Opinion
Civil Action No. 00-0781, Section "C" (1)
February 20, 2002
ORDER REASONS
Before the Court is Defendant American Interstate Insurance Co.'s ("American Interstate") Motion to Dismiss for Failure to State a Claim upon which Relief Can Be Granted pursuant to Federal Rule of Civil Procedure 12(b)(6). After reviewing the arguments of counsel, the record, and the applicable law, IT IS ORDERED that the Motion is hereby DENIED.
Standard of review
When considering a motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted, a district court must accept the factual allegations of the complaint as true and resolve all ambiguities or doubts regarding the sufficiency of the claim in favor of the plaintiff. See Fernandez-Montes v. Allied Pilots Ass'n, 987 F.2d 278, 284 (5th Cir. 1993). Unless it appears "beyond a doubt that the plaintiff can prove no set of facts in support of his claim," the complaint should not be dismissed for failure to state a claim. Id. at 284-285 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). However, conclusory allegations or legal conclusions masquerading as factual conclusions will not defeat a motion to dismiss. See Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995) (citing Fernandez-Montes, 987 F.2d at 284).
Background
Plaintiff, described in his Seaman's Complaint for Damages under the Jones Act, Etc. as an Alabama resident, alleges that on or about August 20, 1999, he was a seaman and crew member of the MN CAPTAIN JOHN ("vessel"), a dive support vessel in navigation. See Rec. Doc. 1. Plaintiff contends that he was injured while performing or attempting to perform a pleasure craft salvage operation in the Gulf of Mexico off the Mississippi coast. See id. at ¶ 3. He claims to have suffered severe decompression sickness resulting from Defendant Commercial Diving Services' negligence and the unseaworthiness of the vessel. See id. In his Second Amended Complaint for Damages, Plaintiff named American Interstate as an additional defendant pursuant to Louisiana's direct action statute, La. R.S. § 22:655, see Rec. Doc. 53, which allows a plaintiff to sue the tortfeasor's insurer directly.
Analysis
Louisiana's direct action statute in question provides, in pertinent part, "This right of direct action shall exist whether or not the policy of insurance sued upon was written or delivered in the state of Louisiana and whether or not such policy contains a provision forbidding such direct action, provided the accident or injury occurred within the state of Louisiana." See § 22:655B(2).
Both the Louisiana Supreme Court and the Fifth Circuit have read the statute expansively. See Webb v. Zurich Ins. Co., 205 So.2d 398 (La. 1967); Landry v. Indem. Co., 890 F.2d 770 (5th Cir. 1989).
In the seminal case of Webb, the Louisiana Supreme Court held that coverage under the statute was not limited to accidents in Louisiana. See 205 So.2d 398. Webb concerned the question of whether the administratrices of the estates of two decedents could sue under the statute although the accident killing the decedents occurred outside Louisiana. See id. The Webb court concluded that, based on legislative history and caselaw interpreting the statute, the legislature had not intended to deny the right of direct action to an injured Louisiana resident "merely because the accident occurred outside of Louisiana. . . ." Id. at 405. The court held that the statute makes "a fund directly available to one injured as the result of the acts of an insured, provided there are minimum contacts in Louisiana." Id. at 402.
The Fifth Circuit has since held that a right of direct action under Louisiana law "may be brought against an insurer in only three limited instances:
(1) if the accident occurred in Louisiana;
(2) if the policy was written in Louisiana'
or (3) if the policy was delivered in Louisiana.
Landry, 890 F.2d at 773 (emphasis in the original).
American Interstate concedes that the policy allegedly covering the injury at issue was "issued" in Louisiana. Nevertheless, American Interstate contends that a number of facts in this case, which the Court assumes to be true for purposes of the instant motion, necessitates the conclusion that Plaintiff's claim under the direct statute is not cognizable.
The terms "written" and "issued" seem synonymous as used in the direct action statute. Compare § 22:655A ("No policy or contract of liability insurance shall be issued or delivered in this state . . .") with § 22:655B(2) ("This right of action shall exist whether or not the policy of insurance sued upon was written or delivered in the state of Louisiana . . .") (emphasis added). Thus, the Court reads American Interstate's concession as falling within the second of the limited instances in which coverage is provided.
The Court first addresses American Interstate's argument that even if the policy was written or issued in Louisiana, language in Webb as well as in other authority, see H. Alston Johnson, The Louisiana Direct Action Statute, 43 La. L. Rev. 1455 (1983), necessitates the conclusion that plaintiffs be Louisiana residents to sue under the statute.
The Louisiana Direct Action Statute states that the Fifth Circuit has referred to the Louisiana legislature as having made a fund directly available to its injured residents through the direct action statute. See Johnson, supra, at 1472 (citing Kirchman v. Mikula, 258 So.2d 701 (La.Ct.App. 1972)). This Court disagrees, however, that Kirchman portrayed the fund as being limited to Louisiana residents. Rather, the Kirchman court noted that the statute "has had the end result of making a fund directly available to one injured as the result of the acts of an insured." See id. at 703 (emphasis added). Nothing in Kirchman specifically limited coverage under the statute to Louisiana residents. If anything, the Fifth Circuit's reference to coverage under the statute of " one injured" rather than "a Louisiana citizen injured" cuts against American Interstate here.
At least two passages in Webb arguably suggest that the purpose of the statute was to protect Louisiana citizens in particular. First, the court noted, "`All legislation making foreign corporations amenable to judicial process in the state in which they seek the privilege of doing business is predicated upon the right of the state to protect its citizens in their controversies with such corporations by requiring that the same be adjudicated in the courts of the state rather than compelling its citizens to travel to remote places to litigate such controversies."' See 205 So.2d at 402 (quoting Travelers Fire Ins. Co. v. Ranney-Davis Mercantile Co., 173 F.2d 844 (1Oth Cir. 1949)) (emphasis added).
Later in the opinion, the Webb court noted that, given the legislative history and interpretive caselaw of the legislation, "it would seem ridiculous to hold that the legislature intended . . . to deny the right of direct action to an injured resident of this state merely because the accident occurred outside of Louisiana. . . ." See 205 So.2d at 405 (emphasis added).
Nevertheless, the Webb court also repeatedly refers to the injured person without reference to residency. See id. at 402. For example, the court noted as follows:
[N]ow well established public policy recognizes the social importance of modern liability insurance in our highly industrialized society as a means whereby persons injured as the result of an accident may obtain financial relief, and that the policy against liability is not issued primarily for the protection of the insured but for the protection of the public.Id.
The Court next turns to the interpretation of § 22:655 under Landry and the language of the statute. Such an analysis confirms that the legislation was meant to provide a direct right of action here.
First, as stated above, the statute provides coverage to policies written (i.e., issued) in Louisiana. See Landry, 890 F.2d at 773.
Second, the statute, by its terms, does not provide protection solely to injured Louisiana residents. "It is also the intent of this Section that all liability policies within their terms and limits are executed for the benefit of all injured persons and their survivors or heirs to whom the insured is liable[.]" § 22:655D (emphasis added). See also West v. Monroe Bakery, Inc., 46 So.2d 122, 130 (La. 1950) ("The statute expresses the public policy of this State that an insurance policy against liability is not issued primarily for the protection of the insured but for the protection of the public.") (emphasis partially omitted).
If the legislature had wanted to limit the right of direct actions to injured Louisianans, it showed itself fully capable of doing so — elsewhere in the statute can be found language specifically placing an intrastate limitation on the policies to which the statute applies in certain respects. For instance, § 22:655A states, in pertinent part, "No policy . . . of liability insurance shall be issued or delivered in this state . . ." unless it contains certain provisions regarding, inter alia, the insolvency or bankruptcy of the insured. The legislature's limitation of insurance policies to which § 22:655A refers and the absence of such a limitation on injured parties is convincing evidence that the legislature intended the scope of the statute to be broad enough to provide plaintiffs such as the one here with a right of direct action.
This court is not the only one to have drawn the conclusion that Louisiana residents are not the only ones protected by the direct action statute. See Myers v. Gov't Employees Ins. Co., 225 N.W.2d 238, 242 (Minn. 1974). In Myers, non-Louisiana residents were injured in an automobile accident on a Louisiana road. See id. at 240. The court found that the statute was designed to protect not only Louisiana residents, but also nonresidents. See id. at 242 (citing West, 46 So.2d at 130). Thus, the court's conclusion that Louisiana residency is not required to trigger a plaintiff's rights under the statute further undergirds the opinion here.
Accordingly,
IT IS ORDERED that:
American Interstate's Motion to Dismiss for Failure to State a Claim upon which Relief Can Be Granted is hereby DENTED.