Delta Seaboard Well v. Steadfast Ins Co

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 15, 2002
• Docket: 01-31254
• Status: Unpublished

Opinion

UNITED STATES COURT OF APPEALS FIFTH CIRCUIT

_________________

No. 01-31254

(Summary Calendar) _________________

DELTA SEABOARD WELL SERVICE; ET AL,

Plaintiffs,

DELTA SEABOARD WELL SERVICE INC,

Plaintiff-Appellant,

versus

STEADFAST INSURANCE CO; ET AL,

Defendants,

WATER QUALITY INSURANCE SYNDICATE,

Defendant-Appellee.

Appeal from the United States District Court For the Western District of Louisiana No. 99-CV-2319

July 11, 2002

Before JONES, SMITH, and EMILIO M. GARZA, Circuit Judges. PER CURIAM*:

Delta Seaboard (“Delta”) appeals the summary judgment granted by the district court in favor

of its insurer, the Water Quality Insurance Syndicate (WQIS).

Delta performed plugging and abandoning (P & A) operations on an oil well located on Lake

Henderson in Louisiana. As part of these operations, Delta used the MOP 141, a keyway barge

which it owned, operated, and manned. Delta also used as part of these operations the MOP 22 and

the MOP 25, two unmanned deck barges which it bareboat chartered. During the P & A operations,

petroleum and other hydrocarbons were recovered and stored aboard the MOP 22 by the crew of the

MOP 141, at the direction of the MOP 141's tool pusher, Alvin Miller. After the operations were

completed, Miller ordered the crew of the MOP 141 to burn off some metal protrusions on the deck

of the MOP 25. The protrusions were a tripping hazard. The MOP 25 was tied between the MOP

141 and the MOP 22 at the time of the welding. Sparks from the welding on the MOP 25 traveled

downwind and ignited the petroleum stored on the MOP 22. As a consequence of the resulting

explosion, the MOP 22 spilled oil and other hydrocarbons into the lake. The clean-up costs for the

spill amounted to about $100,000.

WQIS issued a pollution liability insurance policy for Delta. The policy, within certain

limitations, covers costs incurred by Delta from spilling oil or other chemicals. The policy covers only

those costs incurred by Delta “as o wner or operator of the vessel named on the Vessel Schedule

attached to and forming part of this policy.” The MOP 141 was a vessel named on the Vessel

Schedule, but the MOP 22, from which the spill issued, and the MOP 25, from which the sparks

* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

-2- originated, were not. WQIS denied coverage for the spill costs on the grounds that such costs were

incurred by Delta “as owner or operator” of the unscheduled vessels, not the scheduled MOP 141.

Delta filed suit against WQIS in Louisiana state court to recover on the pol icy. The case was

removed to federal court on diversity grounds.

On cross motions for summary judgment, the district court concluded, without any detailed

written opinion and without setting forth findings of fact or conclusions of law,1 that the spill from

the MOP 22 was within the scope of the WQIS policy. The district court nevertheless concluded

that, under the subrogation clause in the policy, WQIS had no obligation to pay any of the costs of

the spill. Delta appeals.

We have on a number of occasions considered the meaning of the phrase “as owner” in marine

insurance contracts.2 The test is whether there is a “causal operational relation” between the vessel

and the incident that gave rise to liability. Gaspard v. Offshore Crane & Equip., Inc., 106 F.3d 1232,

1237 (5th Cir. 1997); Randall v. Chevron U.S.A., Inc., 13 F.3d 888, 907-09 (5th Cir. 1994),

modified on other grounds, 22 F.3d 568 (5th Cir. 1994), overruled on other grounds, Bienvenu v.

Texaco, Inc., 164 F.3d 901 (5th Cir. 1999); Lanasse v. Travelers Ins. Co., 450 F.2d 580, 584 (5th

Cir. 1972). The leading case is Lanasse, in which a crane on a fixed platform was moving a welding

machine off of a vessel. Chevron operated both the platform and the vessel. Due to the negligence

1 Delta argues that the district court erred under FED. R. CIV. P. 52(a) in failing to issue findings of fact and conclusions of law. FED. R. CIV. P. 52(a) explicitly states that “[f]indings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56.” Because the district court’s decision was on a motion for summary judgment under Rule 56, findings of fact and conclusions of law were not required. 2 We have considered this issue mo stly in the context of Protection & Indemnity (P & I) policies, but we see no reason to treat a pollution liability policy differently.

-3- of the crane operator, Lanasse was injured on the deck of the vessel while helping to offload the

machine. The court held that Chevron was liable in its capacity as owner of the platform, not in its

capacity “as owner” of the vessel within the meaning of its insurance policy. The vessel was just the

“inert locale” of the injury; nothing about its operation, maintenance, movement or seaworthiness

gave rise to the incident.

The court in Lanasse acknowledged that “line may be a wavy one between coverage and

noncoverage.” Similarly, we have explained that the “causal operational relation” test sometimes

“does little to clarify the meaning of the phrase ‘as owner.’” Randall, 13 F.3d at 907. But whatever

the limits of the test, in this case the incident was clearly caused, not by the operation of the MOP

141, but of the MOP 25 and the MOP 22. The only relationship the MOP 141 has to the incident is

that its crew was involved with the welding on the MOP 25 that caused the explosion. But the crew

of the MOP 141 was not performing any functions relating to the operation of the MOP 141. They

were not maintaining, steering, navigating, repairing or otherwise doing anything with respect to the

covered vessel. Here, the sole reason for the welding was to burn off metal protrusions on the deck

of the MOP 25 that posed a tripping hazard. The crewmen were not “maintaining” or “operating”

the MOP 141, they were maintaining the MOP 25. The sparks here were caused as part of the

operation of the MOP 25, and the spill came from the MOP 22. The accident did not involve the

operation of the MOP 141 at all.

All of the liability provisions of the policy extend only to amounts that Delta incurs “as owner

or operator” of the MOP 141. Because the incident here was not caused by Delta in its capacity as

owner or operator of the MOP 141, none of these provisions provide coverage. We therefore

AFFIRM the summary judgment in favor of WQIS.

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