                             UNITED STATE COURT OF APPEALS

                                     FOR THE FIFTH CIRCUIT

                              ___________________________________

                                          No. 96-20441
                              ___________________________________

                 MARINE INDEMNITY INSURANCE COMPANY OF AMERICA,
                                               Plaintiff,

                        LOCKWOOD WAREHOUSE & STORAGE, ET AL,
                                                Defendants,

          MAXWELL HOUSE COFFEE COMPANY, KRAFT GENERAL FOOD, INC.,
                                           Defendants - Appellants

                                                VERSUS


     KRAFT GENERAL FOODS, INC; GRAND LOCKWOOD PARTNERS LIMITED
  PARTNERSHIP; THIRD COAST PACKAGING; IGI BAYCHEM, INC; OXID, INC.; RDA
                  INTERNATIONAL, INC.; VISTA CHEMICAL,
                                             Defendants - Appellees

                                                VERSUS

                          ENTERPLAST, INC.; H. MUEHLSTEIN & CO.,
                                                     Intervenor Defendants - Appellants

                 _______________________________________________________

                          Appeals from the United States District Court
                               for the Southern District of Texas
                 _______________________________________________________
                                         June 4, 1997

Before POLITZ, and DeMOSS, Circuit Judges, and JUSTICE,* District Judge.


JUSTICE, District Judge:

         This appeal arises out of an interpleader action brought by Marine Indemnity Insurance

Company of America (“Marine Indemnity”) to resolve conflicting claims for insurance proceeds under

an insurance policy issued by it to Lockwood Warehouse & Storage (“Lockwood”). The district

court, upon recommendation of a special master, determined the issues of insurable interests,


   *
       District Judge of the Eastern District of Texas, sitting by designation.
calculation of damages, and priority of claims, and entered final judgment. Defendants Maxwell

House Coffee Company (“Maxwell”) and Kraft General Foods, Inc. (“Kraft”), in addition to

intervenor-defendants Enterplast, Inc. (“Enterplast”) and H. Muehlstein & Company (“Muehlstein”),

appeal the district court’s order and seek review of its interpretation of the Marine Indemnity

insurance policy. We affirm in part and reverse in part the district court’s judgment.



I.       Proceedings Below

         In November 1993, a fire destroyed a warehouse owned by Grand Lockwood Partners

Limited Partnership (“Grand Lockwood”). It was managed and leased by Lockwood at the time of

the fire. Property worth millions of dollars that was stored in the warehouse was also destroyed by

the fire. Lockwood maintained insurance coverage with Marine Indemnity for certain property inside

the warehouse. Numerous owners of property stored inside the warehouse made claims against

Marine Indemnity for the value of their damaged property. Because the claims exceeded the limits

of the insurance policy, Marine Indemnity instituted this interpleader action.

         In October 1995, the district court determined that the amount of insurance available under

the Marine Indemnity policy was $1,275,610, plus accrued interest. The court ordered that Marine

Indemnity pay this amount into the court’s registry. The district court appointed a magistrate judge

to act as special master and recommend findings of facts and conclusions of law on the issues of

insurable interests, calculation of damages, and priority of claims. Issues concerning the causation

of the fire and the liability of the parties are the subjects of a separate proceeding pending in a Texas

state court action. After holding a hearing on the parties’ conflicting claims to the interpleaded funds

and considering briefs submitted by the parties setting forth their respective positions, along with

affidavits, documents, and deposition excerpts, the special master issued her report,2 which the district

court adopted. On March 4, 1996, after considering various motions and objections to the special


     2
     The special master also issued an errata sheet which she incorporated into her report and
recommendation and which corrected several factual errors contained in the report.

                                                   2
master’s report, the district court entered final judgment ordering the disbursement of the interpleaded

funds. Kraft subsequently filed a motion for new trial which was denied. This appeal followed.

       This appeal raises two primary disputes concerning the district court’s disbursement of the

Marine Indemnity insurance proceeds. First, intervenor-defendants Enterplast and Muehlstein object

to the district court’s order denying them any recovery from the interpleaded funds. Second,

defendants Kraft, Maxwell, and Vista Chemical Company, who all recovered only a portion of their

uninsured losses under the court’s allocation of policy proceeds, contest the district court’s award

from the interpleaded funds, of $158,430.76, plus accrued interest, to Grand Lockwood, for the costs

Grand Lockwood incurred in removing debris from the warehouse and cleaning up the warehouse

property site. Each of these claims shall be addressed, in turn, below.



II.    Analysis

       A.      Enterplast and Muehlstein’s Right to Recover

       The special master found two independent bases for denying both Enterplast and Muehlstein

any recovery from the interpleaded funds. First, the court found t hat, given Enterplast’s and

Muehlstein’s bailment relationship with sublessees of Lockwood, the Marine Indemnity policy

provisions governing covered property barred the two entities from recovery. Lockwood had

subleased space in the warehouse to Ultra Warehouse (“Ultra”) and Lance Cowan, doing business

as Shippers International (“Shippers”), who each stored, respectively, the property of Muehlstein and

Enterplast.

       The Marine Indemnity policy provided coverage of the following property:

               (A)     Personal Property of the Insured pertaining to the conduct of
               the                   Insured’s business.
               (B)     Personal Property of others which is directly connected with
               the                                   Insured’s business while in the
                                                     care, custody or control of the
                                                     Insured, and for which the
                                                     Insured is responsible, or for
                                                     which the Insured has agreed
                                                     in writing prior to loss to
                                                     insure.

                                                   3
                (C)     Real Property of the Insured.
                (D)     To the extent of the Insured’s business interests only,
                improvements and betterments to buildings occupied, but not owned
                by the Insured.

The special master determined that the policy had three coverage requirements with respect to the

property belonging to those other than Lockwood that was stored in the warehouse. First, the

property must have been “directly connected” with Lockwood’s business. Second, the property must

have been in the “care, custody, or control” of Lockwood. Third, Lockwood must either have been

“responsible” for the property or have had agreed in writing, prior to the fire, to insure the property.

        In construing the first requirement, the special master determined that the policy covered the

property of those who stored property directly with Lockwood, but did not cover the property of

those, including Enterplast and Muehlstein, who stored property with a sublessee of Lockwood.

Because Enterplast and Muehlstein did not enter into an agreement with Lockwood for the storage

of property, the court adjudged that neither entity could establish that it had a direct relationship or

involvement with Lockwood, and thus also concluded that their property could not be found to have

been “directly connected” with Lockwood’s business.

        The special master also found that the third coverage requirement barred Enterplast and

Muehlstein from recovery under the Marine Indemnity policy, in that they failed to establish that

Lockwood was “responsible” for their property. Evidence was presented to the court that Muehlstein

entered into a warehouseman’s agreement with Ultra for the storage of its property. Under this

agreement, Ultra disavowed responsibility for loss or damage to Muehlstein’s goods, however

caused. Moreover, evidence was adduced that Ultra and Shippers each entered into a sublease

agreement with Lockwood, which stated, in each instance, that the sublease incorporated all terms

and conditions of the master lease between Grand Lockwood and Lockwood. The master lease

provided:

                Lessor and Lessee, in their o wn behalf and in behalf of their insurers, each
        hereby waive any and all claims which such party may have against the other party
        during the Term for any and all loss of, or damage to, any of such party’s property
        located within or upon, or constituting a part of the Leased Premises or the Building
        to the extent that such loss or damage is or could have been covered by a standard

                                                   4
        Texas fire and extended coverage insurance policy, regardless of cause or origin,
        including the negligence (sole or otherwise), of such party hereto.

Since Ultra’s and Shippers’ leases with Lockwood, by incorporating the terms of the master lease,

exonerated Lockwood and its insurers from any damage claims for Ultra’s and Shippers’ property,

the special master concluded that, based on these waiver of liability provisions, Lockwood was not

responsible for the goods of Ultra and Shippers or the goods of their bailees, including Muehlstein

and Enterplast.

        The district court held that, even if it were to reject the incorporation of the master lease’s

waiver of liability provision, Lockwood was not “responsible” for Muehlstein’s and Enterplast’s

property, pursuant to the Texas law of leases and bailments. Under Texas law, a bailment is a

delivery of goods to anot her which creates a duty of trust on the part of the bailee to return the

deposited goods as directed. Braniff Airways, Inc. v. Exxon Co. U.S.A., 814 F.2d 1030, 1038 (5th

Cir. 1987). A bailee has the duty to exercise ordinary care over the goods and is therefore

“responsible” for the bailor’s goods. Allright, Inc. v. Elledge, 515 S.W.2d 266, 267 (Tex. 1974);

Ampco Auto Parks, Inc. v. Williams, 517 S.W.2d 401, 403 (Tex. Civ. App.--Dallas 1974, writ ref’d

n.r.e.); West v. Slaughter, 384 S.W.2d 185, 187 (Tex. Civ. App.--Waco 1964, writ ref’d n.r.e.). In

contrast, a lease is “a transfer of interest in and possession of property for a prescribed period of time

in exchange for an agreed consideration called ‘rent.’” State Nat’l Bank v. United States, 509 F.2d

832, 835 (5th Cir. 1975). The lessor has t he duty of ordinary care in maintaining the premises it

controls, but does not have a duty to exercise care regarding the lessee’s property stored on the

premises. See Jones v. Houston Aristocrat Apartments, Ltd., 572 S.W.2d 1 (Tex. Civ. App.--

Houston [1st Dist.] 1978, writ ref’d n.r.e.). The lessor is therefore not “responsible” for the property

of the lessee. The district court found that the sublease agreement between Ultra and Lockwood, and

also that between Shippers and Lockwood, established a lessor-lessee relationship. Consequently,

the court found that, under Texas law, Lockwood was not responsible for the property of Ultra or

Shippers, or the property of their bailors, Muehlstein and Enterplast.

        The special master also denied recovery to Muehlstein and Enterplast, based on its finding that

                                                    5
Muehlstein’s and Enterplast’s losses were covered by the Marine Indemnity policy’s “other

insurance” clause, which, together with considerations of equity, foreclosed recovery. The “other

insurance” clause provided: “If at the time of loss, or damage, there is available to a named or

unnamed insured or any other interested party any other insurance which would apply in the absence

of this policy, the insurance under this policy shall apply only as excess insurance over such other

insurance.” The court then held that, because the amount of claims to the policy exceeded the

amount of interpleaded funds, those claimants who were not covered by other insurance should have

first priority to the funds.

        Muehlstein, the court found, lost $547,546.63 worth of goods in the fire and suffered a net

sales loss of $1,078,233. The court concluded that, since Muehlstein recovered $750,000 from its

own insurance company, Phoenix Assurance, Muehlstein had been fully compensated for the loss of

its goods by other insurance, and, therefore, could not recover additional money from the

interpleaded funds.       Muehlstein objected to this finding in the special master’s report and

recommendation, maintaining that the majority of the proceeds it received from Phoenix Assurance

covered its lost profits, but did not cover the value of its lost inventory. In this connection,

Muehlstein contends that it suffered an uninsured loss of $1,078,233 minus $750,000, or $328,233.

The district court overruled Muehlstein’s objection, but did not directly address Muehlstein’s claim

regarding lost profits.

        The court also found that Enterplast was fully compensated for the actual cash value of its

property. Enterplast submitted a claim of $370,502 for the loss of its goods in the fire, of which its

insurance carrier paid $347,911.49. It was also determined by the court that Enterplast had stored

goods in the warehouse with a fair market value of $339,445. Enterplast did not object to the court’s

factual findings. Instead, Enterplast objected to the court’s decision that those entities storing

uninsured property in the warehouse with uninsured claims had first priority to the interpleaded funds.

The district court overruled Enterplast’s objection.

        Enterplast and Muehlstein argue on appeal that the district court erred in denying them


                                                  6
recovery of the interpleaded funds. They contend that they meet all three prerequisites to recovery

under the Marine Indemnity policy: first, that the goods they stored in the warehouse were directly

connected with Lockwood’s business; second, that the goods were in the care, custody, or control

of Lockwood; and finally, that Lockwood was responsible for the goods. Further, Muehlstein argues

that the district court erred in concluding that Muehlstein did not suffer an uninsured loss, and

therefore fell into error in denying it recovery on this basis.

        We review conclusions of law de novo. Phillips Petroleum Co. v. Best Oilfield Services, Inc.,

48 F.3d 913, 915 (5th Cir. 1995). We review the factual findings of the special master, adopted by

the district court, for clear error. Fed. R. Civ. P. 52(a); see also Sherri A.D. v. Kirby, 975 F.2d 193,

207 n.25 (5th Cir. 1992). The district court’s finding concerning the priority of claims (to the extent

that the priority of claims was not controlled by policy language or controlling law) is neither a

conclusion of law nor a factual finding, but is, instead, an equitable decision. See Bricks Unlimited,

Inc. v. Agee, 672 F.2d 1255, 1261 (5th Cir. 1982) (“In determining the order of distribution of the

interpleaded funds, we sit as a court of equity, and possess the remedial flexibility of a chancellor in

shaping our decree so as to do complete equity between the parties.”); see also American Airlines,

Inc. v. Block, 905 F.2d 12, 14 (2d Cir.1990) (“[I]t is well recognized that interpleader is an equitable

remedy . . . .”); Fulton v. Kaiser Steel Corp., 397 F.2d 580, 583 (5th Cir. 1968) (“Interpleader

generally is a suit in equity which invokes equitable principles.”). Hence, we review the priority of

claims finding for abuse of discretion. Based on these standards of review, we affirm the district

court’s judgment barring Muehlstein and Enterplast from recovery of the interpleaded funds.

Specifically, we affirm the district court’s holding that Lockwood was not responsible for the

property of Muehlstein and Enterplast under the Marine Indemnity policy. Further, we find that the

court did not commit clear error in finding that Muehlstein and Enterplast were fully compensated

for their losses, and that the court did not abuse its discretion in ruling that those with uninsured

losses should receive priority over Muehlstein and Enterplast to the limited interpleaded funds.

                1.      Lockwood’s responsibility under the insurance contract. Both Muehlstein and


                                                   7
Enterplast contend, on appeal, that Lockwood was responsible for their property by the terms of the

insurance policy, since it maintained control over the warehouse: that is, by directing and performing

warehouse maintenance, repairs, security, housekeeping, and fire protection, among other things,

Lockwood thereby assumed obligations and duties with regard to all property in the warehouse.

Muehlstein and Enterplast argue that the negligent performance of these duties by Lockwood

rendered it, as landlord, liable, and hence responsible, for the destruction to their property.

        We agree with the district court that Texas law, which governs this case, does not support

the bailors’ interpretation of the term “responsible” in the insurance contract. Pursuant to Texas law,

responsibility for goods is dependent on the existence of a bailor-bailee relationship. A bailee, in

contrast to a lessor, assumes a duty of care with regard to both the premises and the goods in its

possession. As a lessor, Lockwood had a duty to exercise care respecting the portions of the

warehouse it controlled,3 but did not have a general duty to exercise care as to the sublessees’

property stored on the premises or care with relation to the property of the sublessees’ bailors. Thus,

as lessor, Lockwood was not responsible for the property of the Muehlstein and Enterplast.

        In support of its argument, Enterplast cites to the case of Brown v. Frontier Theaters, Inc.,

369 S.W.2d 299 (Tex. 1963). In Brown, the Texas Supreme Court held that, if a landlord retains

control over a portion of the leased premises, “the landlord is charged with the duty of ordinary care

in maintaining the portion retained so as to not damage the tenant.” Id. at 303. Frontier Theaters

was found to be in control of the upper portion of the theater and, after the court ruled that Frontier

had been negligent in maintaining that portion of the theater, it held Frontier liable for damages to the

tenant’s property in the lower portion of the theater. Enterplast confuses responsibility for the

premises with responsibility for property stored on the premises. Contrary to Enterplast’s argument,

   3
      Texas law provides that, “[g]enerally, a landlord who retains control over a part of the
premises that the tenant is entitled to use owes a duty to exercise ordinary care” over such
commonly used premises. Stein v. Gill, 895 S.W.2d 501, 502 (Tex. App.--Fort Worth 1995, no
writ). Because we find that, regardless of whether Lockwood exercised control over the
warehouse premises, Lockwood was not responsible for the property of Muehlstein and
Enterplast, we need not and do not rule on the issue of Lockwood’s control and corresponding
duty of care over the premises.

                                                   8
Frontier Theaters only relates to a lessor’s duty with regard to the portion of the leased premises it

retained. If a lessor does not fulfill its duty of care with respect to the premises it controls and

thereby causes damage to the lessee’s property, regardless of whether the property is stored on the

retained premises or unretained premises, the lessor may be held liable for the property damage. But

a lessor’s liability for damaged property stored on the premises arises only out of its responsibility to

maintain the lessor’s retained part of the premises with due care; it does not ensue from a

responsibility to maintain with due care the propert y stored by others inside the premises. Only a

bailee, not a lessor, assumes this latter responsibility.

        Finally, Muehlstein’s and Enterplast’s argument that Lockwood was responsible for their

property is barred by the exculpatory clause contained in the master lease and incorporated into the

sublease agreement between Lockwood and Ultra, as well as between Lockwood and Shippers. The

exculpatory clause provides that the lessor is not liable for any damage to the lessee’s property, to

the extent that the property damage is or could have been insured. Under Texas law, exculpatory

clauses will ordinarily be enforced, if they are between private persons who bargain from positions

of equal strength. Crowell v. Housing Authority, 495 S.W.2d 887, 889 (Tex. 1973). The parties do

not contend that the exculpatory clause is void as a matter of public policy; instead, they contend that,

although the clause may apply to Ultra and Shippers, the clause does not apply to them, as bailors of

Ultra and Shippers. This claim is unavailing. If Lockwood, pursuant to the exculpatory clause,

waived its liability for damage to the property of Ultra and Shippers, Lockwood cannot then be said

to be responsible for the goods that they, as bailees, stored on behalf of others, including Muehlstein

and Enterplast.

                  2.    Priority to the interpleaded funds. In its initial brief, Enterplast does not

contest the district court’s denial of recovery to Enterplast on the ground that it was fully

compensated for its losses and should therefore receive last priority to the interpleaded funds. As a

result, Enterplast abandons its right to raise this issue on appeal. United Paperworkers Int’l Union

v. Champion Int’l Corp., 908 F.2d 1252, 1255 (5th Cir. 1990). Muehlstein, on the other hand,


                                                    9
continues to maintain that it was not fully compensated for the losses it suffered with respect to the

stored goods that were destroyed by the warehouse fire, and t hat, consequently, it suffered a loss

which the Marine Indemnity policy should compensate. The Marine Indemnity policy covers only

the value of lost property. Muehlstein’s policy with Phoenix Assurance, on the other hand, covers

net sales value. Muehlstein presented evidence that Phoenix Assurance paid Muehlstein the $750,000

limits under the policy for “losses to Muehlstein’s inventory based on net sales value.”

        Muehlstein contends, first, that the entire $750,000 it recovered under the Phoenix Assurance

policy covered only its lost profits and did not cover the value of the stored goods. In the alternative,

Muehlstein maintains that, if net sales loss includes a component of both lost profits and the value of

its stored goods, then, because Muehlstein only recovered 69.6% of its claim from Phoenix for net

sales loss, the court should have allocated this percentage to each of the components of Muehlstein’s

claim. Thus, Muehlstein argues that the trial court should have found that Muehlstein did not recover

30.4% of the actual value of its stored goods, or $174,662.60.4

        Muehlstein, as a claimant to the interpleaded funds, had the burden of establishing by the

preponderance of the evidence that is was entitled to recover. After reviewing the record and

considering the arguments of the parties, we find that it was no t clearly erroneous for the special

master to have found that Muehlstein was fully compensated for the value of its lost goods.

Moreover, in light of the fact that the claims exceeded the amount of the interpleaded funds, it was

not an abuse of discretion to give those who were not fully compensated first priority to the funds.

        B.      Grand Lockwood’s Right to Recover

        Kraft, Maxwell, and Vista Chemical (referred to collectively as “Kraft”) object to the district

court’s award of $158,430.76 to Grand Lockwood, for the costs Grand Lockwood incurred in

removing debris from the warehouse and cleaning up the warehouse property site after the fire.

   4
      Muehlstein erroneously uses the figure of $574,546.63 as the amount of its inventory losses
in arriving at the final uninsured loss figure of $174,662.60 ($574,546.63 x 30.4%). The special
master, however, found that the amount of inventory losses was $547,546.63. Accordingly, if
only 69.6% of Muehlstein’s inventory costs were paid by other insurance, Muehlstein is left with
an uninsured loss of $166,454.18 ($547,546.63 x 30.4%), not $174,662.60.

                                                   10
Grand Lockwood contends that Lockwood terminated its lease with Grand Lockwood and refused

to clean up the warehouse site and remove debris from the premises, as it was obligated to do under

the lease.

        The Marine Indemnity policy contained two provisions governing debris removal and clean-up

expenses. Section 13 provided:

                This policy is extended, subject otherwise to its full terms, conditions and
        limitations, to cover the Insured’s expenses incurred in the removal of all debris of the
        property insured hereunder, at the premises where the loss occurs, which may be
        occasioned by loss or damage directly caused by any of the perils insured against in
        this policy . . . .

        The “Debris Removal and Cost of Clean Up Extension” (“debris removal extension”)

provided:

               [I]n the event of direct physical loss or damage to the property insured
        hereunder, this Policy . . . also insures, within the sum insured
               (a) expenses reasonably incurred in removal of debris of the property insured
        hereunder destroyed or damaged from the premises of the Assured; and/or
               (b) cost of clean up, at the premises of the Assured, made necessary as a result
        of such direct physical loss or damage . . . .

        The special master found that, after the fire, Grand Lockwood spent in excess of $384,000

to remove debris and clean up the warehouse premises. Taking into consideration the $5,000

deductible under the Marine Indemnity policy, the magistrate judge then concluded that Grand

Lockwood incurred damages of $379,000 that were covered by the Marine Indemnity Policy. The

district court, in adopting these findings, granted Grand Lockwood a pro rata portion of the

interpleaded funds, thereby diminishing the pool of interpleaded funds available to the other parties

with claims.

        On appeal, Kraft contests the court’s disbursement of interpleaded funds to Grand Lockwood

on the following grounds: (1) the Marine policy does not provide coverage to Grand Lockwood; (2)

claims for damaged property should receive first priority; (3) Lockwood did not present evidence that

it established the condition precedent under the Marine policy, which requires that Lockwood give

notice of its intent to claim recovery for debris removal or clean-up costs; and (4) Grand Lockwood

failed to offer evidence that the debris removal expenses it incurred were related to the removal of

                                                   11
property insured under the policy.

       Insurance policies are no exception to the rule that one for whose benefit a contract is made

may enforce the contract. However, under Texas law, a presumption exists that parties intended to

contract only for themselves. Talman Home Fed. Sav. & Loan Assoc. of Ill. v. American Bankers

Ins., 924 F.2d 1347, 1351 (5th Cir. 1991). Because Grand Lockwood is not a party to the Marine

Indemnity insurance contract, “it follows that [the Marine Indemnity insurance] contract will not be

construed as having been made for the benefit of [Grand Lockwood] unless it clearly appears that this

was the intention of the contracting parties.” Id.; see also Resolution Trust Corp. v. Kemp, 951 F.2d

657, 662 (5th Cir. 1992). “If there is any doubt concerning the intent in this regard as it appears from

the contract itself, such doubt should be construed against such intent.” Talman, 924 F.2d at 1351

(quoting Republic Nat’l Bank, 427 S.W.2d 76, 80 (Tex. Civ. App.--Dallas 1968, writ ref’d n.r.e.)).

       The first provision of the Marine Indemnity policy concerning debris removal costs explicitly

states that the policy covers the “Insured’s expenses” for debris removal. The policy also expressly

states that Lockwood is the “Insured.” The second provision relating to debris removal, which is

contained in the debris removal extension, does not state who can claim debris removal costs. While

the debris removal extension does not explicitly exclude coverage to a third party, it also does not

explicitly provide coverage to a third party. Nor do any other portions of the insurance contract

demonstrate that Grand Lockwood was intended to be a beneficiary under the debris removal and

clean-up cost provisions. In contrast, the property coverage provisions of the contract, by referring

to the property of “others,” specifically provide that certain third parties storing property in the

Lockwood warehouse were intended beneficiaries under the policy.

       Moreover, the debris removal extension contains a requirement that the “Assured shall give

notice to the Underwriters of intent to claim for cost removal of debris or cost of clean up . . . .” In

effectuating the intent of the parties to a contract, “[i ]t is the duty of the Court to construe the

contract as an entire instrument, and to consider each part with every other part so that the effect and

meaning of one part on any other part may be determined.” Steeger v. Beard Drilling, Inc., 371


                                                  12
S.W.2d 684, 688 (Tex. 1963); see also Mustang Tractor & Equip. Co. v. Liberty Mut. Ins. Co., 76

F.3d 89, 91 (5th Cir. 1996) (Texas law requires that the court read all provisions of a contract

together in order to give each provision its intended effect). The notice requirement in the debris

removal extension is rendered meaningless, unless the parties intended that only Lockwood could

claim expenses for debris removal and clean-up costs. In order to give effect to the notice

requirement, which requires that Lockwood provide notice to Marine Indemnity of its intent to claim

debris removal and clean-up costs, we find that Grand Lockwood was not entitled to make a claim

for these costs. In summary, Grand Lockwood has failed to meet its burden of proof in establishing

that it was an intended beneficiary under the debris removal and clean up provisions of the Marine

Indemnity contract, and, for this reason, we reverse the judgment of the district court.



III.   Conclusion

       In light of the foregoing, we affirm the district court’s judgment that Muehlstein and

Enterplast are not entitled to recover under the Marine Indemnity policy. We reverse the district

court’s judgment awarding interpleaded funds to Grand Lockwood and remand for a recalculation

and redistribution of the interpleaded funds.




                                                 13
