Grubbs v. Gulf Intern. Marine, Inc.

• Decision Date: 19 October 1992
• Docket Number: No. 91-3220,91-3220
• Parties: Jonathan P. GRUBBS, Plaintiff-Appellant, v. GULF INTERNATIONAL MARINE, INC., et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 186

975 F.2d 186

1993 A.M.C. 164

Jonathan P. GRUBBS, Plaintiff-Appellant, v. GULF INTERNATIONAL MARINE, INC., et al., Defendants-Appellees.

No. 91-3220.

United States Court of Appeals, Fifth Circuit.

Oct. 19, 1992.

Withdrawn from the bound volume at the request of the court.

For Opinion on Petition for Rehearing see 985 F.2d 762.

Roger S. Bernstein, Bernstein & Bernstein, New Orleans, La., for plaintiff-appellant.

John S. Hunter, Terrence C. Forstall, Richard L. Seelman, Courtenay, Forstall, Guilbault, Hunter & Fontana, New Orleans, La., for defendants-appellees.

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

Before KING, JOHNSON and DAVIS, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Jonathan P. Grubbs appeals the judgment of the district court dismissing his Jones Act/general maritime law action against his employer Gulf International Marine, Inc. (Gulf) and its insurer American Steamship Owners' Mutual Protection and Indemnity Association, Inc. (American Steamship). The district court concluded that because American Steamship's policy was not delivered in Louisiana, the Louisiana Direct Action Statute did not apply. Based on this conclusion, the district court dismissed Grubb's action against American Steamship. The district court also dismissed Grubbs' claim against Gulf because the corporate entity has been dissolved. We affirm the district court's dismissal of American Steamship but for reasons different than those relied on by the district court. However, we reverse the dismissal of Gulf.

I.

Jonathan Grubbs was injured in 1986 while employed as an engineer on the tug, the M/V THOMAS HERBERT. Grubbs' accident and injury occurred while the tug was in Texas territorial waters. Gulf, a Houma, Louisiana based entity, was insured under a marine protection and indemnity (P & I) policy issued by American Steamship. American Steamship has its sole U.S. office in New York, New York. It delivered the policy to Gulf's broker, Seahawk International, Inc. (Seahawk), at Seahawk's New York office. The principals of Gulf repeatedly asked American Steamship and Seahawk for a copy of the policy, but neither complied with these requests. American Steamship and Seahawk did furnish certificates of insurance to Gulf's customers upon Gulf's request.

Grubbs filed suit against Gulf and American Steamship in December 1986 to recover for his injuries. American Steamship filed a motion for summary judgment on a number of grounds. It argued primarily that it was not amenable to suit under the Louisiana Direct Action Statute because the accident occurred outside Louisiana and the policy was neither written nor delivered in Louisiana. It also argued that it committed no independent tort of failure to pay maintenance and cure because, under Gulf's protection and indemnity policy, it was only obligated to pay if Gulf first paid maintenance and cure and sought reimbursement. According to American Steamship, Gulf never did so. American Steamship argued alternatively that the Direct Action Statute does not apply because the marine protection and indemnity policy it issued to Gulf is an "ocean marine" insurance policy that is excepted from the provisions of the Direct Action Statute.

Grubbs argued to the district court that a material issue of fact was presented on whether the policy had been constructively delivered to Gulf in Houma, Louisiana. He also argued that American Steamship's failure to deliver the policy in Louisiana, as requested, was for the purpose of avoiding the Direct Action Statute and that such conduct should not be allowed to defeat the application of the statute.

The district court granted American Steamship's motion for summary judgment. The defendants later informed the court that Gulf's corporate charter had been dissolved upon the completion of its bankruptcy proceedings and that Gulf was no longer in existence. The court then dismissed the action against the remaining defendant, Gulf. In this appeal, Grubbs argues that he is entitled to sue American Steamship under the Louisiana Direct Action statute. He also contends that his action against Gulf did not abate upon Gulf's dissolution. We consider both of these arguments below.

II.

The Louisiana Direct Action statute permits an action directly against an insurer of a tort-feasor if the plaintiff can establish one of the following:

(1) the accident occurred in Louisiana;

(2) the policy was written in Louisiana; or

(3) the policy was delivered in Louisiana.

LSA-R.S. 22:655 ¹; Webb v. Zurich Insurance Co., 251 La. 558, 205 So.2d 398 (1967); Signal Oil & Gas Co. v. The Barge W-701, 654 F.2d 1164 (5th Cir.1981); Landry v. Travelers Indemnity Co., 890 F.2d 770 (5th Cir.1989). The district court dismissed Grubbs' action against American Steamship on the grounds that the policy at issue was not delivered in Louisiana and that Grubbs presented no other basis for a direct action against American Steamship.

American Steamship argued alternatively both to the district court and to us that even if the policy were delivered in Louisiana, the Louisiana Direct Action Statute had no application to Grubbs' claim against its P & I insurer. For reasons that follow, we agree with this argument and rest our decision solely on this ground.

The Louisiana Direct Action Statute is codified in Part XIV of the Insurance Code. LSA-R.S. 22:655. Section 611(A) of Part XIV states that "The applicable provisions of this Part shall apply to insurance other than ocean marine and foreign trade insurances." American argues that the marine P & I policy it issued to Gulf is an "ocean marine" policy which is excluded from the application of Louisiana's Direct Action Statute.

For decades, the federal courts have assumed that the Louisiana Direct Action Statute permitted an injured person to sue a P & I insurer directly. See Cushing v. Maryland Cas. Co., 198 F.2d 536 (5th Cir.1952), modified on other grounds, 347 U.S. 409, 74 S.Ct. 608, 98 L.Ed. 806 (1954), and Crown Zellerbach Corp. v. Ingram Industries, Inc., 783 F.2d 1296 (5th Cir.1986) (en banc), cert. denied, 479 U.S. 821, 107 S.Ct. 87, 93 L.Ed.2d 40 (1986). Although P & I insurers were sued directly under the Louisiana Direct Action Statute in both Cushing and Crown Zellerbach, neither decision dealt directly with, and in fact did not discuss, the ocean marine exclusion.

Two recent opinions of the Louisiana Supreme Court, which is entitled to the final word on the meaning of a Louisiana statute, require us to confront this issue. In both cases the Louisiana high court was asked whether certain types of insurance policies provided ocean marine coverage for purposes of the Louisiana Insurance Guaranty Association Fund (LIGA). ² LIGA, like the direct action statute, excludes ocean marine insurance from its application. LSA-R.S. 22:1377 states that LIGA covers "all kinds of direct insurance, except life, health and accident, title, disability, mortgage guaranty, and ocean marine insurance." (emphasis added).

First, in Deshotels v. SHRM Catering Services, Inc., 538 So.2d 988 (La.1989), the court answered a certified question from this court. We asked whether a workmen's compensation policy with a maritime endorsement is ocean marine insurance for purposes of this exclusion. The court answered no. It reasoned that "LSA-R.S. 22:1377 states that Guaranty Association insurance applies 'to all kinds of direct insurance, except life, health and accident, title, disability, mortgage guaranty, and ocean marine insurance.' These categories enumerate different kinds of insurance policies, rather than different risks." Id. at 993. The court, relying on marine insurance treatises and the statutory definitions, considered a marine policy one that has as its central objective insuring against " 'marine losses, that is to say, losses incident to a marine adventure.' " Id. at 992, citing Parks, The Law and Practice of Marine Insurance and Average, Vol. 1, p. 19 (Cornell Maritime Press, 1987). It concluded that "[a]n insurance policy which insures an employer against liability to employees is not a policy of 'ocean marine' insurance merely because it embraces some maritime risks." Id.

In Backhus v. Transit Cas. Co., 549 So.2d 283 (La.1989), the court concluded, however, that marine protection and indemnity insurance is ocean marine insurance for purposes of LIGA. The reasoning of the Backhus court is important and we outline it below in some detail. It first looked to the statutory definitions contained in the Insurance Code. LSA-R.S. 22:6(13), defines "marine and transportation (inland marine) insurance", by listing five categories of coverage. Id. at 287. The fifth category of marine and transportation insurance listed by the statute is "marine protection and indemnity type insurance" which the statute defines as follows:

[I]nsurance against, or against legal liability of the insured for, loss, damage, or expense incident to ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person.

Id. at 288; LSA-R.S. 22:6(13)(e) (emphasis added).

The court then considered commercial literature on marine insurance and noted that the definition in the statute was consistent with the commercial usage of the term "marine insurance." The Court observed that marine insurance encompasses a broad category of insurance coverages against risks associated with both maritime and nonmaritime transportation. The commercial meaning associated with "ocean" or "wet" marine insurance covers these risks "associated with the perils encountered by the maritime industry." Backhus, 549 So.2d at 288; citing 1 A. Brunck, V. Simone, C. Williams, Ocean Marine Insurance 1-4 (1988).

Relying on insurance...