Cont'l Ins. Co. v. L&L Marine Transp., Inc.
| Decision Date | 15 February 2018 |
| Docket Number | No. 17-30424,17-30424 |
| Citation | 882 F.3d 566 |
| Parties | CONTINENTAL INSURANCE COMPANY, Plaintiff, v. L&L MARINE TRANSPORTATION, INCORPORATED, Defendant. P & I Underwriters, Subscribing to Policy Number B0507M13PP07280, Plaintiff–Appellee, v. Atlantic Specialty Insurance Company, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Harry E. Morse, New Orleans, LA, for Plaintiff–Appellee.
Anthony John Staines, Esq., Craig W. Brewer, Corey Patrick Parenton, Esq., Staines & Eppling, A.P.L.C., Metairie, LA, for Defendant–Appellant.
Before REAVLEY, SMITH, and OWEN, Circuit Judges.
Three tugs were towing a barge, with one designated as the "lead" tug and the other two as "assisting" tugs. One of the assisting tugs allided with a bridge fender system and sank. An insurance policy on the lead tug covers damage only to its "tow." Accordingly, we decide the meaning of "tow" for purposes of that insurance contract and whether the assisting tug was the "tow" of the lead tug. The district court held that the assisting tug was the "tow" because of a tort principle known as the "dominant mind" doctrine. We reverse and render.
Most importantly to the present dispute, Continental alleged that "[t]he M/V ANGELA RAE was the lead tug and was responsible for coordination of the tow." Continental further averred that the ANGELA RAE was negligent in several ways, including "failure to keep a proper look out; failure to properly navigate around the Sunshine Bridge fender system; [and] failure to chart and plan a proper and safe route."
Both Atlantic Specialty Insurance Company ("Atlantic Specialty") and P & I Underwriters ("P & I") insured the ANGELA RAE. This is a dispute between them regarding whose policy covers the incident.1 Atlantic Specialty is the Hull & Machinery insurer, while P & I provides Protection and Indemnity Insurance. Following the above complaint, Atlantic Specialty denied that its policy covered any liability for the MISS DOROTHY's allision and sinking. Accordingly, P & I filed a complaint against Atlantic Specialty, claiming that the Atlantic Specialty policy did so cover. P & I's coverage complaint was initially consolidated with Continental's tort suit against L&L, then severed by joint motion.
The parties cross-moved for summary judgment, each alleging that the other's policy covered any liability for the loss of the MISS DOROTHY. As relevant here, Atlantic Specialty's policy insures the ANGELA RAE as follows:
[I]f 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 persons any sum or sums we, the Underwriters, will pay.
Essentially, the Atlantic Specialty policy covers the following situations: (1) the ANGELA RAE collides with something else, (2) the ANGELA RAE strands her tow, (3) the ANGELA RAE causes her tow to come into collision with anything else, or (4) the ANGELA RAE causes any damage to her tow or to her tow's freight. As Atlantic Specialty maintains, none of those situations occurred. The ANGELA RAE never collided with anything, nor was her tow stranded, subject to collision, or damaged in any way.
Conversely, P & I's policy is much broader, indemnifying L&L for "[l]iability for loss of or damage to any other vessel or craft, or to property on such other vessel or craft ... provided such liability does not arise by reason of a contract made by the assured." Yet P & I is suing because its policy covers only situations that Atlantic Specialty's does not : "Nonwithstanding anything to the contrary contained in this policy, no liability attaches to the Assurer [f]or any loss, damage, or expense which would be payable under the terms of the {Response} form of policy on hull and machinery." It is undisputed that, if Atlantic Specialty's policy does not cover this incident, then P & I's does.
Accordingly, P & I contends that the loss of the MISS DOROTHY falls within the third situation covered by Atlantic Specialty's policy, i.e. that the ANGELA RAE caused her "tow" to come into collision with the fender system. P & I reasons that the MISS DOROTHY was the "tow" of the ANGELA RAE—despite being itself a tugboat—because the ANGELA RAE was allegedly the lead tug. The district court agreed with P & I and granted it summary judgment. Atlantic Specialty appeals.
As a preliminary matter, the parties dispute whether the so-called "Eight Corners" rule governs this case. Under it, courts "assess whether there is a duty to defend by applying the allegations of the compliant to the underlying policy without resort to extrinsic evidence." Martco Ltd. P'ship v. Wellons, Inc. , 588 F.3d 864, 872 (5th Cir. 2009). Put another way, the court determines whether an insurance policy covers an incident by looking to the allegations in the underlying suit's complaint. See id. P & I has consistently maintained, before the district court and on appeal, that the rule applies.
For the first time on appeal—and only in its reply brief—Atlantic Specialty disputes the application of the rule. Accordingly, the district court stated, "The parties do not dispute [that] the allegations in the complaint control which policy is liable for defense costs and coverage." Thus, Atlantic Specialty has waived any quarrel over the applicability of the Eight Corners rule and the controlling nature of Continental's complaint.2 Accordingly, we assume the facts in Continental's complaint—the ANGELA RAE was the lead tug; the MISS DOROTHY was assisting the ANGELA RAE with the towage of FSB 101; and the ANGELA RAE negligently caused the MISS DOROTHY's allision.
With these facts assumed, we turn to the central issue: Was the MISS DOROTHY the "tow" of the ANGELA RAE for purposes of Atlantic Specialty's policy? Both sides agree that Louisiana law controls.3 Under Louisiana law, the interpretation of insurance policies is governed by general rules of contract interpretation. Cadwallader v. Allstate Ins. Co. , 848 So.2d 577, 580 (La. 2003). Accordingly, courts "should seek to determine the parties' common intent, as reflected by the words in the policy." Gabarick v. Laurin Maritime (Am.), Inc. , 650 F.3d 545, 553 (5th Cir. 2011) (internal quotations omitted). "The words of a contract must be given their generally prevailing meaning" or their technical meaning "when the contract involves a technical matter."4 If the words of the contract "are unambiguous and the parties' intent is clear, the insurance contract will be enforced as written."5
Because we look for the "plain, ordinary and generally prevailing meaning" or "technical meaning" of the word "tow," we begin with the dictionary. See Cadwallader , 848 So.2d at 580–81. Dictionary definitions almost uniformly point toward the following definition of "tow": a vessel that is being provided extra motive power from another vessel by being pushed or pulled. For example, Black's Law Dictionary defines "towage" as "[t]he act or service of towing ships ... by means of a small vessel called a tug ."6 That indicates that the "tug" is actively "towing" or exerting some force on the "tow." Supporting this, Merriam–Webster defines the verb "tow" as "to draw or pull along behind" or "to move in tow."7 The Oxford English Dictionary agrees, defining the verb "tow" as "[t]o draw by force; to pull, drag."8 Furthermore, Oxford defines the noun "tow" as "[t]he action of towing or fact of being towed" or as 9
Caselaw and treatises support those definitions. The Supreme Court explained tows and towage in Stevens v. The White City , 285 U.S. 195, 200, 52 S.Ct. 347, 76 L.Ed. 699 (1932) :
The supplying of power by a vessel, usually one propelled by steam, to tow or draw another is towage. Many vessels, such as barges and canal boats, have no power of their own and are built with a view to receiving their propelling force from other sources. And vessels having motive power often employ auxiliary power to assist them in moving about harbors and docks.[10 ]
Fifth Circuit precedent accords with this notion. In Mississippi Valley Barge Line Co. v. Indian Towing Co. , 232 F.2d 750, 753 n.5 (5th Cir. 1956), the court noted that "[towage] is the employment of one vessel to expedite the voyage of another." Finally, at least one treatise defines "[t]owage" as THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 12-1 (West 5th ed. 2017) (" SCHOENBAUM ").
Therefore, dictionaries, cases, and treatises all point to a common under-standing of "tow": some ship or boat that is being provided extra...
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