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applying rules set forth in Hodgen and holding that where the plaintiff, who was injured while carrying a hose from a barge to a vessel with other crew members, made no allegations that and there was no evidence that, at the time of his injury, a time charterer was acting in one of the traditional spheres of a time charterer's activity and it was uncontested that the time charterer did not direct the crew to move the hose, the time charterer was not liable as a matter of law
Summary of this case from SAUDI v. S/T MARINE ATLANTICOpinion
Civ. No. 99-0002, SECTION "K" (4).
January 25, 2000.
ORDER AND REASONS
Before the court are cross motions for summary judgment filed by the third-party plaintiff, Maryland Marine, Inc.("MMI"), and third-party defendant, St. Paul Fire and Marine Insurance Company ("St. Paul"). The question before the court is whether St. Paul owes indemnity to MMI for the cost of defending this action. Plaintiff alleges that his injuries were sustained as the result of separate accidents, the first occurring on January 5, 1996 and the second on April 8, 1996. Because different charter agreements and insurance policies were in effect at the time of each accident, the court will discuss St. Paul's duty to indemnify MMI for the January and April accidents separately. For the following reasons, the court finds that St. Paul's motion has merit and should be granted.
1. Standard for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment should be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56 (c). The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Stults v. Conoco, 76 F.3d 651, 656, (5th Cir. 1996), (citing Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 9 12-13 (5th Cir. 1992) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. The nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial" Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986) (emphasis supplied); Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995).
Thus, where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986). Finally, the court notes that the substantive law determines materiality of facts and only "facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986).
The court now turns to the merits of the arguments with these standards in mind.
2. January 5, 1996
a. Background
On January 5, 1996, plaintiff Gary Lester Chisholm ("Chisholm") was injured while employed as a tankerman by Marine Inland Transportation Company ("MITCO"). Chisholm was a crew member aboard the M/V MARINE MARVEL and was injured while he and two other crewmen were carrying a crossover hose from MMI's barge to MITCO's tug. When the crew member carrying the center of the hose dropped his section, the weight of the hose fell on Chisholm, who was in the process of stepping down from the barge to the vessel. Chisholm alleges that he then felt a burning sensation in his lower abdomen.
At the time of the January incident, MMI had time chartered several MITCO vessels to tow MMI barges. The MARVEL was not among the chartered vessels, however, both parties agree that on January 5, 1996, the MARVEL was working as a substitute for one of the chartered tugs. Pursuant to the time charter agreements in effect on January 5, MITCO had secured PI insurance for the tugs from St. Paul. St. Paul admits that MMI was an additional assured under the policy in effect on January 5, 1996. The only issue remaining is whether St. Paul's policy provided coverage for the accident.
See Paragraph V of MMI's Third-Party Complaint against St. Paul and St. Paul's Answer to the Third-Party Complaint.
The charter agreements provide:
Owner, at his expense, shall insure the tugs used in towing under this charter agreement for full form, hull coverage, tug syndicate form or its equivalent, including collision and towers' liability, and ocean PI coverage.
2. Analysis
In its Motion for Summary Judgment, St. Paul contends that the policy in effect on January 5, 1996 did not provide coverage for three reasons. First, St. Paul contends that there is no coverage because MMI was not acting "as owner" of the tug when the January accident occurred. Second, St. Paul argues that plaintiffs complaint excludes coverage to MMI under the policy. Finally, St. Paul maintains that the policy's "escape clause" excludes coverage for the accident.
First, St. Paul denies that MMI, as an additional assured, is entitled to coverage under the terms of the policy. Policy number 315JC1095 issued to MITCO on January 31, 1995 and effective through March 31, 1996 reads in pertinent part:
In consideration of the premium and subject to the warranties, terms, and conditions herein mentioned, this Company hereby undertakes to pay . . ., such sums as the assured as: tower, carrier and/or transporter by water, owner, charterer, operator, hirer, bailee and/or custodian of vessels and/or their cargoes; shall have become legally liable to pay. . . .Policy number 315JC1095, attached to St. Paul's Motion for Summary Judgment and Opposition to Motion for Summary Judgment, as Tab 1 to Exhibit "D in globo."
Although, as an additional assured, MMI is entitled to coverage for liability arising from its acts as owner, tower, carrier, time charterer, etc. of the vessel, St. Paul argues that the plaintiffs complaint alleges that MMI is liable for his injuries only as barge owner, not as owner of the vessel (as the policy language requires). St. Paul cites Lanasse v. Travelers Ins. Co., 450 F.2d 580 (5th Cir. 1971) and Randall v. Chevron, USA., Inc. 13 F.3d 888 (5th Cir. 1994) for the Fifth Circuit's interpretation of the policy language "as owner." Basically, the Fifth Circuit has found that a time charterer acts "as owner," within the meaning of an PI policy, if the negligence of the additional assured has some "causal operational relationship" to the vessel. Randall at 909.
Overruled on other grounds by Bienvenu v. Texaco, Inc., 164 F.3d 901 (5th Cir. 1999).
MMI argues that it is entitled to indemnity because the policy language is broader than the "as owner" clause at issue in the Randall and Lanasse cases. MMI contends that the breadth of the St. Paul policy language provides coverage for all capacities in which a charterer might incur liability.
MMI is correct is its assertion that the language of St. Paul's policy is broader than the "at owner" clause addressed in Randall and Lanasse. The policy provides coverage for a time charterer acting as time charterer, in various capacities.
Hence, the question before the court is whether Chisholm made any allegations of wrongdoing by MMI, which would give rise to its liability in its capacity as time charterer. Although MMI, as time charterer, cannot be liable to Chisholm under the Jones Act, it may be liable if it is negligent in conducting its activities as time charterer. In Hodgen v. Forrest Oil Corp., 87 F.3d 1512 (5th Cir. 1996), the Fifth Circuit reviewed precedent regarding the duties of a time charterer vis á vis third parties.
[First], a time charterer may be held liable regardless of whether the vessel owes a primary duty or high standard of care to the injured plaintiff. Second, a time charterer owes a hybrid . . . duty arising from contract and tort, to persons with whom it has no contractual relationship, including vessel passengers, to avoid negligent action within the sphere of activity over which it exercises at least partial control. [The precedent] establish[es] that the traditional spheres of activity in which a time charterer exercises control and thus owes a duty include choosing the vessel's cargo, route, and general mission, as well as the specific time in which the vessel will perform its assignment. Third [it is] clear that the parties may vary the traditional assignment of control by contract or custom. Fourth, . . . unless the parties have so varied the traditional allocation of responsibility, a time charterer owes no duty beyond these spheres. Fifth, . . . a time charterer's traditional sphere of control does not extend to providing a safe means of ingress and egress from the vessel, absent special circumstances. Sixth, [it is] clear that the fact that a vessel may owe a duty to a third party over a certain sphere of activity does not necessarily mean that this duty is exclusive. Thus, the fact that a vessel owes a duty to a passenger to provide a safe means of ingress and egress does not mean that an accident arising from this activity cannot also be the fault of the time charterer, if the plaintiff can establish that the accident resulted in part from a decision, such as the timing of the ingress or egress, within the time charterer's control spheres.Hodgen, 87 F.3d at 1520 (emphasis added).
Therefore, in this case, MMI may be liable to Chisholm in its capacity as time charterer if the January incident occurred as a result of MMI's exercised control in a "traditional sphere of activity."
Chisholm has made no allegations that MMI was acting in one of the traditional spheres of a time charterer's activity. Specifically, plaintiffs complaint, in Paragraphs IV and XII, reads:
On January 5, 1996, petitioner was working with co-crew members doing routine maintenance aboard the vessel, which included stripping various pieces of equipment from a M.M.I., barge that the M/V Marine Marvel was utilizing. These operations were being conducted in the Houston Ship Channel and, more particularly, within the navigable waters of the United States. Petitioner and two co-crew members were carrying a very heavy crossover hose that was approximately 20 feet long by 6 inches in diameter from the aforedescribed barge to the MN Marine Marvel, when one of the co-crew members dropped his end of the hose, causing the majority of the weight to shift to petitioner, which caused a sudden burning sensation in petitioner's lower abdomen on the left side. . . . .
At all material times herein, M.M.I., is responsible to your petitioner under the General Maritime Law for failing to provide safe and seaworthy barges that did not have frozen, or stuck valves and/or for negligence under the General Maritime Law and/or under any other applicable state or federal statutes.
The January incident occurred while Chisholm and other MITCO crew members were carrying a hose from the barge to the vessel. There is no evidence that the incident was connected in any way to MMI's selection of cargo, route, mission, or timing of the assignment. MMI did not direct MITCO's crew to move the hose, and there is no allegation that the incident was related to the route or timing of the assignment. MMI admits as much in its Opposition to St. Paul's Cross Motion:
MMI did instruct MITCO where to tow the barges; however, the destination of the vessels plays no part whatsoever in the alleged accidents. . . . MITCO's tug was towing MMI's barges, and the barges had no crew. MMI had no personnel present to operate the c[r]ane or give any instructions whatsoever which affected the operations in which Mr. CHISHOLM alleges he was injured.
MMI's Opposition to Cross Motion, p. 3.
Chisholm may have stated a claim against MMI as barge owner under the General Maritime Law. However, St. Paul's PI policy only covers MMI for liability it incurs while acting in its capacity as time charterer. Therefore, MMI is not entitled to recover its cost of defending Chisholm's allegations with respect to the January incident. Because the policy does not provide coverage for MMI as barge owner, the court does not reach the question of whether coverage is excluded on the face of plaintiffs complaint or whether the "escape clause" is a basis for denying coverage.
3. April 8, 1996
a. Background
On April 8, 1996, Chisholm was working as a tankerman aboard the MN MARINE VENTURE, which MMI had chartered to tow one of its barges. Chisholm was injured while attempting to turn a frozen valve on the barge. Again, St. Paul argues that MMI may only be liable for the incident in its capacity as barge owner, not as time charterer. Therefore, according to St. Paul, the policy does not provide coverage. MMI, on the other hand, does not explain how it could be held liable as time charterer for the April incident.
On April 8, 1996, St. Paul's policy number 315JC1367 was in effect and contained the same clause in question as the policy in effect on January 5, 1996.
b. Analysis
As explained above, a time charterer is only liable for negligence arising from its exercise of control within traditional spheres of activity, such as designating the route, mission, cargo, or timing of the assignment. Hodgen, 87 F.3d at 1520. St. Paul maintains that Chisholm's second accident was unrelated to MMI's activities as time charterer but arose out of MMI's position as barge owner. Chisholm's complaint, in Paragraph V, reads:
On or about April 8, 1996, while . . ., in the Houston Ship Channel at the Oil Tanker Dock, . . . petitioner was assigned to discharge oil from the M.M.I. barge number 302. Part of the petitioner's job involves having to open and close certain valves quickly in order to avoid losing suction. While petitioner attempted to accomplish his job, he encountered a frozen or stuck, valve aboard the M.M.I. barge 302, and while attempting to torque said valve in order to accomplish his job, petitioner felt a severe burning pain in his lower abdomen.
The April incident had nothing to do with MMI's exercise of control within a time charterer's traditional spheres of activity. Chisholm's injuries were not caused by MMI's selection of a route, mission, cargo, or timing. Rather, Chisholm's injuries may relate to the unseaworthiness of the barge under the General Maritime Law. Because MMI's liability for the April incident arises only in its capacity as barge owner, MMI is not entitled to coverage under the terms of the St. Paul policy. Therefore, the court does not reach the question of whether coverage is excluded on the face of plaintiffs complaint or whether the "escape clause" is a basis for denying coverage.
In sum, neither the January nor April incidents was related to MMI's actions as time charterer. Neither incident is covered under the terms of St. Paul's policy.
Accordingly,
IT IS ORDERED that St. Paul's Motion for Summary Judgment is hereby GRANTED, and MMI's Motion for Summary Judgment is hereby DENIED.
New Orleans, Louisiana this 24th day of January, 2000.