Exxon Corp. v. St. Paul Fire and Marine Ins. Co.

• Decision Date: 05 December 1997
• Docket Number: No. 96-31309,96-31309
• Citation: 129 F.3d 781
• Parties: , 39 Fed.R.Serv.3d 474, 28 Envtl. L. Rep. 20,389 EXXON CORPORATION, Plaintiff-Appellee, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 781

129 F.3d 781

1998 A.M.C. 913, 39 Fed.R.Serv.3d 474,

28 Envtl. L. Rep. 20,389

EXXON CORPORATION, Plaintiff-Appellee, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Defendant-Appellant.

No. 96-31309.

United States Court of Appeals, Fifth Circuit.

Dec. 5, 1997.

Louise V. White, Exxon Company, USA, New Orleans, LA, for Plaintiff-Appellee.

William E. O'Neil, Ira Matthew Williamson, O'Neil, Eichin, Miller, Saporito & Harris, New Orleans, LA, for Defendant-Appellant.

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

Before REAVLEY, BARKSDALE and STEWART, Circuit Judges.

STEWART, Circuit Judge:

Appellant St. Paul Fire and Marine Insurance Company ("St. Paul") appeals the denial of its motion for summary judgment and the grant of appellee Exxon Corporation's ("Exxon's") motion for partial summary judgment. St. Paul contends that the district court erred in (1) its refusal to stay this action pending the outcome of underlying state court personal injury actions, (2) its grant of summary judgment in favor of Exxon on the attorney's fees issue, and (3) its declaration that there are five occurrences of injury under the insurance policy rather than one. In response, Exxon filed a motion to dismiss the appeal. For the following reasons, we deny Exxon's motion to dismiss the appeal and we affirm the district court's ruling regarding its grant of summary judgment in favor of Exxon.

Factual Background

In April 1989, Exxon closed a surface impoundment at its gas treating facility in Flomaton, Alabama. In order to dispose of the sludge that had accumulated at the facility, Exxon contracted with Land Treatment Systems, Inc. ("LTS") to receive the sludge at its waste facility near Morgan City, Louisiana. Exxon entered into a Bareboat Charter Party with McDonough Marine Service, a division of the Marmac Corporation ("Marmac") for the transportation of the sludge. Under the terms of the contract, Marmac provided insurance coverage to Exxon, naming Exxon as an additional assured and Exxon provided hull, protection & indemnity ("P & I"), and water pollution insurance. St. Paul was the insurance carrier.

The barge was manned by its captain and a deckhand. The barge was met by four employees of LTS, who collected the sludge and transported it to the disposal site. Subsequently, the two barge crewmembers and three of the LTS employees brought suit against Exxon claiming that they had suffered personal injuries as the result of inhaling the fumes from the sludge. Exxon notified St. Paul of the lawsuits, however, St. Paul denied coverage.

After settling one of the claims, Exxon and St. Paul agreed to settle their coverage dispute and to jointly fund settlements or pay judgments in each of the five cases. After a second case was settled pursuant to this agreement, a dispute arose between Exxon and St. Paul as to whether St. Paul's policy limit of $500,000 applied to the settlement agreement. Exxon then filed suit in federal district court seeking a declaratory judgment against St. Paul, asking the court to determine: (1) that the policy provided Exxon coverage for the five claims; (2) that the payment of attorney's fees in defending the claims did not reduce the policy's limit of liability; (3) that each of the five claims was a separate "occurrence" under the policy; and (4) that St. Paul breached its duty of good faith and fair dealing. ¹ At the time Exxon filed its motion, three of the five actions were still pending in Louisiana state court and St. Paul was not and is not a party to any of these actions. ² Exxon's federal suit was assigned to Judge Okla Jones, who ordered both parties to file cross-motions for summary judgment on the coverage issue. ³ Judge Jones died while the motion was pending and Judge Stanford Duval was assigned to the case. On March 15, 1996, Judge Duval granted Exxon's motion for partial summary judgment and denied St. Paul's. St. Paul then filed a motion for a new trial and/or for rehearing and reconsideration and refiled its motion for a stay pending judgment in the state court actions. The motion was denied. The court then ordered the parties to file cross-motions for summary judgment on the issue of the number of occurrences. On November 14, 1996 the court issued a final judgment in favor of Exxon on the coverage issue, the effect of attorney's fees on the limit, and the number of occurrences. St. Paul timely appealed from the final judgment entered by the district court on November 15, 1996. Thereafter, Exxon filed a motion to dismiss the appeal.

Exxon's Motion to Dismiss

Before addressing the substance of St. Paul's claim, we must first address Exxon's motion to dismiss St. Paul's appeal. Exxon argues that St. Paul's appeal should be dismissed because the district court orders dated August 9, 1995 and June 5, 1996 refusing to stay the action were interlocutory orders not immediately subject to appellate review. Because of the district court's entry of a final judgment in this matter on November 15, 1996, however, Exxon's argument is unpersuasive. It is a well-settled rule of law that an appeal from a final judgment raises all antecedent issues previously decided. Dickinson v. Auto Center Manufacturing Company, 733 F.2d 1092, 1102 (5th Cir.1983). Thus, once a final judgment is entered, all earlier non-final orders affecting that judgment may properly be appealed. Exxon argues in the alternative that should this court accept jurisdiction over St. Paul's appeal, it must nonetheless dismiss St. Paul's appeal for untimeliness. Exxon grounds this argument upon its own flawed timeline, failing to note once again that St. Paul is appealing the final judgment and not the interlocutory orders. Exxon's argument is without merit. St. Paul's appeal based on the district court's final judgment is timely. ⁴ We therefore conclude that we have appellate jurisdiction over this case.

St. Paul's Claims

We now turn to the district court's denial of St. Paul's motion to stay the federal court proceedings and its grant of partial summary judgment to Exxon. St. Paul argued before the district court that it would be more appropriate for the issues of coverage, policy interpretation, and bad faith to be litigated in each of the state court proceedings before entering the federal litigation phase of this claim. The district court denied that motion and we affirm its decision. Further, the district court awarded partial summary judgment to Exxon regarding the issue of whether attorney's fees are covered under the policy. We also affirm this ruling.

Standard of Review

We note the proper standards of review for both aspects of this claim. The district court's action on a request for a stay is a matter of judgment and it is reviewed by the Court of Appeals only for abuse of discretion. Wilton v. Seven Falls Co., 515 U.S. 277, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995). We review a district court's grant of summary judgment de novo, applying the same standard of review as would the district court. See, e.g., Melton v. Teachers Ins. & Annuity Ass'n of Am., 114 F.3d 557, 559 (5th Cir.1997); Dawkins v. Sears Roebuck and Co., 109 F.3d 241, 242 (5th Cir.1997) (citing Cockerham v. Kerr-McGee Chem. Corp., 23 F.3d 101, 104 (5th Cir.1994)). Summary judgment should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Kinsey v. Farmland Industries, Inc., 39 F.3d 603 (5th Cir.1994) (quoting Fed.R.Civ.P. 56(c)).

St. Paul's Motion to Stay

St. Paul sought to stay the instant proceedings based on the Supreme Court's decision in Wilton. In that case, the Supreme Court upheld a district court's decision to stay a federal declaratory judgment action in favor of pending state court litigation on parallel issues in order to avoid piecemeal litigation and to prevent forum shopping. In the instant case, St. Paul argued before the district court that the issue of coverage was not ripe for summary judgment because Exxon's negligence had not yet been determined in the state court proceedings. St. Paul further argues on appeal that though the "specific issues of coverage for Exxon and St. Paul's alleged bad faith were not present in the state court personal injury actions, what the state court had to say about the basis of Exxon's liability, if any, would not only be relevant to, but potentially dispositive of, Exxon's contention that it could only be liable in the capacity of a vessel owner."

The district court concluded that Exxon was acting as "vessel owner" and that there was a "causal connection" between the insured vessel and the injuries suffered which entitled Exxon to coverage for the personal injury claims asserted by the five plaintiffs. However, on appeal, St. Paul contends that the district court reversibly erred in deciding this issue prior to a determination of liability in the state court actions. Exxon rejects this argument, asserting that St. Paul's contention is not supported by law and if adopted by the court, would preclude a determination of liability in the three claims that have already been settled.

St. Paul's suggestion that determination of Exxon's liability in the state court suits is a prerequisite to a determination of coverage in this case is not supported by law. Indeed, the district court found the instant case distinguishable from Wilton because the federal and state causes of action do not encompass the same issues. This circuit has clearly held that in order to consider the propriety of a stay pending disposition of state court actions, the federal and state cases must be parallel, meaning that they involve the same parties and the same issues. Hartford Accident & Indemnity Company v. Costa Lines Cargo Services, Inc., 903 F.2d 352, 360 (5th Cir.1990) (internal citations omitted); Mendiola v. Hart, 561 F.2d 1207, 1208 (5th Cir.1977). As Exxon notes, there are no parallel state court proceedings where...