Eagle Leasing Corp. v. Hartford Fire Insurance Co., Civ. A. No. 7279.

Citation384 F. Supp. 247
Decision Date21 September 1974
Docket NumberCiv. A. No. 7279.
PartiesEAGLE LEASING CORPORATION et al. v. The HARTFORD FIRE INSURANCE COMPANY.
CourtUnited States District Courts. 5th Circuit. United States District Court of Eastern District Texas

Earl S. Hines, Brown & Hines, Beaumont, Tex., Donald A. Hoffman, George A. Frilot, III, Lemle, Kelleher, Kohlmeyer, Matthews & Schumacher, New Orleans, La., for plaintiffs.

H. Barton Williams, Deutsch, Kerrigan & Stiles, New Orleans, La., Leslie M. Ball, Wendell C. Radford, Benckenstein, McNicholas, Ball, Oxford & Radford, Beaumont, Tex., for defendant.

MEMORANDUM OPINION

JOE J. FISHER, Chief Judge.

This is a suit on a contract of insurance. The assured has sued the insurer to recover the costs of successfully defending an earlier action in this court. The insurer resists on the basis that the policy in question expired prior to the event complained of in the prior action against the assured. The Court has concluded that the policy provided continuing coverage against the type of liability asserted in the prior action, and, therefore, the assured is entitled to recoup its costs of defense.

This case was tried to the Court on the basis of agreed stipulations of fact and briefs of counsel. While the Court took full cognizance of all of the stipulated facts, the following are the essential elements upon which the Court relied in reaching its judgment:

A fleet policy of marine insurance, No, 84 OM A18900, was issued and delivered in St. Louis, Missouri, to the plaintiffs, Eagle Leasing Corporation, Olin Corporation (formerly Olin Mathieson Chemical Corporation), and Nilo Barge Line, Inc., through the Lawton-Byrne-Bruner Insurance Agency Co. of St. Louis, Missouri, for a period beginning at noon, January 1, 1967, and extending for a period of three years, subject to the payment of annual renewal premiums. The coverage provided by the policy was set forth as follows: Section I — Hull and Machinery; Section II — Protection and Indemnity including Excess Protection and Indemnity; Section III — Cargo; Section IV — Charterer's Legal Liability. By endorsement dated January 10, 1968, the policy term was extended until January 1, 1971, and the policy was amended so that the sole subscribing underwriter was The Hartford Fire Insurance Company. The first annual premium for the vessels covered under the policy amounted to $251,016.58. All premium charges due The Hartford were timely paid.

In December, 1968, The Hartford, through the Lawton-Byrne-Bruner Agency, quoted to the plaintiffs an annual renewal premium price of $583,000.00. Plaintiffs declined to accept this quotation, and by January 27, 1969, obtained insurance with companies other than The Hartford.

On November 16, 1968, Barge NL-701, one of the vessels covered by the policy, sank in the Gulf of Mexico. Nilo Barge Line, Inc. immediately commenced search and salvage operations in an effort to raise and remove the sunken barge from the bottom of the Gulf. Such operations, interrupted only by adverse weather, were underway approximately four months until March 17, 1969, at which time further efforts were deemed to be economically inadvisable, and the sunken wreck was abandoned and sold.

On February 10, 1971, Sun Oil Company brought Civil Action No. 7082 on the docket of this Court, wherein Sun claimed that its tanker, the S/S WESTERN SUN, struck the sunken Barge NL-701 on February 14, 1969, resulting in damages in the amount of $389,781.91. Liability was asserted against Nilo, et al., on the basis of negligent failure to promptly remove the sunken wreck. The case came on for trial before the Court on June 12, 1972 through June 15, 1972. This Court found in favor of Nilo, et al., and denied any recovery by Sun. Judgment to that effect was entered on January 29, 1973.

At the outset of the litigation by Sun against Nilo, et al., the Assureds made appropriate requests of The Hartford to protect, defend or indemnify in accordance with the policy. The Hartford refused, its position being that the duty, to protect and indemnify the plaintiffs existed only during the "currency" of the policy, which was claimed to have terminated on January 27, 1969. The controversy thus presented for the Court's determination centers on the question as to whether The Hartford's Protection and Indemnity policy (Section II) provided coverage because the policy was in effect when the barge sank, even though the premium term of the policy expired prior to the alleged striking of the wreck by the S/S WESTERN SUN.

The most significant element of this case is the provision of the Protection and Indemnity policy which affords coverage. It provides:

"It is agreed that if the Assured, as shipowners, shall have become liable to pay, and shall have in fact paid, any sum or sums in respect of any responsibility, claim demand, damages and/or expenses, or shall become liable for and shall pay any other loss arising from or occasioned by any of the following matters or things during the currency of this policy in respect of the ship hereby insured, that is to say:
(a) Loss or damage in respect of any other ship or boat, or in respect of any goods, merchandise, freight or other things or interests whatsoever, on board such other ship or boat, caused approximately or otherwise by the insured vessel, in so far as the same is not covered by the Running Down Clause in or attached to the policies on Hull and Machinery.
(b) Loss or damage to any goods, merchandise, freight, or other things or interests whatsoever, other than as aforesaid, whether on board said vessel or not.
(c) Loss of life or personal injury, and for payments made on account of life salvage.
(d) Loss or damage to any harbor, dock, graving, or otherwise, slipway, way, gridiron, pontoon, pier, quay, jetty, stage, buoy, telegraph cable, or other fixed or movable thing whatsoever or to any goods or property in or on the same.
(e) Any attempted or actual raising, removal or destruction of the wreck of the insured vessel or the cargo thereof, or any neglect or failure to raise, remove or destroy the same.
(f) Liability for loss, damage, or expense incurred in connection with or in resisting any unfounded claim by the master or crew or other persons employed on the
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2 cases
  • Eagle Leasing Corp. v. Hartford Fire Ins. Co., 74-3858
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • October 22, 1976
    ...referred to as Olin), for attorneys' fees and expenses incurred in the defense of a suit against Olin by Sun Oil Company. See E.D.Tex. 1974, 384 F.Supp. 247. The fleet policy was issued and delivered to Olin in St. Louis, Missouri, on January 1, 1967, and also included coverage for Hull and......
  • Gardner v. Woodcock, Civ. A. No. 4-71585.
    • United States
    • United States District Courts. 6th Circuit. United States District Court (Western District Michigan)
    • October 25, 1974
    ......Philo, Detroit, Mich., co-counsel for plaintiffs. .         John ......

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