Court Opinion

ID: 6348953
Source: CourtListenerOpinion
Date Created: 2022-06-13 00:00:26.373328+00
Date Added: 2024-06-11T08:42:54.280683
License: Public Domain

Case: 21-30520     Document: 00516353394          Page: 1    Date Filed: 06/10/2022

           United States Court of Appeals
                for the Fifth Circuit                            United States Court of Appeals
                                                                          Fifth Circuit

                                                                        FILED
                                                                    June 10, 2022
                                   No. 21-30520
                                                                   Lyle W. Cayce
                                                                        Clerk

   XL Insurance America, Incorporated, as subrogee of
   Boh Bros. Construction Company, L.L.C.,

                                                            Plaintiff—Appellant,

                                       versus

   Turn Services, L.L.C.,

                                                            Defendant—Appellee.

                  Appeal from the United States District Court
                     for the Eastern District of Louisiana
                            USDC No. 2:20-cv-427

   Before Smith, Wiener, and Southwick, Circuit Judges.
   Jacques L. Wiener, Jr., Circuit Judge:
          Plaintiff-Appellant XL Insurance America, Inc. (“XL”), as subrogee
   of Boh Bros. Construction Co., L.L.C. (“Boh Bros.”), challenges the district
   court’s summary judgment in favor of Defendant-Appellee Turn Services,
   L.L.C. (“Turn”).
          For nearly a century, Robins Dry Dock & Repair Co. v. Flint, 275 U.S.
   303 (1927), has limited plaintiffs’ ability to recover “purely economic claims
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                                              No. 21-30520

   . . . in a maritime negligence suit.”1 “[A]bsent physical injury to a proprietary
   interest”—or one of a few other limited exceptions—plaintiffs asserting such
   claims are out of luck.2 As Chief Justice Holmes noted there, “a tort to the
   person or property of one man does not make the tort-feasor liable to another
   merely because the injured person was under a contract with that other
   unknown to the doer of the wrong.”3
              We have faithfully applied this “pragmatic limitation on the doctrine
   of foreseeability.”4 We have explained in doing so that its purpose is “to limit
   the   consequences             of    negligence       and   exclude    indirect     economic
   repercussions, which can be widespread and open-ended.”5 Put another way,
   the “spectre of runaway recovery lies at the heart of the Robins Dry Dock
   rubric.”6
              No such spectre lurks among us today. For that reason—and
   notwithstanding the district court’s thoughtful disposition of the matter—
   we vacate and remand for further treatment consistent with this opinion.
                                     I. OPERATIVE FACTS
              Plains Marketing LP (“Plains”) hired Boh Bros. to construct a dock
   in the Mississippi River. The project required Boh Bros. to install mooring
   dolphins in the river. It is undisputed that Plains owned the dolphins.

              1
                  In re Taira Lynn Marine Ltd. No. 5, LLC, 444 F.3d 371, 377 (5th Cir. 2006).
              2
                  Id.
              3
                  Robins Dry Dock, 275 U.S. at 309 (citing Nat’l Sav. Bank v. Ward, 100 U.S. 195
   (1879)).
              4
            Plains Pipeline, L.P. v. Great Lakes Dredge & Dock Co., 620 F. App’x 281, 285 (5th
   Cir. 2015) (per curiam) (quoting Louisiana ex rel. Guste v. M/V TESTBANK, 752 F.2d 1019,
   1032 (5th Cir. 1985) (en banc)).
              5
             Catalyst Old River Hydroelectric Ltd. P’ship v. Ingram Barge Co., 639 F.3d 207, 210
   (5th Cir. 2011) (citing TESTBANK, 752 F.2d at 1022).
              6
                  Amoco Transp. Co. v. S/S Mason Lykes, 768 F.2d 659, 668 (5th Cir. 1985).

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                                        No. 21-30520

            On the night of February 12, 2019—while the construction project
   was ongoing—the M/V AFFIRMED, a vessel owned by Turn, allided with
   MD-9, one of the mooring dolphins. Fortunately, Boh Bros. had procured a
   builder’s risk insurance policy from XL covering the project. The policy
   covered Boh Bros. as the named insured and Plains as an additional insured
   party.
            Boh Bros. repaired the dolphin at a cost of $1.254 million and
   submitted a claim to XL. XL paid Boh Bros. that amount less the deductible.
   XL also paid Boh Bros. $485,000, which Boh Bros. remitted to Plains after
   subtracting Plains’s share of the deductible.7
            XL, acting as Boh Bros.’s subrogee, sued Turn in an effort to recover
   the more than $1.7 million that XL had paid out. The district court, however,
   granted Turn’s summary judgment motion, concluding that Robins Dry Dock
   precluded XL from recovering from Turn. XL timely appealed.
                              II. Standard of Review
            We review a summary judgment de novo.8 Summary judgment is
   proper only if “the movant shows that there is no genuine dispute as to any
   material fact and the movant is entitled to judgment as a matter of law.” 9
                                     III. Analysis
                                      A. Repair Costs
            As noted, the district court rendered summary judgment for Turn in
   the belief that Robins Dry Dock compelled that outcome. The court concluded

            7
             The record does not establish what this $485,000 payout covered, although
   common sense and record evidence suggest it was for a loss incurred by Plains, the
   recipient. XL “concedes that [it] . . . was not for direct physical damage to the dock
   project/MD-9.”
            8
           Taira Lynn, 444 F.3d at 376 (citing Am. Home Assurance Co. v. United Space All.,
   LLC, 378 F.3d 482, 486 (5th Cir. 2004)).
            9
                Fed. R. Civ. Proc. 56(a).

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                                               No. 21-30520

   that a decision to the contrary would “undoubtedly contradict the doctrine’s
   [policy against] limitless liability.” We disagree. A claim for the costs of
   repairing damage caused by an allision presents no such risk. Robins Dry Dock
   therefore does not bar XL’s claim as it relates to the $1.254 million in repair
   costs.
            “It is unmistakable that the law of this circuit does not allow recovery
   of purely economic claims absent physical injury to a proprietary interest in
   a maritime negligence suit.”10 As noted above—and by the district court—
   this rule exists to avoid the possibility of limitless liability.11
            We have emphatically rejected calls to abandon the physical injury
   requirement.12 In doing so, though, we have explained that the
   requirement—like the common law principle from which it emerged—
   applies to claims for “pure economic losses.”13 We have also made clear that
   “Robins Dry Dock is inapposite” when “the risk of double recovery from the
   tortfeasor is not extant.”14 In Amoco Transport Co. v. S/S Mason Lykes—
   which we decided mere months after TESTBANK—we concluded that the
   owners of cargo aboard a ship involved in a collision could recover their
   economic losses, despite the cargo’s being undamaged.15 We reached this
   conclusion because, given a risk-shifting provision in the cargo owners’

            10
                 Taira Lynn, 444 F.3d at 376.
            11
                 See, e.g., Catalyst, 639 F.3d at 210.
            12
                 TESTBANK, 752 F.2d at 1032.
            13
                 Id. at 1027.
            14
             Amoco, 768 F.2d at 668 (citing Venore Transp. Co. v. M/V STRUMA, 583 F.2d
   708 (4th Cir. 1978)).
            15
                 Id. at 660–62.

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                                      No. 21-30520

   agreement with the ship owner, there was no risk of “double recovery, much
   less runaway recovery.”16
          If Robins Dry Dock was inapposite to that situation, it must also be
   inapposite to the instant case. Unlike the cargo owners in Amoco, Boh Bros.
   (XL’s subroger) did not suffer a “pure economic loss.” Rather, the $1.2
   million claim was paid for the cost of repairing physical damage to the
   dolphin. The fact that Plains owned the dolphin is irrelevant: The $1.2
   million went towards repairing physical damage, and that is dispositive. As in
   Amoco, there is no risk of “runaway recovery.”17
          On appeal, Turn devotes significant ink to its contention that Boh
   Bros.’s responsibility for repairing the dolphin does not equate to a
   proprietary interest in it. Turn similarly contends that the risk of loss for the
   dolphin was not shifted from Plains to Boh Bros. by virtue of their contract.
   (If it were, an exception to Robins Dry Dock would apply.)18 We are
   particularly skeptical of the second claim: If Boh Bros. bore no risk for the
   project, why would it pay for the repairs? Surely that is enough to warrant
   applying the risk-shifting exception to Robins Dry Dock. We need not answer
   this question definitively, though, because we hold that Robins Dry Dock is
   not implicated by the $1.2 million that XL paid Boh Bros. to cover the repairs.
                                  B. Economic Damages
          The remaining $485,000 of XL’s claim presents a slightly different
   issue. As noted, the record is less than clear regarding the nature of the
   damages covered by this payment from XL. It concedes, however, that the

          16
               Id. at 668.
          17
               Id.
          18
               See id.

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                                              No. 21-30520

   money it paid “was not for direct physical damage to the dock project/MD-
   9.” We may assume for purposes of this appeal, then, that the subject
   payment covered some sort of economic damages. Record evidence
   indicates, however, that Boh Bros. passed the $485,000 along to Plains,
   subtracting only an agreed-upon portion of the deductible. It is also
   undisputed that Plains owned the damaged dolphin at the time of the allision.
   And, as noted, the dolphin suffered extensive damage.
          We perceive no reason, then, that Robins Dry Dock bars recovery in
   this situation. It is clear, after all, that the doctrine would be inapplicable here
   if XL had paid the money directly to Plains, because Plains had a proprietary
   interest in the damaged dolphin. That the money passes through the hands
   of an intermediary—here, Boh Bros.—is irrelevant to the concerns animating
   Robins Dry Dock.19 Regardless, the district court is well-positioned to make
   any additional findings of fact that may prove necessary regarding such claim.
                                           IV. Conclusion
          We conclude that the rule of Robins Dry Dock does not bar recovery by
   XL. We therefore VACATE the district court’s judgment and REMAND
   for further proceedings consistent with this opinion.

          19
               See, e.g., id. at 668–69.

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