Opposition Brief — Crown Zellerbach Corp. v. Ingram Industries, Inc.

Supreme Court, U.S,

ee oye

NQ. 85-198 JUL 2 1986

re) JOSEPH F-SPANIOL, JR.

In the CLERK

Supreme Court of the United States

OCTOBER TERM, 1985

CROWN ZELLERBACH CORPORATION,

Petitioner

versus

INGRAM INDUSTRIES, INC., CHEROKEE _IN-

SURANCE CO., and the LONDON STEAM-SHIP

OWNERS’ MUTUAL INSURANCE ASSOCIATION,

LIMITED,

Respondents

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

OPPOSITION OF THE LONDON

STEAM-SHIP OWNERS’ MUTUAL INSURANCE

ASSOCIATION, LIMITED

BENJAMIN W. YANCEY

ANDREW T. MARTINEZ

TERRIBERRY, CARROLL & YANCEY

2100 ITM Building

New Orleans, Louisiana 70130

(504) 523-6451

ATTORNEYS FOR RESPONDENT

The London Steam-Ship Owners’ Mutual

Insurance Association, Limited

A B Letter Service, Inc., 327 Chartres St., New Orleans, La. (504) 581-5555

i

COUNTERSTATEMENT OF QUESTIONS

FOR REVIEW

The questions presented should be stated more ac-

curately as: whether Louisiana law prohibits a marine

mutual protection and indemnity association of shipowners

from limiting its coverage, by its contract with its own

member, to the amount of the assured shipowner member’s

judicially declared federal limitation of liability; and

whether the shipowner’s federal limitation of liability is a

‘personal defense”’, to it as that term is used in Louisiana

law.

ii

TABLE OF CONTENTS

Page

QUESTIONS FOR REVIEW...........cccssscesssessesesssrseseeseneeens i

TABLE OF CONTENTS. ...cccs0cccccccccsscssscvescesssesecsertencsessess ii

TABLE OF AUTHORITIBG.......................ccccscccesssesesesene iii

STATEMENT OF THE CAGL..............ccccccccccccccseceescesseees 2

SUMMARY OF ARGUMENT..............c.cccccccscceesseeneeseneeees 4

Reasons Why the Case Should Not Be Reviewed by

a Cia ve nisiisicnnesccocicnecccondscenseesevnsssesetsneneenmiaetenentians 4

PIE bse cccitasseccedineesiserseninesterrmncsernnenetniecannsnmaenienind 5

The Decision Below is in Conflict with No Decision of

CE 5, en nn CEN nn 5

The Decision Below is Not Contrary to Louisiana

JUTISPFUCENCE............c.scceesseseeeseeesseeseeseesenseeneseeesesenssenseees 7

The Purported ‘Conflict Amoung Federal Courts”

Thee Met To xiat.....<.cesccscccccesesccsnenesssenvresenunesensecevanannneansees 13

Alledged Adverse Effects on ‘Important’ State

BEE oo sininsiccssivessccscosscccescnesesesscesscssssessasenstenbenemnanenenns 14

IN isis eviavesecsocsssenenencesscousosescisencessnenenvpennineunennnnen 15

PTI Aa cicavicccescvcvcessviscsvssssscsnicsaseneninenereenearenaseenen A-l

APPENDIX B.......cccccccsssscccessorcosevccccvonesonccocsnsnnnacessasencuoes A-3

ili

TABLE OF AUTHORITIES

Cases Pages

Alcoa Steamship Company v. Charles Ferran & Co.,

251 F.Supp. 823, at 831 (E.D.La. 1966).................0...0... 9

Brooks v. Bass, 184 So.222 (La. App. 1938)................... 11

Crown Zellerbach v. Ingram Industries, Inc., Cherokee

Insurance Co., and the London Steam-Ship Owners’

Mutual Insurance, Limited, 745 F.2d 995, 783 F.2d

Re stiiellsadichsidenhennschennadgnchsenteneenssnicnbssseseseooneve 3,4

Danzy v. United States Fidelity & Guaranty Co., 380

cok ire ntitadenaneinssbasdaundaseresgsevunnnen 12

Edwards v. Royal Indemnity Co.,161 So. 191 (Sup. Ct.

EE Cit Nanchidinubhdbiknandakeesaseanssénndidpsbasvenseassetasvess 11

Harvey v. New Amsterdam Casualty, 6 So.2d 774 (La.

Sta hicah sarnbenchibannasecnnonessnsecdbobisesstneesheventeoees 11

In the matter of independent Towing Company, 242

I EE RON, RU cnncisnesorcnesvsssciscesenscessocssosseses 8

Johnson v. Housing Authority of New Orleans, 163

I NRO cicsncnsasssmessccnsisnssessectevensssevens 11

Lake Tankers Corp. v. Henn, 354 U.S. 147, at

ET aioli lisa ba sec pidinaaiscaennhiebnadonaneséocsosenseseceosess 11

Lintz v. M/T APHRODITE B, 561 F.Supp. 424 (E.D.

cians ce codenshncnnemntensssncsconnetebvecenasaetonsesese 11

Maryland Casualty Co. v. Cushing, 347 U.S. 409

ITT racendladevelacaneipiinlaaiideneesensenesenenesenes 4,5,6,7,13

Musmeci v. American Automobile Insurance Co. 146

So.2d 496 (La. App. 1962) cert. den. (1963)................. 11

Olympic Towing Corp. v. Nebel Towing Company, 419

F.2d 230 (5th Cir. 1969) cert. den. 397 U.S.

Ramos v. Continental Insurance Co., 493 F.2d 329 (1st

ES ET 13

iv

TABLE OF AUTHORITIES (continued)

Cases Pages

Rome v. London & Lancashire Indemnity Co. 169

BO TBR Cite. BBW. BO iserasscerecccenesseicinsereneseecrencscsneseseceee 11

Rouley v. State Farm Mutual Automobile Insurance

Co., 235 F. Supp. 786 (W.D.La. 1964)..............cceeeeeees 11

Ruiz v. Clancy, 162 So. 734 (1935)............cccceesseeseeeeeeneees 11

Smith v. Southern Farm Bureau Casualty Insurance

Co., 164 So.2d 647 (La. App. 1964)..............cccceeeeeeeees 11

Torres vu. Interstate Fire & Casualty Co., 275 F.Supp.

DOG GET Wa vndnictisinsinstivsinicincstitvsinisinicciananiaiiasiinniaiannnait 14

STATUTES:

GB UGE. Bae. BED an cccascesecsserivniasinsncssiicnisiascnctentnnsescisniasdel 2

ali, ee Me crnccscnssncencescrenstanvsnssecnsiteiateenveniveteossessnsastsantes 2

ee, EI I I, isi siiscenincisen csscdccseceectivenpsveniananansinntnsinl 8

1

NO. 85-1989 l

In The

SUPREME COURT OF THE UNITED STATES

CROWN ZELLERBACH CORPORATION,

Petitioner

V

INGRAM INDUSTRIES, INC., CHEROKEE _IN-

SURANCE CO., AND THE LONDON STEAM-SHIP

OWNERS’ MUTUAL INSURANCE ASSOCIATION,

LIMITED,

Respondents

OPPOSITION OF THE LONDON STEAM-SHIP

OWNERS’ MUTUAL INSURANCE ASSOCIATION,

LIMITED

TO THE PETITION OF CROWN ZELLERBACH

CORPORATION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

2

STATEMENT OF THE CASE

This case arises from a collision of an Ingram tug and

tow with a Crown Zellerbach water intake structure in the

Mississippi River above New Orleans in February, 1979.

Ingram was insured for protection and indemnity

risks, which included the liability for this accident, by

Cherokee Insurance Company, an American company, with

a monetary limit of one million dollars. It was also entered

with The London Steam-Ship Owners’ Mutual Insurance

Association, Limited, (hereinafter, the London Club) with a

one million dollar deductible, and with this condition:

When a Member for whose account a ship is entered in

this Class, is entitled to limit his liability, liability of

this Class shall not exceed the amount of such limita-

tion ...

Suit was commenced in admiralty, in the United

States District Court for the Middle District of Louisiana,

at Baton Rouge, and, under the Louisiana direct action

statute,! against the London Club. Ingram, by answer, not

by affirmative petition, pleaded its right, under the federal

limitation of liability act, to limit its liability to the value

of its interest in the vessel and its freight then pending.”

The London Club, in no way attacking the direct action

statute, pleaded the contractual limit of its coverage.

Before trial, Ingram, Cherokee, and the London Club

stipulated liability for the accident, reserving only

damages and Ingram’s right to limit its liability.

1 La. R.S.22:655, see appendix A-1.

2 46 U.S.C. Sec. 183(a).

3

The trial court found Ingram entitled to limit its

liability to $2,100,000 (round figures), and assessed Crown

Zellerbach’s damages at $3,950,000; gave judgment

against Ingram and Cherokee for $1,000,000 (Cherokee’s

limit); against Ingram and the London CLub for the

balance of Ingram’s limited liability, $1,100,000; and, final-

ly, against the London Club alone for the entire balance,

$1,850,000, with interest and costs.’ This last was directly

in face of, and contrary to, the provision of the London

Club’s Rules or coverage.

Still not attacking the Louisiana direct action

statute, Cherokee and the London Club promptly satisfied

in full the principal of Ingram’s liability under this judg-

ment. The Club then appealed the assessment of the

balance of the judgment directly against it, as a violation

of its valid contract with its own member, Ingram.

A divided panel‘ affirmed on this point, under the

asserted authority of the Fifth Circuit’s own prior decision,

Olympic Towing Corporation v. Nebel Towing Company, a

decision which had rebuffed an attack on the Louisiana

direct action statute in a limitation of liability situation on

the untenable ground that the federal limitation of liability

was a “‘personal defense’ under Louisiana law.®

Nebel had been decided, in effect, on a 7 to 6 vote of

the Fifth Circuit, in that it was a panel decision, with

rehearing en banc denied by that vote.

3 See the district court's judgment, our appendix A-2, omitted from peti-

tioner’s appendix.

4745 F.2d 995.

5 419 F.2d 230 (1969) cert.den. 397 U.S. 989.

4

In the present case, the Fifth Circuit, en banc, by a

12 to 5 division,® expressly overruled Nebel, as not

representing Louisiana law, and at the same time held that

the London Club’s rule, by fixing its liability to its own

member (and hence, to third parties), to the legally limited

liability of the member, did not violate Louisiana law.

It is from this decision that petitioner seeks to obtain

a writ.

SUMMARY OF ARGUMENT

Reasons Why the Case Should Not

Be Reviewed by this Court

A

The decision below in no way conflicts with any prior

decision of this Court, particularly, Maryland Casualty Co.

v. Cushing."

B

The decision below does not determine an issue of

Louisiana law contrary to Louisiana jurisprudence, and the

statement that it does is wholly erroneous.

C

The decision below does not create any conflict

among federal courts; the statement that it does is

baseless.

6 783 F.2d 1296.

7 347 U.S. 409 (1954).

Te Te me |

5

D

The decision below does not adversely affect any im-

portant state interest.

ARGUMENT

A

The Decision below is in Conflict

with No Decision of this Court.

The petition opens with the statement that the deci-

sion here is in “‘conflict’’ with this Court’s decision of

Maryland Casualty v. Cushing.® This statement, which

will not bear examination, has never once been asserted at

any time in the long history of the present litigation.

Nothing in this case faintly approximates the situation in

Cushing and to argue that it does is to ignore the true

situation in both.

Cushing involved the sinking of a tug in Louisiana

waters, with the loss of five seamen. The tug owner peti-

tioned for limitation of liability in the United States

District Court for the Eastern District of Louisiana, and

the plaintiffs thereupon proceeded directly against the

tug’s P & I underwriters under the Louisiana statute. The

district court dismissed their suits. The Fifth Circuit

reversed, and the case came to this Court.

In that case, underwriters made a direct, frontal at-

tack on the Louisiana statute, as violative of the uniformi-

ty of admiralty, and as contrary to the Limitation of

Liability Act.

8 347 U.S. 409 (1954).

9 Except in the dissent en banc below.

sine

ili acai |

6

This Court divided 4-1-4 on that issue. Justice Clark

was the one, with Justice Frankfurter writing the opinion

of the Court, concurring in Justice Clark’s conclusion.

As Justice Frankfurther put it:1°

The only question presented in the petition for cer-

tiorari is whether the application of the Louisiana

statute in this case would violate the Jones Act, the

Limited Act, and the constitutional grant to the

federal government of exclusive jurisdiction in

maritime matters.

He would have concluded that it did; but as Justice Clark,

the “‘swing vote’’, stated it:!!

I see no necessity for invalidating Louisiana’s law by

dismissing these direct actions. In administering the

Limited Liability Act the Court can easily avoid a

clear conflict between it and the direct action statute.

Justice Clark concluded with what was the effective

holding of the Court:!2

For these reasons I would direct the district court to

first conclude the limitation proceeding, after which

the liability, if any, of the petitioners on their policies

in the direct action could be determined.

(emphasis added)

10 347 U.S. at 412.

11 347 US. at 423.

12 347 U.S. at 427.

7

The present case followed Justice Clark’s direction. In this

case, there was no petition by Ingram for limitation of

liability; its right to limit was presented by answer. The

London Club, as Co-defendant here, made no attack what-

soever on the Louisiana act and in no way contested its ap-

plicability. On the contrary, it immediately satisfied in full

its portion of the principal of Ingram’s liability as fixed by

the district court.

Precisely what Justice Clark said should be done was

done: the questions of Ingram’s right to limit and the

amount of its limited liability were first concluded, after

which the liability, if any, of the underwriters under the

‘policy’ in the direct action was determined.

The court below concluded that the provision of the

Club’s rules, its contract with its own member, measuring

its liability to indemnify the member, and hence the plain-

tiff, by the actual, federally fixed legal liability of the

member, is valid under Louisiana law.

This demonstrates the inaccuracy of petitioner’s

statement that the court below has ‘‘invalidated’”’ the Loui-

siana statute, or that the result here is one that this Court

refused to require in Cushing.

What has been done here is exactly what Cushing

directed; and that it should be argued that the present case

is in any sense whatever contrary to Cushing is without

any basis.

B

The Decision Below is Not Contrary

to Louisiana Jurisprudence

Petitioner’s statement that the decision below

8

contravenes Louisiana law is erroneous and will not bear

scrutiny.

In this case, the Fifth Circuit reexamined and over-

ruled one of its own prior decisions involving Louisiana

law,13 but the argument that this “conflicts’’ with the

“great weight’ of Louisiana’s state and _ federal

jurisprudence and “‘directly conflicts’ with a recent pro-

nouncement of the Louisiana Supreme Court, is

unsupportable.

The Louisiana direct action statute makes the in-

sured and the insurer “‘jointly and in solido liable’ to the

third party, and the Louisiana Civil Code, article 1801

(formerly 2098), on ‘‘solidary obligors,’’ provides that the

obligor (here, the London Club), may raise against the

obligee (here, the plaintiff), defenses personal to himself,

but not such as are ‘“‘personal”’ to another solidary obligor

(here, the member).

That ‘‘defenses personal’’ to the insured may not be

pleaded by the insurer in a direct action has long been settl-

ed in Louisiana law; but the application of that designation,

‘personal defense,” to the shipowner’s federally establish-

ed and federally restricted right to seek limitation has come

about by a patent misinterpretation of the Louisiana con-

cept of ‘‘personal’’ defense.

It made its debut in a case in the Eastern District of

Louisiana (Itco),!4 11 years after Cushing, where, entirely

13 Olympic Towing Corp. v. Nebel Towing Company, 419 F.2d 230, 5th

Cir. 1969), cert.den. 397 U.S. 989.

14 Jn the matter of Independent Towing Company, 242 F.Supp. 950

(E.D.La. 1965).

9

unlike the situation here, the insurer was moving to stay

the direct action against it, and, for the very first time

anywhere, the district judge labeled the right of the

shipowner to petition for limitation to be a ‘“‘defense”’ ‘‘per-

sonal’’ to the shipowner under Louisiana law.

None of the authorities cited for that strange pro-

position was supportive of that proposition, but were sup-

portive only of the well recognized principle that the Loui-

siana “‘personal defense’’, in the context of solidary obliga-

tions, referred only to absolute and complete immunities

from any suit whatsoever: e.g., infancy, coverture,

charitable immunity, governmental immunity, interdic-

tion, lunacy, bankruptcy, and the like.

About a year later, in Alcoa Steamship Company uv.

Charles Ferran & Co.\© a case which did not involve the

shipowner’s limitation of liability, the same district judge

again listed the ‘‘personal defenses’’ under Louisiana law,

those set out above, and then commented:

In Itco we merely added to this list ‘“‘vessel owners

who asert their federally created right to limit

liability’.

(emphasis added)

This deliberate, non-sequential injection of ‘‘vessel

owners’ into the list cannot be and is not supported by

anything. It has no basis whatsoever in Louisiana state

jurisprudence, before or since. The similarity between

parents, spouses, bankrupts, lunatics, and vessel owners is,

at the very least, obscure.

15 251 F.Supp. 831 (E.D.La. 1966) states:

The personal defense attaches to the status. Hence, parents.

children, husbands, wives, governmental units, charitable organiza-

tions, bankrupts, lunatics, vessel owners, and the like possess a defense

denied their respective insurers. (emphasis supplied)

10

Before [tco, as embroidered by Ferran, both by the

same district judge, there had never been a syllable or hint

faintly suggesting that the shipwoner’s right to seek

limitation of liability could possibly be a ‘“‘personal’”’

defense under the Louisiana Civil Code. The whole notion

was conceived by that district judge, without any support

whatsoever in Louisiana jurisprudence.

The next development was the decision of the Fifth

Circuit in Nebel. 16

Again, entirely unlike the present case, Nebel involv-

ed a full scale, frontal attack on the direct action statute

itself in the limitation of liability context, in effect, an ef-

fort to relitigate Cushing. Relying on Ferran, supra, which

did not involve the federal limitation statute at all, Nebel,

proceeded to hold that limitation was a ‘‘personal defense’’

under Louisiana law. It then quoted Ferran’s list: parents,

children, husbands, wives, governmental units, charitable

units, ‘“‘vessel owners and the like.”’

This obstrusive injection of ‘“‘vessel owners’’, carried

over from Ferran, is impossible to sustain, as the court

below recognized. It completely disregards the fundamen-

tal and decisive fact that every single one of the “‘personal”’

defenses under Louisiana law is a complete, automatic, and

absolute immunity from suit.

Shipowners’ limitation of liability is in no sense

whatsoever an immunity. It does not “adhere to the

status.’’ Shipowners may obtain it only under very

16 Olympic Towing Corp. v. Nebel Towing Co., 419 F.2d 230 (1969),

cert.den. 397 U.S. 989.

11

restricted circumstances: their ability to prove that the ac-

cident occurred without the privity or knowledge of the

owner; and even then, it is not an immunity but a

limitation.

We shall not discuss the Louisiana cases on “‘per-

sonal defense’ but shall list them in a footnote below

should the Court desire to pursue them.!7 We limit

ourselves here to the categorical, incontrovertible state-

ment that the Louisiana “‘personal defense’”’ is a total im-

munity from suit, in every instance and unvaryingly, and

that it has never been applied to a situation such as ours.

That federal limitation of shipowner’s liability is not

an ‘‘immunity’’, and therefore not a ‘“‘personal defense”’ in

the Louisiana sense is perfectly plain, but is fortified by

Justice Clark’s comment in Lake Tankers Corp. v. Henn:'8

The Act is not one of immunity from liability but of

limitation of it and we read no other privilege for the

shipowner into its language over and above that

17 Brooks v. Bass, 184 So. 222 (La. App. 1938); Rome v. London

& Lancashire Indemnity Co., 169 So. 132 (La. App. 1936); Harvey

vu. New Amsterdam Casualty, 6 So.2d 774 (La. App. 1942), (cited

in the petition, but not mentioning that it was a total immunity);

Smith v. Southern Farm Bureau Casualty Insurance Co., 164

So.2d 647 (La. App. 1964), where Judge Tate, who wrote the dis-

sent in the present case, but was then on the state bench, referred

throughout to the “interspousal immunity’’, the ‘statutory im-

munity’’, the “‘infra-familial immunity from suit’’, the parents’

“immunity”’ from suit by the child; Johnson v. Housing Authority

of New Orleans, 163 So.2d 569 (La. App. 1964); Musmeci v.

American Automobile insurance Co., 146 So.2d 496 (La. App.

1962) cert.den. 1963; Edwards v. Royal Indemnity Co., 161 So.191

(Sup. Ct. La. 1935); Rouley v. State Farm Mutual Sutomobile In-

surance Co., 235 F.Supp. 786 (W.D.La. 1964); and most il-

luminating, Ruiz v. Clancy, 162 So. 734 (Sup.Ct.La.1935).

18 354 U.S. 147, at 152-153.

12

granting him limited liability ... the Act, as we have

said, was not adopted to insulate shipowners from

liability but merely to limit it to the value of the vessel

and the pending freight.

The statement of the petition (p. 13) that the Fifth

Circuit here has failed to adhere to a ‘‘pronouncement”’ of

the Louisiana Supreme Court, Danzy v. United States

Fidelity & Guaranty Co.,!9 is incorrect. First, Danzy did

not involve the Limitation Act but the immunity which the

Federal Tort Claims Act gives to a federal employee from

personal liability. The Louisiana Supreme Court, in an ac-

tion directly against the employee’s insurer, did not find it

necessary to determine the effects of the ‘‘immunity”’

granted by the act’s exclusivity provision. In a footnote, on

page 1359, the court listed the forms of “immunity from

suit’’ which constituted ‘‘personal defenses’’ and, having

listed all the very same situations to which we have already

referred, it added in passing, the ‘‘immunity”’ [sic] granted

to shipowners, by limitation of liability, without analysis,

and citing Nebel. This footnote has grown in the petition to

a “citation with approval,’’ a statement which has no

justification. Instead, it shows the Louisiana Supreme

Court’s unconsidered listing of the ‘ederal limitation of

liability as an “‘immunity’’, which, te constitute a ‘“‘per-

sonal”’ defense under state law, it would have to be, but

which, under federal law, it is not.

Lintz v. M/T APHRODITE B?° needs no comment

other than to point out that it is a decision of a district

court, sitting in Louisiana, which, as it was then bound to

do, merely followed Nebel.

19 380 So.2d 1356 (1980).

20 561 F.Supp. 424 (E.D.La. 1983).

ert

13

The reiterated statement in the petition that the

decision below is contrary to state law is inaccurate and

gains no stature by the reiteration. Further, the reiterated

statement that the decision below allows the insurer to

avail itself of the shipowner’s right to limit is a misconcep-

tion of respondent’s position as to Cushing, as well as a

misreading of the decision below. What was said by Justice

Frankfurter in Cushing?! is very pertinent here:

Of course, liability underwriters are not entitled to

“limitation of liability’’ as that phrase is used as a

term of art in admiralty. To state the issue in these

terms is to misconceive it.

The Fifth Circuit’s reversal of its Nebel case was proper

and it does not justify the issuance of a writ by this Court.

C

The Purported ‘‘Conflict Among Federal

Courts’’ Does Not Exist

In asserting here that a ‘‘direct conflict’’ exists bet-

ween two circuits on the question, the petition refers to a

First Circuit case, Ramos v. Continental Co.,2% citing a

footnote, in that case, which petitioner sees as creating an

alleged conflict on ‘‘personal defense’, but in which the

First Circuit itself expressly disavows passing on the

point:

As the issue is not before us, we do not now pass upon

the merit of any such contention.

That is hardly a ‘‘conflict’’ of the circuits.

21 347 USS. at 42.

22 493 F.2d 329, at 333, note 4.

14

The district court opinion in Torres?3 is irrelevant

here, since it relies on the Louisiana federal district court’s

opinions in Jtco and Ferran, both of which antedated Nebel

and were rendered obsolete by the overruling of Nebel in

this case.

The ‘‘conflict’’ does not at all exist, and to pretend

that it does is, at the very least, the legerdemain of a

zealous advocate.

D

Alleged Adverse Effects on ‘‘Important’’ State Interests

The section of the petition devoted to the alleged

‘“‘adverse”’ effects on state interests is, we suggest, totally

unsupported. Nothing in the decision below affects the

“traditional authority of states to provide tort remedies for

their citizens’; nothing conflicts with Louisiana public

policy; nothing turns ‘‘topsy turvy”’ the ‘‘public policy”

favoring the injured party over the insurer. All of this, we

most respectfully submit, is no more than rhetoric and is

out of place here. So, too, is the extraneous injection of the

Silkwood case, and the McCarran Act.

What this case really involves is the Fifth Circuit’s

proper correction of its own earlier erroneous confection of

Louisiana law and nothing more.

23 Torres v. Interstate Fire and Casualty Co., 275 F.Supp. 784 (D.P.R.

1967).

em

15

E

CONCLUSION

We submit that nothing in Louisiana law prohibits a

marine mutual protection and indemnity association from

limiting, by its contract with its own member (and hence

third parties), the indemnity it affords its member, to the

amount of the shipowner member’s judicially declared

federal limitation of liability; to the contrary, Louisiana law

authorizes, recognizes, and enforces contractual limits; and

we further submit that the shipowner’s federal limitation

of liability is nct a ‘‘personal defense’ as that term is used

in the Louisiana law. In every single case the “‘personal

defense”’ under Louisiana law is a total, complete immunity

from suit, which is essentially no different from immunities

in the common law states, an immunity which the federal

limitation of shipowner’s liability is not.

The decision of the Court of Appeals in this case is

proper and there is no justification for the issuance of a

writ.

Respectfully submitted,

Benjamin W. Yancey

Andrew T. Martinez

TERRIBERRY, CARROLL & YANCEY

2100 ITM Building

New Orleans, Louisiana 70130

ATTORNEYS FOR RESPONDENT

A-1

APPENDIX A

The Louisiana Direct Action Statute, La. R.S. 22:655

provides:

No policy or contract of liability insurance shall be

issued or delivered in this state, unless it contains pro-

visions to the effect that the insolvency or bankruptcy

of the insured shall not release the insurer from the

payment of damages for injuries sustained or loss oc-

casioned during the existence of the policy, and any

judgment which may be rendered against the insured

for which the insurer is liable which shall have become

executory, shall be deemed prima facie evidence of the

insolvency of the insured, and an action may

thereafter be maintained within the terms and limits

of the policy by the injured person, or his or her sur-

vivors mentioned in Revised Civil Code Article 2315,

or heirs against the insurer. The injured person or his

or her survivors or heirs hereinabove referred to, at

their option, shall have a right of direct action againsi.

the insurer within the terms and limits of the policy

and such action may be brought against the insure:

alone, or against both the insured and insurer jointly

and in solido, in the parish in which the accident or in-

jury occurred or in the parish in which an action could

be brought against either the insured or the insurer

under the general rules of venue prescribed by Art. 42,

Code of Civil Procedure. This right of direct action

shall exist whether the policy of insurance sued upon

was written or delivered in the State of Louisiana or

not and whether or not such policy contains a provi-

sion forbidding such direct action, provided the acci-

dent or injury occurred within the State of Louisiana.

A-2

Nothing contained in this Section shall be construed

to affect the provisions of the policy or contract if the

same are not in violation of the laws of this State. It

is the intent of this Section that any action brought

hereunder shall be subject to all of the lawful condi-

tions of the policy or contract and the defenses which

could be urged by the insurer to a direct action

brought by the insured, provided the terms and condi-

tions of such policy or contract are not in violation of

the laws of this State.

It is also the intent of this Section that all liability

policies within their terms and limits are executed for

the benefit of all injured persons, his or her survivors

or heirs, to whom the insured is liable; and that it is

the purpose of all liability policies to give protection

and coverage to all insureds, whether they are named

insured or additional insureds under the omnibus

clause, for any legal liability said insured may have as

or for a tort-feasor within the terms and limits of said

policy.

— a ee

A-3

APPENDIX B

CORRECTED JUDGMENT

For the written reasons assigned:

IT IS ORDERED AND ADJUDGED that judg-

ment be entered in favor of Ingram Industries, Inc.,

limiting its liability in this case to the sum of

$2,134,918.88.

IT IS FURTHER ORDERED AND ADJUDGED

that judgment be entered in favor of Crown Zellerbach Cor-

poration in the total sum of $3,948,210.31, together with in-

terest at the rate of 10.41% per annum from December 11,

1980, until paid on the total judgment and all costs of these

proceedings. Of this sum, judgment in the amount of

$1,025,000.00 be entered against Ingram Industries, Inc.

and Cherokee Insurance Company for the maximum limits

of the latter’s policy of insurance covering the M/V F.R.

BIGELOW. Above that, judgment in the amount of

$1,109,918.88 be entered against Ingram Industries, Inc.

and London Steam-Ship Owners’ Mutual Insurance

Association, Ltd. Thereafter, judgment be entered against

London Steam-Ship Owners’ Mutual Insurance Associa-

tion, Ltd. for the balance of the judgment, with interest

and costs as aforesaid.

BATON ROUGE, LOUISIANA, November 22,

1982.

FRANK J. POLOZOLA

U.S. DISTRICT JUDGE

MIDDLE DISTRICT