United States District Court, E.D. Louisiana
FINDINGS OF FACT AND CONCLUSIONS OF LAW
W. ASHE UNITED STATES DISTRICT JUDGE
matter involves an indemnity dispute that arises out of a
series of contracts between Chevron Chemical Company
(“Chevron Chemical”), which plaintiff, Chevron
Oronite Company LLC (“Chevron Oronite”), succeeds
in interest, and J.E. Merit Constructors, Inc. (“J.E.
Merit”), which the defendant, Jacobs Field Services
North America, Inc. (“Jacobs”), succeeds in
interest.On March 2, 2018, Chevron Oronite filed a
complaint against Jacobs, seeking to compel Jacobs to
indemnify Chevron Oronite in connection with a lawsuit it had
settled. Jacobs answered denying that it owed
defense or indemnity to Chevron Oronite.
to agreement of counsel at the final pretrial conference, the
matter was submitted to the Court for decision on the papers,
including the parties' trial memoranda,  proposed findings
of fact,  proposed conclusions of law,
trial exhibits. Having considered the evidence and the
arguments of counsel, the Court announces its Findings of
Fact and Conclusions of Law pursuant to Rule 52 of the
Federal Rules of Civil Procedure. To the extent a finding of
fact constitutes a conclusion of law, the Court adopts it as
such. To the extent a conclusion of law constitutes a finding
of fact, the Court adopts it as such.
Court has diversity jurisdiction under 28 U.S.C. § 1332
because the parties are citizens of different states and the
requisite amount in controversy is satisfied.
Plaintiff Chevron Oronite is the successor-in-interest to
Chevron Chemical under the series of contracts at issue in
Defendant Jacobs is the successor-in-interest to J.E. Merit
under the series of contracts at issue in this
Chevron Oronite is a wholly-owned subsidiary of Chevron
The Bourgeois Suit
1989 through 1993, Chevron Chemical engaged J.E. Merit to
perform maintenance work, including providing welders, at
Chevron Chemical's facility in Belle Chasse,
Louisiana. Each contract contained a provision
requiring J.E. Merit to indemnify Chevron Chemical against
loss, damage, injury, liability, or death caused by J.E.
Merit or connected with the contract or J.E. Merit's
performance under the contract.
Wayne Bourgeois worked as a welder for J.E. Merit from
2016, Bourgeois was diagnosed with
March 2017, Bourgeois sued various companies for which he
worked, alleging exposure to asbestos. Bourgeois
alleged in relevant part that he was exposed to asbestos
while working for J.E. Merit at Chevron Chemical's Belle
Chevron Oronite tendered the lawsuit to Jacobs on July 24,
2017. (The next day, Bourgeois
died.) On September 19, 2017, Jacobs rejected
the tender, claiming that Chevron Oronite cited an
inapplicable contract relating to warehouse
workers. Thereafter, Jacobs produced the
applicable contracts in response to a subpoena duces
tecum issued in the state-court Bourgeois
proceeding, and counsel for Jacobs had conversations with
counsel for Chevron Oronite regarding settlement negotiations
among the parties to the state-court
a letter to Jacobs dated November 7, 2017, Chevron Oronite
tendered the lawsuit a second time, referencing the
applicable contracts Jacobs had produced in discovery,
updating Jacobs about ongoing settlement negotiations, and
again inviting it to defend Chevron Oronite in the
Bourgeois lawsuit. Jacobs again
Nevertheless, Chevron Oronite continued to apprise Jacobs of
the proposed settlement amounts (including Bourgeois'
demand to Chevron Oronite of $895, 000 as well as the range
between which Chevron Oronite thought it could settle the
case) and invited Jacobs' participation in settlement
discussions in late November and early December of
2017. Jacobs repeatedly refused.
Chevron Oronite settled the Bourgeois lawsuit on
January 24, 2018, for $550, 000.This amount fell in the
middle of the settlement range Chevron Oronite had projected
and communicated to Jacobs.
The Indemnity Agreements
a result of the series of contracts between Chevron Chemical
and J.E. Merit, indemnity agreements between Chevron Oronite
and Jacobs were in effect when Bourgeois was allegedly
exposed to asbestos while employed for J.E. Merit at
Chevron's Belle Chasse facility.
plain and unambiguous language of Section 3.4 of the
indemnity agreements provides that Chevron Oronite may
recover reasonable attorney's fees in connection with its
defense and settlement of the Bourgeois suit and its
pursuit of the instant suit against Jacobs.
Section 3.4 of the indemnity agreements also provides for
recovery of ordinary costs of litigation.
The Complaint and Answer in the Captioned
March 2, 2018, Chevron Oronite filed a complaint for breach
of contract, alleging that Jacobs refused to satisfy its
contractual obligation to indemnify Chevron
April 19, 2018, Jacobs filed its answer, generally denying
the allegations of the complaint on the basis that Chevron
Oronite had no liability to Bourgeois in the underlying
Bourgeois case and that Jacobs is not liable to
Chevron Oronite for defense and indemnity of that
October 10, 2018, on cross-motions for summary judgment,
this Court decided the threshold issue of whether Chevron
Oronite was required to establish actual liability or
potential liability to Bourgeois when it made demand upon
Jacobs for indemnification. This Court held that the
summary judgment evidence established the sufficiency of
Chevron Oronite's tender under Louisiana law as would
call for application of the potential liability
standard.Because Jacobs had opportunity following
the tender to defend and settle the Bourgeois suit
on its own terms, but chose not to, this Court determined
that potential liability is the appropriate standard to apply
in assessing Jacobs' indemnity obligation under the
contracts at issue here.Under this standard, this Court
further held that the Bourgeois suit exposed Chevron
Oronite to potential liability as to trigger Jacobs'
indemnity obligation under the contracts at issue because
Chevron Oronite had a reasonable apprehension of liability to
Bourgeois. Even assuming that an assessment of
potential liability requires some evidence in addition to the
claimant's allegations in the underlying suit, this Court
held that Chevron Oronite had provided such evidence in the
form of Bourgeois' deposition testimony and the testimony
of his expert industrial hygienist.
Thus, Chevron Oronite had shown it was potentially liable to
Bourgeois in the underlying suit and that it was entitled to
attorney's fees and ordinary costs incurred in defending
and settling the Bourgeois suit and in prosecuting
the instant suit. This ruling left for trial only the
issues of (1) the reasonableness of the amount Chevron
Oronite paid to settle the Bourgeois suit and (2)
the amount of attorney's fees and costs Chevron Oronite
should be awarded.
The Reasonableness of the Bourgeois
March 9, 2017, Bourgeois filed suit in state court against
numerous defendants, including Chevron Oronite, seeking
damages related to mesothelioma caused by his alleged
exposure to asbestos.
to Chevron Oronite, Bourgeois alleged he was exposed to
asbestos while working for one and a half to two years as a
welder for J.E. Merit at Chevron Chemical's Belle Chasse
Bourgeois was 65 years old when diagnosed with mesothelioma
and died from mesothelioma approximately 16 months
later. When he died, Bourgeois had been married
to his wife for 47 years, and he had three living children
aged 44, 39, and 38.
the underlying case, the Bourgeois plaintiffs sued
over two-dozen individually-named defendants grouped in the
following categories: “employer defendants”;
“premises defendants” (including Chevron
Oronite); “premises contractor defendants”;
“asbestos abatement contractor defendants”;
“asbestos manufacturer defendants”; and
“asbestos supplier defendants.”
perpetuation depositions, Bourgeois testified that he was
exposed to asbestos while working at or for certain entities
(Avondale, H.B. Fowler, Williams-McWilliams, Good Hope
Refinery, Payne & Keller, Chevron, Kostmayer, J.E. Merit,
BP Oil Refinery, Performance, Exxon, Tenneco, Shell,
Johns-Manville, Monsanto, and Comet Construction) from pipe
insulation, fire blankets, gaskets, and gloves manufactured
by unknown manufacturers and supplied by unknown suppliers;
or from being around his father and brother who worked at or
for some of these entities, or workers at Cajun Insulation
Company and other unknown insulator workers.Bourgeois was
also exposed to asbestos through his use of welding rods
manufactured by unknown manufacturers and supplied by unknown
light of these exposures to asbestos, Jacobs argues that
Chevron Oronite could have potentially shared liability with
at least two-dozen other persons or entities (including
Avondale; unknown manufacturers of pipe insulation; unknown
suppliers of pipe insulation; unknown manufacturers of
asbestos fire blankets; unknown suppliers of asbestos fire
blankets; H.B. Fowler; Williams-McWilliams; Good Hope
Refinery; unknown insulator workers; Payne & Keller;
Kostmayer; J.E. Merit; unknown manufacturers of gaskets;
unknown suppliers of gaskets; BP Oil; Performance; Exxon;
unknown manufacturers of asbestos gloves; unknown suppliers
of asbestos gloves; Tenneco; Shell; Cajun Insulation Company;
Johns-Manville; Monsanto; Comet Construction; unknown
manufacturers of welding rods; unknown suppliers of welding
rods), so that all twenty-four of these other persons or
entities should be deemed to share equal responsibility with
Chevron Oronite for Bourgeois'
mesothelioma. In sum, Jacobs asserts:
“Certainly, nothing about the evidence suggests that
Chevron Oronite was more or less liable than any other entity
the obverse is equally true: there is nothing about the
evidence that conclusively establishes that Chevron
Oronite's share of the potential liability for
Bourgeois' claims was less than the settlement amount as
a proportion of the total claim value.
its submissions to the Court, Jacobs has made no effort to
demonstrate that the settlement amount ($550, 000) Chevron
Oronite paid to Bourgeois was unreasonable, because Jacobs
insists that Chevron Oronite had the affirmative burden to
show that the amount was reasonable and that Chevron Oronite
has not carried its burden. As a consequence, Jacobs contends
that the Louisiana law in effect at the time of the alleged
asbestos exposures and on the date of Bourgeois' death
requires that the potential damages on Bourgeois' claims
be shared equally among all defendants alleged to have caused
any asbestos exposure contributing to Bourgeois'
Jacobs recites the Louisiana law applicable to Bourgeois'
claims and any assessment of the reasonableness of a
settlement of such claims, to be as follows:
a. The substantive law in effect at the time of an asbestos
claimant's “repeated tortious exposures resulting
in continuous, on-going damages” is the law that
governs a mesothelioma plaintiffs own claim or a survival
claim arising from a mesothelioma patient's death.
Cole v. Celotex Corp., 599 So.2d 1058, 1066 (La.
b. The substantive law in effect at the time of a
mesothelioma patient's death is the law that governs a
wrongful death claim. Meredith v. Asbestos Corp.,
707 So.2d 1334, 1336 (La.App. 1998).
c. In 1980, Louisiana adopted a comparative fault system to
require loss apportionment in multi-party litigation.
“Since the adoption of a pure comparative fault system,
it has been the task of the factfinder to allocate shares of
negligence.” Keith v. U.S. Fid. & Guar.
Co., 694 So.2d 180, 183 (La. 1997).
d. Jacobs urges that, because the alleged exposures at issue
here (1989-1993) postdate Louisiana's enactment of a
comparative fault regime, determining the probable amount of
a total judgment for which Chevron Oronite may have been
liable due to the alleged exposures in the Bourgeois
case requires consideration of the law applicable both at the
time of Bourgeois' death (wrongful death claim) as well
as at the time of the alleged exposures (survival claim).
e. Under the post-1980 comparative fault law, fault is
apportioned to all liable parties and non-parties, even those
immune or whose identity is unknown. See, e.g., Petroleum
Rental Tools, Inc. v. Hal Oil & Gas Co., 701 So.2d
213 (La.App. 1997). Evaluating Chevron Oronite's risk of
exposure in the Bourgeois case therefore requires
consideration of the potential extent to which fault for
Bourgeois' mesothelioma could have been allocated to
persons and entities other than Chevron Oronite.
f Under Louisiana Civil Code article 2324, had the
Bourgeois plaintiffs obtained a wrongful death
judgment, Chevron Oronite would have been liable only for
that portion corresponding to its own percentage of allocated
fault, except that for the period at issue (1989-1993), when
the alleged exposures occurred, an immune employer's
fault must be reallocated to the other culpable tortfeasors.
See, e.g., Fleniken v. Entergy Corp., 780 So.2d 1175
g. Until Louisiana's 1975 revision of La. R.S. 23:1031.1,
the Louisiana Workers Compensation Act did not shield
employers from liability in mesothelioma claims. Rando v.
Anco Insulations Inc., 16 So.3d 1065, 1071 (La. 2009).
h. In mesothelioma cases, Louisiana courts have in recent
years affirmed wrongful death damage awards for surviving
spouses in the “high” range of $900, 000 to $2,
500, 000 and for adult children in the “high”
range of $250, 000 to $750, 000. See Zimko v. American
Cyanamid,905 So.2d 465 (La.App. 2005) ($2, 500, 000 to
widow of 55-year-old mesothelioma decedent); Oddo v.
Asbestos Corp.,173 So.3d 1192 (La.App. 2015) ($900, 000
to widow of 81-year-old mesothelioma decedent); Williams
v. Placid Oil Co.,224 So.3d 1101 (La.App. 2017) ($750,
000 to each adult child of 59-year-old ...