LM Insurance v Dubuque Barge and Fleeting Service Comapny

Filing 31

ORDER granting 20 Motion for Summary Judgment; denying 21 Motion for Summary Judgment. Signed by Magistrate Judge Mark A Roberts on 3/8/2019. (pac)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
EASTERN DIVISION
LM INSURANCE CORPORATION,
Plaintiff,

No. 17-CV-1035-MAR
RULING ON MOTIONS FOR
SUMMARY JUDGMENT

vs.
DUBUQUE BARGE AND FLEETING
SERVICE COMPANY d/b/a NEWT
MARINE SERVICE,
Defendant.

____________________
I. INTRODUCTION
This matter is before the Court on (1) Plaintiff LM’s motion for summary
judgment (Doc. 21) and (2) Defendant Newt Marine’s motion for summary judgment
(Doc. 20). Each party has filed a resistance to the other’s motion. (Docs. 22, 23.) Each
party has filed a reply brief in support of its own motion. (Docs. 24, 25.) The Court
held oral arguments February 25, 2019. The matter is fully submitted.
Plaintiff Liberty Mutual Insurance Corporation (“LM”) commenced this action by
filing a complaint on December 20, 2017. (Doc. 1.) LM’s Complaint asserts that
Defendant Dubuque Barge and Fleeting Service Company d/b/a Newt Marine Services
(“Newt Marine”) breached the parties’ contract to provide workers’ compensation
insurance because Newt Marine failed to pay workers’ compensation insurance
premiums. The dispute concerns whether Newt Marine is required to pay premiums for
employees who are classified as seamen under the Jones Act.

1

Pursuant to the scheduling order and discovery plan of March 30, 2018 (Doc. 12),
the parties unanimously consented to disposition by a United States Magistrate Judge,
and the case was subsequently reassigned to me. See 28 U.S.C. Section 636(c)(3).
II. SUMMARY JUDGMENT STANDARD
Any party may move for summary judgment regarding all or any part of the claims
asserted in a case. Fed. R. Civ. P. 56(a). Summary judgment is appropriate when “the
pleadings, depositions, answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986).
A material fact is one “that might affect the outcome of the suit under the
governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, “the
substantive law will identify which facts are material.” Id. Facts that are “critical” under
the substantive law are material, while facts that are “irrelevant or unnecessary” are
not. Id. “An issue of material fact is genuine if it has a real basis in the
record,” Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir. 1992) (citing Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)), or “when ‘a
reasonable jury could return a verdict for the nonmoving party’ on the question,” Woods
v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005) (quoting Anderson, 477
U.S. at 248)). Evidence that only provides “some metaphysical doubt as to the material
facts,” Matsushita, 475 U.S. at 586, or evidence that is “merely colorable or is not
significantly probative,” Anderson, 477 U.S. at 249-50 (internal citation omitted), does
not make an issue of material fact genuine. Put another way, “‘[e]vidence, not
contentions, avoids summary judgment.’” Reasonover v. St. Louis Cty., 447 F.3d 569,
578 (8th Cir. 2006) (quoting Mayer v. Nextel W. Corp., 318 F.3d 803, 809 (8th Cir.
2003)).

The parties

“may

not merely

2

point

to unsupported

self-serving

allegations.” Anda v. Wickes Furniture Co., 517 F.3d 526, 531 (8th Cir. 2008) (citation
omitted).
As such, a genuine issue of material fact requires “sufficient evidence supporting
the claimed factual dispute” so as to “require a jury or judge to resolve the parties’
differing versions of the truth at trial.” Anderson, 477 U.S. at 249 (quotations omitted).
The party moving for entry of summary judgment bears “the initial responsibility of
informing the district court of the basis for its motion and identifying those portions of
the record which show a lack of a genuine issue.” Hartnagel, 953 F.2d at 395
(citing Celotex, 477 U.S. at 323). Once the moving party has met this burden, the
nonmoving party must go beyond the pleadings and by depositions, affidavits, or
otherwise, designate specific facts showing that there is a genuine issue for trial. Mosley
v. City of Northwoods, 415 F.3d 908, 910 (8th Cir. 2005). The nonmovant must show
an alleged issue of fact is genuine and material as it relates to the substantive law. Id. at
910-11. If a party fails to make a sufficient showing of an essential element of a claim
or defense with respect to which that party has the burden of proof, then the opposing
party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 322.
In determining if a genuine issue of material fact is present, the court must view
the evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S.
at 587-88. Further, the court must give the nonmoving party the benefit of all reasonable
inferences that can be drawn from the facts. Id. However, because the court views “the
facts in the light most favorable to the nonmoving party, [the court does] not weigh the
evidence or attempt to determine the credibility of the witnesses.” Kammueller v. Loomis,
Fargo & Co., 383 F.3d 779, 784 (8th Cir. 2004) (citation omitted). Instead, “the court’s
function is to determine whether a dispute about a material fact is genuine.” Quick v.
Donaldson Co., 90 F.3d 1372, 1377 (8th Cir. 1996).

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On cross motions for summary judgment, the “court must rule on each party’s
motion on an individual and separate basis, determining, for each side, whether a
judgment may be entered in accordance with the Rule 56 standard.” 10A Charles Alan
Wright et al., Federal Practice and Procedure § 2720 (3d ed. 1998). When the parties
seek summary judgment on some of the same issues, the court may consider all the
parties’ arguments as to each issue, keeping in mind the separate inferences that are to
be drawn from each motion. See Wright v. Keokuk Cty. Health Ctr., 399 F. Supp. 2d
938, 946 (S.D. Iowa 2005). In the instant case, virtually all of the relevant facts are not
in dispute. Where an objection is raised to any statement of a material fact, the dispute,
for the most part, concerns the legal effect of a certain fact or facts – not about the facts
themselves.
III. RELEVANT FACTS
Newt Marine, an Iowa Corporation, is engaged in marine construction work,
mostly conducted on a floating plant and dredge barge with a tug boat.

LM is a

corporation that sells, among other things, workers’ compensation insurance of the type
that Iowa employers are required to maintain. This case involves workers’ compensation
insurance policies issued by LM to Newt Marine.
At the time the policies were issued, LM was a servicing carrier who issued
workers’ compensation insurance through Iowa’s state-administered assigned risk plan.
See Iowa Code § 515A.15. As LM describes it, employers who cannot obtain workers’
compensation insurance on the voluntary market apply for insurance through Iowa’s
assigned risk plan. A participating insurer is then randomly assigned and issues the policy
to the employer. (Doc. 21-1 at 2.) There is no opportunity to investigate or engage in
underwriting prior to issuing the policy. The insurer issues the policy based solely on
information supplied by the employer and an estimated premium deposit. However, the

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employer is subject to audit by the insurer to determine the actual premium owed based
on the risk actually undertaken:
The final premium will be determined after this policy ends by using the
actual, not the estimated, premium basis and the proper classifications and
rates that lawfully apply to the business and the work covered by this policy.
If the final premium is more than the premium you paid to us, you must
pay us the balance.
(Doc. 21-3 at 28 (Policy, Pt. Five ¶ E).) The policy further permits LM to charge a
premium “for all other persons engaged in work that could make us liable.” (Id. at 27 ¶
C2.)
LM issued Newt Marine three workers’ compensation policies between May 4,
2013 and February 1, 2016 as part of Iowa’s assigned risk plan. The policies gave LM
the right to examine and audit Newt Marine’s records relating to the policies and
determine the final premium after the policy period. The final premium is determined
after [each] policy ends by using the actual, not the estimated, premium
basis and the proper classifications and rates that lawfully apply to the
business and work covered by [each] policy. If the final premium is more
than the premium [the insured] paid to [LM], [the insured] must pay [LM]
the balance.
(Doc. 23-1 ¶ 5.) Each policy further provided that “[i]nformation developed by audit
will be used to determine final premium,” and that LM can charge a premium. (Doc.
21-3 at 28 (Policy, Pt. Five ¶ G).)
Each policy expressly excluded from coverage: “[b]odily injury to a master or
member of the crew of any vessel.” (Doc. 20-4 at 35 (Policy, Pt. Two ¶ C10).) Masters
or members of any crew of any vessel, otherwise known as “seamen,” are covered under
a separate protection and indemnity policy maintained by Newt Marine with AIG.
Newt Marine contends that all of its deckhands, operators, pilots, and boat
engineers were excluded from the LM policies because they were classified by Newt

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Marine as seamen. (Doc. 22-1 ¶ 7.) In response, LM asserts that those individuals
“were supposed to be excluded from the policy however [Newt Marine] still submitted
claims on these individuals to LM Insurance, claims which LM Insurance paid on.” (Id.)
Three injuries to Newt Marine employees were reported to LM. These employees were
classified as seamen and employed as “operators,” but asserted workers’ compensation
claims and received benefits under the Iowa Workers’ Compensation Statute. 1 LM
conducted audits in 2013, 2014, and 2015 to calculate final premiums. The audits
specifically excluded the three seamen who were compensated under the Iowa workers’
compensation statute and all of whom were identified as “operators.” At all material
times, deckhands, operators, pilots, and boat engineers employed by Newt Marine were
masters or members of a vessel excluded from coverage under each of the LM policies
at issue and were subject to the Jones Act based on their duties and responsibilities. LM
performed an audit following the end of the policies and decided to assess a total
additional premium of $1,290,927.58, plus interest. (Doc. 21-2 ¶ 14.) This amount was
determined by charging a premium for the seamen who were excluded under the policies.
In fact, the only relief LM requests is damages for unpaid premiums for “all other persons
engaged in work that could make us liable.” (Doc. 1 ¶¶ 22, 36, 37, 51, 52.) Plaintiff
LM’s Complaint does not state any claim to recover amounts it paid in claims for
employees that should have been excluded under the policies.
IV. ANALYSIS
A.

The alleged breach of contract.
The Iowa Supreme Court has explained the elements of a breach of contract action:
To prevail on a breach of contract claim, [the claimant] [i]s required to
prove: (1) the existence of a contract, (2) the terms and conditions of the
contract, (3) that [the claimant] has performed all the terms and conditions

1

LM clarified at oral argument that it ultimately paid the claims for these workers and was not
reimbursed by Newt Marine or AIG.

6

required under the contract, (4) the [opposing party’s] breach of
the contract in some particular way, and (5) that [the claimant] has suffered
damages as a result of [the opposing party’s] breach.
Royal Indem. Co. v. Factory Mut. Ins. Co., 786 N.W.2d 839, 846 (Iowa 2010) (citing
Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa 1998));
see also Hagen v. Siouxland Obstetrics & Genecology, P.C., 934 F. Supp. 2d 1026, 1053
(N.D. Iowa 2013) (citing Royal Indem., 786 N.W.2d at 846, for the elements of a breach
of contract claim under Iowa law); Nationwide Agribusiness Ins. Co. v. SMA Elevator
Constr., Inc., 816 F. Supp. 2d 631, 688 (N.D. Iowa 2011) (citing Molo Oil Co., 578
N.W.2d at 224, for the same elements).
Of these elements, the existence of a breach and the concomitant damages remain
in dispute. It is undisputed that three insurance policies were issued and are binding
contracts. The terms and conditions of those contracts are apparent. The only issues for
resolution are (1) whether Newt Marine’s refusal to pay premiums to LM relating to
certain employees constitutes a breach and, if so, (2) what damages is LM entitled to
recover.
B.

“Seamen” under the Iowa Workers’ Compensation statute and the Jones Act.
Iowa law requires employers to maintain workers’ compensation insurance on their

employees. Iowa Code § 85. One exception to this requirement is relevant to this case.
Iowa Code § 85.1(6) prohibits an employer from assuming liability for any employee
“with respect to whom a rule of liability or method of compensation is established by the
Congress of the United States.” The Jones Act establishes such a rule of liability of
method or compensation:
A seaman injured in the course of employment or, if the seaman dies from
the injury, the personal representative of the seaman may elect to bring a
civil action at law, with the right of trial by jury, against the employer.

7

Laws of the United States regulating recovery for personal injury to, or
death of, a railway employee apply to an action under this section.
46 U.S.C. § 30104. The Iowa Supreme Court has read Iowa Code § 85.1(6) and this
provision of the Jones Act to deprive the Iowa Workers’ Compensation Commission of
subject matter jurisdiction over such claims. Therefore, a seaman cannot recover Iowa
workers’ compensation benefits. Harvey’s Casino v. Isenhour, 724 N.W.2d 705. 70809 (Iowa 2006). Because of this restriction, employers obtain separate coverage for
claims that may arise from injuries to seamen, as Newt Marine did with AIG.
The term “seaman” is not defined by the Jones Act, but is determined by the
employee’s duties and connection to a vessel in navigation. Id. at 707 (citing Chandris,
Inc v. Latsis, 515 U.S. 347, 368 (1995)). An employee will generally not qualify as a
seaman under the Jones Act if he spends “less than about 30 percent of his time in the
service of a vessel in navigation.” Chandris, 515 U.S. at 371.
C.

LM’s payment of claims to excluded seamen.
In this case, both parties agree that LM paid claims that it was not obligated to pay

under the policy language because the injured employees were seamen and thus excluded.
It is not entirely clear why LM paid claims relating to employees excluded from its
policies. LM argues that it had a duty to pay the claims “based on the information
provided by the insured or risk a bad faith claim.” (Doc. 22 (citing Boylan v. American
Motorist Ins. Co., 489 N.W.2d 742, 744 (Iowa 1992)). Other than its reliance on the
assertions by Newt that the claims should be covered by the LM workers’ compensation
policy, LM does not explain why it paid claims of employees who were unequivocally
listed as seamen by Newt Marine, as well as on its own audits.
Newt Marine’s argument does not provide much more explanation regarding why
employees classified as seamen were compensated under the LM workers’ compensation
policy. It does appear that the duties of those workers may have changed during the

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course of their employment—or at least that was the position that Newt Marine’s manager
took. (Doc. 22 at 2-3; Doc. 21-3 at 7-8 (Holtrup Dep.).)
At oral argument, LM’s counsel stated that the seamen’s classification was not
litigated in the course of the workers’ compensation claims. Iowa workers’ compensation
law provides a mechanism whereby the issue of coverage can be determined in the course
of a claim. In fact, Harvey’s Casino v. Isenhour arose when the injured employees sought
workers’ compensation benefits and the employers successfully asserted that the
employees’ status as seamen removed the case from the Workers’ Compensation
Commission’s subject matter jurisdiction. 724 N.W.2d 705, 709 (Iowa 2006); see also,
Bluff Harbor Marina, Inc. v. Wunnenberg, 801 N.W.2d 627, 2011 WL 2041833, at **1,
3 (Iowa Ct. App., May 25, 2011) (issue arose when surviving spouse applied for death
benefits with Iowa Workers’ Compensation Board; court held that because deceased
husband was not an employee covered under federal Longshore and Harbor Workers’
Compensation Act, Iowa Code § 85.1(6) did not deprive Workers’ Compensation
Commissioner of subject matter jurisdiction).
Thus, LM could have, but did not, challenge the status of the seamen in the course
of the workers’ compensation claims and it does not seek to recover the amounts it paid
on claims that were excluded under the policy. LM does not offer a satisfactory
explanation for its decision to pay the workers’ compensation claims for three employees
classified as seamen despite the policy exclusion. LM states that refusing to pay the
benefits claims for could have subjected it to bad faith claims. Newt Marine points out
that there is nothing to prevent LM from raising the policy exclusion to any claim by an
injured seaman. Ultimately, LM has not shown there is a genuine issue of disputed fact
regarding whether it was prevented from contesting the seamen’s status or that it was
somehow estopped from asserting the exclusion for seamen in subsequent cases.

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D.

The “could make us liable” clause.
Rather than seek to recover amounts paid for claims it did not owe or seek

premiums for the three employees who were improperly classified, LM takes the position
that it is entitled to premiums on all excluded seamen employed by Newt Marine. LM
relies on the policy language in “PART FIVE—PREMIUM” paragraph C(2) (“Section
C2”) as the basis for its potential liability and for charging a premium to Newt Marine.
Section C2 provides:
C. Remuneration
Premium for each work classification is determined by multiplying a rate
times a premium basis. Remuneration is the most common premium basis.
This premium basis includes payroll and all other remuneration paid or
payable during the policy period for the services of:
1. all your officers and employees engaged in work covered by this policy;
and
2. all other persons engaged in work that could make us liable under Part
One (Workers Compensation Insurance) of this policy. If you do not
have payroll records for these persons, the contract price for their
services and materials may be used as the premium basis. This
paragraph 2 will not apply if you give us proof that the employers of
these persons lawfully secured their workers compensation obligations.
(Doc. 21-3 at 28 (Policy, Pt. Five ¶ C) (italics added).) LM’s argument regarding this
provision is as follows:
Given the nature of the NCCI 2 procedure, LM Insurance was not
able to classify [Newt Marine] employees themselves, but instead relied on
the information provided to them by [Newt Marine]. As a result, LM
Insurance faced exposure for employees that were not originally known to
be covered under LM Insurance policies and not properly reflected in the
premium.
[T]he three individuals that filed claims, Abitz, Jackson and
Cawthorn, create an exposure under the could-make-us-liable
2

NCCI is an abbreviation for National Council of Compensation Insurance. (Doc. 21-1 at 2.)

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section of the policy, so therefore we included them in all
other seamen since they fall within that category of – if we’re
going to pay claims on these three folks, there’s a potential to
pay claims on the rest of them, they create an exposure under
our policy, so we included them within the audit and charged
premium.
(Doc. 21-1 at 5 (citing LM Insurance Appendix [Doc. 21-3] at 8 ll. 9-18).)
LM seeks to support its position with cases arising out of disputes over premiums
charged for independent contractors. See e.g., Compassionate Care, Inc. v. Travelers
Indem. Co., 83 A.3d 647, 663 (Conn. App. Ct. 2013) (defendant may charge a premium
based on its risk exposure regardless of whether disputed individuals are classified as
employees or independent contractors); Nat’l Fire Ins. Co. of Hartford v. Beaulieu Co.,
59 A.3d 393, 399 (Conn. App. Ct. 2013) (independent contractors all fit within Part Five
C2 because they engaged in work that could make the plaintiff liable to provide workers’
compensation benefits); Louisiana Workers’ Comp. Corp. v. N/C Materials, Inc., 858
So. 2d 534, 536 (whether truck drivers were employees or independent contractors was
immaterial within the context of the legal issue in this case).
LM does not cite any case outside the independent contractor context where
Section C2 was applied. LM argues, “Nothing in the insurance policy limits section C2
to subcontractors and independent contractors.” (Doc. 25 at 2.) The language of the last
two sentences of Section C2, however, seems to show that the drafters had the issue of
independent contractors in mind. The second to last sentence refers to the “contract price
for their services.” The last sentence refers to the employer of “these persons” as though
it means someone other than the insured employer. Although LM may be right that
Section C2 does not expressly limit its application to subcontractor or independent
contractors, the language and the cases discussing it explain the risk it was designed to
address. C1 includes all employees engaged in work covered by the policy. C2 includes

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“all other persons engaged in work that could make [the insurer] liable. (Doc. 21-3 at
27 (Policy, Pt. Five ¶ C2) (emphasis added).)
In Beaulieu the court held that the employer could be held liable for non-employees
(uninsured subcontractors) under certain circumstances applicable to the Connecticut
workers’ compensation statute. 3 59 A.3d at 401. In N/C Materials, the employer could
be held liable for premiums for certain non-employees under an endorsement to the policy
that provided:
The [insured] shall include in the gross payroll for the reporting period all
payments made to contractors performing any work for the [insured] which
is a part or process of the trade or business of the [insured] and shall pay
premium thereon calculated at the rate or rates named in the policy and any
later endorsements, with the exception that the [insured] shall not be
required to report as payroll any payments made to contractors who have
furnished to the [insured] certificates of insurance showing workers
compensation insurance coverage for the contractor’s Louisiana employees
during the reporting period.
858 So. 2d at 536 (emphasis and brackets in original). In both cases, the issue at bar was
the payment of premiums for non-employees for whom the insurer could be liable to pay
benefits. Neither case involved employees who were expressly excluded by the policy
language and whose coverage was prohibited by the state workers’ compensation statute.

3

The statute provides:
When any principal employer procures any work to be done wholly or in part for
him by a contractor, or through him by a subcontractor, and the work so procured
to be done is a part or process in the trade or business of such principal employer,
and is performed in, on or about premises under his control, such principal
employer shall be liable to pay all compensation under this chapter to the same
extent as if the work were done without the intervention of such contractor or
subcontractor.
Conn. Gen. Stat. § 31-291; Beaulieu, 59 A.3d at 401. There does not appear to be an analogous
Iowa statute that could make an Iowa employer liable for its non-employees.

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The case at bar is distinguishable from the cases LM cites not merely because it involves
undisputed employees rather than independent contractors, but because the status of the
employees for whom LM paid claims changed during the policy period. It appears LM
may have paid these claims (or at least LM could be made liable for these claims) because
the classification of these three individuals may have changed during the course of their
employment. While the parties’ statements of facts and the briefs do not address the
issue, the correspondence between the parties in LM’s Appendix at Doc. 22-2, does.
According to the correspondence, LM continued to take the position that the three claims
should be “handled as Jones Act seamen claims under the insured’s P&I [policy].” (Doc.
22-2 at 7.) Newt Marine’s General Manager Marcus Murphy responded with a discussion
of the applicability of the Jones Act and workers’ compensation coverage. (Id. at 3-5.)
In pertinent part, Mr. Murphy asserted:
We believe, further, that case law allows an employee to be re-assigned
at any time and coverage, whether Workers’ Compensation or Jones
Act, depends on the employee’s assigned task at the time of injury.
Please see below some case law in this area. . . . Again, as mandated
by the Supreme Court in case law, they have made it clear that the
correct approach is to examine the employee’s basic job assignment as
it existed at the time of an injury. The basic job assignments of Mr. Abitz
and Mr. Jackson were changed away from seaman duties at the time of
their injuries.
(Id. at 4-5) (emphasis added). The Court sees no reason to disagree with Newt Marine’s
position that coverage is determined at the time of an injury and LM asserts none. Despite
how an employee may have been classified to obtain insurance, whether an employee is
excluded as a seaman depends on the employee’s actual job assignment at the time of
injury.
Similarly, whether the employer owes a premium depends on the employee’s
actual classification during the policy period. The audit procedures to determine the final

13

premium based on actual classification contemplate this process. The audit procedure
allows LM to investigate and address the problem it is complaining about. In other
words, by auditing its insured, LM can determine if the premium matches the actual risk
it assumed. LM cites American Zurich Ins. Co. v. MVT Servs. Inc. for the proposition
that “[i]n a retrospective premium audit, the issue is not whether the worker would have
certainly been covered had he filed a claim on the insurance policy; rather, the audit is
an after-the-fact analysis designed to examine the actual risk which [the insurance
company] undertook during the policy period.” M2011-0266-COA-R3-CV, 2012 WL
3064650, at *12 (Tenn. Ct. App. Jul. 27, 2012) (bracketed information in original).
LM asserts, “Based on Dubuque Barge’s own original position, LM Insurance
would have to include all seamen in its risk assessment coverage because each could be
covered by the Workers’ Compensation policy depending on what task the employee was
doing at the time of injury.” (Doc. 22 at 3.) This overstates the actual risk LM was
exposed to. The policy provides for the determination of the final premium after the
policy ends “by using the actual, not the estimated, premium basis and the proper
classifications and rates that lawfully apply to the business and work covered by this
policy.” (Doc. 21-3 at 28 (Policy, Pt. Five ¶ E).) LM has audit rights under the policies
that allow it to examine and audit all records including “ledgers, journals, registers,
vouchers, contracts, tax reports, payroll and disbursement records, and programs for
storing and retrieving data.” (See e.g., Id. ¶ G; Doc. 20-4 at 38 (Policy, Pt. Five ¶ G).)
Presumably this is the type of information LM obtained or could have obtained to create
the audit reports shown in pages 146-191 of Newt Marine’s Appendix. (Doc. 20-4 at
146-91.) More to the point, this is the type information that would permit LM to ascertain
if Newt Marine’s employees—including seamen—were placed in the “proper
classifications” to determine the final premium. (Id. at 38 (Policy, Pt. Five ¶ E).)

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Requiring Newt Marine to pay premiums for workers who were properly classified
as seamen but who might have been reassigned to covered classifications does not match
the “actual, not the estimated, premium basis and the proper classifications and rates that
lawfully apply to the business and the work covered by this policy.” (Doc. 21-3 at 28
(Policy, Pt. Five ¶ E).) The mere possibility that Newt Marine might reassign workers
does not increase LM’s actual “premium basis” any more than the possibility that LM
might hire additional covered employees. If Newt Marine hired more covered employees
during a policy period that were not part of the estimated premium, those new workers
would nevertheless be covered and the premium reflected in the “premium basis;” i.e.,
the “payroll and all other remuneration paid or payable during the policy period for the
services of” Newt Marine’s employees. (See e.g., Doc. 20-4 at 117 (Policy, Pt. Five ¶
C).) Similarly, Newt Marine might reassign clerical workers to be carpenters during a
policy period. Because of the higher rate for carpenters, (see id. at 97) such a change
would be included in the final premium basis and reflect the actual risk assumed with
respect to the workers’ proper classifications.
Neither party claims Section C2 is ambiguous or even asserts there is any difficulty
in interpreting this policy language. “Insurance policies are contracts between the insurer
and the insured and must be interpreted like other contracts, the object being to ascertain
the intent of the parties.” Talen v. Employers Mut. Cas. Co., 703 N.W.2d 395, 407
(Iowa 2005) (citing Ferguson v. Allied Mut. Ins. Co., 512 N.W.2d 296, 299 (Iowa
1994)). “Generally, contracts are interpreted based on the language contained within
the four corners of the document.” Clinton Physical Therapy Servs., P.C. v. John Deere
Health Care, Inc., 714 N.W.2d 603, 615 (Iowa 2006) (citing Smidt v. Porter, 695
N.W.2d 9, 21 (Iowa 2005)). When a contract’s terms are unambiguous and their
meanings plain, the court need not engage in contract interpretation or construction.
See Allen v. Highway Equip. Co., 239 N.W.2d 135, 139 (Iowa 1976). Rather,“[i]t is a

15

fundamental and well-settled rule that when a contract is not ambiguous, [the court] must
simply interpret it as written.” Smidt, 695 N.W.2d at 21 (citing State Pub. Def. v. Iowa
Dist. Ct., 594 N.W.2d 34, 37 (Iowa 1999); Rogers v. Maryland Cas. Co., 109 N.W.2d
435, 437 (Iowa 1961)).

No reasonable interpretation of Section C2 would require

payment of additional premiums because the insurer “could be held liable” if the express
policy language excluding seamen is not enforced and if Iowa Code Section 85.1(6) is
ignored.
Based on the foregoing, the Court concludes that LM is not entitled to recover
from Newt Marine the additional premiums it seeks for all of its seamen under Section
C2 on the grounds they were “persons engaged in work that could make us liable under
Part One (Workers Compensation Insurance) of this policy.”
LM’s Complaint states a claim solely for unpaid premiums. As stated above, it
does not seek to recover amounts it may have paid for claims or otherwise state a claim
for damages. In support of its motion for summary judgment, LM appears to have
recalculated Newt Marine’s final premium by including all formerly excluded seamen in
each of the three policy years. For the reasons set forth above, the Court concludes that
LM is not entitled to recover on the broad claim that all of Newt Marine’s seamen should
have been included in the premium calculation.

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V.

CONCLUSION

For the reasons set forth herein:
1. Plaintiff’s Motion for Summary Judgment (Doc. 21) is DENIED.
2. Defendant’s Motion for Summary Judgment (Doc. 20) is GRANTED.
3. Because this Order disposes of all pending claims, the trial of this case currently
scheduled for April 29, 2019 is now canceled.
4. The Clerk shall enter judgment in accordance with this Order.
IT IS SO ORDERED this 8th day of March, 2019.

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