418 F. App'x 305
5th Cir.2011Background
- This is a certified interlocutory appeal from a district court ruling granting partial summary judgment to excess insurers under a bumbershoot policy issued to the Port of New Orleans.
- The district court held admiralty jurisdiction over the contract action and enforced a New York choice-of-law clause.
- Under New York law, late notice to insurers was a complete defense to coverage, and the Port challenged both the jurisdictional basis and the choice of law.
- The Port contends the case falls under diversity jurisdiction with Louisiana law applying, potentially rendering the New York clause ineffective.
- The court focuses on whether the bumbershoot policy is maritime in character, the governing choice-of-law rules, and the notice provisions to determine coverage.
- The court ultimately affirms the district court, holding admiralty jurisdiction exists, New York law governs the contract, and the notice requirement was not satisfied for all subscribing insurers.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether admiralty jurisdiction was proper | Port argues only diversity jurisdiction applies. | Appellees contend the contract has maritime character and falls under admiralty jurisdiction. | Admiralty jurisdiction proper; contract maritime in character. |
| Whether the NY choice-of-law clause should govern | Port disputes enforceability of the NY clause or favors Louisiana law under inherently local analysis. | Appellees urge enforcement of the NY clause under maritime choice-of-law rules. | New York law enforced; clause valid under maritime choice rules. |
| Whether late-notice defense under NY law defeats coverage | Port contends NY defense is not applicable or was misapplied. | Insurers argue NY law allows late notice as complete defense to coverage. | NY rule applied; late notice defeats coverage where applicable. |
Key Cases Cited
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (2004) (admiralty jurisdiction focuses on maritime commerce objective)
- Stoot v. Fluor Drilling Servs., Inc., 851 F.2d 1514 (5th Cir. 1988) (inherently local test for maritime contracts)
- Great Lakes Reinsurance (UK) PLC v. Durham Auctions, Inc., 585 F.3d 236 (5th Cir. 2009) (enforcement of contractual choice-of-law provisions in maritime context)
- Folksamerica Reinsurance Co. v. Clean Water of N.Y., Inc., 413 F.3d 373 (2d Cir. 2005) (coverage determines whether policy is marine insurance)
- The St. Paul Travelers Cos. v. Corn Island Shipyard, Inc., 495 F.3d 376 (7th Cir. 2007) (definition and scope of a bumbershoot policy)
- New Hampshire Ins. Co. v. Home Savings & Loan Co., 581 F.3d 420 (6th Cir. 2009) (inherently local analysis in admiralty context; marina operations example)
- Duane Reade, Inc. v. St Paul Fire and Marine Ins. Co., 600 F.3d 190 (2d Cir. 2010) (unambiguous notice language requires notice to all subscribing insurers)