One Beacon Ins. Co. v. CROWLEY MARINE SERVICES
648 F.3d 258
| 5th Cir. | 2011Background
- Crowley Marine Services contracted Tubal-Cain to repair Crowley’s MWB 403 Barge; Tubal-Cain hired Rio Marine for electrical work on the barge.
- Marcus Parker, Rio Marine employee, allegedly injured on the barge; Parker sued Tubal-Cain and Crowley in Texas state court.
- Crowley sought defense/indemnity from Tubal-Cain and coverage as an additional insured under Tubal-Cain’s One Beacon Maritime Policy; One Beacon denied coverage and sued Crowley for declaratory relief.
- District court ruled in Crowley’s favor on defense/indemnity and insurance-coverage issues, and against Crowley on additional insured status under the policy.
- Tubal-Cain challenged the district court’s finding that Crowley was bound by Crowley’s online terms and conditions incorporated via Crowley’s RSOs and invoices.
- Court held that Tubal-Cain was bound by the RSO terms, including defense/indemnity and insurance requirements, and that Crowley was not an additional insured under the One Beacon policy because Crowley was not named in the endorsement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Tubal-Cain contractually obligated to defend, indemnify, and procure insurance for Crowley? | Crowley contends an oral agreement plus Crowley’s RSOs and invoices formed a written contract imposing those duties on Tubal-Cain. | Tubal-Cain argues no enforceable written contract exists imposing defense/indemnity/insurance obligations beyond the oral agreement. | Yes; there is a written contract via RSOs, course of dealing, and invoicing. |
| Are Crowley’s online terms and conditions incorporated by reference into the RSO with adequate notice to Tubal-Cain? | Crowley’s terms were clearly incorporated by reference and reasonably accessible via a specific URL in the RSO. | Tubal-Cain lacked notice because terms were contained online in four-point font and not attached to the RSO itself. | Yes; terms were clearly incorporated by reference and Tubal-Cain had adequate notice. |
| Does the One Beacon policy provide Crowley with additional insured status? | Crowley argues the insured contract endorsement extends coverage to Crowley as an additional insured. | Tubal-Cain contends Crowley must be specifically named in the endorsement to qualify as an additional insured. | No; Crowley must be specifically named in the endorsement to qualify. |
Key Cases Cited
- Kossick v. United Fruit Co., 365 U.S. 731 (1961) (oral contracts valid in admiralty)
- Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115 (5th Cir. 1992) (course of dealing can supplement an oral agreement)
- Orduna S.A. v. Zen-Noh Grain Corp., 913 F.2d 1149 (5th Cir. 1990) (indemnity clause unenforceable where no notice or identification of dock tariff)
- New Moon Shipping Co., Ltd. v. MAN B&W Diesel AG, 121 F.3d 24 (2d Cir. 1997) (course of dealing can establish knowledge/assent to incorporated terms)
- Coastal Iron Works, Inc. v. Petty Ray Geophysical, 783 F.2d 577 (5th Cir. 1986) (industry practice and notice can validate incorporated terms)
- Hudson Waterways Corp. v. Coastal Marine Serv., Inc., 436 F. Supp. 597 (E.D. Tex. 1977) (shipping repairs and post-performance contract terms binding)
- Brown v. Pacific Life Insurance Co., 462 F.3d 384 (5th Cir. 2006) (signing or accepting a written instrument binds party to its terms)