Eastern District of Louisiana Excludes Pre-Trial Surveillance for Failure to Disclose

Plaintiff filed a Jones Act claim against several defendants, including barge drilling contractor, Baywater Drilling, LLC (“Baywater”) and oil services company Frank’s International, LLC (“Frank’s”).  The matter was initially set for trial in April 2015, but was continued several times.  The final continuance, granted in August 2016, set the trial for October 31, 2016 with an order that “no further discovery shall be conducted and no motions shall be filed without leave of Court.”

 

On October 2, 2016, Baywater and Frank’s conducted targeted surveillance that revealed Plaintiff working on his truck, using a handheld jack to jack up his truck, and physically lying under his truck.  This video was produced to Plaintiff on October 19, 2016, which prompted Plaintiff to file a Motion to Exclude.  At no time was the court provided with the surveillance video prior to Plaintiff’s motion.  Further, at no time did the defendants move to amend the pretrial order to include the videographer as a witness or the video itself as an exhibit.  The court granted Plaintiff’s motion to exclude.

 

In granting Plaintiff’s motion, the court cited Chaisson v. Zapata Gulf Marine Co., 988 F.2d 513 (5th Cir. 1993), which held that surveillance evidence is considered substantive evidence that is subject to discovery and that failure to timely disclose it can lead to its exclusion.  The court held that inclusion of the surveillance footage would be highly prejudicial to Plaintiff constituting the type of surprise that Chaisson was intended to prevent.

 

Smith v. Baywater Drilling, LLC, et al

Drilling Rig Exclusion Precluded Insured’s Reimbursement Claim Against Excess Insurer

The U.S. Fifth Circuit Court of Appeals recently addressed an insurance coverage question involving an excess insurer and an offshore injury.  The Plaintiff was injured while working on a drillship in the Gulf of Mexico.  Plaintiff filed a lawsuit in 2011 pursuant to the Jones Act and general maritime law in the U.S. District Court for the Western District of Louisiana.  Later that year, his employer was named as a third party defendant.  The employer filed cross claims against its primary insurer in 2012 and against its excess insurer 2014.  The Jones Act employer eventually settled with the Plaintiff, but maintained its claims for reimbursement against its two insurers.

 

The excess insurer moved for summary judgment and argued the excess insurance policy excluded coverage.  Specifically, the policy contained an exclusion for “any liability or expense arising out of the ownership, use or operation of drilling rigs, drilling barges, drilling tenders, platforms, flow lines, gathering stations and/or pipelines, but this exclusion shall not apply to craft serving the foregoing such as crew, supply, or utility boats, tenders, barges or tugs.”  The District Court agreed the injury occurring on a drillship fell within this exclusion and dismissed the employer’s claim for reimbursement against the excess insurer.  The employer appealed to the Fifth Circuit.

 

On appeal, the employer argued in part that the excess insurer waived coverage defenses by not raising them until 2014 and not issuing a reservation of right letter.  Under Louisiana law, waiver occurs when there is 1) an existing right, 2) knowledge of its existence, and 3) an actual intention to relinquish it or conduct so inconsistent with the intent to enforce the right as to induce a reasonable belief that it has been relinquished.  The Court found the excess insurer satisfied the first two elements by possessing the coverage defense and having knowledge of the accident as early as 2011.  The employer argued that the excess insurer’s conduct of not raising the coverage defense for three years satisfied the third element and effectively waived the insurer’s right to assert a coverage defense.  The Fifth Circuit determined that because the excess insurer was not made a party to the case until three years after the lawsuit being filed, there was no evidence that the excess insurer had assumed defense of the employer with the intention or conduct of eventually denying coverage.  In other words, the insurer’s conduct prior to being brought into the lawsuit did not create a belief that it intended to waive the coverage defense, which was asserted in its initial filings.  Thus, the excess insurer had not waived its right to lodge a coverage defense and the Fifth Circuit affirmed the dismissal of the employer’s claim against its excess insurer.

 

Richard v. Dolphin Drilling

Fifth Circuit Weighs in on P&I Insurance Coverage Dispute

Following a verdict in favor a Jones Act seaman, Larry Naquin, for injuries he sustained in a land-based crane accident, an insurance coverage dispute arose between Naquin’s employer, Elevating Boats, LLC (“EBI”), and its insurance companies, State National Insurance Company (“SNIC”) and Certain London Insurers (“London Insurers”).  EBI alleged that SNIC and London Insurers breached their insurance contracts by denying EBI’s claims related to Naquin’s accident and failing to provide defense and indemnity.  EBI also sought damages for bad faith on the part of SNIC and London Insurers.  SNIC moved for summary judgment, arguing there was no coverage for Naquin’s land-based accident under its Protection & Indemnity Policy (the “Policy”) and that EBI failed to provide sufficient notice as required by the Policy.  The District Court granted summary judgment and entered final judgment in favor of SNIC.

 

On appeal, the Fifth Circuit reviewed the “Indemnity” provision of the policy that called for indemnification of EBI “as owner of the Vessel” for liability arising out of “any casualty or occurrence[.]”  SNIC argued that the “as owner of the Vessel” clause did not provide coverage for EBI’s negligence in Naquin’s land-based accident.  EBI’s assertion to the District Court was that the “any casualty or occurrence” clause provided coverage for the accident.  The Fifth Circuit, interpreting Louisiana law, found that the only way to give meaning to the “Indemnity” provision of the Policy was to construe it as limiting coverage to “any casualty or occurrence” which arises out of EBI’s conduct “as owner of the Vessel.”  Since Naquin’s injuries resulted from a land-based crane accident, the Court held that there was no causal operational relation between the vessel and injury so as to extend coverage of the Policy in this instance.  The District Court’s summary judgment was affirmed.

 

Naquin v. Elevating Boats, L.L.C., et al.

Alleged Seaman’s Claims Dismissed for Lack of Negligence

Plaintiff was injured when he allegedly fell from a defective rope ladder while working on a barge.  He filed a lawsuit against his employer, Weber Marine, alleging negligence under the Jones Act, unseaworthiness of the barge, and seeking maintenance and cure.  In the alternative, he sought damages under Section 905(b) of the LHWCA.  Weber Marine filed two Motions for Summary Judgment.  The first motion argued that plaintiff would be unable to support his claims for Jones Act negligence, unseaworthiness, or 905(b) vessel negligence at trial.  In support of the motion, Weber Marine asserted that the ladder was in good working order, the accident was unwitnessed, and that it did not own the barge in question.  In its second motion, Weber Marine argued the plaintiff was not a Jones Act seaman and was instead a maritime worker covered by the LHWCA.

 

The district court judge for the U.S. District Court for the Middle District of Louisiana granted both of Weber Marine’s motions.  In holding plaintiff was not a Jones Act seaman, the Court determined his claims for Jones Act negligence, unseaworthiness, and maintenance and cure were moot.  Furthermore, the Court recognized that while a maritime worker has a tort-based cause of action against his employer by virtue of Section 905(b), the plaintiff had failed to raise any facts supporting his claim for negligence.  The Court dismissed the plaintiff’s claims with prejudice and instructed him to pursue any claim he may have under the LHWCA before the U.S. Department of Labor.

 

Bourgeois v. Weber Marine