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SEACOR Holdings, Inc. v. Commonwealth Ins. Co.

United States Court of Appeals for the Fifth Circuit

March 10, 2011, Filed

No. 10-30020


 [*677]  PATRICK E. HIGGINBOTHAM, Circuit Judge:

In this diversity case, Commonwealth Insurance Company appeals a grant of partial summary judgment in favor of SEACOR Holdings Inc. on an insurance contract interpretation question. The district court also granted summary judgment in favor of Commonwealth with regard to SEACOR's bad faith claims, which SEACOR now cross-appeals. We AFFIRM both judgments.

SEACOR is a publicly traded Delaware corporation that owns and operates marine and aviation assets servicing the transportation and oil-and-gas industries  [**2] worldwide. Commonwealth, a Canadian corporation, furnished SEACOR with an all-risk property insurance policy for the 2005 calendar year. The matter before us involves two interweaving factual backgrounds—the first for the insurance contract interpretation and the second for bad faith claims.

SEACOR's all-risk policy includes a provision denoting various deductibles contingent on the source of the damage.

 [*678]  Each occurrence resulting in a claim for loss shall be adjusted separately and [Commonwealth]'s liability shall be limited to that amount by which the loss exceeds the deductible amounts shown hereunder, up to the applicable Limit of Liability.

. . .

(c) In respect of loss caused directly by the peril of Windstorm, as defined: $25,000, except

(d) In respect of loss caused directly by the peril of a "Named Windstorm", as defined, 3% of the total insurable values . . . subject to a minimum of $50,000 per occurrence

(e) In respect of loss caused directly by the peril of Flood, as defined: $25,000; except Flood Zones A and V, excess maximum National Flood Insurance Program (NFIP) limits available . . . .

SEACOR and Commonwealth disagree as to whether damages from Hurricanes Katrina and Rita  [**3] should be covered using only the Named Windstorm deductible or using both the Named Windstorm and Flood deductible. The parties further dispute the application of the policy's limit of liability provision, which reads:

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635 F.3d 675 *; 2011 U.S. App. LEXIS 4643 **

SEACOR HOLDINGS INC., Plaintiff — Appellee/Cross-Appellant v. COMMONWEALTH INSURANCE COMPANY, Defendant — Appellant/Cross-Appellee

Prior History:  [**1] Appeals from the United States District Court for the Eastern District of Louisiana.

Seacor Holdings v. Commonwealth Ins. Co., 2009 U.S. Dist. LEXIS 26075 (E.D. La., Mar. 26, 2009)


Windstorm, deductible, Flood, limitation of liability, peril, damages, hurricane, insurer, occurrence, losses, wind, summary judgment, capricious, insurance policy, bad faith claim, probable cause, disturbance, proximate, adjusted, casualty, coverage, policies, parties, storm

Insurance Law, Liability & Performance Standards, Good Faith & Fair Dealing, General Overview, Payments, Civil Procedure, Appeals, Summary Judgment Review, Standards of Review, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Legal Entitlement, Claim, Contract & Practice Issues, Policy Interpretation, Entire Contract, Plain Language, Ordinary & Usual Meanings, Property Insurance, Coverage, Hurricanes & Tornadoes, Governments, Courts, Judicial Precedent