Veillon v. Exploration Services, Inc.

• Decision Date: 07 July 1989
• Docket Number: No. 88-3362,88-3362
• Citation: 876 F.2d 1197
• Parties: Michael Wayne VEILLON, Plaintiff-Appellee, v. EXPLORATION SERVICES, INC., Defendant, The Travelers Insurance Company, Intervenor-Appellant, and Fred E. Salley & Charles N. Branton, Movants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1197

876 F.2d 1197

14 Fed.R.Serv.3d 233

Michael Wayne VEILLON, Plaintiff-Appellee, v. EXPLORATION SERVICES, INC., Defendant The Travelers Insurance Company, Intervenor-Appellant and Fred E. Salley & Charles N. Branton, Movants-Appellants.

No. 88-3362.

United States Court of Appeals Fifth Circuit.

July 7, 1989.

Charles N. Branton, Fred A. Salley, New Orleans, La., for intervenor-appellant and pro se.

Pamela A. Tynes, Paul J. Guillot, Lafayette, La., for plaintiff-appellee.

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

Before THORNBERRY, WILLIAMS, and DAVIS, Circuit Judges.

THORNBERRY, Circuit Judge:

On December 20, 1984, plaintiff-appellee Michael Veillon was injured while working aboard a seismic marsh rig owned and operated by his employer Exploration Services, Inc. At all relevant times, Exploration Services was insured by The Travelers Insurance Company (Travelers) whose policy served the dual purposes of covering employer liability and worker's compensation claims. Veillon brought suit against Exploration Services, Travelers, and Texaco, Inc., the charterer of the seismic rig, based on the Jones Act, 46 U.S.C.App. Sec. 688, and general maritime law. Travelers subsequently filed a complaint of intervention seeking reimbursement for any sums paid to or on behalf of Mr. Veillon in discharging its obligations as Exploration Services' worker's compensation carrier.

Pursuant to its obligations under the policy issued to Exploration Services, Travelers paid Veillon $4515 in maintenance and $10,203.44 in cure. At the early stages of this litigation it was uncontested that Travelers' coverage for maintenance and cure was limited to $25,000. Travelers attempted to tender its remaining coverage to Veillon, but such offers were apparently rejected. Thereafter, on August 10, 1987, Travelers moved the court for permission to pay into the court's registry the balance of its policy limits ($10,281.56) and to be dismissed from the suit as a party-defendant. The district court granted Travelers' motion on August 26, 1987 and dismissed the claims against Travelers.

In September 1987, Veillon terminated the services of his then-attorney Leonard Cline and hired Paul Guilliot. Ms. Pamela Tynes, an associate of Mr. Guilliot, was eventually substituted for Mr. Guilliot as Veillon's counsel. Ms. Tynes discovered a possible ambiguity in Travelers' maritime endorsement which, if construed against Travelers, would have the effect of raising its policy limits from $25,000 to $100,000. Based on this discovery, on October 23, 1987, Ms. Tynes filed a motion with the court to reconsider the dismissal of Travelers. In early January 1988, after construing the terms of the policy in a light least favorable to the insurer, the district court ordered Travelers reinstated as a party-defendant. The funds deposited by Travelers remained in the court's registry.

Having been reinstated as a defendant in the case, Travelers, through its attorneys Fred Salley and Charles Branton, filed a motion for reconsideration of its reinstatement or, alternatively, for summary judgment. This motion was to be considered at a status conference on February 11, 1988. By letter dated February 8, 1988, Fred Salley requested the presence of a court reporter at the conference. No court reporter was present as requested. At the conference, the district court refused to consider Travelers' motion for reconsideration or, in the alternative, for summary judgment despite the fact that Veillon filed no opposition. The case remained set for trial for February 22, 1988.

Shortly after the February 11 status conference, Ms. Tynes and Mr. Salley entered settlement negotiations. Apparently, Ms. Tynes agreed to inform the court that Travelers' motion for reinstatement or, alternatively, summary judgment could be entered in exchange for Travelers' agreement not to oppose a motion to withdraw the funds from the court's registry which Veillon planned to file at a later date. The supplemented record contains several correspondences between Ms. Tynes and Mr. Salley which suggest the terms of the agreement. The supplemented record and appellate briefs suggest that Travelers wanted an actual judgment entered to the effect that its policy limit for maritime injuries provided an unambiguous limit of $25,000. Thousands of similar policies were in effect, and a judgment of this nature would presumably deter other insureds from raising the policy limits issue. In any event, the record does not contain an actual agreement executed by both parties.

On the morning of February 22, 1988, the first day of trial, the court entertained several pre-trial motions. Ms. Tynes began the discussion by stating, "[t]he plaintiff would like to dismiss Travelers Insurance Company and pursuant to the agreement that we would be allowed to withdraw the funds which have been deposited into the registry of the Court without any objection from Travelers." Mr. Salley explained that "[t]he agreement was that [Ms. Tynes] would note to the court her lack of objection to the motion to reconsider and motion for summary judgment filed by Travelers Insurance Company. For that, we would withdraw from the case."

In an attempt to simplify matters, the district judge characterized the motion as one by the plaintiff to dismiss its claims against Travelers in return for Travelers agreement not to oppose Veillon's future motion to withdraw the funds from the registry. Mr. Salley objected to this characterization because the resulting dismissal would not intimate a victory for Travelers on the coverage issue as would a summary judgment. Despite Mr. Salley's objection, the court granted the plaintiff's motion to dismiss. Mr. Salley again tried to interject the terms of the agreement into the proceeding at which point the court asked, "Travelers has no further interest in those funds [in the court's registry]." To which Mr. Salley responded, "That's correct." The court then excused Mr. Salley and his client Travelers from further participation in the trial.

The plaintiff's claims against Texaco and Exploration Services were tried on February 22 and 23. On April 27, 1988, the court rendered its findings of fact and conclusions of law in which the plaintiff's claims against both defendants were dismissed. The court entered its final judgment on the pre-trial dismissal of Travelers and post-trial dismissal of Texaco and Exploration Services on April 27.

Shortly after the court entered judgment against the plaintiff, Mr. Branton filed a motion to withdraw funds from the registry of the court on behalf of Travelers. Despite having disavowed any interest in the funds at the February 22 proceeding, Mr. Branton argued that, since the plaintiff had no right to the funds, the money should be returned to Travelers. On behalf of the plaintiff, Ms. Tynes opposed the motion to withdraw based on Travelers prior dismissal from the suit. Travelers filed a supplemental memorandum to its motion to withdraw arguing that Travelers and the plaintiff had never reached a settlement agreement cognizable under applicable Louisiana law. On May 23, Ms. Tynes filed a response to Travelers' supplemental memorandum again asserting the groundlessness of Travelers' motion based on its prior tender of its policy limits and dismissal from the suit. Ms. Tynes also requested the court to impose Rule 11 sanctions.

A hearing was held on May 25, 1988 to resolve the pending motion to withdraw funds. Based on the February 22 transcript reflecting Travelers' dismissal from the suit and relinquishment of rights to the deposited funds, the court denied Travelers' motion and, pursuant to Rule 11, imposed a $750 sanction on attorneys Branton and Salley.

Appellant Travelers appeals all adverse rulings from the February 11 denial of its unopposed motion for reconsideration to the denial of its motion to withdraw funds. Also on appeal, Messrs. Branton and Salley appeal the imposition of Rule 11 sanctions.

Discussion

A. Travelers' Claims

Travelers raises two objections with respect to the events which transpired at the February 11, 1988 status conference. As discussed above, after the court reinstated Travelers as a defendant, Travelers filed a motion for reconsideration or, in the alternative, for summary judgment. Ms. Tynes, on behalf of the plaintiff, did not oppose this motion. Nevertheless, at the February 11 conference, the district court refused to entertain Travelers' unopposed motion. Instead, the court ruled that the case should proceed to trial which was scheduled to begin on February 22. Travelers claims that the district court erred in refusing to grant its motion. We disagree. A district judge has the discretion to deny a Rule 56 motion even if the movant otherwise successfully carries its burden of proof if the judge has doubt as to the wisdom of terminating the case before a full trial. See Marcus v. St. Paul Fire and Marine Insurance Co., 651 F.2d 379, 382 (5th Cir.1981); C. Wright, A. Miller & M. Kane, Federal Practice and Procedure Sec. 2728 (1983). We find no abuse of discretion under the present circumstances.

Travelers also claims that the denial of its unopposed motion was exacerbated by the court's refusal to allow a court reporter to attend the February 11 conference. The record indicates that Travelers' counsel requested the presence of a court reporter on February 8. Travelers cites as authority for its position the Court Reporters Act, 28 U.S.C. Sec. 753(b), which provides in part:

one of the reporters appointed for each such court shall attend at each session of the court and at every other proceeding designated by rule or order of the court or by one of the judges, and shall record verbatim by shorthand or by mechanical means which may be promulgated by the Judicial Conference: ... (3) such other proceedings ... as may be requested by any party to the proceeding.

This court has held...