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Bainville v. Hess Oil V.I. Corp.

filed: January 15, 1988.

ROBERT J. BAINVILLE
v.
HESS OIL V.I. CORP. V. THIRD PARTY DEFENDANT STANDBY POWER SUPPLIES, INC., APPELLANT



On Appeal from the District Court of the Virgin Islands, D.C. Civ. No. 84-017.

Gibbons, Chief Judge and Stapleton and Mansmann Circuit Judges.

Author: Gibbons

Opinion OF THE COURT

GIBBONS, Chief Judge:

Standby Power Supplies, Inc. (Standby) appeals from summary judgment in a third party indemnity action, enforcing its contractual duty to indemnify Hess Oil Virgin Islands Corporation (Hess), and from a supplemental judgment awarding attorney's fees to Hess. Since we review a summary judgment our review is plenary.

At issue is an indemnity clause contained in a contract for manpower between a company "contracting-out" for labor and services (here, Hess) and a general contractor/labor supplier (here, Standby). We read the contract to express the intent that the duty to indemnify extends to stipulated judgments. We further conclude that the duty to pay attorney's fees follows the duty to indemnify. Therefore, we will affirm the summary judgment, enforcing Standby's duty to indemnify, and the supplemental judgment awarding Hess attorney's fees.

I.

The Facts

In 1981, Hess and Standby entered into a contract whereby Standby agreed to provide millwright manpower to Hess at its oil refinery on St. Croix. The parties expressed their agreement in a standard form contract drafted by Hess which contained the following clause requiring Standby to:

indemnify, exonerate, and hold harmless [Hess] against loss, damage, liability or expense by reason of any suits, claims, demands, judgments or causes of action for personal injury (including death) or property damage (including property of the parties) arising out of or in any way in consequence of the performance hereunder by [Standby] except that in no instance shall [Standby] be held responsible for any liability, claim, demand or cause of action attributable solely to the negligence of [Hess].

The contract further required Standby to procure worker's compensation insurance and insurance for certain risks.

In 1982 Robert Bainville, one of the millwrights hired by Standby and provided by Standby to work at Hess's plant pursuant to the agreement, was injured on the job. Bainville subsequently filed a personal injury suit against Hess for failure to provide proper supervision and failure to warn. Bainville brought the suit against Hess on the assumption that Hess did not assume the status of Bainville's employer but rather stood in relation to Bainville as the owner of the premises and, therefore, was not protected from liability to suit in negligence by the Worker's Compensation Act.

Upon notice of the personal injury action against it, Hess tendered the defense to Standby, relying on their hold harmless-indemnity agreement. Standby refused to accept the tender of defense, although it did proceed to assist in Hess's preparation of its own defense. Following Standby's refusal to take over the defense, Hess filed a third-party indemnity action against Standby on the theory of an express contractual duty to indemnify. The third-party indemnity action was severed prior to the trial of the primary lawsuit. Before and during the course of the trial, counsel for Bainville and Hess maintained settlement negotiations, during which Bainville made settlement demands, first for $300,000, then for $200,000. Hess offered Standby the opportunity to approve the lower demand for $200,000, but Standby stated that it refused to contribute more than $25,000 to a settlement. Subsequent to Standby's refusal, during jury deliberations, Hess reached a conditional settlement with Bainville for $175,0000 -- payment of that amount being conditioned on allowing the jury to reach a verdict on the allocation of negligence for the sole purpose, approved by the district court, of determining ...


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