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Continental Insurance Company v. L&L Marine Transportation, Inc.

United States District Court, E.D. Louisiana

April 19, 2017

CONTINENTAL INSURANCE COMPANY, ET AL.
v.
L&L MARINE TRANSPORTATION, INC., ET AL

         SECTION "F"

          ORDER AND REASONS

          MARTIN L. C. FELDMAN UNITED STATES DISTRICT JUDGE

         Before the Court are P&I Underwriters' and Atlantic Specialty Insurance's cross-motions for summary judgment. For the following reasons, P&I Underwriters motion for summary judgment is GRANTED and Atlantic's motion for summary judgment is DENIED.

         Background

         This insurance dispute arises from a marine allision involving multiple boats; one of which, sank.[1] P&I Underwriters insures L&L Marine Transportation under a protection and indemnity (P&I) policy. Atlantic Specialty also insures L&L, but under a hull and machinery policy.[2]

         The basic facts in the underlying lawsuit are as follows. The M/V ANGELA RAE, a vessel owned by L&L, was the lead tug in a four-vessel flotilla. The M/V ANGELA RAE and the M/V FREEDOM were positioned behind a barge, the FSB-101, and the M/V MISS DOROTHY was positioned in front of the barge. When the flotilla approached the Sunshine Bridge in St. James Parish, the M/V MISS DOROTHY allided with the bridge and sank.

         The insurers of the M/V MISS DOROTHY brought suit against L&L, the owner of the M/V ANGELA RAE, contending that L&L was responsible for the allision and the resulting loss of the M/V MISS DOROTHY. L&L sought coverage from Atlantic Specialty against these claims, but Atlantic Specialty denied coverage. Pursuant to its protection and indemnity policy, P&I has funded L&L's defense in that case. In this dispute, P&I seeks a judgment declaring that Atlantic Specialty has a duty to reimburse the defense costs of L&L relative to the allegations made against them in civil action 14-2967. Atlantic Specialty files a cross-motion for summary judgment on the basis that its hull policy does not provide coverage for the damages allegedly incurred by the M/V MISS DOROTHY and a dismissal of P&I's complaint against it.[3]

         I.

         Federal Rule of Civil Procedure 56 instructs that summary judgment is proper if the record discloses no genuine dispute as to any material fact such that the moving party is entitled to judgment as a matter of law. No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio., 475 U.S. 574, 586 (1986). A genuine dispute of fact exists only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         The Court emphasizes that the mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. See id. Therefore, "[i]f the evidence is merely colorable, or is not significantly probative, " summary judgment is appropriate. Id. at 249-50 (citations omitted). Summary judgment is also proper if the party opposing the motion fails to establish an essential element of his case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In this regard, the non-moving party must do more than simply deny the allegations raised by the moving party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d 646, 649 (5th Cir. 1992). Rather, he must come forward with competent evidence, such as affidavits or depositions, to buttress his claim. Id. Hearsay evidence and unsworn documents that cannot be presented in a form that would be admissible in evidence at trial do not qualify as competent opposing evidence. Martin v. John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir. 1987); Fed.R.Civ.P. 56(c)(2). Finally, in evaluating the summary judgment motion, the Court must read the facts in the light most favorable to the non-moving party. Anderson, 477 U.S. at 255.

         The interpretation of an insurance policy is a question of law. Cal-Dive Intern., Inc. v. Seabright Ins. Co., 627 F.3d 110, 113 (5th Cir. 2010). Accordingly, summary judgment review is appropriate.

         II.

         Louisiana law governs the interpretation of marine insurance contracts. See id. (“The interpretation of a marine policy of insurance is governed by relevant state law . . . .”). Under Louisiana law, “courts interpreting insurance contracts should ‘seek to determine the parties' common intent, as reflected by the words in the policy.'” Gabarick v. Laurin Maritime (America), Inc., 650 F.3d 545, 553 (5th Cir. 2011)(quoting Seacor Holdings, Inc. v. Commonwealth Ins. Co., 635 F.3d 675, 680 (5th Cir. 2011). The words in an insurance policy must be given their generally prevailing meaning. Id. (citing La. Civ. Code art. 2047). “[W]hen the language of an insurance policy is clear, courts lack the authority to change or alter its terms under the guise of interpretation.” Coleman v. School Bd. Of Richland Parish, 418 F.3d 511, 518 (5th Cir. 2005)(quoting La. Ins. Guar. Ass'n v. Interstate Fire & Cas. Co., 630 So.2d 759, 764 (La. 1994)).

         “If after applying the other general rules of construction an ambiguity remains, the ambiguous contractual provision is to be construed against the drafter, or, as originating in the insurance context, in favor of the insured.” La. Ins. Guar. Ass'n, 630 So.2d at 764. “Ambiguity will also be resolved by ascertaining how a reasonable insurance policy purchaser would construe the clause at the time the insurance contract was entered.” Id. “Yet, if the policy wording at issue is clear and unambiguously expresses the parties' intent, the ...


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