JACKSONVILLE SHIPYARDS, INC., APPELLANT,
v.
OSWEGO PETROLEUM CARRIERS, INC., A CORPORATION, AND MARINE TRANSPORT LINES, INC., A CORPORATION, APPELLEES
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
Jacksonville Shipyards appeals a judgment denying its claim for attorney's fees and costs in a maritime indemnity dispute. The court held that a clear indemnity clause in the repair contract entitled Shipyards to recover attorney's fees and costs as an incident of indemnity, and reversed the lower court's denial of this award.
Yes. The court held that attorney's fees and costs are generally an incident of indemnity under federal maritime law, and the express indemnity provision in the 'Red Letter' clause provided sufficient predicate for an award of attorney's fees and costs absent explicit contractual language negating their application.
[1] A "Red Letter" clause in a maritime contract, which limits liability for defective workmanship or material and provides for indemnification, is generally valid and enforc…
[2] Attorney's fees and costs are typically considered an incident of indemnity unless the agreement explicitly provides otherwise.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“attorney's fees and costs are generally an incident of indemnity. The inclusion of attorney's fees for indemnity may be assumed to be the parties' intent unless the agreement explicitly provides otherwise.”
Establishes the legal rule that attorney's fees are presumptively included in indemnity provisions absent contrary language
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceSeaman Chien-Yun Chu was injured falling from a lifeboat that Shipyards had serviced on a vessel owned and operated by Oswego. Chu sued both parties; …
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Explore caselaw by topic → Browse Federal Maritime Law cases and more on FLexlaw
WENTWORTH, Judge.
Appellant seeks review, and appellees seek review by cross-appeal, of a partial summary judgment and an order entered after trial whereby each party’s claim was denied and it was decreed that each party “take nothing” from the other. We find that the court erred in denying appellant’s claim for attorney’s fees and costs, and we otherwise affirm the order appealed.
Chien-Yun Chu was a seaman aboard a vessel which was owned and operated by appellee and which was repaired by appellant. Chu brought an action against both appellant and appellee after he sustained injury upon falling from a lifeboat which appellant had serviced; appellant and appellee both cross-claimed against the other for indemnity/contribution. Appellee eventually settled with Chu, obtaining a release of liability effective as to both appellee and appellant.
Although Chu was no longer a party to the action, appellant’s and appellee’s cross-claims remained outstanding. The court entered summary judgment in favor of appellant upon appellee’s claim for indemnity, and the cause otherwise proceeded to trial. The jury returned a verdict finding that appellee was 60% negligent, and appellant 40% negligent, and the court directed verdict in appellant’s favor on the issue of whether an exculpatory and indemnity clause in the contract between the parties precluded recovery by appellee. The court then entered an order finding that each party should “take nothing” from the other. The contract between the parties consists of numerous documents prepared by appellant, some of which contain language in red type providing that:
... liability for defective workmanship or material shall be limited strictly to ... repair or replacement, and ... we shall have no liability of any kind to any party for damages directly or indirectly caused by defective workmanship or material. For personal injury, death, or damage to the vessel or any other property, not caused by defective workmanship or material, we shall be liable only for damages affirmatively shown to have been caused by our sole negligence. In no event shall we be liable for any consequential damages whatsoever.... The Customer agrees to indemnify and hold us harmless with respect to the above conditions.
Commonly known as a “Red Letter” clause, similar provisions have been held to be valid and enforceable as a matter of federal maritime law. See e.g., Alcoa Steamship Co. v. Charles Ferran and Co., 383 F. 2d 46 (5th Cir.1967). In the present case the clause is clear and unambiguous, and expressly provides for indemnification. As Perkins State Bank v. Connolly, 632 F. 2d 1306 (5th CCA 1980), indicates in discussing Florida law,1 attorney’s fees and costs are generally an incident of indemnity. The inclusion of attorney’s fees for indemnity may be assumed to be the parties’ intent unless the agreement explicitly provides otherwise. See E. C. Ernst Inc. v. Manhattan Construction Co. of Texas, 551 F. 2d 1026 rehearing denied in part, granted in part, 559 F. 2d 268 (5th CCA 1977), cert. denied, Provident Hospital v. Manhattan Construction, 434 U.S. 1067, 98 S.Ct. 1246, 55 L.Ed.2d 769 (1978). In the present case the express indemnity provision of the “Red Letter” clause is a suffi cient predicate for an award of attorney’s fees and costs, and the contract does not otherwise negate the application of the indemnity provision to attorney’s fees and costs. Appellant was therefore entitled to such an award, and the court erred in ruling to the contrary.
The order appealed is hereby amended so as to award appellant attorney’s fees and costs, and as amended the order is affirmed.
BOOTH and THOMPSON, JJ„ concur. . The parties agree that this maritime claim is governed by federal maritime law; however, to the extent that it does not conflict, state law may supplement the federal law in this area. See Powell v. Offshore Navigation Inc., 644 F. 2d 1063 (5th CCA 1981), fn. 5.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Alcoa S.S. Co., Inc. v. Charles Ferran & Co., Inc., 383 F.2d 46 (5th Cir. 1967)
- E. C. Ernst, Inc. v. Manhattan Constr. Co. OF Tex., 551 F.2d 1026 (5th Cir. 1977)
- E. C. Ernst, Inc. v. Manhattan Constr. Co. OF Tex., 559 F.2d 268 (5th Cir. 1977)
- Patterson v. Arkansas, 434 U.S. 1067 (U.S. 1978)
- O'Connor v. Washington, 434 U.S. 1067 (U.S. 1978)
- Perkins State Bank v. Connolly, 632 F.2d 1306 (5th Cir. 1980)
- Powell v. Offshore Navigation, Inc., 644 F.2d 1063 (5th Cir. 1981)