Grubbs v. Gulf Intern. Marine, Inc.
| Decision Date | 18 October 1993 |
| Docket Number | No. 93-CQ-0583,93-CQ-0583 |
| Citation | 625 So.2d 495 |
| Parties | Jonathan P. GRUBBS v. GULF INTERNATIONAL MARINE, INC., et al. |
| Court | Louisiana Supreme Court |
Roger S. Bernstein, Harvey D. Lewis, Bernstein & Bernstein, for applicant.
Terrence C. Forstall, Richard L. Seelman, Courtney, Forstall, Guilbaut, Hunter & Fontana, Richard E. Windhorst, Jr., for respondent.
Louis R. Koerner, Jr., for Power Systems Diesel Inc., Vener Marine Ltd., Calvin Loveless, Sr., Sandy Holland amicus curiae.
George M. Gilly, Stephanie G. McShane, for Offshore Marine Serv. Ass'n amicus curiae.
Drew A. Ranier, Michael R. Garber, for Waldon Doxey, Edna Doxey amicus curiae.
Paul H. Due, Walter L. Smith, Donald W. Price, George Pavlakis, Dimitrios Giannouleaus amicus curiae.
Harvey J. Lewis, Louisiana Trial Lawyers Ass'n amicus curiae.
*
The United States Court of Appeals for the Fifth Circuit has certified to this court the following question of law:
Whether the Louisiana Direct Action Statute, LSA-R.S. 22:655 (West Supp.1992) permits an injured party to maintain a direct action against a marine protection and indemnity insurer.
985 F.2d 762 (5th Cir.1993) (per curiam), withdrawing 975 F.2d 186. We accepted certification, 616 So.2d 691 (La.1993), and now answer in the affirmative. 1
Jonathan P. Grubbs was injured in 1986 while employed as an engineer on the tug M/V THOMAS HEBERT. At the time of the accident, the tug was in Texas territorial waters. Gulf International Marine, Inc. (Gulf), Grubbs' Houma, Louisiana based employer and the owner and operator of the tug, was insured under a marine protection and indemnity (P & I) policy issued by American Steamship Owners' Mutual Protection and Indemnity Association, Inc. (American). American's sole U.S. office is located in New York, New York. It delivered the policy to Gulf's broker, Seahawk International, Inc. (Seahawk), at Seahawk's New York office. Although American and Seahawk furnished certificates of insurance to Gulf's customers upon Gulf's request, neither the insurer nor the broker ever complied with Gulf's repeated requests for a copy of the policy.
In December 1986, Grubbs filed suit in United States District Court for the Eastern District of Louisiana against Gulf and American seeking recovery for his injuries. 2 The district court granted American's motion for summary judgment, concluding that American 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. 3
On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court's dismissal of American, but on different grounds. The district court had dismissed Grubbs' direct action against American on the grounds that the requirements of the Louisiana Direct Action Statute had not been met; the court of appeals, on the other hand, relied on this court's reasoning in Backhus v. Transit Casualty Co., 4 as well as on dicta in Deshotels v. SHRM Catering Services, Inc., 5 to conclude that the P & I policy American issued to Gulf was an "ocean marine" policy and as such was excluded altogether from the application of the Direct Action Statute.
Meanwhile, two Louisiana courts of appeal held that an injured party may maintain a direct action against a P & I insurer under the Direct Action Statute. See Hae Woo Youn v. Maritime Overseas Corp., 605 So.2d 187 (La.App. 5th Cir.), writ denied, 609 So.2d 240 (1992), cert. denied, --- U.S. ----, 113 S.Ct. 2342, 124 L.Ed.2d 252 (1993), writ granted, 609 So.2d 239 (1992), vacated in part on other grounds, 623 So.2d 1257 (1993), and Treadway v. Certain Underwriters at Lloyds, No. 92-C-1500 (La.App. 4th Cir. Sept. 15, 1992). 6 Noting that the Louisiana appellate court decisions "cast some doubt on how the Louisiana Supreme Court would resolve this issue," the Fifth Circuit granted Grubbs' petition for rehearing, withdrew its original opinion, and certified the question stated above to this court. 985 F.2d at 763.
The Louisiana Direct Action Statute generally allows an injured party to proceed directly against an insurance company which has issued a policy or contract of insurance against the liability of the insured tortfeasor. 7 The issue in this case is whether the Direct Action Statute applies to marine P & I insurance.
By its literal terms, the Direct Action Statute applies to "all liability policies." La.Rev.Stat. 22:655(D) (emphasis added). Likewise, this court held in Quinlan v. Liberty Bank and Trust Co., 575 So.2d 336, 347 (La.1990), that "the statute applies to any insurance against the liability of the insured for the personal injury or corporeal property damage to a tort victim, regardless of whether the policy is framed in liability or indemnity terms ..." (emphasis added). Additionally, the Louisiana Insurance Code classifies "Marine protection and indemnity insurance" as one of five types of "Marine and transportation (inland marine)" insurance and defines P & I insurance as
insurance 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.
La.Rev.Stat. 22:6(13)(e) (emphasis added).
Considering the plain meaning of the language in the Direct Action Statute, the language in Quinlan, and the Insurance Code definition of P & I insurance, it would seem to follow that the Direct Action Statute applies to P & I insurance as well as to other types of liability insurance. 8 Moreover, as we observed in Quinlan:
[I]t is well settled that the statute is remedial and should be liberally construed to accomplish its purpose of affording a person suffering loss or damage a direct action against a tortfeasor's insurer. It is consistent with the principle of liberal construction to uphold the direct action when an insurer, charged with knowledge of the law, issues a policy specifically insuring against liability, rather than indemnifying against loss, in the face of the Direct Action Statute, which applies to every "policy or contract of liability insurance" and proclaims that "all liability policies within their terms and limits are executed for the benefit of all injured persons".
Quinlan, 575 So.2d at 353 (citations omitted). When the Direct Action Statute is interpreted in reference to other provisions in the Insurance Code, however, the law is not so clear and unambiguous. 9
The Louisiana Insurance Code is found in Title 22 of the Louisiana Revised Statutes. The Direct Action Statute is contained in Part XIV of the Insurance Code. Part XIV is entitled "The Insurance Contract" and includes Sections 611-673 of Title 22. Section 611 is entitled "Scope of Part" and provides in pertinent part: "The applicable provisions of this Part shall apply to insurance other than ocean marine and foreign trade insurances." La.Rev.Stat. 22:611(A) (emphasis added). 10 Section 611 thus raises the question of whether P & I insurance is a type of "ocean marine" insurance. If it is, then the "ocean marine" exclusion in Section 611 appears to conflict with the plain meaning of the all-inclusive language in the Direct Action Statute.
In Deshotels v. SHRM Catering Services, Inc., 538 So.2d 988 (La.1989), and Backhus v. Transit Casualty Co., 549 So.2d 283 (La.1989), this court interpreted the meaning of the term "ocean marine insurance" as that term is used in Part XXIX-A of the Insurance Code which governs the Louisiana Insurance Guaranty Association Fund (LIGA). Section 1377 delineates the scope of Part XXIX-A and provides that that Part "shall apply to all kinds of direct insurance, except ... ocean marine insurance." La.Rev.Stat. 22:1377(A).
In Deshotels, the court concluded that because the categories of insurance excluded from coverage under LIGA enumerated different kinds of insurance policies rather than different kinds of risks, therefore a claim brought under a workers' compensation policy with a maritime endorsement was not a claim brought under an "ocean marine insurance" policy and thus was subject to LIGA protection. Deshotels, 538 So.2d at 993. Implicit in this holding was the premise that ocean marine insurance policies would fall within the ocean marine insurance exclusion in Section 1377 and thereby be excluded from LIGA protection.
Later, in Backhus, the court addressed the issue of whether a P & I policy was "ocean marine insurance" within the meaning of the LIGA exclusion. The court held that
common usage, coupled with the inclusion of protection and indemnity insurance under the definition of marine insurance in R.S. 22:6(13), leads to the conclusion that the term "ocean marine insurance" includes protection and indemnity insurance and that protection and indemnity insurance, absent some intent on the part of the legislature to protect individuals entitled to recover under protection and indemnity policies, falls within the "ocean marine insurance" exception to Louisiana Insurance Guaranty Association protection.
Backhus, 549 So.2d at 289 (emphasis added). Backhus therefore establishes that P & I insurance constitutes "ocean marine insurance" as that term is used in the Louisiana Insurance Code, including Part XIV of the Insurance Code containing Section 611 and the Direct Action Statute. 11 The similarity between the "ocean marine insurance" exclusion in Part XXIX-A of the Insurance Code (governing LIGA) and the "ocean marine" insurance exclusion in Part XIV of the Insurance Code (containing the Direct Action Statute) has led some courts, including the federal court of appeals in...
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