REVISED JULY 1, 2002
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
RODNEY SUMRALL, Etc
ENSCO OFFSHORE CO
SANTA FE ENERGY RESOURCES INC
Plaintiff - Appellee
PREMIERE, INC; ET AL
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Louisiana
May 9, 2002
Before KING, Chief Judge, and REAVLEY and
WIENER, Circuit Judges.
Plaintiff Santa Fe Energy Resources, Inc.
seeks indemnification from defendant Premiere, Inc. for a tort claim filed
by an injured employee of Premiere against a third-party contractor of
Santa Fe. The district court granted summary judgment in favor of Santa
Fe. For the following reasons, we AFFIRM.
I. FACTUAL AND PROCEDURAL HISTORY
On September 27, 1999, Rodney Sumrall, an
employee of defendant Premiere, Inc. ("Premiere") was working on a drilling
rig jack-up vessel owned by defendant Ensco Offshore Co. ("Ensco"). On
that day, Sumrall was injured when a crane operator, an employee of Ensco,
swung the basket of a crane carrying Sumrall into a pole, thus knocking
Sumrall to the deck of the Ensco rig. On September 18, 2000, Sumrall filed
a tort action in federal district court against Ensco under the
general maritime law.
At the time of the accident, plaintiff Santa
Fe Energy Resources, Inc. ("Santa Fe") was the operator on the drilling
operation. Santa Fe had a contractual relationship with Ensco, in accordance
with the terms of which Ensco would provide the drilling rig vessel and
drilling services. The Ensco-Santa Fe contract required indemnification
by Santa Fe for claims brought against Ensco by employees of Santa Fe and
of Santa Fe's contractors. Santa Fe contracted separately with Premiere
for Premiere to provide casing and other services on the same drilling
operation. The Premiere-Santa Fe contract likewise required some indemnification
between the parties for claims brought by their respective employees. Premiere
and Ensco had no contract between them.
The parties do not dispute that Santa Fe's
contract with Ensco obligated Santa Fe to indemnify and defend Ensco against
claims brought by any Premiere employee such as Sumrall. Pursuant to that
agreement, Santa Fe did assume defense of Ensco against Sumrall's claim.
Then, pursuant to the indemnification agreement between Premiere and Santa
Fe, Santa Fe demanded indemnification and defense in turn from Premiere
because a Premiere employee filed the original tort suit. Premiere refused.
Santa Fe filed suit to compel Premiere to
indemnify Santa Fe pursuant to their contract. Santa Fe and Premiere then
filed cross-motions for summary judgment. On April 12, 2001, the district
court denied Premiere's motion.(1) At the
same time, the district court granted Santa Fe's motion, thus ordering
Premiere to provide defense, indemnification, and attorney fees to Santa
Fe.(2) Premiere filed a motion for reconsideration
of the summary judgment in favor of Santa Fe, which the district court
denied on May 9, 2001.(3) Premiere now timely
appeals the district court's summary judgment in favor of Santa Fe.
II. STANDARD OF REVIEW
This court reviews summary judgment de novo,
applying the same standards as the district court. Chaney v. New Orleans
Pub. Facility Mgmt., Inc., 179 F.3d 164, 167 (5th Cir. 1999). Summary
judgment is appropriate when there is no genuine issue as to any material
fact, and the moving party is entitled to judgment as a matter of law.
FED. R. CIV. P. 56(c).
III. PREMIERE'S AGREEMENT TO INDEMNIFY
A. Premiere's Agreement to Indemnify Santa
Fe for Contractual and Other Legal Duties
Premiere contends that our decision in Corbitt
v. Diamond M. Drilling Co., 654 F.2d 329 (5th Cir. 1981), in which
we denied indemnification to a contractor situated similarly to Santa Fe,
controls the instant case and thus that the district court erred in finding
that Premiere must indemnify Santa Fe. In Corbitt, we explained
that a "contract of indemnity should be construed to cover all losses ...
which reasonably appear to have been within the contemplation of the parties,
but it should not be read to impose liability for those losses ... which
are neither expressly within its terms nor of such character that it can
be reasonably inferred that the parties intended to include them within
the indemnity coverage." Id. at 333. A close reading of Corbitt,
however, indicates that the indemnification provision at issue in that
case was less broadly drafted than, and thus is distinguishable from, the
indemnification provision outlining Premiere's obligation to Santa Fe,
which provision appears as Section 15.1 of the Premiere-Santa Fe contract.
id. at 331-34.(4) Moreover, recent
decisions by this court in cases involving provisions more analogous to
Section 15.1, and which build on our reasoning in Corbitt, indicate
that the district court correctly determined that Premiere owes indemnification
to Santa Fe based on their agreement in Section 15.1.
In Corbitt, Shell Oil contracted with
two companies, Diamond M. and Sladco, to work on a drilling operation.
at 331. When an injured employee of Sladco sued Diamond M. in tort, Diamond
M. sought indemnification from Shell Oil pursuant to their contract. Id.
Shell Oil then filed a third-party action seeking indemnification in turn
from the employer of the injured plaintiff, Sladco, pursuant to their contract.
Id. Thus, in
Corbitt, Shell Oil was situated similarly to
Santa Fe in the instant case. Likewise, defendant Diamond M. and the injured
plaintiff's employer, Sladco, which maintained no contract between them,
were situated similarly to Ensco and Premiere.In
Corbitt, we agreed
with the district court that Shell Oil was not entitled to indemnification
from its contractor, Sladco, because the indemnification provision in the
contract between Shell and employer Sladco restricted the scope of Sladco's
duty to indemnify solely to those obligations sounding in tort. Id.
at 333.(5) We reasoned that, although the
underlying claim creating the obligation for which Shell Oil sought indemnification
from Sladco sounded in tort, the obligation for which Shell sought indemnification
itself was contractual in nature, as it arose from the agreement
between Shell and Diamond M.
Id. We declined to interpret the phrase
"all claims" in the Corbitt provision to include such contractual
obligations. See id. We noted that the language of the indemnification
provision at issue in
Corbitt made no mention of a duty to defend
for obligations arising in contract, and thus we read the scope of that
provision by its express terms, stating:
.... Shell's liability to Diamond M is not
on account of personal injury. Rather, it is on account of its agreement
to indemnify Diamond M under [the drilling contract between them]. Since
the [indemnification agreement] between Shell and Sladco does not specifically
provide that Sladco assumes claims arising from Shell's own separate contractual
obligations, such indemnification is not required.
Id. We further indicated that
[t]he contract need not contain any special
words to evince an intention to create a right of indemnity for independent
contractual liabilities. We hold only that it must clearly express such
a purpose. In this case, there is nothing in the contractual language itself
or in the realities of the situation in which the parties executed [the
indemnification agreement] which reflects any such intention.
Id. at 334.
In contrast, the language of Section 15.1
of the contract between Santa Fe and Premiere indicates that the scope
of employer Premiere's duty to indemnify Santa Fe is broader than was the
scope of employer Sladco's duty to indemnify Shell Oil in
Section 15.1 does include language similar to that in the provision at
issue in Corbitt, by which Premiere owes a duty to indemnify for
obligations arising in favor of Premiere employees "due to bodily injury"
or "death." However, unlike the provision at issue in Corbitt, Section
15.1 also includes language that clearly and expressly indicates Premiere's
intent to indemnify Santa Fe for obligations "whether arising in ... tort"
or "contract." Moreover, Section 15.1 includes additional, rather expansive,
language that broadens Santa Fe's entitlement to indemnification for "all
claims ... of whatsoever nature or character ... whether or not
caused by the ... legal duty of [Santa Fe] ...." (emphasis added).
Thus, Section 15.1 is distinguishable from the more narrowly drafted provision
Corbitt, and our reading of the more narrow provision in Corbitt
does not control. Moreover, our reasoning in Corbitt suggests that
Premiere owes indemnification to Santa Fe in the instant case for Santa
Fe's contractual or legal duty to indemnify Ensco against Sumrall's injury
B. Premiere's Agreement to Indemnify Santa
Fe's Contractors and Subcontractors
Additional language in Section 15.1, which
language did not appear in the provision at issue in Corbitt, even
more compellingly indicates that Premiere owes indemnification to Santa
Fe in the instant case. Specifically, Section 15.1 expressly indicates
Premiere's intent to indemnify not only Santa Fe, but also Santa Fe's "contractors
and subcontractors" for the covered obligations. Contrary to Premiere's
assertion that Premiere owes no duty to indemnify for obligations arising
due to Santa Fe's contractual relationships with third parties, prior decisions
by this court interpreting analogous indemnification provisions in like
circumstances indicate that such language in Section 15.1 expresses clear
intent by Premiere to indemnify Santa Fe for amounts paid due to an injury
claim filed against Santa Fe's third-party contractor, Ensco. In six cases
Corbitt, we confronted circumstances indistinguishable from
those in Corbitt and the instant case in all material respects except
that the indemnification provisions at issue -- unlike the provision in
but like Section 15.1 -- included agreement by a party such as Premiere
to indemnify third-party contractors, subcontractors, and/or invitees of
a party such as Santa Fe. In all six cases, we found based on such language
that the party situated similarly to Premiere owed indemnification to the
party such as Santa Fe. See Demette v. Falcon Drilling Co., Inc.,
280 F.3d 492 (5th Cir. 2002); Campbell v. Sonat Offshore Drilling, Inc.,
27 F.3d 185 (5th Cir. 1994) ("Campbell II"); Campbell v. Sonat
Offshore Drilling, Inc., 979 F.2d 1115 (5th Cir. 1992) ("Campbell
I"); Babcock v. Cont'l Oil Co., 792 F.2d 1346 (5th Cir. 1986)
(per curiam); Mills v. Zapata Drilling Co., Inc., 722 F.2d 1170
(5th Cir. 1983), overruled on other grounds,
Kelly v. Lee's Old
Fashioned Hamburgers, Inc., 908 F.2d 1218 (5th Cir. 1990) (per curiam);
Lirette v. Popich Bros. Water Transp., Inc., 699 F.2d 725 (5th Cir.
In Campbell I & II, for example,
after an employee of a casing services contractor was injured on a drilling
operation, the employee sued the owner of the drilling vessel. SeeCampbell
II, 27 F.3d at 186-87. The vessel owner and the casing services employer
maintained no direct contractual relationship. Id. A party situated
similarly to Santa Fe, Union Texas Petroleum ("UTP"), contracted separately
with the casing services employer and the vessel owner for each to supply
services on the UTP drilling operation. Id. Thus, the casing services
employer of the injured plaintiff was situated similarly to Premiere, and
the vessel owner was situated similarly to Ensco.
Pursuant to the contract between UTP and the
defendant vessel owner, in which UTP agreed to indemnify and defend the
vessel owner, UTP undertook defense of the vessel owner. UTP further impleaded
the casing services employer. Id. at 187. In the contract between
the casing services employer and UTP, the employer agreed to indemnify
not only UTP, but also "contractors engaged by UTP, such as [the
vessel owner,]" "'for injury to ... [the casing services employer's] employees
....'" Id. (emphasis added). In Campbell I, we had "enforced
[the casing services employer's] indemnity obligation under the UTP/[employer]
contract, affirming a ruling requiring [the employer] to defend and indemnify
[both the vessel owner] and UTP." See Campbell II, 27 F.3d
at 187 (describing Campbell I, 979 F.2d at 1115).
In Campbell II, however, the casing
services employer contended that it did not owe full, but only half, indemnity
under the circumstances and that UTP owed the other half. Id. The
employer thus filed for contribution from UTP. Id. In rejecting
that claim in Campbell II, and thus affirming our decision in Campbell
I, we reasoned that the employer's "duty to indemnify [the vessel owner]
flows from its contract with UTP" because the employer expressly agreed
to indemnify contractors of UTP. Id. We further rejected an argument
by the employer based on Corbitt, which is similar to the argument
made by Premiere, contending that the employer owed no reimbursement of
UTP because UTP "independently contracted to indemnify" the vessel owner.
In so doing, we noted that unlike in Corbitt, the employer in Campbell
I & II "agreed with UTP to indemnify both UTP and [its contractor,
the vessel owner]." See id. (emphasis added). We stated that
the employer "cannot insulate itself from paying its full indemnity obligation
on the basis that UTP's liability to [the vessel owner] is contractual."
Id. at 188 (citing
Lirette, 699 F.2d at 725). We concluded
that "[s]imilarly" to the employer of the injured plaintiff in Lirette,
the employer's "duty to indemnify UTP fully for amounts UTP owes [the vessel
owner] for the [injured employee's] claims arises from [the employer's]
express undertaking to indemnify both UTP and [the vessel owner] [for]
such losses. The Corbitt argument fails." Id. (citing Lirette,
699 F.2d at 728). Like the employer in
Campbell I & II, Premiere
expressly agreed to indemnify not only Santa Fe, but also Santa Fe's "contractors
and subcontractors," thus including Ensco, for obligations that arise due
to claims of injury brought by Premiere employees. Consequently, under
the consistent reasoning of this court, as in Campbell I & II,
we conclude that Premiere is obligated to indemnify, and thus to reimburse,
Santa Fe for any amounts owing for indemnification and defense provided
by Santa Fe to Ensco on account of Sumrall's tort claim. See also
Demette, 280 F.3d at 504; Babcock, 792 F.2d at 1351-53; Mills,
722 F.2d at 1174-75; Lirette, 699 F.2d at 725.
In an unusually poor alternative argument,
Premiere contends that even if it has a duty to indemnify Santa Fe for
tortious, contractual or any other type of obligations, the language by
which it agrees to indemnify "from and against all claims ... which are
asserted by or arise in favor of [Premiere] or any of its ... employees"
limits its duty to indemnify. (emphasis added). Premiere contends that
it owes indemnification for only those obligations flowing from actions
filed directly against Santa Fe by Premiere or Premiere employees.
Premiere thus asserts that any contractual obligation arising from Santa
Fe's indemnification of Ensco is not included in Premiere's duty because
neither Premiere nor any Premiere employee was party to any contractual
claim filed directly against Santa Fe.
None of the indemnification provisions at
issue in our
Lirette line of decisions contains precisely the same
"in favor of" language as that relied on by Premiere for this argument.
The corresponding relevant language in the provision at issue in
for example, reads: "'Owner ... agrees to indemnify ... Charterer ... from
any claims or suits resulting from injury or damage to Owner's ... employees
....'" 699 F.2d at 726 n.4. However, the presence of language that is similar,
if not identical, to the "in favor of" language of Section 15.1 in the
provisions at issue in Lirette and its progeny did not alter our
findings in favor of the parties situated similarly to Santa Fe in those
materially indistinguishable decisions. See, e.g.,
699 F.2d at 729; Campbell II, 27 F.3d at 186-88. Consequently, we
reject Premiere's preferred reading of the "in favor of" language in Section
15.1 as wholly specious.
The district court did not err in finding
as a matter of law that Premiere owes indemnification to Santa Fe in the
instant case based on the express language of their agreement in Section
IV. RECIPROCITY OF THE INDEMNIFICATION
Premiere contends that its obligation to indemnify
Santa Fe is more onerous than Santa Fe's corresponding obligation. Premiere
thus argues that its indemnification agreement with Santa Fe is not reciprocal
and therefore is unenforceable under the Longshore and Harbor Workers Compensation
Act ("the LHWCA"), 33 U.S.C. § 905 (1999), which governs the agreement.
Subsection 905(b) of the LHWCA prohibits indemnification by the employer
of a longshoreman for a claim due to bodily injury brought by the employee
against a vessel owner. 33 U.S.C. § 905(b).(7)
Subsection 905(c) provides an exception, however, allowing indemnification
by such an employer, in this case Premiere, so long as there is "reciprocal"
agreement by the vessel owner, in this case Santa Fe, to indemnify the
employer. 33 U.S.C. § 905(c).(8) Examination
of the indemnification agreement between Premiere and Santa Fe indicates
that the agreement is sufficiently reciprocal to satisfy the subsection
905(c) exception. Thus, the agreement is enforceable against Premiere pursuant
to subsection 905(b).
Premiere first argues that Section 15.3 of
its agreement with Santa Fe impermissibly enlarges Premiere's burden to
indemnify beyond Santa Fe's burden in return. Premiere notes that in Section
15.3, Premiere agrees to indemnify Santa Fe against any claims arising
on behalf of employees of Premiere, as well as against claims on behalf
of employees of Premiere subcontractors. Premiere contends, however, that
there is no similar provision obligating Santa Fe to indemnify Premiere
on account of Santa Fe's third-party contractors or subcontractors.(9)
Contrary to Premiere's assertion, however, the language of the indemnification
agreement, as outlined in Section 15.2, reveals that Santa Fe expressly
and unconditionally agreed to indemnify Premiere against any claims arising
on behalf of employees of Santa Fe's third-party contractors. Section 15.2
reads in relevant part:
15.2 [Santa Fe] agrees to protect, defend,
indemnify, hold, and save Contractor [Premiere] ... harmless from and against
all claims ... and which are asserted by or arise in favor of [Santa
Fe's] employees or [Santa Fe's] contractors or their employees, other than
those parties identified in sub-clause 15.1, due to bodily injury ....
(emphasis added). Thus, both Premiere and
Santa Fe agreed to indemnify each other for claims brought on behalf of
the employees of their respective third-party contractors (or in the case
of Premiere, its subcontractors).(10)
Premiere further contends, however, that Section
15.3 creates an additional obligation because it contains an undertaking
by Premiere to obtain an express contractual undertaking by any Premiere
subcontractor to indemnify Santa Fe. Premiere argues that because Santa
Fe is not likewise required to obtain the same contractual undertaking
by Santa Fe's contractors to indemnify Premiere and Premiere subcontractors,
then Premiere's obligation to Santa Fe is more onerous. We fail to see
how this undertaking creates any additional indemnification obligation
on the part of Premiere.
We do see how Section 15.3 may result in an
additional obligation on the part of a subcontractor of Premiere.
However, regardless of whether Premiere obtains an additional agreement
by any of its subcontractors to indemnify Santa Fe pursuant to Section
15.3, Santa Fe is already entitled to look to Premiere for -- and Premiere
is obligated to provide -- indemnification against claims by employees
of Premiere subcontractors pursuant to Section 15.1. Consequently, Section
15.3 in no way alters or enlarges Premiere's obligation to indemnify Santa
Fe (or Santa Fe's contractors), and both Premiere and Santa Fe are entitled
to look to each other for indemnification for claims brought by the employees
of the respective third-party entities with which each might contract in
We likewise reject Premiere's argument that
the reciprocity of its indemnification agreement with Santa Fe is destroyed
by the fact that Ensco did not agree in its contract with Santa Fe to indemnify
any contractors of Santa Fe, such as Premiere. By the terms of Section
15.2, Premiere is entitled to indemnification from Santa Fe against claims
brought against Premiere by Ensco employees. Thus, the fact that any contractor
of Santa Fe such as Ensco does not agree to indemnify other contractors
of Santa Fe has no effect on the reciprocity of the indemnification obligations
running between Santa Fe and Premiere.(11)
In support of its argument that the indemnification
agreement is not reciprocal, Premiere relies on a single, unpublished district
court decision, Falcon Operators, Inc. v. P.M.P. Wireline Servs., Inc.,
Nos. Civ.A. 97-825, 97-2586, 1997 WL 610825, at *8-9 (E.D. La. Sept. 30,
1997). We note that
Falcon Operators is not binding on this court.
Moreover, we agree with Santa Fe that the provisions at issue in that case
are distinguishable in that the groups of constituents affiliated with
the parties that each agreed to indemnify were in greater disparity than
is the case here. Likewise, the parties in that case agreed to indemnify
against claims brought on behalf of groups of their affiliated constituents
that were in greater disparity than is the case here. See id.Falcon
Operators is thus distinguishable, and Premiere's reliance upon that
case is unavailing.(12)
We find that the indemnification provisions
of the Premiere- Santa Fe contract are sufficiently reciprocal that their
agreement is enforceable under the LHWCA. The district court did not err,
therefore, in finding as a matter of law that Premiere's agreement to indemnify
Santa Fe is enforceable.
For the foregoing reasons, the district court's
summary judgment in favor of Santa Fe is AFFIRMED.
1. Prior to Santa Fe's
suit, Ensco had filed a third-party claim demanding indemnification for
obligations arising from Sumrall's claim based on the contract between
Santa Fe and Premiere. Ensco, Santa Fe, and Premiere cross-moved
for summary judgment on Ensco's third-party demand. On March 14, 2001,
the district court consolidated Sumrall's and Ensco's claims. On April
12, the court denied Ensco's motion for summary judgment and granted summary
judgment in favor of Premiere, dismissing Ensco's third-party claim. That
judgment was not appealed.
2. The contract between
Santa Fe and Premiere entitles Santa Fe to indemnity and defense from Premiere
for covered obligations. Indemnity and defense are referred to under the
umbrella term of indemnification henceforth in this opinion.
3. On June 5, 2001, the
district court entered final judgment pursuant to its April 12 summary
judgment order and, for a second time, denied Premiere's motion for reconsideration.
4. Section 15.1 reads in
15.1 [Premiere] agrees to protect, defend,
indemnify, hold, and save [Santa Fe] and its ... employees ... contractors
and subcontractors, and all their ... employees ... harmless from
and against all claims, losses, costs, demands, damages, suits, ...
causes of action of whatsoever nature or character ... and whether arising
out of contract, tort, strict liability, unseaworthiness of any vessel,
misrepresentation, violation of applicable law and/or any cause whatsoever,
including, but not limited to, reasonable attorney's fees and other costs
and expenses, without limit and without regard to the cause or causes thereof,
which in any way arise out of or are related to this Contract (including,
without limitation, the performance or subject matter of this Contract)
and which are asserted by or arise in favor of [Premiere] or any
of its agents, representatives, or employees, or [Premiere's] subcontractors
or any of their employees (and/or their spouses or relatives)
bodily injury, death, or loss of or damage to property, or any cause
whatsoever ... whether or not caused by the sole, joint, and/or
concurrent negligence, fault, strict liability, breach of contract, or
legal duty of [Santa Fe] or any other party indemnified hereunder,
the unseaworthiness of any vessel, or any cause whatsoever ....
5. The indemnification
agreement between Shell and Sladco at issue in Corbitt reads in
relevant part: "Contractor [Sladco] shall indemnify and defend Shell Oil
Company ... against all claims, suits, liabilities and expenses on account
of injury or death of persons (including employees of Shell or Contractor
[Sladco] ...) ... arising out of or in connection with performance of this
[contract] ...." 654 F.2d at 331 (emphasis added).
6. Premiere further asserts
that this court's more recent decision in Foreman v. Exxon Corp.,
770 F.2d 490 (5th Cir. 1985), in which we denied indemnification to a party
situated similarly to Santa Fe, likewise indicates that the district court
erred. However, as we noted in Foreman, the circumstances and provisions
at issue in Corbitt and Foreman are materially "indistinguishable."
at 494-99. We further found in Foreman that "the reasoning in Corbitt
[is] equally applicable to the instant case." Id. Premiere's reliance
on Foreman, therefore, is misplaced for the same reasons that its
argument based on
7. Section 905(b) reads
in relevant part: "In the event of injury to a person ... caused by the
negligence of a vessel, then such person ... may bring an action against
such vessel ... and the employer shall not be liable to the vessel ...
and any agreements or warranties to the contrary shall be void." 33 U.S.C.
8. Section 905(c) reads
in relevant part:
.... Nothing contained in subsection (b) of
this section shall preclude the enforcement ... of any reciprocal indemnity
provision whereby the employer ... and the vessel agree to defend and indemnify
the other for cost of defense and ... liability for damages arising out
of or resulting from death or bodily injury to their employees.
33 U.S.C. § 905(c).
9. Section 15.3 reads in
15.3 In the event [Premiere] subcontracts
any of the Work to be performed under this Contract, [Premiere] warrants
that the agreements or Contracts with its subcontractors shall contain
defense, indemnity, and hold harmless provisions equal to those set forth
in Sub-clause 15.1 above in favor of [Santa Fe]. Unless such agreements
or contracts contain said provisions, any and all subcontractor personnel
engaged in performing Work hereunder shall be deemed to be employees of
[Premiere] for all the purposes of Sub-clause 15.1 hereof....
10. Although Section 15.2
refers only to Santa Fe's duty to indemnify on account of its "contractors,"
while Section 15.1 and Section 15.3 refer to Premiere's duty to indemnify
on account of its "subcontractors," this difference does not undermine
the reciprocity of the agreement. The standard by which we judge the scope
of an indemnification agreement is the reasonable contemplation of the
parties. See Corbitt, 654 F.2d at 333. It was reasonable
in this case for the parties to contemplate that, because Santa Fe was
the operator on the drilling operation, and because Premiere was Santa
Fe's contractor, then Santa Fe would likely only engage other third-party
"contractors," but not "subcontractors," while Premiere would engage third-party
"subcontractors." We conclude, therefore, that despite this difference
in the language, both Premiere and Santa Fe agreed reciprocally to indemnify
each other against claims brought on behalf of their own employees, as
well as against claims on behalf of employees of their respective third-party
11. Premiere further argues
that because it has more employees than does Santa Fe, its exposure to
claims for which it must indemnify is larger and, thus, that reciprocity
is destroyed. This argument ignores the fact that both Premiere and Santa
Fe have agreed to indemnify each other for an unspecified potential number
of employees of their respective potential contractors. Moreover, we decline
to count the number of employees engaged by an indemnitor on a drilling
operation as a means of determining the scope of the potential indemnification
obligation, just as we would be loathe to attempt to measure the comparative
incompetence and propensity for negligent behavior of given indemnitors'
employees as a means of gauging the scope of their respective obligations.
12. The district court
in Falcon Operators based its determination that the agreement lacked
reciprocity in some part on one additional finding: that the employer of
the injured plaintiff in that case was required to obtain insurance, but
that the oil company party to the indemnification agreement was not required
to do the same. We have determined that differing insurance obligations
do not create additional indirect liability sufficient to implicate the
prohibitions of subsection 905(b). See Voisin v. O.D.E.C.O. Drilling
Co., 744 F.2d 1174, 1176-78 (5th Cir. 1984). Thus, we find that any
difference in the insurance obligations owed between Premiere and Santa
Fe does not undermine the reciprocity of their indemnification agreement.