Opinion ID: 505524
Heading Depth: 2
Heading Rank: 3

Heading: Examining Appellant's Argument

Text: 35 The Vessel argues that allowing the employer's worker's compensation carrier to exercise the employer's lien in actions such as this one, 20 conflicts with the basic principle of insurance law that an insurer may not subrogate against its own insured. 21 36 The Vessel relies on 16 Couch on Insurance 2d Sec. 61:133 at 313 (1983), which states: No right of subrogation can arise in favor of the insurer against its insured, since by definition subrogation arises only with respect to rights of the insured against third persons to whom the insurer owes no duty. Id.; see Wager v. Providence Insurance Co., 150 U.S. 99, 14 S.Ct. 55, 37 L.Ed. 1013 (1893). This argument ignores the fact that the law of admiralty and the LHWCA treat a vessel as a third party, distinct from its owner. The worker's compensation insurer in this case therefore owes a duty to Bunge, the employer, but not to the Vessel. 37 Even were this not true, the facts of this case would still not conflict with the spirit of the black letter rule. Appellant concedes that the purpose of the rule is to prevent a circumstance where To allow subrogation ... would permit an insurer, in effect, to pass the incidence of the loss, either partially or totally, from itself to its own insured, and thus avoid the coverage which its insured purchased. St. Paul Fire & Marine Ins. Co. v. Murray Plumbing & Heating Corp. 65 Cal.App.3d 66, 135 Cal.Rptr. 120, 126 (1976). This principle has been carefully followed in this Circuit. In Wiley v. Offshore Painting Contractors, Inc., 716 F.2d 256 (5th Cir.1983), this court paid close attention to precisely which risks and which people were covered by the particular insurance policies at issue, disallowing a lien for contribution only after it was determined that a policy insured defendant against the risk for which the insurance company sought contribution. Id. at 257; cf. Tran v. Manitowoc Engineering Co., 767 F.2d 223 (5th Cir.1985) (a vessel owner acting as its own stevedore is liable only for negligence in its' owner capacity, not for negligence in its 'stevedore' capacity.) (quoting Jones & Laughlin, 462 U.S. at 531 n. 6, 103 S.Ct. at 2547 n. 6). 38 We must therefore carefully examine the risk against which the Comp Policy insures. A worker's compensation policy guards against an employer's statutory liability for workplace injuries to employees. The statutory scheme imposes liability for all workplace injuries with the caveat that the employer, or his worker's compensation insurer, will be entitled to exercise a lien against any recovery from third parties. The statute does not impose liability upon an employer for the negligence of a third party. As we demonstrated above, a vessel is considered a third party even where the vessel is owned by, or is, the longshoreman's employer. Thus by enforcing the employer's lien against the settlement fund, INA is not trying to avoid the risk against which it insured. 22