Complicated facts but easily understood legal standards were presented in Breaux v. Halliburton Energy Serv., Inc., No. 04-1636, 2009 U.S. Dist. LEXIS 112374 (E.D. La. Dec. 2, 2009).
Era Aviation, Inc., a subsidiary of Rowan Companies, Inc., transported oil field workers by helicopter to an offshore drilling vessel in the Gulf owned by Unocal. Halliburton Energy Services, Inc. supplied employees to Unocal to work on the offshore vessel. On March 23, 2004, two crew members and eight passengers, including four employees of Halliburton, were killed in a crash while attempting to fly to the drilling vessel.
By agreement, Rowan (with its subsidiary, Era) and Halliburton apportioned their respective liabilities when Halliburton's personnel were located on Rowan's property to provide services for the same customer on a project. Moreover, Halliburton agreed to hold harmless and indemnify Rowan and Era against claims arising from such circumstances and to name Rowan and Era as additional insureds in its liability policy. Paragraph 6 of the agreement required Halliburton to secure the following endorsement: "to the extent such party has assumed liability hereunder, name the other party and its parent, subsidiary, and affiliated companies as an additional insured." Finally, Halliburton's policy with ACE American Insurance included an endorsement providing that where Halliburton executed a contract requiring the other party to be named as an additional insured, the policy would honor the agreement.
The widow of one of Halliburton's employees killed in the crash sued Era and Rowan. Era and Rowan filed a third-party complaint against Halliburton seeking defense, indemnity and additional insured status under the Rowan/Halliburton agreement.
In a motion for summary judgment, Era and Rowan contended that as additional insureds, they were entitled to a defense in the underlying suit. Although the policy included an aircraft exclusion, it expressly did not apply to "liability assumed under any 'insured contract' for the ownership, maintenance or use of aircraft." Halliburton argued the exception to the aircraft exclusion was inapplicable because Era and Rowan's liability did not arise from their assumption of a third party's tort liability under a contractual agreement, but from direct tort liability based on their ownership and operation of the helicopter.
The court disagreed, determining that Era and Rowan were additional insureds under Halliburton's policy. Moreover, the Rowan/Halliburton agreement was an insured contract. Under the agreement, Halliburton held Era and Rowan harmless for tort liability to Halliburton's employees and assumed liability for claims arising out of injury to Halliburton's employees. Accordingly, the exception to the aircraft exclusion applied.
