Court Opinion

ID: 9469166
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:33:52.303108+00
Date Added: 2024-06-11T17:41:15.583340
License: Public Domain

*469DYER, Circuit Judge,
dissenting:
I respectfully dissent because the majority in striving to find coverage in a standard marine insurance policy where there is none has overturned the settled law of this and other circuits.
The facts are simple and undisputed. Bonanza, as owner, and Conoco, as charterer entered into a charter party which provided that the “[ojperation, navigation and management of the vessel [M/V Aqua Safari] shall be under the exclusive control and command of owner and its servants and its master and crew .... It is expressly understood and agreed that owner is an independent contractor and neither its employees nor the master and crew of the vessel are servants, agents or employees of the charterer.” Further that “[ojwner shall, at its expense man, operate, maintain and repair the vessel.”
In accordance with its obligation under the charter party Bonanza obtained a standard SP-38 form of marine policy from Republic which provided that the company would pay “... such sums as the assured, as owner of the S/D Stand-By Vessel ‘Aqua Safari’ shall have become legally liable to pay and shall have paid on account of: loss of, or damage to, or expense in connection with any fixed or moveable object or property of whatever nature; costs or expenses of, or incidental to, the removal of the wreck of the vessel named herein when such removal is compulsory by law .... ” Conoco was named as an additional assured under the policy.
The sole cause of the sinking of the Safari was the negligence of the Master in the navigation of the vessel. The ocean bottom where the Safari went down was soft and it rapidly sunk into the mud. When viewed by the divers before removal it was half covered with mud and soon would have been completely covered. The wreck was approximately 2000 feet from the nearest pipeline or structure owned by a third party. There was no evidence that it could have been possible for the wreck to move such a distance once buried in the mud.
Conoco was initially concerned that the wreck of the vessel might interfere with moving the drilling rig that was then in place over the site of the sinking, and that the presence of the wreck might impede the placing of a platform over that location. The rig was moved without difficulty, and thereafter Conoco proceeded to remove the wreck and filed this suit to attempt to recover the cost of removal.
Henderson, Conoco’s Division Manager for Production, was not concerned with potential liability to pipeline or vessel owners, but wanted to facilitate the placing of the platform. In-house counsel for Conoco said that “it could be contended that ... if the vessel were to move over and strike the line I am sure Conoco would be sued on it, whether or not any ultimate liability would be there, I can’t answer.”
The majority has found that “the potential liability to third persons constituted the compulsion by law in the case, and, motivated Conoco, at least in part, to remove the ‘Aqua Safari.’ ”
As it must, the majority concedes at the outset that “[tjhere is no settled principle of law that would fix liability on Conoco if the Aqua Safari propelled by roiled storm waters from its resting place on Conoco’s lease, had severed a pipeline.” It recognizes that a non-negligent time charterer is not liable for damages due to the owner’s fault. Agrico-Chemical Co. v. M/V Ben W. Martin, 664 F.2d 85 (5th Cir. 1981); Mallard v. Aluminum Co. of Canada, Ltd., 634 F.2d 236, 242 n.5 (5th Cir.), cert. denied, 454 U.S. 816, 102 S.Ct. 93, 70 L.Ed.2d 85 (1981); see St. Paul Fire & Marine Ins. v. Vest Transp., 666 F.2d 932 (5th Cir. 1982); Tennessee Valley Sand & Gravel Co. v. M/V Delta, 598 F.2d 930 (5th Cir. 1979), modified per curiam on other grounds, 604 F.2d 13 (5th Cir. 1979); Lane v. United States, 529 F.2d 175 (5th Cir. 1975); United States v. Raven, 500 F.2d 728 (5th Cir. 1974), cert. denied, 419 U.S. 1124, 95 S.Ct. 809, 42 L.Ed.2d 824; In re Marine Leasing Services, Inc., 471 F.2d 255 (5th Cir. 1973). Nevertheless, in the face of this settled law, the majority holds that “[i]n the light of expanding concepts of enterprise and vicarious liability, Conoco faced a significant prospect of being held liable for damages should the Aqua Safari become a floating menace.”
*470Not a single case is cited to support this unfounded statement. We are referred to Prosser’s Law of Torts at 468 (4th Edition 1971), where the majority has omitted, in its opinion quotation, the author’s preceding statement that, “[f]or the torts of an independent contractor ... it has long been said to be the general rule that there is no vicarious liability upon the employer” (footnotes omitted). The “contention” alluded to by the author, and cited by the majority, that the general rule should be, and probably will be, changed (a prediction that has borne no fruit in the eleven years since publication) is supported only by various law review articles, but no case law. I am not concerned with what law students say the law should be, or probably will be, but I am concerned when their views are cited to overturn what the law is, and has been for over one hundred years. See The Clarita and The Clara, 90 U.S. (23 Wall.) 1, 23 L.Ed. 146 (1874).
Nor can I subscribe to the majority’s reliance on “policy reasons” to hold that Conoco might be liable if it had not removed the wreck. It is self-evident that Conoco chose Bonanza’s services, and there is no suggestion that Bonanza was not wholly reliable (factors which seem to me to have no relevance in this case). Apparently based on this premise, the majority finds that Conoco “might have been negligent [in failing to remove the wreck] independent of Conoco’s freedom from negligence in the sinking of the vessel.” Policy reasons cannot override settled law.
In Progress Marine, Inc. v. Foremost Insurance Co., 642 F.2d 816 (5th Cir.), cert. denied, 454 U.S. 860, 102 S.Ct. 315, 70 L.Ed.2d 158 (1981), this Court construed the same SP-38 policy form. There Judge Brown aptly said that “removal occasioned by an unarticulated or unreasonable apprehension of ... civil liability could not be considered ‘compelled by law.’ ” That should be enough to dispose of this case. In any event, the two-fold test set forth in Progress Marine that the assured is “reasonable [sic] ... exposed to liability by law sufficiently great to justify the expense of removal and the assured is actually motivated by the legal compulsion, was not met. It is clear that Conoco faced no exposure whatever to legal liability, much less legal compulsion sufficient to justify removal. Conoco neither negligently nor intentionally placed the wreck in a position to be of danger to third persons and, accordingly, had no duty whatsoever to remove it. The fact that Conoco’s house counsel said he was concerned about potential legal liability is of no moment because Progress Marine requires an objective potential of liability as well as a subjective fear of that liability.
Moreover, any liability that might be conjured up would not be the liability of Conoco as owner of the Safari, and thus would not be within the coverage of the policy which is very clearly limited to sums paid by the assured “as owner of the S/D StandBy Vessel Aqua Safari.” See St. Paul Fire & Marine Ins. v. Vest Transp., 666 F.2d 932 (5th Cir. 1982); Lanasse v. Travelers Insurance Company, 450 F.2d 580 (5th Cir. 1971); Wedlock v. Gulf Mississippi Marine Corp., 554 F.2d 240 (5th Cir. 1977). To transform Conoco from a time charterer with no control over the operation or navigation of the Safari to an owner of the vessel within the terms of the policy, the majority points to three factors. First, Conoco was responsible for having directed the Safari to be at the site of the sinking. Second, the Safari came to rest on Conoco’s leasehold. Third, Conoco knew that Bonanza did not intend to raise the Safari. As a consequence, the majority holds that “Conoco was compelled by law to raise the wreck in the capacity ‘as owner’ of the Aqua Safari.” This legal metamorphosis from a charterer to an owner is unsupported by precedent, and can only be brought about by judicial legerdemain.
I would reverse the judgment of the district court.1

. The majority does not find it necessary to address the question of whether federal regulations also compelled removal of the wreck. The holding of the district court that the provision of the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331, and the regulation thereunder compelled the removal of the wreck by
Conoco, and Conoco’s argument in support of the holding are so meritless that discussion of this issue is not warranted.
My disposition of the case makes it unnecessary for me to reach the limitation of liability question.