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Shell Offshore, Inc. v. Tesla Offshore, LLC

United States District Court, E.D. Louisiana

March 24, 2017

SHELL OFFSHORE, INC.
v.
TESLA OFFSHORE, LLC ET AL.

         SECTION I

          ORDER

          LANCE M. AFRICK UNITED STATES DISTRICT JUDGE

         A party does not have an entitlement to a contribution remedy until it pays more than its fair share to satisfy the judgment. See 1 Thomas J. Schoenbaum, Admiralty & Maritime Law § 5-19 (5th ed. 2016). Therefore, the judgment in this case did not memorialize that any of the defendants had an entitlement to contribution. No defendant did when judgment was entered.

         That all changed while this case was pending on appeal. There, defendant Tesla Offshore (“Tesla”) paid more than its fair share of the judgment to obtain a full release of plaintiff Shell Offshore's claims. Because that post-judgment payment gives Tesla the right to obtain contribution from its co-defendants, this Court (1) grants the motion[1] to reopen the judgment, (2) grants summary judgment on the contribution claim, and (3) issues an amended judgment.

         I.

         This case arises out of a maritime accident. Tesla hired International Offshore Services and International Marine, LLC (collectively “International”) to conduct an offshore survey. Part of the terrain to be surveyed lay near an offshore drilling rig leased by Shell. During the survey, the towline dragging the sonar towfish behind International's vessel struck a mooring line on the offshore rig. As a result, drilling ceased for almost two weeks while the damaged mooring line was replaced.

         Litigation ensued. The jury found both Tesla's and International's negligence to be a proximate cause of the accident and attributed 75% of the fault to Tesla and 25% of the fault to International. The jury further found that Shell was entitled to $ 9, 041, 552 in damages. So under the “well-established” rule of joint and several liability in maritime law, McDermott, Inc. v. AmClyde, 511 U.S. 202, 220 (1994), this Court entered a final judgment making Tesla and International jointly and severally liable to Shell for the full amount of the judgment, see Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 271 n.30 (1979) (“[T]he plaintiff may recover from one of the colliding vessels the damage concurrently caused by the negligence of both.”).

         Notices of appeal followed. Tesla posted a bond to stay execution of the judgment. International took a different tack. Instead of posting an appeal bond, International reached a side deal with Shell. Under that deal, International paid Shell $244, 918.99 in partial satisfaction of the judgment. The payment was “without prejudice” to International's ability to challenge any part of the judgment on appeal. R. Doc. No. 364-1, at 15. Shell agreed to delay either (1) pursuing a judgment debtor examination against International or (2) pursing a subrogation claim against International's underwriters. R. Doc. No. 364-1, at 15. Shell also agreed to first try to execute the judgment against Tesla's bond rather than International or its underwriters. R. Doc. No. 364-1, at 15.

         With the issue of security settled, the parties went on their way to the Fifth Circuit. Tesla and Shell reached an agreement to satisfy the judgment while the parties were briefing the appeal. Tesla agreed to pay $8, 527, 000 in new money to Shell. In exchange for Tesla's new money and the $244, 918.99 that Shell had already received from International, Shell agreed to release the judgment.[2] Shell also assigned Tesla all of Shell's possible claims against International and International's underwriters. See R. Doc. No. 361-2 (settlement agreement).

         The net-net of that settlement was that Tesla had paid more than its 75% share of the judgment. But in return Tesla received more than just a release of Shell's claims. Instead, Tesla is now purportedly armed with any claims that Shell had against International or International's insurers.

         Tesla and International disagreed about the implications of the settlement on the pending appeal. As a result, the Fifth Circuit remanded the matter back to this Court for consideration of Tesla's claims against International. R. Doc. No. 360. Tesla now moves for this Court to reopen the judgment and grant summary judgment on its contribution claim.

         II.

         The first step in evaluating Tesla's motion is to determine whether this Court may reopen its previously final judgment. Tesla moves for relief from judgment under Federal Rule of Civil Procedure 60.

         Rule 60(b)(5) permits relief from a judgment when “the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable.” The “[u]se of the disjunctive ‘or'” in Rule 60(b)(5) “makes it clear that each of the provision's three grounds for relief is ...


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