Greenville Shipbuilding Corp. v. Hartford Acc. & Ind. Co.

• Citation: 334 F. Supp. 1228
• Decision Date: 19 November 1971
• Docket Number: No. GC 7121.,GC 7121.
• Court: U.S. District Court — Northern District of Mississippi
• Parties: GREENVILLE SHIPBUILDING CORP. et al., Plaintiffs, v. The HARTFORD ACCIDENT & INDEMNITY COMPANY, Defendant.

334 F. Supp. 1228

GREENVILLE SHIPBUILDING CORP. et al., Plaintiffs, v. The HARTFORD ACCIDENT & INDEMNITY COMPANY, Defendant.

No. GC 7121.

United States District Court, N. D. Mississippi, Greenville Division.

November 19, 1971.

J. Robert Nunnery, Jr., of Robertshaw, Merideth & Swank, Greenville, Miss., for plaintiffs.

James L. Robertson, of Campbell, DeLong, Keady, Robertson & Hagwood, Greenville, Miss., for defendant.

MEMORANDUM OF DECISION

ORMA R. SMITH, District Judge.

The incident which gives rise to this litigation occurred on Lake Ferguson, a navigable waterway near Greenville, Mississippi on the Mississippi River, on the afternoon of January 20, 1970, when tankerman Ivey Harold Duke, a member of the crew of the M/V J. E. VICKERS, stepped down from the deck of the Barge JOHNNA B onto a scaffold placed on the deck of the steel hull paint barge #25, positioned alongside the Barge JOHNNA B, and losing his footing, plunged into the water between the two barges and drowned.

The incident occurred at the shipyard of plaintiff, Greenville Shipbuilding Corporation (Greenville), where said plaintiff has a floating drydock and other facilities, utilized by it in designing, constructing and repairing steel vessels, barges, towboats and marine vessels. At this point on the banks of Lake Ferguson, plaintiff has a drydock, quarter boat, ramp and work barge and a steel hull paint barge (paint barge), floating upon the lake's waters and permanently affixed to the bank of the lake. The quarter boat and paint barge are storage barges. At the time of the incident above mentioned the Barge JOHNNA B (Johnna B) was tied up on the inside of the paint barge between that barge and the bank of the lake. The Johnna B's stern corner was pulled up tight with a wire to the paint barge. Approximately thirty feet from the stern corner of the Johnna B alongside the paint barge there was a small opening between the barges. The deck of the Johnna B was about six feet above the deck of the paint barge. On the deck of the paint barge Greenville provided a wooden scaffold approximately three feet in height. This scaffold was positioned on the paint barge near the Johnna B and provided a means by which persons working on the Johnna B could ascend to its deck, and return therefrom.

Plaintiff J. E. Vickers (Vickers), operates the shipyard and ship-repair facility above mentioned (facility), through Greenville, a corporate entity either owned or controlled by him. Plaintiff Barge Bobbie, Inc., owns the Johnna B. Vickers either owns or controls Barge Bobbie, Inc. The M/V J. E. VICKERS is owned by Vickers. At the time of the incident aforesaid plaintiff Vickers Towing Co., Inc. (Vickers Towing), was the charterer and operator of the M/V J. E. VICKERS and its tow, which included the Johnna B. Vickers also controls Vickers Towing.

On the occasion in question the M/V J. E. VICKERS and its tow were docked at the facility and employees of Vickers were engaged in gas freeing the Johnna B. Duke was one of the workmen engaged in this undertaking.

At about 4:50 p. m. on the date aforesaid, Duke attempted to leave the Johnna B, and in doing so made use of the scaffold. The weather was severe at the time and ice had accumulated on the floor of the scaffold. While stepping down from the deck of the Johnna B onto the floor of the scaffold, Duke slipped on the ice, lost his footing and plunged into the waters of the lake under the two barges. His body was recovered from the lake, after the Johnna B was moved from its mooring.

Vickers held, at the time, a policy of comprehensive general liability insurance with defendant Hartford Accident and Indemnity Company (Hartford) which provided bodily injury liability coverage with limits of liability of $100,000 for each person and $300,000 for each occurrence. The policy had been issued to Greenville and covered the premises occupied by Greenville in the operation of its aforesaid shipyard and ship-repair facility. A policy provision excluded bodily injury arising out of the ownership, maintenance, operation, use, loading or unloading of any watercraft, if such injury occurred away from the premises owned by, rented to or controlled by Greenville.¹

Vickers also held, in addition to the Hartford policy, two Protection and Indemnity (P & I) insurance policies issued by Northwestern National Insurance Company through its general agents S. Kausler, Limited (Kausler),² New Orleans, La. One of the policies issued by Northwestern provided, inter alia, that Northwestern would pay Greenville such sum within the limits fixed by the policy as Greenville, as the owner of the vessel described as "Steel Tank Barge `No. 25'", became legally liable to pay for the loss of life of, or injury to, or illness of, any person. This policy contains the following:

Upon making payment under this policy this Company shall be vested with all of the assured's rights of recovery against any person, corporation, vessel or interest and the assured shall execute and deliver such instruments and papers as this Company shall require and do whatever else is necessary to secure such rights.

. . . . . .

Where the assured is, irrespective of this policy, covered or protected against any loss or claim which would otherwise have been paid by this Company, under this policy, there shall be no contribution or participation by this Company on the basis of excess, contributing, deficiency, concurrent, or double insurance or otherwise."

The other policy issued by Northwestern provided, inter alia, that Northwestern would pay Vickers Towing Company, Inc., the name insured in the policy, subject to the limits of the policy, such sum of money as Vickers Towing Company, Inc., as the owner of the M/V J. E. VICKERS, and the Barge JOHNNA B, became legally liable to pay on account of the loss of life of, or injury to, or illness of, any person.

On the day of the accident Duke and John C. Byrd, the latter being employed as port captain for Vickers Towing, with others, were engaged in cleaning and gas freeing the Johnna B, which, as has been indicated, was a part of the tow of the M/V J. E. VICKERS, to which Duke was assigned as a tankerman. A scaffold owned by Greenville was positioned on the paint barge, alongside the Johnna B and was being used by those working on the Johnna B as a means of going upon and departing from the Johnna B. The scaffold was not defective in its construction. However, on account of prevailing weather conditions, a coat of ice had been allowed to accumulate on the platform. Duke, Byrd, and the others who worked on the barge, knew of this condition, and tried to exercise extreme care when using the scaffold. Duke and Byrd, needing additional equipment for the cleaning work being performed by them, started to leave the Johnna B by way of the scaffold to secure the equipment. Duke left the Johnna B first and the accident occurred.

The file does not indicate whether Greenville was engaged in any work relative to the cleaning of the Johnna B. The facility and the waters of the lake adjacent to the facility seemed to have been used indiscriminately by Greenville, and the other Vickers corporations. Neither does the record reflect the connection, if any, of Greenville with the use of the scaffold, except that Greenville owned the scaffold, and that the scaffold was on the paint barge, which barge was a part of the flotilla making up the shipyard facility owned by Greenville.

Immediately after the tragic death of Duke, Hartford and Kausler were notified of the incident and both promptly made an investigation thereof. The investigations of both carriers were full and complete in every respect, the attorney employed by Kausler and the adjuster for Hartford cooperating with each other to develop the full facts surrounding the incident.

In the course of the investigation Vickers Towing, the employer of Duke, received a letter from the attorneys representing Duke's beneficiaries making a demand for the payment of monetary damages resulting from Duke's death. The attorney representing the Kausler interest and Hartford's representative decided that it would be best that the demand be handled by Vickers Towing's carrier, Kausler, through its attorney, without making known to the attorneys for Duke's beneficiaries, Hartford's connection with the incident. Accordingly, this was done. On May 20, 1970 the attorneys for the Duke interest made a firm offer to settle the claim for the sum of $15,000. This offer was very attractive to Kausler's attorney, and upon his recommendation Kausler determined that the offer should be accepted. Kausler's attorney contacted Hartford's representative in Greenville and proposed that Kausler and Hartford share equally in the settlement. Hartford's local representative relayed the proposal to Hartford's Memphis office, with his recommendation that the proposal be accepted. However, the Memphis office decided to reject the proposal on the ground that the accident did not occur on the premises insured by Hartford. The next day, May 21, 1970, Hartford's Oxford, Mississippi office wrote Greenville a letter in which Greenville was advised of Hartford's receipt of Greenville's loss report, and that Hartford had been and was conducting an investigation of the claim which investigation would continue. However, Hartford included a provision in the letter giving Greenville notice that Hartford's investigation did not constitute an admission of coverage and/or liability, but was being conducted with full reservation of all rights afforded Hartford under Greenville's policy of insurance.

Kausler proceeded with the settlement making payment to the claimants in the sum of $5,000 under the Greenville P & I Policy and $10,000 under the Vickers Towing P & I Policy. Hartford refused to participate in the settlement, taking the position that the "Watercraft" exclusion of the policy relieved it of liability in the premises. This...