When Words Allide, Plain Meaning Wins

Navigating the Mighty Mississippi and the English language have quite a bit in common. Sometimes it takes a lot of skill and creativity to get where you want to go. Due to a recent dispute in Continental Insurance Co. v. L&L Marine Transportation, Inc.,¹ regarding the meaning of the undefined policy term “tow” and the creative approach to “plain or technical meaning” interpretation, the U. S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) was presented with the opportunity to revisit well-established principles of general contract interpretation.

The M/V Miss Dorothy was an assisting tug to the lead tug of a towage, the M/V Angela Rae. During the towage, the M/V Miss Dorothy sank as a result of its allision² with a bridge fender system. The M/V Miss Dorothy’s insurer, Continental Insurance Co. (“Continental”), sought recovery for property damage under L&L Marine Transportation, Inc.’s (“L & L”) Hull & Machinery insurance policy issued by Atlantic Specialty Insurance Co. (Atlantic Specialty), which provided tow liability coverage for its M/V Angela Rae. Atlantic Specialty denied liability for M/V Miss Dorothy’s allision and sinking arguing that the M/V Miss Dorothy was not a “tow” within the meaning of the policy terms.

The M/V Angela Rae was also insured by P& I Underwriters (“P & I”) for Protection and Indemnity Insurance. P & I denied coverage and filed a complaint against Atlantic Specialty alleging the Atlantic Specialty policy covered the M/V Miss Dorothy’s damages complained of against the M/V Angela Rae. P & I’s complaint was consolidated with Continental’s tort action against L & L, the owner of the M/V Angela Rae.³ P & I joined the argument of Continental alleging that under the tort principle known as the “dominant mind” doctrine, the lead tug was responsible for the towage and that all other vessels, powered or not, were considered part of the “tow”. Continental also alleged that the M/V Angela Rae was negligent for failing to keep proper look-out; failing to properly navigate around the bridge; and failing to chart a safe route.

The case was originally brought in the U. S. District Court for the Eastern District of Louisiana (“ED LA”). The ED LA court considered tort doctrines and the technical interpretation of the meaning of “tow” as found in Schoenbaum’s Admiralty & Maritime Law treatise regarding flotillas and tows, as well as Louisiana case law regarding the same.⁴ The ED LA court ruled in favor of P & I and found the term “tow” in Atlantic Specialty’s policy to include coverage for the M/V Miss Dorothy. Atlantic Specialty appealed to the Fifth Circuit disputing the application of the tort doctrine to interpret the terms of the contract of insurance.

The central issue presented to the Fifth Circuit was whether the M/V Miss Dorothy was the “tow” of the M/V Angela Rae for the purposes of Atlantic Specialty’s policy. The parties agreed that Louisiana law controlled. The Fifth Circuit began its analysis with the holding in Cadwallader that the interpretation of insurance policies in Louisiana is governed by general rules of contract interpretation.⁵ The court continued with precedent that the courts “should seek to determine the parties’ common intent, as reflected by the words in the policy.”⁶ The court further recognized that under Louisiana law, “The words of a contract must be given their generally prevailing meaning” or their technical meaning “when the contract involves a technical matter.”⁷ The court provided this analysis:

Because we look for the “plain, ordinary and generally prevailing meaning” or “technical meaning” of the word “tow,” we begin with the dictionary. See Cadwallader, 848 So. 2d at 580–81. Dictionary definitions almost uniformly point toward the following definition of “tow”: a vessel that is being provided extra motive power from another vessel by being pushed or pulled. For example, Black’s Law Dictionary defines “towage” as “[t]he act or service of towing ships . . . by means of a small vessel called a tug.” That indicates that the “tug” is actively “towing” or exerting some force on the “tow.” Supporting this, Merriam-Webster defines the verb “tow” as “to draw or pull along behind” or “to move in tow.” The Oxford English Dictionary agrees, defining the verb “tow” as “[t]o draw by force; to pull, drag.” Furthermore, Oxford defines the noun “tow” as “[t]he action of towing or fact of being towed” or as “[a] vessel taken in tow; also, string of boats, barges, etc. being towed. Hence also, a string of barges that is pushed rather than pulled.”⁸

The Fifth Circuit found the above definitions supported in caselaw and treatises. In Stevens, the Supreme Court explained tows and towage:

The supplying of power by a vessel, usually one propelled by steam, to tow or draw another is towage. Many vessels, such as barges and canal boats, have no power of their own and are built with a view to receiving their propelling force from other sources. And vessels having motive power often employ auxiliary power to assist them in moving about harbors and docks.[10] The Fifth Circuit determined that the its precedent is in accordance with the notion above cited Mississippi Valley Barge Line where it noted, “[towage] is the employment of one vessel to expedite the voyage of another.” Finally, at least one treatise defines “[t]owage” as “a service rendered by one vessel to aid the propulsion or to expedite the movement of another vessel. The vessel that supplies the power . . . is typically called a tug.” THOMAS J. SCHOENBAUM, ADMIRALTY AND MARITIME LAW § 12-1 (West 5th ed. 2017) (“SCHOENBAUM”).⁹

The Fifth Circuit concluded that the dictionaries, cases, and treatises all point to a common understanding of “tow,” i.e., “some ship or boat that is being provided extra motive power from another ship or boat by being pushed or pulled.” The court found that “tow” has a plain and unambiguous meaning outside tort law or the “dominant mind” doctrine and declined the invitation to derive the meaning of “tow” in an insurance contract from tort law as opposed to its ordinary definition. Therefore, the court found, “Under this plain-meaning approach, it is evident that the MISS DOROTHY was not the “tow” of the ANGELA RAE.” The court held that the Atlantic Specialty policy did not apply and reversed the ED LA in favor of Atlantic Specialty, holding that “tow” as used in Atlantic Specialty’s policy is defined by its plain, ordinary meaning: “a vessel that is provided auxiliary motive power by being pushed or pulled.”

Though, the creative “technical meaning” approach using tort doctrines for interpretation of undefined contractual terms propelled the case through the district court, it too, allided with the well-established contract interpretation principle of “plain and ordinary meaning.” The Mighty Mississippi moves fast, and the creative must take their chance and roll with it. Rolling, Rolling on the River… Roll on.
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¹ Continental Ins. Co. v. L&L Marine Transportation, Inc., No. 17-30424 (5th Cir. Feb. 15, 2018).
² In maritime terms, when two moving objects strike each other, that is a collision; when a moving object strikes a stationary object, that is an allision.
³ The P & I suit was later severed by joint motion.
⁴ See, Continental Insurance Co. v. L&L Marine Transportation, Inc., No. 17-30424 (5th Cir. 2018), at 9, Footnotes 13 and 14 (13 See SCHOENBAUM § 12-6; Melbourne Bros. Constr. Co. v. Gnots-Reserve, 461 So. 2d 1145, 1148 (La. Ct. App. 5th Cir. 1984); Dep’t of Highways v. S. Shipbuilding Corp., 217 So. 2d 497, 500–02 (La. Ct. App. 1st Cir. 1969). 14 SCHOENBAUM § 12-6; see also Chitty v. M/V Valley Voyager, 408 F.2d 1354, 1356–58 (5th Cir. 1969) (finding that a refueling tug, which effectively became the “tow” of the lead tug because it docked with the barge and mostly shut down its engines, was negligent by failing to warn the lead tug of excessive speed); Commercial Union Ins. Co. v. M/V Bill Andrews, 624 F.2d 643, 646–48 (5th Cir. 1980) (similarly finding that a tug was mostly liable for the sinking of a refueling tug that was effectively a tow but that the refueling tug was also somewhat liable); S. Shipbuilding, 217 So. 2d at 502 (“[T]he helper tug is not liable for damages proximately caused by the faulty navigation of the superior or dominant vessel unless the helper is guilty of independent fault which contributes to the casualty.”)).
⁵ Cadwallader v. Allstate Ins. Co., 848 So. 2d 577, 580 (La. 2003).
⁶ Gabarick v. Laurin Maritime (Am.), Inc., 650 F.3d 545, 553 (5th Cir. 2011) (internal quotations omitted).
⁷ LA. CIV. CODE ANN. art. 2047; see also Naquin v. Elevating Boats, L.L.C., 817 F.3d 235, 238 (5th Cir. 2016); Cadwallader, 848 So. 2d at 580.
⁸ See, Continental Insurance Co. v. L&L Marine Transportation, Inc., No. 17-30424 (5th Cir. Feb. 15, 2018) (cites omitted).
⁹ See, Stevens v. The White City, 285 U.S. 195, 200 (1932)(cites omitted).