United States District Court, S.D. Texas, Houston Division
CERTAIN UNDERWRITERS AT LLOYD'S LONDON AND CERTAIN INSURANCE COMPANIES, et al, Plaintiffs,
CAMERON INTERNATIONAL CORPORATION, et al, Defendants.
MEMORANDUM AND ORDER
Kenneth M. Hoyt United States District Judge
the Court are Axon's motion for summary judgment [DE#
256] asserting that Hercules owes Axon a duty to defend and
indemnify Axon for claims made by the
plaintiffs in this suit, Hercules' response [DE#
277] and Axon's reply [DE# 329]. The Court has examined
the motion, response, reply and related documents and,
incorporating by reference the Court's earlier Memorandum
[DE# 413], determines that Axon's motion for summary
judgment should be granted.
factual background giving rise to Axon's claims against
Hercules originates in the business relationship between Axon
and Seahawk Drilling, Inc., (“Seahawk”) and the
Master Service Agreement (“MSA”) executed on June
16, 2010. Axon contracted to provide materials, goods,
equipment and services in connection with Seahawk's
business of drilling oil and gas wells. Specifically, Axon
refurbished the Hercules 265 blowout preventer
(“BOP”) at issue in this case. Prior to executing
the MSA, Seahawk filed for bankruptcy. Executing an MSA with
Axon was essential to the consummation of Seahawk's sale
of its assets to Hercules. In Re Seahawk
Drilling, Inc., et. al; Cause No. 11-20089 [DE# 489].
The June 16, MSA, in sweeping language, formalized all prior
and ongoing contractual obligations between Axon and Seahawk
with the following language:
Upon execution of this agreement, [Seahawk] agrees that . . .
this Agreement shall remain in force and effect until
canceled by either party by giving the other party ten (10)
days prior written notice . . . [T]his agreement shall
control and govern all work performed by [Axon] . . . [and
any] agreements or stipulations not in conformity with the
terms and provisions hereof shall be null and void . . .
See [DE# 256, Exh. A].
18, 2010, Axon executed a Master Service Contract
(“MSC”) with Hercules after Hercules purchased
the assets of Seahawk out of a bankruptcy, pursuant to an
Asset Purchase Agreement (“APA”). The purchase
included ownership and assumption of the MSA between Axon and
Seahawk. See [DE# 256, Exh. B]. At the time of the
July 23, 2013 blowout, the MSA had not been terminated
according to its terms.
and the blind shear arms, the subject of the plaintiffs'
suit against Axon and others, were refurbished by Axon after
the MSC was executed. From time-to-time, prior to the
execution of the APA between Hercules and Seahawk, Axon
performed similar and related work for Seahawk. When the
blowout occurred, Hercules was under contract with Walter,
pursuant to a 2011 Offshore Drilling contract, to recomplete
the A-3 Well in the Gulf of Mexico.
several opposing contentions to Axon's motion for summary
judgment, Hercules asserts that: (a) the June 16, 2010, MSA
between Axon and Seahawk was superseded by the MSC executed
by Hercules and Axon on June 18, 2010; (b) the MSC calls for
the parties to defend and indemnify each other except where
the cause of loss was the negligence or legal fault of the
other party; (c) the MSC provides that “it shall not be
amended, modified, or waived except in writing signed by the
parties”; (d) the equipment and services, the subject
of this suit, were supplied “after” June 18, 2010
and are; therefore, subject only to the MSC; and (e) a
material fact issue exists concerning which of the
agreements, the MSA or MSC, governs the contentions between
Hercules and Axon.
SUMMARY JUDGMENT STANDARD
Rule 56(c) of the Federal Rules of Civil Procedure, the
moving party bears the initial burden of “informing the
district court of the basis for its motion and identifying
those portions of [the record] which it believes demonstrate
the absence of a genuine issue for trial.”
Matsushita Elec. Ind. Co. v. Zenith Radio Corp., 475
U.S. 574, 586 - 87 (1986); Adams v. Travelers Indem. Co.
of Connecticut, 465 F.3d 156, 163 (5th Cir. 2006). Where
the moving party has met its Rule 56(c) burden, the nonmovant
must come forward with “specific facts showing that
there is a genuine issue for trial.”
Matsushita, 475 U.S. at 586-87 (quoting Fed.R.Civ.P.
56(e)) (emphasis in original); Celotex Corp. v.
Catrett, 477 U.S. 317 (1986); and Adams, 465
F.3d at 164. To sustain the burden, the nonmoving party must
produce evidence admissible at trial showing that reasonable
minds could differ regarding a genuine issue of material
fact. Anderson, 477 U.S. at 250-51; 255; Morris
v. Covan World Wide Moving, Inc., 144 F.3d 377, 380 (5th
Cir. 1998). In deciding a summary judgment motion,
“[t]he evidence of the nonmovant is to be believed, and
all justifiable inferences are to be drawn in his
favor.” Anderson v. Liberty Lobby, Inc., 477
U.S. at 242, 255 (1986).