Klepac v. Champlin Petroleum Co.
Klepac v. Champlin Petroleum Co.
Opinion of the Court
Defendant Champlin Petroleum Company appeals from an adverse summary judgment on a claim of indemnification against Champlin. We reverse the summary judgment and remand the case.
I.
Plaintiff Thomas Klepac brought this action against defendants Champlin Petroleum Company (Champlin) and Western Oceanic, Inc. (Western), for damages in the amount of $350,000 to compensate for personal injuries sustained on Western’s offshore drilling rig. Western filed a cross-claim against Champlin seeking indemnification and, alternatively, contribution. Western thereafter moved for summary judgment on its cross-claim for indemnification. The district court granted the motion. Champlin appeals.
II.
A.
The indemnification cross-claim is governed by a drilling contract dated March 22, 1984, between Western and Champlin. Western contends that, under article 808 of the contract, Champlin must indemnify Western for any amount paid on Klepac’s personal injury claim. Champlin resists Western’s contention in two ways. First, Champlin disagrees with Western’s interpretation of article 808 and argues that this
B.
In Ogea v. Loffland Brothers Co.,
The Ogea Court read the insurance provision and the indemnification provision together, such that the insurance “would cover ... damages” “up to $500,000.00,” and “[f]or damages in excess of $500,000.00, the indemnity provisions would come into effect.”
In the present case, the district court did not dispute the Ogea analysis. Instead, the district court noted that, whereas the Ogea drilling contract provided that the party in Champlin’s position “was to be named a co-insured in the [comprehensive general liability insurance] policies,”
Article 901 of the drilling contract provides:
[# 1] [Western] shall maintain, at its sole cost, and shall require any subcontractors it may engage to maintain, at all times while performing work hereunder, the insurance coverage set forth in Schedule “D” with companies satisfactory to CHAMPLIN with full policy limits applying, but not less than stated. [#2] A certificate naming CHAMPLIN and such non-operators as may be listed in Schedule “A” as co-insured and evidencing the coverages, specifically quoting the indemnification provision set forth in Article 807, shall be delivered to CHAMPLIN prior to commencement of operations under this Contract, however, the coverage afforded CHAMPLIN and such non-operators as co-insureds under [Western’s insurances shall include risks, losses, and liabilities assumed herein by [Western] or in respect of which [Western] has agreed to indemnify CHAMPLIN.
In its first sentence, article 901 provides for comprehensive general liability insurance: Western “shall maintain, at its sole cost, and shall require any subcontractors it may engage to maintain, at all times while performing work hereunder, the insurance coverage set forth in Schedule ‘D’ [concerning comprehensive general liability insurance] with companies satisfactory to CHAMPLIN with full policy limits applying, but not less than stated.” The very next sentence provides that a “certificate naming CHAMPLIN ... as co-insured and evidencing the coverages ... shall be delivered to CHAMPLIN.” At this point, the only insurance for which provision has been made is the comprehensive general liability insurance of sentence (1). Thus, sentence (2), when it refers to Champlin “as co-insured,” is naturally read as referring to Champlin as co-insured under the comprehensive general liability insurance of the immediately preceding sentence (1).
III.
In sum, we conclude that the drilling contract did require Western to procure and maintain comprehensive general liability insurance naming Champlin as co-insured. Western's arguments notwithstanding, Ogea then compels the further conclusion that any indemnification duty running from Champlin to Western “do[es] not come into play” for amounts within the insurance coverage Western was required to procure and maintain.
REVERSED AND REMANDED.
. 622 F.2d 186 (5th Cir. 1980).
.Memorandum and Order at 5 (filed April 8, 1987) (emphasis supplied).
Reference
- Full Case Name
- Thomas KLEPAC, Highlands Insurance Company, Intervenor v. CHAMPLIN PETROLEUM COMPANY, Defendant-Cross v. WESTERN OCEANIC, INC., Cross and The Dia Log Company
- Cited By
- 14 cases
- Status
- Published