Lead Opinion
Thеodore F. Randall, an employee of Chevron, U.S.A., Inc. (“Chevron”), drowned after unsuccéssfully attempting a swing rope transfer from a fixed platform in the Gulf of Mexico to the MTV SEA SAVAGE. Randall’s widow, Barbara Randall, brought suit individually, on behalf of Randall’s estate, and on behalf of their children against Chevron and Sea Savage, Inc. (“Sea Savage”). The matter was tried to the court, and the court entered judgment against the defendants. This appeal followed.
I.
Factual Background
This case arises from the tragic death of Theodore F. Randall, a mechanic employed by Chevron on its fixed platforms in the Gulf of Mexico. On July 31, 1989, Randall was on Chevron’s West Delta Field Block 27 P-1 platform, a fixed structure located off the coast of Louisiana but within Louisiana territorial waters. At the time, a tropical storm was known to be approaching the West Delta area.
The M/V SEA SAVAGE was a 100-foot vessel owned and operated by Sea Savage and certified by the United States Coast Guard as a passenger vessel. Chevron entered into a time charter with Sea Savage on January 1, 1989, to obtain the services of the vessel in the operation of Chevron’s platforms in the West Delta Block 27 oil field. The time charter provided that Sea Savage would man, operate, and navigate the vessel, while Chevron would assign the vessel its tasks. Sea Savage was required to provide liability insurance naming Chevron as an additional insured, and Sea Savage did in fact procure some $5,000,000 of protection and indemnity coverage naming Chevrоn as an additional insured.
At 2:30 a.m. on July 31, 1989, the SEA SAVAGE set out on its regularly scheduled cargo run in the West Delta field. Captain Dalton Parker was in command of the vessel. By 10:06 a.m., the tropical storm had been upgraded to a hurricane, and Chevron’s operations manager ordered ah evacuation of the West Delta field. Before proceeding to the
The SEA SAVAGE arrived at the P-1 platform at approximately 10:45 a.m. Witnesses estimated that the seas were between six and eight feet at the time and that the winds were some 35 miles per hour. Three workers, including Randall, were waiting to be evacuated. Captain Parker backed the SEA SAVAGE next to the platform and, following standard procedures, held the stem at an angle to the platform. Randall was the first to attempt the swing transfer. He grasped the swing rope and swung ,to the deck of the vessel. What happened next is not clear, but it appears that Randall landed on his feet as the vessel rose with a swell, causing the swing rope to go slack. Randall continued to hold onto the rope, and as the vessel fell with the waves the rope went taut. Randall was then pulled back off the vessel. Randall lost his grip on the rope and fell into the water.
Deckhand Paul Nash witnessed the episode and immediately ran some fifty feet to the rear of the SEA SAVAGE’s pilothouse to retrieve the life ring. Captain Parker was aware of Randall’s fall and immediately put the vessel into gear, moving the vessel forward and away from Randall. He testified that moving towards Randall would have risked sucking Randall into the propellers or crashing him against the platform. Randall, a strong swimmer, managed to swim to one of the platform’s legs. He clung to the leg as best he could in the rough water for some twenty-five minutes. Efforts to save Randall with a life ring thrown from the SEA SAVAGE were unsuccessful. At last Randall let go of the platform, slumped over, and drowned. He floated out from under the platform and was - recovered by deckhand Nash. His body was lacerated, apparently from being thrown against the barnacle-encrusted leg of the platform by the waves. The remaining Chevron employees were evacuated by helicopter.
Procedural History
On October 2, 1989, Barbara Randall, both individually and as personal representative of the estate of her deceased husband and their two children, commenсed this action in the United States District Court for the Eastern District of Louisiana seeking wrongful death and survival damages under the Jones Act, 46 U.S.CApp. § 688, and the general maritime law against Chevron and the SEA SAVAGE. Sea Savage filed a complaint for exoneration from or limitation of liability, claiming it was entitled to limit its liability to the value of the SEA SAVAGE and her pending freight. On January 25, 1990, this matter was consolidated with the Randall lawsuit for trial. Chevron answered and filed a cross-claim against Sea Savage seeking indemnification, costs, and attorneys’ fees in connection with the Randall lawsuit. Chevron also filed a third-party complaint against the underwriters supplying the insurance coverage to Chevron as an additional insured pursuant to Chevron’s time charter with Sea Savage.
On March 30, 1990, Chevron moved for summary judgment on plaintiffs Jones Act and punitive damages claims. By minute entry dated July 26, 1990, the district court dismissed the Jones Act claims, finding that Randall could not be considered a Jones Act seaman because he was never assigned to any vessel and worked exclusively on fixed platforms. The court did not dismiss plaintiffs general maritime or punitive damages claims.
On March 26, 1991, Chevron moved for partial summary judgment, arguing that the court should dismiss all of the plaintiffs claims except for those claims stated under § 905(b) of the Longshore and Harbor Workers’ Compensation Act (“LHWCA”), 33 U.S.C. § 901 et seq., and/or the exclusive remedy provisions of the Louisiana Workers’
The bench trial commenced on November 12, 1991. At the conclusion of the trial on November 14, 1991, the district court rendered oral reasons for judgment from the bench. The court found Sea Savage and the crew of the SEA SAVAGE 75% liable in causing the accident. Among other things, the district court found that Sea Savage was negligent in failing to train the captain and crew of the SEA SAVAGE properly in lifesaving procedures, in failing to place a life ring near the jump station of the vessel, and for the failure of the SEA SAVAGE’s captain and crew to follow accepted rescue procedures after Randall fell into the water. The court further held that Sea Savage was not entitled to its requested limitation of liability because of its failure to properly train the captain and crew of the vessel, to require drills in rescue procedures, and to ensure that the captain was competent. The court held Chevron'25% liable for directing the vessel to remain in and encounter the treacherous weather conditions that then existed.
With respect to damages, the district court made the following awards to the Randalls: $66,725 for past lost wages; $309,177 for lost future support; and $30,395 for loss of personal services. Under the heading of “loss of society” damages, the court awarded $300,-000 to Mrs. Randall, $100,000 to Randall’s adult son Rod Randall, and $150,000 to Randall’s daughter Holly Randall. The court awarded $1,000,000 for Randall’s pain and suffering and $3,897 for funeral expenses. The claim for punitive damages was denied.
The district court took under advisement Chevron’s claim against Sea Savage for contractual indemnity. By minute entry filed February 19, 1992, the district court ruled that Chevron was entitled to contractual indemnity from Sea Savage under the terms of the time charter. This decision is reported as Randall v. Chevron U.S.A., Inc.,
On March 19, 1992, judgment was entered in favor of Chevron for indemnity and insurance coverage. The district judge' referred the issue of the appropriate amount of costs and attorneys’ fees to award Chevron to a magistrate judge. On July 7, 1992, the district court found that the fees and expenses incurred by Chevron in defending the plaintiffs claims were fair and reasonable and awarded reimbursement for those fees. The court denied reimbursement, however, for those fees and expenses spent in defense of the punitive damages claim.
After the notices of appeal and briefs were filed, Sea Savage and its various insurance underwriters entered into a settlement agreement with the plaintiff on April 22, 1993, which included a complete assignment of all plaintiffs claims in this matter to Sea Savage and its underwriters. Thus, Sea Sav
II.
Standard of Review and Choice of Law
This court accepts the factual findings of the district judge unless they are clearly erroneous. However, we may review de novo a district court’s conclusions of law. Halferty v. Pulse Drug Co.,
Construction of maritime contracts is governed by federal maritime law. Theriot v. Bay Drilling Corp.,
III.
A. Was Randall a “maritime employee’’ within the meaning of the LHWCA?
The first issue presented for our decision is whether the district court correctly held that Randall was a “maritime employee” and thus that his widow was entitled to proceed under the LHWCA rather thаn under Louisiana’s workers’ compensation statute. Both Chevron and Sea Savage argue that the district court erred and that Randall was not covered by the LHWCA. Mrs. Randall, before she settled out of this case, argued the opposite position.
A brief overview of the LHWCA is in order. The coverage section of the LHWCA provides that compensation shall be payable upon the disability or death of an employee “if the disability or death results from an injury occurring on the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel).” 33 U.S.C. § 903(a). With certain exclusions not relevant to the instant case, the term “employee” is defined as “any person engaged in maritime employment, including any longshoreman or other person engaged in longshoring operations, and any harbor-worker including a ship repairman, shipbuilder, and ship-breaker.” Id. § 902(3). As a general rule, the LHWCA imposes liability for benefits payable to an injured worker upon the employer. Id. § 904(a). This is the exclusive liability of the employer qua employer, so the employer is generally immune from the injured worker’s potential tort suits. Id. § 905(a). The specific benefits to which the injured longshoreman is entitled are defined in the LHWCA. Id. §§ 907-09.
The issue of whether Randall's accident is one covered by the LHWCA turns on whether he satisfies the two-pronged test set forth in that statute. First, his injury must have occurred at a covered location or “situs.” Herb’s Welding, Inc. v. Gray,
Our analysis of the “status” issue begins with the Supreme Court’s decision in Northeast Marine Terminal Co. v. Caputo,
The next case in which the Supreme Court addressed the “status” test was Director, Office of Workers’ Compensation Programs v. Perini N: River Assocs.,
The Court again considered the contours of the “status” test in Herb’s Welding, in which a welder employed on a fixed offshore drilling platform was injured on such a platform and sought LHWCA benefits. Herb’s Welding,
Gray was a welder. His work had nothing to do with the loading or unloading process, nor is there any indication that he was even employed in the maintenance of equipment used in such tasks.... He built and maintained pipelines and the platforms themselves. There is nothing inherently maritime about those tasks. They are also performed on land, and their nature is not significantly altered by the marine environment, particularly since the exploration and development of the Continental Shelf are not themselves maritime commerce.
Id. at 425,
The instant case falls within that grey area left open for later decision by the Supreme Court in Perini and Herb’s Welding. Chevron and Sea Savage argue that the circumstances of Randall’s death place him outside the LHWCA’s ambit under Brockington v. Certified Elec., Inc.,
In Fontenot, the plaintiff, Joseph Fonte-not, was a “wireline operator” employed by an oil field service company as a “pipe recovery specialist.” Fontenot,
We believe that Fontenot answers, although only implicitly, the question left open in Perini and Herb’s Welding in favor of LHWCA coverage for the worker injured while transiently or fortuitously on actual navigable waters. The Fontenot court relied on Perini in reaching the conclusion that Fontenot came within the ambit of the LHWCA, stating,
[I]f the employee was injured while on actual navigable waters, in the course of his employment, then he is engaged in maritime employment and satisfies the status test under Perini....
In this ease, Fontenot injured himself while on the crewboat. The crewboat was docked in actual navigable waters. Therefore, under [Perini], Fontenot, at the time of his injury, satisfied the status requirement of the LHWCA.
Id. at 1130 (emphasis added). We have some difficulty with this analysis, specifically in the Fontenot court’s conspicuous omission of the “in the course of his employment” element of Perini in its application of Perini to Fonte-not’s case. Part of the difficulty, however, stems from the language of Perini itself. In one passage in Perini, the Supreme Court strongly suggested that even workers who are injured on navigable waters are required to show that “they are required to perform their employment duties upon navigable waters.” Perini,
Had the Fontenot court relied on the fact that Fontenot was employed on vessels, i.e., on actual navigable waters, some thirty percent of the time as well as on the day of his accident, its holding would be within the Perini rule. Instead, the court chose to rely solely on the situs of Fontenot’s injury:
The Court [in Herb’s Welding] did not address the status of an oil field employee injured while in transit on navigable waterways, or one who spent a substantial period of his time working on drilling vessels, rather than fixed platforms.
This case presents both issues. Fonte-not injured himself while on a vessel in navigable waters. And Fontenot spent thirty percent of his time working on oil production vessels, and was returning from a job on such a vessel when he injured himself. We hold that the first fact satisfies the status test for coverage under the LHWCA, and address but leave open the question of whether the second would satisfy the status test.
Id. at 1130 (emphasis added). We understand “the first fact” to be the fact that “Fontenot injured himself while on a vessel in navigable waters.” Id. By holding that the occurrence of an injury on actual navigable waters satisfies the “status” test, the Fontenot court answered the question of whether LHWCA coverage extends to workers injured while transiently or fortuitously upon actual navigable waters in the affirmative.
Applying Fontenot to the instant case, we think it beyond cavil that Randall was injured “on navigable waters” within the meaning of Perini and the LHWCA. The accident occurred during Randall’s attempt to return to shore. The instant case is thus on all fours with Fontenot, and we must thereforе conclude that Randall was covered by the LHWCA.
B. Apportionment of Fault
1. Time Charterer Liability
We next consider the district court’s apportionment of liability between Chevron and Sea Savage. The court apportioned fault because, under § 905(b) of the LHWCA, a longshoreman injured by the negligence of a “vessel” is entitled to bring an action against that vessel. The court determined that Chevron constituted a “vessel” because the term “vessel” is defined by the LHWCA to include not only the vessel’s owner but also a “charter or bare boat charterer.” 33 U.S.C. § 902(21). Thus a time charterer may be liable under § 905(b) if the cause of the harm is “within the charterer’s traditional sphere of control and responsibility or has been transferred thereto by the clear language of the charter agreement.” Kerr-McGee Corp. v. Ma-Ju Marine Servs., Inc.,
We begin by noting that the LHWCA casts a wide net in defining parties potentially liable in the event of injury caused by vessel negligence. The statute provides that
[U]nless the context requires otherwise, the term “vessel” means any vessel upon which or in connection with which any person entitled to benefits under this chapter suffers injury or death arising out of or in the course of his employment, and said vessel’s owner, owner pro hac vice, agent, operator, charter or bare boat charterer, master, officer, or crew member.
33 U.S.C. § 902(21). Nothing in the statute suggests that a finding that negligence was committed by one entity defined as a “vessel” in § 902(21), such as the vessel’s owner, pre-
Chevron argues that there was no evidence that it was negligent in its capacity as time charterer of the SEA SAVAGE. In his oral findings, the district judge found Chevron negligent for “direct[ing] the vessel to remain in, and to encounter the treacherous weather conditions that existed in the Gulf.” Chevron argues that there is no duty on the part of a time charterer to determine whether the missions it assigns can be accomplished safely. In Chevron’s view, this duty rests solely with the vessel captain unless specific contractual provisions shift duties onto the time charterer. Sea Savage takes the opposite position, arguing that the district court correctly held that a time charterer may be held hable for damages that rеsult from directing a vessel to encounter dangerous natural conditions.
Sea Savage.cites several cases in its favor, beginning with the Helaire case cited above. In that case, Edmond Helaire was employed by Mobil as a roustabout and was ordered to unload casing onto a fixed platform from a supply vessel during rough weather. Helaire,
There are other precedents for the district court’s assignment of fault to Chevron as time charterer. In Graham v. Milky Way Barge, Inc.,
Chevron counters by referring this court to our decision in M.O.N.T. Boat Rental Servs., Inc. v. Union Oil Co.,
Chevron also directs our attention to Smith v. Southern Gulf Marine Co. No. 2, Inc.,
The trend of our more recent decisions, as demonstrated by Sea Savage, plainly favors imposing a duty of care on a time charterer who orders the vessel he has hired to put to sea in dangerous weather. We distinguished M.O.N.T. Boat Rental in Graham, noting that M.O.N.T. Boat Rental “implicitly recognizes that there is a distinction between a time charterer’s potential liability under the time charter and independent tort liability which is not governed by the time charter.” Graham,
We think it clear that a time charterer may breach its duty of care if it “forces [the vessеl under charter] out in hurricane weather or similar treacherous conditions.” Kerr-McGee Corp.,
2. Sufficiency of the Evidence
Sea Savage argues that it was clearly erroneous for the district court to assign 75% of the liability for Randall’s death to Sea Savage. Specifically, Sea Savage contends that the district court should have assigned more than 25% of the liability to Chevron for its role in ordering the evacuation of the platform by vessel instead of by helicopter, and that the district court should have found Randall himself contributorily negligent.
We reject both of Sea Savage’s contentions. There was ample evidence to support the district court’s assignment of 75% of the fault to Sea Savage, based on the acts and omissions of the crew of the SEA SAVAGE. We list only a few of the pertinent factual findings by the district court, all of which were supported by the evidence. The captain of the SEA SAVAGE failed to post any crew members near the stern of the vessel where platform personnel would be boarding, despite the rough weather conditions. No life ring was easily accessible at the stern of the vessel, and to retrieve a life ring deckhand Nash had to leave the stern of
Neither was it clearly erroneous for the district court to assign no ' fault to Randall himself. There was eyewitness testimony that Randall’s swing was not improperly done. Because the SEA SAVAGE began to move away from Randall as soon as he fell overboard, his decision to swim beneath the platform and cling to its legs for support could be found to be reasonable under the circumstances. We find no error in the district court’s apportionment of fault in this case.
C. Damages
Chevron challenges two elements of the district court’s damages award. First, Chevron argues that it was clear error for the district court to award $1,000,000 for Randall’s pain and suffering. Second, Chevron argues that the district court’s award of loss of society damages was improper under the LHWCA.
1. Pain and Suffering
A trial judge’s assessment of damages is a finding of fact and is reviewed under the clearly erroneous standard. Wheat v. United States,
After careful consideration, we conclude that the $1,000,000 award for Randall’s pain and suffering must be reduced to $500,-000. We recognize that “[o]ur reassessment of [pain and suffering] damages cannot be supported entirely by rational analysis, but is inherently subjective, involving experience and emotions as well as calculation.” Dixon v. International Harvester Co.,
The instant case is distinguishable from Wellborn, in which we affirmed a $1,000,000 award for pain and suffering to the estate of a fourteen year-old boy who died after being pinned beneath an automatic gаrage door. Wellborn,
2. Loss of Society
We next address Chevron’s challenge of the district court’s awards for loss of society. Under this heading, the district court awarded $300,000 to Randall’s widow, $100,000 to Randall’s adult son Rod Randall, and $150,000 to Randall’s daughter Holly Randall. It appears that both of Randall’s children lived at home and that Rod Randall worked for his father. Chevron argues that non-pecuniary damages such as for loss of society are not available as a matter of law in the instant case. We disagree.
The,availability of loss of society damages in maritime cases is an issue that has led the courts to weave an intricate web of ease law. We begin our analysis with the seminal case of Sea-Land Servs., Inc. v. Gaudet,
In a case not involving longshoremen, however, the Supreme Court took a less expansive view of the remedies available under maritime law. In Mobil Oil Corp. v. Higginbotham,
After Alvez, the maritime rules regarding loss of society damages in this circuit developed somewhat unevenly. In light of Gaudet and Alvez, we took a friendly view of loss of society damages in Cruz v. Hendy Int’l Co.,
In 1990, the Supreme Court again turned its attention to this complex area of the law. In Miles v. Apex Marine Corp.,
Thus, Gaudet remains good law, even though its application has been severely limited. This case comes squarely within its ambit. Randall, we have held, was a longshoreman within the mеaning of the LHWCA, and his accident occurred within Louisiana state territorial waters. Miles, therefore, does not preclude loss of society damages as a matter of law in the instant case. The continued vitality of Gaudet and Alvez on their facts has been noted. See Ferrara v. Fukuoka Senpaku K.K.,
Chevron argues in the alternative that the district court erred in awarding loss of society damages to Randall’s adult son because only financial dependents may recover such damages and there was no evidence that Rod Randall was dependent upon his father. In our view, the law of this circuit does not unequivocally limit recovery of loss of society damages for the wrongful death of a parent to children who are financially dependent on the deceased parent. The case of Skidmore v. Grueninger,
In any event, we need not unravel this tangled skein of case law today. In ruling on Sea Savage’s post-trial motion to amend the judgment, the district court specifically found that Rod Randall was financially dependent on his father. Both Sea Savage and Chevron argue in their briefs that there was no evidence to support this finding, making much ado about the fact that Randall did not declare his son as a dependent on his income tax returns. However, other credible evidence supports the district court’s finding. As Rod Randall testified, he had dropped out of college and was living at
We affirm the district court’s awards of loss of society damages.
D. Indemnity and Insurance
As is often the case in this type of dispute, the most hotly contested issue is not whether the accident victim or his family should be compensated but rather who should ultimately bear the cost of that compensation. The district court decided that Chevron was entitled to both indemnification for its liability from Sea Savage and insurance coverage for its liability from the underwriters of the insurance procured for Chevron by Sea Savage. We address these holdings in turn.
1. Indemnity
Sea Savage mounts a two-pronged attack on the district court’s holding that it was liable to indemnify Chevron in this case. First, Sea Savage argues that the language of the indemnity clause contained in its time charter with Chevron does not entitle Chevron to indemnification for damages arising out of Chevron’s own negligence. Second, Sea Savage argues that Chevron’s liability in this case does not arise out of the “management or control” of the SEA SAVAGE as required by the time charter. Because Sea Savage’s first argument is meritorious, we do not reach Sea Savage’s second point.
We begin our analysis with the words of the time charter themselves. That contract provides, in pertinent part, as follows:
Owner shall man, operate, and navigate the vessel. The vessel shall prosecute its trips and perform its services with dispatch, as directed by the charterer, but responsibility for the management and navigation and operation of the vessel shall remain at all times in the owner, same as when trading for owner’s account; and nothing herein contained shall be construed as making this a demise.... Owner hereby agrees to defend, indemnify and hold harmless Chevron against all claims for taxes or for penalties or fines, as well as against any and all claims for damages, whether to person or property, and howsoever arising in any way directly or indirectly connected with the possession, navigation, management, and operatiоn of the vessel.
As a maritime contract, the time charter is governed by federal law. Thurmond v. Delta Well Surveyors,
Sea Savage argues that Lanasse v. Travelers Ins. Co.,
Owner shall man, operate, and navigate the vessel. * * * Responsibility for the management and navigation and operation of the vessel shall remain at all times in the owner. * * * Owner hereby agrees toindemnify and hold harmless [Chevron] against all claims * * * as well as against any and all claims for damages, whether to person or property, and howsoever arising in any way directly or indirectly connected with the possession, navigation, management, and operation of the vessel.
Id. at 582 n. 4 (emphasis deleted). The court held that the language of this indemnity agreement could not be stretched so far as to reach the negligence of Chevron’s crane operator, as this negligence was “not even remotely related to the operation, navigation or management of the vessel.” Id. at 583. We also held that, even if the crane accident were covered under the “operation of the vessel” clause, the indemnity provision could not be construed to entitle Chevron to indemnification for liability arising from the negligence of its own employees. Id. at 583-84 (stating that contractual indemnity for one’s own negligence arises only from the “plainly expressed intention of the parties, manifested by language couched in unmistakable terms”).
The district court relied on In re Incident Aboard D/B Ocean King,
Sea Savage argues that Ocean King is inapposite because it involved the application of Louisiana law rather than federal law. The district court reached the opposite conclusion, using the following reasoning: (1) Louisiana law requires more specificity than federal law in order for an indemnity provision to include indemnification for an indem-nitee’s own negligence; (2) the instant indemnity provision would include indemnification for Chevron’s own negligence under Louisiana law;- and (3) therefore the instant indemnity provision includes indemnification for Chevron’s own negligence under federal law. Randall,
We are not convinced that the district court’s basic assumption — that federal law construes indemnity provisions more generously in favor of the indemnitee than Louisiana law — is correct. Our cases reveal many instances in which we have held that “[l]ong-established general principles of interpreting indemnity agreements require that indemnification for an indemnitee’s own negligence be clearly and unequivocally expressed.” Theriot,
It may be that the Ocean King case, relied upon by the district court, is properly distin
In the final analysis, however, we need not decide whether Ocean King is distinguishable because Lanasse is controlling. Confronting the indemnity provision in Lanasse we held that damages caused by the indemnitee’s own negligence were not covered. Lanasse,
2. Insurance
Although we have concluded that Chevron was not entitled to indemnification from Sea Savage under the terms of the time charter, Chevron may still avoid bearing the ultimate cost for its negligence through the protection and indemnification policy (P & I policy) procured by Sea Savage naming Chevron as an additional insured. Sea Savage was required to provide Chevron with such insurance protection by the terms of the time charter, the relevant portion of which reads as follows:
During the life of this charter, owner will, at its own expense, provide and maintain insurance covering all liabilities which might arise from the possession, management, manning, navigation and operation of the vessel, which said policies shall be in form and amount, and with companies as required and approved by Chevron; and on which policies Chevron shall be included as party assured and all rights of subrogation against Chevron shall be waived.
Sea Savage obtained primary insurance coverage from Royal Insurance Company, among others, and excess coverage from American Home Insurance Company (collectively, “the underwriters”).
The underwriters moved for summary judgment on Chevron’s claims against them before trial. The district court granted these motions on the grounds that Randall’s accident fell outside the scope of the P & I policy. Randall,
The pertinent provision in the P & I policy issued to Chevron reads as follows:
The Assurer hereby undertakes to make good to the Assured ... all such loss and/or damage and/or expense as the Assured shall as owners of the vessel named herein have become hable to pay and shall pay on account of ... liability for loss of life of, or personal injury to, or illness of, any person....
(emphasis added). The underwriters argue that Chevron’s negligence in this case was not committed in the capacity of “owner” of the SEA SAVAGE, and that Chevron thus lacks coverage under the policy. Chevron argued to the district court that this clause had been deleted, but the district court disagreed, see Randall, 788 F.Supp. at 1401-08, and Chevron does not challenge this finding on appeal.
The question presented for our decision, quite simply, is whether the district court correctly held that the liability incurred by Chevron in its capacity as time charterer was incurred “as owner” within the meaning of the insurance policy. The court’s reasoning, it appears, was largely based on the assumption that thе term “owner” has the same meaning in the insurance policy as it does in § 902(21) in the LHWCA. Randall,
Both Chevron and the underwriters acknowledge that Lanasse is the seminal case in this area of the law. In Lanasse, Chevron claimed it was entitled to insurance coverage “as owner” of the vessel on which the victim was injured by the negligence of Chevron’s crane operator. Lanasse,
There must be some causal operational relation between the vessel and the resulting injury. The line may be a wavy one between coverage and non-coverage, especially with industrial complications in these ambiguous amphibious operations plus those arising from the personification of the vessel as an actor in a suit in rem. But where injury is done through nonves-sel operations, the vessel must be more than the inert locale of the injury.
Id. at 584 (footnote omitted). Although the phrase “causal operational relation” does little to clarify the meaning of the phrase “as owner” in the instant case, Lanasse clearly suggests that a time charterer may become eligible for insurance coverage “as owner” under some circumstances.
The underwriters direct our attention to Graham v. Milky Way Barges, Inc.,
Chevron cites the Helaire case in support of the proposition that any negligence it may have committed as time charterer is within the “as owner” language of the insurance policy. As we have seen, the time сharterer in that case was held liable for injuries suffered by a worker who was unloading equipment from a vessel to a platform under § 905(b) of the LHWCA. Helaire,
Chevron also relies on Texas E. Transmission Corp. v. Garber Bros.,
Sea Savage and its underwriters argue that Garber Bros. was implicitly overruled by this court’s decision in Texas E. Transmission Corp. v. McMoRan Offshore Exploration Co.,
We do not agree with the position urged by Sea Savage and its underwriters. Their interpretation of McMoRan would make it virtually, if not completely, impossible for a time charterer ever to receive insurance coverage under any circumstances, and if McMoRan did have such an effect we might be forced to disregard it as inconsistent with our earlier opinion in Lanasse. This is not necessary, however, as the underwriters have overstated the breadth of the holding in McMoRan. As that court clearly stated,
Any P & I insurance that Faustug might have obtained would not have covered McMoRan’s negligence, since McMoRan’s negligence did not arise out of the ownership of a vessel, but out of the operation of an anchor retrieval process in which the vessel was only “the inert locale of the injury.”
Additionally, as we have suggested, the interpretation of the insurance policy urged by Sea Savage and its underwriters would render the insurance coverage virtually meaningless. Sea Savage argues that, as owner of the SEA SAVAGE, it retained control of the navigation, management, and operation' of the vessel. Sea Savage also argues that “by contract and tradition, Chevron could not act as a manager or operator of the vessel,” and that “as a matter of common sense it could not commit fault ‘as owner’ of the vessel.” If this were true, then the insurance policy providing coverage for Chevron’s liability “as owner” of the vessel could never come into effect. Under this interpretation, no time charterer could ever satisfy the “causal operational relationship” requirement so as to qualify for insurance coverage “as owner” of the vessel. We will not construe an insurance policy in such a way that it provides no coverage whatsoever to the insured.
The only connection a time charterer typically hаs with the vessel it hires is the right to direct the vessel’s movements. We find persuasive the reasoning of the court below and that of the court in Garber Bros. that when the time charterer exercises this right negligently, it has committed negligence “as owner” of the vessel within the meaning of that phrase in a marine insurance policy. This type of negligent conduct, it seems to us, has the requisite “causal operational relationship” to the vessel, even though the time charterer wholly lacks the authority to direct the minutiae of the vessel’s day-today operations. “In this action, Chevron’s contribution to Randall’s death, ordering the vessel to encounter dangerous seas, clearly is related to the vessel.” Randall,
3. Chevron’s Expenses Incurred Defending Mrs. Randall’s Punitive Damages Claim
Chevron argues that the district court erred by refusing to award Chevron costs and attorneys’ fees incurred in connection with Mrs. Randall’s claims for punitive damages. Chevron contends that it is entitled to reimbursement for these expenses under both the indemnity provision of the time charter and the P & I policies. The claim based on the indemnity provision of the time charter must fail because, as we have already held, Chevron is not entitled to indemnification from Sea Savage for any losses suffered by Chevron as a result of its own negligence. We must now consider whether Chevron may recover its costs and attorneys’ fees from Sea Savage’s underwriters.
As has bеen observed, the seminal question in resolution of this coverage issue is the choice of law to be applied. 2 Parks, supra, at 1039. We have recently resolved this issue in favor of state law. In Taylor v. Lloyds Underwriters,
The P & I policy in question insures Chevron with respect to “[c]osts, charges, and expenses, reasonably incurred and paid by the Assured in defense against any liabilities insured against hereunder in respect of the
The underwriters argue that punitive damages, and by extension expenses incurred in defending against such damages, are excluded from coverage under the policy. They contend that punitive damages are not liabilities “for loss of life of ... any person” as are covered by the policy. For support the underwriters cite Smith v. Front Lawn Enters.,
Although the Sharp case, decided by the Louisiana Supreme Court, deals with uninsured motorist insurance only, there is nothing in the opinion to suggest that its holding would not apply with equal force to other types of insurance. P & I policies are, strictly speaking, indemnity policies rather than liability policies, but the indemnity is itself basically against liabilities, 2 Parks, supra, at 1004, and in general indemnity policies are construed like any other insurance policy. Id. at 839. Sea Savage’s underwriters have not directed our attention to any Louisiana cases suggesting that the application of Sharp should be limited in any way, nor does our research uncover any. The policy language at issue in Sharp, which covered damages arising “because of bodily injury, sickness, or disease,” is not more general or all-encompassing than the “[[liability for loss of life of, or personal injury to, or illness of, any person” language in the instant P & I policy. We therefore hold that under Louisiana law, applied in the absence of a controlling federal rule, punitive damages are covered by the P & I insurance policy at issue in the instant case. Chevron is therefore entitled to recover its costs and attorneys’ fees expended in defending Mrs. Randall’s claim for punitive damages. The district court’s holding to the contrary is reversed.
E. Attorneys’ Fees
Our final task on this appeal is to review the district court’s award of attorneys’ fees to Chevron. The district court referred Chevron’s claim for attorneys’ fees to a magistrate judge, who made several recommendations that Chevron’s claims be reduced in amount. Specifically, the magistrate judge recommended that the hourly rate of Chevron’s lead trial cоunsel be reduced from $175 to $150 and that the total number of hours billed by Chevron’s attorneys be reduced by 30%. The district court heard oral argument and refused to adopt these recommendations, instead finding the hours and rates requested by Chevron to be reasonable. Sea Savage asks this court to reverse the decision of the district court and to enforce the recommendations of the magistrate judge.
IV.
For the foregoing reasons, we REVERSE the district court’s award for pain and suffering and REMAND for the granting of a remittitur to $500,000 or a new trial on damages at Sea Savage’s option. We REVERSE the district court’s holding that Chevron is entitled to indemnification from Sea Savage under the time charter. We .also REVERSE the district court’s denial of attorneys’ fees to Chevron for its defense of the claim for punitive damages and REMAND for determination of those fees. In all other respects, the judgment of the district court is AFFIRMED. Costs shall be borne by Chevron and Sea Savage.
Notes
. After the parties filed their briefs, the Randalls settled with Sea Savage and its underwriters and assigned their claims to them. Thus, Sea Savage and its. underwriters have taken the place of the Randalls on this appeal. As will be seen, however, they have not adopted all the legal positions taken by the Randalls at trial.
. Strangely, the pre-trial order filed on November 5, 1991, listed as a contested issue of law "[w]hether Louisiana, General Maritime and/or LSHWA Law applies” ("LSHWA” being another acronym occasionally used in lieu of "LHWCA”). However, after judgment was entered in favor of Mrs. Randall, the district court reiterated that it hаd "previously held that Mr. Randall was covered by the Longshore and Harbor Worker's Compensation Act.” Randall v. Chevron U.S.A., Inc.,
. According to Sea Savage, the only issue mooted by the settlement is Sea Savage's claim before the district court that it was entitled to limit its liability as vessel owner.
. The threshold determination of whether Randall was covered by the LHWCA may have an impact on the outcome of several other issues in this case. The availability of loss of society damages may depend on whether or not Randall was a longshoreman. Sea Savage, although it now stands in Mrs. Randall's shoes for our purposes, has chosen to continue to argue against LHWCA coverage in the apparent belief that reversal on this issue would necessitate a remand for redetermination of its and Chevron's comparative negligence. We note, however, that the district court apportioned 100% of the liability between Chevron in its capacity as "vessel” and Sea Savage, suggesting that Chevron was not liable in any other capacity and that no reapportionment of negligence would be necessary. Chevron argues against LHWCA coverage in the apparent belief that Louisiana workers' compensation law would provide the exclusive remedy to the Randalls should we decide that the LHWCA does not apply. But see Thibodaux v. Atlantic Richfield Co.,
. Fontenot's interpretation of the LHWCA conflicts with that of the Eleventh Circuit. In Brockington v. Certified Elec., Inc.,
. The limitation of the Gaudet rule to longshoremen injured in state territorial waters has been scrupulously observed. See Robertson v. Arco Oil and Gas Co.,
. The court below also held, in the alternative, that a presumption of dependency exists whenever a child continues to live at home with his parents, adopting the reasoning found in Truehart v. Blandon,
. We refer, as do the parties, only to the primary P & I policy, because the excess P & I policies cover the same liabilities as the primary policy.
Concurrence Opinion
concurring in part, dissenting in part:
I concur with the majority opinion, with the exception of the remittitur portion contained in Section III., C., 1., Damages; Pain and Suffering. I am persuaded that the district court’s assessment of the facts of this case as it relates to the award of damages in the amount of $1,000,000.00 for pain and suffering is not only not clearly erroneous, but falls within the bounds of reasonable compensation under the circumstances. I therefore limit my dissent to the remittitur ordered.
