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Admiralty Law Keyed to Maraist
Signal Oil & Gas Co. v. The Barge W-701
Citation:
654 F.2d 1164 (1981)Facts
SLAM operated an oil production rig and pipeline in the Gulf of Mexico. Sun negotiated an agreement with SLAM to connect to their pipeline, with Sun agreeing to indemnify SLAM for any losses. Sun contracted with McDermott to handle the construction, and McDermott agreed to indemnify Sun. McDermott contracted with Williams for the use of a barge and crew. While operating near the SLAM platform, the Williams barge fouled anchor on SLAM’s pipeline. The barge superintendent, Southon, used a “dogging” technique to free the anchor, which ruptured the pipeline. SLAM’s production was interrupted, requiring substantial repairs. The district court found Williams solely at fault but allowed Williams to limit its liability to $450,000 (the value of the barge). With insurance coverage of only $500,000 subject to direct action, SLAM could not recover its full damages of $1,116,234.62 from Williams. The court held Sun liable to SLAM on its indemnity agreement and McDermott liable to Sun on its indemnity agreement.
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