Court Opinion

ID: 9393731
Source: CourtListenerOpinion
Date Created: 2023-05-11 00:00:34.106491+00
Date Added: 2024-06-11T17:18:54.876328
License: Public Domain

Case: 22-30043    Document: 00516746180       Page: 1    Date Filed: 05/10/2023

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

                               No. 22-30043                            FILED
                             Summary Calendar                      May 10, 2023
                             ____________                         Lyle W. Cayce
                                                                       Clerk
   Tremayne Jajuan Kelly,

                                                                   Plaintiff,

                                    versus

   Rodi Marine, L.L.C.,

                      Defendant/Cross-Claimant/Cross-Defendant—Appellee,

                                    versus

   Island Operating Company, Incorporated,

           Defendant/Cross-Defendant/Third Party Plaintiff/Cross-Claimant—
                                                                  Appellant,

                                    versus

   Ascot Insurance Company; Navigators Insurance
   Company; QBE UK Limited, trading as British Marine,

                                  Third Party Defendants—Appellees.
                 ______________________________

                 Appeal from the United States District Court
                    for the Western District of Louisiana
                           USDC No. 6:20-CV-512
                 ______________________________
Case: 22-30043         Document: 00516746180             Page: 2      Date Filed: 05/10/2023

                                          No. 22-30043

   Before Richman, Chief Judge, and Duncan and Oldham, Circuit
   Judges.

   Per Curiam: *
          Island Operating Company, Inc. (Island), brought a third-party
   complaint against Rodi Marine, LLC (Rodi), and its insurers asserting that
   Island is an additional insured under Rodi’s Master Time Charter Agreement
   and that it is entitled to a defense and indemnity from Rodi and its insurers
   in ongoing personal injury litigation. The district court granted Rodi’s
   motion for summary judgment and denied Island’s. Because the additional
   insured and indemnity provisions of the relevant contract contained
   limitations of coverage under which Island does not qualify, we affirm.
                                                I
          Arena Offshore, LP (Arena), is an offshore oil and gas developer
   which hires other companies to provide and transport workers to its
   platforms. Arena contracted with Island to provide crane operators for the
   platform—a transaction governed by the Arena/Island Master Service
   Contract. Arena separately contracted with C&G Boats, Inc. (C&G), to
   provide boats to transport workers to the platform—a transaction governed
   by the C&G/Arena Master Time Charter Agreement (C&G/Arena MTCA).
   C&G is a boat broker that brokered the boat job to Rodi—a transaction
   governed by the Rodi/C&G MTCA. This dispute arises from the interplay
   between the C&G/Arena MTCA and the Rodi/C&G MTCA. Tremayne
   Kelly, a Rodi employee, was injured while an Island-operated crane was about
   to begin loading workers from a Rodi boat onto the Arena platform. Kelly

          _____________________
          *
              This opinion is not designated for publication. See 5th Cir. R. 47.5.

                                                    2
Case: 22-30043        Document: 00516746180             Page: 3      Date Filed: 05/10/2023

                                         No. 22-30043

   sued Island, Arena, and Rodi for negligence under general maritime law, the
   Jones Act, and the Longshore and Harbor Workers’ Compensation Act.
           Island then filed a cross claim/third-party complaint against Rodi,
   arguing that the Rodi/C&G MTCA granted Island additional insured status,
   and that Rodi was obligated to a defend and indemnify Island in the Kelly
   lawsuit. Rodi argued that the coverage in the Rodi/C&G MTCA was limited
   to the extent of the coverage in the C&G/Arena MTCA, which did not cover
   Island. The parties submitted a Joint Statement of Uncontested Material
   Facts. The district court conducted a hearing, after which it granted Rodi’s
   motion for summary judgment and denied Island’s, “for the reasons orally
   assigned” at the hearing and dismissed Island’s cross claim/third-party
   complaint. Island filed a timely notice of appeal.
                                              II
           “‘We review a grant of summary judgment de novo, applying the
   same standard as the district court.’ Summary judgment is appropriate ‘if
   the pleadings, the discovery and disclosure materials on file, and any
   affidavits show that there is no genuine issue as to any material fact and that
   the movant is entitled to judgment as a matter of law.’” 1 There are two
   contracts relevant to this dispute—the first is the C&G/Arena MTCA in
   which C&G promised to provide additional insured status to Arena and to
   defend and indemnify it. Neither party disputes this contract did not extend
   those obligations to Arena’s contractors, and Island is Arena’s contractor.
   The second contract at issue is the Rodi/C&G MTCA. The parties disagree
   about whether the additional insured and indemnity provisions in the

           _____________________
           1
            Combo Mar., Inc. v. U.S. United Bulk Terminal, LLC, 615 F.3d 599, 604 (5th Cir.
   2010) (citation omitted) (first quoting QBE Ins. Corp. v. Brown & Mitchell, Inc., 591 F.3d
   439, 442 (5th Cir. 2009); and then quoting Fed. R. Civ. P. 56(c)).

                                                   3
Case: 22-30043         Document: 00516746180                Page: 4       Date Filed: 05/10/2023

                                           No. 22-30043

   Rodi/C&G MTCA require more coverage than what is required in the
   C&G/Arena MTCA.
           This dispute involves a maritime contract which is “governed by
   maritime law.” 2           “A maritime contract containing an indemnity
   agreement . . . should be read as a whole and its words given their plain
   meaning unless the provision is ambiguous.” 3 “‘Disagreement as to the
   meaning of a contract does not make it ambiguous, nor does uncertainty or
   lack of clarity in the language chosen by the parties.’ Where ‘the written
   instrument is so worded that it can be given a certain definite legal meaning
   or interpretation, then it is not ambiguous . . . .’” 4
                                                 A
           We start with the text of Section 5 of the Rodi/C&G MTCA. Section
   5.3, which addresses the various insurance policies, states:
           [T]he Customer [Arena]’s agents, servants, contractors
           [Island] and sub-contractors at every tier, employees, co-
           lessees, co-venturers, and related, subsidiary, and affiliated
           corporations, (collectively, the “Additional Assureds”) shall
           by this provision, but subject to the limitation provided below,
           without listing specific legal names, be additional assureds
           under the policy with full waiver of subrogation in favor of the
           Additional Assureds.

           _____________________
           2
             Theriot v. Bay Drilling Corp., 783 F.2d 527, 538 (5th Cir. 1986) (first citing Lirette
   v. Popich Bros. Water Transp., Inc., 699 F.2d 725, 728 n.11 (5th Cir. 1983); and then citing
   Transcon. Gas Pipe Line Corp. v. Mobile Drilling Barge, 424 F.2d 684, 691 (5th Cir. 1970)).
           3
             Breaux v. Halliburton Energy Servs., 562 F.3d 358, 364 (5th Cir. 2009) (citation
   omitted) (quoting Weathersby v. Conoco Oil Co., 752 F.2d 953, 955 (5th Cir. 1984) (per
   curiam)).
           4
            Id. (citation omitted) (quoting Weir v. Fed. Asset Disposition Ass’n, 123 F.3d 281,
   286 (5th Cir. 1997)).

                                                      4
Case: 22-30043      Document: 00516746180          Page: 5    Date Filed: 05/10/2023

                                    No. 22-30043

   The “subject to the limitation below” language is repeated twice more, in
   the next two sentences, and that limitation is given in the last sentence of the
   section: “In all instances, the coverage available to the Additional
   Assureds other than C&G hereunder shall be no greater than the
   coverage required to be provided by C&G under the terms of its
   agreement with any particular Additional Assured.” Section 5.6, which
   addresses general liability coverage, follows the same pattern, including
   “subject to the limitation below” three times in the paragraph and ending
   with the same limitation.
          The parties agree that Island, as a contractor of Arena, is an Additional
   Assured pursuant to the above language. The language of the limitation thus
   can be read: “the coverage available to [Island] hereunder shall be no greater
   than the coverage required to be provided by C&G under the terms of its
   agreement with any particular Additional Assured.” Island agrees that the
   C&G/Arena MTCA is an agreement between C&G and “any particular
   Additional Assured.” So the limitation can be read: “the coverage available
   to [Island] hereunder shall be no greater than the coverage required to be
   provided by C&G under the terms of [the C&G/Arena MTCA].”
          Island does not argue that it is entitled to coverage under the language
   of the C&G/Arena MTCA, likely because the plain wording of that contract
   does not include contractors or subcontractors like Island. Instead, Island
   argues that it is entitled to whatever coverage Arena is entitled to under the
   C&G/Arena MTCA. However, the language of the limitation says that the
   coverage available to Island shall be no greater than what C&G owes under
   the C&G/Arena MTCA, it does not say that the coverage available to Island
   shall be no greater than what C&G owes to Arena under the C&G/Arena
   MTCA. Further, it would not make sense for what is three times referred to
   in that paragraph as a “limitation” to expand the coverage Island is owed to
   also include whatever Arena is owed. Island’s reading of the provision as an

                                              5
Case: 22-30043          Document: 00516746180                  Page: 6        Date Filed: 05/10/2023

                                              No. 22-30043

   expansion of coverage makes even less sense considering the purpose of these
   contracts: to broker the boat supply. C&G agreed to provide boats to Arena
   in the C&G/Arena MTCA. C&G then brokered that responsibility to Rodi,
   who agreed to grant additional insured status and indemnification, but not
   any more than what C&G had already promised in the prior agreement.
            Island next argues that the limitation only refers to the type of
   coverage—not who is covered. For example, if Kelly was suing for punitive
   damages but the C&G/Arena MTCA said C&G did not owe coverage for
   punitive damages, then Rodi would not owe Island coverage for punitive
   damages. Rodi responds that the types of coverage it owes Island are zero
   even if Island is listed as an Additional Assured, because of the limitation
   above. An additional insured with no coverage is not entitled to anything. 5
   The coverage limitation is not designed to limit only risks like punitive
   damages.
            Island also argues that there can be no “coverage limitations” because
   the parties stipulated that “should it be determined I[sland] is entitled
   to . . . additional insured coverage . . . for the Kelly claim, there are no
   provision[s] in the British American P&I policy, or the Ascot/Navigators
   excess Bumbershoot policy, that would give I[sland] anything less than full
   coverage for the Kelly loss.” However, this stipulation refers to the coverage
   limits in the British American and Ascot/Navigators policy, it does not
   stipulate to any coverage amount pursuant to the Rodi/C&G MTCA.
            Island argues in the alternative that if this court agrees with Rodi’s
   interpretation that the coverage Rodi owes is not greater than what C&G
            _____________________
            5
              See Hardy v. Hartford Ins. Co., 236 F.3d 287, 290 (5th Cir. 2001) (“Assuming all
   the allegations of the petition are true, the insurer must defend, regardless of the outcome
   of the suit, if there would be both (1) coverage under the policy and (2) liability to the plaintiff.”
   (emphasis added)).

                                                         6
Case: 22-30043      Document: 00516746180           Page: 7     Date Filed: 05/10/2023

                                     No. 22-30043

   owed in its other contracts, there is a different contract under which C&G
   owed additional insured status and indemnity to Island—the 1999
   C&G/Island MTCA. The C&G/Island MTCA does say that C&G “shall
   name Charterer [Island] its affiliated and subsidiaries, and their respective
   underwriters . . . as Additional Assureds.” However, this contract would not
   require C&G to grant Island coverage or indemnify or defend Island in the
   present suit, because this contract did not cover the Kelly incident. The
   C&G/Island MTCA was created because “CHARTERER [Island] from
   time to time desires to Time Charter Vessels from OWNER [C&G]” and
   contemplates “Short Form Charter Agreements” to govern those charters,
   incorporating this MTCA. There is ample evidence in the C&G/Island
   MTCA that it only applies when Island is chartering vessels from C&G; the
   whole contract is structured around those Short Forms to be executed for
   vessel charters. The specific additional insured and indemnity provisions
   support that understanding.       Here, both parties jointly stipulated that
   “I[sland] did not charter the [boat] from or through either C&G or Rodi
   Marine on the date of the Kelly accident that gives rise to this claim,” which
   explains why there was no Short Form charter here. It was Arena that hired
   Rodi’s boat through C&G, not Island. C&G did not owe Island coverage for
   this incident under the C&G/Island MTCA, and so neither does Rodi.
                                           B
          The text of the defense and indemnity provisions in the Rodi/C&G
   MTCA is similarly limited. Section 5.11 reads:
          Notwithstanding said insurance provisions above, it is further
          understood and agreed that Owner agrees to defend, indemnity
          [sic] and hold Charterer and Customer Group harmless from
          and against any claim for damage to property owned by any
          person or entity, or for personal injury, illness to or death of any
          person . . . Notwithstanding the foregoing, the indemnity

                                               7
Case: 22-30043        Document: 00516746180              Page: 8       Date Filed: 05/10/2023

                                         No. 22-30043

           provided to any member of Customer Group hereunder
           shall be no greater than the indemnity owed by Charterer
           to any member of Customer Group under the terms of
           Charterer’s own agreement, if any, with Charterer
           Customers.
   Using the defined terms from Section 1, that limitation reads: the indemnity
   provided to Island shall be no greater than the indemnity owed by C&G to
   Island under the terms of C&G’s own agreement, if any, with Arena. We
   reject Island’s argument that this provision limits the scope of the indemnity
   rather than who is indemnified for the same reasons discussed above. Island
   argues that the use of the word “indemnity” rather than “indemnitee”
   bolsters its interpretation. The distinction is illusory—if the indemnity owed
   to a company is zero, that company is not an indemnitee. The fact that the
   contract could have accomplished the same goal by saying no one will be
   indemnified who is not an indemnitee under the terms of another agreement
   does not change our analysis.
           Island next argues that the section requires Rodi to defend, indemnify,
   and hold harmless, which are separate obligations, 6 and the limitation only
   applies to the indemnification portion. Therefore, according to Island, even
   if the limitation means Rodi does not have to indemnify Island, Rodi still must
   defend Island.
           However, the word indemnity read in the context of the paragraph as
   a whole 7 refers to the entire suite of indemnity obligations, which is
           _____________________
           6
             See id. (“The insurer’s duty to defend the insured is generally broader than the
   duty to indemnify.”).
           7
            See One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 271 (5th Cir.
   2011) (“‘The primary concern of a court in construing a written contract is to ascertain the
   true intent of the parties as expressed in the instrument.’ When interpreting contract
   language, courts must strive to give meaning to ‘every sentence, clause, and word to avoid
   rendering any portion inoperative.’” (citation omitted) (first quoting Nat’l Union Fire Ins.

                                                    8
Case: 22-30043         Document: 00516746180               Page: 9      Date Filed: 05/10/2023

                                            No. 22-30043

   supported both by the use of indemnity in the other contracts in the record
   and by the absurd outcome that would result from Island’s reading. In the
   sentences right before the ones quoted above, the contract says, “It is further
   recognized that Charterer may be obligated by Charterer Customers to
   provide certain indemnification to the Charterer Customers. . . . It is the
   intent of this Agreement that these obligations be assumed by Owner.” It is
   reasonable to assume this reference to “certain indemnification” included
   the entire suite even though defend and hold harmless were not separately
   spelled out. 8 This is supported by the fact that the other three contracts with
   indemnity obligations in the record all use the phrase “indemnity” to
   reference the entire suite of obligations. Rodi owes no duty to indemnify,
   defend, or hold Island harmless under the Rodi/C&G MTCA.
                                        *        *         *
           For the foregoing reasons, we AFFIRM.

           _____________________
   Co. of Pittsburgh v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (per curiam); and then
   quoting Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 741 (Tex. 1998))).
           8
             See Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 333 (5th Cir. 1981) (“A
   contract of indemnity should be construed to cover all losses, damages, or liabilities which
   reasonably appear to have been within the contemplation of the parties, but it should not
   be read to impose liability for those losses or liabilities which are neither expressly within
   its terms nor of such a character that it can be reasonably inferred that the parties intended
   to include them within the indemnity coverage.”).

                                                     9