Garcia v. Queen, Ltd.

• Decision Date: 13 November 1973
• Docket Number: No. 73-2025 Summary Calendar.,73-2025 Summary Calendar.
• Citation: 487 F.2d 625
• Parties: Marcos GARCIA, Plaintiff-Appellant, v. The QUEEN, LTD., and Fidelity and Casualty Company of New York, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

487 F.2d 625 (1973)

Marcos GARCIA, Plaintiff-Appellant, v. The QUEEN, LTD., and Fidelity and Casualty Company of New York, et al., Defendants-Appellees.

No. 73-2025 Summary Calendar.^*

United States Court of Appeals, Fifth Circuit.

November 13, 1973.

Thomas M. Carney, William M. Alper, Miami, Fla., for plaintiff-appellant.

Frank A. Lane, Miami, Fla., for defendants-appellees.

Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges.

SIMPSON, Circuit Judge:

We review a final judgment below denying relief to the plaintiff-appellant, Marcos Garcia, in his suit for damages against his employer, The Queen, Ltd., and his employer's two insurers. The district court concluded, inter alia, that, as a matter of law, an insurance policy labelled as a workmen's compensation policy issued by one insurer to the appellant's employer did not provide coverage for damages where as here the relief sought was by a maritime remedy. For reasons which we explicate below, we reach the view that the insurance coverage under that policy was broader than determined under the district court's theory of coverage. We reverse as to this issue.

THE FACTS

Garcia was employed as an able-bodied seaman by The Queen, Ltd., a Delaware corporation which had purchased the S/S QUEEN ELIZABETH (The Queen). It was planned to convert the ship into a hotel and restaurant. At the time that the appellant's alleged injuries occurred, The Queen was lying at dockside in Port Everglades, Florida, pending completion of a permanent berth for her at that port. On December 17, 1969, appellant was engaged, pursuant to orders given by his superiors, in hoisting a steam generating machine from dockside to the deck of The Queen by means of lifeboat davits. In the course of this endeavor, the steam generating machine moved suddenly, apparently causing the plaintiff to fall and receive bodily injury.

THE TRIAL

Appellant filed suit in the court below against his employer, The Queen, Ltd., and the employer's two insurers, Fidelity and Casualty Company of New York (Fidelity) and The United Kingdom Mutual Steamhip Assurance Association, Ltd (Bermuda).¹ Damages were sought under the Jones Act, 46 U.S.C. Sec. 688, for unseaworthiness of the vessel, and for maintenance and cure. Fidelity was sued on the basis of a policy entitled "Workmen's Compensation and Employer's Liability Policy" issued by it to The Queen, Ltd. and in force at the time of appellant's accident. The specific provision of the policy under which relief was sought, Part B, bound the insurer to pay:

"All sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident * * * sustained ... by any employee of the insured arising out of and in the course of his employment by the insured * * *."

Fidelity denied liability for appellant's claim on grounds: (i) that the policy was a workmen's compensation policy and was not designed or sold to cover maritime injuries to maritime employees, and (ii) that the appellant was not a seaman and therefore not entitled to proceed under the maritime theories advanced by him as a basis for his action.²

As discovery and other pre-trial procedures progressed, counsel for both parties found themselves unable to agree whether Part B of the Fidelity workmen's compensation policy afforded coverage where damages were sought under maritime theories of recovery.³ Accordingly, the trial judge ordered that "the issue of insurance coverage be tried before the issue of liability and damages." For this purpose, plaintiff's counsel waived his right, previously claimed, to trial by jury on the issue of insurance coverage⁴ and trial—supposedly limited to the one issue—was held before the district court sitting without a jury on December 4, 1972.

At trial, orders and stipulations as to its limited nature notwithstanding, evidence was introduced concerning the ultimate question of Fidelity's liability under the policy issued to The Queen, Ltd., and the district judge in his opinion entered findings of fact and conclusions of law concerning both coverage and liability.⁵ The judge concluded as a matter of law: (i) that Part B of the workmen's compensation policy did not afford coverage for the appellant's injuries; (ii) that The Queen was not a ship but a land structure; (iii) that The Queen was not in navigation at the time of the alleged injury; and (iv) that the appellant was not a seaman at the time of the alleged injury.⁶

Before considering the trial court's conclusions on insurance coverage, we must determine whether its departure from its self-imposed limits on the scope of the trial constituted an abuse of discretion on the part of the trial judge in violation of constitutional principles.

TRIAL BY JURY OR BY THE COURT?

Trial by jury is a right guaranteed to parties in suits at law by the Seventh Amendment to the Constitution. The guarantee is reiterated in the Federal Rules of Civil Procedure, Rule 38(a), which requires that "the right of trial by jury ... shall be preserved * * * inviolate."

Plaintiff's counsel in the instant case, both in the original and amended complaints demanded the right to a jury trial on all issues triable of right by a jury. The issues determinative of liability, whether The Queen was in navigation at the time of the alleged injury, and the issue of damages were issues of fact properly for a jury to decide.⁷ The procedure below deprived the appellant of his right to a jury trial on the issues of liability and damages. In the circumstances of this case, the district judge abused his discretion in reaching the issues of liability apart from that of coverage under the insurance policy in question.⁸ Accordingly, we vacate the findings of fact⁹ and conclusions of law¹⁰ made by the district judge as to Fidelity's liability to the appellant under the workmen's compensation policy issued to appellant's employer, The Queen, Ltd.

INSURANCE COVERAGE

We determine that as a matter of law Part B of the workmen's compensation insurance policy issued by Fidelity to The Queen, Ltd., provided coverage for damages sought under the maritime theories of recovery upon which this suit is predicated: the Jones Act, unseaworthiness, and maintenance and cure. We are guided to this conclusion by several district court decisions in this circuit involving similar policy provisions in similar contexts. Voisin v. Ocean Protein, Inc., E.D.La.1970, 321 F.Supp. 173; Brickley v. Offshore Shipyard, Inc., E.D.La.1967, 270 F.Supp. 985; Keys Engineering Co. v. Boston Insurance Co., S.D.Fla.1961, 192 F.Supp. 574. Brief discussion of the Brickley case will be helpful in indicating the reasons for our holding.

The question was squarely presented in Brickley, whether a maritime worker, suing under maritime theories might recover damages under Part B of a standard workmen's compensation and employer's liability policy. There, the plaintiff filed suit against his former employer, Offshore Shipyard, Inc., and Offshore's insurer, Fidelity and Casualty Company of New York, the same insurer as in this case. The plaintiff sought damages for injuries sustained aboard a barge operated by Offshore. The plaintiff stated as grounds upon which he sought recovery: (i) the Jones Act, (ii) the warranty of seaworthiness, and (iii) the general maritime law of negligence. The plaintiff further stated that recovery was sought solely under a policy entitled "Workmen's Compensation and Employer's Liability Policy" issued by Fidelity and Casualty. Part B of the policy provided that the insurer was obligated:

"To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident or disease * * * sustained * * * by any employee of the insured arising out of and in the course of his employment by the insured * * *."

270 F.Supp. at 987. In addition, the policy contained a provision which excluded from its coverage injury sustained by "`a master or member of the crew of any vessel.'" Id.

Fidelity and Casualty argued that coverage under the policy was not afforded for suits brought under maritime theories of recovery. The basis for this argument was Fidelity and Casualty's position that coverage under Part B was impliedly restricted "to accidents to employees and suits by them for damages where the employee sues on a theory grounded in his employee relationship with the insured ..." Id. Fidelity argued that the suit having been brought under maritime theories not grounded in the employment relationship, coverage would not lie.

The court looked to the plain wording of the policy and rejected the attempt to read any such implied restriction into the policy. After reciting the terms of Part B, the court stated:

"Coverage under that wording encompasses any accident sustained by an employee of the insured which arose out of and in the course of his employment. The legal theory under which such an employee might institute suit is totally irrelevant under the terms of the policy. The only requirement for coverage is that the injury be sustained by the employee during his employment. We cannot read the terms of the policy to imply that the legal theory under which a suit may be brought by an employee must "arise out of" the employment relationship."

Noting that Fidelity was arguing the existence of an ambiguity in the policy when in fact there was none, the court ruled first that the construction of a policy of insurance was a matter of law for the court and second that, "were there any real and substantial ambiguity in ... the policy, that ambiguity would, as a matter of law, have to be construed against the insurance company" under State Mutual Life Assurance Co. v. Dorsey, 5 Cir.1956, 357 F.2d 600. On this basis the court denied Fidelity's motion for summary judgment on the question of insurance coverage.¹¹

We approve and adopt the approach taken by the court in Brickley. It...