CAL-DIVE INTERN., INC. v. Seabright Ins. Co., 627 F.3d 110

SNIC and Seabright dispute defense obligation for Horizon in Brown Jones Act suit; Coastal Catering employed Brown and contractually involved Horizon; SNIC defended Horizon via Coastal's MEL; Seabright defended Coastal under MEL, but Seabright contends Alternate Employer Endorsement may require defense of Horizon; Horizon carried a P&I policy with AEGIS covering crew; Seabright excluded coverage for crew injuries covered by P&I; district court awarded SNIC but this Court reverses and renders for Seabright.
Brown alleged Coastal and Horizon were his employers; the Alternate Employer Endorsement could trigger Seabright to defend Horizon; the P&I Exclusion in Seabright’s policy excludes Horizon where a P&I policy covers crew injuries.
The district court found the Alternate Employer Endorsement activated Seabright’s duty to defend Horizon and that the P&I Exclusion conflicted, creating ambiguity in favor of Horizon.
The issue on appeal is whether Seabright must defend Horizon under the Alternate Employer Endorsement and/or is excluded by the P&I Exclusion; the court reverses and renders for Seabright.
The court holds that the P&I Exclusion applies to Horizon as an additional insured under the Alternate Employer Endorsement, excluding coverage despite any potential trigger.
Conclusion: Seabright did not have a duty to defend Horizon; district court reversal and judgment for Seabright.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does Brown’s complaint trigger coverage for Horizon under the Alternate Employer Endorsement?	SNIC argues allegations show Horizon as alternate employer.	Seabright contends pleadings are insufficient to trigger coverage; even if triggered, P&I Exclusion applies.	Not decided; assumed triggered, but exclusion applies.
Does the P&I Exclusion defeat Seabright's duty to defend Horizon?	SNIC argues exclusion does not apply to Horizon as additional insured.	Horizon had P&I coverage; exclusion bars coverage for crew bodily injury.	P&I Exclusion applies to Horizon; no defense duty.
Do Alternate Employer Endorsement and P&I Exclusion conflict creating ambiguity?	Horizon should be covered under endorsement.	Exclusion resolves any ambiguity against coverage.	No conflict; exclusion controls.
Is Horizon an insured under Seabright’s policy for purposes of the endorsement?	Alternate Employer Endorsement makes Horizon insured.	Endorsement treats alternate employer as insured.	Horizon treated as insured; exclusion still applies.

Landerman v. Liberty Servs., Inc., 637 So. 2d 809 (La. App. 1 Cir. 1994) (alternate employer treated as insured; P&I exclusion applies to alternate employer)
Storebrand Arendal A/S v. Point Marine, Inc., 1990 U.S. Dist. LEXIS 5937 (E.D. La. 1990) (federal court recognizing similar interplay of MEL/EMEL and P&I exclusion)
Am. Home Assurance Co. v. Czarniecki, 255 La. 251, 268-69 (1969) (eight corners rule in Louisiana with respect to duty to defend)
Steptore v. Masco Const. Co., Inc., 643 So.2d 1213 (La. 1994) (duty to defend arises when suit discloses possibility of liability)
Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310 (1955) (state-law marine policy interpretation governs; relevance to coverage analysis)