Tred R. Eyerly | Insurance Law Hawaii | November 29, 2017
The court disagreed with the insurer’s attempt to limit additional insured status based upon the contract between the parties. Mays v. In re All C-Dive LLC, 2017 U.S. Dist. LEXIS 185874 (E.D. La. Nov. 9, 2017).
Five employees of C-Dive LLC filed a lawsuit after belng injured in a pipeline explosion aboard a vessel servicing a pipeline owned by Gulf South Pipeline Company. During the work, there was a release of gas that caused an explosion and injured the employees.
Gulf South was a subsidiary of Boardwalk Pipelines LP. Boardwalk Pipelines entered into a Master Services Agreement (MSA) with C-Dive. C-Dive and Gulf South also entered into a Scope of Work Agreement (SWA), whereby C-Dive was to decommission the pipeline. The SWA incorporated the MSA.
The MSA applied to both Boardwalk Pipelines and its subsidiaries, including Gulf South. The agreement was “by and between Boardwalk Pipelines, LP and C-Dive, LLC.” It further stated that “reference to Boardwalk shall also include its subsidiaries, including but not limited to . . . Gulf South Pipeline Company.” The MSA required C-Drive to maintain insurance which would include Boardwalk Pipelines, LP as additional insured.
Gulf South made third-party claims against the insurers as an additional insured under the policies issued to Baordwalk. The insurers moved for summary judgment, arguing that the MSA obligated C-Dive to name only Boardwalk Pipelines as an additional insured and not its subsidiaries.
The court disagreed. The insurers argued that the MSA’s additional insured provision referred to ‘Boardwalk Pipelines LP,” rather than the shorthand, “Boardwalk.” Therefore, Gulf South was not included as an additional insured. But the plain meaning of the MSA meant that the terms “Boardwalk” and “Boardwalk Pipelines” were interchangeable. The agreement first stated that Boardwalk Pipelines LP was “hereinafter referred to as ‘Boardwalk.'” Thus, when the MSA used the phrase “Boardwalk,” it was referring to the entity Boardwalk Pipelines.
Therefore, Gulf South was an additional insured under the policies.