Sifers v. General Marine Catering Co.
| Decision Date | 03 January 1990 |
| Docket Number | 89-4046,86-3760,89-4671,87-3606,Nos. 86-3494,86-3685,87-4387,87-4798,89-3453,87-3164,88-3308,s. 86-3494 |
| Citation | 892 F.2d 386 |
| Parties | Stanley R. SIFERS, Plaintiff, v. GENERAL MARINE CATERING COMPANY, Defendant-Third Party Plaintiff-Appellant, v. FIRST STATE INSURANCE CO. and Louisiana Insurance Guaranty Association, Third Party Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
John J. Cooper and Kenneth A. Beobay, New Orleans, La., for General Marine Catering Co.
Earl S. Eichin, Jr., O'Neil, Eichin & Miller, New Orleans, La., for First State Ins. Co.
Thomas E. Balhoff, Judith R. Atkinson, Carey J. Guglielmo, Charles A. Schutte, Jr., Mathews, Atkinson, Guglielmo, Marks & Day, Baton Rouge, La., for La. Ins. Guar. Ass'n.
Robert C. Stern, Perrin C. Butler, Perrin, Butler, Ltd., Metairie, La., for Blair, et al.
S. Daniel Meeks, Abbott, Webb, Best & Meeks, New Orleans, La., for Sealift, Inc., Elsie A. Dominick and William F. Smith.
Terry W. Sercovich, Belle Chasse, La., for Allied Towing Services, Inc. and Lafayette Crewboats, Inc.
Kerry P. Camarata, Thibodaux, La., for John David Naples.
Robert B. Nolan, New Orleans, La., amicus curiae S.H.R.M. Catering in No. 86-3494.
Robert B. Nolan and Joseph B. Guilbeau, New Orleans, for S.H.R.M. Catering in No. 87-4387.
Thomas G. O'Brien and Edwin C. Laizer, Adams & Reese, New Orleans, for S.H.R.M. Catering in No. 87-4798.
Robert B. Nolan and Deborah B. Rouen, Adams & Reese, New Orleans, for S.H.R.M. Catering in No. 89-4671.
Alex D. Chapman, Jr. and J. Wendel Fusilier, Ville Platte, La., for amicus curiae Joseph Mike Deshotels.
Andre J. Mouledoux and Alan G. Brackett, Hebert, Mouledoux & Bland, New Orleans, La., for appellants in No. 88-3308.
Anthony A. Dingleman, Thibodaux, La., for Duplantis.
Paul J. Galuszka and Gregory Bulluing, New Orleans, La., for Galuszka.
Richard J. Arsenault and Stacy DeMartini Bruton, Neblett, Beard & Arsenault, Alexandria, La., for Billy D. Cox and Sandra Elaine Cox.
Appeals from the United States District Courts for the Eastern and Western Districts of Louisiana.
Before GEE, RUBIN, and SMITH, Circuit Judges.
Introduction.
The Louisiana Insurance Guaranty Association (LIGA) is a nonprofit, unincorporated creation of state law, designed to reinsure the obligations of insolvent insurers doing business in Louisiana. Born after the 1950's and 1960's, a period that witnessed increased insolvencies by insurance carriers, LIGA was fashioned by the Louisiana Legislature in 1970. The statute mimicked a uniform state model that was offered nationally to protect the public through the device known as "insurance guarantee associations."
As a condition of doing business in Louisiana, insurance carriers receiving the statutory benefit of being reinsured were forced to finance LIGA through assessments. In the event that a member-carrier became insolvent, it was envisioned that LIGA would assume all the benefits and obligations of the direct insurance policies underwritten by the defunct carrier. Some notable exceptions, such as life insurance and ocean marine insurance, were carved out of the enabling statute. That is, LIGA could not be held at risk for claims made by policyholders or beneficiaries who possessed, for example, life or ocean marine insurance written by insolvent carriers.
For purposes of this consolidated appeal, arising from eleven separate cases, 1 we are concerned primarily with the statutory provision that exempts LIGA from reinsuring the claims of "ocean marine insurance," which, until recently, remained an undefined term of art under Louisiana's insurance code. The claimants in these separate cases share the common attributes that all have alleged injuries arising from maritime service, all have no recourse against certain defunct insurance companies, and all now seek recovery from LIGA as a reinsurer.
The claimants believe that LIGA is responsible for their injuries as a reinsurer of outstanding "Protection and Indemnity" (P & I) and "Worker's Compensation/Employer Liability" (WC/EL) policies carried by employers, owners, and operators involved in these cases. The claimants argue that such policies do not constitute "ocean marine insurance," as LIGA believes, within the meaning of the statutory exception and that, accordingly, LIGA must honor their claims.
Jurisdiction here is based upon federal questions presented under the Jones Act 2 and general maritime law. The courts of the Eastern and Western Districts of Louisiana have been sharply divided concerning the proper interpretation of LIGA's statutory obligations. The issues presented raise complicated issues of insurance law and, until recently, there has been a dearth of state caselaw on the subject.
This consolidated appeal, before us for the second time, has a lengthy history. 3 Since the resolution of the dispositive issues turned upon the statutory obligations of LIGA, and the outcome would have an immediate impact upon many pending state and federal cases, we certified a narrow question of Louisiana insurance law to the Louisiana Supreme Court in May 1988. 4 With the benefit of that court's resolution of our certified question, 5 and its recent decision in Backhus v. Transit Casualty Co., 6 the state law applicable to the separate cases before us is now considerably more settled. While new parties have since been added to this appeal and others have settled their disputes, 7 the issues remain essentially the same.
We are presented with seven separate issues, some of which are uniformly relevant to all cases, while other issues have an impact upon only one. We elect to address these issues seriatim, as argued orally before us. 8
The Characterization of "Protection and Indemnity" Insurance.
The claimants and insurers in these various cases seek to obtain payment from LIGA on the basis of insurance policies which the defendants purchased from several liability insurers that have since become insolvent. Each of the policies purporting to afford P & I insurance provides coverage against liability for personal injuries and damage to the property of third persons. Some of the claimants seek to hold LIGA accountable for damages of the first kind; others, for damages of the second kind.
LIGA's liability for these damages turns upon the construction of certain provisions of Louisiana's Insurance Guaranty Association Law (IGAL). 9 Although the statute in general terms makes LIGA responsible for claims that arise under "all kinds of direct insurance," section 1377 exempts from coverage several enumerated types of direct insurance, including "ocean marine" insurance. 10 LIGA contends that P & I insurance is a variety of "ocean marine" insurance and that, therefore, it is not obligated to pay claims arising under these policies underwritten by insolvent carriers. The claimants reject the basic premise of this argument, contending that P & I insurance, properly characterized, is not a species of "ocean marine" insurance.
The district courts whose judgments are now before us on appeal did not resolve the question uniformly. We are therefore presented with the question whether, for purposes of the IGAL, "ocean marine" insurance includes P & I insurance against (i) liability for personal injuries and/or (ii) liability for damage to the property of third parties.
The Louisiana Supreme Court's decision in Backhus, issued shortly after oral argument herein, is dispositive of the first part of this question. In that case, the plaintiff, an employee aboard an ocean-going vessel, sued her employer's insurer and LIGA to recover damages for personal injuries she sustained while on board the vessel. Coverage against liability for such injuries was provided under a P & I policy. The court described the principal issue in these terms: "whether 'protection and indemnity' insurance constitutes 'ocean marine insurance' under the terms of the Louisiana Insurance Code and the [IGAL]." 11 To this question the court gave an unequivocal, affirmative answer.
The Backhus court's ruling rests upon several considerations. First, the court noted that although the code does not define the term "ocean marine" insurance, it does define the closely related term "marine and transportation (inland marine)" insurance. 12 Among the types of insurance included within that category is "marine protection and indemnity insurance," which includes insurance "against legal liability ... of the insured for personal injury, illness or death or for loss of or damage to the property of another." 13 This definition, the court reasoned, supports the view that "protection and indemnity" insurance, even that which provides protection against liability for personal injuries, is a form of "ocean marine" insurance.
Second, the court, after invoking the civilian interpretive principle that "words of art and technical terms must be given their technical meaning when the law involves a technical matter," 14 reviewed several leading treatises and published articles concerning maritime insurance law. The court found that "[p]rotection and indemnity insurance is consistently treated as marine insurance within the industry." 15
Third, the court examined the IGAL for evidence of legislative intent to protect personal injury claimants who are entitled to recover under "protection and indemnity" policies. The court found no such evidence. Citing its recent decision in Deshotels, the court remarked that the legislature, in enacting section 1377, had intended to exclude certain "kinds of policies," rather than certain "kinds of risks," from coverage. 16 One of the kinds of policies so excluded, the court noted, was "ocean marine" insurance.
Backhus therefore resolves the question of whether insurance covering liability for personal injuries afforded under a P & I policy constitutes "ocean marine" insurance. It follows, then, that those plaintiffs who have suffered personal...
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