SCF Waxler Marine, L.L.C. v. Aris T M/V, et
SCF Waxler Marine, L.L.C. v. Aris T M/V, et
Opinion
A stream of litigation followed a marine accident that resulted in damages estimated to exceed $60 million. The underlying fault or liability for that accident is not at issue on appeal. Rather, Valero, Shell, and Motiva ask this court to resolve whether the excess insurers of one of the involved vessels may limit their liability to that of the insured vessel. On a partial motion for summary judgment, the district court held that the Protection and Indemnity policy covering the vessel has a Crown Zellerbach clause thereby permitting the excess insurers to limit their liability to that of the insured vessel.
Valero, Shell, and Motiva timely appealed, asserting that this court has jurisdiction to hear an appeal of that interlocutory order under
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
On January 31, 2016, bulk carrier Aris T collided with a tank barge, a towing vessel, *463 and two facility structures along the Mississippi River upriver from New Orleans. Prior to the accident, the Aris T was proceeding upriver as two towing vessels, the Elizabeth M. Robinson and Loretta G. Cenac , were moving downriver toward their respective destinations. Both towing vessels were pushing ahead three loaded tank barges, each barge 300 feet long and 54 feet wide. Despite communications between the captains of each vessel about facilitating the Loretta G. Cenac 's attempted pass of the Elizabeth M. Robinson , an accident occurred after the Aris T struck the portside of an empty tank barge which in turn struck another tank barge. The barges were connected by the stern to the bow of towing vessel SCF Vision moored at a dock owned by Valero Refining - New Orleans ("Valero"). In the aftermath of this initial collision, the Aris T , still moving upriver, struck another towing vessel as well as multiple berths owned by Shell Chemical, L.P. ("Shell") and Motiva Enterprises ("Motiva"). Both tank barges, the facility dock, and the SCF Vision sustained damage.
On February 2, 2016, SCF Waxler Marine, LLC, owner and operator of damaged towing vessel
SCF Vision
, filed suit against the
Aris T
in the Eastern District of Louisiana. Soon thereafter, Valero, Shell, and Motiva also filed actions against the
Aris T
. Seeking to limit its liability for damages resulting from the accident, the
Aris T
filed a Verified Complaint in Limitation under the Limitation of Liability Act (
Louisiana's Direct Action Statute permits persons sustaining damages in accidents occurring in Louisiana to bring direct actions against insurers of the individual alleged to have caused the accident. LA. REV. STAT. ANN. 22:1269. Subject to a handful of exceptions not applicable here, a direct action may not be brought against the insurer alone.
See
Valero, Shell, Motiva, and the Excess
*464
Insurers
3
then quarreled about whether the primary P&I policy, issued by the Primary Insurers and followed by all Excess Insurers, had language indicating that the insurers could limit their liability to that of the
Loretta G. Cenac
. That is, whether the P&I policy contains a "
Crown Zellerbach
clause."
See
Crown Zellerbach Corp. v. Ingram Indus., Inc.
Valero, Motiva, and Shell filed a motion for partial summary judgment to settle the Crown Zellerbach issue. On September 6, 2017, the district court sided with the Excess Insurers, denying the motion. More specifically, the district court concluded that the following provision satisfied Crown Zellerbach's requirements for an insurer to limit its liability:
The Assurer hereby undertakes to make good to the Assured or the Assured's executors, administrators and/or successors, all such loss and/or expense as the Assured shall as owners of the vessel named herein have become liable to pay and shall pay on account of the liabilities, risks, events and/or happenings herein set forth ....
Valero, Motiva, and Shell timely appealed on October 5, 2017. They assert that this court has jurisdiction to hear the appeal pursuant to
II. JURISDICTION
The Excess Insurers contend that this court lacks jurisdiction to hear this interlocutory appeal under § 1292(a)(3) because the district court's Order and Reasons fails to "determin[e] the rights and liabilities of the parties." We agree.
Although this court must satisfy itself of its own jurisdiction, Valero, Shell, and Motiva " 'bear[ ] the burden of establishing this court's appellate jurisdiction over this appeal,' and there is no need to explore jurisdictional bases the appellant does not address."
Thibodeaux v. Vamos Oil & Gas Co.
,
Relevant here, § 1292(a)(3) provides that appellate courts may entertain appeals from a district court's "[i]nterlocutory decrees ... determining the rights and liabilities of the parties to admiralty cases." This circuit has construed the grant narrowly, hewing closely to the statute's "original purpose of permitting appeals from orders finally determining one party's liability to another and referring the action for a computation of damages."
Hollywood Marine, Inc. v. M/V Artie James
,
We have clarified that appellate jurisdiction is generally appropriate "whenever an order in an admiralty case dismisses
*465
a claim for relief on the merits."
Francis ex rel. Francis v. Forest Oil Corp.
,
For example, in
In re Ingram Towing Co.
, this court concluded that jurisdiction was not proper under § 1292(a)(3) where the district court did not determine liability or determine that a party could never bring a claim against the opposing party.
The principal dispute on the jurisdictional question in this case revolves around the applicability of this court's per curiam decision in
Bucher-Guyer AG v. M/V Incotrans Spirit
,
The Excess Insurers present a more persuasive view of this jurisdictional dispute. In
Bucher-Guyer
, this court held that the applicability of a $500 limitation on liability pursuant to the Carriage of Goods at Sea Act ("COGSA") was not a determination of a party's rights and liabilities for purposes of § 1292(a)(3).
Bucher-Guyer
,
The fundamentals of Bucher-Guyer bear a striking resemblance to this case. There, the district court determined the boundaries of a party's liability-$500-based on the applicability of statutory language. Nevertheless, whether the opposing party was entitled to anything and, if so, how much was still to be determined. In this case, the court decided the boundaries of a party's liability through determination of whether a contractual provision permitted them to do so. Whether Valero, Shell, and Motiva are legally permitted to recover anything from the Excess Insurers and, if so, how much remains to be determined. That question turns on the fault and or liability of the Loretta G. Cenac . Answering the important, but ancillary, question about the extent of the insurer's potential liability leaves the heart of the claim to be decided.
Valero, Shell, and Motiva attempt to dismiss the relevance of this decision because: (1) Bucher-Guyer does not address an insurance policy provision; (2) the statute at issue in that case-the U.S. Carriage of Goods Act-has no bearing on this case; and (3) here the district court did not find a statutory right to entitlement; rather, the focus was on a policy provision. Valero, Shell, and Motiva advance these arguments despite asking this court to instead rely on Wallis -a case that rejects the first two of their proffered distinguishing features.
In
Wallis
, the Ninth Circuit addressed whether that court had appellate jurisdiction over a district court's determination of the applicability of a contractual limitation of liability provision. In analyzing that issue, the Ninth Circuit explained that § 1292(a)(3) case law concerning the Carriage of Goods at Sea Act was instructive.
Beyond not being helpful to Valero, Shell, and Motiva's attempt to distinguish
Bucher-Guyer
,
Wallis
expressly noted that the panel disagreed with and would not follow this court's interpretation of § 1292(a)(3).
In
Wajnstat
, the Eleventh Circuit analyzed whether § 1292(a)(3) permitted the appeal of a district court order determining whether a "limitation-of-liability provision in a cruise ticket contract was unenforceable and, as a result, inapplicable."
If, as [the Fifth Circuit in] Ford Motor Co. held, a district court does not determine the "rights and liabilities of the parties" when it decides the applicability of a statutory limitation of liability, it also does not determine the "rights and liabilities of the parties" when it determines the applicability of a contractual limitation of liability.
We find no compelling reason to distinguish between a district court's determination of a contractual entitlement rather than statutory entitlement to limit liability. 5 Neither decision is reviewable on appeal under § 1292(a)(3). We join the Eleventh Circuit in so holding.
If the district court had determined that the Excess Insurers via the shipowner's liability were not entitled to exoneration or limitation-requiring a determination of actual liability and having res judicata effect-jurisdiction would likely be appropriate.
See, e.g.
,
Republic of France v. United States
,
Shell, Motiva, and Valero also rely on this court's decision in
Gabarick v. Laurin Maritime (America), Inc.
, when asserting that this court has exercised jurisdiction over interlocutory admiralty appeals under § 1292(a)(3) where, as here, the trial court interpreted part of a marine insurance policy before any liability determinations had been made.
III. CONCLUSION
For the foregoing reasons, this appeal is DISMISSED for lack of jurisdiction.
Continental Insurance Company and AGCS Marine Insurance Company are Cenac's Primary insurers and provide a policy with $1 million in coverage. They will collectively be referred to as the Primary Insurers throughout this opinion.
New York Marine and General Insurance Company and Stonington Insurance Company National Specialty Insurance Company ("First Excess Insurers") are Cenac's First Excess Insurers and provide policies with $29 million in coverage. Certain Underwriters at Lloyd's of London ("Second Excess Insurers") are Cenac's Second Excess Insurers and provide policies with $70 million in coverage. The First and Second Excess Insurers will be collectively referred to as the Excess Insurers throughout this opinion.
The Primary Insurers did not oppose the partial motion for summary judgment. On appeal the Primary Insurers maintain a hands off approach. Their brief on appeal simply explains that they are unaffected by the outcome of this appeal because the limitation fund posted by Cenac exceeds the $1 million limit of their policy.
Notably, one of Appellants' counsel conceded during oral arguments that there was nothing precluding this court's review of the ruling at issue after a final judgment.
It is true that
Crown Zellerbach
refers to the "
right
to assert [a] policy defense."
Our conclusion is not changed by the Federal Rule of Appellate Procedure 28(j) letter filed by Motiva and Shell after oral argument. The cases cited, similar to Gabarick , conclusively decided how much a party was required to deposit to satisfy their legal or policy obligations. It is fair for Motiva and Shell to make clear that this court has exercised jurisdiction prior to a final determination of liability in a case. But, again, the question preceding the determination of liability matters. Where the question, as here, is whether a potentially liable party may limit his liability, § 1292(a)(3) does not afford this court jurisdiction where the underlying claim for liability has not been adjudicated. Moreover, as Motiva and Shell ostensibly concede, the cited decisions did not meaningfully analyze the jurisdictional question. Stated simply, where the district court answers the question of whether a party may, under a contractual provision, limit his liability should the liability question be determined in his or his insured's favor, we will not exercise jurisdiction.
Reference
- Full Case Name
- SCF WAXLER MARINE, L.L.C., Plaintiff v. ARIS T M/V, Defendant in Re: In the Matter of the Complaint of Cenac Marine Services, L.L.C., as Owner and Operator of the M/V LORETTA CENAC, Barge CTCO 338, Barge CTCO 339, and Barge CTCO Barge 357B, for Exoneration From or Limitation of Liability Cenac Marine Services, L.L.C., Etc. Petitioner Valero Refining - New Orleans, L.L.C.; Motiva Enterprises, L.L.C., Third Party Plaintiffs Claimants - Appellants v. Continental Insurance Company; AGCS Marine Insurance Company; New York Marine and General Insurance Company; Stonington Insurance Company; National Specialty Insurance Company; Lloyd's Syndicates, Third Party Defendants - Appellees v. Shell Chemical, L.P., Claimant - Appellant
- Cited By
- 7 cases
- Status
- Published