Opinion ID: 2857337
Heading Depth: 2
Heading Rank: 1

Heading: Coverage Under the Bumbershoot Policy

Text: The parties do not dispute that Louisiana law applies in this case. See Albany Ins. Co. v. Anh Thi Kieu, 927 F.2d 882, 886–87 (5th Cir. 1991). “To determine Louisiana law, we look to the final decisions of the Louisiana Supreme Court.” Bradley v. Allstate Ins. Co., 620 F.3d 509, 517 n.2 (5th Cir. 2010) (citations omitted). “In the absence of a final decision by the Louisiana Supreme Court, we must make an Erie guess and determine, in our best judgment, how that court would resolve the issue if presented with the same case.” Id. Pursuant to Louisiana law, “[a]n insurance policy is a contract between the parties and should be construed by using the general rules of interpretation of contracts . . . .” Cadwallader v. Allstate Ins. Co., 848 So. 2d 577, 580 (La. 2003). This court’s role in interpreting insurance contracts is “to ascertain the common intent of the parties to the contract,” id. at 580, because their intent, “as reflected by the words of the policy, determine[s] the extent of coverage.” Reynolds v. Select Props., Ltd., 634 So. 2d 1180, 1183 (La. 1994). “The words of a contract must be given their generally prevailing meaning [and] [w]ords of art and technical terms must be given their technical meaning when the contract involves a technical matter.” La. Civ. Code art. 2047. Further, “[w]hen the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation” is required to determine the parties’ intent. La. Civ. Code art. 2046. “In Louisiana, ‘[p]arol or extrinsic evidence is generally inadmissible to vary the terms of a written contract unless there is ambiguity in the written expression of the parties’ common intent.’” Total E & P USA, Inc. v. KerrMcGee Oil & Gas Corp., 719 F.3d 424, 435 (5th Cir. 2013) (alteration in original) (citation omitted). “A contract is considered ambiguous on the issue 8 Case: 14-31072 Document: 00513182864 Page: 9 Date Filed: 09/04/2015 No. 14-31072 of intent when it lacks a provision bearing on that issue or when the language used in the contract is uncertain or is fairly susceptible to more than one interpretation.” Id. (internal quotation marks omitted). However, “if the language of [a policy] exclusion is subject to two or more reasonable interpretations, the interpretation which favors coverage must be applied.” Elliott v. Cont’l Cas. Co., 949 So. 2d 1247, 1254 (La. 2007) (citation omitted). “[I]t is the burden of the insured to prove the incident falls within the policy’s terms,” and “the insurer bears the burden of proving the applicability of an exclusionary clause within a policy.” Doerr v. Mobil Oil Corp., 774 So. 2d 119, 124 (La. 2000). If the insurer “cannot unambiguously show an exclusion applies, the Policy must be construed in favor of coverage.” Martco Ltd. P’ship v. Wellons, Inc., 588 F.3d 864, 880 (5th Cir. 2009) (citation omitted). Liberty argues that the term “use” as provided in the Platform Exclusion is unambiguous and excludes coverage. We agree. The district court reached the conclusion that the term “use” in the Bumbershoot Policy was ambiguous after it considered and distinguished two cases which had nearly identical language to Platform Exclusion at issue herein. Upon closer review of those two cases, we find them to be dispositive. In Janex Oil Co., Inc. v. Hanover Compressor Co., a suit was filed alleging that an employee of the insured negligently failed to properly supervise activities on a platform, which ultimately led to the occurrence of a fire and explosion on the platform. 694 So. 2d 415, 416 (La. App. 4 Cir. 2/19/97). The parties had entered into a bumbershoot insurance policy contract with an exclusion containing nearly identical language to the one at issue herein. Id. The exclusion stated that the insurer would not cover liability or expense arising “from ownership, use or operation of drilling rigs, drilling barges, drilling tenders, platforms [and/or] lose lines . . . .” Id. The Louisiana Fourth Circuit Court of Appeals agreed with the insurer’s argument in that case that “the 9 Case: 14-31072 Document: 00513182864 Page: 10 Date Filed: 09/04/2015 No. 14-31072 purpose of [the] exclusion was to limit coverage to vessels while excluding drilling platforms.” Id. (stating that “[t]he actions of [the insured] were involved in the operation of the platform and under any reasonable reading of the policy language [arose] out of the operation of the platform/drilling rig”). In Underwriters at Lloyd’s London v. OSCA, Inc., an employee of the insured was attempting to set a bridge plug in a well located on a platform when a blowout occurred causing damages. Nos. 03-21021, 03-20817, 2006 WL 941794, at  (5th Cir. Apr. 12, 2006) (per curiam). Again, the parties had entered into a bumbershoot insurance policy contract with an exclusion containing nearly identical language to the one herein. Id. at . The exclusion stated that the insurer was excluded from liability “arising from: ownership, use, or operation of drilling rigs, drilling barges, drilling tenders, platforms, flow lines, gathering stations, and or pipelines . . .” Id. This court held that the exclusion applied and barred recovery. Id. at  (declining to view the platform as nothing more than a location for the well and therefore incidental to where the actual damage occurred). As the court did in Janex, and as this court did in Lloyd’s, we find herein that the policy exclusion at issuecontaining essentially identical language to the policy exclusions in those casesapplies in this case to exclude coverage. The term “use” as contained in the Platform Exclusion is not ambiguous. See Elliott, 949 So. 2d at 1254. It is clear from the plain language of the policy here, as it was to the court in Janex, that the parties intended to exclude platforms from coverage. See Cadwallader, 848 So. 2d at 580. If the parties had intended for the use or operation of the platforms to be covered under the policy, they could have drafted the contractual language that way or omitted the term “platform” from the exclusions section, but they did not. Moreover, it is clear from the record that the actions of Max Welders in this casemoving Shaw employees between the platform and the vessels to 10 Case: 14-31072 Document: 00513182864 Page: 11 Date Filed: 09/04/2015 No. 14-31072 perform their job dutiesclearly involved the use of the platform. See Janex, 694 So. 2d at 416. Further, similar to the court’s observation in Lloyd’s, the platform as it was used by Max Welders was not merely a location for the crane and therefore incidental to the damage that occurred there. See Lloyd’s London, 2006 WL 941794, at . The platform was being used by the crane operator to transport Shaw employees in connection with the work they were doing for Unocal. Although it may be true, as the district court concluded, that one intended use of a platform is to extract energy, it is also possible that platforms can have more than one use in connection with that intended purposeas was the case here. In conclusion, we hold that the district court erred in finding that Liberty owed coverage to Max Welders under the Bumbershoot Policy. 9