Touchstone v. Land & Marine Applicators, Inc.

628 F. Supp. 1202, 1986 U.S. Dist. LEXIS 30861
CourtDistrict Court, E.D. Louisiana
DecidedJanuary 3, 1986
DocketCiv. A. 76-3364, 82-1613, 81-1823, 84-0111, 85-0068, 83-0617 and 81-1213
StatusPublished
Cited by6 cases

This text of 628 F. Supp. 1202 (Touchstone v. Land & Marine Applicators, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Touchstone v. Land & Marine Applicators, Inc., 628 F. Supp. 1202, 1986 U.S. Dist. LEXIS 30861 (E.D. La. 1986).

Opinion

ORDER AND REASONS

FELDMAN, District Judge.

Before the Court is the Motion of defendant insurers, members of the common interest defense group, consisting of employers and their insurers, for Summary Judgment dismissing the claims made against them by the plaintiffs in these consolidated cases. After hearing oral argument of counsel and reviewing the applicable law, the Court requested supplemental memoranda and took the matter under submission. The Court is now prepared to rule.

The principal questions before the Court are:

(1) Whether the recent holding in Armstrong v. Land & Marine Applicators, Inc., 463 So.2d 1331 (La.App.1984) is binding precedent on this Court regarding the invalidity of the thirty-six month exclusion insurance provision contained in the policies at issue.

(2) Whether the holdings in Armstrong and Scarborough v. Travelers Ins. Co., 718 F.2d 702 (5th Cir.1983) reflect an inconsistency in Louisiana law. (Scarborough upheld the conceptual propriety of “discovery” and “claims made” insurance provisions, in contrast with the philosophical concerns articulated in Armstrong, which struck down a thirty-six month provision).

BACKGROUND

Generally, plaintiffs worked as sandblasters and painters on oil drilling platforms located in the Gulf of Mexico from 1959 and were employed by Land and Marine Applicators, Inc., Coating Specialist Co. and Platform Services, Inc.; they lived aboard their employers’ vessels while servicing the platforms. Plaintiffs claim that during the sandblasting operations they were exposed to an environment saturated with silica dust which allegedly was ingested into their lungs and caused silicosis. Plaintiffs filed suit under the Jones Act, 46 U.S.C. § 688, and the General Maritime Law against their former employers, vessel owners, the owners of the offshore drilling platforms 1 on which they had worked, certain manufacturers of safety equipment and suppliers of sand used in the sandblasting operations, and the parties’ insurers, asserting various negligence, unseaworthiness, and products liability claims.

The employers obtained insurance from Insurance Company of North America, Travelers Insurance Company, Old Reliable Tire Insurance Company, State Automobile Casualty Underwriters, Inc., Texas Fire *1208 and Casualty Company, the Steamship Mutual Underwriting Association Limited, Harbor Insurance Company, Henry Ralph Rokeby Johnson, as designated underwriters subscribing policy number 67/18490/1, Highlands Insurance Company and Certain Underwriters at Lloyds. It is uncontested that each of the insurance companies extended liability coverage to the various named employers, and that all plaintiffs’ claims are being asserted more than three years after the expiration of the policies.

Typically, the policies contain two categories of coverage for injuries to workers: Coverage A and Coverage B. Coverage A generally provides coverage for claims which arise under a workmen’s compensation scheme, such as the Louisiana Workmen’s Compensation Act, L.S.A.-R.S. 23:1021 et seq. or the Longshoremen and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq. Coverage B generally provides employers liability coverage for bodily injury or accident sustained by an employee of the insured arising out of and in the course of his employment; in this case, Coverage B includes coverage for maritime claims.

With respect to Coverage B, it is uncontested for purposes of this Motion that the exclusion section of each insurance policy included a provision which specifically indicated the policy would not apply to bodily injury by disease unless prior to thirty-six months after the end of the policy period a written claim was made, or suit was brought, against the insured for damages because of injury or death. In other words, claims brought against employers after thirty-six months from the expiration of a policy would not be insurance-protected.

The disputed issue is whether the thirty-six month exclusion provision retains its vitality and validity in light of Armstrong v. Land & Marine Applicators, 463 So.2d 1331 (La.App.1984).

In Armstrong, the claimant brought an action for worker’s compensation benefits for contracting silicosis as a result of work-offshore as a sandblaster for fourteen years. The insurance companies denied coverage and argued that the thirty-six month exclusion provision prevented recovery under the policy. The Court framed the issue for review as “whether the thirty-six month exclusion violates public policy insofar as worker’s compensation is concerned and whether the provision conflicts with LSA-R.S. 22:629.” Armstrong, 463 So.2d at 1333 (emphasis added). Noting that the precise question had not been previously considered, the Armstrong Court was not persuaded by the Louisiana cases involving “claims made” or “discovery” insurance provisions, which had been previously upheld. Precisely, the parties disputing coverage in those cases, according to Armstrong, were the parties to the contract; and the particular considerations unique to the injured workers’ rights were not addressed. See Oceanonics, Inc. v. Petroleum Distributing Co., 292 So.2d 190 (La.1974) (no recovery under a general liability policy which limited coverage for property damage occurring during the policy period even where the delictual act occurred during the policy period); Livingston Parish School Board v. Fireman’s American Insurance Co., 282 So.2d 478 (La.1973) (no recovery under professional liability insurance which limited coverage to claims for policy-covered negligence discovered and reported even where the negligent act occurred during the policy period); Cormack v. Prudential Insurance Co. of America, 259 So.2d 340 (La.App.1972), writ refused, 261 La. 824, 261 So.2d 230 (1972) (no recovery under a group health and accident policy requiring certain medical treatment be administered within six months of an accident even though treatment could not be administered because of physical impossibility).

But in 1983 the Fifth Circuit decided Scarborough v. Travelers Insurance Co., 718 F.2d 702 (5th Cir.1983). That Court held the thirty-six month exclusion provision did not violate Louisiana’s public policy and did not violate LSA-R.S. 22:269, the Louisiana Insurance Code, because it did not place a time limit on the right to bring *1209 suit; it merely defined the duration of the covered risk. How to deal with Scarborough? The state court perceived a difference. The Armstrong Court underscored the fact that the parties to the Scarborough

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Bluebook (online)
628 F. Supp. 1202, 1986 U.S. Dist. LEXIS 30861, Counsel Stack Legal Research, https://law.counselstack.com/opinion/touchstone-v-land-marine-applicators-inc-laed-1986.