Deshotels v. SHRM Catering Services, Inc.

Full title: JOSEPH MIKE DESHOTELS, PLAINTIFF, v. SHRM CATERING SERVICES, INC.…

Court: United States Court of Appeals, Fifth Circuit

Date published: May 24, 1988

845 F.2d 582 (5th Cir. 1988)

Opinion

No. 87-4798.

May 24, 1988.

Judith R. Atkinson, Thomas E. Balhoff, Mathews, Atkinson, Guglielmo, Marks Day, Baton Rouge, La., for third-party defendant-appellant.

Thomas G. O'Brien, Edwin C. Laizer, Adams Reese, New Orleans, La., for defendant-third-party plaintiff-appellee.

Alex D. Chapman, Jr., J. Wendel Fusilier, VillePlatte, La., for amicus curiae — Joseph Mike Deshotels.

Appeal from the United States District Court for the Western District of Louisiana; John M. Dune, Jr., District Judge, Presiding.

Before GEE, RUBIN, and SMITH, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge:

An employer whose insurer became insolvent settled its employee's claim for work-related maritime injuries and sought reimbursement from the Louisiana Insurance Guaranty Association. The case raises an important and unsettled issue of Louisiana law concerning the Association's obligation to pay a claim brought for maritime-related injuries under a general workers' compensation policy with an endorsement for an employer engaging in maritime operations, and the same issue is raised in many other appeals pending before us and in a number of other cases pending in federal district courts and in state courts. The district court granted summary judgment for the employer. In our earlier opinion,¹ we decided to certify to the Louisiana Supreme Court the question whether the Association was liable.

1 Deshotels v. SHRM Catering Services, Inc., 842 F.2d 116, 117 (5th Cir. 1988).

In response to our direction,² the parties have submitted proposed statements of the case and a phrasing of the question for certification. We now certify the question stated below to the Louisiana Supreme Court. The parties' agreed statement of the facts, in which we concur, is as follows:

2 Id. at 121.

Joseph Mike Deshotels was a night cook employed by SHRM Catering Services, Inc., aboard the MR. DEMP, a jack-up rig operating in the Gulf of Mexico. On September 26, 1984, while working on the vessel, Deshotels became ill with cellulitis and had to be transported by crewboat to a hospital on land. He alleges that, while he was in a personnel basket being transferred to the crewboat, the crane operator lowering the basket dropped or slammed it to the deck of the crewboat from a height of about 10 feet. As a result, Deshotels contends, he suffered injuries to his cervical and lumbar regions that necessitated two surgical procedures.

In May 1985, Deshotels filed suit in federal district court against SHRM and Magnum-Marine Drilling Corporation, which owned the jack-up rig and employed the crane operator, for negligence under both general maritime law and the Jones Act.³ In addition to general negligence claims under the Jones Act, he asserted a claim against SHRM for maintenance and cure and against Magnum-Marine for breach of its duty to maintain a seaworthy vessel.

3 46 U.S.C. § 688.

At the time of the accident, SHRM was insured by a "Standard Workmen's Compensation and Employer's Liability Policy" issued by Transit Casualty Company, a Missouri insurer. The policy included a maritime endorsement that applied to "masters or members of the crews of vessels," noted that SHRM was engaged in offshore catering operations in Louisiana, and insured SHRM for its liability to provide transportation, wages, maintenance, and cure to an employee who had suffered bodily injury by accident or disease.

In December 1985, however, Transit was declared insolvent, and all Transit policies were cancelled, by order of the Missouri courts. SHRM then filed a third-party demand against the Louisiana Insurance Guaranty Association (LIGA) contending that its claims against LIGA were covered by the Insurance Guaranty Association Law, passed in 1970.⁴ That law created LIGA as a non-profit, unincorporated entity to pay valid claims, up to statutory limits, in the event an insurer who was a member of the Association became insolvent.⁵ The law provides that LIGA coverage "shall apply to all kinds of direct insurance, except life, health and accident, title, disability, mortgage guaranty, and ocean marine insurance."⁶ LIGA denied liability to SHRM, contending that Deshotels's claim involved "ocean marine insurance" to the extent it sought recovery under maritime laws for maritime-related injuries, such claims being risks normally and traditionally covered by "ocean marine insurance."

4 La.Rev.Stat.Ann. 22:1375-1394 (West 1978 1988 Supp.).

5 La.Rev.Stat.Ann. 22:1380, 1376.

6 La.Rev.Stat.Ann. 22:1377.

Magnum-Marine filed for bankruptcy in Texas, and all proceedings against it were stayed. Prior to trial, Deshotels settled his claim with SHRM for $75,000, so the case proceeded solely on SHRM's third-party demand against LIGA. SHRM filed a motion for summary judgment, which the parties agreed to convert to a submission for purposes of a final judgment. The parties filed briefs and submitted depositions, affidavits, and stipulated facts. The parties also agreed that LIGA would introduce testimony given in two other cases⁷ by marine insurance industry experts concerning the meaning the industry generally attached to "ocean marine insurance."

7 Blair v. Sealift, Inc., CA 84-5367 (E.D.La. 1986); Sifers v. General Marine Catering Company, CA 85-2374 (E.D.La. 1986).

The federal district court ruled that the policy was not "ocean marine insurance" and LIGA was therefore obligated to pay the amount of Deshotels's claim, as well as the expenses SHRM had incurred in the defending and prosecuting the action. The court noted that policies of this type had been figured in calculating the assessments that Transit would pay to LIGA and it would be "incongruous" to exclude this policy from the coverage provided by LIGA. The court therefore entered judgment awarding SHRM $75,000 for the amount it had paid Deshotels to settle his claim; $24,143.79 in maintenance and cure benefits it had paid him between December 1985 and August 1987; and $26,606.84 in attorney's fees it had incurred through July 31, 1987, in defense of Deshotels's claim and prosecution of its third-party demand. The court also ruled that SHRM would be entitled to attorney's fees, costs, and expenses it had incurred after July 31, 1987, these to be determined after the disposition of any appeal.

LIGA did not ask the district court to reconsider its judgment, but appealed to this court. Its appeal was consolidated with seven others raising identical or closely related issues, to await resolution by the Louisiana courts of the same question in a state case, Boudreaux v. LeBlanc Welding Construction, Inc. In October 1987, the Louisiana First Circuit Court of Appeals held in Boudreaux that a worker's compensation policy with a marine endorsement similar to the SHRM policy was not "ocean marine insurance" and LIGA therefore was liable.⁸ In February 1988, however, the Louisiana Supreme Court vacated the decision and remanded "for trial on the merits and full development of the facts concerning liability, the lower courts thereafter to rule on questions and extent of coverage."⁹

8 515 So.2d 809 (La.App. 1st Cir. 1987).

9 Boudreaux v. LeBlanc Welding Construction, Inc., 519 So.2d 771, 772 (La. 1988) (per curiam).

We then proceeded with the appeal. We decided that the question whether the policy at issue was "ocean marine insurance" should be certified to the Louisiana Supreme Court, noting that the same issue is also presented in 51 cases pending in federal courts and in 22 cases pending in Louisiana state courts.¹⁰ To present the Supreme Court with a single dispositive question, however, we first determined that should SHRM prevail on the coverage issue against LIGA, it would be entitled to $26,606.84 in attorney's fees, costs, and expenses incurred in the defense and prosecution of this claim through July 31, 1987, the amount to which the parties had stipulated, in addition to any attorney's fees, costs, or expenses it incurred thereafter in the district court or on appeal, these to be determined by the district court on remand.¹¹

10 Deshotels, 842 F.2d at 119.

11 Id. at 120-21.

CERTIFICATE FROM THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT TO THE SUPREME COURT OF LOUISIANA, PURSUANT TO RULE XII, LOUISIANA SUPREME COURT RULES

TO THE SUPREME COURT OF LOUISIANA AND THE HONORABLE JUSTICES THEREOF:

I. STYLE OF THE CASE

The style of the case in which certification is made is Joseph Mike Deshotels, Plaintiff, versus SHRM Catering Services, Inc., Defendant/Third-Party Plaintiff/Appellee, versus The Louisiana Insurance Guaranty Association, Third-Party Defendant/Appellant, Case No. 87-4798, United States Court of Appeals for the Fifth Circuit, on appeal from the United States District Court for the Western District of Louisiana.

II. QUESTION CERTIFIED TO THE SUPREME COURT OF LOUISIANA

The following question of law is hereby certified to the Supreme Court of Louisiana for instructions based upon the facts recited herein:

Does this claim for maritime-related injuries, brought on the Standard Workmen's Compensation and Employers' Liability policy with a marine endorsement, involve "ocean marine insurance" so as to be excluded, by virtue of La.R.S. 22:1377, from the coverage of the Insurance Guaranty Association Fund?

We disclaim any intention or desire that the Supreme Court of the State of Louisiana confine its reply to the precise form or scope of the question certified.

In answering this question, the Louisiana Supreme Court may also find helpful portions of the record in two other cases pending before this court, Sifers v. General Marine Catering ¹² and Blair v. Sealift, Inc. ¹³ These portions involve expert testimony concerning the meaning that the marine insurance industry attaches to "ocean marine insurance." The Supreme Court may, of course, choose not to rely on any testimony concerning this question of statutory interpretation.

12 No. 86-3494 (5th Cir. 1986).

13 No. 86-3760 (5th Cir. 1986).

This court also certifies to the Louisiana Supreme Court that its answer to this question will be determinative of the issue of the liability of LIGA in this case.

The record in this case, together with the copies of the parties' briefs, is transmitted herewith.

QUESTION CERTIFIED.

APPENDIX

FEDERAL COURT SUITS

Fifth Circuit Blair v. Sealift, Inc., Boudreaux v. Cardinal Wireline Specialists, Inc., Deshotels v. SHRM Catering Services, Inc., Green v. SHRM Catering, Inc., et al., Lafayette Crewboats, Inc. v. Louisiana Insurance Guaranty Association, McDermott v. Louisiana Insurance Guaranty Association, Naples v. Brown Root, Inc., Sifers v. General Marine Catering Company, Western District of Louisiana Aucoin v. Union Oil Company of California, Beckley v. Houtech LTD. I Partnership, Benoit v. Geophysical Services, Boudreaux v. Teledyne Movible Offshore, Breaux v. Houtech Energy, Inc., Campbell v. Union Oil Co. of California, consolidated with Campbell v. Murphy's Lease and Welding Service, Inc., Carlin v. Teledyne Movible Offshore, Cavelier v. Bruce Boat Rentals, Inc., Coe v. L L Sandblasting, Inc., Cole v. L L Sandblasting, Inc., Cox v. Magnum Marine, Inc., consolidated with Cox v. Louisiana Insurance Guaranty Association, Everage v. Oceanic Butler, Inc., Hebert v. Delmar Offshore, Inc., Henry v. Houtech Energy, Inc., et al., Martin v. Harris Well Service, Inc., Temple Drilling Company, Tidelands Limited I, and Tidelands II v. Louisiana Insurance Guaranty Association, Thornton v. Bengal Marine, Inc., Watson v. Houtech Energy, Inc., Wiltz v. Teledyne Movible Offshore, Inc., Middle District of Louisiana Crawford Company v. Temple Drilling Company, Eastern District of Louisiana Belala v. Bailey Coke Transport, Inc., Joseph A. Bladsker, Jr. v. Compass Marine Propulsion, Inc., Boudwin v. Bruce Boat Rentals, Inc., Cody v. Keyes Offshore, Inc., Daniel J. DeBlanc v. A.J. St. Pierre, Delape v. Service Machine Group, Inc., Dominick v. Houtech Inland Well Service, Inc., Doyle v. In Foods International, Duplantis v. Latex Gulf Drilling Co., Fuller v. Houtech Energy, Inc., George v. Bailey Coke Transport, Inc., Hale v. Durward Dunn, Inc., Harrison v. General Marine Catering Co., Lyons v. Bruce Boat Rentals, Inc., McLemore v. Bailey Coke Transport, Inc., Nageley v. E D Oilfield Services, Inc., Natural Gas Pipeline Company of America v. Odom Offshore Surveys, Inc., et al., Percle v. Indian Marine, Inc., Rutherford v. Nordrill, Inc., Sealift v. Val-Tex Coatings, Inc., Sheridan v. Salen Offshore Drilling Co., et al., Smedley v. Temple Drilling Company, Thornhill v. Magnum Marine Corporation,

STATE COURT SUITS

First Circuit Court of Appeals Backhus v. Transit Casualty Company, et al., 15th Judicial District Court, Lafayette Parish Trahan v. Broughton Offshore Drilling, Inc., 16th Judicial District Court Boudreaux v. LeBlanc Welding Construction, Inc., Johnson v. Quarles Drilling Corporation, Kelone v. Cardinal Wireline Specialists, Inc., Landry v. John E. Graham Sons, 19th Judicial District Court, East Baton Rouge Parish Allied Shipyard, Inc. v. Louisiana Insurance Guaranty Association, Cardinal Wireline Specialists, Inc. v. Louisiana Insurance Guaranty Association, Delmar Systems v. Louisiana Insurance Guaranty Association, Hammers v. Louisiana Insurance Guaranty Association, International Marine Terminals v. Louisiana Insurance Guaranty Association, 24th Judicial District Court, Jefferson Parish Grear v. OTTO Candies, Inc., 32nd Judicial District Court, Terrebonne Parish Lambert v. Offshore Painting Contractors, Inc., Pellegrin v. Pressure Services, Inc., Seay v. Houtech Energy, Inc., 38th Judicial District Court, Cameron Parish Cain v. Magnum Marine, Inc., 40th Judicial District Court, St. John the Baptist Parish Heacock v. M/V Miss Kate, Civil District Court, Orleans Parish Hale v. Land Marine Applicators, Inc., Oldham v. Touchard, Inc. Chevron USA, Inc., Richardson v. General Marine Catering Company, Suby v. Delmar Systems, Inc., et al., Toups v. Chevron USA, Inc., M/V Wager ABR Company, No. 86-3760 (5th Cir. 1986). No. 86-3811 (5th Cir. 1986). No. 87-4798 (5th Cir. 1987). No. 87-4387 (5th Cir. 1987). No. 87-3164 (5th Cir. 1987). No. 86-3685 (5th Cir. 1986). No. 87-3606 (5th Cir. 1987). No. 86-3494 (5th Cir. 1986). No. 85-1446 Sec. O (Laf./Opel.Div.). No. 86-1032 Sec. M (Monroe Div.). No. 84-0374 Sec. L (Laf./Opel.Div.). No. 84-2268. No. 85-2369 Sec. L (Laf./Opel.Div.). No. 84-0403 Sec. L (Laf./Opel.Div.)., No. 84-0404 Sec. L (Laf./Opel.Div.). No. 84-2267. No. 86-1762 Sec. O (Laf./Opel.Div.). No. 85-1001 (L.C.Div.). No. 85-2293 (Laf./Opel.Div.). No. 85-2975 (Alex.Div.), No. 86-1970 Sec. A (Alex.Div.). No. 87-0494 Sec. L (Laf./Opel.Div.). No. 84-3173 Sec. L (Laf./Opel.Div.). No. 86-0267 Sec. O (Laf./Opel.Div.). No. 86-3443 Sec. O. No. 87-0775 Sec. L (Laf./Opel.Div.). No. 84-0548 Sec. O. No. 85-2627 Sec. O. No. 84-2269. No. 86-512 Sec. B. No. 85-5568 Sec. I. No. 86-4477 Sec. L(3). No. 85-2611 Sec. I(6). No. 85-451 Sec. G(6). No. 84-2081 Sec. G. No. 85-0405 Sec. B(3). No. 85-3893 Sec. I. No. 85-4122 Sec. I(1). No. 86-0143 Sec. E(4). No. 85-3506 Sec. D(6). No. 86-1494 Sec. M(1). No. 84-5888 Sec. M(6). No. 86-1577 Sec. E(1). No. 87-0571 Sec. K(6). No. 86-0408 Sec. G(5). No. 85-1468 Sec. E(6). No. 84-2451 Sec. L(3). No. 84-5332 Sec. L(2). No. 85-2890 Sec. K(4). No. 85-1847 Sec. C. No. 86-5515 Sec. H. No. 84-512 Sec. D Mag. 4. No. 85-2034 Sec. L(6). No. 87-0842. No. 85-3710 Div. C. No. 74,020 Div. E (St. Mary Parish), on remand from Louisiana Supreme Court Nos. 88-C-0064, 88-C-0072 (La. Feb. 12, 1988) (per curiam). No. 75,759 (St. Mary Parish). No. 58,355 Div. G (Iberia Parish). No. 75,716 Div. A (St. Mary Parish). No. 325,176 Div. K. No. 306,706 Div. M. No. 306, 483 Div. B. No. 324,545 Div. I. No. 309,962 Div. I. No. 296,142 Div. K. No. 79,895 Div. A. No. 80,077. No. 80,180. No. 10-10561. No. 15,315. No. 85-3984 Div. I. No. 84-11562 Div. E. No. 87-83. No. 85-16992. No. 85-10527 Div. D.