Ali Galeb Ahmed v. American Steamship Mutual Protection & Indemnity Association

Appellants are twenty-six seamen who, after obtaining default judgments against their employer shipping companies for damages for personal injuries, directly sued appellee, the insurance carrier for all the employers. The district court granted summary judgment in favor of the defendant carrier on the ground that New York Insurance Law § 167(4) precludes appellants’ direct action suit against the insurer. We affirm in part and remand in part.

Plaintiffs-appellants are injured merchant seamen who served on vessels owned by three companies, collectively referred to as Amercargo. Defendant-appellee, American Steamship Owners Mutual Protection & Indemnity Association, is a non-profit mutual insurance association engaged in the business of providing marine protection and indemnity insurance to member shipowners. Appellee insurance carrier insured Amer-cargo during 1969 and 1970 against risks of loss for personal injuries sustained by crew members in the course of their employment aboard Amercargo’s vessels. Each of the appellants sustained personal injuries while working for Amercargo during the years covered by the policies.

Appellants filed suit against Amercargo in the San…