Appeal from the United States District Court for the Southern District of Texas
Before DAVIS and JONES, Circuit Judges, and MILAZZO, District Judge. [*]
JONES, Circuit Judge
This case revolves around the terms of an indemnity agreement between Weeks Marine, Inc. ("Weeks Marine") and Standard Concrete Products, Inc. ("Standard Concrete"). In 2011, John Johnson, Jr., ("Johnson") filed suit in Alabama state court against several entities, including Weeks Marine and Standard Concrete, for the injuries that he allegedly sustained when he fell from his crane while working on the I-10 Mississippi River Bridge fender replacement and reconditioning project ("the Project"). In the present case, Weeks Marine, the general contractor on the Project, seeks a declaration that Standard Concrete, Johnson's employer, is contractually obliged to defend and indemnify it in the underlying state court action. Because the indemnity agreement is not applicable to the underlying suit, we affirm the judgment in favor of Standard Concrete.
Shortly after Weeks Marine was selected as general contractor for the Project, it accepted Standard Concrete's bid for the manufacture of pre-cast concrete fender modules. The parties executed a contract, which consists of two documents: Purchase Order No. 161845 ("Purchase Order") and the Additional Terms and Conditions ("Additional Terms"). The present dispute involves the following provisions from the contract:
Description of Material (Purchase Order): Seller (Standard Concrete) shall furnish all supervision, equipment, forms, materials, labor, supplies, fabrication, coatings, quality control, etc. to provide pre-cast fender modules.
Paragraph 2 (Purchase Order): Inserts: Buyer (Weeks Marine) to provide all inserts for shear keys and whalers and lift hardware. Seller (Standard Concrete) to install lift hardware to facilitate lifting and handling.
Paragraph 10 (Purchase Order): Property and Personal Liability: Seller (Standard Concrete) shall save harmless and indemnify Buyer (Weeks Marine) from and against all claims, suits (including counsel fees and other expenses), judgments and awards stemming from any damage to property or injury (including death) to persons (including any damage or injury to the property or the person of any employee of either Buyer or Seller which may be caused or alleged to have been caused in whole or in part by, or which may occur or be alleged to have occurred in connection with the execution of this Purchase Order by Seller (Standard Concrete), or the use of the items furnished hereunder, excepting Buyer's (Weeks Marine) sole negligence.
Paragraph 4 (Additional Terms): Indemnification will be limited to actual damages relating to workmanship of Seller's (Standard Concrete) product. In no event is Seller (Standard Concrete) liable for indirect or consequential damages. Total damages are limited to $500, 000.00.
Paragraph 6 (Additional Terms): It is mutually agreed that any provision in the purchase order which would modify, conflict with, or contradict any of these terms and conditions, shall be deemed to be null and void.
On March 10, 2009, seven months after the parties executed the contract, Johnson sustained the alleged injuries that form the basis of the underlying suit. In his state court pleadings, Johnson alleges that he fell from a "corner module" or "steel module" that was designed by Modjeski & Masters, Inc., manufactured by Helser Industries, Inc., and contracted for by Weeks Marine. The complaint describes the incident as occurring in the following manner:
[Johnson] was attempting to disassemble the corner module (hereinafter "corner module" or "steel module") by lifting it away from a concrete form using a crane. Mr. Johnson placed two eye-hooks in pre-drilled holes in the top of the steel module. However, the eye-hooks could not be secured from the top. Instead, Mr. Johnson had to secure the eye-hooks to the module by placing a nut on the eye-hooks from the underside. Unlike in other locations on that and other modules, there were no pre-welded nuts on the underside of the holes in the corner module where the eye-hooks were placed. When Mr. Johnson attempted to secure the eye-hook to the corner module, he fell approximately fourteen feet to the ground.
After Weeks Marine was served with Johnson's complaint, it sent demand letters to Standard Concrete, seeking defense and indemnification in the state court action. When Standard Concrete concluded that it had no duty to defend or indemnify, Weeks Marine sought declaratory relief in federal court, and Standard Concrete counter-claimed. Cross-motions for summary judgment were filed. The district court referred the motions to a magistrate judge, who issued a Report and Recommendation ("Report"), concluding that the court should grant Standard Concrete's motion for exoneration from ...