Lumar Marine, Inc. v. Insurance Co. of North America, 90-3125

• Decision Date: 07 September 1990
• Docket Number: No. 90-3125,90-3125
• Citation: 910 F.2d 1267
• Parties: LUMAR MARINE, INC., Plaintiff-Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellee. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1267

910 F.2d 1267

LUMAR MARINE, INC., Plaintiff-Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellee.

No. 90-3125

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

Sept. 7, 1990.

Joseph B. Guilbeau, Dean A. Sutherland, Sutherland, Juge, Horack & Dwyer, New Orleans, La., for plaintiff-appellant.

John Emerson Galloway, Galloway, Johnson, Thompkins & Burr, New Orleans, La., Henry D.H. Olinde, Baton Rouge, La., for defendant-appellee.

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

Before GEE, SMITH and WIENER, Circuit Judges.

WIENER, Circuit Judge:

Plaintiff-Appellant, Lumar Marine, Inc. ("Lumar"), appeals from the district court's grant of a Motion for Summary Judgment in favor of Insurance Company of North America ("INA"), dismissing Lumar's complaint. Finding no error, we affirm.

I.

This is a diversity case originally filed by Lumar against INA in state court in Plaquemines Parish, Louisiana, and from there timely removed by INA to the United States District Court for the Eastern District of Louisiana. The parties and the district court unanimously concluded that the substantive law of Louisiana applied in this case. On the basis of stipulated facts INA filed a motion for summary judgment seeking dismissal of Lumar's complaint. INA urged that its policy of excess insurance did not "drop down" to provide primary insurance coverage to Lumar when Lumar's primary carrier became insolvent. Lumar filed a cross-motion for summary judgment on the same issue, contending that INA's excess coverage did drop down under those circumstances. When the District Court granted INA's motion and entered judgment dismissing Lumar's complaint, Lumar appealed.

II.

This case was filed after Lumar was cast in judgment in Simeon v. T. Smith & Son, Inc., No. 84-4705 (E.D.La.1984), aff'd, Simeon v. T. Smith & Son, Inc., 852 F.2d 1421 (5th Cir.1988), cert. denied sub nom, Lumar Marine, Inc. v. Simeon, --- U.S. ----, 109 S.Ct. 3156, 104 L.Ed.2d 1019 (1989). Simeon's recovery resulted from an accident that occurred on September 27, 1981, on the M/V Tako Bandit, ¹ one of several vessels owned by Lumar and primarily insured by Glacier General Assurance Company ("Glacier") up to $500,000.00. The final judgment in favor of Simeon exceeded that amount.

At the time of Simeon's accident, a policy of excess insurance issued by INA covered Lumar's vessels, including the M/V Tako Bandit. That policy covered the type of risk upon which Simeon's judgment was based. Glacier became insolvent after Simeon's accident but before his litigation At issue in this case is whether INA's policy, issued to cover Lumar's liability in excess of its coverage under the Glacier policy or any other insurance, must "drop down" to provide coverage to Lumar from "dollar one" because of Glacier's insolvency and LIGA's absence of coverage. The answer to that question lies in the wording of the INA policy, interpreted according to the law of Louisiana.

was completed. Glacier was not a member carrier of the Louisiana Insurance Guaranty Association ("LIGA"), so Lumar had no claim for relief from that organization.

An examination of the INA policy reveals the following:

1.

The upper right-hand corner of the first page of the policy contains a multiple choice check list for the type of coverage provided. A typed "x" appears to the left of the first of those choices, "Excess Protection & Indemnity." (emphasis added)

2.

The words "as per schedule" are typed into the blank that follows the dollar sign in "Limits of Liability: $ ."

3.

The following paragraph appears in the center of the first page:

INSURING CONDITIONS: This insurance shall, subject to the terms and conditions herein, indemnify the Assured [Lumar] for all sums which the Assured shall become obliged to pay for liability described in and insured against in underlying primary insurances listed hereon, but this insurance is warranted free from claims in respect of any one loss, accident or occurrence unless the aggregate of such claims exceed [sic] the amounts insured in the primary underlying insurances in which event this Company shall be liable only for the amount by which such aggregate exceeds the limit of liability in the primary underlying insurance not to exceed, however, the Limit of Liability as shown on Line 9 of this policy ["$ as per schedule"] for any one accident or occurrence arising out of the same event:" (emphasis added)

4.

Three column headings appear under the heading PRIMARY UNDERLYING INSURANCES. Under Primary Insurer, the words "Glacier General Assurance Company" are typed; under Primary Insurer's Policy Number, the serial number of the primary insurance policy is typed; and under Primary Insurer's Limit of Liability, the words "as per policy" are typed into a blank that follows a printed dollar sign and appears immediately above the parenthetical statement, "(if no amount is shown hereon see endorsement for schedule)."

5.

The pertinent special conditions of the policy appear as follows:

SPECIAL CONDITIONS

Notwithstanding anything to the contrary, no liability shall attach for:

A. Legal fees for claims paid or payable under the scheduled Primary and/or underlying forms of policies except as excess over such policies. (emphasis added)

B. The deductible contained in the Primary and/or underlying policies. (emphasis added)

. . . . .

In no event is this insurance to be considered as contributing or double insurance.

6.

To the right of the marginal caption BANKRUPTCY OR INSOLVENCY, appears the statement, "Bankruptcy or insolvency of the Assured shall not relieve this Company of any of its obligations hereunder." [Nowhere does the policy mention the bankruptcy or insolvency of the primary insurance carrier.] 7.

To the right of the marginal caption OTHER INSURANCE appears:

If other collectible insurance with any other insurer is available to the Assured covering a loss also covered hereunder (except insurance purchased to apply in excess of the limit of liability hereunder), the insurance hereunder shall be in excess of, and not contribute with, such other insurance. If collectible insurance under any other policy(ies) of this Company is available to the Assured, covering a loss also covered hereunder (other than the primary insurance of which the insurance afforded by this policy is in excess), the Company's total liability shall in no event exceed the greater or greatest limit of liability applicable to such loss under this or any other such policy(ies). (emphasis added)

8.

To the right of the marginal caption LEGAL COSTS appears:

Should any claim, or series of claims arising out of one occurrence or accident, appear likely to exceed the limit of liability in the Primary and/or underlying Policy(ies), no legal costs shall be incurred on behalf of this Company without its consent being first obtained. Should such claim or claims be adjusted prior to trial court judgment for a sum or aggregate sum of not more than the limit of liability in the Primary and/or underlying policy(ies), then no legal costs shall be payable by this Company. Should however, the sum or aggregate sum for which such claim or claims are adjustable prior to the rendering of trial court judgment(s) exceed the limit of liability in the Primary and/or underlying policy(ies), then the Company, if it consents to trial court proceedings continuing, shall contribute to the legal costs in the ratio of its proportion of the liability for the judgment(s) rendered, or settlement(s) made, bears to the whole amount of said judgment(s) or settlement(s). (emphasis added)

9.

To the right of the marginal caption PRIMARY AND UNDERLYING POLICIES appears in part:

This insurance shall follow any changes made under primary and underlying policies but this Company shall be advised of any such changes as promptly as possible. If underlying amounts of insurance are reduced without prior agreement of this Company, this Company shall only be liable to the same extent as if present underlying amounts had been maintained. (emphasis added)

10.

Endorsement # 1 to the policy, titled "Schedule of Vessels," consists of four columns: Under "Vessel," the names of five vessels are listed, including "Tako Bandit"; under "Excess Limit of Liability," $4,500,000.00 is listed for each vessel; under "Primary Limit of Liability," $500,000.00 is listed for each vessel; and under "Premium," $2,750.00 is listed for each vessel.

III.

This court reviews the grant of summary judgment motion de novo, using the same criteria used by the district court in the first instance. Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir.1988). We "review the evidence and any inferences to be drawn therefrom in the light most favorable to the non-moving party." Baton Rouge Bldg. & Constr. Trades Council v. Jacobs Constructors, Inc., 804 F.2d 879, 881 (5th Cir.1986) (per curiam) (citing Southmark Properties v. Charles House Corp., 742 F.2d 862, 873 (5th Cir.1984)). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ. P. 56(c). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Our review of the entire INA policy, the stipulated facts, the briefs of appellant and appellee, and the opinion of the district court, convinces us that the district court reached the correct conclusion for the correct reasons under the Louisiana jurisprudence then extant. We are constrained, however, in our de novo review of this case, to consider it in light of late-breaking developments in Louisiana's jurisprudence on drop down coverage in excess insurance policies.

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