Chet Morrison Contractors, LLC v. OneBeacon American Insurance Company et al, No. 2:2014cv01958 - Document 52 (E.D. La. 2015)
Court Description: ORDER AND REASONS - For the reasons herein, the Court DENIES Chet Morrison's 30 motion for summary judgment and GRANTS Continental's 29 motion for summary judgment. Signed by Chief Judge Sarah S. Vance. (bwn)
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Chet Morrison Contractors, LLC v. OneBeacon American Insurance Company et al Doc. 52 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA CHET MORRISON CONTRACTORS, LLC CIVIL ACTION VERSUS NO: 14-1958 ONE BEACON AMERICAN INSURANCE COMPANY, MARKEL AMERICAN INSURANCE COMPANY; AND CONTINENTAL INSURANCE COMPANY SECTION: R(3) ORD ER AN D REASON S This is an insurance dispute involving a com m ercial general liability policy issued to Offshore Marine Contractors, Inc. by defendant Continental Insurance Com pany. Plaintiff Chet Morrison Contractors, LLC incurred litigation costs and was cast in judgm ent in an underlying litigation. Chet Morrison now seeks paym ent from Continental of costs associated with defending the underlying suit, as well as the am ount of the judgm ent against it. Both parties have filed cross m otions for sum m ary judgm ent. For the following reasons, the Court GRANTS Continental's motion for summary judgment and DENIES Chet Morrison's m otion for sum m ary judgm ent. I. BACKGROU N D A. Th e U n d e rlyin g "Offs h o re Marin e " Litigatio n On October 29, 20 10 , Offshore Marine Contractors, Inc. filed suit, alleging that Palm Energy Offshore, LLC and Chet Morrison Well Services, LLC failed to pay for the charter of one of Offshore Marine's vessels, the L/ B NICOLE EYMARD. Offshore Marine also claim ed that Palm Energy and Chet Morrison breached a separate oral contract that the Dockets.Justia.com parties allegedly form ed after the L/ B NICOLE EYMARD's legs becam e stuck in the seabed. Under the term s of the alleged oral contract, Palm Energy and Chet Morrison prom ised to pay Offshore Marine for repair costs and lost charter fees if Offshore Marine freed the vessel by cutting its legs.1 Chet Morrison later sued Palm Energy and H.C. Resources, LLC ("HCR") alleging that if Chet Morrison were found to have chartered the L/ B NICOLE EYMARD, Palm Energy and HCR were obligated to pay Chet Morrison the cost of the charter, plus a 15% m arkup and interest for untim ely paym ents. On February 6, 20 13, the Court consolidated the two cases for trial.2 On J une 24, 20 13, the Court conducted a two-day bench trial and sum m arized its findings as follows: (1) [Chet Morrison] is liable to [Offshore Marine] for the charter of the L/ B NICOLE EYMARD for the Chandeleur 37 job, which took place from J uly 15 to J uly 27, 20 0 8. HCR is in turn liable to [Chet Morrison] for the full am ount of those charter fees. (2) [Chet Morrison] is liable to [Offshore Marine] for the charter of the vessel for the West Delta 55 job, which took place from J uly 28 to August 18, 20 0 8. [Palm Energy] is in turn liable to [Chet Morrison] for the full am ount of those charter fees. (3) Neither [Chet Morrison] nor [Palm Energy] is liable for the repair costs and downtim e charter associated with the decision to cut the leg of the vessel.3 1 Offshore Marine Contractors, Inc. v. Palm Energy Offshore LLC and Chet Morrison W ell Services, LLC, No. 10 -4151, R. Doc. 1. (hereinafter "Offshore Marine Litigation") . 2 Offshore Marine Litigation, R. Doc. 140 . 3 Offshore Marine Litigation, R. Doc. 243. The Court later am ended the judgm ent lim iting Chet Morrison's liability for the West Delta 55 job to charter fees 2 In addition to the judgm ent against it, Chet Morrison incurred attorneys' fees and costs in defense of the Offshore Marine Litigation.4 Here, neither Chet Morrison nor Continental dispute: (1) that Chet Morrison tendered its defense and requested coverage from Continental; (2) that Continental has had sufficient tim e and inform ation to m ake defense and coverage decisions; and (3) that Continental denied Chet Morrison's request for defense and indem nification.5 B. Th e In s tan t Litigatio n After the Court's bench trial in the Offshore Marine Litigation, Chet Morrison sued defendants Onebeacon Am erica Insurance Com pany, Markel Am erican Insurance Com pany, and Continental Insurance Com pany alleging that all three insurance com panies failed to undertake Chet Morrison's defense in the Offshore Marine Litigation despite Chet Morrison's status as an "additional insured" under the insurance policies underwritten by the defendants. Thus, Chet Morrison seeks to recover the am ount it was cast in judgm ent, as well as defense costs associated with the Offshore Marine Litigation. Chet Morrison also asserts derivative statutory bad faith claim s relating to the denial of those defense costs. On October 14, 20 14, defendants Onebeacon and Markel m oved the Court to dismiss the claim s against them for failure to state a claim .6 The Court concluded that the only incurred between J uly 28 and J uly 31, 20 0 8. Offshore Marine Litigation, R. Doc. 258 at 15. 4 See R. Doc. 30 -1, at 2, ¶9 (Chet Morrison's statem ent of uncontested facts); R. Doc. 40 -1, at 2, ¶9 (Continental's adm ission). 5 See R. Doc. 30 -1, at 2, ¶11-13 (Chet Morrison's statem ent of uncontested facts); R. Doc. 40 -1, at 2, ¶11-13 (Continental's adm issions). 6 R. Doc. 18. 3 policy underwritten by the m oving defendants provided no defense coverage to Chet Morrison. Accordingly, the Court granted the m otion and dism issed Chet Morrison's claim s against Onebeacon and Markel.7 Chet Morrison's claim s against defendant Continental are the only claim s rem aining in this litigation. C. Co n tin e n tal's Co m m e rcial Ge n e ral Liability Po licy At issue in this case is a Marine Services Liability Policy, ML 0 871842 (the "Policy"), which Continental issued to Offshore Marine as the nam ed insured.8 The Policy does not specifically identify Chet Morrison as an additional insured. Instead, the Policy contains a blanket additional insured endorsem ent, which provides: WHO IS AN INSURED (Section II) is am ended to include any person or organization as an insured under this policy to the extent you are obligated by an"insured contract" to include them as Additional Insureds, but only with respect to "your work."9 Under the term s of the endorsem ent, the prerequisite to additional insured coverage is an "insured contract" between Offshore Marine and Chet Morrison. In relevant part, the Policy defines "insured contract" as: That part of any other contract or agreem ent pertaining to your business (including an indem nification of a m unicipality in connection with work perform ed for a m unicipality) under which you assum e the tort liability of another party to pay for "bodily injury" or "property dam age" to a third person or organization. Tort liability m eans a liability that would be im posed by law in the absence of any contract or agreem ent. 10 7 R. Doc. 28. 8 R. Doc. 29-4. 9 Id. at 31. 10 Id. at 10 . 4 Under the Policy, Continental agreed to cover all claim s involving liability incurred because of "bodily injury" or "property dam age": We will pay those sum s, in excess of the deductible, that the insured becom es legally obligated to pay as dam ages because of "bodily injury" or "property dam age" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those dam ages. However, we will have no duty to defend the insured against any "suit" seeking dam ages for "bodily injury" or "property dam age" to which this insurance does not apply.11 The Policy lim its coverage to instances in which "[t]he 'bodily injury' or 'property dam age' is caused by an 'occurrence' that takes place in the 'coverage territory.' " Thus, one trigger for coverage under the Policy is the existence of a claim for "property dam age." The Policy defines that term as follows: a. Physical injury to or destruction of tangible property, including all resulting loss of use of that property. All such loss of use shall be deem ed to occur at the tim e of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured or destroyed. All such loss of use shall be deem ed to occur at the tim e of the "occurrence" that caused it.12 In addition, the Policy containes an exclusion stating coverage does not apply to: " '[p]roperty dam age to . . . property you own, rent, or occupy."13 Under the Policy, the term "you" refers to the Policy's nam ed insured.14 11 Id. at 17. 12 Id. at 10 . 13 Id. at 19. 14 Id. at 17 ("Throughout this Coverage Form the words 'you' and 'your' refer to the Nam ed Insured shown in the Declarations, and any other person or organization qualifying as a Nam ed Insured under this policy."). 5 D. Th e Cro s s Mo tio n s fo r Su m m ary Ju d gm e n t Chet Morrison and Continental now m ove for sum m ary judgm ent. Chet Morrison argues that it is covered as an additional insured under the Policy because Offshore Marine agreed to indem nify and hold Chet Morrison harm less under no less than five "insured contracts." Chet Morrison further argues that the allegations in the Offshore Marine Litigation triggered Continental's duty to defend Chet Morrison and indem nify it against any loss. Specifically, Chet Morrison points to Offshore Marine's allegations that the L/ B NICOLE EYMARD becam e stuck in the seabed and that the vessel sustained severe dam age when Chet Morrison cut its legs to set it free. According to Chet Morrison, these allegations demonstrate that Chet Morrison faced the possibility of becom ing obligated to pay damages "because of property dam age." Thus, Chet Morrison concludes that Continental m ust pay for defense costs incurred and losses that Chet Morrison sustained in the underlying litigation. Continental assum es for the purpose of its m otion for sum m ary judgm ent that Chet Morrison was an additional insured under the Policy. Thus, Continental states that "the duty to defend would exist unless the claim s asserted by [Offshore Marine] are unam biguously excluded" from coverage.15 Nonetheless, Continental contends that it had no duty to defend Chet Morrison in the Offshore Marine Litigation because coverage was foreclosed by several policy exclusions. 15 R. Doc. 29-1 at 2. ("Although CIC disputes CMS'c claim that CMWS was an additional insured under the policy, for purposes of the present m otion only, CIC will assum e that CMC and CMWS were additional insureds under Poilcy ML0 871842."). 6 II. LEGAL STAN D ARD Sum m ary judgm ent is warranted when "the m ovant shows that there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law." Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322– 23 (1986); Little v. Liquid Air Corp., 37 F.3d 10 69, 10 75 (5th Cir. 1994). When assessing whether a dispute as to any m aterial fact exists, the Court considers "all of the evidence in the record but refrains from m aking credibility determ inations or weighing the evidence." Delta & Pine Land Co. v. Nationw ide Agribusiness Ins. Co., 530 F.3d 395, 398– 99 (5th Cir. 20 0 8). The Court m ust draw reasonable inferences in favor of the nonm oving party, but "unsupported allegations or affidavits setting forth 'ultim ate or conclusory facts and conclusions of law' are insufficient to either support or defeat a m otion for sum m ary judgm ent." Galindo v. Precision Am . Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting 10 B Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure: Civil § 2738 (2d ed. 1983)). If the dispositive issue is one on which the m oving party will bear the burden of proof at trial, the m oving party "m ust com e forward with evidence that would entitle it to a directed verdict if the evidence went uncontroverted at trial." Int'l Shortstop, Inc. v. Rally 's, Inc., 939 F.2d 1257, 1264– 65 (5th Cir. 1991). The nonm oving party can then defeat the m otion by either countering with sufficient evidence of its own, or "showing that the m oving party's evidence is so sheer that it m ay not persuade the reasonable fact-finder to return a verdict in favor of the m oving party." Id. at 1265. If the dispositive issue is one on which the nonm oving party will bear the burden of proof at trial, the m oving party m ay satisfy its burden by m erely pointing out that the evidence in the record is insufficient with respect to an essential elem ent of the nonm oving 7 party's claim . See Celotex, 477 U.S. at 325. The burden then shifts to the nonm oving party, who m ust, by subm itting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonm ovant m ay not rest upon the pleadings but m ust identify specific facts that establish a genuine issue for trial. Id.; see also Little, 37 F.3d at 10 75 ("Rule 56 'm andates the entry of sum m ary judgm ent, after adequate tim e for discovery and upon m otion, against a party who fails to m ake a showing sufficient to establish the existence of an elem ent essential to that party's case, and on which that party will bear the burden of proof at trial.'") (quoting Celotex, 477 U.S. at 322). III. D ISCU SSION An insurer's duty to defend an insured is "a separate and distinct inquiry from that of the insurer's duty to indem nify a covered claim after judgm ent against the insured in the underlying liability case." Marco Ltd. P'ship v. W ellons, Inc., 588 F.3d 864, 872 (5th Cir. 20 0 9) (citing Elliot v. Cont'l Cas. Co., 949 So. 2d 1247, 1250 (La. 20 0 7)). The Court, therefore, will address each duty separately. A. D u ty to D e fe n d An insurer's duty to defend suits against its insured is broader than its obligation to indem nify for dam age claim s. Hardy v. Hartford Ins. Co., 236 F.3d 287, 290 (5th Cir. 20 0 1); Suire v. Lafay ette City -Parish Consol. Gov't, 90 7 So. 2d 37, 52 (La. 20 0 5); Yount v. Maisano, 627 So. 2d 148, 153 (La. 1993). Under Louisiana law, courts determ ining an insurer's duty to defend follow the "Eight Corners" rule: if, after com paring the term s of the policy to the allegations of the com plaint, the court determ ines that "'there are any facts 8 in the com plaint which, if taken as true, support a claim for which coverage is not unam biguously excluded,' the insurer m ust defend the insured." Lam ar Advert. v. Cont'l Cas. Co., 396 F.3d 654, 660 (5th Cir. 20 0 5); see also Holzenthal v. Sew erage & W ater Bd. of New Orleans, 950 So.2d 55, 84 (La. App. Cir. 20 0 7) ("An insurer m ust provide a defense to an insured if, assum ing all of the allegations to be true, there would be both coverage under the policy and liability to the plaintiff.") (citing Am . Hom e Assur. Co. v. Czarniecki, 230 So. 2d 253 (La. 1969)). "The allegations . . . m ust be liberally interpreted in determ ining whether the claim falls within the scope of the insurer's duty to defend." Hardy , 236 F.3d at 290 (5th Cir. 20 0 1) (citing Yount, 627 So.2d at 153). But, while the court m ust accept as true the facts alleged in the com plaint for purposes of applying the Eight Corners rule, the court need not credit "statem ents of conclusions . . . that are unsupported by factual allegations." Colem an v. Sch. Bd. of Richland Parish, 418 F.3d 511, 523 (5th Cir. 20 0 5) (quoting Jensen v. Snellings, 841 F.2d 60 0 , 612 (5th Cir. 1988)); accord William S. McKenzie & H. Alston J ohnson, III, 15 Louisiana Civil Law Treatise, Insurance Law & Practice § 7:2 (4th ed. 20 12) ("It is well settled that the allegations of fact, and not conclusions, contained in the petition determ ine the obligation to defend."). "[O]nce a com plaint states one claim within the policy's coverage, the insurer has a duty to accept defense of the entire lawsuit, even though other claim s in the com plaint fall outside of the policy's coverage." Colem an, 418 F.3d at 523 (quoting Montgom ery Elevator Co. v. Bldg. Eng'g Servs. Co., 730 F.2d 377, 382 (5th Cir. 1984)); accord McKenzie & J ohnson, supra, § 7:2. Here, the relevant pleadings for determ ining Continental's duty to defend are Offshore Marine's com plaint and Palm Energy's cross-claim against Chet Morison in the 9 Offshore Marine Litigation. Ordinarily, the Court would undertake this analysis in two steps: first, the Court would determ ine whether either "com plaint allege[d] a set of facts that would fall within coverage"; second, the Court would determ ine whether Continental carries its burden of proving any policy exclusion applies. See Martco, 588 F.3d at 874. Here, however, the Court finds that Continental easily m eets its burden of proving that coverage under the Policy is foreclosed by a policy exclusion. This single issue is dispositive of all other aspects of Continental's duty to provide a defense. Thus, the Court assum es for purposes of this order that the claim s against Chet Morrison alleged facts that would fall within coverage and proceeds directly to the issue of whether an exclusion applies. The Policy that Continental issued to Offshore Marine covers only "'bodily injury' or 'property dam age' [that] is caused by an 'occurrence' that takes place in the 'coverage territory.'"16 The Policy defines "property dam age" as: a. Physical injury to or destruction of tangible property, including all resulting loss of use of that property. All such loss of use shall be deem ed to occur at the tim e of the physical injury that caused it; or b. Loss of use of tangible property that is not physically injured or destroyed. All such loss of use shall be deem ed to occur at the tim e of the "occurrence" that caused it. In short, Continental's Policy is triggered only by claim s for either bodily injury or either physical injury to or loss of use of tangible property. Certain property dam age claim s are, however, excluded from coverage under the Policy. Exclusion j(1) of the Policy states that the Policy does not apply to " 16 R. Doc. 29-4 at 17. 10 '[p]roperty dam age' to . . . [p]roperty you own, rent, or occupy."17 The Policy defines "you" as the named insured.18 Although "nam ed insured" is not further defined in the contract, the term 's m eaning is abundantly clear: the Policy's declarations page lists Offshore Marine Contractors as the only named insured on the Policy. Exclusion j(1) therefore precludes coverage for property damage to property owned, rented, or occupied by the nam ed insured, Offshore Marine. The parties do not dispute that Offshore Marine owns the L/ B NICOLE EYMARD. Moreover, a review of the pleadings in the underlying litigation shows that the only allegations against Chet Morrison that arguably triggered Policy coverage involved dam age to the L/ B NICOLE EYMARD. According to Offshore Marine's com plaint, Chet Morrison chartered Offshore Marine's vessel, the L/ B NICOLE EYMARD in order to com plete a job for Palm Energy at West Delta 54.19 According to the com plaint, the L/ B NICOLE EYMARD arrived at West Delta 54 and jacked without incident.20 But when the vessel began to jack down, the crew realized that its legs were 17 Id. at 1. 18 Id. at 17 ("Throughout this Coverage Form the words 'you' and 'your' refer to the Nam ed Insured shown in the Declarations, and any other person or organization qualifying as a Nam ed Insured under this policy."). 19 Offshore Marine Litigation, R. Doc. 1 at 8, ¶29. 20 Id. at 9, ¶31. 11 stuck in the seabed.21 This effectively im m obilized the vessel at West Delta 54 and prevented Chet Morrison from taking it off charter.22 The com plaint alleges that despite receiving invoices from Offshore Marine, Chet Morrison and Palm Energy both refused to m ake paym ents due under the charter agreem ent.23 The com plaint further alleges that L/ B NICOLE EYMARD was not freed from the seabed until Offshore Marine, Chet Morrison, and Palm Energy reached an unusual agreem ent. With Hurricane Fay approaching, threatening dam age to the im m obilized vessel, all parties allegedly agreed as follows: Offshore Marine [would] allow the legs on the vessel Nicole to be cut so that the vessel could be m oved off location from West Delta 54. In exchange for Offshore Marine allowing the legs to be cut and thereby insuring that no further dam age (this tim e from Hurricane Fay) would be sustained, Palm Energy and Chet Morrison agreed to pay for repairs to the legs and further to agree that the vessel would rem ain "on charter" until she was ready again to put to sea.24 According to the com plaint, Offshore Marine allowed the legs to be cut and com pleted repairs on the vessel, but Chet Morrison and Palm Energy refused 21 Id. at 9, ¶32. 22 Id. 23 Id. at 11, ¶38. 24 Id. at 10 , ¶35. 12 to reim burse Offshore Marine for costs incurred.25 Thus, Offshore Marine's complaint sought damages for defendants' alleged breaches of both the charter and the contract to cut-and-repair the L/ B NICOLE EYMARD.26 To the extent that Offshore Marine's complaint alleged liability "because of property dam age," all of the relevant dam age was to Offshore Marine's own vessel. Specifically, the L/ B NICOLE EYMARD becam e stuck in the seabed at West Delta 54, and the L/ B NICOLE EYMARD sustained dam age when Chet Morrison cut its legs to set it free. As noted earlier, exclusion j(1) excludes from coverage dam age to "property [Offshore Marine] own[s], rent[s], or occup[ies]." Therefore, exclusion j(1) precludes coverage for claim s fo property dam age to the L/ B NICOLE EYMARD. Chet Morrison m akes two argum ents against this conclusion. First, Chet Morrison argues that the Policy's In Rem Endorsem ent trum ps exclusion j(1) and extends coverage to liabilities sustained because of the operation of Offshore Marine's vessels. The In Rem Endorsem ent states, in its entirety, as follows: "We agree that any action 'In Rem ' against any vessel owned, operated 25 Id. at 11, ¶39. 26 In addition, Palm Energy asserted a cross-claim against Chet Morrison. (Offshore Marine Litigation, R. Doc. 26). In applicable part, Palm Energy alleged as follows: "In its Com plaint (Docum ent 1), OMC claim s that its vessel suffered severe dam age while conducting (or when com pleting) the P&A Activities and has asserted claim s against Palm and Chet Morrison relating thereto." Palm Energy sought defense and indem nity from Chet Morrison for Offshore Marine's claim s against Palm Energy. 13 by or for, or chartered by or for you shall in all respects be treated in the sam e m anner as though the action were 'In Personam ' against you."27 This is a narrow provision with a specific purpose. Under its plain term s, if one of Offshore Marine's vessels is sued in rem , Continental's Policy will cover that suit as if it had been m ade against Offshore Marine itself. See Seabulk Offshore, Ltd. v. Am . Hom e Assur. Co., 377 F.3d 40 8, 420 (4th Cir. 20 0 4) (concluding that an In Rem Endorsem ent "requires that in rem actions against watercraft are to be treated as in personam actions against insureds"). Thus, the endorsem ent has no effect unless a plaintiff m akes an in rem claim against a vessel. Here, Offshore Marine sued Chet Morrison and Palm Energy; it m ade no claim against the L/ B NICOLE EYMARD. Thus, Chet Morrison's argum ent fails. Second, Chet Morrison argues that exclusion j(1) sim ply does not apply to additional insureds. Chet Morrison asserts that because the exclusion uses "you," m eaning the nam ed insured, to identify the property dam age excluded, that exclusion applies only to Offshore Marine. According to Chet Morrison, exclusion j(1) therefore cannot prevent additional insureds like Chet Morrison from benefitting from coverage under the Policy. This argum ent is also 27 R. Doc. 29-4 at 37. 14 without m erit. While exclusion j(1) does use the term "you," it uses that term only to identify the property to which the exclusion applies. Specifically, exclusion j(1) states that the Policy does not apply to dam age to "[p]roperty you own, rent, or occupy." The exclusion does not in any way lim it who is subject to the exclusion. Cf. Deville v. Conm aco/ Rector, L.P., No. CIV.A. 0 9-7391, 20 10 WL 39240 67, at *4 (E.D. La. Sept. 28, 20 10 ) aff'd, 516 F. App'x 296 (5th Cir. 20 12) (concluding that exclusion could reasonably be read to apply only to nam ed insured when exclusion used "you" to indicate to whom it applied). Rather, the exclusion precludes coverage for any dam age sustained to Offshore Marine's property, regardless of whether coverage is sought by Offshore Marine, Chet Morrison, or anyone else who m ight otherwise qualify for Policy coverage. Again, the Policy at issue covered only "sum s . . . that the insured becom es legally obligated to pay as dam ages because of 'bodily injury' or 'property dam age.' "28 As discussed above, the only allegations in the Offshore m arine that involved bodily injury or property dam age were (1) that the L/ B NICOLE EYMARD becam e stuck in the seabed and (2) that its legs were cut to allow it to break free. Both allegations involve dam age to the L/ B NICOLE 28 Id. at 17. 15 EYMARD, a vessel owned by the nam ed insured, Offshore Marine. Thus, both allegations fall squarely within exclusion j(1). Accordingly, the Court finds that even if the claim s against Chet Morrison in the Offshore Marine Litigation fell within the Policy's am bit, the exclusion would nonetheless operate to preclude coverage. Continental has dem onstrated that it had no duty to defend Chet Morrison, and the Court grants Continental's m otion for sum m ary judgem ent. B. D u ty to In d e m n ify As discussed above, an insurer's duty to defend suits is broader than its obligation to indem nify for dam age claim s. Suire, 90 7 So. 2d at 52. Thus, while the duty to defend applies "whenever the pleadings against the insured disclose even a possibility of liability," Sibley v. Deer Valley Hom ebuilders, Inc., 32 So. 3d 10 34, 10 39 (La. App. 2 Cir. 20 10 ), the duty to indem nify arises only when the insured is found liable for a loss that is covered by the policy. Chi. Prop. Interests, LLC v. Broussard, 8 So. 3d 42, 48 (La. App. 5 Cir. 20 0 9). Here, the Court finds that Continental had no duty to defend Chet Morrison because there was no possibility of liability under the Policy. This finding is conclusive on the indem nification issue as well. Because the Policy excluded claim s for dam age to the L/ B NICOLE EYMARD, Continental has no duty to m ake paym ent for liabilities incurred by Chet Morrison in the Offshore Marine Litigation. Thus, the Court denies Chet Morrison's m otion for sum m ary 16 judgm ent and grants Continental's m otion for sum m ary judgm ent on indem nification. C. Statu to ry Bad Faith Claim s In addition to its claim s for rem uneration, Chet Morrison also asserts derivative statutory bad faith claim s under La. R.S. §§ 22:1892 and 22:1973. Because the Court finds that Continental had no duty to defend Chet Morrison in the underlying litigation, Chet Morrison's argum ent that Continental acted in bad faith by refusing to reim burse Chet Morrison's defense costs necessarily fails. XL Specialty Ins. Co. v. Bollinger Shipy ards, Inc., 57 F. Supp. 3d 728, 763 (E.D. La. 20 14) aff'd, 593 F. App'x 40 8 (5th Cir. 20 15) aff'd sub nom . X L Spec. Ins. Co. v. Bollinger Shipy ards, Inc., No. 14-31283, 20 15 WL 50 5250 4 (5th Cir. Aug. 27, 20 15). Continental is not liable for statutory penalties, attorneys' fees, costs, or interest. 17 IV. CON CLU SION For the foregoing reasons, the Court DENIES Chet Morrison's m otion for sum m ary judgm ent and GRANTS Continental's m otion for sum m ary judgm ent. New Orleans, Louisiana, this 18th day of Septem ber, 20 15. ___ _____________________________ SARAH S. VANCE UNITED STATES DISTRICT J UDGE 18
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