Royal Insurance Co. of America v. Sphere Drake Underwriting Management, Ltd.

4 S.W.3d 378, 1999 Tex. App. LEXIS 7286, 1999 WL 777575
CourtCourt of Appeals of Texas
DecidedSeptember 30, 1999
DocketNo. 09-97-485 CV
StatusPublished
Cited by1 cases

This text of 4 S.W.3d 378 (Royal Insurance Co. of America v. Sphere Drake Underwriting Management, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Royal Insurance Co. of America v. Sphere Drake Underwriting Management, Ltd., 4 S.W.3d 378, 1999 Tex. App. LEXIS 7286, 1999 WL 777575 (Tex. Ct. App. 1999).

Opinion

OPINION ON MOTION FOR REHEARING

DON BURGESS, Justice.

Upon motion for rehearing, Sphere Drake makes several contentions we wish to address.

First, Sphere Drake contends our application of Texas contract law was incorrect. The basis of Sphere Drake’s contention is that because Allemand’s claim against Marine Fueling and the third-party tortfeasors was a maritime tort, the allocation of the recouped monies is governed by maritime law. Neither Allemand nor Marine Fueling are parties before this court in this action. The only parties before this court are two of Marine Fueling’s insurers; the only issue is which insurance company’s subrogation provision takes precedence. Sphere Drake cites General Chemical Corp. v. De La Lastra, 852 S.W.2d 916, 920 (Tex.1993), for support. In that case, General Chemical argued, and the Texas Supreme Court agreed, that maritime law, and not state law, controlled the case. Id. at 919. The suit was a products liability case brought by the parents of deceased shrimp fishermen. Id. at 917. The jury was asked, without objection, to determine damages which are recoverable under state law but not under federal maritime law. Id. The court held that state law applies because maritime law, although properly invoked, was waived. Id. The court noted that

[pjursuant to the ‘savings to suitors’ clause of 28 U.S.C. § 1333, state courts have concurrent jurisdiction with the federal courts over maritime actions, constrained by the “reverse-Erie’ doctrine which requires that the substantive remedies afforded by the States conform to governing federal maritime standards.’ Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 223, 106 S.Ct. 2485, 2494, 91 L.Ed.2d 174 (1986); see also Texaco Ref. and Mktg., Inc. v. Estate of Dau Van Tran, 808 S.W.2d 61, 64 (Tex.), cert. denied, 502 U.S. 908, 112 S.Ct. 301, 116 L.Ed.2d 245 (1991). Thus, maritime law does not affect a court’s jurisdiction over the claim, it merely dictates the substantive law that governs that claim’s resolution....

Id. at 920.

In General Chemical, it was the claims of the deceased’s families which were found to be governed by maritime law (had that issue not been waived). We therefore agree that Allemand’s claims would be governed by maritime law, were they before this court. The only matter before this court is Sphere Drakes’ dispute with Royal over which insurance company recovers monies recouped from a third-party tortfeasor — not a maritime matter. Unlike General Chemical, the facts of this [380]*380case do not “come within the purview of maritime law.” Id.

Sphere Drake next claims we erred because Marine Fueling (Royal) had no future maintenance and cure obligation to Allemand. Citing In re Liberty Seafood, Inc., 38 F.3d 755 (5th Cir.1994), and Bertram v. Freeport McMoran, Inc., 35 F.3d 1008 (5th Cir.1994), Sphere Drake contends “[a]dmiralty law limits a maritime employer’s suit for recoupment of maintenance and cure to the actual maintenance and cure outlay expended by the employer prior to any Jones Act settlement.”

In Liberty, the injured seamen’s employer, Herndon, was required to pay maintenance and cure after Liberty’s vessel drifted into Herndon’s anchored vessel. In re Liberty Seafood, 38 F.3d at 756. Herndon filed claims against Liberty for indemnity and contribution for maintenance and cure and for the costs of defending actions brought by the seamen and damages resulting from the loss of use of, and damage to, Herndon’s vessel. Id. at 757. Liberty settled with the three seamen prior to trial. Id. Liberty then moved to dismiss Herndon’s claims for indemnity and contribution on the basis that Herndon could not claim contribution from a joint tortfeasor because Liberty had settled with the seamen. Id. The district court agreed and granted Liberty’s motion. Id. The Fifth Circuit reversed. Id. at 759.

The court noted that “maritime law provides two separate lines of recovery for an injured seaman: damages, and maintenance and cure.” Id. at 758. The court then recognized

[t]he damage claim may be brought against the employer and a third-party tortfeasor. In turn, through indemnity or contribution, the employer may recover from the third-party tortfeasor for part or all of any damages assessed against the employer. Thus, in a maritime collision, a third-party tortfeasor faces two distinct claims by a shipowner for contribution or indemnity: (1) for damages assessed against the shipowner; and (2) for maintenance and cure. As stated, Bertram holds that a settlement by the third-party with an injured seaman on the damage claim will not bar the shipowner’s recovery of maintenance and cure.

Id. (citation omitted). The court then concluded that Herndon had a claim against Liberty for maintenance and cure.

Sphere Drake’s claim that Liberty and Bertram limit the employer’s suit for indemnity and contribution “to the actual maintenance and cure outlay expended ... prior to any Jones Act settlement” is therefore clearly erroneous. The Fifth Circuit in Liberty explicitly held that Herndon (the employer) had a claim for indemnity and contribution for maintenance and cure after the Jones Act settlement between Liberty and the injured seaman occurred.

Sphere Drake further argues that “[ojnce Allemand recovered any money pursuant to his Jones Act or maritime negligence claims, he could no longer recover maintenance and cure from Marine Fueling.” Sphere Drake cites Gooden v. Sinclair Refining Co., 378 F.2d 576 (3rd Cir.1967); Crooks v. U.S, 459 F.2d 631, 633 (9th Cir.1972); Vickers v. Tumey, 290 F.2d 426 (5th Cir.1961); and Smith v. Lykes Bros., 105 F.2d 604, 607 (5th Cir.1939), for support. We first note that the far more recent cases of Liberty and Bertram, which are from the Fifth Circuit, clearly recognize “two separate lines of recovery for an injured seaman: damages, and maintenance and cure.” In re Liberty Seafood, 38 F.3d at 758. See also Bertram, 35 F.3d at 1013.

In Smith, the court found the injured seaman had a cause of action to recover maintenance and cure, as well as a cause of action for his personal injury, “but he did not have the right to be compensated twice for the same elements of damage.” Smith, 105 F.2d at 606. The court noted, “[h]is reasonable expenses of maintenance and cure might have been recovered in the [381]

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4 S.W.3d 378, 1999 Tex. App. LEXIS 7286, 1999 WL 777575, Counsel Stack Legal Research, https://law.counselstack.com/opinion/royal-insurance-co-of-america-v-sphere-drake-underwriting-management-texapp-1999.