Naquin v. Elevating Boats, L.L.C.

• Citation: 817 F.3d 235
• Decision Date: 22 March 2016
• Docket Number: No. 15–30471.,15–30471.
• Parties: Larry NAQUIN, Sr., Plaintiff v. ELEVATING BOATS, L.L.C., Defendant–Third Party Plaintiff–Appellant v. State National Insurance Company, Third Party Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

817 F.3d 235

Larry NAQUIN, Sr., Plaintiff

v.ELEVATING BOATS, L.L.C., Defendant–Third Party Plaintiff–Appellant

v.State National Insurance Company, Third Party Defendant–Appellee.

No. 15–30471.

United States Court of Appeals, Fifth Circuit.

March 22, 2016.

Peter S. Koeppel, Esq., Jonathan Holden Adams, Esq., Attorney, Evelyn Alexis Bevis, Esq., William Scarth Clark, Esq., Emma Alexandra Mekinda, Esq., Koeppel Clark Turner, New Orleans, LA, for Defendant–Third Party Plaintiff–Appellant.

Jay M. Lonero, Christopher Raymond Pennison, Esq., Larzelere Picou Wells Simpson Lonero, L.L.C., Metairie, LA, Jennifer Ruth Kretschmann, Esq., Phelps Dunbar, L.L.P., New Orleans, LA, for Third Party Defendant–Appellee.

Before DENNIS, ELROD, and GRAVES, Circuit Judges.

JAMES E. GRAVES, JR.

, Circuit Judge:

In this insurance coverage dispute, Elevating Boats, LLC ("EBI") appeals a summary judgment in favor of State National Insurance Company ("SNIC"). For the reasons outlined below, we AFFIRM the district court.

I.

This appeal flows directly from a previous decision by this court. In that matter, Larry Naquin was using an EBI land-based crane to relocate a test block when the pedestal of the crane snapped, causing the crane to topple over. Naquin v. Elevating Boats, L.L.C., 744 F.3d 927, 931 (5th Cir.2014)

. Upon jumping from the crane house, Naquin sustained a broken left foot, a severely broken right foot, and a lower abdominal hernia. Id. Naquin's cousin's husband, another EBI employee, was crushed by the crane and killed. Id. Despite reparative surgeries and physical therapy sessions, Naquin was unable to return to physical work. Id.

Naquin subsequently sued EBI pursuant to the Jones Act, and the suit proceeded to trial. Id. After a three-day trial, a jury concluded that Naquin was a Jones Act seaman and that EBI's negligence caused his injury. The jury subsequently awarded Naquin $1,000,000 for past and future physical pain and suffering, $1,000,000 for past and future mental pain and suffering, and $400,000 for future lost wages. Id. EBI appealed, challenging, among other things, the grant of Jones Act seaman status to Naquin and the sufficiency of evidence to establish EBI's negligence. Id. at 932

.

Pertinent to this appeal, the Naquin majority¹ affirmed the jury's verdict as to liability, concluding that the jury correctly determined that Naquin qualified as a Jones Act seaman; the entire panel, though, agreed that EBI acted negligently in failing to provide a reasonably safe work environment and work equipment. Naquin, 744 F.3d at 932–38

. Specifically, as to the negligence inquiry, we held: "EBI was the only party responsible for welding the LC–400 crane to its base, a weld which was indisputably defective and the direct cause of Naquin's injuries." Id. at 937. We, however, vacated the verdict as it related to damages and remanded the matter to the district court to conduct a new trial on that specific issue. Id. at 938–41.

The district court subsequently granted EBI leave to file a third-party complaint against its insurance companies, SNIC and Certain London Insurers ("London Insurers"). In its third-party demand, EBI complained that both SNIC and London Insurers breached their insurance contracts by denying EBI's insurance claims arising from Naquin's accident and by failing to provide EBI with defense and indemnity. EBI, in connection to its claims, also sought statutory bad-faith damages pursuant to Louisiana Civil Code 1997

and Louisiana Recording Statute 22:1973. The district court granted a motion to sever, ordering that EBI's claims against SNIC and London Insurers be severed from the remaining issue of damages and resolved by a separate trial.

SNIC moved for summary judgment, asserting, chiefly, that EBI was not entitled to coverage under its Protection & Indemnity Policy (the "Policy") because coverage did not extend to Naquin's land-based incident and that EBI failed to comply with the notice requirements imposed by the Policy. EBI responded in opposition, explaining that it was entitled to indemnity under the "any casualty or occurrence" language of the Policy. The remaining opposition to SNIC's summary judgment motion concerned EBI's perceived lack of actual notice. Upon consideration of both parties' arguments, the district court granted summary judgment to SNIC. Thereafter, the district court entered final judgment in favor of SNIC, and later denied EBI's Rule 59(e) Motion to Reconsider.

II.

We consider only whether the district court erred in granting summary judgment to SNIC on the grounds that the Policy did not cover EBI's liability for Naquin's incident and that SNIC, therefore, exhibited no bad faith in denying coverage. Summary judgment is proper when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a)

. We review the district court's grant of summary judgment de novo, construing all facts and inferences in the light most favorable to the nonmoving party. See EEOC v. Chevron Phillips Chem. Co., 570 F.3d 606, 615 (5th Cir.2009). Because the proper interpretation of an insurance policy presents a legal question, not a factual one, the district court's interpretations of the Policy are also reviewed de novo. See Martco Ltd. P'ship v. Wellons, Inc., 588 F.3d 864, 878 (5th Cir.2009).

A. Scope of Coverage

The "Indemnity" provision of the Policy at the heart of this appeal, provides:

Subject to all exclusions and other terms of this Policy, the Underwriters agree to indemnify the Assured for any sums which the Assured, as owner of the Vessel, shall have become liable to pay, and shall have paid in respect of any casualty or occurrence during the currency of the Policy, but only in consequence of any other matters set forth hereunder ...

(emphasis added). The district court interpreted this critical language as excluding coverage to EBI due to the circumstances surrounding its liability in Naquin. We endorse this interpretation.

In the absence of a specific and controlling federal maritime rule over this dispute, we interpret this maritime insurance contract under Louisiana state law. See Albany Ins. Co. v. Anh Thi Kieu, 927 F.2d 882, 886 (5th Cir.1991)

. Under Louisiana law, "an insurance policy is a contract between the parties and should be construed using the general rules of contract interpretation set forth in the Louisiana Civil Code." First Am. Bank v. First Am. Transp. Title Ins. Co., 585 F.3d 833, 837 (5th Cir.2009) ; see also Cadwallader v. Allstate Ins. Co., 848 So.2d 577, 580 (La.2003).

Words and phrases used in an insurance policy should be construed using their plain, ordinary and generally prevailing meaning, unless the words have acquired a technical meaning. Cadwallader, 848 So.2d at 580

; Carbon v. Allstate Ins. Co., 719 So.2d 437, 439–40 (La.1998). Thus, when the words of the insurance contract "are unambiguous and the parties' intent is clear, the insurance contract will be enforced as written." Doerr v. Mobil Oil Corp., 774 So.2d 119, 124 (La.2000)

(citing La. Civ.Code Ann. art.2046). A contractual "provision susceptible of different meanings must be interpreted with a meaning that renders it effective and not with one that renders it ineffective," so as to avoid rendering any provision in the contract superfluous. La. Civ.Code Ann. art.2049; Berk–Cohen Assocs., LLC v. Landmark Am. Ins. Co., No. 07–9205, 2009 WL 3738152, at *3–4 (E.D.La. Nov. 5, 2009). The provisions of the contract "must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole." La. Civ.Code Ann. art.2050; First Am. Bank, 585 F.3d at 837.

As relevant here, SNIC avers that the terms of the subject Policy—specifically, the "as owner of the Vessel" clause—does not provide coverage for the land-based incident due to EBI's negligence as described in Naquin. Before the district court, EBI urged a blanket reading of the Policy that would provide coverage for "any casualty or occurrence" for which EBI might become liable.²

We are persuaded, guided by the law and facts before us, that EBI's strained interpretation of the Policy is unreasonable in this context. See La. Civ.Code Ann. art.2050; First Am. Bank, 585 F.3d at 837

. We, therefore, follow the district court in holding that there is no genuine issue that the scope of coverage of the Policy does not extend to EBI's liability for the Naquin incident. In reaching this conclusion, we decline EBI's invitation to read the provision in the piecemeal fashion that it prefers—a construal that would directly contradict the well-established Louisiana rules regarding contractual interpretation. See Foret v. La. Farm Bureau Cas. Ins. Co., 582 So.2d 989, 991 (La.App. 1 Cir.1991) ("An insurance contract must be construed as a whole; one section is not to be construed separately or at the expense of disregarding other sections."). The only way to give meaning to both provisions of the Policy is to construe the Policy as limiting coverage to "any casualty or occurrence" which arises out of EBI's conduct "as owner of the Vessel."

Moreover, our holding is required under our precedent. See Lanasse v. Travelers Ins. Co., 450 F.2d 580 (5th Cir.1971)

. In Lanasse, the plaintiff was injured when the operator of a platform owned by Chevron allowed a welding machine to swing against the vessel's railing. Id. at 582. Chevron claimed, in part, that its liability was covered under the terms of a standard P & I Policy. Id. at 583. Chevron, the Lanasse court reasoned, "was found at fault for the manner in which the crane was operated. The vessel offered nothing further than a condition or locale for the accident." Id. at 584. As we explained:

There must be at least some causal operational relation between the vessel and the resulting injury. The line may be a wavy one between coverage and noncoverage, especially with industrial complications in these ambiguous

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