ROBERT T. LEMON, II

NEW ORLEANS

Chapter 15

LIMITATION OF LIABILITY

TO THAT OF SHIPOWNER

It is expressly understood and agreed if and when the Assured under this policy has any interest other than as a shipowner in the vessel or vessels named herein, in no event shall the Assurer be liable hereunder to any greater extent than if such Assured were the owner and were entitled to all the rights of limitation to which a shipowner is entitled.

I. IN GENERAL

In American-form P&I policies, such as the SP-23 form, the P&I underwriter seeks to limit its exposure to the assured and to third parties in a variety of ways. First, the P&I underwriter specifically identifies in the policy those risks for which the P&I underwriter agrees to indemnify the assured. American-form P&I policies indemnify vessel owners against certain legal liabilities which are normally incurred by vessel owners incident to their operation or use of the vessel. The P&I policy is not a "comprehensive general liability" policy, and it does not purport to cover the entire range of liabilities which are likely to be encountered by a vessel owner. Instead, the P&I underwriter agrees to indemnify its assured only against those risks specifically enumerated in the policy, and so in that sense, the P&I underwriter limits the extent of its liability, or limits its exposure, by specifically describing those risks for which the underwriter will agree to provide indemnity.

Second, the P&I underwriter limits its exposure in the American-form P&I policy by limiting the "amount" of the coverage provided. The P&I underwriter limits the amount of its liability by inserting "policy limits" as to the maximum amount for which the P&I underwriter agrees to indemnify its assured under the policy. By virtue of these "policy limits," the P&I underwriter agrees to indemnify the Assured for the specifically enumerated covered risks up to a specified sum, but not exceeding that sum. The policy limits constitute the P&I underwriters' maximum exposure under its policy. (This often results in the practice whereby the assured will obtain a "primary" P&I policy, and to the extent necessary, obtain an "excess" P&I policy, and possibly even a "bumbershoot" policy, so as to protect the vessel owner against claims involving high exposure.) These policy limits are valid and enforceable, and the P&I underwriter is not liable -- even in direct action jurisdictions -- in excess of the policy limits.

Third, the P&I underwriter indirectly limits the amount of its coverage in the "insuring clause" of the P&I policy. As a condition precedent to any right of recovery under the P&I policy, the "insuring clause" provides that the assured must be found legally liable "as owner" of the insured vessel. The effect of this "as owner" language is that the P&I underwriter provides coverage to its assured only in a capacity in which the assured is "prima facie" entitled to limit its liability, since only those assureds having "owner" status -- i.e, vessel-related liability -- are entitled to limitation of liability, and so only those having "owner" status are entitled to coverage under the P&I policy. In other words, American-form P&I policies purport to cover specifically enumerated liabilities incident to a vessel owner's use or operation of its vessel, but coverage under these policy forms is ftirther restricted in that coverage is afforded to the assured only for liability the assured incurs "as owner of the insured vessel." Liabilities incurred by the assured in some other capacity are not protected or covered under the P&I policy, and so by restricting coverage to "as owner" liability, the P&I underwriter further limits its exposure.

In an effort to protect themselves in direct action jurisdictions against third-party claims in excess of the assured's legal liability, P&I underwriters seek to limit their liability to third parties by inserting in their policy a provision which is commonly referred to as a "Crown-Zellerbach clause," in which the P&I underwriter stipulates that the maximum indemnity the P&I underwriter will provide is limited to the assured's limited liability in those situations where the assured vessel owner is found to be entitled to limitation of liability under the applicable maritime law. The effect of such "Crown-Zellerbach" clauses is to allow the P&I underwriter to claim by contract the assured's statutory defense of limitation of liability (which would not otherwise be available to the P&I underwriter).

II. INDEMNITY LIMITED TO SPECIFIC RISKS

The P&I policy is not "comprehensive general liability policy," nor does the P&I policy purport to cover all possible liabilities which a vessel owner is likely to encounter in the course of its use and operation of the vessel. Instead, the P&I policy only insures the vessel owner against those risks specifically set forth in the policy, and no others. See Wiley v. Offshore Painting Contractors, Inc. 711 F.2d 602, 613 n. 23, 1984 AMC 1144, 1153 n. 23 (5th Cir. 1983), on reh.,16F.3d 256, 257,1984 AMC 11559 1156 (5th Cir. 1983); Texas Eastern Transmission Corp, v. McMoRan Offshore Exploration Co., 877 F.2d 1214, 1227 (5th Cir. 1989); Continental Off Co. v. Bonanza Corp., 706 F.2d 1365, 1372, 1983 AMC 2059, 2069 (5th Cir. 1983).

III. SHIPOWNER'S LIMITATION OF LIABILITY AND DIRECT ACTION STATUTES

The Limitation of Liability Act, 46 U.S.C. §§ 183-189, allows the vessel owner to limit its legal liability to the value of the vessel owner's interest in the vessel and its pending freight, provided the loss or damage did not occur within the privity or knowledge of the vessel owner. See 46 U.S.C. § 183. This statutory right of limitation of liability is available only to the vessel owner and vessel bareboat (demise) charterer; time charterers and voyage charterers, and others who lack an ownership interest in or a dominion relationship to the vessel, are not entitled to limitation of liability under this statute. This statutory right of limitation of liability is not available to the vessel owner's P&I underwriter.

In non-direct action jurisdictions, the lack of this statutory defense is of no moment to the P&I underwriter, since the P&I policy is written in such a way that the underwriter will indirectly benefit from the shipowner's limited liability. First, in non-direct action jurisdictions, the P&I underwriter is liable under its policy only to the assured. Second, in the P&I policy's "insuring clause," the P&I underwriter conditions its payment to the assured on the assured first being found legally liable and actually paying that liability before the underwriter will indemnify the assured; the underwriter is not liable to indemnify its assured unless and until the assured has actually paid its own liability. The P&I underwriter can then indirectly benefit from the shipowner's limited liability due to the fact that the underwriter is only liable to indemnify the 'assured and then only for that for which the assured has actually paid. If the shipowner is found entitled to limitation of liability, then the P&I underwriter will benefit too, since it only has to pay that for which the shipowner must pay. The "pay to be paid" language of the policy's "insuring clause," then allows the P & I underwriter to indirectly claim the benefit of the shipowner's limitation of liability.

However, whether the P&I underwriter can limit its liability under its policy to the statutory limited liability of its assured shipowner is of critical importance in direct action jurisdictions, since those jurisdictions allow an injured third party (non-assured) claimant the right to sue the tortfeasor's liability insurer directly for the assured's tort liability, and since those jurisdictions construe P&I policies as constituting "liability" policies for purposes of falling within the ambit of the direct action statutes. The Louisiana Direct Action Statute, L.R.S. §22:655, provides an injured third party, who has a cause of action against the assured, a right of direct action against the assured's liability insurer, if the liability policy was issued or delivered in Louisiana or the accident or injury occurred in Louisiana. The Puerto Rico Direct Action Statute, 26 L.P.R.A. §2003, provides for a similar right of direct action against an assured's liability insurer. Both the Louisiana Direct Action Statute and the Puerto Rico Direct Action Statute have been found to apply to marine P&I policies, such that the P&I underwriter is directly liable under its policy to the injured third party.

Therefore, it becomes of critical importance to the P&I underwriter, when sued pursuant to a direct action statute, that the underwriter can limit its liability to that of its assured, where the assured is found to be entitled to limit its liability under the Limitation of Liability Act. Since the vessel owner's statutory right of limitation liability is not available to the vessel owner's P&I underwriter, if the P&I underwriter is going to limit its liability under its policy to third-party claimants to that of its assured's limited liability, then the P&I underwriter most look to its policy and determine whether it has contractually stipulated in its policy that its maximum indemnity under its policy is limited to that of the assured's limited liability. Commonly referred to as "Crown-Zellerbach clauses" (after the case of the same name) these contractual stipulations allow the P&I underwriter to be protected against liability in excess of the assured's liability in direct action jurisdictions. By virtue of such clauses, the P&I underwriter's right of limitation of liability then becomes a matter of contract rather then a matter of statute.

IV. AVAILABILITY OF LIMITATION DEFENSE TO UNDERWRITERS

In a 4-1-4 opinion, majority of court recognized that marine P&I underwriter is not entitled to "limitation of liability" under 46 U.S.C. § 181 et seq. [See 347 U.S. at 421-22, 74 S.Ct. at 615.] Majority of court set forth procedure that shipowner's limitation of liability proceeding should be concluded first before proceeding with the direct action against the shipowner's P&I underwriter, and so majority of court remanded matter with instructions that Louisiana direct action against P&I underwriter be continued until after completion of shipowner's limitation of liability proceeding. Maryland Cas, Co. v. Cushing 347 U.S. 409,74 S.Ct. 6089 98 L.Ed. 806 (1954).

Limitation of Liability under 46 U. S.C. § 183 et seq. is available only to vessel owner and vessel bareboat charterer, and statutory defense is not available to vessel owner's P&I underwriter sued pursuant to the Louisiana Direct Action Statute. Limitation of liability under federal statute is not available to P&I underwriter sued in a direct action suit. Olympic Towing Corp.v. Nebel Towing Co., 419 F.2d 230 (5th Cir. 1969) [subsequently overruled by Crown-Zellerbach Corp, v. Ingram Industries, Inc., 783 F.2d 1296 (5th Cir. 1986)].

En banc Fifth Circuit holds that P&I underwriter may claim the benefit of assured-vessel owner's statutory defense of limitation of liability under 46 U.S.C. § 183 by inserting clause in P&I policy to the effect that the P&I underwriter's maximum liability shall not exceed the assured's liability and in the event the assured is entitled to limit his liability then the maximum liability of the P&I underwriter shall not exceed the amount of such limitation. Crown-Zellerbach Corp, v. Ingram Industries. Inc., 783 F.2d 1296 (5th Cir. 1986).

Vessel owner's P&I underwriter does not have standing under Limitation of Liability Act, 46 U.S.C. § 183 et seq., to demand that federal court interpret whether its P&I policy allows the underwriter to limit the amount of its liability to the amount of the vessel owner's liability. Furthermore, vessel owner's P&I underwriter cannot require that the limitation injunction cover the P&I underwriter, as the junction issued in a limitation of liability proceeding protects only the vessel owner and vessel bareboat charterer, but not their P&I underwriter. Since the Limitation of Liability Act does not afford the P&I underwriter any right of limitation of liability, the P&I underwriter has no statutory basis to demand inclusion in the court's injunction, and the P&I underwriter has no statutory basis to demand protection in the claimants' stipulations. However, favoring the procedure suggested in Maryland Cas. Co. v. Cushing, in which the limitation action precedes the direct action against the P&I underwriter, the court stayed the state court proceedings against both the shipowner and its P&I underwriters until after conclusion of the limitation of liability proceeding. Magnolia Marine Transport Co. v. LaPlace Towing Co., 964 F.2d 1571 (5th Cir. 1992).

The Limitation of Liability Act, 46 U.S.C. § 183 et seq., does not afford any protection to the P&I underwriter nor does it afford the P&I underwriter any right of limitation of liability. Texaco Inc. v. Williams, 47 F.3d 765 (5th Cir. 1995).

V. "CROWN-ZELLERBACH" CLAUSES

Overruling, but at the same time distinguishing, Olympic Towing Corp. v. Nebel Towing Co., 419 F.2d 230 (5th Cir. 1969), the U.S. Fifth Circuit (sitting en banc) held that the P&I underwriter could contractually claim in its policy the shipowner's statutory right of limitation of liability under 46 U. S.C. § 183 by stipulating in its policy, that in the event the assured was entitled to limit its liability then the maximum liability of the P&I underwriter under its policy would not exceed the amount of the assured's limitation. P&I underwriter's limitation of liability provision valid and enforceable under Louisiana law.

At issue was the interpretation and effect of the following limitation of liability provision contained in a London P&I Club's "Rules":

When a member for whose account a ship is entered in this class is entitled to limit his liability, the liability of the class shall not exceed the amount of such limitation ....

The court held that such a provision was valid and enforceable under Louisiana law and was not contrary to Louisiana public policy (which holds that liability insurance is for the benefit of the injured party and not for the protection of the assured). Accordingly, if P&I policy contains a clause which allows the P&I underwriter to limit its liability to that of the assured vessel owner's judicially declared limited liability, then the P&I underwriter is entitled to claim the benefit of the shipowner's limitation of liability under 46 U.S.C. § 183 as against the direct action claims of third parties. Crown-Zellerbach Corp. v. Ingram Industries, Inc., 783 F.2d 1296 (5th Cir. 1986) [en banc].

The question whether a P&I policy contains a "Crown-Zellerbach" clause can be determined by either a state court or federal court, and the interpretation of the P&I policy is not necessarily a function of the federal court's limitation of liability proceeding. The Limitation of Liability Act, 46 U.S.C. § 183 et seq. does not afford the P&I underwriter any statutory right of limitation of liability nor does the Act afford the P&I underwriter any statutory basis to demand protection in the court's limitation injunction or to demand protection in the claimant's stipulations. The P&I underwriter's rights are purely contractual, not statutory, and so the P&I underwriter's right to limit its liability to that of the shipowner's judicially-declared limited liability depends solely upon the terms and conditions of its P&I policy. In a direct action jurisdiction, the absence of a Crown-Zellerbach clause subjects the P&I underwriter to liability beyond the vessel owner's limited liability up to the P&I policy's policy limits. If the P&I underwriter fails to contract in its policy for the right to limit its liability to third parties to that of the assured's limited liability, then the underwriter's direct action liability to third parties may exceed the value of the limitation fund without violating federal or state law. The Limitation of Liability Act protects only the vessel owner and does not preclude a claimant from recovering more than the value of a limitation fund from a party not entitled to the Act's protection, such as the P&I underwriter. The existence of a Crown--Zellerbach clause in the P&I policy does not give the P&I underwriter standing under the Limitation of Liability Act to assert limitation of liability defensively nor does it give the P&I underwriter standing to require protective stipulations from claimants who seek to pursue common law remedies in state court outside the federal court limitation action. The existence of a Crown--Zellerbach clause only allows the P&I underwriter to limit its liability to third parties to the limited liability of the assured in the event the assured is found to be entitled to limitation of liability. Magnolia Marine Transp. Co. v. LaPlace Towing Corp., 964 F.2d 1571 (5th Cir. 1992).

The Limitation of Liability Act does not afford any protection to the P&I underwriter nor does it afford the P&I underwriter any statutory right of limitation of liability. Any right to limit liability on the part of the P&I underwriter is purely contractual in nature and depends upon the existence of a Crown--Zellerbach type clause in the P&I policy. The court indicated that claimants could, but were not required to, include the P&I underwriters in the joint stipulations filed in order to allow those claimants to pursue common law remedies in state court outside the federal court limitation of liability proceeding. Texaco Inc. v. Williams, 47 F.3d 765 (5th Cir. 1995).

Court would expand its injunction in shipowner's limitation of liability proceeding to include among others shipowner's P&I underwriter whose policy contains Crown- Zellerbach clause. United States v. M/V MANDAN, 1991 AMC 1340 (E.D. La. 1991).

Interpreting the West of England P&I ClubRules, the court held the P&I underwriter was entitled to limit its liability to that of assured vessel owner's limited liability by virtue of Crown-Zellerbach clause which provided:

The Association shall in no circumstances be liable hereunder for a sum in excess of the liability in law of the Member for damages or otherwise and, when a Member is entitled to limit his liability, the liability of the Association shall not exceed the amount of such limitation. Where the Association is sued directly by a third party, it shall be entitled to adopt each and every denial, defense and right to limitation of liability that would have been available to the Member in such proceedings where the Member and not the Association to be the party sued.

Brister v. A.W.I., Inc., 946 F.2d 350 (5th Cir. 1991).

P&I policy may validly provide that P&I underwriter cannot be liable for more than the assured's judicially declared limitation of liability. By virtue of Crown-Zellerbach clause in the P&I policy, court declined to modify injunction so as to permit direct action against vessel owner's P&I insurer, and court stayed trial of direct action against P&I underwriter until after completion of limitation of liability proceeding. In re Louisiana Bunkers, Inc., 1988 AMC 1597 (E.D. La. 1988).

The Limitation of Liability Act does not afford any protection to the P&I underwriter. Any right to limit liability on the part of the P&I underwriter depends upon the terms and conditions of its P&I policy. In re Nobles (Motorboat FL 1258 FV)., 842 F.Supp. 1430 (N.D. Fla. 1993).

In order for direct action liability of underwriter to be limited to the insured shipowner's liability under the Limitation of Liability Act in accordance with Crown-Zellerbach, the P&I policy need not contain a particular form of clause or any reference to the Limitation of Liability Act; rather, it is sufficient that the policy provide that coverage is limited to the insured's liability. Clause contained in worker's compensation/employer's liability policy which provided "We will pay all sums you legally must pay as damages because of bodily injury.. . ." constitutes a Crown-Zellerbach clause. Court further held that Crown-Zellerbach did not establish any standard language requirement, and that the language simply should be sufficient to state that the insurance company's liability is limited to that of the insured. Rogers v. Texaco Inc., 638 So.2d 347, 1994 AMC 2148 (La. App. 4th Cir. 1994).

On motion to modify limitation of liability stay to allow claimants to sue P&I underwriter in state court under Louisiana Direct Action Statute, claimants argued P&I policy did not include specific "Crown-Zellerbach language" to allow P&I underwriter to contractually acquire the shipowner's statutory defense of limitation of liability. However, court concluded the P&I policy "clearly contemplated" the P&I underwriter indemnifying the shipowner "only for those amounts [shipowner] is legally obligated to pay." The court found that was all the Crown-Zellerbach rule required. 'Me court found the P&I policy contained the necessary Crown-Zellerbach language, and refused to modify injunction to allow claimants to proceed in state court against P&I underwriter. In re Nika Corp., 1996 WL 648838 (E.D. La. 1996).

P&I underwriter may limit its liability to that of the shipowner's liability only if the P&I policy contains a provision fixing the underwriter's maximum liability to that of the assured shipowner's judicially declared limitation of liability. P&I underwriter does not have standing to assert the shipowner's statutory right of limitation of liability under 46 U. S.C. § 183, and so court will grant motion to strike affirmative defense of limitation of liability under 46 U.S.C. § 183 asserted by P&I underwriter in its answer, but court will allow P&I underwriter to amend answer to assert contractual right of limitation of liability pursuant to the terms and conditions of P&I policy, given that P&I policy contained requisite Crown-Zellerbach clause. Fountain v. L & M Botruck Rental, Inc. 1995 WL 574446 (E.D. La. 1995).

Where claimants in limitation of liability proceeding filed stipulations in order to satisfy requirements to lift stay order to proceed in state court, court held that P&I underwriters were not entitled to stipulations in their favor requiring that claimants stipulate P&I underwriters' right to limitation of liability. Nevertheless, court found claimants' proposed stipulations deficient in that the stipulations failed to afford shipowner/assured the right to preserve its insurance coverage by prioritizing shipowner's claim to its insurance proceeds in the event that it was found entitled to limitation and its insurers were subject to direct action under the Louisiana Direct Action Statute. In re Plimsoll Marine, Inc. 1998 WL 373404 (E.D. La. 1998). See also Magnolia Marine Transport Co. v. LaPlace Towing-Co, 964 F.2d 1571, 1579-80 (5th Cir. 1992).

VI. "CROWN-ZELLERBACH" AND THE SP-23 FORM

It is not altogether certain whether the SP-23 form's "other than as shipowner" language qualifies under Crown-Zellerbach to allow the P&I underwriter to limit its liability in a direct action jurisdiction to that of its assured's limited liability. The courts have given inconsistent signals regarding this issue, perhaps due to the fact that the SP-23 form's "other than as shipowner" language is vague and ambiguous when compared to the limitation of liability language contained in the London P&I Club rules which was the subject of the Crown-Zellerbach and A.W. Brister decisions.

In Olympic Towing Corp. v. Nebel Towing Co., 419 F.2d 230 (5th Cir. 1969), the P&I underwriter contended that it was entitled to assert its assured shipowner's statutory right to limit liability under 46 U. S.C. § 183, but the court rejected that contention, holding that the statutory right of limitation of liability under 46 U.S.C. § 183 was a defense "personal" to the shipowner and so not available to the shipowner's P&I underwriter. The P&I underwriter did not contend that the terms and conditions of its P&I policy (specifically the "other than as shipowner" language) allowed it to limit its liability to third parties to the assured vessel owner's limited liability. Although the P&I policy form is not identified in Nebel Towing, it appears that the P&I policy was the SP-23 form, since the "as owner" and "other than as shipowner" language quoted by the court is identical to that of the SP-23 form. See 419 F.2d at 236 & 236 n. 22. Rather than contending that the P&I policy's terms and conditions allowed it to limit its liability to the limited liability of its assured, the P&I underwriter argued that the "as owner" and the "other than as shipowner" language of its policy precluded any direct action. The court rejected this contention on the grounds that such policy language constituted a "no action clause," which was invalid and unenforceable under Louisiana law. See 419 F.2d 236-37. Nevertheless, the question whether the P&I policy afforded the underwriter the right to limit its liability was not before the court.

Crown-Zellerbach Corp. v. Ingram Industries. Inc. suggests that the SP-23 form's "other than as shipowner" language does not qualify as sufficient language to allow the P&I underwriter to limit its liability in a direct action jurisdiction to that of its assured vessel owner. In the panel decision, Crown-Zellerbach Corp, v. Ingram Industdes. Inc., 745 F.2d 995 (5th Cir. 1985) Judge Brown wrote a strong dissent to the panel majority's reliance on Nebel Towing, in which he distinguished the policy in Nebel Towing from the policy in Crown-Zellerbach, explaining that the P&I policy in Crown-Zellerbach contained a policy condition in which the P&I underwriter expressly limited its liability to that of the shipowner's limited liability, whereas the policy in Nebel Towing contained no such clause. 745 F.2d,at 1003. In a footnote, Judge Brown observed that the only language in the P&I policy at issue in Nebel Towing even remotely similar to that in Crown-Zellerbach was the "other than as shipowner" language, but Judge Brown felt this language was not sufficient to allow the P&I underwriter to limit its liability to the assured's limited liability. See 745 F.2d at 1004 n. 17, quoting 419 F.2d at 236 n. 22.

Writing for the en banc majority in Crown-Zellerbach v. Ingram Industries. Inc., 783 F.2d 1296 (5th Cir. 1986), Judge Brown again distinguished the P&I policy in Crown-Zellerbach from the P&I policy in Nebel Towing, finding that while the former contained a clause which expressly limited the P&I underwriter's liability to the assured's limited liability, the Nebel Towing policy did not:

The P&I policy in Nebel Towing did not by its terms limit the insurer's liability to the vessel owner's limited liability. That meant that the P&I underwriter, in its effort to limit its liability, had to contend that as the insurer it had the right to claim the vessel owner's statutory right to limit its liability. 783 F.2d at 1299

Judge Brown then went on to reiterate his previous observation in his dissent to the panel decision in which he noted that the closest the Nebel Towing P&I policy came to the Crown-Zellerbach policy term was the "any interest other than as shipownee, language, which Judge Brown rejected as sufficient to constitute "limitation of liability" language:

This clause [Nebel Towing's SP-23 form language] applied only to the suppositional situation of the assured having an interest other than as shipowner in the vessel. This supposition's condition could not have significance in Nebel Towing since it was uncontradicted that the insured vessel was under bareboat charter to the assured which the court properly considered as an owner. 783 F.2d at 1300 n. 9.

However, in Randall v. Chevron U.S.A.. Inc., 788 F.2d 1398 (E.D.La. 1992), the district court assumed that the "other than as shipowner" clause in the SP-23 form was sufficient for Crown-Zellerbach purposes:

The intent of the "other than owner" clause is "to limit the underwriter's liability to an amount no greater than that which the insured would be entitled to limit liability if the assured were the owner." Thus, deleting the "other than owner" clause simply waives the insurer's right to limit its liability to that of the shipowner, who possesses the statutory right to limit liability to the value of its vessel and pending freight. 788 F.Supp. at 1402

The court cites the Parks Insurance Treatise as support for its assumption, but the Parks Treatise relied on the AIW-form language and not the SP-23 form language. See 2 Parks The Law and Practice of Marine Insurance and Average, p. 1024 (1987). On appeal, the question whether the "other than as shipowner" language constituted Crown-Zellerbach language was not considered by the Fifth Circuit. Instead, the Fifth Circuit's decision focused on the interpretation of the "as owner" language of the P&I policy's insuring clause. See Randall v. Chevron U.S.A.. Inc., 13 F.3d 888, 906-909 (5th Cir. 1994).

In Hodgen v. Forest Oil Corp., 862 F.Supp. 1567 (W.D. La. 1994), the district court again assumed that the "other than as shipowner" language would allow the underwriter to limit its liability to its assured shipowner's limited liability, the court so assuming by virtue of the district court's opinion in Randall v. Chevron U.S.A.. Inc. However, the P&I policy at issue in Hodgen was the AIMU form and not the SP-23 form.