Articles Posted in U.S. 5th Circuit Court of Appeals

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This case arose out of the sinking of a vessel owned by Hornbeck while at R&R's shipyard for repairs. R&R's liability insurer, National, filed suit to disclaim liability under its policy. Hornbeck counterclaimed. The district court found that R&R was negligent and that National was liable for the ensuing damages. The court concluded that the district court did not clearly err in finding that R&R was negligent under bailment law where the vessel was delivered to R&R afloat, R&R had full custody of the vessel, and the vessel sank while under R&R's care; even if the salvage company had been negligent, R&R would remain fully liable because this negligence was a foreseeable consequence of R&R's own negligence; under Rule 13(a), Hornbeck had standing to bring its counterclaim and the district court properly ruled on that claim after deciding R&R's liability; and the district court erred in the amount of damages it awarded and in applying an 18% interest rate. Accordingly, the court affirmed in part, reversed in part, and remanded for the entry of judgment and the appropriate assessment of interest on that judgment. View "National Liability & Fire Ins. Co. v. R & R Marine, Inc., et al." on Justia Law

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In this diversity case, the court considered whether Mid-Continent was obligated under Texas law to pay for damage caused by one of its insureds, Arrow, when Arrow failed to promptly correct work in the home that it had constructed for plaintiffs and which failed to conform to the requirements of the construction contract into which Arrow and plaintiffs had entered. The court concluded that, consistent with Texas law and considering the Texas Supreme Court's decisions in Gilbert Texas Construction, L.P. v. Underwriters at Lloyd's London, and Ewing Construction Co. v. Amerisure Insurance Co., Mid-Content has demonstrated that an exclusion from coverage applied and that the insureds have failed to show that an exception to that exclusion applies. The district court committed no error in granting summary judgment to Mid-Content. Accordingly, the court affirmed the judgment of the district court. View "Crownover, et al. v. Mid-Continent Casualty Co." on Justia Law

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The Insureds filed suit against Mid-Continent alleging that it failed in its obligation to defend them when it refused to pay the fees of the Insureds' chosen attorney who represented them in an underlying lawsuit brought against them by KFA. On appeal, the Insureds challenged the district court's grant of summary judgment in favor of Mid-Continent. The court concluded that the district court did not err because no disqualifying conflict of interest existed under Texas law, and Mid-Continent fulfilled its duty to defend the Insureds by tendering its chosen attorney. Accordingly, the court affirmed the judgment of the district court. View "Partain, et al. v. Mid-Continent Casualty Co." on Justia Law

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Anticipating that W&T, an energy exploration and development company, would seek recovery for its Removal of Debris (ROD) expenses as a result of Hurricane Ike under its Umbrella Policies, Underwriters sought a declaratory judgment that they were not liable for W&T's ROD damages. Because W&T's underlying insurance was admittedly exhausted by claims not covered by the Umbrella Policies, the insurers argued that they have no liability. The district court granted summary judgment in favor of Underwriters, holding that the plain terms of the Umbrella Policies stated that it only takes effect if the underlying policies were exhausted by claims that would be covered under the Umbrella Policies themselves. The court reversed and remanded, concluding that a careful reading of the contract unambiguously precluded Underwriters' interpretation. W&T's interpretation fits neatly with (1) the plain text of the Coverage provision, (2) the definition of a Retained Limit, and (3) other contract provisions relating to coverage and payment. View "Indemnity Ins. Co., et al. v. W & T Offshore, Inc." on Justia Law

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Plaintiffs appealed the district court's grant of summary judgment in favor of LINA upholding LINA's denial of life insurance benefits to plaintiffs, beneficiaries of two policies. The court concluded that LINA properly denied coverage to plaintiffs as the insured's death fell within the policies' explicit exclusion for accidents involving the operation of a vehicle while intoxicated. The court held that the plain meaning of the word "vehicle" as used in the policies was unambiguous and broad enough to encompass a boat. Accordingly, the court affirmed the district court's grant of summary judgment to LINA. The court also affirmed the modification of the discovery order. View "Green, et al. v. Life Ins Co. of N. America" on Justia Law

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This appeal arose from an insurance coverage dispute concerning an industrial accident that occurred on a decommissioned platform in the Outer Continental Shelf. The key issue on appeal was whether the district court entirely disposed of any one claim against Continental. The court need not conclusively determine whether Tetra and Maritech have asserted one claim or two against Continental because, even if the court were to construe their request for a declaration on Continental's indemnity obligations as a single claim, it was clear that the district court did not fully dispose of that one claim. Accordingly, the court dismissed for want of jurisdiction. View "Tetra Technologies, Inc., et al. v. Vertex Services, L.L.C." on Justia Law

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Elizabeth Mosley, a volunteer driver for LogistiCare, provided non-emergency medical transportation services for Medicaid patients using an automobile insured by State Farm. After Mosley was involved in an accident in which she was driving and Pearlie Graham was injured, Graham's heirs filed suit against Mosley and LogistiCare in Mississippi state court. State Farm filed suit in federal court seeking a declaration that it had no duty to defend or indemnify Mosley or LogistiCare in the underlying action. The court concluded that collateral estoppel did not prevent State Farm from litigating the "for a charge" exclusion contained in the insurance policy in the present case; the allegations do not sufficiently trigger the "for a charge" exclusion and therefore do not absolve State Farm of its duty to defend LogistiCare and Mosley; the district court erred in granting summary judgment in favor of State Farm as to the duty to defend; but the district court did not err in granting summary judgment in favor of State Farm as to the duty to indemnify. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "State Farm Mutual Auto Ins. Co. v. Mosley, et al." on Justia Law

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The State filed a class action suit against several insurers to recover on the homeowner insurance policies purchased by individual Louisiana citizens but assigned by the respective policy holders to the State in return for State financial assistance in repairing and rebuilding their homes in the wake of the hurricanes. Defendants removed to federal court. The State eventually dropped its class allegations and severed this individual action from the original class action case. At issue was whether there was federal jurisdiction over these individual cases, once part of the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(2), class action. The court held that the general rule regarding federal jurisdiction over a removed case controlled; jurisdictional facts were determined at the time of removal, not by subsequent events; because at the time of removal CAFA supplied federal subject matter jurisdiction over these cases, the court held that CAFA continued to provide jurisdiction over these individual cases notwithstanding their severance from the class. View "State of Louisiana v. American National Property and Casualty Co., et al." on Justia Law

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Plaintiff, injured while employed by GC, filed suit against GC alleging that he was working as a seamen at the time of his accident and sought damages under the Jones Act, 46 U.S.C. 30104, for GC's negligence. Travelers, which provided coverage to GC at the time of plaintiff's accident, moved to intervene. In this appeal, the court held that an insurer who makes voluntary Longshore Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901-950, payments to an injured employee on behalf of the employer acquires a subrogation lien on any recovery by the employee in a Jones Act suit against the employer based on the injuries for which the insurer has already compensated him. Therefore, Travelers was entitled to the disputed funds in the district court's registry, and Travelers could intervene for the purpose of collecting these funds. Accordingly, the court reversed the district court's denial of the motion to intervene filed by Travelers and remanded with instructions. View "Chenevert v. Travelers Indemnity Co." on Justia Law

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Amzak appealed the district court's summary judgment on its loan loss claims against its title insurance policy provider and related entities. The court concluded that Amzak failed to show that it suffered actual loss because of a failure of title and STL could not be held responsible for any harm suffered by Amzak. The court formalized the holding in First State Bank v. American Title and likewise rejected the guarantee rationale of Citicorp Savings of Illinois v. Stewart Title Guaranty Co., and agreed with the district court's rejection of Amzak's argument that STL breached the title policy at the time of the loan because its mortgage was voidable at that time. The court also disposed of Amzak's negligence claim where STL's delay in making a complete filing of Amzak's mortgage was not a legal cause of Amzak's loss. Accordingly, the court affirmed the judgment of the district court. View "Amzak Capital Mgmt. v. Stewart Title" on Justia Law