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Ergon - St. James, Inc. v. Privocean M/V

United States District Court, E.D. Louisiana

April 2, 2018

ERGON - ST. JAMES, INC.
v.
PRIVOCEAN M/V, ET AL.

         SECTION: "A" (3)

          ORDER AND REASONS

          JAY C. ZAINEY UNITED STATES DISTRICT JUDGE

         The following motion is before the Court: Motion for Summary Judgment (Rec. Doc. 345) filed by Raven Energy, LLC. Privocean and Cargill International SA oppose the motion.[1] The motion, scheduled for submission on March 7, 2018, is before the Court on the briefs without oral argument.

         This case arises out of a breakaway incident in which the M/V PRIVOCEAN broke away from its moorings at the Convent Marine Terminal on the east bank of the Mississippi River. The PRIVOCEAN drifted across the river and allided with the M/T BRAVO, which was moored at the Ergon - St. James terminal and dock on the west bank of the river. As a result, Ergon and the M/T BRAVO suffered extensive damages.

         Raven was the owner and operator of the Convent Marine Terminal facility (“CMT”) where the PRIVOCEAN was berthed prior to the breakaway.

         At the time of the incident, the PRIVOCEAN was operating under a head time charter between Bunge, S.A. and Privocean; under a sub-time charter from Bunge to Cargill International SA; under a voyage charter from Cargill to Foresight Coal Sales, LLC, for loading of coal at CMT.

         Raven has been tendered by Privocean as a direct defendant in the limitation proceedings. In turn, Raven filed various defense/indemnity claims, including claims against Privocean and Cargill.

         A bench trial is scheduled for April 23, 2018.

         In its motion for summary judgment (345), Raven seeks judgment as a matter of law on all claims that have been asserted against it as to its liability for the PRIVOCEAN's breakaway and the resulting damages. Raven also seeks judgment as a matter of law as to the indemnity (and other) claims that it has asserted against Privocean and Cargill.

         At the outset, the Court denies the motion insofar as Raven seeks judgment as a matter of law as to its fault for the PRIVOCEAN's breakaway. The Court agrees that Raven's allocation of fault, if any, likely would be minimal but the Court is persuaded that the other claimants have sufficiently created an issue of fact as to whether Raven is chargeable with some degree of fault, even if one percent. If Raven is to be absolved of all liability for the breakaway then that must occur following the trial on the merits.

         Raven argues that the question of its fault for the breakaway is nonetheless irrelevant because Privocean is bound by CMT's Terminal Rules and Regulations (“ the R&R”) (Rec. Doc. 345-2, Exhibit A), which contain indemnity obligations that attach even when Raven is at fault. Raven argues that Cargill is likewise bound by the R&R and its indemnity provisions because the R&R was incorporated into the voyage charter between Cargill and Foresight.

         Privocean does not concede that it is bound by the R&R, and Cargill vehemently disputes that it is bound. But even if Privocean and Cargill were bound by the R&R, Privocean and Cargill argue that the the R&R does not call for them to indemnify Raven for its own fault.

         A contract of indemnity should be construed to cover all losses, damages, or liabilities which reasonably appear to have been within the contemplation of the parties. Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 333 (5th Cir. 1981). It should not be read to impose liability for those losses or liabilities which are neither expressly within its terms nor of such a character that it can be reasonably inferred that the parties intended to include them within the indemnity coverage. Id.

         A contract to indemnify another for his own negligence imposes an extraordinary obligation. Id. Therefore, a contract of indemnity will not afford protection to an indemnitee against the consequences of his own negligent act unless the contract clearly expresses such an obligation in unequivocal terms. Id. (citing United States v. Seckinger, 397 U.S. 203, 211-13 (1970); Transcon. Pipe Line Corp. v. Mobile Drilling Barge, 424 F.2d 684, 691-92 (5th Cir. 1970)). An indemnitor is entitled to express notice that under his agreement, and through no fault of his own, he may be called upon to pay damages solely caused by the negligence of his indemnitee. Id. General maritime law has not adopted the “express negligence test, which requires an indemnity provision to expressly ...


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