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Hammer v. PHI Inc.

United States District Court, W.D. Louisiana, Lafayette Division

September 17, 2019

NORMAN M HAMMER ET AL
v.
PHI INC ET AL

          MEMORANDUM RULING

          PATRICK J. HANNA MAGISTRATE JUDGE.

         Before the Court is the Motion for Summary filed on behalf of Plaintiffs, Norman Hammer, David Loupe, Norris Webb, and Carol Webb in which they seek to dismiss the Complaint of Intervention filed by Zurich American Insurance Company. (Rec. Doc. 133; 157[1]). Zurich opposed the Motion. (Rec. Doc. 152), and Plaintiffs replied (Rec. Doc. 158). Considering the evidence, the law, and the arguments of the parties, and for the reasons fully explained below, Plaintiffs' Motion is DENIED.

         Factual Background

         Plaintiffs filed this suit following a helicopter crash in June 2015. At the time of the accident, Plaintiffs (with the exception of Norris Webb's spouse, Carol Webb) were employed by Kinetica Partners, LLC and were being transported aboard the helicopter from Stone Energy Platform 165 to Kinetica Partners in Pecan Island. (Rec. Doc. 152-1, ¶6-8). Kinetica maintained workers compensation insurance through Zurich. (Rec. Doc. 149-5; 152-1, ¶4).

         Plaintiffs filed this suit against the owner of the helicopter, PHI Inc., the helicopter manufacturer, Bell Helicopter Textron, Inc., and the pilot, Andrew Ford. (Rec. Doc. 1-3, at 2). Bell removed to this Court (Rec. Doc. 1). Plaintiffs later amended the Complaint to name PHI's insurer, Allianz Global Risks U.S. Insurance Company, as an additional defendant. (Rec. Doc. 117; 122). Zurich filed a Petition in Intervention in state court to recover its workers compensation benefits paid to or on behalf of Plaintiffs employed by Kinetica pursuant to the Longshore and Harbor Workers Compensation Act (LHWCA), 33 U.S.C. 901 et. seq. (Rec. Doc. 1-3, at 20).[2] Plaintiffs now move to dismiss Zurich's Intervention on the grounds that Kinetica, and thus Zurich, contractually waived its rights of subrogation.

         The contract at the heart of this dispute is the Agreement for Flight Service (AFS) between PHI and Kinetica. (Rec. Doc. 133-5).[3] In the AFS, PHI and Kinetica agreed to modified reciprocal defense, indemnity, and waivers of subrogation. (Rec. Doc. 133-5, pp. 6-9). Zurich's worker's compensation policy contains a “Waiver of Our Right to Recover from Others Endorsement” which states:

We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.)
This agreement shall not operate directly or indirectly to benefit anyone not named in the Schedule.
Schedule
ALL PERSONS AND/OR ORGANIZATIONS THAT ARE REQUIRED BY WRITTEN CONTRACT OR AGREEMENT WITH THE INSURED, EXECUTED PRIOR TO THE ACCIDENT OR LOSS, THAT WAIVER OF SUBROGATION BE PROVIDED UNDER THIS POLICY FOR WORK PERFORMED BY YOU FOR THAT PERSON AND/OR ORGANIZATION

(Rec. Doc. 133-5, p. 31).

         None of the parties have asserted cross-claims against any other party or otherwise asserted any rights to defense or indemnity that are contained in the record. Nor has the Court been apprised of any pending demands for defense or indemnity.

         Applicable Law

         I. Legal Standard for Motions for Summary Judgment.

         Under Rule 56(a) of the Federal Rules of Civil Procedure, summary judgment is appropriate when there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law. A fact is material if proof of its existence or nonexistence might affect the outcome of the lawsuit under the applicable governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Sossamon v. Lone Star State of Tex., 560 F.3d 316, 326 (5th Cir.2009); Hamilton v. Segue Software, Inc., 232 F.3d 473, 477 (5th Cir.2000). A genuine issue of material fact exists if a reasonable jury could render a verdict for the nonmoving party. Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir.2008) (citing Anderson, 477 U.S. at 252); Hamilton, 232 F.3d at 477.

         The party seeking summary judgment has the initial responsibility of informing the court of the basis for its motion and identifying those parts of the record that demonstrate the absence of genuine issues of material fact. Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir.2007) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). If the moving party carries its initial burden, the burden shifts to the nonmoving party to demonstrate the existence of a genuine issue of a material fact. Washburn v. Harvey, 504 F.3d at 508. All facts and inferences are construed in the light most favorable to the nonmoving party. Brumfield v. Hollins, 551 F.3d at 326 (citing Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)).

         If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by pointing out that there is insufficient proof concerning an essential element of the nonmoving party's claim. Norwegian Bulk Transport A/S v. International Marine Terminals Partnership, 520 F.3d 409, 412 (5th Cir.2008) (citing Celotex, 477 U.S. at 325). The motion should be granted if the nonmoving party cannot produce evidence to support an essential element of its claim. Condrey v. Suntrust Bank of Ga., 431 F.3d 191, 197 (5th Cir.2005).

         II. Jurisdiction and Choice of Law

         This Court has already determined that jurisdiction exists by virtue of the Outer Continental Shelf Lands Act (OCSLA) (43 U.S.C. §1349(b)). (Rec. Doc. 49; Hammer v. PHI, Inc., No. CV 6:16-1048, 2016 WL 7029354, at *7 (W.D. La. Oct. 14, 2016), report and recommendation adopted, No. CV 6:16-1048, 2016 WL 7031774 (W.D. La. Dec. 1, 2016)). The Court has not yet addressed the separate inquiry of choice of law. In the context of a helicopter crash in the Gulf of Mexico, the Fifth Circuit succinctly explained whether OCSLA, and thus the law of Louisiana as the adjacent state's law, or maritime law applies, as follows:

OCSLA extends the laws and jurisdiction of the United States to the seabed and artificial islands on the outer Continental Shelf, including offshore platforms. 43 U.S.C. § 1333(a)(1). The laws of the adjacent state also apply, to the extent they are not inconsistent with federal law. Id. § 1333(a)(2)(A). The state adjacent to the W&T platform involved in the helicopter accident is Louisiana, so Louisiana law would apply if OCSLA governs the contract…Therefore, the dispositive issue is whether OCSLA applies, as opposed to maritime law.

         We use a three-part test to determine whether OCSLA applies:

(1) The controversy must arise on a situs covered by OCSLA (i.e. the subsoil, seabed, or artific[i]al structures permanently or temporarily attached thereto). (2) Federal maritime law must not apply of its own force. (3) The state law must not be inconsistent with Federal law.
Alleman v. Omni Energy Servs. Corp., 580 F.3d 280, 283 (5th Cir.2009) (citations omitted).

         Unlike the jurisdictional inquiry, the choice of law determination demands a situs analysis. (See this Court's discussion in Hammer, at *3, citing In re Deepwater Horizon, 745 F.3d 157, 164 (5th Cir.2014)). The situs of the controversy in a tort suit is the place where the tort occurs; however, the “controversy [in a contractual dispute] arises under an OCSLA situs if a majority of the work called for by the contract is on stationary platforms or other enumerated OCSLA situses.” Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778, 784, 787 (5th Cir.2009).

         The disputed issue in this instance is the indemnity and waiver of subrogation provisions in the AFS between Kinetica and PHI. The object of the AFS is to “render flight services to transport personnel and equipment of [Kinetica]…between landing sites within and without the territorial limits of the United States and offshore thereof[.]” (Rec. Doc. 133-5, p. 3). The parties do not dispute, and the Court finds, that the situs invoked by the AFS includes landing sites on fixed platforms where the assets of Tennessee Gas Pipeline, the entity acquired by Kinetica as set forth in the AFS, would be located. (Rec. Doc. 133-5, p. 1). This was in fact the case here when the PHI helicopter picked up Plaintiffs on a platform located on the OCS to bring them onshore. Thus, the situs requirement of OCSLA is satisfied. See Alleman, supra, decided the same year as Grand Isle Shipyard, addressing the indemnity provisions in an agreement for helicopter flight services and finding the OCSLA situs test satisfied.

         The Court must next determine whether maritime law applies of its own force. When the issue is contractual, as it is in this instance, the Court must determine whether the contract is maritime (in which case maritime law would apply of its own force) or non-maritime (in which case OCSLA would permit application of state law). In In re Doiron, the Fifth Circuit adopted the following test for determining whether a contract for the ...


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