In re: The Matter of TK Boat Rentals, L.L.C.

Filing 191

ORDER AND REASONS granting 117 Motion for Partial Summary Judgment. Signed by Judge Sarah S. Vance on 9/6/2018. (Reference: All cases)(cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: TK BOAT RENTALS, LLC as
owner and operator of the M/V MISS
IDA, for exoneration from or
limitation of liability.

CIVIL ACTION

NO. 17-1545
c/w 17-2446 and 17-3657
SECTION “R” (4)

ORDER AND REASONS
Before the Court is defendant Andre Boudreau’s motion for partial
summary judgment against defendant Allianz Global Corporate and
Specialty Marine Insurance Company (AGCS).1 For the following reasons,
the Court grants the motion.

I.

BACKGROUND
This consolidated action arises out of a boat collision. 2 Plaintiffs

scheduled a chartered fishing trip with defendant Extreme Fishing through
Troy Wetzel, Extreme Fishing’s founder and sole member, 3 for February 12,

R. Doc. 117.
R. Doc. 1. For a more detailed account of the facts of this case, see R.
Doc. 186.
3
R. Doc. 107-6 at 1 ¶¶ 2-3; R. Doc. 112-8 at 1 ¶¶ 2-3; R. Doc. 113-1 at 1 ¶¶
2-3.
1

2

2017.4 Wetzel arranged for Boudreau to captain the trip. 5 On February 11,
the M/V KINGFISH, the vessel that was scheduled to be used for the trip,
became inoperable. 6

The parties ultimately arranged to instead use

defendant Chase St. Clair’s fishing vessel, the M/V SUPER STRIKE.7 Shortly
after the trip began, the SUPERSTRIKE collided with the M/V MISS IDA, a
vessel owned by defendant TK Boat Rentals (TKBR). 8
The owners of the MISS IDA and of the SUPERSTRIKE each filed
limitation of liability actions relating to the collision. 9 Plaintiffs filed claims
in these limitation actions against Extreme Fishing, Wetzel, TKBR, St. Clair
and Boudreau.10 Plaintiffs later amended their original complaint to add
AGCS as a defendant. 11 AGCS provided marine liability insurance to Extreme
Fishing and Wetzel (the AGCS policy). 12

R. Doc. 1 at 3 ¶ 13 (Case No. 17-2446); see also R. Doc. 107-6 at 4 ¶ 15;
R. Doc. 112-8 at 2 ¶ 15; R. Doc. 113-1 at 2 ¶ 15.
5
R. Doc. 107-6 at 5 ¶ 19; R. Doc. 112-8 at 2 ¶ 19; R. Doc. 113-1 at 2 ¶ 19.
6
R. Doc. 107-6 at 4 ¶ 18; R. Doc. 112-8 at 2 ¶ 18; R. Doc. 113-1 at 2 ¶ 18.
7
R. Doc. 107-6 at 5 ¶ 20; R. Doc. 112-8 at 3 ¶ 20; R. Doc. 113-1 at 2 ¶ 20.
8
R. Doc. 107-6 at 7 ¶ 28; R. Doc. 112-8 at 3 ¶ 28; R. Doc. 113-1 at 3 ¶
28.
9
R. Doc. 1; R. Doc. 1 (Case No. 17-3657).
10
R. Doc. 5; R. Doc. 17.
11
R. Doc. 54.
12
Id. at 2 ¶ 3.
2
4

St. Clair and Boudreau filed a crossclaim against AGCS asserting that
the AGCS policy covers Extreme Fishing’s use of St. Clair’s vessel. 13
Boudreau now moves for partial summary judgment against AGCS on the
limited issue of whether AGCS has a duty to defend Boudreau under the
terms of the AGCS policy.14

II.

LEGAL STANDARD
Summary judgment is warranted when “the movant shows that there

is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069,
1075 (5th Cir. 1994). When assessing whether a dispute as to any material
fact exists, the Court considers “all of the evidence in the record but refrain[s]
from making credibility determinations or weighing the evidence.” Delta &
Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99
(5th Cir. 2008).

All reasonable inferences are drawn in favor of the

nonmoving party, but “unsupported allegations or affidavits setting forth
‘ultimate or conclusory facts and conclusions of law’ are insufficient to either

13
14

R. Doc. 79.
R. Doc. 117.
3

support or defeat a motion for summary judgment.” Galindo v. Precision
Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see also Little, 37 F.3d at
1075. “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 nonmoving party.” EEOC v.
Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).
If the dispositive issue is one on which the moving party will bear the
burden of proof at trial, the moving party “must come forward with evidence
which would entitle it to a directed verdict if the evidence went
uncontroverted at trial.” Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257,
1264-65 (5th Cir. 1991) (internal citation omitted). The nonmoving party can
then defeat the motion by either countering with evidence sufficient to
demonstrate the existence of a genuine dispute of material fact, or by
“showing that the moving party’s evidence is so sheer that it may not
persuade the reasonable fact-finder to return a verdict in favor of the moving
party.” Id. at 1265.
If the dispositive issue is one on which the nonmoving party will bear
the burden of proof at trial, the moving party may satisfy its burden by
pointing out that the evidence in the record is insufficient with respect to an
essential element of the nonmoving party’s claim. See Celotex, 477 U.S. at
325.

The burden then shifts to the nonmoving party, who must, by
4

submitting or referring to evidence, set out specific facts showing that a
genuine issue exists. See id. at 324. The nonmovant may not rest upon the
pleadings, but must identify specific facts that establish a genuine issue for
trial. See, e.g., id.; Little, 37 F.3d at 1075 (“Rule 56 mandates the entry of
summary judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party
will bear the burden of proof at trial.” (quoting Celotex, 477 U.S. at 322)).

III. DISCUSSION
The scope of a duty to defend contained in a liability insurance policy
is generally “broader than the scope of the duty to provide coverage.”
Coleman v. Sch. Bd. of Richland Parish, 418 F.3d 511, 523 (quoting Suire v.
Lafayette City-Parish Consol. Gov’t, 907 So.2d 37, 51-52 (La. 2005)); accord
Lamar Advertising Co. v. Cont’l Cas. Co., 396 F.3d 654, 660 (5th Cir. 2005).
Courts apply the so-called “eight corners rule” when determining an insurer’s
duty to defend under Louisiana law. Under this rule, a court compares the
allegations of the petition against the insured with the language of the
insurance policy. Martco Ltd. P’ship v. Wellons, Inc., 588 F.3d 864, 872 (5th
Cir. 2009); see also Lodwick, LLC v. Chevron USA, Inc., 126 So.3d 544, 550
5

(La. App. 2 Cir. 2013) (“[Under] the ‘eight corners rule’ . . . an insurer must
look to the ‘four corners’ of the plaintiff’s petition and the ‘four corners’ of its
policy to determine whether it has a duty to defend.”). The insurer has a duty
to defend its insured if the underlying petition “disclose[s] even a possibility
of liability under the policy.” Vaughn v. Franklin, 785 So. 2d 79, 84 (La. App.
1 Cir. 2001) (citing Steptore v. Masco Constr. Co., 643 So. 2d 1213, 1218 (La.
1994)); accord Martco Ltd., 588 F.3d at 872-73. “In other words, the test is
not whether the allegations unambiguously assert coverage, but whether
they do not unambiguously exclude coverage.” Johnson v. Misirci, 955 So.
2d 715, 718 (La. App. 4 Cir. 2007). Indeed, the duty to defend “exist[s] if
there is at least a single allegation in the petition under which coverage is not
unambiguously excluded.” Yarborough v. Fed. Land Bank of Jackson, 731
So.2d 482, 487-88 (La. App. 2 Cir. 1999) (collecting cases).
The court making this determination must liberally interpret the
underlying petition and assume all allegations to be true. Martco Ltd., 588
F.3d at 873; Vaughn, 785 So. 2d at 83-84 (quoting Am. Home Assur. Co. v.
Czarniecki, 230 So. 2d 253, 259 (La. 1969)). If the insured bears its burden
of demonstrating that any allegations possibly fall within coverage, the
burden shifts to the insurer to prove that the underlying petition states only
facts that fall within an exclusion from coverage. Id. at 872.
6

In determining whether AGCS has a duty to defend Boudreau in the
underlying suit, the Court thus looks only to plaintiffs’ complaint against
Boudreau and the AGCS policy.

Despite its apparent awareness of

Louisiana’s “eight corners rule,” AGCS asks the Court to consider a number
of extraneous documents, including correspondence notifying AGCS of the
collision, St. Clair’s marine insurance policy for the SUPERSTRIKE through
the GEICO, and various court filings in this case. 15 None of these documents
is cognizable in determining AGCS’s duty to defend because they are not
incorporated in the underlying petition against Boudreau. See generally
Lamar Advert. Co., 396 F.3d at 660 (“Whether an insurer has a duty to
defend is determined solely by compar[ing] the allegations in the complaint
against the insured with the terms of the policy at issue. . . .”).
AGCS issued a Charter Value Vessel Policy to Wetzel that provides
liability coverage for the KINGFISH. 16

The policy defines “insured”

individuals to include “persons . . . using the Watercraft with [Wetzel’s] prior
permission.”17
Indemnity,

15
16
17

Under a section titled “Coverage for Protection and

Medical

Payments,

and

R. Doc. 142.
R. Doc. 117-2.
Id. at 5.
7

Uninsured

and

Underinsured

Watercraft,” the policy contains a provision for “Temporary Substitute
Watercraft,” which provides that
[i]f your Watercraft is out of normal use because of a covered
loss, we will cover damages you are legally obligated to pay for
bodily injury or property damage arising from the maintenance,
use, or control of a temporary substitute Watercraft. The
Temporary substitute Watercraft must be of a similar type, value
and length as the Watercraft that is out of normal use. But we do
not cover temporary substitute Watercraft being used for any
purpose other than replacing your Watercraft while it is out of
normal use due to a covered loss. 18
AGCS has a duty to defend Boudreau in this action under the terms of
the AGCS Policy. First, plaintiffs’ complaint against Boudreau asserts the
following key facts: (1) plaintiffs booked a charter fishing trip with Extreme
Fishing through Wetzel; (2) Wetzel’s boat became inoperable shortly before
the day of the trip; (3) the parties instead arranged to use St. Clair’s vessel;
(4) Boudreau captained the vessel on the day of the collision under the course
of his employment with Extreme Fishing; and (5) plaintiffs suffered bodily
injuries as a result of the collision. 19
Second, the AGCS policy may cover any liability Boudreau may incur
as a result of plaintiffs’ allegations. The parties’ use of the SUPERSTRIKE
appears to fall under the policy’s “Temporary Substitute Watercraft”

18
19

Id. at 13.
R. Doc. 1 at 3-5 ¶¶ 13-18 (Case No. 17-2446).
8

provision. 20 There is insufficient information in plaintiffs’ complaint to
determine whether the SUPERSTRIKE was of a “similar type, value, and
length” as the KINGFISH—or whether the KINGFISH became inoperable as
a result of a “covered loss”—but this lack of information does not relieve the
insurer from its duty to defend. 21 Nat’l Cas. Co. v. W. World Ins. Co., 669
F.3d 608, 612-13 (5th Cir. 2012) (“Where the complaint does not state facts
sufficient to clearly bring the case within or without the coverage, the general
rule is that the insurer is obligated to defend if there is, potentially, a case
under the complaint within the coverage of the policy.”). The complaint also
sufficiently asserts that Boudreau was functioning as an “insured” under the
terms of the policy, because it states that Boudreau was captaining the
SUPERSTRIKE in the course of his employment for Wetzel and Extreme
Fishing. 22
AGCS bears the burden to prove that the complaint states only facts
that fall within an exclusion from coverage, see Martco Ltd., 588 F.3d at 872,
but it has failed to meet this burden. AGCS instead argues that Boudreau is
not covered by the policy because AGCS was not provided timely notice of
loss, and that even if it were obligated to defend Boudreau, that defense

20
21
22

R. Doc. 117-2 at 13.
Id.
See id. at 5; R. Doc. 1 at 4 ¶ 15 (Case No. 17-2446).
9

would be triggered only when Boudreau exhausts his alleged primary
insurance under St. Clair’s GEICO policy.23 But the Court cannot determine
from just the complaint and the AGCS policy whether Boudreau will be
unambiguously excluded from coverage because AGCS did not receive timely
notice. Nor can the Court possibly determine from the eight corners of the
documents whether the terms of GEICO’s policy will preclude coverage
under the AGCS policy. AGCS’s arguments are therefore unavailing.
Because there is no genuine dispute that plaintiffs’ complaint asserts
facts that may allow Boudreau to receive coverage under the terms of the
AGCS policy, AGCS has a duty to defend Boudreau.

IV.

CONCLUSION
For the foregoing reasons, Boudreau’s motion for partial summary

judgment is granted.

6th
New Orleans, Louisiana, this _____ day of September, 2018.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

23

R. Doc. 142 at 7.
10