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Roberts v. Inland Salvage Inc.

United States District Court, E.D. Louisiana

December 19, 2017

KENNETH ROBERTS
v.
INLAND SALVAGE, INC.

         SECTION A (4)

          ORDER AND REASONS

          JAY C. ZAINEY UNITED STATES DISTRTCT JUDGE

         Before the Court is a Motion for Partial Summary Judgment Regarding Punitive Damages (Rec. Doc. 106) filed by Defendants: Hiscox Dedicated Corporate Member Limited and Catlin Syndicate Limited Subscribing to Covernote NO4MM-34-1049-03, and Chubb Syndicate 1882 (hereinafter collectively referred to as “Defendants”). Plaintiff Kenneth Roberts (“Roberts”) opposes this motion (Rec. Doc. 110) and Defendants have replied. (Rec. Doc. 113). The motion, set for submission on November 29, 2017, is before the Court on the briefs without oral argument.[1]This matter is set as a jury trial beginning on May 14, 2018 at 8:30 a.m. Having considered the motion and memoranda of counsel, the record, and the applicable law, the Court finds that the Defendants' motion should be GRANTED for the reasons set forth below.

         I. Background

         Defendants bring this motion contending that Roberts's punitive damages claims must be dismissed in accordance with the Defendants' respective insurance policies. (Rec. Doc. 106). In his Complaint, Roberts asserts claims for negligence under the Jones Act (46 U.S.C. § 30104) and under general maritime law, as well as claims for unseaworthiness and maintenance and cure. (Rec. Doc. 1). Roberts additionally asserts claims seeking punitive damages based on the general maritime law. Id. at p. 4, ¶ XI. According to his Complaint, Roberts's punitive damages claim “relates not only to any arbitrary and/or unreasonable failure of defendant to pay maintenance and cure benefits but also for any gross negligence of the defendant, or unseaworthiness of the vessel as may be allowed under General Maritime Law.” Id.

         This matter arises from a maritime personal injury action. Roberts contends that on November 22, 2013 he experienced an accident resulting in serious injuries while employed by Inland Salvage, Inc. (“Inland Salvage”). (Rec. Doc. 1, p. 2, ¶ 5). On August 22, 2014, Roberts filed a Seaman's Complaint for Damages against Inland Salvage. (Rec. Doc. 1). However, Inland Salvage filed for Chapter 11 Bankruptcy prior to Roberts filing his Complaint. (Rec. Doc. 19-1, p. 1). Roberts was then precluded from maintaining an action against Inland Salvage due to the automatic stay on actions against Inland Salvage during bankruptcy proceedings.[2] (Rec. Doc. 13, pp. 1-2).

         Thereafter, on June 10, 2016, Roberts filed a First Supplemental and Amended Complaint, directly naming the following entities as defendants: American Equity Underwriters, Inc.; Castlepoint National Insurance Company; and Underwriters at Lloyd's, London Chubb Syndicate 1882 (“Chubb”). (Rec. Doc. 21, pp. 1-2, ¶¶ 13-15). Roberts did so in accordance with Louisiana's Direct Action Statute (La. R.S. § 22:1269), which allows him to maintain this action directly against the insurer-defendants. Id. at pp. 1-2, ¶¶ 17-18. Roberts again amended his complaint to add Hiscox Dedicated Corporate Member Limited and Catlin Syndicate Limited Subscribing to Covernote NO4MM-34-1049-03 as direct defendants (hereinafter referred to as “Hiscox”). (Rec. Doc. 93). Defendants Hiscox and Chubb bring the instant motion for partial summary judgment.

         II. Legal Standard

         Summary judgment is appropriate only if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ” when viewed in the light most favorable to the non-movant, “show that there is no genuine issue as to any material fact.” TIG Ins. Co. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir. 2002) (citing Anderson v. Liberty Lobby, Inc., 447 U.S. 242, 249-50 (1986)). A dispute about a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. (citing Anderson, 477 U.S. at 255). The court must draw all justifiable inferences in favor of the non-moving party. Id. (citing Anderson, 477 U.S. at 255).

         Once the moving party has initially shown “that there is an absence of evidence to support the non-moving party's cause, ” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the non-movant must come forward with “specific facts” showing a genuine factual issue for trial. Id. (citing Fed. R. Civ. P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986)). Conclusional allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation do not adequately substitute for specific facts showing a genuine issue for trial. Id. (citing SEC v. Recile, 10 F.3d 1093, 1097 (1993)).

         III. Law and Analysis

         Defendants bring the instant motion seeking to dismiss Plaintiff's claims for punitive damages on the grounds that neither of Defendants' insurance agreements with Inland Salvage provide coverage for punitive damages. On the other hand, Plaintiff argues that the language of the agreements does not specifically preclude Defendants from being assessed punitive damages.

         Defendant Hiscox provided primary coverage to Inland Salvage and Defendant Chubb provided excess coverage. Hiscox issued its Covernote NO4MM-34-1049-03 (the “Covernote”) to Inland Salvage providing Primary Maritime Employers' Liability Insurance for the period of April 18, 2013 to April 18, 2014. (Rec. Doc. 95-1, p. 2). The second policy at issue is the Slip (the “Chubb Slip”) issued by Defendant Chubb Syndicate 1882 to Inland Salvage. The Chubb Slip provided Excess Marine Employers' Liability coverage to Inland Salvage from July 26, 2013 to July 26, 2014. (Rec. Doc. 106-2, Ex. A).[3] The Chubb Slip provides 50% of excess liability coverage above the underlying primary insurance contract-in this case, the Hiscox Covernote.

         In analyzing the instant motion, the most noteworthy feature of the Chubb Slip is that the scope of its coverage mirrors that of the Covernote's scope of coverage. Under Section B of the Chubb Slip, the following conditions apply:

Section B)
All terms, clauses and conditions as per Underlying Insurance Contract NO4MM-34-1049-03 and to follow in all respects. . . .

(Rec. Doc. 106-2, Ex. A, p. 2). Thus, the issue of whether the Chubb Slip provides excess coverage for punitive damages will directly depend on this Court's determination of whether Hiscox's Covernote provides primary coverage for punitive damages. As a result, the Court's analysis of ...


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