Opinion
00-868 Section "T" (1)
April 3, 2001
Before the Court is a Motion for Partial Summary Judgment filed on behalf of the defendant, American Global Maritime, Inc. d/b/a Global Maritime ("Global Maritime"). Global Maritime seeks an order holding that it will not be liable for the respective percentages of fault, if any, the Court might allocate to Versatruss Americas L.L.C. and/or Crowley Marine Services, Inc. This matter came before the Court for hearing on November 8, 2000. The parties waived oral argument and the matter was taken under submission. The Court, having considered the arguments of counsel, the evidence submitted, the record, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND:
This case arises from Chevron Global Technology Service Company's ("Chevron") refurbishment and extension of an oil and gas field in Lake Maracaibo, Venezuela. Chevron contracted with Versatruss Americas L.L.C. ("Versatruss") to design and manufacture a jacket lifting system (the "Versatruss System I") for use in the project. Due to the size of the Versatruss System I and complexity of assembly, Chevron decided to transport the Versatruss System I across the Gulf of Mexico to Lake Maracaibo fully assembled on two barges, to be towed in a catamaran formation. As such, the Versatruss System I was erected aboard two barges. The barges were towed from Amelia, Louisiana to the Eugene Island sea buoy, offshore Louisiana, by a tug owned by United Tugs, Inc. without incident. The tug CRUSADER, owned by Crowley Maritime Services, Inc. ("Crowley") then attempted to tow the barges from the Eugene Island sea buoy to Lake Maracaibo. Global Maritime was contracted to act as warranty surveyor of the tow. While in tow, on open waters, the Versatruss System I collapsed and became a total loss.
Prior to beginning the project, Chevron arranged to insure these risks with an "all risk" policy, which was issued by two Venezuelan insurers. These two companies in turn reinsured the entire risk through numerous companies providing varying percentages of reinsurance. Seven (7) of these reinsurance companies are the plaintiffs in this case.
II. ARGUMENTS OF THE RESPECTIVE PARTIES:
A. Arguments of the defendant, Global Maritime, in support of the motion:
Global Maritime seeks an order holding that it will not be liable for the respective percentages of fault, if any, the Court might allocate to Versatruss Americas L.L.C. and/or Crowley Marine Services, Inc. Global Maritime submits that Chevron contractually agreed to hold Versatruss and Crowley harmless, and as such, Chevron and its underwriters have voluntarily relinquished all rights to recover that percentage of fault attributable to Versatruss and Crowley and others who might be solidarily liable with Versatruss and Crowley. Specifically, the policy contains a subrogation provision which reads "[i]nsurers agree to waive rights of subrogation against any assured(s) and any person, company, firm or corporation whose interests are covered by this Policy . . ." The policy further includes the contractors and sub-contractors of Chevron as "other assured(s)." Accordingly, Global Maritime contends that in accordance with the provisions of this policy, both Crowley and Versatruss are contractually immune from suit by the plaintiffs.
The defendant argues that "pure" comparative fault requires that all parties at fault be assigned a percentage of liability at trial. Global Maritime asserts that it is responsible only for that percentage of fault, if any, it may be allocated at trial. Global Maritime submits that this case is analogous to McDermott v. AmClyde 511 U.S. 202, 114 S.Ct. 1461, 128 L.Ed.2d 148 (1994) wherein the Court adopted a proportionate share rule granting the non-settling parties a credit in proportion to the settling defendant's share of fault. The Court stated that joint and several liability allows a plaintiff to recover from one of multiple defendants, when plaintiffs recovery from other tortfeasors is limited by outside facts, such as a defendant's insolvency, making other defendants, rather than the innocent plaintiff responsible for the short fall. Id. When a settlement occurs, however, the plaintiff's recovery has not been limited by outside forces, but instead by plaintiffs own decision to settle. Id. Therefore, there is no reason to allocate any potential shortfall to a non-settling defendant and allow a plaintiff double recovery. Id. In this case, a waiver of subrogation provision was purposely included in the insurance policy to preclude the insurer from bringing an action against either Versatruss or Crowley. Like inMcDermott, this limitation on plaintiffs' ability to recover from these two tortfeasors was not created by outside factors, but instead by agreement Chevron's insurers freely negotiated and voluntarily entered into. There is no innocent plaintiff at risk of shouldering the burden left by an insolvent defendant, but a sophisticated commercial entity that knowingly contracted away its rights. As such, it would be unfair to force Global Maritime to be cast in judgment for any percentage of fault attributable to Versatruss and Crowley.
B. Arguments of the plaintiffs in opposition to the motion:
Plaintiffs submit that they are NOT asserting any rights of Chevron against Global Maritime to which they may be subrogated. Instead, plaintiffs are proceeding against Global Maritime on the basis of its appointment by plaintiffs to act as the warranty surveyor under the subject Cover Notes (Slips) and subject Policy of Insurance and Reinsurance Policy Endorsement for breach of its fiduciary duty as plaintiffs' agent, breach of contract, and as foreseeable injured parties of any negligence on the part of Global Maritime in approving the towage configuration of the Versatruss System I. The Cover Notes (Slips) provide that:
Movement by barges across the Gulf of Mexico and/or lifts in excess of 1000 tons to be approved by Warranty Supervision Surveyors Global Maritime at original Assured's expense.
Further, the Insurance Policy includes a Surveyor Warranty Clause which reads:
Warranted Global Maritime, Houston, approve and issue the following certification and that all their requirements/recommendations are complied with:
A. Jackets/Well Head Jackets
i Conceptual — prior to load-out Approve and certify:
a) Load out procedures
b) Tug, Barge and Stowage
c) Lifting, setting down, and securing at site procedures
ii Physical — in respect of jackets not constructed in Venezuela Supervise and certify for approval:
a) Load-out operations-prior to load-out
b) Weather conditions for sailing-prior to sailing
c) Securing of load on barge-prior to sailing
d) Tug, Barge are in conformity with i)b)-prior to sailing
e) Lifting, setting down and securing at site-prior to commencement of liftingB. Topsides
i Conceptual-prior to load out Approve and certify:
a) Load out procedures
b) Tug, Barge and Stowage
c) Lifting, setting down, and securing at site procedures
ii Physical-in respect of Topsides not constructed in Venezuela Supervise and certify for approval for:
a) Load out operations-prior to load-out
b) Weather conditions for sailing-prior to sailing
c) Securing of load on barge-prior to sailing
d) Tug, Barge are in conformity with i)b)-prior to sailing
e) Lifting, setting down and securing at site-prior to commencement of liftingC. Pipelines
Conceptual-prior to installation of new pipelines Approve and certify:
i Safe positioning of new pipelines in relation to existing Underwater pipelines of all descriptions
ii Existing pipeline crossing procedure
iii Tie in procedures to existing pipelines
iv Anchoring procedures of marine spread
v Testing procedures
(Defendant's Exhibit G). As such, the plaintiffs contend that Global Maritime was appointed by plaintiffs to act as the warranty surveyor under the subject Cover Notes (Slips) and subject Policy of Insurance and Reinsurance Policy Endorsement. Thus, Global Maritime was an agent of plaintiffs with obligations and duties owed directly to plaintiffs not dependant on any subrogation rights plaintiffs may have from Chevron. As such, Global Maritime is not solidarily liable with Versatruss and Crowley to plaintiffs, but has its own separate liability arising from its negligence and improper performance of its duties as a warranty surveyor. Accordingly, this alone is sufficient grounds for denying the motion for partial summary judgment.
Additionally, plaintiffs argue that the facts and case law make clear that Global Maritime was the agent of the Underwriters, not Chevron, in serving as warranty surveyor. In Oceanic Contractors Inc., Subsidiary of J. Ray McDermott Co., Inc. v. Underwriters at Lloyd's London, 1981 AMC 1264 (La. Civ. D. Ct., 1980), writ den. 383 So.2d 1018 (La. 1980), and 384 So.2d 805 (La. 1980), determining whether certain information had been disclosed, the Court concluded that knowledge by the warranty surveyor constituted notice and disclosure to their principle, the underwriters. Plaintiffs argue that if the underwriters as "principal" is bound by the knowledge of the warranty surveyor, then it is clear that the warranty surveyor is the agent of the underwriters. As agent to the plaintiffs, Global Maritime had a direct fiduciary and contractual duty owed to the plaintiffs. Yet, even if Global Maritime was not the agent of the plaintiffs, plaintiffs would still have a direct action against Global Maritime for negligence, not based upon any subrogation rights plaintiffs may have from Chevron.
Moreover, it is asserted that since Versatruss and Crowley are not jointly and severally liable with Global Maritime to plaintiffs, there is no basis for reducing Global Maritime's liability based on the proportionate fault of Versatruss and Crowley Plaintiffs had no contract with Versatruss or Crowley and neither owed any duty to plaintiffs. To the extent that they were negligent, liability was incurred to Chevron, not plaintiffs, and plaintiffs claim no subrogated rights of Chevron. Additionally, there was no settlement by Chevron or plaintiffs with either Crowley or Versatruss within the meaning of McDermott. A pre-loss contractual waiver of claims is not a "settlement" giving rise to a right of a joint tortfeasor to reduce its liability by the proportionate fault of such parties. It is for these reasons that the motion for partial summary judgment should be denied.
III. LAW AND ANALYSIS:
A. Law on Summary Judgment:
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment should be granted "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." Fed.R.Civ.P. 56(c). "The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact." Stults v. Conoco, 76 F.3d 651 (5th Cir. 1996), (citing Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 912-13 (5th Cir.) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323(1986). When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. The nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986) (emphasis supplied);Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995).
Thus, where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Matsushita Elec. Industrial Co., 475 U.S. at 588. Finally, the Court notes that substantive law determines the materiality of facts and only "facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1986).
B. The Court's Analysis:
This suit names only one defendant, the warranty surveyor. The plaintiffs allege that Global Maritime was employed to review procedures, check calculations, and inspect the preparations related to the catamaran towage of the Versatruss System I. Global Maritime in accordance with its duties as warranty surveyor, allegedly checked the sea fastening and towage arrangements and approved the same by issuing Certificates of Approval indicating that the towage arrangements had been carried out in a satisfactory, safe, and seaworthy manner. (Complaint paragraph 20). Plaintiffs assert however, that in fact, the arrangements were not satisfactory, safe and/or seaworthy as the Versatruss System I collapsed and became a total loss. (Complaint paragraph 21-22). The plaintiffs assert four claims for relief: (1) that Global Maritime owed plaintiffs a fiduciary duty to perform its duties as warranty surveyor in a correct and workmanlike manner; (2) that Global Maritime had a contractual obligation to review procedures, check calculations, inspect preparations and check sea fastening and towage arrangements for safety and confirm that they were carried out in a safe, satisfactory, and seaworthy manner; (3) that Global Maritime was negligent in approving and issuing Certificates of Approval; and (4) that Global Maritime was aware that plaintiffs were relying on Global Maritime to assure that the towage arrangements were safe and to notify them of any unsafe, unsatisfactory, or unseaworthy condition and refuse to issue the Certificates of Approval. (Complaint paragraphs 28-29, 32-33, 36, 39-41).
This Court finds that genuine issues of material fact exist regarding the negligence, breach of fiduciary duty and/or breach of contract on the part of Global Maritime in approving the towage configuration of the Versatruss System I in its capacity as warranty surveyor. The fact that Versatruss and Crowley may be contractually immune from suit by the plaintiffs in no way relates to the potential liability of Global Maritime as to the causes of action asserted by the plaintiffs. If the defendant believes that other parties, not named in this lawsuit, were at fault, it is free to file third-party actions and litigate its own claims against said parties.
This Court does not believe that the case of United States v. Reliable Transfer Co., Inc. 421 U.S. 397, 95 S.Ct. 1708 44 L.Ed.2d 251 (1975) lends support to Global Maritime's arguments in support of a partial summary judgment. In that case, the Supreme Court was called upon to decide if the admiralty rule of divided damages should be replaced by a rule requiring, when possible, the allocation of liability for damages in proportion to the relative fault of each party. After examining the origins of the rule, the Supreme Court held that:
The divided damages rule was established in The Schooner Catharine v. Dickinson, 17 How. 170, 15 L.Ed. 233, which is most commonly applied in cases of collision between two vessels, requires the equal division of property damage whenever both parties are found to be guilty of contributing fault, whatever the relative degree of their fault may have been.
when two or more parties have contributed by their fault to cause property damage in a maritime collision or stranding, liability for such damage is to be allocated among the parties proportionately to the comparative degree of their fault, and that liability for such damages is to be allocated equally only when the parties are equally at fault or when it is not possible fairly to measure the comparative degree of their fault.Reliable Transfer, 421 U.S. at 411, 95 S.Ct. at 1715-6. In this case, there is no maritime collision or stranding at issue. Instead, plaintiffs seek recovery from Global Maritime based upon alleged negligence, breach of fiduciary duty, and/or breach of contract as the warranty surveyor over the project. As such, this Court does not believe that Reliable Transfer requires this Court to apportion fault and relieve defendant from any liability assessed against an "empty chair" Global Maritime may point to in the course of these proceedings.
Furthermore, the defendant, Global Maritime, relies heavily on the case of McDermott v. AmClyde, supra. In McDermott, a crane owner brought an admiralty action against several joint tortfeasors, namely, the crane manufacturer, crane hook manufacturer, and steel sling suppliers, seeking to recover for damages to the crane and offshore platform deck which fell from the crane when the hook and slings broke. Before going to trial, the plaintiff settled with one of the defendants. The Supreme Court was asked to determine how a settlement with less than all of the defendants in an admiralty case should affect the liability of non-settling defendants. The Court held that the "proportionate share" approach should be applied wherein the liability of non-settling defendants should be calculated with reference to the jury's allocation of proportionate responsibility, rather than by giving the non-settling defendants a dollar-for-dollar credit for the amount of the settlement. In other words, the non-settling defendants pay no more than their share of the judgment and thus there is no need for contribution. Id. In McDermott the suit involved multiple defendants and the issue involved the effect of a settling defendant on remaining defendants. The situation presented in this case is entirely different. The plaintiffs name only one defendant as being responsible for the loss, Global Maritime. The fact that certain parties are contractually immune from suit by the plaintiffs is not akin to a settling defendant. The defendant in this case is alleged to be liable based upon its own negligence, breach of contract, and breach of fiduciary duty for the entirety of the loss. As such, allocation of proportionate responsibility is not required.
Finally, in Central State Transit Leasing Corp. v. Jones Boat Yard, Inc., 206 F.3d 1373 (11th Cir. 2000), the Court concluded that the proportionate share rule applied in that case because the two defendants had "operated in concert" to cause a single injury. It did not matter that one defendant was sued in tort while the other defendant was sued under breach of contract claims. Id. The situation in this case, however, is distinguishable. Again in this case, we have only one defendant who is alleged to have been derelict in its duties as warranty surveyor. Plaintiffs do not contend that the actions of several parties caused the loss of the Versatruss System I, instead it is alleged that based upon the negligence and breach of duties on the part of Global Maritime the loss occurred. As such, it is the finding of this Court that there is no requirement in the applicable jurisprudence that the Court apportion fault to non-parties which the defendant argues are responsible for the collapse and then limit the sole defendant's liability to said apportionment.
Therefore, it is the opinion of this Court that genuine issues of material fact exist such that partial summary judgment is inappropriate in this matter. Plaintiffs are entitled to set forth evidence that defendant, Global Maritime, is liable in this matter for the entirety of the loss. Should defendant believe that other parties are responsible and that said parties should be added to these proceedings, there are legal mechanisms to accomplish such a result.
Accordingly,
IT IS ORDERED that the Motion for Partial Summary Judgment filed on behalf of the defendant, Global Maritime, be and the same is hereby DENIED.
IT IS FURTHER ORDERED that defendant has (20) days to file any third-party actions it deems appropriate.