Hanover Insurance Company v. Superior Labor Services, Inc. et al

Filing 543

ORDER AND REASONS denying 531 Motion for Reconsideration. Signed by Judge Susie Morgan on 8/21/2017. (Reference: 16-2490)(clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HANOVER INSURANCE COMPANY,
Plaintiff

CIVIL ACTION

VERSUS

No. 11-2375 c/w 14-1930
14-1933, 16-2490

SUPERIOR LABOR SERVICES,
INC., ET AL.
Defendants

SECTION “E”

Applies to: 16-2490

ORDER AND REASONS

Before the Court is Allied Shipyard, Inc.’s motion for reconsideration. 1 On July 12,
2017, the Court granted Lexington Insurance Company’s motions for summary judgment
with respect to Allied’s status as an additional insured and with respect to Lexington’s
duty to defend Allied in the Adams and St. Pierre lawsuits as an additional insured under
the 2000–2001 and 2008–2009 insurance policies issued by Lexington to Masse
Contracting, Inc. 2 In Allied’s motion, it asks the Court to reconsider its ruling under Rule
59(e) of the Federal Rules of Civil Procedure.
Allied contends the Court committed manifest errors of law in granting
Lexington’s motions for summary judgment because (1) the Court ruled on the motions
for summary judgment before Allied had an opportunity to answer or to conduct
discovery on Lexington’s claims, (2) the Court ruled that Allied was not a “certificate
holder” under the 2000–2001 Lexington Policy, but Allied was not given the opportunity
to conduct discovery with respect to whether it was a “certificate holder,” and (3) the
Court failed to consider two Fifth Circuit cases when reaching its conclusion that

1
2

R. Doc. 531.
R. Doc. 509.

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Lexington’s 2008–2009 policy was “excess” to Allied’s primary insurance with the Gray
Insurance Company. 3
A motion for reconsideration pursuant to Rule 59(e) of the Federal Rules of Civil
Procedure “must clearly establish either a manifest error of law or fact or must present
newly discovered evidence and cannot be used to raise arguments which could, and
should, have been made before the judgment issued.” 4 A motion for reconsideration,
however, “is ‘not the proper vehicle for rehashing evidence, legal theories, or arguments
that could have been offered or raised before the entry of [the order].’” 5 “The Court is
mindful that ‘[r]econsideration of a judgment after its entry is an extraordinary remedy
that should be used sparingly.’” 6 “When there exists no independent reason for
reconsideration other than mere disagreement with a prior order, reconsideration is a
waste of judicial time and resources and should not be granted.” 7
In deciding motions under the Rule 59(e) standards, the courts in this district have
considered the following factors:
(1) whether the movant demonstrates the motion is necessary to correct
manifest errors of law or fact upon which the judgment is based;
(2) whether the movant presents new evidence;
(3) whether the motion is necessary in order to prevent manifest injustice;
and
(4) whether the motion is justified by an intervening change in the
controlling law. 8
R. Doc. 531-1 at 2–4.
Schiller v. Physicians Res. Grp. Inc., 342 F.3d 563, 567 (5th Cir. 2003) (citations omitted) (internal
quotation marks omitted).
5 Lacoste v. Pilgrim Int’l, No. 07-2904, 2009 WL 1565940, at *8 (E.D. La. June 3, 2009) (Vance, J.)
(alteration in original) (quoting Templet v. HydroChem Inc., 367 F.3d 473, 478–79 (5th Cir. 2004)).
6 Castrillo v. Am. Home Mortg. Servicing, Inc., No. 09-4369, 2010 WL 1424398, at *4 (E.D. La. April 5,
2010) (alteration in original) (quoting Templet, 367 F.3d at 479).
7 Lightfoot v. Hartford Fire Ins. Co., No. 07-4833, 2012 WL 711842, at *3 (E.D. La. Mar. 5, 2012) (Brown,
J.).
8 Castrillo, 2010 WL 1424398, at *4. The Court notes that the time limits of Rule 59 do not apply in this
matter because the order appealed is interlocutory. Rules 59 and 60 set forth deadlines for seeking
3

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I.

The Court Did Not Err in Granting Lexington’s Motions for Summary
Judgment Before Allied was Afforded the Opportunity to Answer and
to Conduct Discovery
Allied first argues the Court committed manifest legal error in granting Lexington’s

motions for summary judgment before Allied was afforded an opportunity to answer or
to conduct discovery on Lexington’s claims asserted against Allied. 9 Lexington filed its
motions for summary judgment on January 23, 2017. 10 Allied filed responses to the
motions for summary judgment on February 6, 2017. 11 On February 14, 2017, Lexington
filed reply memoranda in support of its motions for summary judgment. 12 Over
Lexington’s objection, 13 the Court allowed Allied to file a supplemental opposition to
Lexington’s motion for summary judgment. 14 On June 23, 2017, Allied sought leave of
Court to file yet another memorandum in opposition to Lexington’s motions for summary
judgment, which the Court granted. 15
Six months after Lexington’s motions for summary judgment were filed, and after
Allied was allowed to file three memoranda in opposition, Allied filed a motion to strike
Lexington’s motions for summary judgment, arguing Lexington and Allied were not
adverse parties because there was no claim pending between them. 16 Realizing that this
was, in fact, the case, on July 2, 2017 the Court ordered Lexington to request leave of court

reconsideration of final judgments. See Carter v. Farmers Rice Milling Co., Inc., 33 F. App’x 704, at *2 (5th
Cir. 2002) (per curiam); Lightfoot, 2012 WL 711842, at *2.
9 R. Doc. 531-1 at 6.
10 R. Docs. 443, 444.
11 R. Docs. 450, 451.
12 R. Docs. 462, 464.
13 Lexington filed a motion to strike Allied’s motion for leave to file a supplemental memorandum in
opposition to its motion for summary judgment. R. Doc. 477. The Court denied Lexington’s motion to strike.
R. Doc. 478.
14 R. Docs. 478, 479. Lexington filed a reply to Allied’s supplemental opposition on May 23, 2017. R. Doc.
488. Because Allied’s responses to Lexington’s statements of uncontested facts were deficient, the Court
ordered Allied to re-file its responses. R. Doc. 489.
15 R. Docs. 495, 496, 497.
16 R. Doc. 498.

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to file an amended complaint in intervention naming Allied as a defendant-inintervention in case number 14-1933 and/or to file a cross-claim against Allied in case
number 16-2490. 17 In the interest of judicial economy and to avoid needless rebriefing of
the same issue, the Court further stated that in either or both events it would “rely on the
parties’ briefing that ha[d] already been submitted” in ruling on Lexington’s motions for
summary judgment. 18 Allied had notice that this would be the procedure followed by the
Court on July 3, 2017 and did not voice any objection. On July 10, 2017, Lexington filed
an answer and crossclaim against Allied in case number 16-2490 and an amended
complaint naming Allied as a defendant-in-intervention in case number 14-1933. 19
Neither Lexington’s crossclaim against Allied nor its amended complaint naming Allied
as a defendant-in-intervention raised any new issues not already addressed in the briefs.
Relying on the extensive briefing already submitted, the Court granted Lexington’s
motions for summary judgment on July 12, 2017. 20
Allied now argues the Court erred in ruling on Lexington’s motions for summary
judgment before Allied was able to answer Lexington’s amended complaint in
intervention and before Allied was able to conduct any discovery on Lexington’s claims. 21
“[A] ‘court must not grant a summary judgment . . . before the service of an answer, unless
in the situation presented, it appears to a certainty that no answer which the adverse
party might properly serve could present a genuine issue of fact.’” 22 Allied contends that
its answer could have raised a genuine issue of material fact with respect to whether it is

R. Doc. 499.
Id.
19 R. Docs. 503, 507.
20 R. Doc. 509.
21 R. Doc. 531-1 at 6.
22 Kuperman v. ICF Intern., No. 08-565, 2008 WL 647557 (E.D. La. Mar. 5, 2008) (citing Stuart Inv. Co.
v. Westinghouse Elec. Corp., 11 F.R.D. 277, 280 (D. Neb. 1951)) (emphasis added).
17

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a “certificate holder” under Lexington’s 2000–2001 Policy. 23 According to Allied,
Endorsement #006 in the 2000–2001 Lexington Policy provides additional-insured
coverage to “certificate holders.” 24
Allied’s argument is that its answer could have raised a genuine issue of material
fact because it is entitled to coverage under Endorsement #006 if it is a certificate holder.
The language of Endorsement #006—an “other insurance” endorsement—provides:
[T]he company agrees that such insurance as afforded by this policy for the
benefit of certificate holders included as persons insured shall be primary
and non-contributing insurance, but only as rests a claim, loss of liability
arising out of insured operations or work on behalf of the named insured
performed under a written contract between the named insured and the
certificate holder that requires the named insured to maintain such primary
and non-contributory insurance and to include the certificate holder as a
person insured thereunder. 25
As stated in the Court’s order and reasons, Endorsement #006 “provides insurance
for the benefit of the certificate holder included as a person[s] insured.” 26 “Endorsement
#006 modifies neither the ‘Persons Insured’ section nor the definitions of ‘Insured’ or
‘Named Insured’ of the 2000–2001 Lexington Policy.” 27 The fact that an entity is a
“certificate holder” does not automatically entitle that entity to additional insured status
under the 2000–2001 Lexington Policy; to enjoy additional insured coverage, the
“certificate holder” must be “included as persons insured.” 28 As discussed at length in the
Court’s ruling, Allied is not a “person insured” under the 2000–2001 Lexington Policy,
and the policy does not contain an additional insured endorsement to provide Allied with

R. Doc. 531-1 at 6–7.
Id. at 7.
25 R. Doc. 443-17 at 38–39 (emphasis added).
26 R. Doc. 509 at 23 (emphasis added).
27 Id. at 23–24.
28 R. Doc. 443-17 at 38–39.
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additional insured status. 29 Even if Allied were a “certificate holder,” this fact alone would
not entitle it to additional insured status under the 2000–2001 Lexington Policy.
As a result, if Allied had conducted discovery and located certificates of insurance
provided by Masse, or located such certificates in its own files, those certificates would
not make Allied an additional insured. Louisiana law provides “Every insurance contract
shall be construed according to the entirety of its terms and conditions as set forth in the
policy, and as amplified, extended, or modified by any rider, endorsement, or application
attached to or made a part of the policy.” 30 “Louisiana courts have found that certificates
of insurance do not fall under this rubric and thus cannot create coverage.” 31 “A certificate
of insurance is not a rider, endorsement, or application” and thus a court “cannot examine
the certificate for purposes of determining if it modifies the terms of coverage because . .
. the certificate cannot amplify, extend or modify coverage.” 32 A leading treatise on
insurance provides:
Certificates of insurance are often issued to the designated certificate holder
as proof that the named insured has insurance to cover work or operations
being performed for the certificate holder and that the named insured has
had the certificate holder named as an additional insured on the named
insured's insurance policy. However, the presentation of a certificate of
insurance alone does not create coverage or legal obligations between the
insurer and the certificate holder. Generally, a certificate of insurance is not
considered to be a part of the insurance contract; it is merely evidence of the
insurance. Accordingly, a certificate of insurance cannot contradict the
terms of a policy but instead only provides information as to the contents of
the policy.
In accordance with the above principles, a certificate of insurance cannot
create a contractual relationship between an insurer and an alleged
additional insured if the policy itself does not provide for such a
relationship. In other words, no additional insured relationship exists
where a certificate of insurance has been issued identifying an individual or
See R. Doc. 509.
LA. REV. STAT. § 22:881.
31 Arch Specialty Ins. Co. v. C&G Constr. of La., Inc., No. 12-2047, 2014 WL 3662837, at *5 (E.D. La. July
23, 2014).
32 Citgo Petroleum Corp. v. Yeargin, Inc., 95-1574 (La. Ct. App. 3 Cir. 2/19/97); 690 So. 2d 154, 164.
29

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entity as an additional insured without corresponding language in the policy
or endorsement thereto that would include that individual or entity as an
additional insured. 33
Even if Allied had been allowed time to conduct discovery to locate certificates of
insurance and to file an answer, any certificates of insurance would be immaterial. Any
certificates of insurance provided by Masse to Allied would not alter the fact that the
2000–2001 Lexington Policy does not provide additional insured status to Allied, and the
certificates themselves would not render Allied an additional insured. As a result, the
Court’s granting of Lexington’s motions for summary judgment before Allied was able to
serve an answer or conduct discovery was not in error because “no answer [that Allied]
might properly serve could present a genuine issue of fact.” 34
II.

The Court Did Not Err in Concluding that the 2008–2009 Lexington
Policy was Excess
Lexington moved for summary judgment that:
(1) Allied Shipyard, Inc. (“Allied”) does not qualify as an insured under the
2008-2009 Lexington Policy, and therefore, no duty to defend is owed to
Allied thereunder;
(2) alternatively, even if Allied could qualify as an insured, which is denied,
any coverage afforded to Allied under the 2008-2009 Lexington Policy is
excess, excusing Lexington from any duty to defend unless and until all
available primary insurance has been exhausted; and
(3) in the further alternative, even if Allied could qualify as an insured and
the coverage afforded to it under the 2008-2009 Lexington Policy was not
excess, both of which are denied, Lexington’s defense obligation is limited
to 0.833% for the Adams Matter and 6.25% for the St. Pierre Matter of any
post-tender defense costs. 35
Allied’s opposition to the motion addressed only the first point—whether Allied is

an additional insured under the policy. 36 Allied failed to address whether, even if it is an

3 COUCH ON INS. § 40:31 (June 2017).
Kuperman, 2008 WL 647557, at *1.
35 R.Doc. 444-1 at 2.
36 R. Doc. 451.
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insured, the coverage afforded is excess, excusing Lexington from any duty to defend
unless and until all primary insurance has been exhausted. Now, in its motion for
reconsideration, Allied argues the Court committed legal error when it concluded that
“Lexington, as Allied’s excess insurer, owes no duty to defend Allied until Allied has
exhausted its available primary insurance.” 37 Allied could have and should have raised
the issue of whether Lexington’s coverage is excess in its opposition to the motion for
summary judgment. A motion for reconsideration “is ‘not the proper vehicle for rehashing
evidence, legal theories, or arguments that could have been offered or raised before the
entry of [the order].’” 38
The Court notes also that the two Fifth Circuit cases cited by Allied, Ogea v.
Loffland Brothers, Co. 39 and Tullier v. Halliburton Geophysical Services, Inc., 40 are
inapposite. First, those cases involved situations in which the indemnitee was required to
purchase additional insured coverage for the indemnitor. 41 In this case, the indemnitor
was required to purchase additional insured coverage for the indemnitee. 42 Second, the
insurance in those cases was primary, unlike the instant case in which the contract did
not require that the insurance be primary and the policy clearly states that the coverage
is excess. 43 The Lexington Additional Insured Endorsement provides:
Any coverage provided by this endorsement to an additional insured shall
be excess over any other valid and collectible insurance available to the
additional insured, whether primary, excess, contingent or on any other

R. Doc. 531-1 at 9.
Lacoste, 2009 WL 1565940, at *8.
39 622 F.2d 186 (5th Cir. 1980).
40 81 F.3d 552 (5th Cir. 1996).
41 See Ogea, 622 F.2d at 187, 189; Tullier, 81 F.3d at 552, 555.
42 R. Doc. 234-7 at 3–4.
43 See Marquette Trans. Co. v. La. Mach. Co., 367 F.3d 398, 407 (5th Cir. 2004); Tullier, 81 F.3d at 554;
A.M.C. Liftboats, Inc. v. Apache Corp., No. 06-10543, 2008 WL 217177, at *6 (E.D. La. Jan. 25, 2008).
37

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basis unless a written contract or written agreement specifically requires
that this insurance apply on a primary or non-contributory basis. 44
By the terms of the policy, Allied must exhaust any other insurance available to it before
Lexington is required to pay. Only after all insurance has been exhausted do indemnity
obligations come into play.
The Court did not err in finding that Lexington, as Allied’s excess insurer, owes no
duty to defend Allied until Allied has exhausted its available primary insurance. Ogea and
Tullier do not apply to the facts of this case.
Accordingly;
CONCLUSION
IT IS ORDERED that Allied’s motion for reconsideration 45 is DENIED.
New Orleans, Louisiana, this 21st day of August, 2017.
_________
_______ _________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

44 R. Doc. 444-17 at 37 (emphasis added). It is undisputed that neither the 1995 nor 2007 Master Work
Contracts between Allied and Masse require the coverage afforded to Allied to be primary and noncontributory. R. Doc. 444-2 at 7, ¶ 24; R. Doc. 492 at 3, ¶ 24; R. Doc. 444-18; R. Doc. 444-19.
45 R. Doc. 531.

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