Barrios et al v. Centaur, LLC et al
Filing
276
ORDER AND REASONS: DENYING 231 Motion for Summary Judgment; DENYING 241 Motion for Summary Judgment; DENYING 243 Motion for Summary Judgment; GRANTING 253 Motion for Summary Judgment, as state herein. Signed by Judge Jane Triche Milazzo on 06/30/2021. (am)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DEVIN BARRIOS ET AL.
CIVIL ACTION
VERSUS
NO: 17-585
CENTAUR, LLC ET AL.
SECTION: “H”(1)
ORDER AND REASONS
Before the Court are Cross-Plaintiff River Ventures, LLC, IntervenorPlaintiff XL Specialty Insurance Company, and Intervenor-Plaintiff Certain
Underwriters at Lloyd’s London’s Motion for Summary Judgment on Coverage
(Doc. 243); Intervenor-Defendant Travelers Property Casualty Company of
America’s Motion for Summary Judgment on Coverage (Doc. 253); CrossDefendant Centaur LLC’s Motion for Summary Judgment on Breach of
Contract (Doc. 231); and Cross-Plaintiff River Venture LLC’s Motion for
Summary Judgment on Breach of Contract (Doc. 241). For the following
reasons, Plaintiffs’ Motion for Summary Judgment on Coverage is DENIED;
Defendant’s Motion for Summary Judgment on Coverage is GRANTED; and
the Cross-Motions on Breach of Contract are DENIED.
1
BACKGROUND
Plaintiff Devin Barrios brought suit for an injury he sustained while
working for Defendant Centaur, LLC (“Centaur”). Barrios was hired by
Centaur, a marine construction company, to work on a construction project to
build a concrete containment wall around the edge of a dock facility owned by
United Bulk Terminals Davant, LLC (“UBT”). UBT contracted with River
Ventures, LLC (“River Ventures”) to provide a crew boat to transport Centaur’s
employees to and from the project.
Plaintiff brought claims under the general maritime law and Jones Act
against both Centaur and River Ventures. At trial, River Ventures was found
to be solely liable for Barrios’s injury. 1 River Ventures filed a cross-claim
against Centaur and its insurer, Travelers Property Casualty Company of
America (“Travelers”), seeking indemnity and insurance pursuant to a Master
Service Agreement (“MSA”) entered into between UBT and Centaur regarding
all construction projects performed by Centaur for UBT. River Ventures alleges
either that it is owed coverage by Travelers or that Centaur breached its
obligation in the MSA to obtain the appropriate insurance coverage. On
summary judgment, this Court held that the MSA was non-maritime and
therefore the Louisiana Construction Anti-Indemnity Statute applied to
prohibit the indemnity and insurance provisions of the MSA. The Fifth Circuit
reversed and remanded this holding, finding that maritime law applies to the
MSA.
1
Doc. 181.
2
On remand, the parties have filed cross motions for summary judgment
on the issues of breach of contract and coverage. River Ventures and its
insurers, XL Specialty Insurance Company (“XL”) and Certain Underwriters
at Lloyd’s London’s (“Lloyds”), have moved for summary judgment holding that
Travelers owes River Ventures coverage. Travelers has moved for summary
judgment holding that it does not. Centaur and River Ventures each move for
summary judgment on River Venture’s breach of contract claim. This Court
will consider each issue in turn.
LEGAL STANDARD
Summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with 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.” 2 A genuine issue
of fact exists only “if the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” 3
In determining whether the movant is entitled to summary judgment,
the Court views facts in the light most favorable to the non-movant and draws
all reasonable inferences in his favor. 4 “If the moving party meets the initial
burden of showing that there is no genuine issue of material fact, the burden
shifts to the non-moving party to produce evidence or designate specific facts
showing the existence of a genuine issue for trial.” 5 Summary judgment is
Sherman v. Hallbauer, 455 F.2d 1236, 1241 (5th Cir. 1972).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
4 Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 532 (5th Cir. 1997).
5 Engstrom v. First Nat’l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995).
3
2
3
appropriate if the non-movant “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case.” 6 “In response to a
properly supported motion for summary judgment, the non-movant must
identify specific evidence in the record and articulate the manner in which that
evidence supports that party’s claim, and such evidence must be sufficient to
sustain a finding in favor of the non-movant on all issues as to which the nonmovant would bear the burden of proof at trial.” 7 “We do not . . . in the absence
of any proof, assume that the nonmoving party could or would prove the
necessary facts.” 8 Additionally, “[t]he mere argued existence of a factual
dispute will not defeat an otherwise properly supported motion.” 9
LAW AND ANALYSIS
I.
Coverage
River Ventures and its insurers, XL and Lloyds (collectively,
“Plaintiffs”), move for summary judgment on their claim that Travelers owes
defense and indemnity for Barrios’s claim under its policy issued to Centaur.
Travelers moves for summary judgment dismissing this claim. This Court
finds that Travelers does not owe coverage.
Plaintiffs argue that Travelers’ Protection & Indemnity (“P&I”) policy
provides coverage for any additional insured’s liability to third parties arising
out of “work and/or operations of [Centaur] performed in connection with the
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
John v. Deep E. Tex. Reg. Narcotics Trafficking Task Force, 379 F.3d 293, 301 (5th
Cir. 2004) (internal citations omitted).
8 Badon v. R J R Nabisco, Inc., 224 F.3d 382, 394 (5th Cir. 2000) (quoting Little v.
Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)).
9 Boudreaux v. Banctec, Inc., 366 F. Supp. 2d 425, 430 (E.D. La. 2005).
4
6
7
relevant contract or agreement” with an additional insured, such as UBT, or
arising out of “operation or use by [Centaur] of equipment leased or rented”
from an additional insured, such as River Ventures. 10 They argue that it
therefore provides coverage to River Ventures, or to XL in its own right, for
Barrios’s injuries which arose out of his work for Centaur at UBT’s facility and
in connection with the use of a crew boat that had been rented from River
Ventures. 11
Travelers, however, argues that the P&I policy contains a crew/employee
exclusion that excludes coverage here. The relevant provision provides that:
Notwithstanding anything herein contained to the contrary, it is
mutually understood and agreed that this Policy does not cover
claims in respect to . . . bodily injury [or] personal injury of any
crew, seaman or other employee of the Assured regardless of
whether they be employees of the Assured or any Additional
Assured named in the Policy or endorsed thereto. 12
The parties agree that Louisiana law governs the interpretation of the
policy. Under Louisiana law, “[a]n insurance policy is a contract between the
parties and should be construed by using the general rules of interpretation of
contracts set forth in the Louisiana Civil Code.” 13 “When the words of a
contract are clear and explicit and lead to no absurd consequences, no further
interpretation may be made in search of the parties’ intent.” 14 “An insurance
policy should not be interpreted in an unreasonable or a strained manner so as
Doc. 253-4 at 18.
The policy names as additional insureds UBT’s contractors and subcontractors and
“the insurers of each of the foregoing.” Id.
12 Id. at 53.
13 Mayo v. State Farm Mut. Auto. Ins. Co., 869 So. 2d 96, 99 (La. 2004).
14 LA. CIV. CODE art. 2046.
5
10
11
to enlarge or to restrict its provisions beyond what is reasonably contemplated
by its terms or so as to achieve an absurd conclusion.” 15 “The rules of
construction do not authorize a perversion of the words or the exercise of
inventive powers to create an ambiguity where none exists or the making of a
new contract when the terms express with sufficient clarity the parties’
intent.” 16
Travelers argues that the phrase “the Assured” in the crew/employee
exclusion refers to Centaur and that the exclusion therefore plainly excludes
claims for personal injury to Centaur’s employees, such as Barrios. Travelers
points out that the policy expressly identifies Centaur as “the Assured.”
Plaintiffs, on the other hand, argue that the crew/employee exclusion
should be read to exclude claims by employees against their employer. They
argue that the phrase “the Assured” refers to the particular insured against
whom a claim has been asserted, and that therefore, the exclusion applies to
claims against the injured crewmember’s employer. Essentially, they argue
that “the Assured” means the employer, and the subsequent “regardless of”
phrase acknowledges that the exclusion extends to all of the entities insured
under the policy if they are sued by their employee.
Travelers is correct that the P&I policy defines Centaur as “the
Assured.” 17 Therefore, by its plain reading, the policy excludes coverage for
personal injury claims brought by any employee of Centaur. The exclusion does
not differentiate between which insured the employee brings his claim against,
Carrier v. Reliance Ins. Co., 759 So. 2d 37, 43 (La. 2000).
Mayo, 869 So. 2d at 99–100.
17 Doc. 253-4 at 41.
6
15
16
as Plaintiffs suggest. The Court finds this exclusion to be unambiguous, and it
need not engage in Plaintiffs’ tortured reading thereof. Because Barrios was
an employee of Centaur, his personal injury claims are excluded from coverage
under the P&I policy Travelers issued to Centaur. 18
Alternatively, Plaintiffs argue that the indemnity agreement in the MSA
takes precedence over the terms of the policy. The MSA requires Centaur to
procure primary coverage for River Ventures and to defend and indemnify
River Ventures. In so arguing, Plaintiffs cite to the Louisiana Third Circuit’s
holding in Carrier v. Louisiana Pigment Co. and the Louisiana First Circuit’s
holding in Dupre v. Transcontinetal Gas Pipeline for the proposition that the
terms of an indemnity agreement control despite policy provisions otherwise.19
The Court does not read these opinions to stand for this proposition. Rather,
the courts in these cases merely looked to the indemnity agreements to
determine the priority amongst insurance policies that provided coverage.
They did not create coverage where none existed. Further, the indemnity
obligation in the MSA is unenforceable as a matter of law pursuant to § 905(b)
of the Longshore and Harbor Workers’ Compensation Act. 20 Accordingly, the
Plaintiffs also argue that they are entitled to coverage under the Bumbershoot
policy issued by Travelers to Centaur in connection with its work at UBT. The Bumbershoot
policy, however, only applies “in excess of similar coverage provided in a Policy.” Doc. 253-6
at 26. In light of the foregoing, no underlying coverage exists.
19 Carrier v. Louisiana Pigment Co., L.P., 846 So. 2d 803, 810 (La. App. 3 Cir. 2003);
Dupre v. Transcon. Gas Pipe Line, LLC, 240 So. 3d 188 (La. App. 1 Cir. 2017).
20 33 U.S.C. § 905 (“[T]he employer shall not be liable to the vessel for such damages
directly or indirectly and any agreements or warranties to the contrary shall be void.”).
18
7
Court finds that River Ventures and its insurers are not entitled to coverage
from Travelers.
II.
Breach of Contract
In light of that ruling, the Court next considers River Venture’s claim of
breach of contract against Centaur. River Ventures alleges that Centaur’s
MSA with UBT required it to obtain a P&I policy that included coverage of
crew/employee liabilities. River Ventures alleges that Centaur’s failure to
obtain the required insurance coverage is a breach of the MSA, and Centaur is
directly liable for the damages paid to Barrios. Centaur does not dispute that
it was required to obtain a P&I policy and that River Ventures is a third-party
beneficiary to the MSA. Accordingly, the only issue before the Court is whether
the MSA required Centaur to obtain a P&I policy with crew/employee liability
coverage.
The MSA sets out in specific detail what insurance Centaur was required
to procure in connection with its work for UBT. Specifically, it required
Centaur to obtain seven different insurance policies: (1) a worker’s
compensation/maritime employer liability policy; (2) a comprehensive general
liability policy; (3) an automobile policy; (4) a P&I policy; (5) a hull policy; (6) a
pollution policy; and (7) an excess umbrella policy. The MSA set forth specific
coverages and endorsements that each policy should contain. With respect to
the P&I policy, the MSA provide that the following policy should be obtained:
Primary protection and Indemnity Insurance, including
contractual liability, collision/tower’s liability and pollution buyback endorsement subject to the terms and conditions of not less
than the P&I SP-23 (Revised 1/56) form of policy or its equivalent
8
with limit of $1,000,000.00 applicable to any one accident or
occurrence. 21
Centaur argues that its obligations under the MSA should be considered
in conjunction with the larger picture of insurance required for the
construction work being performed. Centaur points out that the parties agreed
to an insurance program where different policies insured different risks, as
outlined by the specific requirements for coverage and endorsements in the
MSA. The MSA did not expressly require Centaur to include crew or employee
coverage in the P&I Policy. It did, however, require it to obtain a worker’s
compensation policy with a maritime employers liability endorsement (“the
MEL policy”), which insured Centaur against liability in the event one of its
employees was injured. Centaur points out that the inclusion of crew or
employee coverage in the P&I Policy would have been redundant of the
coverage provided under the MEL Policy. It argues that it would be illogical
for the parties to agree to obtain costly double coverage for the same risk. It
further points out that the MSA did not require Centaur to add UBT or its
subcontractors as additional insureds on the MEL policy. It argues that this
evidences the parties’ intention to not transfer employee-related liability to
each other. The Court finds these arguments compelling.
On the other hand, River Ventures points to the portion of the MSA that
states that Centaur was required to obtain a P&I policy of “not less than the
P&I SP-23 (revised 1/56) form of policy or its equivalent.” 22 River Ventures
argues that, unlike the policy obtained by Centaur, the standard P&I SP-23
21
22
Doc. 241-4 at 3.
Id.
9
form does not include a crew/employee exclusion. River Venture’s expert
attests to this. In support of its position, River Ventures presents the expert
opinion of Jose Guerrero, an expert in the standard terms and conditions of
insurance policies, who opines that the crew/employee exclusion is not part of
the standard SP-23 (Revised 1/56) policy form. River Ventures argues therefore
that the policy obtained by Centaur was “less than” the P&I SP-23, and it
breached its obligation under the MSA.
In light of the foregoing, the Court finds the MSA ambiguous as to
whether the P&I policy was required to provide crew coverage. The MSA
requires “not less than the P&I SP-23 (revised 1/56),” which, in connection with
the opinion of River Venture’s expert, suggests an intention to include crew
coverage under the P&I Policy. On the other hand, the insurance program
outlined by the MSA suggests that the parties intended for crew and employee
liabilities to be covered by the MEL Policy. Accordingly, this Court finds the
MSA ambiguous, and summary judgment is inappropriate.
CONCLUSION
For the foregoing reasons, Plaintiffs River Ventures, Lloyds, and XL’s
Motion for Summary Judgment on Coverage is DENIED; Defendant Travelers’
Motion for Summary Judgment on Coverage is GRANTED; Plaintiff River
Venture’s Motion for Summary Judgment on Breach of Contract is DENIED;
Defendant Centaur’s Motion for Summary Judgment on Breach of Contract is
DENIED. River Ventures, Lloyds, and XL’s claims against Travelers are
DISMISSED WITH PREJUDICE.
10
New Orleans, Louisiana this 30th day of June, 2021.
____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?