Court Opinion

ID: 62570
Source: CourtListenerOpinion
Date Created: 2010-04-26 04:45:34+00
Date Added: 2024-06-11T17:20:06.491680
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                    Fifth Circuit

                                                                            FILED
                                                                            June 13, 2008

                                             No. 07-30110             Charles R. Fulbruge III
                                                                              Clerk

In Re: In the Matter of: ELEVATING BOATS LLC, as owner of the A C
Brown Elevator praying for Exoneration from or Limitation of Liability

-------------------------------------------------

ELEVATING BOATS LLC,

                                                     Petitioner - Appellant,
v.

DEVON LOUISIANA CORP, formerly known as Ocean Energy Inc,

                                                     Claimant - Appellee.

                 Appeal from the United States District Court for the
                            Eastern District of Louisiana
                                   2:03-CV-3259

Before GARWOOD, GARZA, and BENAVIDES, Circuit Judges.
PER CURIAM:*
        This appeal involves a maritime contract dispute between appellant
Elevating Boats, L.L.C. (“Elevating Boats” or “the Owner”), the owner of the
M/V A.C. BROWN ELEVATOR, and the vessel’s time charterer, appellee Devon

        *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
                                  No. 07-30110

Louisiana Corp. (“Devon” or “the Charterer”). Elevating Boats challenges the
district court’s grant of summary judgment to Devon and award of $250,000 in
damages based on Elevating Boats’ breach of its alleged obligation to list Devon
as an additional insured on its protection and indemnity (“P & I”) insurance
policy. We AFFIRM the judgment of the district court.

                                        I
      The case underlying this appeal arose from an allision that occurred while
Devon was the vessel’s time charterer. Four Devon subcontractors were injured
in the allision and filed suit against Elevating Boats and Devon. Elevating
Boats and Devon each settled with all of the plaintiffs. The last plaintiff settled
on the first day of trial.
      After all of the plaintiffs’ claims were settled, a single issue remained in
the case. Devon contended that Elevating Boats breached an obligation under
the parties’ Blanket Charter Agreement (“the Agreement”) to list Devon as an
additional insured on Elevating Boats’ P & I policy. According to Devon, because
Devon could not rely on Elevating Boats’ insurance, Devon was forced to use its
own insurance to cover the costs of its defense and settlement. Devon paid a
$250,000 insurance deductible to cover the defense and settlement of the case.
Devon sought to recover that amount from Elevating Boats.
      The pertinent sections of the Agreement are as follows.           First, the
Agreement has an indemnity provision. The relevant portion of the indemnity
provision, contained in paragraph 19(c), provides: “OWNER and CHARTERER
each agree to indemnify and hold each other harmless from and against any cost
and expenses resulting from loss, damage or personal injury to any third party
to the extent of such indemnifying party’s negligence in causing such loss,
damage or personal injury.” The parties do not dispute that each of the plaintiffs

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                                  No. 07-30110

was a “third party” for the purposes of this provision and that subsection (c)
therefore applies.
      The Agreement also contains a provision concerning the types of insurance
that each party must obtain. Paragraph 26 of the Agreement provides in
relevant part:
      CHARTERER and OWNER shall procure and maintain in effect, at
      their own expense, with reliable insurance companies authorized to
      do business in the state or states in which OWNER is to render
      Charter Services, insurance coverage to support the indemnities
      provided for herein, provided, however, that OWNER’S coverage
      shall be of the types and with limits not less than those set forth in
      Exhibit “A” attached hereto. . . . OWNER shall have the right, upon
      at least thirty (30) days prior written notice to CHARTERER, to
      elect self-insurance to support the indemnities provided for herein.
      In the event OWNER serves notice to elect self-insurance, then
      OWNER agrees to provide CHARTERER, upon request, sufficient
      financial information regarding OWNER’S ability to self-insure for
      the applicable indemnities. CHARTERER shall be allowed, in its
      sole discretion, to cancel upon 24 hours notice any vessel charter
      hereunder if CHARTERER is not fully satisfied as to OWNER’S
      ability to self-insure.
(emphasis added).      Exhibit “A,” referenced in paragraph 26, is titled
“REQUIRED INSURANCE.” Exhibit “A” requires Elevating Boats to maintain,
among other insurance,“Protection and indemnity insurance on the SP 23 Form
or equivalent, written to include the following endorsements and minimum
limits: . . . CHARTER [sic] as an Additional Insured [and] Removal of ‘other than
Owner’ Limitation clauses as respects CHARTER [sic].” Apart from listing the
required insurance, Exhibit “A” further states and clarifies:
      It is further agreed that each such policy, other than Workers’
      Compensation policies, shall name CHARTERER its parent and
      affiliated companies as Additional Insured with respect to
      OWNER’S operations hereunder. However, OWNER shall be solely
      responsible for deductibles required under such policies, and
      OWNER shall not under any circumstances call upon CHARTERER
      for payment of such deductibles and OWNER shall defend,

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                                        No. 07-30110

       indemnify and hold harmless CHARTERER, its parent and
       affiliated companies, their officers, directors, employees, and agents
       from and against any and all claims, demands, courses of action or
       suits with respect to such deductibles whatsoever the reason for or
       howsoever occurring whether as a result of the negligence in whole
       or in part of CHARTERER, or its parent and affiliated companies.
       After twice reversing itself, the district court eventually granted summary
judgment in favor of Devon for the full amount of the $250,000 deductible that
Devon paid on its own insurance. Reviewing the language of the Agreement, the
district court rejected Elevating Boats’ argument that its obligation to list Devon
as an additional insured was limited by the indemnity obligations in paragraph
19. The district court reasoned that Elevating Boats’ obligation to name Devon
as an additional insured constituted an independent obligation, separate and
apart from the parties’ indemnity agreement. The district court concluded that
the Agreement required Elevating Boats to name Devon as an additional insured
for coverage that extended beyond any indemnity obligations and awarded
damages for Elevating Boats’ failure to do so. Elevating Boats appealed.

                                               II
       We review a district court’s grant of summary judgment de novo, applying
the same standard as the district court. Madison Materials Co., Inc. v. St. Paul
Fire & Marine Ins. Co., 523 F.3d 541, 542 (5th Cir. 2008). Summary judgment
is proper only if “there is no genuine issue as to any material fact and . . . the
movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c);
Madison Materials Co., 523 F.3d at 543.1

       1
        The parties consented to the district court’s resolution of this issue on the papers
submitted in connection with the motion for summary judgment and subsequent motions for
reconsideration. On appeal, neither party contends that there were any genuine issues of
material fact that warranted a trial, nor do they contend that the district court’s resolution of
this matter on summary judgment was improper.

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                                  No. 07-30110

      The interpretation of the terms of a contract is a matter of law, which we
review de novo. See Thibodeaux v. Vamos Oil & Gas Co., 487 F.3d 288, 293 (5th
Cir. 2007). “A maritime contract containing an indemnity agreement, whether
governed by federal maritime or Louisiana law, should be read as a whole and
its words given their plain meaning unless the provision is ambiguous.”
Weathersby v. Conoco Oil Co., 752 F.2d 953, 955–56 (5th Cir. 1984).

                                       III
      As a threshold matter, Elevating Boats raises two procedural objections
to the district court’s judgment. First, Elevating Boats argues that the district
court erred in granting an untimely motion under Federal Rule of Civil
Procedure 59(e) and revising its prior order denying Devon’s motion for
summary judgment. Second, Elevating Boats argues that the district court
abused its discretion in considering new arguments for the first time on a Rule
59(e) motion. Interestingly, despite these objections, which occupy the majority
of Elevating Boats’ brief, Elevating Boats urges us in a footnote to nonetheless
review the substantive merits of the dispute “[i]n the interest of judicial
efficiency.”
      Regardless, the district court did not commit any error or abuse its
discretion in considering the Rule 59(e) motion. The district court’s denial of
Devon’s motion for summary judgment on this issue was an interlocutory order,
and the district court did not abuse its discretion by revising that order prior to
the entry of final judgment. See Lavespere v. Niagara Mach. & Tool Works, Inc.,
910 F.2d 167, 185 (5th Cir. 1990) (“[B]ecause the denial of a motion for
summary judgment is an interlocutory order, the trial court is free to reconsider
and reverse its decision for any reason it deems sufficient, even in the absence
of new evidence or an intervening change in or clarification of the substantive
law.”), abrogated on other grounds by Little v. Liquid Air Corp., 37 F.3d 1069,

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                                        No. 07-30110

1075 n.14 (5th Cir. 1994) (en banc); see also FED. R. CIV. P. 54(b) (“[A]ny order
or other decision, however designated, that adjudicates fewer than all the claims
or the rights and liabilities of fewer than all the parties . . . may be revised at
any time before the entry of a judgment adjudicating all the claims and all the
parties’ rights and liabilities.”)

                                              IV
       In its brief, Elevating Boats raises three arguments that the district court
erred in construing the Agreement. Each of these arguments is without merit.2

                                               A
       First, Elevating Boats argues that the district court erroneously
interpreted the terms of the Agreement so as to render the indemnity provision
contained in paragraph 19(c) of the Agreement meaningless and superfluous.
This provision, it argues, was intended to ensure that each party was responsible
for its own proportionate share of the fault in cases involving damage or injury
to third parties. According to Elevating Boats, Devon and Elevating Boats each
settled for their proportionate share of the fault; as such, under this provision,
there was nothing left to resolve between Elevating Boats and Devon. Elevating
Boats argues that the district court’s award forced Elevating Boats to indemnify
Devon for the costs of Devon’s defense in contravention of the parties’
Agreement.
       The district court awarded damages to Devon because it determined that
Elevating Boats breached an independent obligation under the Agreement to list

       2
         Elevating Boats devotes a mere three-and-a-half pages of its brief to the merits of this
contract dispute. There may be arguments that Elevating Boats might have raised but did
not. We address only those arguments that Elevating Boats has raised; any arguments that
Elevating Boats has not raised are waived. See, e.g., Yohey v. Collins, 985 F.2d 222, 225–26
(5th Cir. 1993). This decision should be read accordingly, narrowly focused on the arguments
presented to the court by the appellant.

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                                 No. 07-30110

Devon as an additional insured under its P & I policy. The award was not based
on any reapportionment of the fault between the parties, as contemplated by
paragraph 19(c). As such, the district court’s award did not conflict with the
parties’ indemnity agreement in paragraph 19(c), and Elevating Boats’ argument
that the award rendered this particular indemnity agreement “meaningless” is
without merit.

                                       B
      Elevating Boats next argues that the district court erred in holding that
it breached its obligation to list Devon as an additional insured under the
Agreement. Elevating Boats argues that its obligation to list Devon as an
additional insured was contingent on the applicability of the indemnity
obligations in Paragraph 19 of the Agreement. Because indemnity was not
required in this case, Elevating Boats argues that the additional insured
obligation was inapplicable.
      The plain language of Exhibit “A” requires Elevating Boats to list Devon
as an additional insured for various, enumerated policies with respect to
Elevating Boats’ operations under the Agreement.            This obligation is
independent of the indemnity obligations and includes the P & I policy at issue
in this case. We thus reject Elevating Boats’ argument that this obligation is
somehow contingent on the specific applicability of the indemnity provision in
paragraph 19. Although paragraph 26 qualifies and circumscribes the purpose
of the insurance coverage that each party is required to obtain (“to support the
indemnities provided for herein”), that paragraph also requires that Elevating
Boats’ coverage “be of the types and with limits not less than those set forth in
Exhibit ‘A.’” Nothing in paragraph 26 suggests that the requirements of Exhibit
“A” only apply if the indemnity provision of the Agreement is triggered. Thus,
as the district court concluded, the obligations created by Exhibit “A” stand on

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                                  No. 07-30110

their own, independent of the specific applicability of the indemnity provision.
      Based on Exhibit “A,” Elevating Boats was required to list Devon as an
additional insured on the P & I policy that Elevating Boats was required to
obtain. The district court therefore did not err in concluding that the provisions
of Exhibit “A” were applicable and that Elevating Boats breached its obligation
to list Devon as an additional insured on the P & I policy.

                                        C
      Finally, Elevating Boats argues that it was not required to pay Devon’s
deductible because Exhibit “A” requires only that Elevating Boats pay the
deductibles on its own insurance and any insurance for which it is required to
name Devon as an additional insured. This argument misconstrues the nature
of the district court’s award. Elevating Boats was required under the agreement
to obtain insurance, list Devon as an additional insured, and cover any
deductibles for that insurance. It failed to do so. As a result of this breach,
Devon suffered damages, the cost of paying its own $250,000 deductible to
proceed using its own insurance. The district court awarded Devon the $250,000
amount. Elevating Boats has not raised any argument to establish why this was
an inappropriate measure of damages.
      AFFIRMED

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