Lightering LLC v. Teichman Grp., LLC

328 F. Supp. 3d 625
CourtDistrict Court, S.D. Texas
DecidedJuly 16, 2018
DocketCivil Action No. H-17-3374
StatusPublished
Cited by3 cases

This text of 328 F. Supp. 3d 625 (Lightering LLC v. Teichman Grp., LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lightering LLC v. Teichman Grp., LLC, 328 F. Supp. 3d 625 (S.D. Tex. 2018).

Opinion

Lee H. Rosenthal, Chief United States District Judge

This is a contractual-indemnity dispute arising out of underlying wrongful-death and personal-injury lawsuits filed after a crane accident in September 2017. The underlying plaintiffs sued the Teichman Group, LLC, T & T Offshore, Inc.,1 and OSG Lightering, LLC,2 seeking damages for the deaths and injuries. OSG Lightering, Starr Indemnity & Liability Company, and AGCS Marine Insurance Company sued Teichman and T & T seeking a declaratory judgment that there is no contractual obligation to defend, indemnify, or provide additional insurance coverage to Teichman or T & T for the underlying wrongful-death and personal-injury lawsuit. OSG Lightering, Starr, and AGCS invoke the court's admiralty and maritime jurisdiction under 28 U.S.C. § 1333. T & T moved to dismiss under Rule 12(b)(1), arguing that admiralty jurisdiction is improper and the court lacks subject matter jurisdiction.

Based on a careful review of the motion, the response, and the reply; the record; and the applicable law, the motion to dismiss for lack of subject matter jurisdiction, (Docket Entry No. 29), is granted. The reasons for this ruling are analyzed below.

I. Background

A. Factual Background

OSG Lightering provides, among other things, lightering services. Lightering involves transferring cargo from one vessel to another. OSG Lightering transfers liquid cargo, such as petrochemical products, and handles all parts of the lightering process, "including providing Mooring Masters and Assistant Mooring Masters, who, similar to compulsory harbor pilots, board the two lightering vessels and provide the Master and crew of each vessel with expert advice, instructions, and recommendations on executing the lightering operation from start to finish." (Docket Entry No. 31 at 8). OSG Lightering provides its own equipment for the lightering process, but charters workboats, operated by seamen specially trained in lightering, that transport both equipment and crew to and from a lightering operation. ACGS Marine Insurance provided excess insurance coverage to OSG Lightering. TT Club, which is not a party, provided primary insurance coverage.

*628In September 2017, OSG Lightering was using T & T's Pelican Island facility, an on-land building in Galveston, Texas, as part of its lightering operations. OSG Lightering would dock its chartered workboats and store its lightering equipment at the facility. The workboats were docked at T & T's facility for long periods between cargo loads, and for shorter periods for loading, unloading, or changing crew. T & T would also provide equipment or personnel to assist in loading or unloading OSG Lightering's equipment from the workboats.

On September 20, a T & T employee was operating a T & T-owned crane to load OSG Lightering's equipment onto a chartered workboat docked at the T & T Pelican Island facility. According to the complaint, the T & T employee failed to properly place the crane's outriggers before he swung the boom toward one of the pieces of equipment he intended to load. As he swung the boom, the crane fell over on its side and killed two people, Tai Vong and Blake Carlisle, who were both working for OSG Lightering. Four other people at the scene alleged both physical and emotional injuries.

Shortly after the accident, several wrongful-death and personal-injury lawsuits were filed in Texas state court against T & T and OSG Lightering. T & T promptly proposed mediation with the wrongful-death plaintiffs. A few days before the scheduled mediation, T & T's counsel sent a letter to OSG Lightering's counsel, seeking a defense, indemnity, and additional insurance coverage under the Master Services Agreement.

The Master Services Agreement that governed the contractual relationship between T & T and OSG Lightering included indemnification provisions. OSG Lightering refused T & T's demands on the ground that the Agreement had expired in December 2014, before the accident occurred, and that there was no contractual obligation to indemnify or defend. T & T maintains that OSG Lightering's continued performance under the terms of the Agreement constituted an implied renewal. T & T alleges that it was forced to defend and settle all of the claims stemming from the accident, and it now seeks full indemnity from OSG Lightering. In response, OSG Lightering and its insurers brought this suit, seeking a declaratory judgment that the Agreement does not govern OSG Lightering's relationship with T & T and that neither it nor its insurers has a contractual obligation to defend, indemnify, or provide added insurance to T & T.

B. The Master Services Agreement

T & T and OSG Lightering entered into the Master Services Agreement on January 1, 2011. (Docket Entry No. 29-1 at 8). Under the Agreement, OSG Lightering paid T & T $16,500 monthly. T & T agreed to the following:

a. Wharfage and Storage areas: T & T will provide wharf space where up to a total of three (3) of [Lightering's] offshore workboats of up to 200 feet in length may simultaneously be safely moored always afloat.... T & T will provide storage space at said location for [Lightering's] ancillary equipment including, fenders, cargo hoses, shipping containers and parking for [Lightering's] chartered workboat personnel, representatives and customers ....
T & T will also provide approximately 5,000 square feet of warehouse for [Lightering's] use. It is expressly understood that while wharfage and storage space sufficient for the above purposes will be provided, such space will also be used for the mooring of T & T vessels, vessels of its other clients and storage of equipment owned by T & T and others.
...
*629b. Dockside Services. T & T will ensure that adequate labor is available at the Facilities to accomplish such tasks as [Lightering] may reasonably require, including loading and discharging equipment from [Lightering's] workboats, general repairs to [Lightering's] equipment and the like. [Lightering] and its sublessees shall utilize T & T's services while at the Facilities.

(Docket Entry No. 29-1 at 9-10). These parties signed a one-page addendum on May 13, 2013, reducing the monthly payments from $16,500 to $15,500. (Id. at 26).

The Agreement contained a choice-of-law provision. It stated: "[t]his Agreement shall be governed and construed in accordance with the general maritime laws of the United States, and to the extent maritime law is not applicable then by the laws of the State of Texas." (Id. at 23). The Agreement provided an effective term of four years from January 1, 2011, (Id. at 21), and did not contain an automatic renewal provision.

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Bluebook (online)
328 F. Supp. 3d 625, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lightering-llc-v-teichman-grp-llc-txsd-2018.