A “Tug” May Be a “Tow,” Says U.S. Fifth Circuit

21
Feb

A “Tug” May Be a “Tow,” Says U.S. Fifth Circuit

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A “tugboat” may be a “tow” if it receives extra motive power from another vessel, according to the U.S. Fifth Circuit Court of Appeals. The Fifth Circuit announced this rule in the context of interpreting an insurance policy, although the court actually determined that an assisting tug was not the tow of a lead tug.

In Continental Insurance Co. v. L&L Marine Transportation, Inc., three tugs were towing a barge. One of the tugs, the M/V MISS DOROTHY, allided with the fender system of the Sunshine Bridge in Louisiana, and sank. The insurer of the MISS DOROTHY sued the owners of one of the other tugs, the M/V ANGELA RAE, alleging that the ANGELA RAE was the lead tug and was responsible for the tow. A dispute then arose between the ANGELA RAE’s hull and machinery insurer and its protection and indemnity (“P&I) insurer as to which insurer’s policy covered this loss. The hull and machinery policy provided coverage in the following situations, according to the Fifth Circuit: (1) the ANGELA RAE collides with something else, (2) the ANGELA RAE strands her tow, (3) the ANGELA RAE causes her tow to come into collision with anything else, or (4) the ANGELA RAE causes any damage to her tow or to her tow’s freight. The P&I policy provided broad coverage for any “[l]iability for loss of or damage to any other vessel or craft.” However, the P&I policy clearly excluded coverage for any coverage provided by the hull and machinery policy.

As a result of the language of these competing policies, the P&I insurer argued that the hull and machinery policy covered the loss of the MISS DOROTHY because the ANGELA RAE caused her tow (the MISS DOROTHY) to collide with the bridge fender system. The P&I insurer essentially argued that the MISS DOROTHY was the “tow” of the ANGELA RAE, even though the MISS DOROTHY was a tugboat, because the ANGELA RAE was the “lead tugboat.” This argument required the Fifth Circuit to determine whether a tugboat could be a “tow” of another tugboat.

Following Louisiana law, which all parties agreed governed the insurance contracts at issue, the Fifth Circuit held that its determination hinged on the “plain, ordinary and generally prevailing meaning” of the word “tow.” The court synthesized the meaning of “tow” from several dictionaries as “a vessel that is being provided extra motive power from another vessel by being pushed or pulled.” Under this straightforward approach, the Fifth Circuit easily concluded that the MISS DOROTHY was not the “tow” of the ANGELA RAE, because no evidence indicated that the ANGELA RAE provided any motive power to, or pushed or pulled, the MISS DOROTHY.

In reaching this decision, the Fifth Circuit rejected the P&I insurer’s argument for application of the “dominant mind” doctrine of maritime law. The Fifth Circuit reasoned that the dominant mind doctrine is a tort doctrine which is used in allocating fault by presuming that the tug, or a lead tug in the case of a flotilla, has the primary responsibility for the safe navigation of the tow. The Fifth Circuit ruled that a tort doctrine should not be engrafted onto a definition of a term in an insurance policy.

Considering this analysis, and finding no allegations that the ANGELA RAE provided any extra motive power to the MISS DOROTHY, the Fifth Circuit held that the MISS DOROTHY was not a “tow” of the ANGELA RAY. This is a notable decision for all maritime interests. It could find application not only in inland river situations, but virtually worldwide as larger and more expensive ships and equipment are towed across great distances.

Continental Insurance Co. v. L&L Marine Transportation, Inc., 17-30424 (5th Cir. 2/15/18); 2018 U.S. App. LEXIS 3542.

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