NELCOME JOSEPH * NO. 2020-CA-0073 COURVILLE, JR. * VERSUS COURT OF APPEAL * LAMORAK INSURANCE FOURTH CIRCUIT COMPANY (AS SUCCESSOR * IN INTEREST TO THE STATE OF LOUISIANA LIABILITY FOR POLICIES OF ******* INSURANCE ISSUED BY COMMERCIAL UNION INSURANCE COMPANY, EMPLOYERS COMMERCIAL UNION INSURANCE COMPANY, AND AMERICAN EMPLOYERS INSURANCE COMPANY), ET AL.
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2017-01117, DIVISION “B-1” Honorable Rachael Johnson, ****** Judge Edwin A. Lombard ****** (Court composed of Judge Edwin A. Lombard, Judge Daniel L. Dysart, Judge Tiffany G. Chase)
Gerolyn P. Roussel Perry J. Roussel, Jr. Jonathan B. Clement Lauren R. Clement Benjamin P. Dinehart ROUSSEL & CLEMENT 1550 West Causeway Approach Mandeville, LA 70068
COUNSEL FOR PLAINTIFFS/APPELLANTS
Charles M. Pisano Skye S. Fantaci Bradley C. Guin ROEDEL PARSONS KOCH BLACHE BALHOFF & MCCOLLISTER 1515 Poydras St., Suite 2300 New Orleans, LA 70112
COUNSEL FOR DEFENDANT/APPELLEE EMPLOYERS MUTUAL FIRE INSURANCE COMPANY
H. Minor Pipes, III Stephen Miles PIPES MILES BECKHAM, LLC 1100 Poydras St., Suite 1800 New Orleans, LA 70163 -AND- Robert A. Kole CHOATE, HALL & STEWART LLP Two International Place Boston, MA 02110
COUNSEL FOR APPELLEE LIBERTY MUTUAL INSURANCE COMPANY Glen E. Mercer Kourtney Twenhafel James Albertine SALLEY HITE MERCER & RESOR, LLC 365 Canal St., Suite 1710 New Orleans, LA 70130
COUNSEL FORAPPELLEE ZURICH AMERICAN INSURANCE COMPANY
REVERSED IN PART; AFFIRMED IN PART
MAY 27, 2020 EAL DLD TGC This appeal is from three summary judgments rendered in favor of three
defendants, Liberty Mutual Insurance Company (“Liberty Mutual”), Employer’s
Mutual Fire Insurance Company (“Wausau”), and Zurich American Insurance
Company (“Zurich”). After de novo review of the record in light of the applicable
law and arguments of the parties, we reverse the district court judgments granting
summary judgment to Liberty Mutual and Wausau but affirm the district court
judgment granting summary judgment to Zurich.
Relevant Facts and Procedural History
The plaintiff, Nelson Joseph Courville, Jr., filed this asbestos case against
his former employers on February 3, 2017, shortly before his death from
mesothelioma. On July 17, 2020, his wife and children substituted themselves as
plaintiffs, asserting any and all survival and wrongful death claims. Pursuant to
La. Rev. Stat. 22:1269, the three defendant insurance companies at issue in this
appeal were made direct defendants. Liberty Mutual, Wausau, and Zurich filed
motions for summary judgment which were heard and ruled upon on October 4,
2019. In each case, the district court granted summary judgment to the insurance
company. The plaintiffs appeal these decisions.
1 Standard of Review
Summary judgment is reviewed de novo, using the same criteria as the
district court. Maddox v. Howard Hughes Corp.,,2019-0135, p. 4 (La. App. 4 Cir.
4/17/19) 268 So.3d 333, 337.
Liberty Mutual
In its motion for summary judgment, Liberty Mutual asserts that to the
extent that any obligation to defend or indemnify Mr. Courville’s asbestos claim
against Reilly-Benton existed on the part of Liberty Mutual, the obligation was
exhausted and extinguished no later than 2013. Specifically, Liberty Mutual argues
that a 2013 Settlement Agreement between Liberty Mutual and Reilly-Benton
resolving alleged coverage disputes bars the plaintiffs from recovering damages
from Liberty Mutual. The district court agreed, granted summary judgment in
favor of Liberty Mutual, and dismissed the plaintiffs’ claims with prejudice. Thus,
the issue before the court is whether the 2013 Settlement Agreement between
Liberty Mutual and Reilly-Benton precludes Liberty Mutual’s liability to Mr.
Courville for asbestos exposure that occurred in the 1960s and 1970s.
In Long v. Eagle, Inc., 2014-0889 (La. App. 4 Cir. 2/25/15), 158 So.3d 968,
an asbestos exposure lawsuit where the defendant employer, Eagle Asbestos &
Packing Company, Inc. (“Eagle”) and One Beacon, its commercial general liability
(CGL) insurer named as a defendant by the plaintiff, brought a third-party claim
against another CGL insurer, United States Fidelity and Guaranty Company
(“USF&G”) seeking a declaration that USF&G was obligated to pay its share of
defense costs and for reimbursement of expenses expended on its behalf. The
asbestos exposure alleged in Long (from 1958 until 1979) covered a time frame
where each of the insurers (One Beacon and USF&G) had multiple years where 2 they issued the primary CGL policy to Eagle. Long, 2014-0889, p. 1, 158 So.3d at
969. Because the two insurers had entered into a settlement agreement in 2003,
resolving coverage disputes including coverage for USF&G’s pro-rata share of
defense costs, USF&G argued that the settlement agreement was a defense to One
Beacon’s claim against them. Long, 2014-0889, p. 2, 158 So.3d at 969-70. On
motion for summary judgment, One Beacon claimed that the settlement agreement
was void under La. Rev. Stat. 22:1262. The district court granted summary
judgment but this court reversed on appeal, finding that the public policy
protections discussed in Washington v. Savoie, 634 So.2d 1176 (La. 1994) and the
mandates of La. Rev. Stat. 22:1262 were not intended to protect other insurers.
Long, 2014-0889, p.4-6, 158 So.3d at 971-972. However, this court explicitly
stated that if the party seeking to challenge the settlement agreement was an
injured plaintiff, the court’s analysis would be different. Long, supra.
Similarly, in this case a settlement agreement between two insurers is being
challenged but with a distinct difference: it is the plaintiffs (the tort victims), not an
insurance company and party to the settlement agreement, who are challenging the
applicability of the settlement agreement. Thus, we must determine the
applicability of Washington and La. Rev. Stat. 22:1262 to the specific
circumstances of this case.
In examining the law and public policy relating to the reformation of
insurance policies, specifically when reformation adversely affects a tort victim,
the Louisiana Supreme Court found that, although reformation of an insurance
contract is to correct a mistake within a policy is not prohibited, when reformation
would prejudice an injured third party. Louisiana’s public policy precludes post-
injury contract reformation of any kind. Washington, 634 So.2d at 1180. Thus, in 3 accordance with the Louisiana Supreme Court decision in Washington, a CGL
insurer that provided unlimited coverage under a policy of insurance is barred from
any post-injury settlement limiting that liability.
Moreover, La. Rev. Stat. 22:1262 provides:
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NELCOME JOSEPH * NO. 2020-CA-0073 COURVILLE, JR. * VERSUS COURT OF APPEAL * LAMORAK INSURANCE FOURTH CIRCUIT COMPANY (AS SUCCESSOR * IN INTEREST TO THE STATE OF LOUISIANA LIABILITY FOR POLICIES OF ******* INSURANCE ISSUED BY COMMERCIAL UNION INSURANCE COMPANY, EMPLOYERS COMMERCIAL UNION INSURANCE COMPANY, AND AMERICAN EMPLOYERS INSURANCE COMPANY), ET AL.
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2017-01117, DIVISION “B-1” Honorable Rachael Johnson, ****** Judge Edwin A. Lombard ****** (Court composed of Judge Edwin A. Lombard, Judge Daniel L. Dysart, Judge Tiffany G. Chase)
Gerolyn P. Roussel Perry J. Roussel, Jr. Jonathan B. Clement Lauren R. Clement Benjamin P. Dinehart ROUSSEL & CLEMENT 1550 West Causeway Approach Mandeville, LA 70068
COUNSEL FOR PLAINTIFFS/APPELLANTS
Charles M. Pisano Skye S. Fantaci Bradley C. Guin ROEDEL PARSONS KOCH BLACHE BALHOFF & MCCOLLISTER 1515 Poydras St., Suite 2300 New Orleans, LA 70112
COUNSEL FOR DEFENDANT/APPELLEE EMPLOYERS MUTUAL FIRE INSURANCE COMPANY
H. Minor Pipes, III Stephen Miles PIPES MILES BECKHAM, LLC 1100 Poydras St., Suite 1800 New Orleans, LA 70163 -AND- Robert A. Kole CHOATE, HALL & STEWART LLP Two International Place Boston, MA 02110
COUNSEL FOR APPELLEE LIBERTY MUTUAL INSURANCE COMPANY Glen E. Mercer Kourtney Twenhafel James Albertine SALLEY HITE MERCER & RESOR, LLC 365 Canal St., Suite 1710 New Orleans, LA 70130
COUNSEL FORAPPELLEE ZURICH AMERICAN INSURANCE COMPANY
REVERSED IN PART; AFFIRMED IN PART
MAY 27, 2020 EAL DLD TGC This appeal is from three summary judgments rendered in favor of three
defendants, Liberty Mutual Insurance Company (“Liberty Mutual”), Employer’s
Mutual Fire Insurance Company (“Wausau”), and Zurich American Insurance
Company (“Zurich”). After de novo review of the record in light of the applicable
law and arguments of the parties, we reverse the district court judgments granting
summary judgment to Liberty Mutual and Wausau but affirm the district court
judgment granting summary judgment to Zurich.
Relevant Facts and Procedural History
The plaintiff, Nelson Joseph Courville, Jr., filed this asbestos case against
his former employers on February 3, 2017, shortly before his death from
mesothelioma. On July 17, 2020, his wife and children substituted themselves as
plaintiffs, asserting any and all survival and wrongful death claims. Pursuant to
La. Rev. Stat. 22:1269, the three defendant insurance companies at issue in this
appeal were made direct defendants. Liberty Mutual, Wausau, and Zurich filed
motions for summary judgment which were heard and ruled upon on October 4,
2019. In each case, the district court granted summary judgment to the insurance
company. The plaintiffs appeal these decisions.
1 Standard of Review
Summary judgment is reviewed de novo, using the same criteria as the
district court. Maddox v. Howard Hughes Corp.,,2019-0135, p. 4 (La. App. 4 Cir.
4/17/19) 268 So.3d 333, 337.
Liberty Mutual
In its motion for summary judgment, Liberty Mutual asserts that to the
extent that any obligation to defend or indemnify Mr. Courville’s asbestos claim
against Reilly-Benton existed on the part of Liberty Mutual, the obligation was
exhausted and extinguished no later than 2013. Specifically, Liberty Mutual argues
that a 2013 Settlement Agreement between Liberty Mutual and Reilly-Benton
resolving alleged coverage disputes bars the plaintiffs from recovering damages
from Liberty Mutual. The district court agreed, granted summary judgment in
favor of Liberty Mutual, and dismissed the plaintiffs’ claims with prejudice. Thus,
the issue before the court is whether the 2013 Settlement Agreement between
Liberty Mutual and Reilly-Benton precludes Liberty Mutual’s liability to Mr.
Courville for asbestos exposure that occurred in the 1960s and 1970s.
In Long v. Eagle, Inc., 2014-0889 (La. App. 4 Cir. 2/25/15), 158 So.3d 968,
an asbestos exposure lawsuit where the defendant employer, Eagle Asbestos &
Packing Company, Inc. (“Eagle”) and One Beacon, its commercial general liability
(CGL) insurer named as a defendant by the plaintiff, brought a third-party claim
against another CGL insurer, United States Fidelity and Guaranty Company
(“USF&G”) seeking a declaration that USF&G was obligated to pay its share of
defense costs and for reimbursement of expenses expended on its behalf. The
asbestos exposure alleged in Long (from 1958 until 1979) covered a time frame
where each of the insurers (One Beacon and USF&G) had multiple years where 2 they issued the primary CGL policy to Eagle. Long, 2014-0889, p. 1, 158 So.3d at
969. Because the two insurers had entered into a settlement agreement in 2003,
resolving coverage disputes including coverage for USF&G’s pro-rata share of
defense costs, USF&G argued that the settlement agreement was a defense to One
Beacon’s claim against them. Long, 2014-0889, p. 2, 158 So.3d at 969-70. On
motion for summary judgment, One Beacon claimed that the settlement agreement
was void under La. Rev. Stat. 22:1262. The district court granted summary
judgment but this court reversed on appeal, finding that the public policy
protections discussed in Washington v. Savoie, 634 So.2d 1176 (La. 1994) and the
mandates of La. Rev. Stat. 22:1262 were not intended to protect other insurers.
Long, 2014-0889, p.4-6, 158 So.3d at 971-972. However, this court explicitly
stated that if the party seeking to challenge the settlement agreement was an
injured plaintiff, the court’s analysis would be different. Long, supra.
Similarly, in this case a settlement agreement between two insurers is being
challenged but with a distinct difference: it is the plaintiffs (the tort victims), not an
insurance company and party to the settlement agreement, who are challenging the
applicability of the settlement agreement. Thus, we must determine the
applicability of Washington and La. Rev. Stat. 22:1262 to the specific
circumstances of this case.
In examining the law and public policy relating to the reformation of
insurance policies, specifically when reformation adversely affects a tort victim,
the Louisiana Supreme Court found that, although reformation of an insurance
contract is to correct a mistake within a policy is not prohibited, when reformation
would prejudice an injured third party. Louisiana’s public policy precludes post-
injury contract reformation of any kind. Washington, 634 So.2d at 1180. Thus, in 3 accordance with the Louisiana Supreme Court decision in Washington, a CGL
insurer that provided unlimited coverage under a policy of insurance is barred from
any post-injury settlement limiting that liability.
Moreover, La. Rev. Stat. 22:1262 provides:
No insurance contract insuring against loss or damage through legal liability for the bodily injury or death by accident of any individual, or for damage to the property of any person, shall be retroactively annulled by any agreement between the insurer and insured after the occurrence of any such injury, death, or damage for which the insured may be liable, and any such annulment attempted shall be null and void.
The plain language of La. Rev. Stat. 22:1262 is clear: insurers and insured
cannot retroactively rescind or annul policy contracts by agreement post-
occurrence. Nonetheless, the 2013 settlement agreement at issue in this case
essentially rescinded or annulled policy contracts for injuries sustained years ago.
Accordingly, under Louisiana public policy, the settlement agreement is not
enforceable against the third-party tort victim in this case, i.e., the plaintiff.
Therefore, Liberty Mutual is not entitled to summary judgment.
Wausau
In its motion for summary judgment, Wausau asserts that (1) the plaintiffs
fail to provide any evidence that Mr. Courville was exposed to asbestos-containing
materials by Wausau’s insured, Reilly-Benton, at any time during Wausau’s
coverage period of July 1, 1969 to July 1, 1972; and (2) the plaintiffs cannot prove
that Reilly-Benton products or work performed by Reilly-Benton was a substantial
contributing factor to the injuries sustained by Mr. Courville. In response, the
4 plaintiffs submitted Mr. Courville’s deposition wherein he testified that he
remembered Reilly-Benton’s presence on job sites where he worked as a
steamfitter in the late 1960s and early 1970s, i.e., during the Wausau coverage
period.
Wausau asserts that Mr. Courville’s deposition lacks the necessary
specificity as to dates and jobsites where exposure occurred and, therefore, fails to
establish a genuine issue of material fact as to Mr. Courville’s exposure to Reilly-
Benton asbestos-related material or work during the Wausau coverage period. We
disagree. Latent disease cases present the extraordinary challenge of recreating
workplace history dating back 40-50 years, generally (as in this case) by an aged
and seriously ill plaintiff. For purposes of summary judgment, we find Mr.
Courville’s deposition testimony regarding Reilly-Benton’s presence at jobsites he
worked during Wausau’s coverage period is sufficient to create the requisite
genuine issue of material fact. Whether that deposition testimony together with
other evidence is enough to establish liability on the part of Wausau is a question
for the finder of fact. Accordingly, Wausau is not entitled to summary judgment.
Zurich
By amended petition, the plaintiffs alleged that Zurich provided Employer’s
Liability coverage to Houston Contracting Company (HCC) during the relevant
years of Mr. Courville’s employment. On motion for summary judgment, Zurich
points out that the plaintiffs submit no specific evidence of Zurich coverage. In
response to Zurich’s motion, the plaintiffs conceded that no specific policy has
5 been located but submit pleadings and answers from prior suits on non-related
cases admitting that Zurich provided coverage to HCC during the relevant time
periods.
The issue on summary judgment, however, is not whether Zurich provided
general liability coverage to HCC but whether, for purposes of summary judgment,
there is sufficient evidence of coverage by Zurich for the alleged injuries suffered
by the plaintiff in this case.
It is undisputed that HCC employed Mr. Courville in 1962, 1965 through
1968, and 1970 through 1973. But, as pointed out by the deposition testimony of
Zurich’s corporate representative, even assuming that Zurich issued General
Liability coverage to HCC, an examination of policies issued by Zurich in other
cases reveal that, by specific provision, coverage does not apply to bodily injury by
disease unless a suit or written claim was made within thirty-six months after the
end of the policy period. It is undisputed that no suit or claim was made by Mr.
Courville within the pertinent time-frame. Moreover, the Louisiana Supreme
Court has found that a similar coverage exclusion is a permissible limitation on an
insurer’s liability as to third parties and does not violate the Direct Action Statute.
See Gorman v. City of Opelousas, 2013-1734, pp. 12-14 (La. 7/1/14), 148 So. 3d
888, 896-97 (insurance policies are executed for the benefits of all persons but
such protection is limited by the terms and limits of the policy) (citations and
quotation marks omitted).
6 Thus, because any policy issued to HCC by Zurich included a provision
barring coverage for work-related claims by HCC employees, including Mr.
Courville, unless the claim was raised within thirty-six months of the termination
of the policy, Zurich cannot be liable for any of Mr. Courville’s work-related
claims in this lawsuit. Therefore, after de novo review, we find that Zurich is
entitled to summary judgment as a matter of law and affirm the district court ruling
granting summary judgment in favor of Zurich.
.Conclusion
For the foregoing reasons, we find that Zurich is entitled to summary
judgment as a matter of law but that genuine issues of material fact exist,
precluding summary judgment for Liberty Mutual and Wausau.