IN RE PHILLIPS PETROLEUM CO

ELDON E. FALLON, Judge

On July 5, 2001 at 2 o'clock p.m., the Court heard oral argument on the following motion:

1. Motion of Clarendon America Insurance Company ("Clarendon") for Partial Summary Judgment Regarding the Obligation of Other Insurers to Defend Fab-Con, Inc. ("Fab-Con");

2. Motion of Fab-Con for Summary Judgment Regarding Clarendon's Duty to Defend;

3. Cross-Motion of Clarendon for Summary Judgment Regard Clarendon's Alleged Duty to Defend;

4. Motion of Fab-Con for Summary Judgment Regarding American Equity Insurance Co's ("AEIC") Duty to Defend and Indemnify Fab-Con;

5. Cross-Motion of AEIC for Partial Summary Judgment Regarding Its Alleged Duty to Defend Fab-Con and Phillips Petroleum Co. ("Phillips"); and

6. AEIC's Motion for Partial Summary Judgment Regarding Security Insurance Co.'s ("Security") Duty to Defend Fab-Con and Phillips.

The Court has. been informed by counsel that all motions other than AEIC's Motion for Partial Summary Judgment Regarding Security's Duty to Defend Fab-Con and Phillips have been settled and, therefore, are DENIED AS MOOT.

After a review of the pleadings and the applicable law, AEIC's remaining motion against Security is DENIED.

These consolidated cases arose from an incident that occurred on March 18, 1999. Carlo Muth, a diver, alleges he was injured when a sandbag thrown from a barge struck him in the neck while he was in the water. At the time of the incident, Mr. Muth was employed by Leo's Diving and Marine Services. Fab-Con had subcontracted the diving work to Leo's Diving and Marine Services as part of the work it was doing under a contract between Fab-Con and Phillips to install. salt-water disposal pipelines in one of Phillips' fields in Plaquemines Parish, Louisiana.

Mr. Muth initially filed suit against Leo's Diving, Fab-Con, and Phillips in the 25th Judicial District Court, Plaquemines Parish, Louisiana. In his petition, he alleged that he was a Jones Act seaman, the employee of both Leo's Diving and Fab-Con and that Fab-Con owned the vessel, the FAB-CON II. from which he was working. According to the summary judgment evidence, during discovery it was determined that Phillips owed the vessel which was not the FAB-CON II, but instead was an unnamed work barge. Phillips subsequently filed case no. 00-2218, a limitation/exoneration action, in this court. Phillips filed a separate action in this Court, case no. 00-2232, seeking a declaratory judgment regarding tort and contractual contribution or indemnity from Fab-Con and its insurers. Fab-Con filed cross-claims against AEIC, Fab-Con's CGL insurer, and Clarendon, Fab-Con's Maritime Excess Employee insurer, for defense and indemnity for the purpose of preserving its rights to have its insurer indemnify and defend it. Fab-Con also filed a third party complaint against Leo's Diving, General Star Indemnity Inc. and U.S.I Gulf Inc.

Security issued an American Institute of Marine Underwriters Protection and Indemnity ("PI") policy to Fab-Con that was in effect at the time of Mr. Muth's alleged injury. AEIC filed the instant motion seeking a determination that Security owed Fab-Con and Phillips a defense against Carlo Muth's claims. AEIC has not filed any claims against Security in either of these consolidated cases.

An insurer's duty to defend suits against its insured is generally broader than its obligation to provide coverage for damage claims. See American Home Assurance Co. v. Czarniecki, 230 So.2d 253, 269 (La. 1969). The duty to defend arises if any allegations in the plaintiff's petition, which, taken as true, support a claim for which coverage is not unambiguously excluded. See Delta Computer Corp. v. Frank, 196 F.3d 589, 591 (5th Cir. 1999) (citations omitted); Steptore v. Masco Constr. Co., Inc., 643 So.2d 1213, 1218 (La. 1994). Accordingly, the possibility of recovery under a policy obligates the insurer to defend the insured regardless of the outcome of the litigation. See Complaint of Stone Petroleum Corp., 961 F.2d 90, 91 (5th Cir. 1992); Milano v. Board of Commissioners of Orleans Levee Dist., 691 So.2d 1311 (La.App. 4th Cir. 1997).

AEIC has not filed any claim against Security in either of these consolidated cases. The Court finds that since no claim has been filed, AEIC is not the proper party to move for summary judgment against Security and, therefore, the AEIC's motion is DENIED.

However, even if AEIC's motion was properly before the Court, it would be denied. According to the summary judgment evidence, Mr. Muth was working as a commercial diver at the time of the accident. Security's PI policy contains a commercial diver exclusion. That provision excludes:

Any liability for, or any loss, damage or expense while engaged in, or resulting from, any commercial diving operation or service from Vessel, EXCEPT, HOWEVER, any liability incurred when the Vessel's crew is engaged in inspection or repair of the Vessel which could not be deferred until commercial divers were available.

PI Policy, Exclusion ¶ "K" ("Exclusion K"), AEIC's Mem. Supp. Summ. J. Ex. A.

AEIC's position is that other exclusions in the PI policy exclude liability for "loss, damage, injury or expense" (emphasis added) whereas Exclusion K excludes liability only for "loss, damage or expense." AEIC argues that the failure to include "injury" in Exclusion K, makes the exclusion ambiguous. While this argument is clever, it does not render Exclusion K ambiguous. Fab-Con's liability to Mr. Muth is unambiguously a liability for a commercial diving operation. The plain language of the commercial diver exclusion unambiguously exclude coverage for Mr. Muth's alleged damages. As coverage is unambiguously excluded under the PI policy, Security had no duty to defend either Fab-Con or Phillips against Mr. Muth's claims.

For the forgoing reasons, AEIC's Motion for Partial Summary Judgment Regarding Security Duty to Defend Fab-Con and Phillips is DENIED.

The following motions have been withdrawn by the parties and are DENTED AS MOOT:

1. Motion of Clarendon for Partial Summary Judgment Regarding the Obligation of Other Insurers to Defend Fab-Con;

2. Motion of Fab-Con for Summary Judgment Regarding Clarendon's Duty to Defend;

3. Cross-Motion of Clarendon for Summary Judgment Regard Clarendon's Alleged Duty to Defend;

4. Motion of Fab-Con for Summary Judgment Regarding AEIC Duty to Defend and Indemnify Fab-Con; and

5. Cross-Motion of AEIC for Partial Summary Judgment Regarding Its Alleged Duty to Defend Fab-Con and Phillips.