Adams v. Unione Mediterranea Di Sicurta

• Decision Date: 14 April 2004
• Docket Number: No. 03-30026.,03-30026.
• Citation: 364 F.3d 646
• Parties: Steven Henry ADAMS, for Himself and as Representative of Certain Underwriters at Lloyd's; Indemnity Marine Assurance Company Ltd.; The Yorkshire Insurance Company Ltd.; Commercial Union Assurance Company PLC; Phoenix Assurance PLC; Cornhill Insurance PLC; Norwich Union Fire Insurance Society Ltd.; Maritime Insurance Company Ltd.; The Northern Assurance Company, Ltd.; Skandia UK Insurance PLC; Ocean Marine Insurance Company; Folksam International Insurance Company (UK) Ltd.; Scottish Lion Insurance Company Ltd.; Wurttembergische Feuerversicherung AG; Sphere Drake Insurance Group PLC; Dai-Tokyo Insurance Co. UK Ltd., Plaintiffs-Appellees-Cross Appellants, v. UNIONE MEDITERRANEA DI SICURTA; et al., Defendants, AK Steel Corp., formerly known as, Armco Steel Company LP, Defendant-Appellant, and UMS Generali Marine Spa, formerly known as Unione Mediterranea Di Sicurta, Defendant-Appellant-Appellee-Cross Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

364 F.3d 646

Steven Henry ADAMS, for Himself and as Representative of Certain Underwriters at Lloyd's; Indemnity Marine Assurance Company Ltd.; The Yorkshire Insurance Company Ltd.; Commercial Union Assurance Company PLC; Phoenix Assurance PLC; Cornhill Insurance PLC; Norwich Union Fire Insurance Society Ltd.; Maritime Insurance Company Ltd.; The Northern Assurance Company, Ltd.; Skandia UK Insurance PLC; Ocean Marine Insurance Company; Folksam International Insurance Company (UK) Ltd.; Scottish Lion Insurance Company Ltd.; Wurttembergische Feuerversicherung AG; Sphere Drake Insurance Group PLC; Dai-Tokyo Insurance Co. UK Ltd., Plaintiffs-Appellees-Cross Appellants, v. UNIONE MEDITERRANEA DI SICURTA; et al., Defendants AK Steel Corp., formerly known as, Armco Steel Company LP, Defendant-Appellant, and UMS Generali Marine Spa, formerly known as Unione Mediterranea Di Sicurta, Defendant-Appellant-Appellee-Cross Appellee.

No. 03-30026.

United States Court of Appeals, Fifth Circuit.

April 14, 2004.

COPYRIGHT MATERIAL OMITTED

Jon D. Picou, Lee Morgan Peacocke (argued), Larzelere, Picou & Wells, Metairie, LA, for Plaintiffs-Appellees-Cross-Appellants.

Christopher O. Davis (argued), Phelps Dunbar, New Orleans, LA, for UMS Generali Marine Spa.

Paul C. Miniclier (argued), David Anthony Binegar, Law Office of Paul C. Miniclier, New Orleans, LA, for AK Steel Corp.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before DAVIS, WIENER and STEWART Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

This suit arises from the sinking of two barges in the Mississippi River and the loss of 158 slabs of steel aboard those barges. The primary issues in this appeal relate to arguments between two co-insurers of the lost steel cargo over the amount of the loss each should bear. Defendant insurer Unione Mediterranea di Sicurta ("UMS") also challenges personal jurisdiction and venue. Issues are also presented challenging the propriety of the district court's order permitting the insurers to recover in their subrogation action against A.K. Steel Corp. ("AK Steel") for converting the salvaged steel. We AFFIRM in part, VACATE in part, and REMAND this case to the district court.

I.

The facts of this case have been set out in detail in the opinion from the earlier appeal to this court, Adams v. Unione Mediterranea Di Sicurta, 220 F.3d 659, 664-67 (5th Cir.2000) ("Adams I"). The background facts will be summarized here to the extent necessary to understand the issues in the present appeal.

On October 16, 1993, while en route from New Orleans to Cincinnati, two Canal Barge Company barges carrying 158 slabs of steel cargo broke away from their flotilla and sank in the Mississippi river. The loss occurred during the final leg of a carriage of 1,290 steel slabs that began in Italy. The owner of the steel slabs was Duferco SA ("Duferco"), a Swiss company, which had agreed to ship the steel to AK Steel, an Ohio Company. Plaintiff underwriters Steven Henry Adams et al. ("Adams") and UMS, an Italian insurer, concurrently insured the steel cargo under separate marine cargo policies. Adams insured the steel through a cargo policy originally issued to Canal Barge Co. Ltd., with Duferco named as an additional insured. Duferco was separately insured under an open cargo policy issued by UMS. The Adams policy carried a policy limit of $5 million; the UMS policy carried a limit of $20 million per shipment. The value of the cargo was $7,580,000. Duferco and Adams ultimately agreed that the value of the lost steel was $986,352.41.

Once the two barges sank, Duferco filed a claim with UMS for the loss. After attempts by UMS and Duferco to salvage the sunken cargo failed, UMS denied Duferco's claim. Duferco then pursued its claim against Adams and abandoned the sunken cargo to the London underwriter. Meanwhile a professional salvage company, American Eagle Marine, Inc. ("American Eagle") attempted to salvage the lost cargo believing it to have been abandoned in its entirety. American Eagle successfully salvaged 127 of the sunken steel slabs and sold them to AK Steel for a net profit of $190,975.68.

Plaintiff Adams initially brought this action in June 1994 seeking a declaratory judgment: (1) identifying whom it should pay for the loss of the cargo under their cargo policy with Canal Barge; (2) that UMS was obligated under its open cargo policy with Duferco to contribute to payment for the loss; and (3) that Plaintiffs were obligated to pay only their proportionate share of the loss. Plaintiffs named as defendants, among others, Canal Barge, UMS, and Duferco.¹

The district court held that Plaintiffs could not recover in a contribution action against UMS for any potential share of the losses without first fully compensating Duferco for the loss. Plaintiffs then paid Duferco $986,352.41 for the loss and obtained an assignment of whatever rights Duferco had against UMS and other potential tortfeasors.

Plaintiffs later discovered a successful salvage of 127 of the sunken steel slabs by American Eagle and AK Steel. Adams demanded that American Eagle and AK Steel return the cargo or pay its value. When the two companies refused to do either Plaintiffs amended their petition to assert a claim against AK Steel and American Eagle for the value of the converted steel. UMS then cross-claimed against AK Steel and American Eagle for its share of the value of the steel.²

UMS filed pretrial motions to dismiss for lack of personal jurisdiction and improper forum. The district court rejected UMS's motions. The district court granted Adams motion for partial summary judgment regarding the apportionment of Duferco's loss between the two insurers, Adams and UMS. The court then proceeded with a bench trial. At the conclusion of the trial the district court denied UMS's coverage defenses and found that UMS was required to contribute pro rata with Adams for the loss according to their respective policy limits. The court then awarded Adams 80% of the approximately $900,000 it had paid out to Duferco. The district court further found that American Eagle and AK Steel had converted the steel and therefore awarded Adams 20% and UMS 80% of the $190,975.68 in value that AK Steel and American Eagle realized from the salvaged steel after paying the cost of salvage.

UMS appealed the district court judgment objecting to the rulings on personal jurisdiction and venue as well as the apportionment of liability between insurers. Adams cross appealed arguing that UMS was not entitled to an award from AK Steel without having paid its portion of the Duferco loss and that UMS owed Adams a portion of the attorney's fees it paid to bring the case against AK Steel and American Eagle. AK Steel appealed the district court's judgment against it. This Court addressed primarily the jurisdictional issues and remanded for further proceedings only on those issues. On remand the district court found sufficient contacts with Louisiana to justify the exercise of jurisdiction and again entered a judgment. UMS appealed.

In the current appeal UMS challenges the district court's rulings on jurisdiction, venue, and apportionment of the liability for Duferco's loss. Adams again challenges the district court's order granting UMS a pro rata portion of the award against AK Steel, and the refusal to award attorney's fees. AK Steel challenges the district court's award of damages to UMS, arguing that UMS is unable to sue its additional insured, AK Steel. We address these separate challenges in turn.

II.

UMS challenges first the district court's finding that it has sufficient contacts with Louisiana to support specific and general personal jurisdiction. UMS argues that neither the coverage of this specific shipment of steel nor the coverage of prior shipments through Louisiana provide the necessary minimum contacts to support personal jurisdiction.

The Court reviews de novo the district court's determination that its exercise of personal jurisdiction over a non-resident defendant is proper. Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir.2002). When, as in the instant case, "the district court decides the motion to dismiss without holding an evidentiary hearing, [the plaintiff] must make only a prima facie showing of the facts on which jurisdiction is predicated." Id. In determining whether that prima facie case exists, we "must accept as true [the plaintiff's] `uncontroverted allegations and resolve in [his] favor all conflicts between the [jurisdictional] facts contained in the parties' affidavits and other documentation.'" Id. (quoting Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 854 (5th Cir.2000)); see also 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 1351 (2d ed.1990).

The district court found both specific and general personal jurisdiction in this case. See Adams v. Unione Mediterranea Di Sicurta, 234 F.Supp.2d, 614, 621-25 (E.D.La.2002). The district court also suggested that jurisdiction might be available under Fed.R.Civ.P. 4(k)(2). Id. at 625-26.

Rule 4(k)(2) provides for service of process and personal jurisdiction in any district court for cases arising under federal law where the defendant has contacts with the United States as a whole sufficient to satisfy due process concerns and the defendant is not subject to jurisdiction in any particular state:

If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state.

Fed.R.Civ.P. 4(k)(2). The Rule was enacted to fill an important gap in the jurisdiction of federal courts in cases arising under federal law:

Thus, there was gap in the...