Cushing v. Texas & P. Ry. Co.
| Decision Date | 24 August 1951 |
| Docket Number | 885-888.,Civ. No. 883 |
| Citation | 99 F. Supp. 681 |
| Court | U.S. District Court — Eastern District of Louisiana |
| Parties | CUSHING v. TEXAS & P. RY. CO. et al., and four other cases. |
James J. Morrison, Arthur A. de la Houssaye, Browne & Rault, Raymond H. Kierr, New Orleans, La., for plaintiffs.
Breazeale, Sachse, Wilson & Hebert, Baton Rouge, La., for Texas & P. Ry. Co.
Deutsch, Kerrigan & Stiles, New Orleans, La., for Maryland Cas. Co. and Home Ins. Co. of New York.
Five suits now consolidated were brought against the liability underwriters of the owner and charterer of the towboat Jane Smith as well as against the Texas & Pacific Railway Company to recover damages for the death of seamen employed aboard the vessel. The men were drowned when the towboat capsized and sank in the Atchafalaya River. Plaintiffs' right to bring a direct action against the underwriters of the owner and charterer is predicated on Title 22, § 655 of the Louisiana Revised Statutes of 1950.
The underwriters have moved to dismiss and for summary judgment, attaching to the motions copies of their policies in question. The grounds for the motion are fivefold: 1st, The Court has no jurisdiction over actions as to the underwriters because plaintiffs are proceeding under the Jones Act, 46 U.S.C.A. § 688. Since that statute creates no direct action against tort-feasor's underwriters no such action can be authorized by state statute. 2nd, Section 655 of Title 22 of the Louisiana Revised Statutes of 1950 which authorizes a direct action against a tortfeasor's liability insurer does not apply to policies of marine insurance. 3rd, Section 655 would be unconstitutional if it purported to apply to policies of marine insurance in that it would infringe the exclusive constitutional grant to the federal government of jurisdiction over marine matters. 4th, Movers' assureds, the owner and charterer of the towboat Jane Smith, have initiated limitation of liability proceedings with respect to the accident in suit and the statutory injunction of the Limitation of Liability Act precludes the instant actions. 5th, Since plaintiffs are enjoined in the limitation proceeding from suing movers' assureds they are precluded by Section 655 itself from suing movers.
The plaintiffs on the other hand assert that they are not proceeding primarily under the Jones Act; that federal jurisdiction in this case is based on diversity of citizenship and jurisdictional amount and plaintiffs are proceeding against movers under Section 655 on the contracts of liability insurance which they contend are for the protection of the public as well as the assureds. They contend also that the regulation of insurance companies including marine insurance is a matter specifically reserved to the states by congressional act and this action under Section 655 is in no way affected by the so-called uniformity doctrine in admiralty. They contend further that the right of action as to the underwriters is unaffected by the limitation of liability proceeding in that that proceeding protects the owner as distinguished from the insurer and the insurer cannot set up as a defense to this action the owner's defense of limitation.
There are several reasons why this action may not stand as against the underwriters. In disposing of these motions, however, this court will cite but two.
The policies in question are marine protection and indemnity policies protecting the owner and charterer of the towboat Jane Smith against liability for personal injury and accidental death occurring on board the vessel. This type of insurance is described in the Louisiana Insurance Code in Louisiana Revised Statutes of 1950, Title 22, Section 6, Subsection 13(e). Title 22, Section 6 defines and classifies the various types of insurance covered by the code. Liability insurance is defined in Section 6, Subsection (4),1 whereas marine and transportation (inland marine) insurance is defined in Revised Statutes Section 6, Subsection (13).2
Louisiana Revised Statutes of 1950, Title 22, Section 655,3 under which this action is brought, is entitled "Liability policy; * * * direct action against insurer" and relates solely to liability insurance as described in Title 22, Section 6, Subsection (4). The policies in suit, however, are policies of marine insurance described in Title 22, Section 6, Subsection 13(e). The legislature when it used the term "liability insurance" in Section 655 obviously intended to limit the application of that section to liability insurance. If it intended Section 655 to be applicable to marine insurance it would have said so. Plaintiffs argue that the term "liability insurance" used in Section 655 is broader than the definition of liability insurance in Section 6, Subsection (4). That argument, however, is unsupported by the basic principles of statutory construction. What purpose would there be in defining the types of insurance covered by the code if the very definitions given in the code are to be ignored by the code itself?
There is yet a more fundamental reason why the action brought against the underwriters must be abated. The charterer and owner of The Jane Smith have filed limitation of liability proceedings under Title 46, Section 183, U.S.C.A. Plaintiffs have filed their claims in that action covering the very claims here in suit. If this action against the shipowner's underwriters is allowed to proceed, the shipowner may be deprived of his right to indemnification against his underwriters. If these plaintiffs should be paid any part of their claims in the limitation proceeding, then the shipowner under his contracts of insurance has a right to be reimbursed by his underwriters. If the underwriters' exposure on the policies is exhausted in paying the claims in this case, then the shipowner's right against his insurers will avail him nothing.
The effect therefore of allowing these plaintiffs to proceed directly against the shipowner's insurers would be to force the owner to turn his insurance into the limitation proceeding as part of "the interest of...
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Delaune v. Saint Marine Transp. Co.
...1). 25 Maryland Casualty Co. v. Cushing, 347 U.S. 409, 411, 74 S.Ct. 608, 609, 98 L.Ed. 806 (1954). 26 See Cushing v. Texas & Pacific Railway Co., 99 F.Supp. 681, 683-84 (E.D.La.1951). 27 See id. at 683. 28 198 F.2d 536 (5th Cir.), reh'g denied, 198 F.2d 1021 (5th Cir.1952) (per curiam) (2-......
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Maryland Cas Co v. Cushing
...essential purpose expressed by an Act of Congress in a field already covered by that Act. Title 46, § 183, U.S.C.A.' Cushing v. Texas & P. Ry. Co., 99 F.Supp. 681, 684. The Court of Appeals, relying solely on diversity jurisdiction, reversed, holding that as a matter of local law the Distri......
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Crown Zellerbach Corp. v. Ingram Industries, Inc., 82-3749
...the Limitation of Liability Act governed, and refused to give effect to Louisiana's direct action statute. Cushing v. Texas & P. Ry. Co., 99 F.Supp. 681 (E.D.La.1951). The Fifth Circuit held, instead, that Louisiana's direct action statute governed, and that the plaintiffs could proceed aga......
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Greater New Orleans Expressway Com'n v. Tug Claribel
...where the policy in that instance was a marine protection and indemnity policy. Judge Wright, in his opinion in Cushing v. Texas & P. Ry. Co., D.C., 99 F.Supp. 681, 684, pointed out that there was no real distinction to be made between hull insurance and marine protection and indemnity insu......