NEW ORLEANS — The 5th Circuit Court of Appeals has
a district court’s ruling in an insurance dispute that allowed
changes to be made to a contract so that an injured offshore worker
could get a $2.5 million settlement.
The core of the dispute involved an employer’s indemnification
of other contractors involved in a drill-ship project and an
insurance company that refused to pay its claim for reimbursement.
Raylin Richard, who had worked as a casing supervisor for Offshore
Energy Services, was injured on the Belford Dolphin in June 2009. He
later sued Anadarko — which had a long-standing master services
contract with OES — and other companies on the project, including
Dolphin Drilling and Smith International.
Offshore Energy Services had indemnified Anadarko, Dolphin
Drilling and Smith International against tort claims filed by its
When OES sought reimbursement from its insurer for funds spent
defending and ultimately settling Richard’s personal-injury suit,
Liberty Mutual denied its claims.
Liberty Mutual appealed a decision in the Western District of
it “erred” by allowing OES and Anadarko, the drilling project’s
principal, “to equitably reform their master services contract.”
It also asserted that the district court interpreted the
OES-Liberty Mutual insurance policy erroneously when it concluded the
policy “obligated Liberty Mutual to reimburse OES for all of the
attorney’s fees OES incurred in connection with the tort suit,
rather than a pro-rata portion of those fees, according to the
At the 5th Circuit, the case went before Judges James
Graves Jr., Jennifer Elrod and Leslie Southwick.
In the decision filed March 2, the appeals panel found that the
“district court properly considered evidence that OES and Anadarko
committed a mutual mistake by failing to write” indemnity coverage
into their master services contract.
“Mutual mistakes by contracting parties can warrant contract
reformation,” Graves wrote.
The appeals panel not only upheld the decision favoring OES, but
it also modified the district court’s judgment in the award of
attorney’s fees, finding that Liberty Mutual owes $168,695.96,
which represents its pro-rata share of OES’s attorney’s fees.