‘Piecemeal’ Appeal Trips in Gulf of Mexico Spat

(CN) - The 5th Circuit dismissed an appeal by an insurer that wants nothing to do with a negligence suit stemming from an industrial accident on a decommissioned platform in the Gulf of Mexico, the 5th Circuit ruled.

Several employees of oil-services contractor Vertex Services suffered injuries during a 2011 platform-salvage operation, 34 miles off the coast of Louisiana. Rigger Abraham Mayorga alleges that he fell more than 70 feet into the Gulf of Mexico from the end of a bridge that workers were trying to remove with a crane from another ship.

Tetra Technologies and its subsidiary Maritech Resources, both Texas companies, had contracted the work to Vertex, and the employees sued them for negligence.

Continental Insurance Co., which insured Vertex, denied coverage to Tetra and Maritech, and it did not participate in Tetra and Maritech's subsequent settlement with Mayorga.

After Tetrra and Maritech sued Vertex and Continental for indemnification in the Pelican State, a federal judge found that the Louisiana Oilfied Indemnity Act does not void Vertex's indemnification obligations.

It found that once cited policy exclusion does not apply and that further proceedings were necessary on the second policy exclusion.

Though the court refused to let Continental appeal those findings, it agreed to enter a final judgment pursuant to Federal Rule of Civil Procedure 54(B), which provides that "when an action presents more than one claim for relief ... or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay."

A three-judge panel with the 5th Circuit rejected Continental's ensuing appeal Tuesday, concluding it lacks jurisdiction.

They noted that their finding hinges on "the requirement that the District Court must have completely disposed of a claim in order to enter final judgment under Rule 54(b)."

"As matters stood after the District Court entered judgment, it was possible for Tetra and Maritech to prevail completely or not at all on their indemnification claim against Continental, depending on the resolution of certain 'factual issues,'" Judge Harold DeMoss wrote for the appellate panel. "Given those circumstances, the District Court had hardly 'sounded the death knell' of the litigation between Continental and Tetra and Maritech concerning Continental's indemnity obligations and therefore did not completely dispose of the claim."

DeMoss and his colleagues refused the lower court's invititation to have it "sign-off mid-litigation on legal questions it considers non-contentions."

"Rule 54(b) does not permit such piecemeal appeals, but rather was 'created specifically to avoid' them," the 14-page ruling concludes. "Accordingly, the District Court erred in entering judgment under Rule 54(b) against Continental."

Tetra and Continental have not returned requests for comment.

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