     Case: 13-30738      Document: 00512614204         Page: 1    Date Filed: 04/30/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                        United States Court of Appeals
                                                                                 Fifth Circuit

                                                                               FILED
                                      No. 13-30738
                                                                           April 30, 2014
                                                                          Lyle W. Cayce
                                                                               Clerk
TIM SOSEBEE; MARK WRITESMAN; DALE PATILLO,

                                                 Plaintiffs-Appellants
v.

CERTAIN UNDERWRITERS AT LLOYDS LONDON, Subscribing to Policy
Number B11252006Q2N1011; CERTAIN UNDERWRITERS AT LLOYDS
LONDON, Subscribing to Policy Number B11252008Q2N1073; ZURICH
AMERICAN INSURANCE COMPANY,

                                                 Defendants-Appellees


                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:09-CV-4138



Before HIGGINBOTHAM, DAVIS, and HAYNES, Circuit Judges.
PER CURIAM:*
           This appeal challenges the district court’s conclusion that a Marine
Protection & Indemnity Policy issued by Certain Underwriters at Lloyds
London (“Lloyds”) and Zurich American Insurance Company (“Zurich”)
provided no coverage to the insured. For the reasons that follow, we affirm the
district court’s ruling on summary judgment in favor of the Defendants.




       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                       No. 13-30738
       On May 1, 2008, Plaintiffs Tim Sosebee, Mark Writesman, and Dale
Patillo (“Plaintiffs,” collectively) chartered a fishing boat owned and operated
by David Mills, d/b/a Reel Tite Fishing Guide Services, LLC (“Mills”). Plaintiffs
suffered serious injuries when their boat collided with a utility boat in a canal
near Venice, La. The utility boat was owned by Harvest Oil & Gas, LLC
(“Harvest”). The Harvest Boat was insured by Steadfast Insurance Company
(“Steadfast”), as well as Lloyds and Zurich. Following preliminary litigation
not relevant to this matter, 1 Plaintiffs filed a direct action suit under the
Louisiana Direct Action Statute 2 and included Harvest’s insurers Lloyds and
Zurich as defendants. Thereafter, the district court granted summary
judgment in favor of Lloyds and Zurich, concluding that coverage was not
available under two Marine Protection & Indemnity policies, issued to Harvest
in 2006 and 2008, respectively. Plaintiffs appeal the district court’s ruling only
as to the conclusion that coverage was not available under the 2008 policy.
       We affirm the district court’s ruling based on a straightforward
application of the fortuity doctrine under Texas law. 3 Fortuity is an inherent
requirement of all risk insurance policies. 4 “The concept of insurance is that


       1 On May 8, 2008, Mills’s insurer, St. Paul Fire and Marine Insurance Company, filed
a declaratory judgment action against Plaintiffs and Mills to resolve the amount of coverage
available under its policy. On September 18, 2008, Plaintiffs filed an answer and a third-
party complaint against Harvest. Harvest declared bankruptcy in April 2009. The district
court issued an administrative stay in the case as a result until the instant direct action suit
was filed.
       2   LA. REV. STAT. ANN. § 22:1269(D).
       3 The appellants do not challenge the district court’s conclusion that Texas law
governs the interpretation of the Marine Protection & Indemnity Policy.
       4 Warrantech Corp. v. Steadfast Ins. Co., 210 S.W.3d 760, 767 (Tex. App.-Ft. Worth
2006, pet. denied) (citing Burlington Ins. Co. v. Tex. Krishnas, Inc., 143 S.W.3d 226, 230 (Tex.
App.-Eastland 2004, no pet.); Scottsdale Ins. Co. v. Travis, 68 S.W.3d 72, 75 (Tex. App.-Dallas
2001, pet. denied); Two Pesos, Inc. v. Gulf Ins. Co., 901 S.W.2d 495, 502 (Tex. App.-Houston
[14th Dist.] 1995, no writ).


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                                       No. 13-30738
the parties, in effect, wager against the occurrence or non-occurrence of a
specified event; the carrier insures against a risk, not a certainty.” 5 “The
fortuity doctrine precludes coverage for two categories of losses: known losses
and losses in progress.” 6 The “known loss” aspect of the fortuity doctrine
precludes coverage “where the insured is, or should be, aware of . . . [a] known
loss at the time the policy is purchased.” 7 “A ‘known loss’ is one that the
insured knew had occurred before the insured entered into the contract for
insurance.” 8
       The 2008 policy provided coverage from May 18, 2008, until May 18,
2009. The accident in this case occurred on May 1, 2008, more than two weeks
before the effective date of the policy. The fortuity doctrine bars coverage for
the accident in this case because it was a known loss at the time the policy took
effect. 9 Plaintiffs’ contention that the Louisiana Direct Action Statute changes
this outcome is without merit. The Direct Action Statute “does not extend the




       5 Two Pesos, 901 S.W.2d at 501 (quoting Bartholomew v. Appalachian Ins. Co., 655
F.2d 27, 29 (1st Cir. 1981)).
       6 Warrantech, 210 S.W.3d at 767 (citing Tex. Krishnas, Inc., 143 S.W.3d at 230;
Travis, 68 S.W.3d at 75).
       7Two Pesos, 901 S.W.2d at 501 (citing Inland Waters Pollution Control, Inc. v. Nat'l
Union Fire Ins. Co., 997 F.2d 172, 175–77 (6th Cir. 1993)).
       8 Warrantech, 210 S.W.3d at 766 (citing Burch v. Commonwealth County Mut. Ins.
Co., 450 S.W.2d 838, 840–41 (Tex. 1970); Tex. Krishnas, Inc., 143 S.W.3d at 230; Travis, 68
S.W.3d at 75).
       9 Plaintiffs argue that the accident itself is not a known loss. They contend that
Harvest must be “adjudicated to be liable” before the accident can qualify as a known loss.
Texas courts have rejected this argument because it is “fatally undermined by the many cases
applying the fortuity doctrine under Texas law where the insured’s liability was not yet fixed
by judgment.” Warrantech, 210 S.W.3d at 766 (citing Roman Catholic Diocese of Dallas ex rel.
Grahmann v. Interstate Fire & Cas. Co., 133 S.W.3d 887, 889 (Tex. App.-Dallas 2004, pet.
denied); Travis, 68 S.W.3d at 74).


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                                      No. 13-30738
protection of [a] liability policy to risks that were not covered by the policy
unless another statute requires a mandatory coverage provision.” 10
       For the reasons stated above, we AFFIRM the district court’s ruling on
summary judgment.




       10 Hood v. Cotter, 5 So.3d 819, 829 (La. 2008) (citing Anderson v. Ichinose, 260 So.2d
302, 307 (La. 1999)).


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