### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 15

- 30324

SEAHAWK LIQUIDATING TRUST , as Trustee of Seahawk Drilling, Incorporated,
Plaintiff

–

Appellant ,

versus CERTAIN UNDERWRITERS AT LLOYDS LONDON; ACE EUROPEAN GROUP LIMITED; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA; AXIS SPECIALTY EUROPE, LIMITED; LANCASHIRE INSURANCE COMPANY, LIMITED; SWISS RE INTERNATIONAL SE; ASPEN INSURANCE U.K. LIMITED; BERKLEY INSURANCE COMPANY; ARCH INSURANCE COMPANY; INTERNATIONAL INSURANCE COMPANY OF HANN OVER, LIMITED; HUDSON SPECIALTY INSURANCE COMPANY; NAVIGATORS INSURANCE COMPANY; NEW YORK MARINE & GENERAL INSURANCE COMPANY; TORUS INSURANCE , Defendants

– Appellees

.

Appeal from the United States District Court for the Middle District of Louisiana United States Court of Appeals Fifth Circuit 

### FILED January 19, 2016

Lyle W. Cayce Clerk Case: 15-30324 Document: 00513347548 Page: 1 Date Filed: 01/19/2016No. 15

- 30324

2 Before SMITH , WIENER , and GRAVES , Circuit Judges

. JERRY E. SMITH, Circuit Judge : This appeal follows a bench trial and judgment for the defendant insur

ers on the claims of Seahawk Liquidating Trust (“Sea hawk”) for payment of insurance proceeds. There is n o error, so we affirm.

I. Seahawk 1 operated a fleet of drilling rigs, one of which was the J/U S EAHAWK 3000 (the “Rig” ) , a three

- legged , mat

- supported jack

- up drill

ing rig with 375

- foot legs used to perform drilling contracts in the Gulf of Mex

ico beginning in 1974

. 2 In February 2010 , while moving between drilling loca

tions, the Rig encou ntered severe weather and jacked up out of the water for several days to avoid the harsh seas

. Despite those efforts, the ro ugh seas still caused the legs to become misaligned. Between February and April, Seahawk repaired the hydraulic

- jack ing system on several occasions, action s that w ere consistent with the Rig’ s his

tory: I t had had consistent wear - and

- tear problems with , and re quired repairs to , its hydraulic

- jacking system for more than twenty years

. In April , the Rig trav eled to perform a drilling contract for Hilco rp Drilling Company (“Hil

corp”) , but Seahawk still did not kno w that the l egs were misaligned. The Rig

1 Seahawk Drilling, Inc. filed for bankruptcy, and its trustee pursued these claims against Lloyds. We refer to both as “Seahawk.”

2 A jack

- up drilling rig drill s for oil offshore at exploratory and developmental wells. These rigs must be towed between drilling location s . Mat

- supported jack

- up rigs have a hull that usually floats on the surface and connects to three or four legs that attach to a mat that must be extended to the sea floor to raise the hull out of the water in order for the rig to drill. A hydraulic

- jacking system extends the legs and mat down and elevates the hull using a mech anism by which pins that are attached to the hull en ter the legs, push the legs down, come out of the legs, re - enter , and push down again . The hydraulic

- jacking system repeats this process until the hull reaches the necessary height. Case: 15-30324 Document: 00513347548 Page: 2 Date Filed: 01/19/2016No. 15

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3 failed to jack up to a sufficient height to perform the Hilcorp contract because of other problems with the hydraulic

- jacking system, leading Hilco rp to request that Seahawk provide a replacement rig , which it did at a cost of $1,092,000.
T hough Seahawk brought in a replacement, t he Rig became stuck for

sev eral days at the Hilcorp location after an incident during the jacking

- down
process caused further damage to the hydraulic

- jacking system. Th at inci dent required temporary repairs to the jacking system while the Rig was stuck and further such repairs once it successfully jacked down and moved to a dry dock. At some point in May, while the Rig was in dry dock, Seahawk learned the legs were mis aligned but did not f ix the m because doing so would be too expensive

. After th at dry

- dock period, the Rig departed in early July to perform another drilling contract , which i t completed in calm weather , though the crew

us ed an unorthodox method to jack it up

— the Rig essentia lly jack ed up one side of the hull at a time, rather than ja cking up the entire hull uniformly

. Seahawk’ s expert , Crane Zumwalt, testified that the crew developed th at pro cedure to compensate for the misaligned legs and that the Rig always suc ceeded in jacking up if

— as with this drilling contract

— the weather and seas were calm. On July 21, 2010, the weather and seas were not calm as the Rig arrived to perform a drilling contract at East Cameron Island

. In th ose condi tions, the Rig’s operating manual fo rbade it s crew from jacking it into or out of the water, but the crew attempted to jack it out of the water nonetheless. The hydraulic

jacking system became disengaged when the Rig attempted to jack up, causing the hull to slide down the legs and float in the sea. The crew, before evacuating, attempted to jack the Rig back up to no avail, and the Rig floated in the rough

seas , sustaining further damage , for nearly thirty hours. Zumwalt testified that the Rig would have been able to jack up

— and jack back up after sliding Case: 15-30324 Document: 00513347548 Page: 3 Date Filed: 01/19/2016No. 15

- 30324

4 down

— without incident if the weather had been calm

. After the July 21 storm, the Rig went to dry dock for furt her repairs until December 2010. The repairs again focused on the hydraulic

- jacking system in stead of the misaligned legs ; Seahawk never repaired the legs. While the Rig was in dry dock, Seahawk submitted a claim to the insurers to cover the cost of re pairs, alleged to be $16,969,860. The insurers rejected the claim

. I I. Seahawk sued the insurers for proceeds covering the p hysical damage to the Rig and the loss on the Hilcorp contract. Seahawk’s insurance policy (the “Pol icy”) 3 included several key provisions :

• The general

- coverage provision: “ This insurance is against all risks of direct physical loss of or physical damag e to the property in sured, subject to the terms, conditions, and exclus ions contained herein . . . . This In

sur ance covers all the hull and machinery of the drilling unit(s) . . . . ”

• The $10,000,000

- deductible provision: “ For the purpose of this [Deducti

ble] Clause, each occurrence shall be treated separately, but it is agreed that a sequence of losses or damages arising from the same occurrence shall be treated as one occurrence. ”

• The wear

- and

- tear exclusion: “ There shall be no recovery under this I n surance in respect of . . . [the] C ost of repairing or replacing any part which may be lost, damaged or condemned solely due to . . . wear and tear

. . . . ”

• The loss

- of

- contract provision ( the “Contract Provision”) : “[C]overage here under shall include the loss of charter hire resulting from the ter

min ation and/or cancellation of [Seahawk’s] drilling contract(s) caus ed by the insured drilling unit s being unable to operate following a claim
re coverable under [the general

- coverage provision] if the deductible were nil.”

3 Each incident took place during one of two separate policy periods; one ended and the other began on June 30, 2010. The content of the policies is identical ; Swiss Re Inter na tional SE was an underwriter of the first policy only, and Hudson Specialty Insurance Com

pany , Navigators Insurance Company , New York Mar ine & General Insurance Com pany , and Torus Insurance were under writers on the second policy only. Case: 15-30324 Document: 00513347548 Page: 4 Date Filed: 01/19/2016No. 15

- 30324

5 Seahawk sought to recover the nearly $17 million for repairs made between February and December 2010

. After a three

- day bench trial, t he dis

trict court determined that the insurers had properly rejected th e claim because they found that there were two occurrences, mean ing two $10 million deductibles had to be met , so Seahawk could recover noth ing

. 4 T here were two

occurrences , the court reasoned, because the sequence of losses (i.e., the dam

ages and subsequent repairs) betw een February and July was proximately caused by the February storm, but the sequence of losses after the July storm

w as proximately caused by that latter storm. There were two sep arate prox i

mate causes of two different series of losses , so there were two occurrences. Seahawk also sought to recov er under the Contract Provision. It main

tained that the misalignment of the legs caused the Rig to be unable to operate and thereby occasioned the loss o f the Hilcorp contract; the misalign ment was caused b y a severe weather event and would have been recovera ble if t he deduc tible were nil; thus, the loss on the Hilcorp contract was recoverable.
The district court found, to the contrary, that the misaligned legs (a the

o retically covered loss) at most co ntributed to the def ective hydraulic

- jacking system (an excluded loss, as it was caused by wear - and

- tear) in causing the lo ss of the contract. Th at finding required that the court apply the concurrent

cause doctrine

. III. The Policy provides that it is governed by Texas law , under which t he interpretation of an insurance policy is a question of law, which we review de novo
. Ran

- Nan Inc. v. Gen . Accident Ins. Co. of Am. , 252 F.3d 738, 739 (5th

4 The parties stipulated after trial that Seahawk could not recover if there w as more than one occurrence. Case: 15-30324 Document: 00513347548 Page: 5 Date Filed: 01/19/2016No. 15

- 30324

6 Cir. 2001). The parties agree that Texas substantive law ap plies. We review any under lying factual findings for clear error. Theriot v. United States , 245 F.3d 388, 394

– 95 (5th Cir. 1998). A factual finding, such as a causation deter

min a tion, is clearly erroneous only “when the appellate court, viewing the e vi

dence in its entirety, is left with the definite and firm con viction that a mistake has been made.” Manderson v. Chet Morrison Con tractors, Inc. , 666 F.3d 373, 376 (5th Cir. 2012). “Re

- stated, our court may not find clear error if the district court ’s finding is plausible in light of the record as a whole, even if this court would have weighed the evidence differ ently.” Id. at 376

– 77 (alterations omitted).

IV. Because there were two occurrences, t he district court properly denied Sea hawk’s clai m for the cost of repairs between February and December 2010. Th at court’s proximate

- cause analysis was the correct legal standard for deter

mining the number of occurrences , and the court did not clearly err in finding that the February storm was not the proximate cause of the sequence of losses following the July storm.
A. Under Texas law, we must construe the Policy according to the general rules of contract construction to give effect to the intent. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London , 327 S.W.3d 118, 126 (Tex. 2010). 5 We begin with the policy language, giving the terms their “ordinary and generally

accepted meaning unless the policy shows the words are meant in a technical or different sense.” Id. Whe n an issue of sta te law is unclear, a federal court

5 Our decisions often refer to Certain Underwri ters at Lloyd’s as “Lloyd’s.” In their briefs, however, the se parties use “Lloyds.” Case: 15-30324 Document: 00513347548 Page: 6 Date Filed: 01/19/2016No. 15

- 30324

7 must make an “ Erie guess” as to what the state ’ s highest court would decide. 6 Seahawk’s first claim turns entirely on the meaning of “ occurrence, ” which, a ccording to its ordinary and generally

- accepted meaning, is “s ome thing that occurs” 7 or “something that takes place; esp : something that hap

pens unexpectedly and without design. ” 8 The parties appear not to contest that the February storm was an occurrence ; u nder th at ordinary meaning , the July storm would appear to be an occurrence too

. Seahawk, however, contends that the Policy gives “ occurrence ” a tec h ni

cal meaning by defining it to include “ a sequence of losses or damages arising from the same occurrence.” The February storm , according to Seahawk , was

an o ccurrence that damaged the Rig’s legs and was a but

- for cause of the damages suffered after the July storm because the damaged legs slowed down the jacking

- up process. Because the Rig’s damaged legs contributed to the dam ages after the July storm, Seah awk characterizes all of the losses between February and December as “arising from the same [February] occurrence.”
The insurers maintain , to the contrary, that an y damages after the July storm arose from that storm , not the February storm. Like the distr ict court, the insurers interpret the phrase “arising from” to require that the occurrence be the proximate cause of the “sequence of losses or damages.” Thus, even if the February storm dam aged the legs and thereby contributed to the losses after July , the July storm would be the proximate cause of

— and the occurrence giving rise to

— the sequence of losses thereafter

. The real issue, then, is how to int e rpret the term “arising from” when

6 Farm Credit Bank v. Guidry , 110 F.3d 1147, 1149 (5th Cir. 1997), overruled on other grounds by Canfield v. Orso (In re Orso) , 283 F.3d 686 (5th Cir. 2002).

7 “ Occurren ce,” W EBSTER ’ S N INTH N EW C OLLEGIATE D ICTIONARY (1984).

8 “Occurrence,” W EBSTER ’ S T HIRD N EW I NTERNATIONAL D ICTIONARY ( 1986). Case: 15-30324 Document: 00513347548 Page: 7 Date Filed: 01/19/2016No. 15

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8 used to determine the number of occurrences under the Policy. Seaha wk claims the term requires only a causal link between the occu rrence and sub

sequent loss es beca use Texas law construes “arising from” broadly in favor of
coverage. The Texas Supreme Court has stated that “arise out of” requires “simply a causal connect ion or relation, which is interpreted to mean that there is but for causation, though not necessarily direct or proximate causation.” 9 But the court broad ly interpreted “arising from”

— or relied on cases broadly interpreting that term

— only in different con texts in which a broad inter pre tation would increase coverage. 10 The court seems not to have addressed the term when used to determine the number of occurrences , so we must make an Erie guess as to how the c ourt would interpret “arising from” in this context. For two reasons, that c ourt likely w ould adopt the proximate

- cause anal

y sis applied by the district court

. First, as the insurers point out, interpreting “arising from” broadly to require only a causal link when determining the num

ber of occur rence s can expand coverage in on e cas e while contracting it in another. For example, Seahawk desires a recognition of only one occurrence to avoid the application of multiple deductibles

— a broad construction would increase cov er age. But i n another case with identical fact s but a slightly dif

ferent insur ance policy , an insured m ay desire multiple occurrences to avoid

9 Utica Nat’l Ins. Co. of Tex. v. Am. Indem. Co. , 141 S.W.3d 198, 203 (Tex. 2004). We interpret identically the terms “ arising out of” and “arising from.” Am. States. Ins. Co. v. Bailey , 133 F.3d 363, 370 n.7 (5th Cir. 1998).

10 See , e.g. , Utica Nat’l Ins. , 141 S.W.3d at 203 (interpreting “arising out of” broadly to reduce the scope of a policy’s exclusionary provision); Mid

- Century Ins. Co. of Tex. v. Lindsey , 997 S.W.2d 153, 156

– 59 (Tex. 1999) (broadly interpreting the term “arise out of” with regard to the use of a motor vehi cle to cover the accidental discharge of a weapon after an attempt to enter the vehi cle); Amerisur e Ins. Co. v. Navigators Ins. Co. , 611 F.3d 299, 312

– 13 (5th Cir. 2010) (interpret ing “arise out of” broadly to find that a conditional exclusion did not apply); Red Ball Motor Freight, Inc. v. Emp’rs Mut. Liab. Ins. Co. of Wis. , 189 F.2d 374, 378 (5th Ci r. 1951) ( inter pret ing “arising out of” the use of a truck broadly to provide coverage for damages f r o m the driver’s negligent re fueling ). Case: 15-30324 Document: 00513347548 Page: 8 Date Filed: 01/19/2016No. 15

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9 the appli ca tion of a single policy limit

— a narrow construct ion would increase

cov erage. Although Texas favors broadly cons truing policies to provide for cov

er age, there is no reason to predict ―given the conflicting effects on coverage―that the Texas Su preme Court would broadly construe “arising from” in this context. Second, the proximate

- cause analysis is at least implicitly consistent with our and Texas’s precedent. Three cases in particular illustrate this point

. 11 In each, the policy defined an occurrence as losses “arising out of” a single event or conti nuous exposure to a condition. And, in each, the court ignored a but

- for cause and focus ed on the direct, immediate, and proximate cause of the losses to determine the number of occurrence s
. In Goose Creek , an arsonist set fire to two schools in the same school district. Although the same arsonist was the but

- for cause of both fires, the fires occurred several blocks and at least two hours apart, and neither caused the other. The school district claimed there was one occurrence and thus one deductible. According to the court , though, there were two o ccurrences because the “two fires [were] distinguishable in space and time [and] one did not cause the other.” Goose Creek , 658 S.W.2d at 341. Though the fires were traced back to the same but

- for cause, there were two occurrences because the damages dir ectly arose from two separate fires.
In U.E. Texas , nineteen buildings in an apartment complex suffered dam age from plumbing leaks. Hoping to pay one deductible, the owner con tended there was only one occurrence because the leaks allegedly arose from

11 Goose Creek Consol. Indep. Sch. Dist. v. Cont’l Cas. Co. , 658 S.W.2d 338 (Tex. App.―Houston [1st Dist.] 1983, no writ); U.E. Tex. One

- Barrington, Ltd. v. Gen. Star Indem. Co. , 332 F.3d 274 (5th Cir. 2003); H.E. Butt Grocery Co. v. Nat’l Union Fire Ins. Co. , 150 F.3d 526 (5th Cir. 1998). Case: 15-30324 Document: 00513347548 Page: 9 Date Filed: 01/19/2016No. 15

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10 one defective installation of plumbing. T he parties stipulated , however, that each leak affected only the specific building under which it occurred. Although there was ostensibly one “overarching cause”

— the installation

— the court in

stead focused on the “specific event[s] that caused the loss , ” U.E. Tex. , 332 F.3d at 278

— the indi vid ual leaks

— to conclude there were nineteen occurrences : To point to the installation of the pipes as a single event which gave rise to the damage to the nineteen buildings proves too much. Of course it is true that had the plumbing system never been installed the leaks would not have occurred. In this sense, it is true that the leaks which independently damaged the nineteen buildings arose from the same event. However, t o look this far back would render any damage to the
com plex occurring at any time related to the plumbing as arising from the same event. Id. In H.E. Butt , one employee sexually abused two children in the same bath room at the same grocery store but on different occasions. Hoping to li mit liability under its self

- insurance, the insured claimed there was only one occur

rence because both incidents arose from its negligent supervision of the em

ployee. The court said that “[t]he question under Texas law becomes whether HEB’s negligent employment relationship with its pedophilic employee, rather than the two acts of sexual abuse, ‘caused’ the injuries to the two children and gave rise to HEB’s liability.” H.E. Butt , 150 F.3d at 530. Although negligent

s upervision plainly was a but

- for cause of the children’s injuries, there would be no injury or exposure to liability without the intervening sexual abuse. Id. at 531. There were two occurrences because [w] hile a single occurrence may result in multi ple injuries to multiple parties over a period of time . . . [,] if one cause is inter rupted and replaced by another intervening cause, the chain of causation is broken and more than one occurrence has taken place . Here, it is clear that each child’s inj uries are independent and caused by the separate acts of sexual abuse. Id. at 534 (alterations in original) (emphasis added) (internal citations Case: 15-30324 Document: 00513347548 Page: 10 Date Filed: 01/19/2016No. 15

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11 omitted). 12 The court discount ed a but

- for cause and exp licitly used the proximate

- cause analysis to determi ne the number of occurrences.
The proper conclusion here follows naturally from the three above

- cited deci sions : Whe n an occur rence is technically defined to include a series of losses arising from the same event, it includes only those losses proximately caused by that event

. T he Policy defines an occurrence as a series of losses “arising from” the same occurrence and thereby incorporates the proximate

c ause anal y sis

. 13 Thus, the district court applied the correct legal standard in deter min ing the number of occurrences by anal yzing whether the February storm was the proximate cause

— not just a contributing or but

- for cause

— of the sequence of losses betw een February and December 2010.

B. T he task remains to review the d istrict court’s factual finding that the July storm

— rather than the February storm

— was the proximate cause of the sequence of losses after July. Again, we review the district court’s causation determinations only for clear error and uphold the same if plausible in light of the record as whole

. Manderson , 666 F.3d at 376

– 77

.

12 The court relied on Appalachian Ins urance Co. v. Liberty Mut ual Ins urance Co. , 676 F.2d 56, 61 (3d Cir. 1982), which held that to determine the number of occurrences “the court asks if there was but one proximate, uninterrupted, and continuing cause which resulted in all of t he injuries and damage.” ( A lteration and internal quotation marks omitted

. )

13 Seahawk points to All Metals, Inc. v. Liberty Mut ual Fire Ins urance Co. , No. 3

- 09

- CV

- 0846

- BD, 2010 WL 3027045, at *1 (N.D. Tex. 2010) , for the proposition that we none theles s m ight broadly interpret “arising from.” All Metals does not support Seahawk’s argu ment , because the policy there defined “ occurrence ” to include all damages at least indirectly stemming from the same event. By explicitly defining “occurrence” to include in direct caus es , the parties had rejected the proximate

- cause analysis. Cf. Fed. Ins. Co. v. Bock , 382 S.W.2d 305, 307 (Tex. App.

— Corpus Christi 1964, writ ref’d n.r.e.) ( “A proper definition of direct loss is loss proximately caused by the peril insured against.” (emphasis added)); Utica Nat’l , 141 S.W.3d at 203 (equating direct causation with proximate causation). Unlike the parties in All Metals , Seahawk and the insurers did not expressly reject the proximate

- cause analysis, so we apply it. Case: 15-30324 Document: 00513347548 Page: 11 Date Filed: 01/19/2016No. 15

- 30324

12 The court noted that a proximate cause is “that cause which in a natural and continu ous sequence unbroken b y any new and intervening cause, pro

duces a loss, and without which the loss would not have occurred.” Bock , 382 S.W.2d at 307. There was significant evidence to support the deter mina

tion that the July storm, not the February storm, was the proximate cause of the sequence of losses after July. Zumwalt testified that the misaligned le gs, caused by the February storm, did not prevent the Rig from jacking up in calm weather

— testimony that was further bolstered by the Rig’s suc cessful comple

tion of a contract in calm weather in early July despite its mis aligned legs

. More over, Zumwalt testified that the Rig continued to jack up with out incident for at least three and one

- half years after the events at issue , despite Sea

hawk ’s never having repair ed the legs. The evidence also showed that the weath er was severe on July 21 before the crew attempted to jack up in violation of the operating manual. Finally, the court noted that five months elap sed be tween the February and July storm s , and Seahawk knew of the misaligned legs for at least two months before the July storm yet did not repair them

. W e cannot say that, given this evidence, the court clearly erred by find

ing the February storm alone , “in a natural and continu ous sequence un broken by any new and intervening cause , ” would not have produce d the sequence of losses after the July storm

. See id. The July storm was thus an intervening and prox imate cause of the los s es
. V. The district court did not err in rejecting Seahawk’s claim under the Con

tract Provision. Th e concurrent

- cause doctrine applies , and Seahawk could not recover because it failed to comply with the requirements of that doctrine. Under Texas law, the concurrent

- cause doctrine applies any time “cov

ered and non

- covered perils combine to create a loss” and limits an insured’s Case: 15-30324 Document: 00513347548 Page: 12 Date Filed: 01/19/2016No. 15

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13 recovery to the “portion of the damage caused solely by the covered peril(s).” Wallis v. United Servs. Auto. Ass’n , 2 S.W.3d 300, 302

– 03 (Tex. App.

― San Antonio 1999, pet. denied ). The doctrine is “a rule which embodies the basic principle that insureds are entitled to recover only that which is covered under their policy . . . .” Id. at 303. Therefore , “[i]t is essential that the insured
pro duce evidence which will afford a reasonable basis for estimating . . . the proportionate part of damage caused by a risk covered by the insurance policy.” Travelers Indem. Co. v. McKillip , 469 S.W.2d 160, 163 (Tex. 1971). “[A] n in

sured’s . . . burden of proof on allocation . . . is c entral to the claim for cover age.” Wallis , 2 S.W.3d at 303. “Where a loss, however, is caused by a covered peril and an excluded peril that are independent causes of the loss, the insurer is lia ble.” Guar

. Nat’l Ins. Co. v. N

. River Ins. Co. , 909 F.2d 133, 137 (5th Cir. 1990) (emphasis added) . Thus , the concurrent

- cause doctrine applies to limit
recovery only whe n the loss is caused by two concurrent causes instead of two independent causes.
T he district court made a factual finding that the misali gned legs (a cov

ered peril) at most combined with the defective hydraulic

- jacking system (an excluded peril) 14 to cause the loss of the Hilcorp contract. We review th at fac

tu al finding only for clear error, Manderson , 666 F.3d at 376

– 77, and con clude there was sufficient evidence to support i t. For example, Hil corp requested that Seahawk replace the Rig specifically because malfunctions with the hydraulic

- jacking system were visible; Hilcorp, apparently, did not notice the misaligned legs. Fur ther, Zumwalt testified that nobody at Sea hawk even knew the legs were misaligned at this point and that the Rig had experienced problems with its hydraulic

- jacking system conti nuously for over twenty years.

14 Seahawk does not challenge the finding that the hydraulic

- jacking system’s prob

lems were caused by wear - and

- tear and were thus excluded from coverage. Case: 15-30324 Document: 00513347548 Page: 13 Date Filed: 01/19/2016No. 15

- 30324

14 Additionally, the court noted that the Rig con tinued to com plete drilling con tracts over the next three and one

- half years without Seahawk’s ever repair ing its misaligned legs. Given th at evidence, the court did not clearly err by finding the misaligned legs were at most a contributing cause

— and c er tainly not an independent cause

— of the loss of the Hilcorp contract. Seahawk advances several unpersuasive theories that even if the mis

aligned legs and defective hydraulic

- jacking system combined to cause the loss of the contract, the concurrent

- cause doctrine should not apply. First, accord

ing to Seahawk, the doctrine should not apply because the Contract Provision does not explicitly invoke it. Th at is a non

- starter , because the concurrent

cause doctrine applies whe ne ver a policy delineates c overed and excluded per

ils and such p erils combine to cause a loss. Second, Seahawk avers that the loss of a contract is different from physi

cal damages to which the doc trine typically applies. Th at notion , for which no caselaw is cited, overlooks the fact that the Contract Provision requires that the loss of contract be the result of physica l damages that are recoverable under the general

- cover age provision. It would be entirely consistent with the

concurr ent

- cause doctrine for Seahawk to prove what proportion of the physi

cal damages that led to the loss of contract are attributable to a cov ered peril and for the insurers to pay out the Contract Provision according to that proportion

. Finally, Seahawk av ers that the concurrent

- cause doctrine would re

quire it to prove a claim “payable” under the Policy’s general coverage provi sion rather than one “recoverable . . . if the deductible were nil.” Seahawk contends that all it must show to recover is some th eoretically covered physical damage that contributed to a loss of con tract. Seahawk elides the principle that com

pliance with the concurrent

- cause doctrine, under Texas law, is a prerequi site Case: 15-30324 Document: 00513347548 Page: 14 Date Filed: 01/19/2016No. 15

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15 to any recovery whatsoever. See Wallis , 2 S.W.3d at 303 (noting that allo ca tion of damages is central to the insured’s claim). Whe n , as here, a covered peril and excluded peril combine to cause a loss, no amount of damages is even recov erable 15

— let alone payable

— until the insured complies with the concurrent

cause doctrine. Id. at 302

– 03 (“[T]he insured is entitled to recover only that portion of the damage caused solely by the covered peril(s).” (empha sis added)). T he district court properly applied the conc urrent

- cause doc trine to the Con

tract Provision. The final point, that Seahawk did not meet its burden under the concurrent

- cause doctrine, is without controversy. Seahawk presented no evi

dence to segregate the damage attributable solely to the misaligned legs (the

cov ered peril) as compar ed to the defective hydraulic

- jacking system (the excluded peril). “Although [an insured] is not required to establish the amount of his damages with mathematical precision, there must be some reasonable basis upon which the [fact finder’s] finding rests. ” Id. at 304. Seahawk failed to meet its burden under the concurrent

- cause doctrine because it presented no evidence to apportion damages between covered and excluded perils, so the district court properly denied the claim under the Contract Provision.
AFFIRMED.

15 See B RYAN A. G ARNER , D ICTIONARY OF L EGAL U SAGE 758 (3d ed. 2011) (“recoverable = compensable. . . . ‘capable of being legally obtained.’”)

. Seahawk’s reference to Cal ifornia Insurance Guarantee Ass ociatio n v. Liemsakul , 193 Cal. App. 3d 433 (Cal. Ct. App. 1987) , does not change this conclusion ; it stands for the uncontroversial proposition that “recovera

ble” means “recovery that might have been possible” rather than that which is “actually
recov ered.” Agreeing as we do with th at proposition, a claim for damages under Texas law , where a covered peril and excluded peril combine to cause the loss , is not even recoverable unless and until the insured complies with the concurrent

- cause doctrine. Case: 15-30324 Document: 00513347548 Page: 15 Date Filed: 01/19/2016