Tetra Technologies, Inc. v. Continental Insurance
814 F.3d 733
5th Cir.2016Background
- Tetra contracted with Vertex under a Master Service Agreement (MSA) requiring Vertex to indemnify Tetra and to name Tetra as an additional insured on Vertex’s Continental general liability policy.
- Tetra retained Vertex to perform work on a salvage project (Salvage Plan) for a decommissioned platform at Eugene Island 129; Vertex employee Abraham Mayorga was injured when a bridge collapsed.
- Mayorga sued Tetra for negligence; Tetra sued Vertex and Continental for indemnity and insurance coverage.
- Continental moved for summary judgment arguing (1) OCSLA requires adoption of Louisiana law (which would bring LOIA into play and void the indemnity), and (2) the Policy’s Exclusion d bars coverage.
- The district court granted summary judgment for Tetra; on appeal the Fifth Circuit affirmed the policy interpretation, reversed the district court’s LOIA analysis, and remanded for the single dispositive threshold: whether OCSLA requires adopting Louisiana law as surrogate federal law.
Issues
| Issue | Plaintiff's Argument (Tetra) | Defendant's Argument (Continental) | Held |
|---|---|---|---|
| Whether OCSLA requires adopting Louisiana law as surrogate federal law (PLT test) | OCSLA does not govern or, even if it does, LOIA would not void indemnity; factual record insufficient for OCSLA but outcome would favor Tetra | OCSLA applies so Louisiana law (LOIA) voids indemnity | Remanded: record inadequate to resolve PLT prongs; district court must decide whether Louisiana law applies under OCSLA |
| Whether the dispute arose on an OCSLA situs (focus-of-contract) | Majority of Vertex’s work was off-platform (barges); work order location unclear | Majority of work was on the EI129 platform and thus on an OCSLA situs | Summary-judgment record inadequate to determine situs; neither party entitled to JMOL on this prong |
| Whether federal maritime law applies of its own force (Davis six-factor inquiry) | Contract/work non-maritime or insufficient evidence to trigger maritime law | Work involved decommissioning/salvage of an OCS platform but record lacks the specific work order to apply factors | Insufficient evidence to determine whether maritime law applies; remand required |
| Whether LOIA voids the indemnity (if Louisiana law applies) | Salvage of a decommissioned platform is too attenuated from a "well" to trigger LOIA | Salvage of decommissioned platform has sufficient functional/geographic nexus to a well; LOIA applies and voids indemnity | If Louisiana law applies, LOIA would void the indemnity and bar Continental’s obligation to indemnify Tetra |
| Whether Continental’s Policy Exclusion d bars coverage | Exclusion d is ambiguous; "any similar law" refers to employer-liability statutes, so coverage exists | Exclusion d includes "General Maritime Law" and thus excludes Tetra’s claim | Exclusion d is ambiguous due to "any similar law" language; ambiguity construed for insured, so Policy does not exclude coverage |
Key Cases Cited
- Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S. 352 (OCSLA governs law for seabed and fixed structures)
- Union Texas Petroleum Corp. v. PLT Eng’g, Inc., 895 F.2d 1043 (5th Cir.) (three-prong PLT test for applying state law under OCSLA)
- Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778 (5th Cir.) (focus-of-contract test for OCSLA situs)
- Verdine v. Ensco Offshore Co., 255 F.3d 246 (5th Cir.) (nexus-to-a-well analysis under LOIA)
- ACE Am. Ins. Co. v. M-I, L.L.C., 699 F.3d 826 (5th Cir.) (Davis six-factor analysis for maritime character)
- Amerisure Ins. Co. v. Navigators Ins. Co., 611 F.3d 299 (5th Cir.) ("any similar law" can render exclusion ambiguous)