of the ACHIEVER while attempting to board a personnel basket, Grogan’s fall precipitated the present suit. Triton and W&T answered and filed cross-claims against each other for indemnity and defense of Grogan’s claims based on the reciprocal indemnity clause of the master service contract (“MSC”). The MSC enumerated claims brought by “invitees on the Work sites,” found within both groups, as indemnified by the parties. Accordingly, both parties argued that Grogan was an invitee of the other party.First, the trial court addressed applicable law and determined the contract was maritime in nature requiring maritime law to apply. It then addressed the substantive issue. W&T asserted the claimant was a “dual invitee” of both it and Triton. The trial court rejected this and held that the claimant was an invitee of W&T, which then owed Triton indemnity.Agreeing with the district court’s finding that the MSC was a maritime contract, the United States Court of Appeals for the Fifth Circuit then turned its attention to the definition of “invitee.” Because the MSC did not define “invitee,” the court noted the Fifth Circuit’s precedent of reliance upon Louisiana law, which defines an “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.” W&T argued that it was not an occupant of the ACHIEVER because it did not “charter, man or operate the vessel,” thus making Triton an independent contractor according to the MSC.The court disagreed. It found that an occupant is “one who has possessory rights in, or control over, certain property or premises.” So, while Triton’s crew retained control over decisions related to the safe operation of the vessel, the direction, command, and control of the vessel, as it pertained to the work on the pipeline recommissioning project itself, came from W&T or its company representative. The court further found that Grogan was W&T’s invitee because Triton did not induce Tiger’s and Grogan’s participation in W&T’s project. Although Triton coordinated logistics with implied consent to have Tiger work onboard the ACHIEVER, it was W&T that directly contracted with Tiger for a specific scope of work, funded and directed all of Tiger’s work, and explicitly invited Tiger to work on the overall pipeline recommissioning project. Moreover, the conduct of the parties, namely W&T through its facilities engineer, further demonstrated that W&T was ultimately responsible for Tiger’s presence and that of its employees. Specifically, Tiger considered W&T its customer and corresponded with W&T directly when changes were made to the number of Tiger personnel or returns of equipment.