United Specialty Insurance Company v. Porto Castelo, Inc. et al

Filing 27

OPINION AND ORDER granting 19 Motion for Summary Judgment.(Signed by Judge Melinda Harmon) Parties notified.(rhawkins)

United States District Court
Southern District of Texas

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
§
§
§
Plaintiff,
§
§
VS.
§
§
PORTO CASTELO, INC. AND TRIDENT §
CIRCLE, INC.,
§
§
Defendants.
§

ENTERED
May 05, 2016
David J. Bradley, Clerk

UNITED SPECIALTY INSURANCE
COMPANY,

CIVIL ACTION NO. H-15-1036

OPINION AND ORDER
The

above

referenced

declaratory

judgment

action

cause,

brought pursuant to Federal Rule of Civil Procedure 57, and the
federal and Texas State Declaratory Judgment Acts, 28 U.S.C. § 2201
and Civil Practice and Remedies Code Chapter 37, is a dispute over
coverage afforded by the ocean/marine Hull and Protection and
Indemnity provisions of Commercial Lines Policy, USA 4055064 (“the
Policy,” Exhibit 1 to instrument #19), issued to Defendants Porto
Castelo, Inc. (“Porto”) and Trident Circle, Inc. (“Trident”) by
Plaintiff United Specialty Insurance Company (“United”).

Pending

before

summary

the

Court

is

United’s

traditional

motion

for

judgment (instrument #19) under Federal Rule of Civil Procedure 56.
Standard of Review
Summary judgment under Federal Rule of Civil Procedure 56(c)
is appropriate when, viewing the evidence in the light most
favorable

to

the

nonmovant,

the

court

determines

that

“the

pleadings, depositions, answers to interrogatories and admissions
on file, together with the affidavits, show that there is no
-1-

genuine issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.”

A dispute of material

fact is “genuine” if the evidence would allow a reasonable jury to
find in favor of the nonmovant. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986).
Under Texas law, the insured bears the burden of proving that
his

insurance

policy

covers

the

benefit

he

seeks.

Metro

Hospitality Partners, Ltd. v. Lexington Ins. Co., 84 F. Supp. 3d
553, citing Harken Exploration Co. v. Sphere Drake Ins. PLC, 261
F.3d 466, 471 (5th Cir. (S.D. Tex. 2015).
Where the nonmovant bears the burden of proof at trial, the
movant must offer evidence that undermines the nonmovant’s claim or
point out the absence of evidence supporting essential elements of
the nonmovant’s claim; the movant may, but does not have to, negate
the

elements

judgment.”

of

the

nonmovant’s

case

to

prevail

on

summary

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986);

Lujan v. National Wildlife Federation, 497 U.S. 871, 885 (1990);
Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998).
“A complete failure of proof concerning an essential element of the
nonmoving

party’s

immaterial.”

case

necessarily

renders

all

other

facts

Celotex, 477 U.S. at 323.

If the movant meets its burden and points out an absence of
evidence to prove an essential element of the nonmovant’s case on
which the nonmovant bears the burden of proof at trial, the
nonmovant must then present competent summary judgment evidence to
-2-

support the essential elements of its claim and to demonstrate that
there is a genuine issue of material fact for trial.

National

Ass’n of Gov’t Employees v. City Pub. Serv. Board, 40 F.3d 698, 712
(5th Cir. 1994).

“[A] complete failure of proof concerning an

essential element of the nonmoving party’s case renders all other
facts immaterial.”
not

rely

merely

Celotex, 477 U.S. at 323.
on

allegations,

denials

The nonmovant may
in

a

pleading

or

unsubstantiated assertions that a fact issue exists, but must set
forth specific facts showing the existence of a genuine issue of
material fact concerning every element of its cause(s) of action.
Morris v. Covan World Wide Moving, Inc,, 144 F.3d 377, 380 (5th Cir.
1998).
Conclusory

allegations

preclude summary judgment.

unsupported

by

evidence

will

not

National Ass’n of Gov’t Employees v.

City Pub. Serv. Board, 40 F.3d at 713; Eason v. Thaler, 73 F.3d
1322, 1325 (5th Cir. 1996).

“‘[T]he mere existence of some alleged

factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment . . . .’”

State

Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990),
quoting Anderson v. Liberty Lobby, Inc.. 477 U.S. 242, 247-48
(1986).

“Nor is the ‘mere scintilla of evidence’ sufficient;

‘there must be evidence on which the jury could reasonably find for
the plaintiff.’”
Fifth

Circuit

Id., quoting Liberty Lobby, 477 U.S. at 252. The

requires

probative evidence.’”

the

nonmovant

to

submit

“‘significant

Id., quoting In re Municipal Bond Reporting
-3-

Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1978), and citing
Fischbach & Moore, Inc. v. Cajun Electric Power Co-Op., 799 F.2d
194, 197 (5th Cir. 1986).

“If the evidence is merely colorable,

or

probative,

is

not

significantly

summary

judgment

may

be

Thomas v. Barton Lodge II, Ltd., 174 F.3d 636, 644 (5th

granted.”

Cir. 1999), citing Celotex, 477 U.S.

at 322, and Liberty Lobby,

477 U.S. at 249-50.
Allegations in a plaintiff’s complaint are not evidence.
Wallace

v.

Texas

Tech

Univ.,

80

F.3d

1042,

1047

(5th

Cir.

1996)(“[P]leadings are not summary judgment evidence.”); Johnston
v. City of Houston, Tex., 14 F.3d 1056, 1060 (5th Cir. 1995)(for the
party opposing the motion for summary judgment, “only evidence-–not
argument, not facts in the complaint--will satisfy’ the burden.”),
citing Solo Serve Corp. v. Westown Assoc., 929 F.2d 160, 164 (5th
Cir. 1991).

The nonmovant must “go beyond the pleadings and by

[his] own affidavits, or by depositions, answers to interrogatories
and admissions on file, designate specific facts showing that there
is a genuine issue of material fact for trial.”

Giles v. General

Elec. Co., 245 F.3d 474, 493 (5th Cir. 2001), citing Celotex, 477
U.S. at 324.
The court must consider all evidence and draw all inferences
from

the

nonmovant.

factual

record

in

the

light

most

favorable

to

the

Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S.

574, 587 (1986); National Ass’n of Gov’t Employees v. City Pub.
Serv. Board, 40 F.3d at 712-13. The Court may not make credibility
-4-

determinations.

Deville v. Marcantel, 567 F.3d 156, 164 (5th Cir.

2009), citing Turner v. Baylor Richardson Medical Center, 476 F.3d
337, 343 (5th Cir. 2007).
Applicable Law
Generally, federal common law applies to maritime disputes,
although there are occasions when state law may supplement or even
supersede maritime law.

Albany Ins. Co. v. Anh Thi Kieu, 927 F.2d

882, 886 (5th Cir. 1991).

In Wilburn Boat Co. v. Fireman’s Fund

Insurance Co., 348 U.S. 310, 321 (1955), however, the Supreme Court
concluded that the regulation of marine insurance belongs to the
states.

The Fifth Circuit has construed this rule to mean that a

marine insurance policy is a maritime contract within federal
admiralty jurisdiction, the interpretation of which, “‘in the
absence of a specific and controlling federal rule--is determined
by reference to appropriate state law.’”

Albany Ins., 927 F.2d at

886 (5th Cir. 1991), quoting Ingersoll-Rand Financial Corp. v.
Employers Ins. of Wausau, 771 F.2d 910, 912 (5th Ci9r. 1985); AGIP
Petroleum Co. v. Gulf Island Fabrication, Inc., 920 F. Supp. 1318,
1322 (S.D. Tex. 1996).
‘axiomatic.’”
at 1323.

“This presumption of state law is, by now,

Albany Ins. Co., 927 F.2d at 886; AGIP, 290 F. Supp.

Here Texas law applies.

Interpretation

of

a

contract,

including

a

determination

whether the contract is ambiguous, is a legal question for the
court.

Instone Travel Tech Marine & Offshore v. Int’l Shipping

Partners, Inc., 334 F.3d 423, 428 (5th Cir. 2003).
-5-

Therefore

“[c]ases involving the interpretation of an insurance policy are
appropriate for summary disposition.” SnyderGeneral Corp. v. Great
Am. Ins., 928 F. Supp. 674, 677 (N.D. Tex. 1996)(citing Principal
Health Care of Louisiana v. Lewer Agency, Inc., 38 F.3d 240, 242
(5th Cir. 1994)), aff’d, 133 F.3d 373 (5th Cir. 1998).

An insurance

policy is a contract to which the rules of contract construction
apply.

Balandran v. Safeco Ins. Co. of America, 972 S.W. 2d 738,

740-41 (Tex. 1998).

In construing a contract under Texas law, the

court’s primary task is to give effect to the written expression of
the parties’ intent.
should

consider

all

Instone Travel, 334 F.3d at 428.
provisions

of

the

contract

The court

together

to

determine the agreement of the parties and to ensure that each
provision is given effect and none is rendered meaningless.

Id.,

citing Int’l Turbine Serv., Inc. v. VASP Brazilian Airlines, 278
F.3d 494, 497 (5th Cir. 2002).

“Texas law requires us to ‘peruse

the complete document to understand, harmonize, and effectuate all
its provisions.’”

Kona Tech. Corp. v. S. Pac. Trans. Co., 225 F.3d

595, 610 (5th Cir. 2000).

Terms in an insurance policy are given

their ordinary and generally accepted meaning unless the policy
indicates that the parties intended a different or technical
meaning.

Security Mutual Cas. Co. v. Johnson, 584 S.W. 2d 703, 704

(Tex. 1979).

When the court can give the contract a certain or

definite legal meaning, it is not ambiguous and the court may
construe it as a matter of law. American Manufacturers Mutual Ins.
Co. v. Schaefer, 124 S.W. 3d 154, 157 (Tex. 2003).
-6-

The court must enforce unambiguous language in a contract as
it is written, with the standard being the “objective intent” of
the parties as demonstrated by the language used. Barnes v. Forest
Hills Inv., Inc., 11 F. Supp. 2d 699, 704 (E.D. Tex. 1998), citing
Clardy Manufacturing Co. v. Marine Midland Business Loans, Inc., 88
F.3d 347, 352 (5th Cir. 1996).

Language is ambiguous when, after

applying the rules of contract construction, the court is genuinely
uncertain which of two or more possible meanings is the correct
one.

Barnes, 11 F. Supp. 2d 704; R&P Enterprises v. LaGuarta,

Gavrel & Kirk, Inc., 596 S.W. 2d 517, 519 (Tex. 1980).

Lack of

clarity in the contract’s language is not sufficient to make a
contract ambiguous.

Madera Production Co. v. Atlantic Richfield

Co., No. CA 3-96-CV-2951-R, 1998 WL 292872, at *3 (N.D. Tex. June
1, 1998), citing Preston Ridge Fin. Serv. Corp. v. Tyler, 796 S.W.
2d 772, 777 (Tex. App. 1990), writ denied), and Weir v. Federal
Asset Disposition Ass’n, 123 F.3d 281, 286 (5th Cir. 1997).

A

contract is not ambiguous when its terms are susceptible to only
one reasonable construction and it can be given a definite legal
meaning.

Id., citing South Hampton Co. v. Stinnes Corp., 733 F.2d

1108, 1114 (5th Cir. 1984); Guaranty Nat’l Ins. Co. v. Azrock
Industries, Inc., 211 F.3d 239, 243 (5th Cir. 2000).

A contract is

not ambiguous merely because there are conflicting interpretations
of the contract language by the parties.

Forbau v. Aetna Life Ins.

Co., 876 S.W. 2d 132, 134 (Tex. 1994).
insurance

policy

is

found

to
-7-

have

If the language in an

two

or

more

reasonable

interpretations, the court must construe it strictly against the
insurer and liberally in favor of the insured.

Barnett v. Aetna

Life Ins. Co., 723 S.W. 2d 663, 666 (Tex. 1987); Nat’l Union Fire
Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., 811 S.W. 2d 552,
555 (Tex. 1991).

Parole evidence is not admissible to create an

ambiguity; “extrinsic evidence can [only] be considered when the
language of the policy is subject to two or more reasonable
interpretations,” i.e., when it is ambiguous.

American Casualty

Ins. Co. v. Ramirez, 651 F. Supp. 2d 686, 695 (N.D. Tex. 2009),
citing National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.
2d 517, 520 (Tex. 1995).
The

decision

whether

a

contract

is

ambiguous

and

the

interpretation of an unambiguous contract are questions of law for
the court under Texas law; but if the court determines the contract
is ambiguous, the intent of the parties becomes a question of fact
for the trier of fact.

Steuber Co. v. Hercules, Inc., 646 F.2d

1093, 1098 (5th Cir.), cert. denied, 454 U.S. 834 (1980).
The Texas Declaratory Judgment Act, § 37.009 of the Civil
Practice & Remedies Code, states, “In any proceeding under this
chapter, the court may award costs and reasonable and necessary
attorney’s fees as are equitable and just.”
United’s Motion for Summary Judgment (#19)
The Policy, in effect from August 15, 2014 to August 15, 2015,
was issued by United to Porto and Trident and insured Porto,
Trident, and a 2001 86' Steel B&B Boatbuilders Shrimp Trawler
-8-

Commercial Fisher Vessel named Miss Eva, owned by Porto and/or
Trident.

The declarations page of the Policy1 states that the Miss

Eva was insured in the amount of $550,000, with a protection and
indemnity limit of $500,000, and a crew sublimit of $100,000.
On or about December 1, 2014, an explosion and fire occurred
on board the Miss Eva while it was in the Gulf of Mexico in route
to Morgan City, Louisiana with four crewmen aboard. As a result of
the explosion and fire the Miss Eva sank, and an oil pollution
incident occurred.

The four crewman suffered different degrees of

injury

flown

and

were

via

helicopter

hospitalization and/or medical treatment:

to

Baton

Rouge

for

Captain Joseph Ryan

Barcot (“Barcot”) purportedly suffered second degree burns over
more that 60% of his body, and he has filed a Jones Act lawsuit
against Porto and Trident in the 113th Judicial District Court of
Harris County, Texas2; crew member Ivan Rodriguez (“Rodriguez”)
allegedly suffered second and third degree burns to his head, upper
extremities, left hand, and back; crew member Javier Altamirano
(“Altamirano”) claims injuries to his back, both elbows, and left
knee; and crew member Juan Zamora (“Zamora”) endured injuries to
his back, both elbows, and his left knee.

Zamora made a demand on

Porto and Trident for $100,000 for each crew member.
On December 16, 2014, attorneys for Trident and Porto demanded

1

#19, Ex. 1, at p. 13.

2

Since then the other three have also filed suits.
2.3, at p. 2.
-9-

#24, ¶

that United tender to them the full limits of the Hull portion of
the

Policy,

after

United

constructive total loss.3

concluded

that

the

Miss

Eva

was

a

United paid the two boat owners the

Agreed Amount of $550,000 and informed them that the Policy
excluded coverage for claims, loss, costs or expenses, fines,
penalties, or other sums directly or indirectly arising out of the
removal of the sunken ship.4

United contends, and Porto and

Trident agree, that no further amount is due under the Hull portion
of the Policy so its is entitled to summary judgment on the Hull
portion of the Policy.
On December 18, 2014 United sent a reservation of rights
letter to Porto and Trident, indicating that there was coverage
under

the

Protection

and

Indemnity

portion

of

the

Policy,

specifically under the applicable crew sublimit, for the claims of
the four injured crew members, but that the $100,000 sublimit was
the total amount of coverage for all claims by these men for
injuries arising out of single occurrence.5

The Policy makes clear

3

The Total Loss section of the Hull Clauses Coverage Form
of the Policy states, “There shall be no recovery for a
constructive total loss hereunder unless the expense of
recovering and repairing the Vessel would exceed the Agreed
Value.” #19. Ex. 1 at p. 24.
4

Endorsement G provides that the Policy “does not cover
claims, loss costs or expense, fine, penalty, or other sum
directly or indirectly arising out of the removal of wreck of any
vessel or its appurtenances or its equipment stored or used on
said vessel . . . Ex. 1 at p. 50.
5

United explains that insurance sublimits are “smaller
internal limits.” G. Victor Hallman & Jerry S. Rosenbloom,
-10-

that a series of claims may arise from a single occurrence.

Ex. 1

at p. 30 (“Liability hereunder in respect of loss, damage, costs,
fees, expenses or claims arising out of or in consequence of any
one occurrence is limited to the amount hereby insured.

(For the

purpose of this clause each occurrence shall be treated separately,
but a series of claims hereunder arising from the same occurrence
shall be treated as due to that occurrence.)”.

In construing

“occurrence,” the court focuses “on the events that cause the
injuries and give rise to the insured’s liability rather than the
number of injurious effects.” H.E. Butt Grocery Co. v. Nat’l Union
Fire Ins. Co., 150 F.3d 526, 530 (5th Cir. 1998).

Furthermore the

crew sublimit is reduced by United’s payment of loss, damage,

Personal Financial Planning 114 (7th ed. 2003). “Many
[insurance] policies also limit the coverage for certain types of
loss to amounts less than the limits of liability stated on the
declarations. These limits are commonly known as sublimits.”
Leonard E. Murphy, et al., Property Insurance Litigator’s
Handbook 21 (2007). United asserts that it is clear in the
Declaration page that sublimits are intended to be a restriction
on insurance of a specific type of harm. Doctors Hospital 1997
LP v. Beazley Ins., Civ. A. No. H-08-3340, 2009 WL 3719482, at
*10 (S.D. Tex. Nov. 3, 2009)(holding that sublimits are ”subject
to the policy limits”; Dillard Univ. v, Lexington Ins. Co., Civ.
A. No. 06-4238, 2009 WL 1565943, *1 (E.D. La. June 3,
2009)(finding that “[t]he primary and excess policies limit flood
coverage to $100,000 through flood sublimits”). United cites
cases showing federal courts that have found sublimits are not
ambiguous. It further cites Six Flags, Inc. v. Westchester
Surplus Lines Ins. Co., 565 F.3d 938, 955 (5th Cir. 2009) for the
rule that within the insurance coverage provided by a policy, the
sublimit sets the maximum liability for that particular kind of
coverage, a cap on liability that is less than the overall
coverage limits, usually on a per occurrence basis. Nowhere in
the crew sublimit at issue here does the language “claim” or “per
claim” appear.
-11-

costs, fees and expenses associated with the crew members’ claims.
“It is the general law and practice in Protection and Indemnity
insurance for legal expenses incurred in defending a liability
covered by the policy to be treated as part of the overall claim.
That claim [inclusive of legal expenses] is limited by the amount
insured in the

. . . policy.”

Taylor v. Lloyd’s Underwriters of

London, Civ. A. No. 90-1403, 1994 WL 118303, *13 (E.D. La. Mar. 25,
1994), aff’d in part, 47 F.3d 427 (5th Cir. 1995).
Porto and Trident disagree and argue that United has a duty to
pay the injured crew members the full value of their claims up to
the $500,000 limit of the Protection and Indemnity portion of the
Policy.
United claims, and Porto and Trident agree, that it has no
duty to cover, defend or indemnify Porto and Trident as to any
claims they may assert against each other.
34,

“Cross

Liability

Indemnity form:

Exclusion”

See #19, Ex. 1, at p.

Endorsement

(“Protection

and

This Policy shall not cover claims for an Assured

against another Assured, nor shall it apply to claims against the
property of another Assured.”).

Nor, all the parties agree, is

United responsible for any oil pollution or water pollution under
the “Total Pollution Exclusion,” which states that “this Policy
does not insure against any loss, damage, cost, liability, expense,
fine or penalty, or any kind or nature whatsoever, imposed on the
Assured, directly or indirectly, in consequence of, or with respect
to, actual or potential discharge, emission, spillage or leakage
-12-

upon or into the seas, waters, land or air, of oil, petroleum
products, chemicals or other substances of any kind or nature
whatsoever.”

#19, Ex. 1, at p. 41.

Moreover the “Absolute

Exclusion Punitive and Exemplary Damages” Endorsement unambiguously
states that there is no coverage for fines, penalties or exemplary
damages assessed against Porto and Trident.

Id. at p. 37.

The parties also agree that all the claims in this suit have
arisen from a single occurrence.
Defendants’ Objections and Response (#24)
Porto and Trident object that United has failed meet its
obligations so under the Protection and Indemnity portion of the
Policy.

They contend that the $100,000 crew sublimit should

provide up to $100,000 of coverage per crew member per occurrence.
Porto and Trident argue that the Policy does not explain how
the $100,000 crew sublimit reconciles with the applicability of the
$500,000 Protection & Indemnity limit in the Policy. They point to
the deposition testimony of James K. Bass (“Bass”), United’s
designated representative, in which he was unable to give a clear
answer to how the two could be reconciled.

#124, Ex. B, 64:20-

65:25. First they look to the original PLTF000199 (#124, Ex. C, p.
30) of the Policy’s explanation of coverage:
In consideration of the premium and subject to the
warranties, terms and conditions herein. . . this Company
hereby undertakes to pay up the amount hereby insured .
. . such sums as the Assured, as owner of the vessels
described on the Declaration Page shall have become
legally liable to pay and shall have paid on account of:
. . . .
-13-

(a) Loss of life of, or injury to, or illness of,
any person;
(b)
Hospital,
medical,
or
other
expenses
necessarily and reasonably incurred in respect of
loss of life of, injury to, or illness of any
member of the crew of the vessel named herein . . .
. [emphasis added by Porto and Trident]
PLTF00199 was amended by PLTF000216 (id. at p. 47) as follows:
(a) Loss of life of, or injury to, or illness of, any
person; excluding crew and/or employees,
Joseph Ryan Barcot
Juan Julos
Javier Martinez
Ivan Rodriguez
Porto and Trident argue that in light of the high premiums they
paid, i.e., $2500 for each crew member for crew coverage and
$12,000 for the $500,000 Protection and Indemnity coverage, they
believed they were buying crew coverage of up to $100,000 per crew
member per occurrence.

During his deposition Bass explained that

no matter what number of crew members Porto and Trident had, they
would have to pay a $2,500 premium for each one, but would only be
entitled to recover the same $100,000 based on the reasoning that
the more crew members the boat had, the more occurrences it would
have.

Porto and Trident argue that the opposite is true:

crew members, the safer the boat.

the more

Bass conceded that the “per

occurrence” language was standard in such policies and did not
depend on the number of crew members or any other factor.

Ex. B,

127:19-128:21.
Alternatively Porto and Trident suggest that given the policy
language under (a), which affords coverage specifically for claims
-14-

of Barcot, Julos, Martinez, and Rodriguez, and because (b) permits
Porto and Trident to trigger both the crew sublimit and the general
Protection and Indemnity portions of the Policy, under (a) the crew
members’

claims

fall

under

the

category

of

“any

person,”

“employees,” and “crew,” and under (b) they fall under the category
of crew.

Therefore coverage associated with their hospital,

medical, or other expenses necessarily and reasonably incurred in
respect to loss of life of, injury to, or illness of any one of
these crew members would be limited by the crew sublimit, but any
other damages could fall under the general Protection and Indemnity
portions of the Policy pursuant to (a).

Ex. C, PLTF000199.

Moreover, the two contend, because “crew” is not defined in
the

policy,

Barcot,

Julos,

Martinez

and

Rodriguez

are

not

identified as crew in the policy, so their damages are not limited
in any way by the crew sublimit.

Indeed, under (a) three of them

are called “persons” and not “crew.”

Under this interpretation of

the crew sublimit, the four would be entitled to recover the full
$500,000 limit of the Protection and Indemnity portion of the
Policy to cover and defend their claims against Porto and Trident
for their injuries in the December 1, 2014 fire.
Porto and Trident claim that United’s interpretation of “crew
sublimit” is not the “certain or definite legal meaning” of the
term, and therefore the Court should determine if United’s proposed
construction is the only logical determination.

Since Porto and

Trident

one

claim

thy

have

suggested
-15-

more

than

reasonable

interpretation, there is an ambiguity which should be construed
against the drafter, United.
United’s Reply (#25)
In light of Porto and Trident’s agreement that United paid in
full the $550,000 hull coverage due under the Policy, that the
Policy provides no coverage for pollution, removal of the wreck,
cross-claims between the insureds, and punitive damages, and that
the four crew members’ injuries arose from the same occurrence, the
only issue here relates to the crew sublimit.

United maintains

that the $100,000 crew sublimit is unambiguous on its face and that
it is subject to only one reasonable interpretation, i.e., that it
applies to damages to the crew as a whole.

Defendants cannot rely

on unsupported allegations or deposition testimony to create an
ambiguity where one does not exist, nor to contradict the plain
language of the unambiguous Policy, nor by modifying the plain term
“crew

sublimit” to “crewmember sublimit [emphasis by United].”
“Crew sublimit” has one clear and definite legal meaning. The

Merriam Webster dictionary defines “crew” as “a group of people
associated in a common activity,” and as “the

whole company

belonging to a ship sometimes including the officers and master,”
clearly in the plural.

Merriam Webster Online Dictionary, 2016,

http://http://www.merriam-webster.com/dictionary/crew
2016).

(Mar.

3,

“Crew” does not refer to a single person; “crewmember”

would be appropriate if it did.

If the Court were to adopt Porto

and Trident’s interpretation, it would be contrary to the purpose
-16-

of a sublimit.

If they would be entitled to up to $500,000 for

crew claims, there would be no purpose in including the sublimit in
the

Policy;

therefore

the

crew

sublimit

would

be

rendered

meaningless in violation of Texas law on contract interpretation.
El Paso Field Services, LP v. MasTec North America, Inc., 389 S.W.
3d 802, 805 (Tex. 2012)(“In discerning the parties’ intent, ‘we
must give effect to all the provisions of the contract so that none
will be rendered meaningless,”), quoting J.M. Davidson, Inc. v.
Webster, 128 S.W. 3d 223, 229 (Tex. 2003).

Moreover a contract

provision is not ambiguous simply because the two parties interpret
it differently.

Forbau, 876 S.W. at 134 (A contract is not

ambiguous merely because there are conflicting interpretations of
the contract language by the parties).

Because the provision is

not ambiguous, Porto and Trident cannot use parole evidence, such
as the testimony of Bass, to create an ambiguity where none exists.
Court’s Decision
The Court fully agrees with United that the language of the
policy, including the crew sublimit, is clear and unambiguous on
its face and should be enforced.

Accordingly, the Court

ORDERS that United’s motion for summary judgment is GRANTED.
United has sought a recovery of fees and costs, but does not
identify the statute under which he seeks them

The Court

ORDERS United to file within 20 days an appropriate motion
applying the factors set out in Johnson v. Georgia Highway Express,
488 F.2d 714, 171-19 (5th Cir. 1974), with accompanying billing
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records. See Campbell v. Hardradio, No. 3:01-CV-2663-BF, 2003 U.S.
Dist. LEXIS 23584, *5 (N.D. Tex. Dec. 31, 2003)(determination of
reasonable attorneys’ fees under Texas law is “virtually identical
to the Johnson factors used by the Fifth Circuit.”), citing Arthur
Andersen & Co. v. Perry Equipment Corp., 945 S.W. 2d 812, 818 (Tex.
1997); Vela v. City of Houston, 276 F.3d 659, 679-81 (5th Cir.
2001).

Porto and Trident shall file a timely response.

After the

Court resolves the matter of an award of fees and costs, it will
issue a final judgment by separate instrument.
SIGNED at Houston, Texas, this

5th

day of

May , 2016.

___________________________
MELINDA HARMON
UNITED STATES DISTRICT JUDGE

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