IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 99-30544 _____________________

GULF STATES AIRGAS, INC.,

Plaintiff-Appellee,

versus

AMERICAN MARINE CONSTRUCTION, INC.; AMERICAN OILFIELD DIVERS, INCORPORATED, Defendants-Appellants. _________________________________________________________________

Appeal from the United States District Court for the Eastern District of Louisiana (98-CV-821) _________________________________________________________________ April 10, 2000

Before POLITZ, JOLLY, and BARKSDALE, Circuit Judges.

PER CURIAM:*

Gulf States Airgas, Inc. leased welding equipment to American

Oilfield Divers, Inc. and its wholly-owned subsidiary, American

Marine Construction, Inc. (collectively “AOD/AMC”). This equipment

was lost at sea. The district court held that AOD/AMC was liable

for the loss. For the reasons stated herein, we affirm.

I

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. In 1997, Airgas leased welding equipment and gas cylinders to

AOD/AMC. The equipment invoices had a bailment contract on the

back, and the gas cylinder invoices had a rental agreement on the

back. Both the contract and the rental agreement contained

indemnity clauses purporting to obligate the lessee for various

types of loss or damage. The equipment and cylinders were loaded

on a ship, and when the ship later capsized, the equipment and

cylinders were lost. Airgas sent AOD/AMC an invoice for this

equipment for $53,134.10.

Before this issue was resolved, AOD/AMC sent Airgas a vendor

service agreement that included an indemnity clause purporting to

generally relieve AOD/AMC of liability for losses incidental to

performance of the service agreement. Airgas later agreed to sign

the service agreement with a retroactive date of March 1, 1996.

AOD/AMC then refused to pay for the lost equipment. Airgas then

filed suit.

On summary judgment, the district court initially concluded

that the AOD/AMC service agreement governed, and that the agreement

relieved AOD/AMC of liability. But on a motion for

reconsideration, the district court vacated its earlier judgment

and ruled for Airgas instead. As part of that decision, the

district court held that the AOD/AMC service agreement only applied

to services onshore.

II

2 Interpretation of the terms of a contract is a matter of law.

Weathersby v. Conoco Oil Co.,

(5th Cir. 1984).

We review a district court’s legal conclusions on a grant of

summary judgment de novo, and view the facts in the light most

favorable to the non-movant. In re Millette,

(5th Cir. 1999). Summary judgment is proper if there is no genuine

issue of material fact and the moving party is entitled to judgment

as a matter of law.

Under Gaspard v. Offshore Crane and Equipment, Inc.,

(5th Cir. 1997), indemnity clauses are to be construed

narrowly based on their specific language. After examining the

service agreement in this case, including Exhibit A attached

thereto, we agree with the district court that the service

agreement does not govern liability for the lost equipment and

cylinders. For that reason, the judgment in favor of Airgas is

A F F I R M E D.

3