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St. Paul Fire & Marine Ins. Co. v. Helena Marine Serv.

St. Paul Fire & Marine Ins. Co. v. Helena Marine Serv.

United States Court of Appeals for the Eighth Circuit

June 14, 1989, Submitted ; September 8, 1989, Filed

Nos. 88-2843, 88-2844

Opinion

 [*392]  WILLIAM C. HANSON, Senior District Judge

This is an appeal from a judgment entered in favor of appellees and against appellant St. Paul Fire and Marine Insurance Company (St. Paul) and against appellant United States Fire Insurance Company (U.S. Fire). We reverse the judgment [**2]  of the District Court.

FACTS

This case first arose as a diversity action filed by appellee Helena Marine Service, Inc. (Helena) against appellants. Helena brought suit claiming entitlement to insurance coverage under comprehensive general liability (CGL) insurance policies issued by appellants to the Union National Bank (Union). Helena sought this coverage after a number of barges it chartered from Union broke from their moorings on the Arkansas river causing extensive damage. The court below found this accident the result of Helena's negligence.

Helena asserts coverage under a provision of the CGL policy St. Paul issued to Union which extends coverage to specified other parties. It is undisputed that if coverage exists under St. Paul's policy, it also exists under U.S. Fire's excess CGL policy. The provision at issue states:

5. If you [Union] operate mobile equipment in your business, such as road construction equipment or fork lifts, then:

* Your employees are protected while they're using mobile equipment on public highways for your work.

* Other persons or organizations are also protected while using mobile equipment registered to you, provided they had your [**3]  permission. They're not protected, however, if other valid and collectible insurance is available to cover the liability.

The barges which caused the damage are owned by Union. They were immediately leased to Helena after their purchase through a seven year "Bareboat Charter". The charter includes a provision whereby "at the expiration of the charter term, and at the option of the Owner [Union], Charterer [Helena] shall purchase all of the barges then subject to this charter for an amount equal to the then fair market value of each barge." The charter made Helena responsible for all day-to-day operations of the barges, subject only to Union's right to maintain the barges should Helena fail to do so. Union did retain, through the charter, the right to claim any Investment Tax Credits and depreciation resulting from the purchase and use of the barges. The charter agreement also required Helena to purchase approximately $ 6 million in primary and excess marine insurance to cover the barges.

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884 F.2d 391 *; 1989 U.S. App. LEXIS 13564 **; 14 Fed. R. Serv. 3d (Callaghan) 744; 1989 AMC 2717

St. Paul Fire and Marine Insurance Company and United States Fire Insurance Company, Appellants, v. Helena Marine Service, Inc. and New York Marine Managers, Inc., Appellees

Subsequent History:  [**1]   Rehearing and Rehearing En Banc Denied October 20, 1989, Reported at 1989 U.S. App. LEXIS 16056.

Rehearing denied by, En banc Helena Marine Service, Inc. v. St. Paul Fire & Marine Ins. Co., 1989 U.S. App. LEXIS 16056 (8th Cir., Oct. 20, 1989)

Writ of certiorari denied Helena Marine Serv. v. St. Paul Fire & Marine Ins., 494 U.S. 1004, 110 S. Ct. 1298, 108 L. Ed. 2d 475, 1990 U.S. LEXIS 1104 (1990)

Prior History: Appeal from the United States District Court for the Eastern District of Arkansas, Honorable George Howard, Judge.

New York Marine Managers, Inc. v. Helena Marine Service, 758 F.2d 313, 1985 U.S. App. LEXIS 29882 (8th Cir. Ark., 1985)

CORE TERMS

barges, mobile equipment, charter, policies, district court, coverage, admiralty jurisdiction, diversity

Admiralty & Maritime Law, Practice & Procedure, Jurisdiction, Civil Procedure, Parties, Intervention, Permissive Intervention, General Overview, Joinder of Parties, Misjoinder, Contracts Law, Contract Interpretation, Ambiguities & Contra Proferentem, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Defenses, Ambiguities & Mistakes, Ambiguous Terms