REVISED JUNE 6, 2012

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-31150

In Re: In The Matter of the Complaint of Jillian Morrison, L.L.C., Et Al, as

Owners and Operators of the M/V Jillian Morrison, for Exoneration from or

Limitation of Liability

Jillian Morrison, L.L.C.; Et Al,

Petitioners

v. 

William Sonia, etc.; Et Al

Claimants

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TRANSCANADA USA SERVICES, INCORPORATED, 

Plaintiff - Appellant Cross-Appellee

v.

KESTREL ENGINEERING, INCORPORATED; HARTFORD LLOYDS

INSURANCE COMPANY, 

Defendants - Appellees Cross-Appellants

Appeals from the United States District Court 

for the Eastern District of Louisianna

USDC No. 2:08-CV-1255

United States Court of Appeals

Fifth Circuit

F I L E D

June 4, 2012

Lyle W. Cayce

Clerk
No. 10-31150

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

1 The Limitation of Liability Act was enacted by Congress to encourage the shipping

industry by limiting vessel owners’ liability in the event of disaster to the value of the vessel

and pending freight. See 46 U.S.C. § 30511. 

2

Before HIGGINBOTHAM, GARZA, and CLEMENT, Circuit Judges.

PER CURIAM:*

This case arises from a Limitation of Liability Action (Limitation Action),

instituted pursuant to the Shipowners’ Limitation of Liability Act (the Act), 46

§ U.S.C. 30505, et seq., by the owners ofthe M/V JILLIAN MORRISON, a vessel

which exploded off the coast of Louisiana. Transcanada USA Services, Inc.,

(TransCanada), sought a declaratory judgment from the district court that

Kestrel Engineering, Inc., (Kestrel) and Hartford Lloyds Insurance Company

(Hartford) were obligated to defend and indemnify TransCanada against claims

filed in theLimitation Action by Rickey and Darlene Richard. TransCanada also

sought damages from Kestrel for breach of contract. The district court dismissed

TransCanada’s claims as premature, and TransCanada now appeals. Kestrel

and Hartford cross-appeal. We agree thatthe proceedings by TransCanada were

brought prematurely, and affirm the district court’s dismissal without prejudice.

FACTS AND PROCEEDINGS

In order to limittheir liability for claims arising from the explosion aboard

the M/V JILLIAN MORRISON, the vessel owners and operators, Jillian

Morrison, LLC; Chet Morrison Diving, LLC; Chet Morrison Contractors, Inc.;

Chet Morrison Services, LLC; and Chet Morrison Services, Inc.; (collectively,

Chet Morrison) instituted the underlying Limitation Action.1In the Limitation

Action, Rickey Richard, who was aboard the vessel at the time of the explosion,

and his wife Darlene asserted a claim for personal injuries against Chet
No. 10-31150

3

Morrison. The Richards also filed an Admiralty Complaint for Damages, which

the district court consolidated with the Limitation Action (collectively, the

Richard Claims). Chet Morrison subsequently tendered the Richard Claims to

TransCanada pursuant to a Master Service Agreement (“MSA”), under which

TransCanada had assumed defense and indemnity obligations to Chet Morrison.

The Richard Claims were settled after a two-day bench trial.

TransCanada requested defense and indemnity from Kestrel, Rickey

Richard’s employer, pursuant to an Alliance Agreement between TransCanada

and Kestrel. The Alliance Agreement contained an indemnity provision which,

according to Transcanada, required Kestrel to defend and indemnify

TransCanada against any claims brought by Kestrel’s employees or growing out

of Kestrel’s negligence. TransCanada also claimed that the Alliance Agreement

required Kestrelto nameTransCanada as an additional insured under Kestrel’s

insurance policy with Hartford (the “Policy”). 

Kestrel in turn requested defense and indemnity from its insurer Hartford.

TransCanada also demanded from Hartford insurance coverage pursuantto the

terms of the Alliance Agreement. Hartford never responded to TransCanada’s

demand, butissued a “reservation of rights”letter to Kestrel, appointing counsel

to defend Kestrel and reserving its rights under the Policy. 

TransCanada then initiated the declaratory judgment action which forms

the basis for this appeal, seeking a declaration from the district court that

TransCanada was an additional insured under the Policy as required by the

Alliance Agreement and that the Policy applied to the dispute. TransCanada

also sought damages from Kestrel for breach of the Alliance Agreement.

Hartford filed a motion to dismiss, arguing that, because the Richards had not

named TransCanada as a defendant an underlying lawsuit, TransCanada’s

request for indemnity and declaratory judgment action were premature. The

district court denied Hartford’s motion, and the parties engaged in discovery.
No. 10-31150

4

At the close of discovery, Hartford and Kestrel each filed motions for

summary judgment, Hartford arguing that the Policy did not cover TransCanada

and Kestrel arguing that it did not breach its contractual obligation under the

Alliance Agreement. TransCanada opposed both motions and filed a cross motion

for partial summary judgment against Hartford and Kestrel, arguing again that

it qualified as an additional insured under the Policy and that Kestrel had

breached the Alliance Agreement by failing to defend and indemnify

TransCanada against the Richard Claims.

The district court granted Kestrel’s and Hartford’s motions for summary

judgment, denied TransCanada’s motion for summary judgment, and dismissed

TransCanada’s claims without prejudice. The district court’s order concluded

that “TransCanada’s claims against Kestrel and Hartford are premature” and

that “TransCanada seeks this Court’s advisory opinion on a hypothetical issue

that may arise in the future.” The district court stated that “[b]ecause there are

no current claims asserted against TransCanada, this Court will not abstractly

rule on the interpretation of TransCanada’s agreements with Kestel [sic] and on

the application of Hartford’s policy.” Dist. Ct. Order (Aug. 17, 2010). 

TransCanada then filed a motion for reconsideration, requesting that the

district court amend its order, which had expressly granted Hartford’s and

Kestrel’s motions for summary judgment, to reflect that the district court had

not actually considered the parties’ contentions on the merits.TransCanada also

requested reconsideration of whether its claims were actually premature. The

district court granted TransCanada’s motion and issued a second order affirming

its prior decision that the claims were premature. The second order also stated

that “TransCanada’s claims have not been adjudicated on the merits” and that

“Kestrel’s and Hartford’s Motions for Summary Judgment were previously

granted only on the issue of Transcanada’s [sic] claims’ prematurity.” Dist. Ct.

Order (Oct. 7, 2010).
No. 10-31150

5

TransCanada filed a timely notice of appeal from the district court’s

August 17 order denying its motion for summary judgment and from the October

7 order granting its motion for reconsideration. Hartford and Kestrel also filed

timely notices of cross appeal from both orders. Kestrel also filed a motion to

dismiss this appeal for lack of jurisdiction, which was carried with the case.

STANDARD OF REVIEW

The parties disagree over the proper standard of review based on their

different reading of the procedural posture of the case and the district court’s

orders. See Tex. Clinical Labs, Inc. v. Sebelius, 612 F.3d 771, 774 (5th Cir. 2010)

(reviewing a grant of summary judgment de novo); The Sherwin-Williams Co. v.

Holmes County, 343 F.3d 383, 389 (5th Cir. 2003) (reviewing the dismissal of a

declaratory judgment action for abuse of discretion). Because the district court’s

two orders amount to a jurisdictional decision on ripeness grounds that did not

reach the merits, the appropriate standard of review is de novo. See American

States Ins. Co. v. Bailey, 133 F.3d 363, 368 (5th Cir. 1998) (reviewing a district

court’s ripeness determination de novo).

DISCUSSION

We conclude that the district court’s dismissal for lack of ripeness was

proper despite the fact that none of the parties raised a ripeness argument in a

summary judgment motion. See United Transp. Union v. Foster, 205 F.3d 851,

857 (5th Cir. 2000). “Since standing and ripeness are essential components of

federal subject-matter jurisdiction, the lack of either can be raised at any time

by a party or by the court.” Sample v. Morrison, 406 F.3d 310, 312 (5th Cir. 2005)

(per curriam). See also Sommers Drug Stores Co. Emp. Profit Sharing Trust v.

Corrigan, 883 F.2d 345, 348 (5th Cir.1989); Cinel v. Connick, 15 F.3d 1338, 1341

(5th Cir. 1994). “Although the Declaratory Judgment Act, 28 U.S.C. § 2201, is

remedial in nature and is to be construed liberally to achieve its purposes, it is

designed to permit adjudication of claims only where there is an actual case or
No. 10-31150

6

controversy and an adjudication would serve a useful purpose.” Americas Ins.

Co. v. Schlumberger Ltd., 111 F.3d 893, *1 (5th Cir. 1997) (unpublished) (citing

Allstate Ins. Co. v. Employers Liability Assurance Corp., 445 F.2d 1278, 1280

(5th Cir. 1971)). A case is ripe when it is no longer “abstract or hypothetical,”

and the key considerations are “the fitness of the issues for judicial decision and

the hardship to the parties of withholding court consideration.” Id. (citing New

Orleans Public Serv., Inc. v. Council of New Orleans, 833 F.2d 583, 586 (5th Cir.

1987)).“A case is generally ripe if any remaining questions are purely legal ones;

conversely, a case is not ripe if further factual development is required.” New

Orleans Public Serv., 833 F.2d at 587 (citing Thomas v. Union Carbide Agric.

Prod. Co., 473 U.S. 568, 581 (1985)). 

Despite arguments to the contrary, there is undoubtedly further factual

development that must take place before the case will be ripe for review by the

district court. Because there are no claims by TransCanada yet,the court cannot

determine the scope of indefinity between the parties. The crux ofthis case is the

contracts and insurance agreements between the parties. This circuit uses the

eight corner rule when determining the scope of indemnity under an insurance

agreement—the four corners of the agreement, and the four corners of the

complaint itself. See, e.g., Columbia Cas. Co. v. Georgia & Florida RailNet, Inc.,

542 F.3d 106, 110-11 (5th Cir. 2008); Guaranty Nat’l Ins. Co. v. Azrock Indus.,

Inc., 211 F.3d 239, 243 (5th Cir. 2000) (“Under [the eight-corners rule], an

insurer’s duty to defend is determined by reference to the allegations in the

pleadings and the language of the insurance policy only.") overruled on other

grounds as recognized by OneBeacon Ins. Co. v. Don’s Bldg Supply Inc., 552 F.3d

901, 903 (5th Cir. 2008) (per curiam); Arceneaux v. Amstar Corp., 66 So.3d 438,

450 (La. 2011) (explaining that, under Louisiana law, “[t]he insurer’s duty to

defend suits brought against its insured is determined by the allegations of the
No. 10-31150

7

injured plaintiff's petition, with the insurer being obligated to furnish a defense

unless the petition unambiguously excludes coverage”). 

Despite the extensive discovery and depositions by the parties, there is

still no complaint againstTransCanada upon which the district court could have

determined any indemnity obligations by Kestrel or Hartford. “[W]hereas the

duty to defend is based upon the allegations in the pleadings, the duty to

indemnify ‘is triggered by the actual facts that establish liability in the

underlying lawsuit.’” Columbia Cas. Co., 542 F.3d at 110-111 (5th Cir. 2008)

(emphasis added) (quoting Guar Nat’l Ins. Co. v. Azrock Indus. Inc., 211 F.3d at

243). 

While it is likely that if TransCanada does not obtain a declaratory

judgment that it is covered by the Policy and in turn does not fulfill its

obligations to Chet Morrison, Chet Morrison will file a lawsuit against

TransCanada, that has not yet happened. TransCanada concedes that this

sequence of events has not yet taken place and we therefore must reach the

conclusion that the case is not ripe for review.

CONCLUSION

We AFFIRM the district court’s dismissal on ripeness grounds and DENY

Kestrel’s motion to dismiss the appeal for lack of jurisdiction.