Offshore Logistics Services v. Mut. Marine Office
| Citation | 1981 AMC 1154,462 F. Supp. 485 |
| Decision Date | 19 July 1978 |
| Docket Number | Civ. A. No. 75-1021,75-1036. |
| Parties | OFFSHORE LOGISTICS SERVICES, INC., Offshore Logistics, Inc., and Gulf Coast Marine, Inc. v. MUTUAL MARINE OFFICE, INC. and Arkwright-Boston Manufacturers Mutual Insurance Company. |
| Court | U.S. District Court — Eastern District of Louisiana |
COPYRIGHT MATERIAL OMITTED
James H. Roussel, Phelps, Dunbar, Marks, Claverie & Sims, Winston Edward Rice, New Orleans, La., for plaintiffs.
Donald L. King, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, La., for defendants Mutual Marine and Arkwright.
James H. Daigle, Lemle, Kelleher, Kohlmeyer & Matthews, New Orleans, La., for defendant Southern Natural Gas Co.
This case involves a question of insurance coverage under a policy of marine insurance.
On February 9, 1973 Milton B. Bourne, an offshore crane operator, sustained serious physical injuries aboard the M/V STONES RIVER while being transported from a rig in the Gulf of Mexico to the Louisiana coast. In June of 1974 Bourne brought suit against Offshore Logistics Services, Inc. (the successor corporation to Stones River Rentals, Inc. the owner of the STONES RIVER at the time of the accident) and against Offshore General, Inc. (the operator of the STONES RIVER on the date in question; hereinafter referred to in tandem with Offshore Logistics Services, Inc. as the Offshore group). Bourne claimed that the STONES RIVER was unseaworthy and that the master of the vessel was negligent in improperly operating the vessel and in navigating the vessel under dangerous weather conditions. Bourne subsequently added Southern Natural Gas Co. (the charterer of the STONES RIVER; hereinafter referred to as Southern) as a defendant alleging that Southern had negligently dispatched the STONES RIVER into the Gulf in rough weather.
As that case progressed the parties entered into settlement negotiations and Bourne indicated a willingness to accept the sum of $160,000 in full settlement of his claim. The defendants turned to their primary insurer Reserve Insurance Co. (hereinafter Reserve) with whom the Offshore group carried a $100,000 Protection and Indemnity policy under which Southern was named as an additional assured. Reserve agreed with the defendants that the proposed compromise was reasonable and advanced the limit of its liability under its policy towards the settlement fund. The defendants turned next to their excess insurer Mutual Marine Office, Inc. and Arkwright-Boston Manufacturers Mutual Insurance Co. (defendants in the present suit; hereinafter Mutual and Arkwright) to complete the settlement. Mutual and Arkwright concurred that the amount of the settlement was reasonable but denied that the excess policy offered coverage. To prevent the loss of the settlement, the Offshore group advanced $30,000, borrowing that sum from their insurance broker Gulf Coast Marine, Inc. (hereinafter Gulf Coast) in return for the execution of an assignment. Southern advanced the remaining $30,000 which it borrowed from St. Paul Fire & Marine Insurance Co. (hereinafter St. Paul) in return for the execution of a loan receipt. The settlement with Bourne was then consummated.
Subsequently the Offshore group and Southern brought suits against Mutual and Arkwright seeking reimbursement for the sums they had personally expended in excess of their primary policy limits. The two cases were consolidated, and all parties agreed to submit the cases for decision on the basis of the record and memoranda.
While all parties agree that the sum accepted by Bourne in settlement of his claim was a reasonable one, the parties are in serious disagreement over the question of the distribution of fault between the Offshore group and Southern. Accordingly, my initial task is to determine who, if anyone, was at fault and then to characterize any negligence I may find to determine the application of the insurance policies at issue here.
After reviewing the deposition testimony and the exhibits, I find the facts surrounding the accident to be as follows:
On the morning of February 9, 1973 the Louisiana coast was shrouded in bad weather. Seas were running at ten to twelve feet and the winds were at thirty-five to forty miles an hour. The sky was overcast while intermittent sleet and rain fell. Ronnie Tucker, Southern's dispatcher at Amelia, Louisiana contacted Edwin Burleigh the drilling foreman for Southern at Offshore Rig Number 24 in the Gulf of Mexico and informed him that because of the rough weather the scheduled helicopter crew change for that day had been cancelled. Burleigh discussed the weather situation with Curless A. Arabie, the tool pusher for Offshore, on Rig 24 and then called both Mr. Straub Roberts (Offshore's superintendent) and Mr. Bill Jones (Offshore's manager) in Morgan City. Burleigh informed Roberts and Jones that in the opinion of himself and Arabie a crew change should and could be safely made by crew boat. Jones informed Burleigh that he would make arrangements to have a large work boat standing by at the mouth of the river to transport the crew to the rig if the weather became too rough for the smaller crew boat. Burleigh, knowing that the trip by work boat took four to five hours longer than the trip by crew boat, stated that it did not matter to him whether the actual drilling crew went on the work boat or the crew boat; however, he insisted that the special service personnel be transferred by the quickest means possible, i. e. the crew boat.
In the meantime the crew boat, the STONES RIVER, was standing by at Amelia. Although scheduled to leave at noon, departure was delayed until 1:30 p. m. because several of the crew hands were late. Before leaving the dock the captain of the STONES RIVER, Buford James Kelly, told Southern's dispatcher several times that the actual transfer from boat to rig of men and equipment could not be performed safely in the stormy weather. However, Kelly did not protest that the mere navigation of the STONES RIVER to and from the rig would present any particular hazard. In spite of Kelly's obvious reluctance, Southern's dispatcher under instruction from Burleigh ordered Kelly to make the trip to the rig.
The STONES RIVER proceeded to the mouth of the river where it rendezvoused with the larger work boat. There Kelly radioed the dispatcher who told Kelly to unload some equipment onto the work boat and to continue out to the rig with the men. After leaving the work boat Kelly, as was his custom, turned the wheel over to John Beal, his deckhand. Beal, unlicensed to operate a vessel, ran the boat for an hour or two but became nervous because of the rough weather. Kelly took over from Beal and ran the boat the rest of the way out to the rig. The voyage was uneventful and the STONES RIVER reached Offshore Rig 24 at about 5:30 p. m.
Although the STONES RIVER bobbed in the waves and its deck was slick with ice, the crew was transferred from boat to rig and vice versa via a personnel net without serious incident.
By the time the STONES RIVER left the rig around 6:40 the weather had worsened considerably. The seas were running at eighteen to twenty-two feet and the winds were at sixty miles an hour. In defiance of the heavy seas Kelly set out from the rig at three-quarter throttle and headed directly into the waves rather than "quartering" into them. Within ten minutes of leaving Rig 24 John Beal, the deckhand, was thrown to the ceiling of the wheelhouse by the jolting vessel and in falling injured his leg. At that point Kelly turned over the wheel to George L. Hyde, the engineer of the STONES RIVER. Hyde was not licensed to operate a vessel and this was the first time he had had occasion to operate a crewboat of this type. Hyde cut back on the speed marginally but continued, at Kelly's direction, to buck the waves head on rather than head into them diagonally.
Meanwhile in the passenger compartment located directly behind the wheelhouse several of the drilling crew members yelled to Hyde to slow the vessel down. Although Hyde heard some of their cries he did not heed them. The passengers were tossed up and down and from side to side as the STONES RIVER plunged forward. The chairs lacked seatbelts and the only way to remain seated was to clutch an armrest or seat back. About 45 minutes out from Rig 24 Milton Bourne was thrown from his seat in the air. He fell across the right armrest of his chair and the wood frame around the seat.
After being informed of Bourne's accident Hyde cut his speed in half. This considerably reduced the tossing of the boat and the uninjured passengers were able to ride the rest of the way in relative comfort.
I conclude that the primary cause of Bourne's injury was the negligence of Captain Kelly in entrusting the navigation of the STONES RIVER to the unlicensed and inexperienced Hyde, in directing Hyde to buck the seas head on, and in failing to instruct Hyde to slow down to a reasonable speed. A contributing cause of Bourne's injury was the negligence of Southern's drilling foreman Edwin L. Burleigh in insisting that the STONES RIVER make the crew change in bad weather. However, the latter cause was minor compared with Kelly's outright recklessness. The division of settlement responsibility between Offshore and Southern ($130,000 to Offshore and $30,000 to Southern as discussed above) was reasonable and fairly reflects the comparative faults of the parties.
(Emphasis supplied.) The excess policy adopted the coverage of the primary policy by reference. Both the Reserve policy and the Mutual/Arkwright...
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