Aug 10: In the U.S. Court of Appeals, Fifth Circuit, Case No. 09-30549 and other consolidated cases. Appealed from the United States District Court for the Eastern District of Louisiana. The Appeals Court explains that the M/V TINTOMARA, an ocean-going tanker, collided with the barge DM-932, in the tow of the M/V MEL OLIVER, splitting the barge in half and spilling its cargo of oil into the Mississippi River. Following the filing of numerous lawsuits, including personal injury claims by the crew members and class actions by fishermen, the primary insurer filed an interpleader action,
depositing its policy limits with the court.
The Appeals Court said, "We are asked to review allocations of interpleader funds as well as the district court's finding that the maritime insurance policy's liability limit included defense costs. We affirm the district court's decision that defense costs erode policy limits but are persuaded that its orders allocating court-held funds among claimants were tentative and produced no appealable order."
The Appeals Court summarized, "In sum, the barge owner's assertions of ambiguity demand reliance upon the collision clause, which is not only severable but also inapplicable because all of the damages incurred are excluded from that coverage. Returning to the pure P&I coverage, the policy is clear that defense costs were intended to be included within the policy limits. This P&I policy is unambiguously written against the backdrop of traditional principles of maritime law that defense costs erode P&I limits of liability. It is evident that viewed objectively the parties expectations were as we have today held. For want of jurisdiction, we decide nothing more regarding allocation of the court-held funds. Affirmed in part; Dismissed in part."
Access the complete opinion (click here). [#Water, #Remed, #CA5]
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