Continental Insurance Company et al v. L&L Marine Transportation, Inc. et al

Filing 124

ORDER AND REASONS: ORDERED that the P&I Underwriters' 118 Motion for Partial Summary Judgment is GRANTED, and the Atlantic's 119 Motion for Summary Judgment is DENIED. The case is hereby dismissed. Signed by Judge Martin L.C. Feldman on 4/19/2017. (Reference: 15-4423)(clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CONTINENTAL INSURANCE
COMPANY, ET AL.

CIVIL ACTION

V.

NO. 14-2967 c/w
15-4423*

L&L MARINE TRANSPORTATION,
INC., ET AL

SECTION "F"
*Applies to: 15-4423

ORDER AND REASONS
Before the Court are P&I Underwriters’ and Atlantic Specialty
Insurance’s cross-motions for summary judgment. For the following
reasons, P&I Underwriters motion for summary judgment is GRANTED
and Atlantic’s motion for summary judgment is DENIED.
Background
This

insurance

dispute

arises

from

a

marine

allision

involving multiple boats; one of which, sank. 1 P&I Underwriters
insures L&L Marine Transportation under a protection and indemnity
(P&I) policy. Atlantic Specialty also insures L&L, but under a
hull and machinery policy. 2

1

The Court assumes familiarity with this dispute and incorporates
the facts it previously stated in its Order and Reasons dated
January 25, 2016 for this civil matter.
2 This case is consolidated with four other cases under the master
case number 14-2697. Two of the cases are limitation of liability
proceedings. The remaining two are a property damage action and a
personal injury action. Here, the parties’ dispute is over who
must fund L&L’s defense in the underlying property damage action.
1

The basic facts in the underlying lawsuit are as follows. The
M/V ANGELA RAE, a vessel owned by L&L, was the lead tug in a fourvessel flotilla. The M/V ANGELA RAE and the M/V FREEDOM were
positioned behind a barge, the FSB-101, and the M/V MISS DOROTHY
was positioned in front of the barge. When the flotilla approached
the Sunshine Bridge in St. James Parish, the M/V MISS DOROTHY
allided with the bridge and sank.
The insurers of the M/V MISS DOROTHY brought suit against
L&L, the owner of the M/V ANGELA RAE, contending that L&L was
responsible for the allision and the resulting loss of the M/V
MISS DOROTHY. L&L sought coverage from Atlantic Specialty against
these claims, but Atlantic Specialty denied coverage. Pursuant to
its protection and indemnity policy, P&I has funded L&L’s defense
in that case. In this dispute, P&I seeks a judgment declaring that
Atlantic Specialty has a duty to reimburse the defense costs of
L&L relative to the allegations made against them in civil action
14-2967.

Atlantic

Specialty

files

a

cross-motion

for

summary

judgment on the basis that its hull policy does not provide
coverage for the damages allegedly incurred by the M/V MISS DOROTHY
and a dismissal of P&I’s complaint against it. 3

3

The parties refer to these motions as cross-motions for summary
judgment. However, P&I claims it seeks summary judgment that
Atlantic owes it reimbursement for defense costs and Atlantic seeks
summary judgment that its hull policy does not apply to the
underlying incident. The Court construes these motions as crossmotions for summary judgment to determine which policy covers the
2

I.
Federal Rule of Civil Procedure 56 instructs that summary
judgment is proper if the record discloses no genuine dispute as
to any material fact such that the moving party is entitled to
judgment as a matter of law. No genuine dispute of fact exists if
the record taken as a whole could not lead a rational trier of
fact to find for the non-moving party. See Matsushita Elec. Indus.
Co. v. Zenith Radio., 475 U.S. 574, 586 (1986). A genuine dispute
of fact exists only "if the evidence is such that a reasonable
jury could return a verdict for the non-moving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence of a
factual dispute does not defeat an otherwise properly supported
motion. See id. Therefore, "[i]f the evidence is merely colorable,
or

is

not

significantly

probative,"

summary

judgment

is

appropriate. Id. at 249-50 (citations omitted). Summary judgment
is also proper if the party opposing the motion fails to establish
an essential element of his case. See Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986). In this regard, the non-moving party
must do more than simply deny the allegations raised by the moving
party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d

allegations against L&L based on the arguments presented by the
parties, which of course in turn determines whether Atlantic is
responsible for reimbursement of defense costs incurred by P&I
Underwriters.
3

646, 649 (5th Cir. 1992). Rather, he must come forward with
competent evidence, such as affidavits or depositions, to buttress
his claim. Id. Hearsay evidence and unsworn documents that cannot
be presented in a form that would be admissible in evidence at
trial do not qualify as competent opposing evidence. Martin v.
John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir.
1987); Fed. R. Civ. P. 56(c)(2). Finally, in evaluating the summary
judgment motion, the Court must read the facts in the light most
favorable to the non-moving party. Anderson, 477 U.S. at 255.
The interpretation of an insurance policy is a question of
law. Cal-Dive Intern., Inc. v. Seabright Ins. Co., 627 F.3d 110,
113 (5th Cir. 2010). Accordingly, summary judgment review is
appropriate.
II.
Louisiana law governs the interpretation of marine insurance
contracts. See id. (“The interpretation of a marine policy of
insurance is governed by relevant state law . . . .”). Under
Louisiana law, “courts interpreting insurance contracts should
‘seek to determine the parties’ common intent, as reflected by the
words in the policy.’” Gabarick v. Laurin Maritime (America), Inc.,
650 F.3d 545, 553 (5th Cir. 2011)(quoting Seacor Holdings, Inc. v.
Commonwealth Ins. Co., 635 F.3d 675, 680 (5th Cir. 2011). The words
in an insurance policy must be given their generally prevailing
meaning. Id. (citing La. Civ. Code art. 2047). “[W]hen the language
4

of an insurance policy is clear, courts lack the authority to
change or alter its terms under the guise of interpretation.”
Coleman v. School Bd. Of Richland Parish, 418 F.3d 511, 518 (5th
Cir. 2005)(quoting La. Ins. Guar. Ass’n v. Interstate Fire & Cas.
Co., 630 So.2d 759, 764 (La. 1994)).
“If after applying the other general rules of construction an
ambiguity remains, the ambiguous contractual provision is to be
construed against the drafter, or, as originating in the insurance
context, in favor of the insured.” La. Ins. Guar. Ass’n, 630 So.2d
at 764. “Ambiguity will also be resolved by ascertaining how a
reasonable insurance policy purchaser would construe the clause at
the time the insurance contract was entered.” Id. “Yet, if the
policy wording at issue is clear and unambiguously expresses the
parties’

intent,

the

insurance

contract

must

be

enforced

as

written.” Id. “The determination of whether a contract is clear or
ambiguous is a question of law.” Id.
III.
P&I

Underwriters

moves

for

a

summary

judgment

holding

Atlantic responsible for reimbursing the defense costs of its
insured, L&L. 4 P&I contends that the complaint filed against L&L

4

On January 25, 2016, the Court issued an Order and Reasons denying
P&I Underwriters’ motion for partial summary judgment that
Atlantic’s policy provided for a duty to defend L&L. At that time,
the Court did not reach the merits of which insurance policy
covered the underlying accident and allegations against L&L. The
5

is relevant to establish whether the M/V MISS DOROTHY was being
towed or whether she was part of the towing responsibility with
the

M/V

ANGELA

RAE.

The

relevant

allegation,

P&I

argues,

is

paragraph 16 of the complaint that states:
At the time of the allision, the M/V MISS DOROTHY was
assisting the M/V ANGELA RAE, and the M/V FREEDOM, with
towage of FSB-101. The M/V ANGELA RAE was the lead tug
and was responsible for coordination of the tow. Both
the M/V ANGELA RAE and M/V FREEDOM were positioned behind
FSB-101, pushing it down the river, and the M/V MISS
DOROTHY was positioned at the head of FSB-101.
(emphasis

added).

The

plaintiffs

in

that

lawsuit,

therefore,

allege that L&L is responsible for the loss of the MISS DOROTHY
because the ANGELA RAE was responsible for the coordination of the
tow, it failed in that duty, and caused the MISS DOROTHY to allide
with the Sunshine Bridge and sink.
P&I Underwriters rely on Atlantic’s hull policy issued to L&L
for the ANGELA RAE as support for its alleged duty to reimburse
P&I Underwriters. The “Collision and Tower’s Liability” provision
in Atlantic’s hull policy provides:
If the Vessel hereby insured shall come into collision
with any other vessel, craft or structure, floating or
otherwise (including her tow); or shall strand her tow
or shall cause her tow to come into collision with any
other vessel, craft or structure, floating or otherwise,
or shall cause any other loss or damage to her tow or to
the freight thereof or to the property on board, and the
Assured, or the Surety, in consequence of the insured
Vessel being at fault, shall become liable to pay and
shall pay by way of damages to any other person or
parties now move the Court to address the remainder of this
insurance dispute.
6

persons any sums, we, the Underwriters, will pay the
Assured or the Surety, whichever shall have paid, such
proportion of such sum or sums so paid as our
subscriptions hereto bear the value of the Vessel hereby
insured, provided always that our liability in respect
of any one such casualty shall not exceed our
proportionate part of the value of the Vessel hereby
insured ….
Because the allegations against L&L arise out of towage, the hull
policy

is

responsible

for

defense

costs,

according

to

P&I

Underwriters. It further contends that the question for coverage
is solely based on the allegations in the complaint against L&L,
not whether the ANGELA RAE actually caused the MISS DOROTHY’s
damage. Whether the allegations are construed broadly or narrowly,
P&I Underwriters argues that the allegations trigger a duty to
reimburse under the hull policy because all interpretations of the
complaint relate to the ANGELA RAE towing the MISS DOROTHY.
IV.
In its cross-motion for summary judgment, Atlantic seeks a
determination that its hull policy does not provide coverage for
the damages allegedly incurred by the MISS DOROTHY, and, as such
P&I Underwriters’ complaint against it should be dismissed. It
contends that the collision and tower’s liability provision of its
hull policy provides coverage in limited circumstances, none of
which are present in this matter. Atlantic argues that for its
coverage to be triggered, damage to the tow of the ANGELA RAE must
have ensued. Further, it contends that the complaint does not

7

allege that the MISS DOROTHY was in the tow of the ANGELA RAE;
instead Atlantic urges that the MISS DOROTHY was assisting the
ANGELE RAE with her towage of the FSB 101.
In support, Atlantic points to a different allegation in the
complaint against L&L, which alleges:
On or about December 29, 2013, the M/V MISS DOROTHY,
under the command of Captain Joseph Colomb, was
traversing the Mississippi River with the barge FSB 101,
which was charted by defendant CGB Enterprises, Inc., in
tow when it allided with a portion of the bridge fender
system at Pier 4 of the Sunshine Bridge located at LA 70
in St. James Parish.
However, the next paragraph in the complaint is the one P&I relies
on, which states that the “ANGELA RAE was the lead tug and was
responsible for the coordination of the tow.”
Atlantic says that its Collision and Tower’s Liability clause
provides coverage in four circumstances: (1) The insured vessel
collides with another vessel, craft, structure, or her tow; (2)
The insured vessel strands her tow; (3) The insured vessel causes
her tow to collide with another vessel, craft, or structure; or
(4) The insured vessel causes any other loss or damage to her tow,
or to the freight thereof. 5 Because, Atlantic contends, the ANGELA

5

Notably, Atlantic mainly addresses why the four coverage areas
of its hull policy are not triggered by the underlying incident
involving its insured’s vessel, the ANGELA RAE. It mentions the
coverage terms in P&I Underwriters’ policy only briefly. For the
sake of completeness, the P&I policy provision Atlantic claims
should cover the incident provides P&I Underwriters have agreed to
indemnity L&L for:
8

RAE did not collide with the MISS DOROTHY or the Sunshine Bridge,
and because the MISS DOROTHY was not “in the tow” of the ANGELA
RAE, none of the four coverage areas are triggered. Accordingly,
its hull policy is not implicated and it does not owe coverage, or
reimbursement, to P&I Underwriters. The Court disagrees.
V.
The parties do not dispute whether the allegations in the
complaint control which policy is liable for defense costs and
coverage. Atlantic is correct in pointing out that the complaint
against L&L alleges that the MISS DOROTHY was assisting the ANGELA
RAE and the FREEDOM in towing the FSB 101. However, the allegation
against L&L further states that the ANGELA RAE was the lead tug
and

was

responsible

for

coordination

of

the

tow.

The

record

indicates that this allegation, that the ANGELA RAE was the lead

Liability for loss of or damage to any other vessel
or craft, or to property on such other vessel or
craft, not caused by collision, provided such
liability does not arise by reason of a contract
made by the assured.
In response, P&I argues that while the P&I policy is technically
broader than the hull policy, it is only intended to effect
coverage where the hull policy does not. The Court agrees.
Specifically, paragraph 2 under “US Collision and Tower’s
Liability Endorsement (01.08.13)” of the P&I Policy states that
P&I Underwriters agree to indemnity its insured, L&L, for sums not
recoverable under the Collision Clause of a hull and machinery
policy when the insured’s liability exceeds amounts insured
against in the collision and tower’s liability coverage. Thus, P&I
Underwriters specifically intended to only cover “collision and
tower” instances after policy limits were expended under the hull
and machinery policy.
9

tow, is agreed to by the parties as evidenced in the statements of
uncontested material facts in P&I Underwriters’ motion for summary
judgement and Atlantic’s opposition to the motion.
The vessel performing the towage is obligated to exercise
reasonable care in maneuvering its tow. See In re Luhr Bros., Inc.,
Nos. 05-1434 & 05-1897, 2007 WL 2042258, at *4 (E.D. La. July 12,
2007); Chitty v. M/V VALLEY VOYAGER, 284 F. Supp. 297, 302-03 (E.D.
La. 1968). “When a tug is in charge of a flotilla, her obligation
to use due care includes, among others, the duty to keep her tow
under observation, to maintain proper speed in order to keep her
tow under control, and to care for the safety of her tow in
general.” Chitty, 284 F. Supp. at 303. “Where damages are caused
by a casualty involving a tow or an entire flotilla, courts employ
the concept of the ‘dominant mind’ to place liability on the tug
. . . .” Plains Pipeline, L.P. v. Great Lakes Dredge & Dock Co.,
54 F. Supp. 3d 586, 589 (E.D. La. 2014) (internal quotations and
citations omitted). Importantly, “[t]he ‘dominant mind’ doctrine
provides that only that vessel in control of the operation is
liable, even if the entire flotilla causes damage.” Id.; see also
Chevron U.S.A. Inc. v. Progress Marine Inc., 1980 A.M.C. 1637 (E.D.
La. 1979), aff’d 632 F.2d 893 (5th Cir. 1980). When the tug
provides the motive power and becomes the dominant mind, “the tug
‘is responsible for the safe navigation of the flotilla’ and ‘has
the duty to exercise such reasonable care and skill as prudent
10

navigators would exercise under similar circumstances.’” Plains
Pipeline, 54 F. Supp. 3d at 589; see also Dow Chemical Co. v. Tug
THOMAS ALLEN, 349 F. Supp. 1354, 1362 (E.D. La. 1972).
It follows that if the ANGELA RAE was the lead tug, which the
record indicates the parties do not contest, then the hull policy
is triggered. Under the “dominant mind” concept, the ANGELA RAE,
as the uncontroverted lead tug, owed a responsibility to the entire
flotilla; this included a duty to the MISS DOROTHY. As explained,
case law places the duty on the lead tug, even if other vessels in
the flotilla could be responsible. Accordingly, the insurance
policy covering the ANGELA RAE for damage caused during her tow is
liable to the damaged vessel.

Specifically, the hull policy has

four areas of coverage, including a category that covers instances
where the “insured vessel causes her tow to collide with another
vessel, craft, or structure.” There is no dispute whether the MISS
DOROTHY

allided

with

the

Sunshine

Bridge

while

part

of

the

flotilla. As the lead tug, the ANGELA RAE is liable for causing
“her tow to collide with another . . . structure.” See Plains
Pipeline, 54 F. Supp. 3d at 589. Giving the policy terms its
textual meaning, the MISS DOROTHY’s allision with the Sunshine
Bridge comports with a specific coverage term of Atlantic’s hull
policy as well as this Circuit’s concept of the “dominant mind.”
Accordingly, no contested issue of material fact exists as to
whether the ANGELA RAE was lead tow or whether the MISS DOROTHY
11

allided with the Sunshine Bridge while part of the tow of the FSB
101. Therefore, Atlantic’s hull policy is implicated and it owes
coverage

to

L&L

and

reimbursement

for

defense

costs

to

P&I

Underwriters.
IT IS ORDERED: that P&I Underwriters’ motion for summary
judgment

is

GRANTED

and

Atlantic’s

cross-motion

for

summary

judgment is DENIED. The case is hereby dismissed.

New Orleans, Louisiana, April 19, 2017

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

12