Delaune v. Saint Marine Transp. Co.

• Decision Date: 07 November 1990
• Docket Number: Civ. A. No. 89-3019.
• Citation: 749 F. Supp. 1463
• Parties: Blaine DELAUNE v. SAINT MARINE TRANSPORTATION CO. and Certain Underwriters at Lloyd's.
• Court: U.S. District Court — Eastern District of Louisiana

749 F. Supp. 1463

Blaine DELAUNE v. SAINT MARINE TRANSPORTATION CO. and Certain Underwriters at Lloyd's.

Civ. A. No. 89-3019.

United States District Court, E.D. Louisiana.

November 7, 1990.

Patrick Hufft, New Orleans, La., for plaintiff.

Daniel Daboval, William A. McLellan, New Orleans, La., for defendants.

ORDER AND REASONS

PATRICK E. CARR, District Judge.

This matter is before the Court on the plaintiff's motion for re-hearing on defendant's motion for summary judgment Record Document No. 30.

Determining in its discretion that oral argument is unnecessary, the Court CANCELED the hearing on the motion, previously set for October 24, 1990. For the following reasons, the Court now DENIES the motion.

This is a maritime personal injury action where the plaintiff sued, among others, the marine protection and indemnity underwriters for a vessel owned and operated by the alleged tortfeasor. The Court determines that two recent Louisiana Supreme Court opinions addressing the term "ocean marine insurance" in the Louisiana Insurance Code, Deshotels v. SHRM Catering Services, Inc., 538 So.2d 988 (La.1989) and Backhus v. Transit Casualty Co., 549 So.2d 283 (La.1989), implicitly but necessarily overruled earlier Fifth Circuit opinions that had held that an injured person may bring a direct action against a marine P & I underwriter under the Louisiana Direct Action Statute, La.R.S. 22:655.

I.

The plaintiff alleges that on May 10, 1989, he was injured while working as a seaman for Saint Marine Transportation Company aboard one of its vessels. The alleged accident occurred in Texas.

On July 7, 1989, he sued Saint Marine for unseaworthiness and Jones Act negligence. Subsequently, on March 22, 1990, he amended his complaint to add as defendants certain Underwriters at Lloyd's; the Underwriters had issued two marine protection and indemnity (P & I) policies — one primary and one excess — covering the vessel at issue on the date of the alleged accident.

In September 1990, the Underwriters moved for summary judgment on two grounds. First, as a factual matter, the Louisiana Direct Action Statute does not apply: the alleged accident did not occur in and the two insurance policies were neither written in nor delivered to Louisiana. Second, as a legal matter, the Louisiana Direct Action Statute does not apply: the policies at issue here are marine P & I policies, and the underwriters for such policies are not subject to the Louisiana Direct Action Statute.

In support of the first ground, the Underwriters supplied the affidavit of the Texas-based insurance broker who obtained the two P & I policies at issue and who states that both policies were written in London, have been kept in London, and were never delivered to Louisiana. The plaintiff sought a continuance of the Underwriters' motion so that he could depose the broker who supplied the affidavit; according to the plaintiff, Saint Marine is a Louisiana corporation.

By Minute Entry, the Court granted the Underwriters' motion; the Court briefly explained:

Marine P & I policies constitute "ocean marine" insurance within the meaning of the Louisiana Insurance Code. See Sifers v. General Marine Catering Co., 892 F.2d 386, 391 (5th Cir.1990) (per curiam); Backhus v. Transit Casualty Co., 549 So.2d 283 (La.1989). The direct action statute, La.R.S. 22:655, appears within the same Part of the Louisiana Insurance Code as La.R.S. 22:611; thus, it follows that the direct action statute applies only "to insurances other than ocean marine ... insurances." See Deshotels v. SHRM Catering Services, 538 So.2d 988, 992 (La.1989).

While pre-Deshotels/Backhus cases exist in which a plaintiff sued a marine P & I insurer under the direct action statute, these cases are not binding: not only did none address the "ocean marine" insurance exception for the Part of the Louisiana Insurance Code in which the direct action statute appears, but also they were decided prior to the definitive opinions of the Louisiana Supreme Court in Deshotels and Backhus on the governing term at issue here, "ocean marine" insurance.

"Because the Court's holding in favor of Lloyd's did not turn on the location(s) where Lloyd's policies were written or delivered," the Court denied the plaintiff's request for a continuance.

The plaintiff now seeks a "re-hearing" on the Underwriters' motion. In support, he attaches a recent unpublished minute entry by Judge Wicker that rejected the Underwriters' second, legal argument.¹ Yet he submits no evidence to dispute the contents of the Texas broker's affidavit that the Underwriters submitted in support of their motion; the record contains no notice by the plaintiff to depose the Texas broker.

The deadline for taking all fact discovery has now passed. The final pretrial conference has just been held, where the Court set the matter for trial.

II.

The central issue here is whether the Louisiana Direct Action Statute, La.R.S. 22:655, applies to underwriters of marine P & I policies.

Last year, in Deshotels v. SHRM Catering Services, Inc.,² the Louisiana Supreme Court observed in dictum that ocean marine insurance is not subject to the Direct Action Statute. In Backhus v. Transit Casualty Co.,³ the court then held that a marine P & I policy constitutes ocean marine insurance and thus that by virtue of a provision that the Louisiana Insurance Guaranty Association (LIGA) Law, La.R.S. 22:1375-1394, "shall apply to all kinds of direct insurance, except ... ocean marine insurance," the LIGA Law does not apply to such policies.

Almost forty years before Backhus and Deshotels, the Fifth Circuit had held in Cushing v. Maryland Casualty Co.⁴ that underwriters to a marine P & I policy could be sued under the Direct Action Statute. Later Fifth Circuit panels followed this holding;⁵ without further addressing the issue, at least two Louisiana appellate courts held the same.⁶ Because Cushing is the law of the Fifth Circuit, this Court must follow its interpretation of the Direct Action Statute "until the Louisiana courts decide the matter differently."⁷ Thus, this Court must decide whether Cushing's interpretation is "irreconcilable with"⁸Backhus and Deshotels.

To reach port, courts have had to dead reckon through ancient precedent "lurking in the fog."⁹ Guided by the Supreme Court's new compass, this Court now plots a new course to steer towards the clear light of the Louisiana Legislature.

A.

Federal maritime law provides no right for a third-party, such as a personal injury plaintiff, to sue his alleged tortfeasor's insurers or indemnity underwriters directly.¹⁰ The same is true for Texas state law.¹¹

"Without enabling legislation, the right to direct action does not exist" under Louisiana state law either.¹² But with the Direct Action Statute, Louisiana has enacted just such legislation. Thus, the Court must determine whether this statute reaches the circumstances here.¹³

B.

The Louisiana Direct Action Statute, La. R.S. 22:655, provides as follows:

§ 655. Liability policy; insolvency or bankruptcy of insured and inability to effect service of citation or other process; direct action against insurer

A. No policy or contract of liability insurance shall be issued or delivered in this state, unless it contains provisions to the effect that the insolvency or bankruptcy of the insured shall not release the insurer from the payment of damages for injuries sustained or loss occasioned during the existence of the policy, and any judgment which may be rendered against the insured for which the insurer is liable which shall have become executory, shall be deemed prima facie evidence of the insolvency of the insured, and an action may thereafter be maintained within the terms and limits of the policy by the insured person, or his or her survivors, mentioned in Civil Code Art. 2315, or heirs against the insurer.

B. (1) The injured person or his or her survivors or heirs mentioned in Subsection A, at their option, shall have a right of direct action against the insurer within the terms and limits of the policy; and, such action may be brought against the insurer alone, or against both the insured and insurer jointly and in solido, in the parish in which the accident or injury occurred or in the parish in which an action could be brought against either the insured or the insurer under the general rules of venue prescribed by Code of Civil Procedure Art. 42 only. However, such action may be brought against the insurer alone only when:

(a) The insured has been adjudged a bankrupt by a court of competent jurisdiction or when proceedings to adjudge an insured a bankrupt have been commenced before a court of competent jurisdiction;

(b) The insured is insolvent;

(c) Service of citation or other process cannot be made on the insured;

(d) When the cause of action is for damages as a result of an offense or quasi-offense between children and their parents or between married persons; or

(e) When the insurer is an uninsured motorist carrier.

(2) This right of direct action shall exist whether or not the policy of insurance sued upon was written or delivered in the state of Louisiana and whether or not such policy contains a provision forbidding such direct action, provided the accident or injury occurred within the state of Louisiana. Nothing contained in this Section shall be construed to affect the provisions of the policy or contract if such provisions are not in violation of the laws of this state.

C. It is the intent of this Section that any action brought under the provisions of this Section shall be subject to all of the lawful conditions of the policy or contract and the defenses which could be urged by the insurer to a direct action brought by the insured, provided the terms and conditions of such policy or contract are not in violation of the laws of this state.

D. It is also the intent of this Section that all liability policies within their terms and limited are executed for the

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