Opinion
Civil Action 98-3326, Section "K"(5)
January 16, 2001
Before the Court is Gottlieb, Barnett Bridges ("GBB") motion for summary judgment against St. Paul Fire Marine Insurance Company ("St. Paul"). The Court heard oral argument on the motion on December 1, 2000 and has considered the motions, memoranda and relevant law and finds for the reasons that follow.
I. Background
The Court has recited the underlying facts of this case with considerable detail through the plethora of orders issued to this date. For the motion before the Court, only relevant insurance facts will be presented.
Associated Marine Terminals, LLC ("AMT") and Associated Marine Equipment, LLC ("AME") sued GBB, among others, for damages caused by the toppling crane to the vessel MARY ANN, which was docked at the Convent terminal on June 11, 1998. St. Paul, as the hull and protection and indemnity insurer of Associated Marine Terminals and Associated Marine Equipment, paid those entities approximately $1.2 million for damages sustained by the MARY ANN.
St. Paul subsequently asserted a subrogation claim against GBB seeking to recover the money it paid for property damage to Associated Marine Terminals and Associated Marine Equipment. St. Paul's right's are as legal subrogee to AME and AMT because there is no contractual subrogation clause in the AME/AMT — St. Paul agreement.
Coincidentally, in addition to providing property insurance to AMT and AME, St. Paul is GBB's commercial general liability insurer under separate primary and umbrella policies. The CGL policy and umbrella excess policy each exclude coverage for damages resulting from the rendition of professional services; indeed, St. Paul expressly reserved its right to deny coverage to GBB under the professional services exclusion. Professional liability insurance is provided by a separate insurer, CNA.
GBB seeks summary judgment against St. Paul, claiming that as the insurer of both the plaintiffs (AMT and AME) and the defendant (GBB), albeit under separate policies, St. Paul cannot sue its own insured and thus should be dismissed from the lawsuit. St. Paul argues that Louisiana's anti-subrogation rule has never been applied to a situation such as the one before the Court, where each party is an insured to a common insurer under completely different policies. Additionally, St. Paul argues that material questions of fact remain as to whether or not it has an obligation to provide coverage to GBB, and whether St. Paul can pursue GBB to the extent that its other insurer, CNA, is liable for coverage.
II. Standard for Motion for 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, 656, (5th Cir. 1996), (citing Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 912-13 (5th Cir. 1992) (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); 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. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986). The court notes that the substantive law determines 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). Where the opposing party bears the burden of proof at trial, the moving party need not submit evidentiary documents to properly support its motion, but need only point out the absence of evidence supporting the essential elements of the opposing party's case. See Saunders v. Michelin Tire Corp., 942 F.2d 299, 301 (5th Cir. 1991).
III. Analysis
It is settled that the under Louisiana law, an insurer may not sue its insured for a risk covered under the policy. See e.g., Peavey Co. v. M/V ANPA, 971 F.2d 1168 (5th Cir. 1992); Dow Chemical Co. v. M/V Roberta Tabor, 815 F.2d 1037 (5th Cir. 1987); U.S. v. St. Bernard Parish, 756 F.2d 1116 (5th Cir. 1985). Whether or not that rule applies to the case where the assureds are covered under different policies is not quite so clear. Movants cite Johnson v. Deselle, 596 So.2d 261 (La.App. 3 Cir. 1992) for such a proposition. The holding of the Johnson was that a debt can be extinguished by offset or confusion when the insurer is both a creditor and debtor in the same lawsuit. InJohnson, State Farm insured the plaintiff under a homeowners policy and a contractor under a separate policy. When the plaintiffs house was fire damaged, State Farm paid under the homeowners policy. Id. at 262. Plaintiff then sued the contractor and its insurer (also State Farm). When State Farm was cast in judgment for the contractors debt, it claimed that the amounts paid under the homeowners policy should be offset against the judgment. Id. at 266.
The court decided that there was no offset in that case by analyzing whether the insurer, unquestionably a debtor to the homeowner via the judgment, was also a subrogated creditor against the defendant for the fire damage. On the conventional subrogation claim, the insurer failed to achieve subrogation through the clear terms of the contract. Id. at 267. On the legal subrogation ground, the court of appeals stated that the insurer was not a subrogee to plaintiff's rights because it did not pay a debt it owned "with others or for others and against who has recourse against those others as a result of payment", as required to become legally subrogated under civil code article 1829(3). The court stated that the insurer did not have a right of recourse against the defendant because it was also his insurer and thus could not be a legally subrogated creditor through payment under plaintiff's homeowners policy. Id. at 268. GBB argues that the reasoning of Johnson mandates that the anti-subrogation rule applies when the there are multiple policies. Unfortunately, reliance on Johnson alone does not supply the answer in this case.
In deciding whether to offset the homeowners payment from defendants debt, the real issue in Johnson was whether the insurer was both a creditor and debtor for the same debt. In the cases where this question has arisen, there is usually no question that the insurer is liable for the defendant's debt.See, e.g., Johnson v. Deselle, 596 So.2d 261 (La.App. 3 Cir. 1992) (legal subrogation); Norris v. Allstate Insurance Co., 293 So.2d 918 (La.App. 3 Cir. 1974) (conventional subrogation); AM Pest Control Service, Inc. v. Fejta Construction Co., 338 So.2d 946 (La.App. 4 Cir. 1976) (conventional subrogation).
Although the Court finds the result of Johnson inequitable in that it allows a plaintiff to double recovery, St. Paul has not convinced the Court that the case before it is distinguishable from Johnson. That being said, St. Paul has demonstrated that CNA also insures GBB. Thus, even under Johnson, St. Paul could legitimately assert claims against GBB for which CNA is ultimately liable. This is especially true considering that, in the event GBB is found liable, St. Paul's policy may exclude coverage for professional negligence. Thus, in order to mitigate the inequitable result of Johnson, in essence allowing double recovery by the plaintiff the Court will not dismiss St. Paul's claims in toto.
Accordingly,
IT IS ORDERED that GBB's motion is DENIED to the extent that CNA or any other insurer is liable for claims against GBB and GRANTED with respect to all claims to which St.Paul is the insurer of GBB in any capacity.