Court Opinion

ID: 3198060
Source: CourtListenerOpinion
Date Created: 2016-04-27 00:00:50.301687+00
Date Added: 2024-06-11T12:20:19.102598
License: Public Domain

Case: 15-30786     Document: 00513480742    Page: 1   Date Filed: 04/26/2016

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT

                                 No. 15-30786                   United States Court of Appeals
                                                                         Fifth Circuit

                                                                       FILED
INTERNATIONAL OFFSHORE SERVICES, L.L.C.,                           April 26, 2016
                                                                  Lyle W. Cayce
            Plaintiff                                                  Clerk

v.

LINEAR CONTROLS OPERATING, INCORPORATED,

            Defendant

APACHE CORPORATION,

             Third Party Plaintiff - Appellant

v.

CATLIN SPECIALTY INSURANCE COMPANY,

             Third Party Defendant - Appellee

                Appeal from the United States District Court
                   for the Eastern District of Louisiana
                          USDC No. 2:13-CV-4852

Before DAVIS, SMITH, and HIGGINSON, Circuit Judges.
     Case: 15-30786       Document: 00513480742          Page: 2     Date Filed: 04/26/2016

                                       No. 15-30786
PER CURIAM:*
       Third Party Plaintiff-Appellant Apache Corporation (“Apache”) appeals
the district court’s final judgment dismissing, on summary judgment, Apache’s
claim against Third Party Defendant-Appellee Catlin Specialty Insurance
Company (“Catlin”). 1 Apache sought insurance coverage under the terms of a
policy issued by Catlin (the “Policy”) to its insured (and Apache’s
subcontractor), Controls Operating, Inc. f/k/a Linear Controls Operating, Inc.
f/k/a Linear Controls, Inc. (“Linear”).
       This case arises out of an incident in which an employee of Linear, Jake
Bergeron, was injured on a boat owned by International Marine, L.L.C. and
International Offshore Services, L.L.C. (collectively “International Marine”),
while en route to an Apache jobsite. International Marine had chartered the
boat to Apache pursuant to a Master Time Charter Agreement (“MTCA”).
International Marine filed a limitation of liability action, in which Bergeron
asserted a personal injury claim.
       International Marine also filed a declaratory judgment action against
Linear and Apache, seeking a determination that one or both owed it defense
and indemnity and insurance coverage. Apache then asserted this claim for
insurance coverage against Catlin, arguing that the Policy it issued to Linear
required it to provide coverage to Apache for Apache’s contractual liability to
International Marine.
       Resolution of the case turns entirely on the Policy, but it is helpful to
understand the underlying contractual obligations. First, under the MTCA,

       * 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 See Int’l Offshore Servs., LLC v. Linear Controls Operating, Inc., No. CIV.A. 13-4852,
2015 WL 4875472 (E.D. La. Aug. 12, 2015). We take the undisputed facts set out herein from
the district court’s opinion.
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                                 No. 15-30786
International Marine agreed to provide marine vessels to Apache on request.
The MTCA also required Apache to defend and indemnify International
Marine for the injury or death of the employees of Apache or its subcontractors,
which is the basis for Apache’s contractual liability at issue in this appeal.
      Apache, in turn, argues that its Master Service Contract (“MSC”) with
Linear required Linear to provide defense and indemnity to Apache, even for
Apache’s contractual liability to International Marine under the MTCA. More
relevant to this appeal, Apache argues that the Policy issued by Catlin provides
coverage to the full extent of Linear’s obligations under the MSC, including
coverage for Apache’s contractual liability under the MTCA.
      The MSC required Linear to maintain insurance coverage for Apache
and Apache-affiliated parties as additional insureds “for obligations
undertaken and liabilities assumed by [Linear] under” the MSC, including
“Contractual Liability, insuring the indemnity agreements contained in this
contract.” The parties amended the MSC for work performed in Louisiana to
circumvent the general prohibition against such indemnity agreements
established in the Louisiana Oilfield Indemnity Act (“LOIA”), La. Rev. Stat. §
9:2780. Under the exception set out in Marcel v. Placid Oil Co., 11 F.3d 563
(5th Cir. 1994), which the parties expressly referenced in the amendment,
Linear was to secure insurance coverage for the “indemnities as required by
this Contract,” but Apache would pay the actual premiums for that coverage.
      Linear listed Apache as an additional insured in an endorsement to the
Policy. The Policy expressly excludes coverage for contractual liability except
for such liability assumed in an “insured contract,” which the Policy defines, in
relevant part, as “[t]hat part of any other contract or agreement pertaining to
your business . . . under which you assume the tort liability of another party to
pay for “bodily injury” . . . to a third person.” The Policy also provides:
“Throughout this policy the words ‘you’ and ‘your’ refer to the Named Insured
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                                   No. 15-30786
shown in the Declarations, and any other person or organization qualifying as
a Named Insured under this policy.”
      In essence, Apache argues that Linear was required under the MSC to
indemnify Apache for Apache’s contractual liability to International Marine
under the MTCA, and the Policy necessarily provided that coverage. We
disagree. Even assuming arguendo that the MSC required Linear to secure
that coverage, that would not determine whether Linear actually secured the
coverage in this Policy. We must look to the Policy’s language, and we agree
with the district court that it does not cover Apache’s contractual liability to
International Marine here.
      Applying the Louisiana law concerning insurance contract construction,
the district court noted that the Policy excludes coverage for contractual
liability except for “insured contracts,” and it concluded that the MTCA at issue
here—the source of Apache’s contractual liability—is not an “insured contract”
under the plain language of the Policy. The district court reasoned that because
the Policy defines “you” and “your” to include only Named Insureds, the
definition of “insured contract” under the Policy does not include the MTCA.
Under the district court’s reading, the definition of “insured contract” could be
rephrased as “[t]hat part of any other contract or agreement pertaining to [a
Named Insured’s] business . . . under which [a Named Insured] assume[s] the
tort liability of another party to pay for ‘bodily injury’ . . . to a third person.”
      On de novo review, applying Louisiana law and the same Rule 56
summary judgment standards as the district court, we agree with the district
court’s interpretation. Thus, Apache is entitled to coverage for its contractual
liability to International Marine under the MTCA only if Apache is a Named
Insured under the Policy. We agree with the district court that it is not.
      Apache was only listed as an additional insured under the Policy, not a
Named Insured. Indeed, the endorsement page adding Apache is carefully
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                                 No. 15-30786
written to add the endorsee only as an additional insured, not a Named
Insured. Apache argues that the Policy incorporated by reference the full MSC
and all of its obligations in an endorsement for “Blanket as per written
contract,” but that endorsement is found on the same type of form that added
Apache, which limits the endorsement to additional insured coverage. Apache
has pointed to no apposite case law that would allow us expand the Policy’s
coverage for an additional insured beyond the plain language of the Policy
itself, and we can find none.
      In sum, we agree with the district court that Apache is only an additional
insured under the Policy, and Apache is not entitled to coverage under the
Policy for its contractual liability to International Marine under the MTCA.
We affirm essentially for the reasons set out by the district court.
      AFFIRMED.

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