BARRY W. ASHE, District Judge.
Before the Court is a motion by defendant-in-crossclaim Warren Paving, Inc. ("Warren Paving") for summary judgment dismissing the claims for contribution and tort indemnity brought against it by plaintiffs-in-crossclaim Florida Marine Transporters, LLC, FMT Industries, LLC, and PBC Management, LLC (collectively, the "FMT entities").
This matter concerns a maritime personal injury, and the motion before the Court relates to a subrogation provision contained in a fully-found charter agreement. On July 1, 2018, Warren Paving and Florida Marine, LLC ("Florida Marine") entered into a fully-found charter agreement with a one-year term under which Warren Paving, the "Charterer," would hire vessels from Florida Marine, the "Owner," on a fully-found basis according to the terms and conditions set forth in the contract.
The charter party also includes the following indemnity provision:
"Vessel" is defined as the M/V Judith Ellen, M/V Samuel J, and M/V Capt WD Nunley, together with all of their appurtenances, equipment, and accessories.
Florida Marine fulfilled its insurance obligation by obtaining coverage from Continental Underwriters, Ltd. LLC ("Continental").
On November 14, 2018, Richie Wilson, a deckhand employed by PBC Management, was assigned to the crew of the Samuel J, which was working pursuant to the charter party at Warren Paving's Slats Lucas Quarry loading dock on the Cumberland River near Salem, Kentucky.
Wilson claims that he was injured when the barge positioning system's wire cable violently struck him on the left shoulder causing him to fall twelve feet down onto the inside bottom of the barge.
Florida Marine filed a motion for summary judgment seeking dismissal of Warren Paving's defense-and-indemnity claim arguing that the indemnity clause was not triggered because Wilson alleged that Warren Paving's employee was negligent in his operation of the barge positioning system, which Florida Marine argued did not stem from the operation or condition of the Samuel J, and Florida Marine did not agree to defend and indemnify Warren Paving for its own negligence.
Thereafter, Warren Paving filed a motion for summary judgment seeking dismissal of Wilson's claims against it.
Warren Paving now seeks dismissal with prejudice of the FMT entities' tort indemnity and contribution claims.
The FMT entities argue that it is premature to determine whether Warren Paving is an additional assured for Wilson's claims, and thus entitled to a waiver of subrogation.
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)). "Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which the party will bear the burden of proof at trial." Id. A party moving for summary judgment bears the initial burden of demonstrating the basis for summary judgment and identifying those portions of the record, discovery, and any affidavits supporting the conclusion that there is no genuine issue of material fact. Id. at 323. If the moving party meets that burden, then the nonmoving party must use evidence cognizable under Rule 56 to demonstrate the existence of a genuine issue of material fact. Id. at 324.
A genuine issue of material fact exists if a reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1996). The substantive law identifies which facts are material. Id. Material facts are not genuinely disputed when a rational trier of fact could not find for the nonmoving party upon a review of the record taken as a whole. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Equal Emp't Opportunity Comm'n v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014). "[U]nsubstantiated assertions," "conclusory allegations," and merely colorable factual bases are insufficient to defeat a motion for summary judgment. See Anderson, 477 U.S. at 249-50; Hopper v. Frank, 16 F.3d 92, 97 (5th Cir. 1994). In ruling on a summary judgment motion, a court may not resolve credibility issues or weigh evidence. See Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008). Furthermore, a court must assess the evidence, review the facts, and draw any appropriate inferences based on the evidence in the light most favorable to the party opposing summary judgment. See Tolan v. Cotton, 572 U.S. 650, 656 (2014); Daniels v. City of Arlington, 246 F.3d 500, 502 (5th Cir. 2001). Yet, a court only draws reasonable inferences in favor of the nonmovant "when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).
After the movant demonstrates the absence of a genuine dispute, the nonmovant must articulate specific facts and point to supporting, competent evidence that may be presented in a form admissible at trial. See Lynch Props., Inc. v. Potomac Ins. Co. of Ill., 140 F.3d 622, 625 (5th Cir. 1998); Fed. R. Civ. P. 56(c)(1)(A) & (c)(2). Such facts must create more than "some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. When the nonmovant will bear the burden of proof at trial on the dispositive issue, the moving party may simply point to insufficient admissible evidence to establish an essential element of the nonmovant's claim in order to satisfy its summary judgment burden. See Celotex, 477 U.S. at 322-25; Fed. R. Civ. P. 56(c)(B). Unless there is a genuine issue for trial that could support a judgment in favor of the nonmovant, summary judgment must be granted. See Little, 37 F.3d at 1075-76.
The Fifth Circuit has recognized there is a "fundamental principle of insurance law [under which] an insurer cannot by way of subrogation recover against its insured or an additional assured any part of its payment for a risk covered by the policy." Lloyd's Syndicate 457 v. FloaTEC, L.L.C., 921 F.3d 508, 521 (5th Cir. 2019) (emphasis in original) (quotations marks, brackets, and citations omitted); Ðow Chem. Co. v. M/V Roberta Tabor, 815 F.2d 1037, 1043 (5th Cir. 1987). This rule evolved in the jurisprudence stemming from Marathon Oil Company v. Mid-Continent Underwriters, where the Fifth Circuit, considering the scope of a waiver-of-subrogation clause in an admiralty protection and indemnity policy, stated that:
786 F.2d at 1032. To that end, waivers of subrogation are generally broader than insurance coverage and apply even when "the insurance would not have protected the [additional] assured with respect to the liability arising out of the activity in which he was engaged ... but would have insured against the type of risk that occurred." Dow Chem., 815 F.2d at 1045 (emphasis in original); see also Marathon Oil, 786 F.2d at 1303-04 ("a waiver-of-subrogation clause reinforces the provision implied by law," that an insurer cannot seek reimbursement for a covered liability, but because "the clause is not merely redundant," it also precludes an insurer from seeking to recoup amounts paid on claims even if the additional assured's liability arises from its uninsured capacity).
In Marathon Oil, the Fifth Circuit applied these principles to preclude an insurer (British Underwriters) from using an injured seaman (James Tye) to recoup from an additional assured (Marathon) amounts British Underwriters paid in settlement. Marathon chartered the M/V Ron Marc from B&C Boat Rentals under a charter party that required B & C to name Marathon as an additional assured on its protection and indemnity ("P&I") policy with a waiver of subrogation. Tye was injured while working aboard the M/V Ron Marc, and his injury was caused, in part, by the negligence of a crane operator employed by Marathon on its fixed platform. Tye filed two separate suits seeking recovery for his injuries: (1) one against British Underwriters, B&C, and Marathon in its capacity as charterer; and (2) another against Marathon in its capacity as platform owner. British Underwriters and Tye's settlement of suit number one included a provision (a notorious Mary Carter agreement) whereby Tye would repay British Underwriters a portion of any recovery he obtained from Marathon in suit number two. The Fifth Circuit held that British Underwriters as insurer could not recover any portion of its settlement with Tye from Marathon through Tye as plaintiff because Marathon was an additional assured entitled to a waiver of subrogation. 786 F.2d at 1301-04. Otherwise, British Underwriters would have been able to use Tye as its "cat's paw" to do what it was prohibited from doing directly by its waiver of subrogation.
A year later, the Fifth Circuit extended and applied these same principles to a self-insured entity in Ðow Chemical Co. v. M/V Roberta Tabor. Dow chartered the M/V Sugarland from Scott Chotin, Inc. ("Chotin") pursuant to a contract that required Dow to obtain hull and P&I insurance naming Chotin as an additional assured with a waiver of subrogation. Dow elected to self-insure for losses under $1,000,000 and was thus required to pay Chotin for any losses and indemnify Chotin for any claims that would have been covered by the required policies. The Sugarland was involved in a collision while it was towing barges that were bareboat chartered by Dow. Dow sued Chotin for damage to the barges and loss of use. The Fifth Circuit found that, as a self-insured, Dow was effectively Chotin's hull underwriter for any damage to the barges, and thus, due to the waiver of subrogation, could not recover against Chotin damages arising from the type of risk covered by the hull policy. However, Dow was permitted to pursue a lossof-use claim against Chotin because neither a traditional hull nor a P&I policy would insure against that type of risk. 815 F.2d at 1043-45.
Warren Paving advocates for a further extension of the Marathon Oil anti-subrogation principles to forbid named insureds from acting as the insurer's "cat's paw" by seeking tort indemnity and contribution from additional insureds. Tort indemnity is an "archaic concept" that has been replaced in the maritime law with the doctrine of comparative fault. Hardy v. Gulf Oil Corp., 949 F.2d 826, 833 (5th Cir. 1992) (citing United States v. Reliable Transfer Co., 421 U.S. 397 (1975)). "Indemnity between liable maritime tortfeasors is now available only `where proportionate degrees of fault cannot be measured and determined on a rational basis.'" Id. (quoting Reliable Transfer, 421 U.S. at 405). Only three viable indemnity theories remain in the maritime law: (1) "a vicariously liable or non-negligent tortfeasor [i.e., `defendants on which the law imposes responsibility even though they commit no negligent acts'] is entitled to indemnity from a co-debtor guilty of actual fault"; (2) the Ryan doctrine applicable to stevedoring operations; and (3) contractual indemnity. Id. at 833-34; see also 1 THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 5:16 (6th ed. 2019). None of these tort indemnity theories applies in this case: Wilson seeks to impose liability on the FMT entities for their own alleged negligence, the Ryan doctrine does not apply, and there is no contractual indemnity in favor of the FMT entities under the fully-found charter. Hence, the FMT entities' claim boils down to a claim for contribution arising from comparative fault.
Comparative fault means that damages are allocated "based upon the parties' respective degrees of fault." Combo Mar., Inc. v. U.S. United Bulk Terminal, LLC, 615 F.3d 599, 602 (5th Cir. 2010) (quotation marks and citations omitted). Under the general maritime law, when multiple defendants are found liable, they are also jointly and severally liable to a plaintiff. Daigle v. L & L Marine Trans. Co., 322 F.Supp.2d 717, 732 (E.D. La. 2004) (citing Hardy, 949 F.2d at 829); see also McDermott, Inc. v. AmClyde, 511 U.S. 202, 220-21 (1994); Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 260 (1979). The "rule of `joint and several liability' permits a plaintiff to obtain full legal redress from any defendant, even if that defendant's actions were not solely responsible for the plaintiff's injuries." Hardy, 949 F.2d at 829.
To reconcile comparative fault with joint and several liability, maritime law recognizes the right of contribution between joint tortfeasors. SCHOENBAUM, supra. The right of contribution allows a defendant that pays more than its pro rata share of a judgment to collect from other parties their allocated portions of the judgment based on comparative fault. Id. A contribution cause of action arises, then, when a tortfeasor actually pays more than its share of the judgment. Id. The right of contribution, however, is extinguished when the plaintiff's claims against the purported joint tortfeasor are dismissed with prejudice, which acts as a full release. AmClyde, 511 U.S. at 217; see also Lindsay v. Ports Am. Gulfport, Inc., 2016 WL 6821958, at *3 (E.D. La. Nov. 18, 2016) (recognizing that the AmClyde rule prohibiting contribution suits against settling defendants applies when a plaintiff's claims against a defendant are dismissed with prejudice and has been extended to claims for tort indemnity).
Applying the foregoing principles, the FMT entities' contribution claim against Warren Paving cannot survive for two independent reasons. First, this Court, recognizing that Wilson abandoned his claims against Warren Paving, dismissed those claims with prejudice. Under AmClyde, that dismissal acts as a full release of Warren Paving for all liability for Wilson's claims and precludes the FMT entities' claim against Warren Paving for contribution. Second, in the current posture of the case, the FMT entities are defending against Wilson's claims by trying to establish that they were not at fault, or only minimally at fault, in part by seeking to impose some or all of the comparative fault on Warren Paving. If the FMT entities succeed in proving that Warren Paving bears any responsibility for the accident (a personal injury), any amount paid by the FMT entities' insurer would necessarily be for a type of risk (viz., damages arising from a personal injury) that is insured under the Continental policies. Thus, under the anti-subrogation principles of Marathon Oil and Dow, the insurer would be prohibited from seeking to recoup from Warren Paving any amounts it paid out on the risk, and the insurer cannot use the FMT entities as named insureds to do what it could not do in its own name. It does not matter that the insurer has not been sued by Wilson as claimant (as in Marathon Oil) or that the FMT entities are not acting as self-insureds (as in Dow). That the insurance obligation exists under the fully-found charter, and the insurance is in place, requires that the waiver of subrogation be enforced against any "cat's paw" of the insurer (including its named assureds) to protect Warren Paving — as the beneficiary of the waiver of subrogation — from any liability arising out of activity for the type of risk required by the charter to be insured.
Accordingly, for the foregoing reasons,
IT IS ORDERED that Warren Paving's motion for summary judgment (R. Doc. 109) is GRANTED, and the FMT entities tort indemnity and contribution claim against Warren Paving is DISMISSED WITH PREJUDICE.