Louisiana Record

Monday, October 14, 2019

Owner of ship that struck well denied summary judgment in insurance bonus case


By Justin Stoltzfus | Jun 12, 2018

NEW ORLEANS – The U.S. District Court for the Eastern District of Louisiana recently denied a defendant's motion for summary judgment in a legal challenge regarding an insured well that was damaged by a moving ship.

U.S. District Judge Lance Africk issued the order May 31 in the case in which the plaintiff, Cox Operating LLC, alleges that since it had to submit a claim to its insurance company for the well damages after the Sept. 13, 2016, accident in which a vessel owned by the defendant, Settoon Towing LLC, allided with the well apparatus, it was no longer entitled to a 10 percent “no claims bonus” from the insurer on its premium.

The court record shows that the plaintiff had to pay back the amount of the no claims bonus according to the insurance contract.

In ruling on partial summary judgment, the court noted that summary judgment is generally seen as proper when there is no “genuine dispute of material fact,” and stated that the party asking for summary judgment bears the burden of pointing out a discrepancy.

Citing available case law, the court spoke about whether evidence supporting a summary judgment should be in a court-admissible form.

The court record indicates that the two parties disagree over whether the no claims bonus can be pursued under general maritime law. The court order also shows the plaintiff likening the no claims bonus to a deductible and claiming that such amounts should be easily recoverable under the law.

Citing the case Louisiana ex rel. Guste v. M/V TESTBANK where the court ruled on similar evidence, the court said the plaintiff's case meets some criteria for recovery.

“Based on the facts that are undisputed for purposes of the present motion, Cox satisfies TESTBANK’s prerequisites to opening the door to the recoverability of the 'no claims bonus,'” the court wrote. “The alleged damage to Cox’s well constitutes physical damage to Cox’s own property.”

Meanwhile, the defendant claimed that the no claims bonus was in a sense, unforeseeable and thus exclusive from some of the provisions of the plaintiff's pursuit.

In denying partial summary judgment for the defendant, the court is indicating the plaintiff's ability to seek to recover the no claims bonus amount, the ruling said.

“Settoon has not demonstrated that Cox is legally precluded from seeking recovery of the 'no claims bonus,'” the court wrote. “As such, summary judgment in Settoon’s favor is unwarranted.”

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