Opinion
CIVIL ACTION NO. 02-3682, SECTION "R" (1)
May 17, 2004
ORDER AND REASONS
After a bench trial in this matter, by order and reasons dated April 8, 2004, the Court awarded defense and indemnity costs to plaintiff Henry's Marine Service, Inc. and dismissed Henry's bad faith claims against defendants Fireman's Fund Insurance Company and New York Marine and General Insurance Company. The Court also ordered plaintiff to submit a brief under Federal Rule of Civil Procedure 54 and the local rules of this Court on the total amount of attorneys' fees that it claims since January 23, 2004, the date of the last invoice submitted by plaintiff's attorneys, Dugan Browne, before trial. The Court is now in receipt of plaintiff's Rule 54 Motion for Additional Attorney's Fees, Costs, and Expenses, and Fireman's opposition to the motion. Having considered the briefs and the applicable law, the Court grants Henry's motion for additional attorneys' fees, costs, and expenses in part and denies it in part. The Court further vacates its prior order and reasons dated April 8, 2004 to the extent that it awarded attorneys' fees to Dugan Browne for litigation of the insurance coverage issue.
In its opposition to Henry's motion, Fireman's Fund argues that under Louisiana law, an insured is not entitled to recover attorney's fees associated with the litigation of insurance coverage. Fireman's Fund is correct. In a diversity case, "state law governs the award of fees," including attorneys' fees. Olander v. Compass Bank, — F.3d —, 2004 WL 727399 (5th Cir. Apr. 6, 2004). It is well-established Louisiana law that an insured may not recover attorneys' fees in connection with insurance coverage litigation unless a statute or the insurance contract specifically provides for them. See Steptore v. Masco. Constr. co., Inc., 643 So.2d 1213, 1218 (La. 1994); Audubon Trace Condominium Ass'n, Inc. v. Brignac-Derbes, Inc., 862 So.2d 157, 160 (La.Ct.App. 2003); Menard v. Lafleur, 737 So.2d 844, 846 (La.Ct.App. 1999).
Here, no statute provides for attorneys' fees. Although Henry's brought claims against Fireman's Fund and New York Marine under Louisiana Revised Statute 22:1220, which provides for the recovery of attorneys' fees, the Court ruled against Henry's on this issue. In addition, the Court finds that the language in the insurance contract does not allow for the recovery of attorneys' fees. The language in the contractual extension provides that
[u]nderwriters hereon agree to give their permission for the Insured to enter into Time or Voyage Charter Agreements whereby the Insured agrees to hold harmless and indemnify the Time or Voyage Charterer for any and all sums said Time or Voyage Charterer may be legally obligated to pay including legal and other expenses arising out of the use, management or operation of such Time or Voyage chartered vessels by the Insured. This insurance is extended to cover the Insured for any such sums as the Insured may be legally obligated to pay including legal and other expenses as a result of the signing of such Time or Voyage Charter Agreements by the Insured.
(Pl.'s Trial Ex. 2) (emphasis added).
Further, the body of the insurance policy provides that "[u]nderwriters agree to reimburse [Henry's] of all sums which [Henry's] shall become obligated to pay, by reason of the liability imposed upon it by law, arising out of the brokering, for consideration paid [Henry's] as commission, of vessels." ( See id.) (emphasis added). The Court does not find that this language is broad enough to include recovery by Henry's of attorneys' fees. Henry's coverage litigation expenses were not obligations imposed by law or amounts that Henry's was legally obligated to pay under its indemnity agreements. The Court interprets these provisions as requiring Fireman's Fund to pay those fees and expenses, including attorneys' fees, that Henry's incurred as a result of its defense of Tetra Applied Technologies, L.P. in the underlying state court lawsuits. To interpret it otherwise would be to read the provision too broadly.
Henry's also seeks costs. Unlike attorneys' fees, federal law, specifically Federal Rule of Civil Procedure 54(d), governs an award of costs. See Carter v. General Motors Corp., 983 F.2d 40, 43-44 (5th Cir. 1993). Rule 54(d) provides that "costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs." FED. R. CIV. P. 54(d). Because Henry's is the prevailing party, the Court exercises its discretion and award Henry's its costs. This amount totals $4,883.53. (See Pl.'s Trial Ex. 29; Pl.'s Mot. Additional Att. Fees, Ex. A). Accordingly,
The Court calculated defense costs pursuant to plaintiff's Exhibit A, on which plaintiff listed its expenses at the end of the invoice after the attorneys listed their total hours and fees. The Court then located the corresponding, although unlabeled, expense sections in plaintiff's trial exhibit number 29 and totaled them.
The Court denies Henry's motion in part and grants it in part to the extent that the Court awards Henry's $4,883.53 in costs.
The Court further vacates its order and reasons dated April 8, 2004 to the extent that it awarded attorneys' fees to Dugan Browne in connection with the insurance coverage litigation.
IT IS FURTHER ORDERED that plaintiff submit a judgment to the Court in accordance with this order and the order and reasons dated April 8, 2004, no later than May 24th, 2004.