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Certain Underwriters at Lloyd's London v. Cameron International Corp.

United States District Court, S.D. Texas, Houston Division

January 10, 2018



          Kenneth M. Hoyt United States District Judge


         Before 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[1] 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.


         The 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”)[2] 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].

         On June 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.

         The BOP 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.


         In 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.


         Under 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).

         V. ...

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