Hanover Insurance Company v. Superior Labor Services, Inc. et al

Filing 342

ORDER AND REASONS denying Hanover's 228 Motion for Partial Summary Judgment Concerning the Duty to Defend Masse Contracting, Inc. and Allied Shipyards, Inc. as an Alleged Additional Insured, as stated herein. Signed by Judge Susie Morgan on 3/31/2016. (Reference: 14-1933) (tsf)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HANOVER INSURANCE COMPANY,
Plaintiff

CIVIL ACTION
No. 11-2375 c/w
14-1930, 14-1933

VERSUS
SUPERIOR LABOR SERVICES,
INC., ET AL.,
Defendants

SECTION “E”

Applies to: 14-1933
ORDER AND REASONS
Before the Court is Hanover’s motion for partial summary judgment seeking a
declaration that Hanover has no duty to defend Masse and no duty to defend Allied as an
additional insured. 1 For the reasons set forth below, the motion is DENIED.
BACKGROUND
A. State-Court Lawsuits
This is a consolidated action. The case originates from two personal-injury actions
(“State-Court Lawsuits”) filed in state court against Allied Shipyard, Inc. (“Allied”):
Adams, et al. v. Allied Shipyard, Inc., et al. and St. Pierre, et al. v. Allied Shipyard, Inc.2
The plaintiffs in the State-Court Lawsuits allege Allied negligently performed
sandblasting activities, causing dangerous silica dust and other hazardous substances to
permeate the plaintiffs’ neighborhood. 3 The plaintiffs seek damages for physical pain and
suffering, medical expenses, property damage, and other damages as a result of their

R. Doc. 228. Unless otherwise indicated, “R. Doc.” refers to record documents in the consolidated matter,
No. 11-2375.
2 The petition for damages from each State-Court Lawsuit is attached to Hanover’s motion for summary
judgment. See R. Docs. 228-4, 228-5.
3 See R. Docs. 228-4, 228-5.
1

1

exposure to the hazardous substances. 4 The two cases were consolidated in state court on
September 9, 2013. 5
In both State-Court Lawsuits, Allied filed third-party demands against its
contractors that performed the sandblasting jobs, including Superior Labor Services, Inc.
(“Superior”) 6 and Masse Contracting, Inc. (“Masse”). 7 Specifically, Allied alleges that
Superior and Masse contracted with Allied to perform certain job responsibilities and to
indemnify Allied under master work contracts. 8 Allied seeks indemnity from Superior and
from Masse with respect to the claims in the State-Court Lawsuits.9 Allied has also alleged
the right to additional assured status and coverage on all insurance policies issued to
Superior and to Masse for any liability in the State-Court Lawsuits. 10
The plaintiffs in Adams amended their petition to name Superior, Masse, other
subcontractors, and Gray Insurance Company as direct defendants. 11
The contractors against which Allied brought third-party demands “in turn sought
coverage, defense and/or indemnity from their various insurers for the periods of time
when these jobs were allegedly performed, which prompted the insurers to file lawsuits
in federal courts.” 12
B. Declaratory Actions in Federal Court
Three federal actions related to the State-Court lawsuits are pending in this Court.
The Court consolidated the three cases on November 21, 2014. 13
See R. Docs. 228-4, 228-5.
See R. Doc. 259-5.
6 R. Doc. 69 at ¶¶ 13–16; R. Docs. 228-4, 228-5.
7 R. Doc. 69 at ¶¶ 13–16; R. Doc. 228-6; R. Doc. 228-7.
8 R. Doc. 228-6.
9 Id.
10 Id. at ¶ 19.
11 See R. Doc. 228-4.
12 R. Doc. 174-1 at 2.
13 See R. Doc. 108.
4
5

2

1. No. 11-2375
On September 21, 2011, Hanover Insurance Company (“Hanover”) filed a
complaint in this Court. 14 Hanover filed an amended complaint on September 27, 2012. 15
Hanover alleges it has been participating in the defense of Superior against Allied’s thirdparty demands in the State-Court Lawsuits. 16 Hanover maintains the other insurers it
names in its federal suit “are not participating in Superior’s defense” in the State-Court
Lawsuits. 17 Hanover seeks judgment against Superior declaring that it has no duty to
defend or indemnify Superior in the State-Court Lawsuits. 18 If Hanover has a duty to
defend or indemnify Superior, Hanover seeks declaratory judgment that State National
Insurance Company (“State National”), Arch Insurance Company (“Arch”), and “other
unidentified insurance companies collectively named as ABC Insurance Company” are
liable “for their share of defense and indemnity to be paid on behalf of Superior” in the
State-Court Lawsuits. 19 Hanover also seeks reimbursement, contribution, and/or
damages from State National, Arch, and other unidentified insurance companies for
defense costs already incurred by Hanover on behalf of Superior in the State-Court
Lawsuits that, Hanover argues, should have been paid by those insurance companies. 20
On January 14, 2015, Hanover filed a second supplemental and amending
complaint naming Allied as a defendant. 21 Hanover alleges that “Allied has tendered the
[State-Court Lawsuits] to Hanover for defense and indemnity in its capacity as an alleged

Hanover Ins. Co. v. Superior Labor Servs., Inc., et al., No. 11-2375.
R. Doc. 69.
16 Id. at ¶¶ 23–24.
17 Id. at ¶ 26.
18 Id. at 22–23.
19 Id. at ¶ 2.
20 Id. at ¶ 3.
21 R. Doc. 125.
14
15

3

additional insured” under Superior’s policies, and Hanover has offered to participate in
Allied’s defense in the State-Court Lawsuits subject to a full reservation of rights. 22
Hanover alleges that Allied is not an additional assured under Hanover’s policies, and
Hanover seeks judgment against Allied declaring that it has no duty to defend or
indemnify Allied in the State-Court Lawsuits. 23 In the alternative, if the Court finds
Hanover has a duty to defend or indemnify Allied, Hanover seeks judgment declaring that
Arch, State National, other unidentified insurance companies are obligated to pay their
portions of defense costs and/or indemnity incurred by Hanover on behalf of Superior
and Allied in the State-Court Lawsuits. 24
2. No. 14-1930
On August 22, 2014, Arch Insurance Company brought an action for declaratory
judgment against Superior and Allied. Arch seeks a declaration of its rights and
responsibilities under “certain insurance policies issued by Arch to Superior,” with
respect to Superior’s request for defense and indemnity in the State-Court Lawsuits. 25
Arch also seeks a declaration of its rights and responsibilities with respect to Allied’s
request for additional assured status under the Superior policies and defense and
indemnity of Allied in the State-Court Lawsuits. 26 Arch seeks a declaration against
Superior and Allied that Arch has no defense or indemnity obligation to Superior in the

Id. at ¶ 79.
Id. at 9.
24 Id.
25 No. 14-1930, R. Doc. 1 at ¶ 3.
26 Id. at ¶ 4. Arch alleges that Allied is not entitled to additional assured coverage “to the extent there is no
evidence that any loss occurred” while Superior was performing work for Allied and during the Arch policy
periods. Id. at ¶¶ 20–21.
22
23

4

State-Court Lawsuits. 27 Arch also seeks recovery of the portion of defense costs already
incurred by it on behalf of Superior. 28
3. No. 14-1933
On August 22, 2014, Arch also filed an action for declaratory judgment against
Masse and Allied. Arch seeks a declaration of its rights and responsibilities under “certain
insurance policies issued by Arch to Masse,” with respect to Masse’s request for defense
and indemnity in the State-Court Lawsuits. 29 Arch also seeks a declaration of its rights
and responsibilities with respect to Allied’s request for additional assured status under
the Masse policies and defense and indemnity of Allied in the State-Court Lawsuits. 30
Arch seeks a declaration against Masse and Allied that Arch has no defense or indemnity
obligation to Masse in the State-Court Lawsuits. 31
On January 14, 2015, Hanover filed a complaint in intervention in Case No. 141933 against Defendants Masse and Allied. 32 Hanover seeks judgment declaring that
Hanover has no obligation to defend or indemnify Masse or Allied in the StateCourt Lawsuits. 33
State National Insurance Company (“State National”) also filed a petition for
intervention for declaratory judgment on January 14, 2015. 34 State National issued two
marine general liability policies to Masse that provided coverage from November 15,

Id. at ¶¶ 21, 47.
Id. at ¶ 47.
29 No. 14-1933, R. Doc. 1 at ¶ 3.
30 Id. at ¶ 4. Arch alleges that Allied is not entitled to additional assured coverage “to the extent there is no
evidence that any loss occurred” while Masse was performing work for Allied and during the Arch policy
periods. Id. at ¶¶ 20–21.
31 Id. at ¶ 46.
32 R. Doc. 128.
33 Id.
34 R. Doc. 132.
27

28

5

2006, to November 15, 2007, and from November 15, 2007, to November 15, 2008. 35
Allied seeks additional insured status under the policies issued by State National to
Masse. 36 State National seeks a judgment declaring there is no coverage afforded to Masse
under the State National policies and that State National has no duty to defend or
indemnify Masse in the State-Court Lawsuits. 37 State National also seeks a declaration
that “there is no coverage afforded to Allied under the [State National] policies as a
purported additional insured” and that State National does not owe a duty to defend or
indemnify Allied in the State-Court Lawsuits. 38
C. Hanover’s Motion for Partial Summary Judgment
Hanover filed a motion for partial summary judgment against Masse and Allied on
July 29, 2015. 39 Hanover argues it has no duty to defend Masse or Allied, as an additional
insured under the policies issued to Masse, in the State-Court Lawsuits for three reasons:
(1) that the plaintiffs in the State-Court Lawsuits do not allege “bodily injury” or “property
damage” that occurred during the terms of the policies Hanover issued to Masse;
(2) alternatively, that the plaintiffs in the State-Court Lawsuits seek recovery for injuries
arising out of exposure to silica dust and the Hanover policies contain an exclusion for
silica, silicon, and silicate; and (3) alternatively, the policies contain a Pollution Buyback
Endorsement that is not triggered by the State-Court Lawsuits and thus does not extend
coverage for the state-court plaintiffs’ injuries. 40 In its motion, and solely for purposes of
its motion, Hanover assumes that Allied qualifies as an additional assured within the

R. Doc. 132 at ¶ 14.
Id. at ¶ 3.
37 Id. at ¶ 19.
38 Id.
39 R. Doc. 228.
40 Id. at 2.
35

36

6

meaning of the Masse policies. 41 Whether Allied will indeed qualify as an additional
assured under the policies is not addressed in this ruling.
Masse filed its opposition to Hanover’s motion on December 8, 2015, 42 and Allied
filed its opposition on December 14, 2015. 43 Hanover filed a reply memorandum in
support of its motion on December 15, 2015. 44 After deposing Anthony Boudreaux,
Allied’s vice president of operations and Superior’s former vice president, Masse filed a
memorandum to supplement its opposition on February 29, 2016. 45
HANOVER’S INTERVENTION
The Court must determine whether Hanover’s intervention in No. 14-1933 was
permissible under Rule 24. Rule 24(a) provides for intervention as of right, while Rule
24(b) provides for permissive intervention. Hanover filed a supplemental memorandum
on March 29, 2016, arguing intervention was proper under both Rule 24(a) and Rule
24(b). 46 Masse argues the intervention is improper. 47
A. Intervention of Right
Rule 24(a) provides that the court must permit anyone to intervene who (1) is given
an unconditional right to intervene by a federal statute or (2) claims an interest relating
to the property or transaction that is the subject of the action, and is so situated that

R. Doc. 228-1 at 10 n.3.
R. Doc. 254.
43 R. Doc. 277.
44 R. Doc. 291.
45 R. Doc. 313.
46 R. Doc. 328.
47 R. Doc. 337. Hanover filed an ex parte motion for leave to file a complaint in intervention on January 12,
2015. R. Doc. 116. Masse and Arch had no opposition to the intervention. R. Doc. 116-1 at 2. The Court
granted the motion for leave to intervene on January 14, 2015, R. Doc. 115, and Hanover filed its complaint
in intervention against Masse and Allied in No. 14-1933 on January 14, 2015. R. Doc. 128.
41

42

7

disposing of the action may as a practical matter impair or impede the movant’s ability to
protect its interest, unless existing parties adequately represent that interest. 48
Hanover points to no federal statute giving it an unconditional right to intervene.
“Absent a statute giving a right to intervene, Rule 24(a) imposes four requirements for
intervention as of right: (1) timeliness, (2) an interest relating to the subject matter of the
main action, (3) at least potential impairment of that interest if the action is resolved
without the intervenor, and (4) lack of adequate representation by existing parties.” 49
To show it has an interest relating to the subject matter of the main action, Hanover
must demonstrate it has “a direct, substantial, legally protectable interest in the action,
meaning ‘that the interest be one which the substantive law recognizes as belonging to or
being owned by the applicant.’” 50 Hanover argues that it has shown it has an interest
relating to the subject matter of the main action (1) because it “has been defending Masse
pursuant to reservation in the same underlying lawsuits at issue in Arch’s declaratory
judgment action,” and (2) because Hanover’s policies issued to Masse and Arch’s policies
issued to Masse, the subject of the main action, both contain substantially similar
exclusions. Hanover argues it has an interest “in obtaining a consistent judicial
determination regarding its coverage obligations to Masse in the underlying lawsuits.” 51
Hanover fails to show, however, that it “has a stake in the matter that goes beyond a
generalized preference that the case come out a certain way.” 52 Hanover’s purported

FED. R. CIV. P. 24(a).
Vallejo v. Garda CL Sw., Inc., No. 12-0555, 2013 WL 391163, at *5 (S.D. Tex. Jan. 30, 2013). See also In
re Lease Oil Antitrust Litig., 570 F.3d 244, 247 (5th Cir. 2009).
50 In re Lease Oil, 570 F.3d at 250 (quoting Cajun Elect. Power Coop. v. Gulf States Utils., Inc., 940 F.2d
117, 119 (5th Cir. 1991)).
51 R. Doc. 228 at 4–5.
52 Texas v. United States, 805 F.3d 653, 657 (5th Cir. 2015).
48
49

8

interest is insufficient to establish an “interest” relating to the subject matter of the main
action under Rule 24(a). 53
Hanover also fails to show that its interest would be at least potentially impaired if
the action is resolved without it. “Impairment exists when the decision of a legal question
would, as a practical matter, foreclose the rights of the proposed intervenor in a
subsequent proceeding.” 54 Hanover has failed to establish that its interest would be
potentially impaired if the main action is resolved without it, as Hanover has not
demonstrated that “the disposition of [the main] suit will . . . bar [Hanover] from
asserting [its] rights in a separate action.” 55
Because Hanover fails to demonstrate at least two of the four prongs necessary to
establish intervention of right, the Court finds Hanover is not entitled to intervention of
right under Rule 24(a).
B. Permissive Intervention
Rule 24(b) provides that courts may permit anyone to intervene who has a claim
or defense that shares with the main action a common question of law or fact. 56 “Even if
not warranted as a matter of right, the Court has broad discretion to allow permissive
intervention where, as here, the parties seeking to intervene assert claims with a common
question of fact or law in connection with the main action.” 57 If the intervenor has a claim
or defense that shares with the main action a common question of law or fact, district

See id. at 657–60.
Vallejo, 2013 WL 391163, at *5.
55 Id. (“If the disposition of a suit will not bar a proposed intervenor from asserting his or her rights in a
separate action, the ‘impairment’ prong of Rule 24(a) typically is not met.”).
56 FED. R. CIV. P. 24(b)(1).
57 Liberty Mut. Fire Ins. Co. v. Lumber Liquidators, Inc., No. 15-34, 2016 WL 554830, at *6 (E.D. Va. Feb.
9, 2016).
53

54

9

courts have “broad discretion” in allowing intervention. 58 “A court possesses the
discretion to determine whether to permit permissive intervention and must ‘consider
whether the intervention will unduly delay or prejudice the adjudication of the rights of
the

original

parties.’” 59

The

rule

on

permissive

intervention

“should

be

liberally construed.” 60
In Pennsylvania National Mutual Casualty Insurance Co. v. Perlberg, the district
court for the District of Maryland allowed an insurer to intervene permissively under Rule
24(b)(1)(B) in a situation similar to that currently before this Court. 61 In Perlberg, Penn
National issued a commercial general liability policy to the Perlbergs, defendants in an
underlying personal injury lawsuit.62 Penn National filed a federal declaratory judgment
action against the Perlbergs, seeking a declaration that it owed no duty to defend or
indemnify the Perlbergs in the underlying lawsuit. 63 New Hampshire, another insurer
that provided a separate commercial general liability policy to the Perlbergs, had been
defending the Perlbergs in the underlying lawsuit. 64 New Hampshire filed a motion to
intervene in Penn National’s declaratory judgment action to protect its potential
contribution rights. 65 The court granted the motion to intervene, concluding that
permissive intervention under Rule 24(b) was appropriate. 66 The court explained that the

Sec. & Exch. Comm’n. v. Mutuals.com, Inc., No. 03-2912, 2004 WL 1629929, at *2 (N.D. Tex. July 20,
2004) (citing League of United Latin Am. Citizens, Council No. 4434 v. Clements, 884 F.2d 185, 189 (5th
Cir. 1989)); Vallejo, 2013 WL 391163, at *10.
59 Waste Mgmt. of Louisiana, L.L.C. v. River Birch, Inc., No. 11-2405, 2013 WL 5175620, at *3 (E.D. La.
Sept. 12, 2013) (quoting FED. R. CIV. P. 24(b)(3)). See also Tajonera v. Black Elk Energy Offshore
Operations, L.L.C., No. 13-0366, 2015 WL 893447, at *8 (E.D. La. Mar. 2, 2015); J.M. Smith Corp. v. Ciolino
Pharmacy Wholesale Distributors, LLC, No. 10-1483, 2013 WL 1344557, at *1 (E.D. La. Apr. 3, 2013).
60 Moore v. Tangipahoa Parish Sch. Bd., 298 F. Supp. 288, 292 (E.D. La. 1969).
61 Pennsylvania Nat. Mut. Cas. Ins. Co. v. Perlberg, 268 F.R.D. 218, 226 (D. Md. 2010).
62 Id. at 220.
63 Id.
64 Id.
65 Id.
66 Id. at 226.
58

10

lawsuit could determine both Penn National’s declaratory judgment action and New
Hampshire’s contribution claim in one proceeding while allowing all parties to be heard. 67
The court also explained that the intervention would avoid a competing suit in
state court. 68
Several issues of law and fact in Hanover’s declaratory judgment action against
Masse and Allied are common to those in Arch’s declaratory judgment action against
those same entities. Both Arch and Hanover seek declaratory judgment that they have no
duty to defend or indemnify Masse or Allied in the State-Court Lawsuits. 69 The allegations
of the underlying State-Court Lawsuits are the same with respect to both declaratory
judgment actions. Although the relevant provisions of the policies issued to Masse by Arch
and by Hanover are not identical, the material factual disputes will most certainly overlap
and the legal issues surrounding the application of the silica and pollution exclusions in
the policies will be substantially similar. As in Perlberg, this lawsuit can be used to
determine Arch’s declaratory judgment action and Hanover’s declaratory judgment
action in one proceeding while allowing all parties to be heard. Intervention will avoid a
competing action in state court and will avoid inconsistent results on these disputed
issues. The Court finds the approach taken by the court in Perlberg to be common-sense
and well within the Court’s discretion under Rule 24(b).
Courts should also consider whether permissive intervention will achieve judicial
economy. 70 The Court finds that judicial economy will be served by allowing Hanover to

Id.
Id.
69 R. Doc. 128; No. 14-1933, R. Doc. 1.
70 United States v. Texas Educ. Agency (Lubbock Indep. Sch. Dist.), 138 F.R.D. 503, 508 (N.D. Tex.), aff’d
sub nom. United States v. Texas Educ. Agency, 952 F.2d 399 (5th Cir. 1991) (“[J]udicial economy is a
relevant consideration in deciding a motion for permissive intervention.” (quoting Venegas v. Skaggs, 867
F.2d 527, 529–31 (9th Cir. 1989))).
67

68

11

intervene in this action and that allowing Hanover’s claim in intervention to proceed will
not unduly delay or prejudice any parties. 71 Although the Arch declaratory judgment
action has been pending for some time, there has been virtually no activity in the case
other than motions for summary judgment on the duty to defend, as the parties have been
focusing on the underlying State-Court Lawsuits. Hanover’s claim in intervention is
permissible under Rule 24(b), and the Court will exercise its broad discretion by allowing
the claim in intervention to proceed, as “[i]ntervention should generally be allowed where
no one would be hurt and greater justice could be attained.” 72
CONSIDERATION OF DECLARATORY JUDGMENT ACTIONS
Hanover has intervened to assert a declaratory judgment action against Masse and
Allied. The Declaratory Judgment Act, 28 U.S.C. § 2201, provides in pertinent part:
In a case of actual controversy within its jurisdiction . . . any court of the United
States, upon the filing of an appropriate pleading, may declare the rights and other
legal relations of any interested party seeking such declaration, whether or not
further relief is or could be sought. Any such declaration shall have the force and
effect of a final judgment or decree and shall be reviewable as such. 73
The Fifth Circuit has explained that, when considering a declaratory judgment action, a
district court must engage in a three-step inquiry to determine whether to decide or

71 Deus v. Allstate Ins. Co., 15 F.3d 506, 525 (5th Cir. 1994) (“The intervention rule is intended to prevent
multiple lawsuits where common questions of law or fact are involved.”); In re Enron Corp. Sec., Derivative
& “ERISA'” Litig., 229 F.R.D. 126, 129 (S.D. Tex. 2005) (allowing permissive intervention where the Court
found the intervenor did “not seek to create a whole new suit by its intervention, but for pragmatic reasons
[sought] to preserve judicial economy by sharing discovery materials that overlap with its own
investigation . . . .”); Texas Educ. Agency, 138 F.R.D. at 508.
72 Ross v. Marshall, 426 F.3d 745, 753 (5th Cir. 2005) (internal quotation marks omitted).

The Court notes that it dismissed Masse’s third-party demands as improper under Rule 14. R. Doc. 321.
Rule 14, which governs impleader, sets forth a different standard than the standard for intervention set
forth in Rule 24. Rule 14 requires that liability of the third-party defendant “be ‘dependent’ or ‘in some way
derivative’ of the outcome of the main claim,” Branch Consultants, L.L.C. v. Allstate Ins. Co., 265 F.R.D.
266, 272 (E.D. La. 2010), while Rule 24 requires only that the party seeking permissive intervention have
“a claim or defense that shares with the main action a common question of law or fact.” FED. R. CIV. P.
24(b)(1)(B).
73 28 U.S.C. § 2201.

12

dismiss a complaint for declaratory relief. 74 First, the Court must determine whether the
action is justiciable. 75 Second, the Court must determine whether it has the authority to
grant declaratory relief. 76 Third, the Court must determine “how to exercise its broad
discretion to decide or dismiss a declaratory judgment action.” 77 If Hanover’s claims
survive this analysis, the Court will then consider whether Hanover has a duty to defend
the insured under the policies at issue.
A. Justiciability
The justiciability doctrines of standing, mootness, political question, and ripeness
derive from Article III’s “case or controversy” requirement. 78 In a declaratory judgment
action, justiciability often turns on ripeness. 79 This case is no exception.
The ripeness doctrine is drawn “both from Article III limitations on judicial power
and from prudential reasons for refusing to exercise jurisdiction.” 80 The purpose of this
doctrine is to forestall “entangl[ement] . . . in abstract disagreements” through
“avoidance of premature adjudication.” 81 “The key considerations are ‘the fitness of the
issues for judicial decision and the hardship to the parties of withholding
court consideration.’” 82

74 Orix Credit All., Inc. v. Wolfe, 212 F.3d 891, 895 (5th Cir. 2000). See also Aggreko, LLC v. Am. Home
Assur. Co., No. 14-1215, 2014 WL 6901376, at *3 (E.D. La. Dec. 5, 2014).
75 Id.
76 Id.
77 Id.
78 Choice Inc. of Tex. v. Greenstein, 691 F.3d 710, 714–15 (5th Cir. 2012).
79 See id; Orix, 212 F.3d at 895; Rowan Cos., Inc. v. Griffin, 876 F.2d 26, 27–28 (5th Cir. 1989).
80 Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993).
81 Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967), abrogated on other grounds by Califano v. Sanders,
430 U.S. 99 (1977).
82 New Orleans Public Serv., Inc. v. Counsel of City of New Orleans, 833 F.2d 583, 586 (5th Cir. 1987)
(quoting Abbott Labs., 387 U.S. at 149).

13

The Fifth Circuit has recognized that “applying the ripeness doctrine in the
declaratory judgment context presents a unique challenge.” 83 This stems primarily from
the fact that declaratory relief often involves an ex ante determination of rights, i.e., a
determination of rights before an injury has occurred, that “exists in some tension with
traditional notions of ripeness.” 84 Fortunately, this challenge is not presented today,
because the Court’s analysis is guided by a distinct subset of ripeness jurisprudence on
disputes regarding the duty to defend.
Because the duty to defend does not depend on the outcome of the underlying law
suit, 85 a duty-to-defend claim is ripe when the underlying suit is filed. 86 Accordingly,
Hanover’s duty-to-defend claim is ripe, and the Court finds the action is justiciable.
B. Authority to Grant Declaratory Relief
The Fifth Circuit has explained that “when a state lawsuit is pending, more often
than not, issuing a declaratory judgment will be tantamount to issuing an injunction—
providing the declaratory plaintiff an end run around the requirements of the AntiInjunction Act.” 87 Therefore, the district court cannot consider the merits of a declaratory
judgment action when (1) a declaratory defendant has previously filed a cause of action in
state court against the declaratory plaintiff; (2) the state case involves the same issues as

Orix, 212 F.3d at 896 (internal quotation marks omitted).
Id.
85 Suire v. Lafayette City-Parish Consol. Gov’t, 907 So. 2d 37, 52 (La. 2005).
86 See Columbia Cas. Co. v. Ga. & Fla. RailNet, Inc., 542 F.3d 106, 110 (5th Cir. 2008) (“An actual case or
controversy exists before the resolution of an insured’s underlying suit concerning the insurer’s duty to
defend.”) (emphasis in original); Morad v. Aviz, No. 12-2190, 2013 WL 1403298, at *2 (E.D. La. Apr. 5,
2013) (“Courts have routinely held that courts may determine an insurer’s duty to defend even before the
underlying suit is decided.”); Greenwich Ins. Co. v. Capsco Indus., Inc., No. 1:14CV297-LG-JCG, 2014 WL
5025856, at *2 (S.D. Miss. Oct. 8, 2014).
87 Travelers Ins. Co. v. Louisiana Farm Bureau Fed’n, Inc., 996 F.2d 774, 776 (5th Cir. 1993). The AntiInjunction Act states, “A court of the United States may not grant an injunction to stay proceedings in a
State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction,
or to protect or effectuate its judgments.” 28 U.S.C. § 2283.
83

84

14

those involved in the federal case; and (3) the district court is prohibited from enjoining
the state proceedings under the Anti-Injunction Act. 88
In Hanover’s complaint in intervention, Hanover alleges that, pursuant to its
policies, it is participating in Masse’s defense against the Adams plaintiffs’ demands and
third-party demands in the State-Court Lawsuits, “subject to a full reservation of
rights.” 89 Hanover does not assert that it is a party in the State-Court Lawsuits, and the
Court is not aware of any state-court proceedings involving the same issues now being
examined. Therefore, the Court finds that the Anti-Injunction Act does not apply, as there
is no pending state-court action between Hanover and any of the defendants in this case. 90
Accordingly, the Court’s authority to grant declaratory relief on the duty-to-defend
claim turns on whether subject-matter jurisdiction is proper. 91 Hanover asserts the Court
has subject-matter jurisdiction over its intervention pursuant to 28 U.S.C. § 1332(a). 92 28
U.S.C. § 1332(a) provides that jurisdiction is proper where (1) the parties are completely
diverse, and (2) the amount in controversy exceeds $75,000. 93
The parties are completely diverse when “the citizenship of each plaintiff is diverse
from the citizenship of each defendant.” 94 All of the parties in this matter are
corporations. 95 For purposes of diversity jurisdiction, a corporation is a citizen of (1) its
Travelers, 996 F.2d at 776; Sherwin-Williams Co. v. Holmes Cty., 343 F.3d 383, 387 (5th Cir. 2003).
R. Doc. 128 at 2.
90 See Sherwin-Williams, 343 F.3d at 387–88 (“The district court also properly concluded that it had the
authority to decide the declaratory judgment suit. Diversity jurisdiction was present and the AntiInjunction Act did not apply because there was no pending state court action between Sherwin-Williams
and any of the declaratory judgment defendants.”); Hudson Specialty Ins. Co. v. King Investments of
Louisiana, Inc., No. 13-5990, 2014 WL 108402, at *3 (E.D. La. Jan. 10, 2014); Nat’l Cas. Co. v. Tom’s
Welding, Inc., No. 11-3101, 2012 WL 2064451, at *5 (E.D. La. June 7, 2012).
91 See Sherwin-Williams, 343 F.3d at 387–88.
92 R. Doc. 128 at ¶ 6.
93 See 28 U.S.C. § 1332(a).
94 Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). The parties have not disputed complete diversity.
Nonetheless, the Court has a duty to examine all aspects of subject matter jurisdiction sua sponte. See Union
Planters Bank Nat’l Ass’n v. Salih, 369 F.3d 457, 460 (5th Cir. 2004).
95 See R. Doc. 128.
88
89

15

state of incorporation, and (2) the state in which its principal place of business is
located. 96 According to the complaint in intervention, Hanover is a citizen of New
Hampshire, the state of its incorporation, and Massachusetts, the state in which its
principal place of business is located. 97 Defendant-in-intervention Masse is a citizen of
Louisiana, the state of its incorporation and the state in which its principal place of
business is located. 98 Defendant-in-intervention Allied is a citizen of Louisiana, the state
of its incorporation and the state in which its principal place of business is located. 99
Because none of the defendants-in-intervention is a citizen of New Hampshire or
Massachusetts, the states in which Hanover is a citizen, there is complete diversity.
In addition to complete diversity, Section 1332(a) requires that the amount in
controversy exceed $75,000. As the party invoking federal jurisdiction, Hanover bears
the burden of establishing the amount in controversy by a preponderance of the
evidence. 100 In order to determine whether that burden has been met, the Court first
inquires whether it is “facially apparent” from the complaint that the amount in
controversy exceeds $75,000. 101 If not, the Court may examine summary judgmenttype evidence. 102
When an insurer seeks a declaratory judgment on coverage issues, the amount in
controversy is equal to the “[insurer’s] potential liability under the policy, plus potential
attorneys’ fees, penalties, statutory damages, and punitive damages.” 103 As set forth in

28 U.S.C. § 1332(c)(1).
R. Doc. 128 at ¶ 3.
98 Id. at ¶ 4.
99 Id. at ¶ 5.
100 See Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 639 (5th Cir. 2003).
101 See Hartford Ins. Grp. v. Lou-Con Inc., 293 F.3d 908, 910 (5th Cir. 2002).
102 Id.
103 Id. (internal quotation marks omitted). Unless the insurer seeks to void the entire insurance contract,
the amount in controversy is not measured by the face amount of the policy. Id. at 911.
96
97

16

the complaint in this case and the petitions from the State-Court Lawsuits, the state-court
plaintiffs allege they have suffered property damage and severe bodily injury and have
contracted diseases, including silicosis, Chronic Obstructive Pulmonary Disease,
Wegener’s granulomatosis. Masse’s potential liability for these injuries—and thus
Hanover’s derivative indemnity liability—could easily exceed $75,000. 104 When coupled
with Hanover’s potential defense obligations, the Court concludes the amount in
controversy exceeded the jurisdictional amount at the time this action was filed. 105
Therefore, because the Court has diversity jurisdiction over this matter and the
Anti-Injunction action does not apply, the Court finds it has the authority to grant
declaratory relief in this case. 106
C. Discretion to Exercise Jurisdiction
“Since its inception, the Declaratory Judgment Act has been understood to confer
on federal courts unique and substantial discretion in deciding whether to declare the
rights of litigants,” even when subject-matter jurisdiction is otherwise proper. 107 The Fifth
Circuit has developed seven factors—the so-called “Trejo factors”—that a district court
should consider when deciding whether to exercise jurisdiction over a declaratory
judgment action:
(1) whether there is a pending state action in which all of the
matters in controversy may be fully litigated;
(2) whether the plaintiff filed suit in anticipation of a lawsuit
filed by the defendant;
The question arises whether Hanover’s indemnity claim can count toward the amount in controversy.
The Fifth Circuit has held that the amount in controversy is equal to the insurer’s “potential liability under
[the] policy.” See St. Paul Reinsurance Co. Ltd., 134 F.3d 1250, 1253 (5th Cir. 1998) (emphasis added);
Hartford Ins. Grp., 293 F.3d at 912.
105 Jurisdictional facts are judged as of the time the complaint is filed. St. Paul, 134 F.3d at 1253.
106 See U.S. Fire Ins. Co. v. A-Port, LLC, No. 14-441, 2015 WL 1416490, at *3 (E.D. La. Mar. 26, 2015);
Hudson, 2014 WL 108402, at *3 (E.D. La. Jan. 10, 2014); Nat’l Cas. Co., 2012 WL 2064451, at *5.
107 Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995).
104

17

(3) whether the plaintiff engaged in forum shopping in
bringing the suit;
(4) whether possible inequities in allowing the declaratory
plaintiff to gain precedence in time or to change forums
exist;
(5) whether the federal court is a convenient forum for the
parties and witnesses;
(6) whether retaining the lawsuit would serve the purposes of
judicial economy; and
(7) whether the federal court is being called on to construe a
state judicial decree involving the same parties and
entered by the court before whom the parallel state suit
between the same parties is pending. 108
As set forth below, the Trejo factors weigh in favor of exercising jurisdiction.
Accordingly, the Court will exercise jurisdiction over this matter.
1.

Nature of Pending State Court Action

The first Trejo factor requires comparison of the declaratory judgment action with
the underlying state-court action. 109 If the declaratory judgment action presents the same
issues as the state-court action, involves the same parties, and is not governed by federal
law, the federal court should generally decline to exercise jurisdiction. 110 If, on the other
hand, the state-court action is not truly parallel because it does not involve all the same
parties or issues as the declaratory judgment action, a federal court should consider the
degree of similarity between the two actions. 111

Sherwin-Williams, 343 F.3d at 388.
See id. at 393–94.
110 See id.; Wilton, 515 U.S. at 283 (“[W]here another suit involving the same parties and presenting
opportunity for ventilation of the same state law issues is pending in state court, a district court might be
indulging in ‘[g]ratuitous interference,’ if it permitted the federal declaratory action to proceed.”) (second
alteration in original) (internal citation omitted) (quoting Brillhart v. Excess Ins. Co. of Am., 316 U.S. 491,
495 (1942)).
111 See Sherwin-Williams, 343 F.3d at 394 n.5.
108
109

18

Hanover is not a party to the State-Court Lawsuits. Moreover, whereas the StateCourt Lawsuits involve issues of fact, fault, and causation, the determination of whether
there is a duty to defend involves a straightforward examination of the state-court
pleadings and the insurance policies Hanover issued to the state-court defendants.
Furthermore, the resolution of the State-Court Lawsuits will not determine Hanover’s
duty to provide coverage. The state and federal proceedings are clearly not parallel. “[T]he
lack of a pending parallel state proceeding . . . weighs strongly against dismissal.” 112 The
first Trejo factor weighs in favor of exercising jurisdiction.
2.

Order of Filing

The St. Pierre lawsuit was filed on December 8, 2010, 113 and the Adams lawsuit
was filed on December 28, 2010. 114 Arch filed the lawsuit presently before this Court on
August 22, 2014, 115 and Hanover filed its complaint-in-intervention on January 14,
2015. 116 Hanover likely was aware that its insurance coverage of Superior and Masse
would become an issue in the pending State-Court Lawsuits. Therefore, Hanover may
have filed its complaint in intervention in anticipation of becoming a party to the pending
State-Court Lawsuits. 117 The second Trejo factor weighs against exercising jurisdiction.118

112 Id. at 394. See also Fed. Ins. Co. v. Sw. Materials, Inc., No. 02-1787, 2003 WL 21634945, at *3 (E.D. La.
July 3, 2003) (finding abstention unwarranted in similar circumstances).
113 R. Doc. 228-5 at 3.
114 R. Doc. 228-4 at 5.
115 No. 14-1933, R. Doc. 1.
116 R. Doc. 128.
117 See Great Am. Ins. Co. v. Cumberland Inv. Grp., LLC, No. 13-4763, 2013 WL 5755641, at *4 (E.D. La.
Oct. 23, 2013) (noting the plaintiff “was aware the issue of its insurance coverage of [the defendant] would
be at issue in the pending state court proceeding,” concluding that “it can be assumed that [the plaintiff]
filed for Declaratory Judgment on June 10, 2013 in anticipation of becoming a party to that pending state
court action,” and finding the second Trejo factor weighs against exercising jurisdiction).
118 See U.S. Fire, 2015 WL 1416490, at *4.

19

3.

Forum Shopping

That Hanover could have intervened and requested declaratory judgment in the
State-Court Lawsuits does not necessarily demonstrate forum shopping. 119 As a
preliminary matter, there is no guarantee Hanover would have been allowed to intervene
in the State-Court Lawsuits. 120 Moreover, courts are less likely to find forum shopping
where, as here, (1) a foreign insurer files a diversity action in federal court, and (2) the
selection of the federal forum does not change the applicable law. 121 “The record does not
support a finding that [Hanover] engaged in impermissible forum shopping by filing this
declaratory

judgment

suit.” 122

The

third

Trejo

factor

weighs

in

favor

of

exercising jurisdiction.
4.

Inequities

The Court cannot conceive of any inequities that flow from allowing Hanover to
proceed in this action while the State-Court Lawsuits remain pending. As explained
above, the State-Court Lawsuits and this action are not parallel in any material sense. No
party will be prejudiced if this action is resolved before the State-Court Lawsuits. The
fourth Trejo factor weighs in favor of exercising jurisdiction.
5.

Convenience of Federal Forum

The State-Court Lawsuits are pending in the 17th Judicial District Court for the
Parish of Lafourche, State of Louisiana. 123 The state courthouse for the 17th Judicial

See id.
See LA. CODE CIV. PROC. art. 1091 (“A third person having an interest therein may intervene in a pending
action to enforce a right related to or connected with the object of the pending action against one or more
of the parties thereto.” (emphasis added)).
121 See Sherwin-Williams, 343 F.3d at 399.
122 Id. at 400. See also Ironshore Specialty Ins. Co. v. Tractor Supply Co., 624 F. App’x 159, 167 (5th Cir.
2015) (per curiam).
123 See R. Docs. 228-5, 228-6.
119

120

20

District Court for Lafourche Parish is approximately 60 miles west of the federal
courthouse in New Orleans. No party argues that this forum is inconvenient or that either
forum is more convenient than the other for the parties or for the witnesses. This factor
is neutral. 124
6.

Judicial Economy

This action has been pending for more than 18 months. The duty-to-defend issue
has been fully briefed before this Court. It would be a waste of judicial resources to dismiss
this action and require Hanover to refile in another forum. Exercising jurisdiction is
clearly in the interest of judicial economy. 125 This factor weighs in favor of
exercising jurisdiction.
7.

Interpretation of Decree from Parallel State Proceeding

Again, the State-Court Lawsuits and this action are clearly not parallel. This Court
need not interpret any decree issued in the State-Court Lawsuits to determine whether
Hanover has a duty to defend or provide coverage. The seventh Trejo factor weighs in
favor of exercising jurisdiction. 126

See GlobalSantaFe Drilling Co. v. Quinn, No. 12-1987, 2012 WL 4471578, at *4 (E.D. La. Sept. 26, 2012)
(“It does not appear that the Eastern District of Louisiana is any more convenient or less convenient of a
forum; the parties are located outside the state but the witnesses are located within. Therefore, this factor
is neutral.” (citations omitted)); Great Am. Ins. Co. v. Cumberland Inv. Grp., LLC, No. 13-4763, 2013 WL
5755641, at *5 (E.D. La. Oct. 23, 2013); Gemini Ins. Co. v. Turner Indus. Grp., LLC, No. 13-05922, 2014
WL 3530475, at *5 (E.D. La. July 16, 2014).
125 See Ironshore, 624 F. App’x at 168 (finding that the judicial economy factor weighed against dismissal
when the parties had “already fully briefed the insurance coverage issues to the district court and entered
into extensive factual stipulations”); Agora Syndicate, Inc. v. Robinson Janitorial Specialists, Inc., 149 F.3d
371, 373 (5th Cir. 1998) (finding that judicial economy weighed against dismissal in part because “there
[were] no factual disputes between the parties and . . . they have fully briefed the merits of the insurance
issues”).
126 Ironshore, 624 F. App’x at 168 (“The seventh and last factor . . . weighs against dismissal. There is no
need to construe a state judicial decree to resolve the issues in this case.”). See also U.S. Fire, 2015 WL
1416490, at *5.
124

21

Five of the Trejo factors weigh in favor of exercising jurisdiction, while one weighs
against and another is neutral. Accordingly, the Court will exercise its jurisdiction over
this matter. 127
LAW AND ANALYSIS
A. The “Eight-Corners Rule”
Under Louisiana law, an insurance policy is a contract and should be construed
using the general rules of interpretation of contracts set forth in the Louisiana Civil
Code. 128 A liability insurer’s duty to defend and the scope of its coverage are separate and
distinct issues. 129 Under Louisiana law, an insurer’s duty to defend is broader than its
obligation to indemnify for damage claims. 130 Louisiana courts apply the “eight-corners
rule” to determine whether a liability insurer has the duty to defend a civil action against
its insured; courts look to the “four corners” of the plaintiff’s petition in the civil action
and the “four corners” of the insurance policy to determine whether the insurer owes its
insured a duty to defend. 131 One Louisiana court explained as follows:
Under [the “eight-corners”] analysis, the factual allegations of the plaintiff’s
petition must be liberally interpreted to determine whether they set forth grounds
which raise even the possibility of liability under the policy. In other words, the test
is not whether the allegations unambiguously assert coverage, but rather whether
they do not unambiguously exclude coverage. Similarly, even though a plaintiff’s
petition may allege numerous claims for which coverage is excluded under an
insurer’s policy, a duty to defend may nonetheless exist if there is at least a single
allegation in the petition under which coverage is not unambiguously excluded. 132

Applying this same analysis to the declaratory judgment action filed by Arch against Masse and Allied
(No. 14-1933) would result in the same conclusion.
128 Sher v. Lafayette Ins. Co., 2007-2441 (La. 4/8/08), 988 So. 2d 186, 192, on reh’g in part (July 7, 2008).
129 Mossy Motors, Inc. v. Cameras Am., 2004-0726 (La. App. 4 Cir. 3/2/05), 898 So. 2d 602, 606, writ
denied, 2005-1181 (La. 12/9/05), 916 So. 2d 1057.
130 Henly v. Phillips Abita Lumber Co., 2006-1856 (La. App. 1 Cir. 10/3/07), 971 So. 2d 1104, 1109.
131 Mossy, 898 So. 2d at 606.
132 Id. (citations omitted).
127

22

The duty to defend “arises whenever the pleadings against the insured disclose even a
possibility of liability under the policy.” 133 The insurer has a duty to defend unless the
allegations in the petition for damages, as applied to the policy, unambiguously preclude
coverage. 134 “Once a complaint states one claim within the policy’s coverage, the insurer
has a duty to accept defense of the entire lawsuit, even though other claims in the
complaint fall outside the policy’s coverage.” 135
When a party files a motion for summary judgment regarding the duty to defend,
the Court may consider only the plaintiff’s petition and the face of the policies; the parties
cannot present any evidence such as affidavits or depositions. 136 Factual inquiries beyond
the petition for damages and the relevant insurance policy are prohibited with respect to
the duty to defend. 137 Any ambiguities within the policy are resolved in favor of the
insured to effect, not deny, coverage. 138
B. The Policies
Hanover issued three commercial lines policies to Masse: one that provided
coverage from November 15, 2009, through November 15, 2010 (“the 2009 policy”), 139
another that provided coverage from November 15, 2010, through November 15, 2011

Steptore v. Masco Const. Co., 93-2064 (La. 8/18/94), 643 So. 2d 1213, 1218. See also United Nat’l Ins.
Co. v. Paul and Mar’s Inc., No. 10-799, 2010 WL 2690615, at *2 (E.D. La. July 11, 2011).
134 Martco Ltd. P’ship v. Wellons, Inc., 588 F.3d 864, 872 (5th Cir. 2009).
135 Treadway v. Vaughn, 633 So. 2d 626, 628 (La. Ct. App. 1993), writ denied, 635 So. 2d 233 (La. 1994).
136 Milano v. Bd. of Comm’rs of Orleans Levee Dist., 96-1368 (La. App. 4 Cir. 3/26/97), 691 So. 2d
1311, 1314.
137 Martco, 588 F.3d at 872.
138 Doerr v. Mobil Oil Corp., 2000-0947 (La. 12/19/00), 774 So. 2d 119, 124. Hanover argues that “neither
Allied nor Masse can sustain their burden of establishing” that the state-court plaintiffs’ bodily injuries or
property damage occurred during Hanover’s policy periods. R. Doc. 228-1 at 11. This, however, is not the
correct standard for motions for summary judgment on the duty to defend.
139 R. Doc. 228-8.
133

23

(“the 2010 policy”), 140 and a third that provided coverage from November 15, 2011,
through November 15, 2012 (“the 2011 policy”). 141
1. General Liability
The 2009 and 2010 policies provide that Hanover “will pay on behalf of the insured
all sums which the insured shall become legally obligated to pay as damages because
of . . . bodily injury [and] . . . property damage to which this insurance applies, caused by
an occurrence, and [Hanover] shall have the right and duty to defend any suit against the
insured seeking damages . . . .” 142 Similarly, the 2011 policy states that Hanover “will pay
those sums that the insured becomes legally obligated to pay as damages because of
‘bodily injury’ or ‘property damage’ to which this insurance applies” and that Hanover
“will have the right and duty to defend the insured against any ‘suit’ seeking
those damages.” 143
The 2009 and 2010 policies define “bodily injury” as “bodily injury, sickness or
disease sustained by any person which occurs during the policy period, including death
at any time resulting therefrom.” 144 The 2009 and 2010 policies define “property damage”
as “(1) physical injury to or destruction of tangible property which occurs during the
policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss
of use of tangible property which has not been physically injured or destroyed provided
such loss of use is caused by an occurrence during the policy period.” 145 The policies define
“occurrence” as “an accident, including continuous or repeated exposure in conditions,

R. Doc. 228-9.
R. Doc. 228-10.
142 R. Doc. 228-8 at 15; R. Doc. 228-9 at 15.
143 R. Doc. 228-10 at 11.
144 R. Doc. 228-8 at 9; R. Doc. 228-9 at 9.
145 R. Doc. 228-8 at 11; R. Doc. 228-9 at 11.
140
141

24

which results in bodily injury or property damage neither expected nor intended from the
standpoint of the insured.” 146
Similarly, the 2011 policy defines “bodily injury” as “bodily injury, sickness or
disease sustained by a person, including death resulting from any of these at any time.” 147
The 2011 policy states, “‘Property damage’ means: (a) physical injury to tangible property,
including all resulting loss of use of that property. All such loss of use shall be deemed to
occur at the time of the physical injury that caused it; or (b) Loss of use of tangible
property that is not physically injured. All such loss of use shall be deemed to occur at the
time of the ‘occurrence’ that caused it.” 148 The 2011 policy defines “occurrence” as “all loss
or damage that is attributable directly or indirectly to: (a) One cause, act, event or series
of similar related causes, acts or events involving one or more persons; or (b) One cause,
act or event, or a series of similar related causes, acts or events not involving any
person.” 149 The 2011 policy states, “This insurance applies to ‘bodily injury’ and ‘property
damage’ only if: (1) The ‘bodily injury’ or ‘property damage’ is caused by an ‘occurrence’
that takes place in the ‘coverage territory’; and (2) The ‘bodily injury’ or ‘property damage’
actually commences during the policy period.” 150 The policy’s “coverage territory”
includes the United States. 151
2. Silicon, Silica, and Silicate Exclusion
All three policies contain an exclusion for silicon, silica, and silicate. The 2009 and
2010 policies provide as follows:

R. Doc. 228-8 at 11; R. Doc. 228-9 at 11.
R. Doc. 228-10 at 6.
148 Id. at 10.
149 Id. at 9.
150 Id. at 11.
151 See id. at 6.
146
147

25

1. This insurance does not apply to any liability or loss, cost or expense arising
out of the actual, alleged or threatened contaminative, pathogenic, toxic or
other hazardous properties of Silicon.
2. This insurance does not apply to any loss, cost or expense arising out of any:
a. [R]equest, demand, order or regulatory or statutory requirement
that any assured or others test for, monitor, clean up, remove,
contain, treat, detoxify or neutralize, or in any way respond to, or
assess the effects of Silicon[;] or
b. Claim or proceeding by or on behalf of a governmental authority or
others for damages because of testing for, monitoring, cleaning up,
removing, containing, treating, detoxifying or neutralizing, or in any
way responding to, or assessing the effects of Silicon.
As used in this exclusion, Silicon means the element Silicon, including silica
and other silicate compounds, or its presence or use in any other alloy, byproduct, compound or other material or waste. Waste includes material to
be recycled, reconditioned or reclaimed. 152
The 2011 policy contains a similar exclusion:
This insurance does not apply to any “bodily injury” or “property damage”, or loss,
cost or expense, however caused, arising out of the actual, alleged or threatened:
(1) contaminative, pathogenic, toxic or other hazardous properties of
Silicon.
(2) request, demand, order or regulatory or statutory requirement that any
insured or others test for, monitor, clean up, remove, contain, treat, detoxify
or neutralize, or in any way respond to, or assess the effects of silicon; or
(3) claim or proceeding by or on behalf of a governmental authority or
others for damages because of testing for, monitoring, cleaning up,
removing, containing, treating, detoxifying or neutralizing, or in any way
responding to, or assessing the effects of Silicon.
As used in this exclusion, Silicon means the element Silicon, including silica and
other silicate compounds, or its presence or use in any other alloy, by-product,
compound or other material or waste. Waste includes material to be recycled,
reconditioned or reclaimed. 153
3. Pollution Buyback Endorsement
The policies also contain a Pollution Buyback Endorsement. In relevant part, the
endorsement contained in the 2009 and 2010 policies states as follows:
It is hereby understood and agreed that this policy shall not apply to any claim
arising out of the discharge, dispersal, release or escape of smoke, vapors, soot,
fumes, alkalis, toxic chemicals, liquids or gases, waste materials, oil or other
152
153

R. Doc. 228-8 at 43; R. Doc. 228-9 at 43.
R. Doc. 228-10 at 23.

26

petroleum substance or derivative (including all oil refuse or oil mixed wastes) or
other irritants, contaminants or pollutants or upon land, the atmosphere, or any
watercourse or body of water.
This exclusion shall not apply, however, provided that the Assured establishes that
all of the following conditions have been met[:]
(a) the occurrence was accidental and was neither expected nor intended by the
assured. An occurrence shall not be considered unintended or unexpected
unless caused by some intervening event neither foreseeable nor intended
by the assured.
(b) the occurrence can be identified as commencing at a specific time and date
during the term of the policy.
(c) the occurrence became known to the assured within 72 hours after it’s [sic]
commencement.
(d) the occurrence was reported in writing to these underwriter [sic] within 30
days after having become known to the assured.
(e) the occurrence did not result from the assured’s intentional and willful
violation of any government statute, rule or regulations. 154
The Pollution Buyback Endorsement in the 2011 policy is worded slightly
differently, as it states, “This policy shall apply to any claim arising out of the discharge,
dispersal, release, or escape of smoke, vapors, soot, fumes . . . provided that the insured
establishes that all of the following conditions have been met . . . .” 155 The endorsement in
the 2011 policy contains the same five time-element conditions. 156 The differences in the
language of the endorsement in the 2011 policies are immaterial, as the effect of the
endorsement in the 2011 policy is the same as the effect of the endorsement in the 2009
and 2010 policies. Hanover does not argue otherwise and indeed analyzes the
policies together. 157

R. Doc. 228-8 at 33; R. Doc. 228-9 at 33.
R. Doc. 228-10 at 63.
156 Id.
157 See R. Doc. 228-1 at 13–17.
154
155

27

C. The Allegations of the State-Court Lawsuits
In Adams, et al. v. Allied Shipyard, Inc., et al., the plaintiffs allege they “are
residents of a neighborhood that borders” Allied’s shipyard. 158 They further allege that
Allied, whose shipyard has been operating since the 1960s, has been operating “for
decades without appropriate borders to stop the resulting dangerous silica dust produced
by its sandblasting from permeating the neighborhood.” 159 Allied’s alleged negligence has
“expos[ed] the residents to dust containing silica sand, a very dangerous substance, as
well as other toxic substances.” 160 The petition alleges that the plaintiffs’ “long, consistent
and protracted” exposure and “inhalation of the silica dust” has caused the plaintiffs to
contract severe diseases and illnesses “that are painful and disabling,” including
Wegener’s granulomatosis, rheumatoid arthritis, silicosis, and Chronic Obstructive
Pulmonary Disease. 161 In the plaintiffs’ third amended petition for damages, the plaintiffs
named Masse as a defendant. 162 The plaintiffs allege that Masse has “conducted
sandblasting and painting operations and [has] allowed dangerous byproduct to drift into
the neighborhood,” which “caused both personal injuries and property damages to
all Plaintiffs.”163
In St. Pierre, et al. v. Allied Shipyard, Inc., the plaintiffs allege they lived in a
residence near Allied’s shipyard for approximately eight years preceding 2010. 164 The St.
Pierre plaintiffs allege that Allied was negligent when performing its operations, which
“resulted in the release into the atmosphere and environment in the neighborhoods

R. Doc. 228-4 at 1.
Id. at 2.
160 Id.
161 Id. at 2–3.
162 Id. at 12–13.
163 Id. at 13.
164 R. Doc. 228-5 at 1.
158
159

28

surrounding the shipyard of hazardous substances, including, but not limited to, paint,
sand and silica.” 165 The petition alleges that, as a result, the plaintiffs were exposed to the
hazardous substances and “have suffered personal injury, mental anguish, health
problems, inconvenience, distress, loss of consortium, fear of disease, and
other damages.” 166
D. Hanover Argues the Damages Did Not Occur during the Policy Periods and, Thus,
Recovery is Unambiguously Excluded under the Policies
The Hanover policies impose on Hanover a duty to pay on behalf of its insured any
sums the insured becomes legally obligated to pay as damages because of “bodily injury”
or “property damage” caused by an “occurrence” and to which the policies apply. 167 Under
the 2009 and 2010 policies, the bodily injury or property damage must “occur[] during
the policy period.” 168
Hanover argues that it has no duty to defend Masse or Allied because the StateCourt Lawsuits do not allege “bodily injury” or “property damage” that “occurred” during
the policy periods. 169 Hanover argues, “[N]either underlying plaintiffs nor Allied have
alleged any injuries during Hanover’s Policy periods, much less that Masse was actually
performing any work at Allied’s shipyard during Hanover’s Policy periods that could have
caused underlying plaintiffs’ alleged damages during the relevant periods.” 170 As
previously explained, however, Hanover misstates the standard for a motion for summary

Id.
Id.
167 See R. Doc. 228-8 at 15; R. Doc. 228-9 at 15; R. Doc. 228-10 at 11.
168 R. Doc. 228-8 at 9, 11; R. Doc. 228-9 at 9, 11. Hanover argues it has no duty to defend under any of the
three policies issued to Masse because the injury did not occur during the policy period. The 2011 policy
defines an “occurrence” but also includes the term “commence.” R. Doc. 228-10 at 11 (“This insurance
applies to ‘bodily injury’ and ‘property damage’ only if . . . [t]he ‘bodily injury’ or ‘property damage’ actually
commences during the policy period.”). Hanover does not rely on the argument that the damage did not
commence during the policy period as a basis for its motion.
169 R. Doc. 228-1 at 10–11.
170 Id. at 11.
165

166

29

judgment on the duty to defend. 171 To prevail on a motion for summary judgment that it
has no duty to defend, an insurer must establish that coverage is unambiguously
precluded based on review of the four corners of the petition for damages and the four
corners of the complaint. 172
The Hanover policy periods span November 15, 2009, through November 15,
2012. 173 The Adams lawsuit was filed on December 28, 2010. 174 The petition in Adams
notes that Allied has operated “for decades without appropriate borders” to prevent
dangerous silica dust from permeating the neighborhood and that the exposure has been
“prolonged” and “long, consistent and protracted.” 175 Thus, the Adams plaintiffs’ allege
their exposure occurred over decades. The Adams plaintiffs also allege that they
contracted illnesses and diseases as a result of the exposure and that “[t]he dust is so
constant and voluminous that residents must continuously wash their cars and houses,
almost on a daily basis.” 176 They seek damages for medical expenses, loss of income,
property damage, and loss of value of property. 177
The St. Pierre lawsuit was filed on December 8, 2010. 178 The St. Pierre petition
alleges that “[f]or approximately eight (8) years, the plaintiffs have lived in a residence . . .
located near the shipyard,” and during that time, they were exposed to the hazardous
substances released by Allied. 179 Based on the allegations in the St. Pierre lawsuit, the St.
Pierre plaintiffs’ exposure began in 2002, eight years prior to the suit’s filing, and

See supra Part A (The “Eight-Corners Rule”).
Id.
173 R. Doc. 228-8 at 1; R. Doc. 228-9 at 1; R. Doc. 228-10 at 1.
174 See R. Doc. 228-4 at 5.
175 Id. at 2, 3.
176 Id. at 2–3.
177 Id. at 4.
178 See R. Doc. 228-5 at 3.
179 R. Doc. 228-5 at 1.
171

172

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continued at least until 2010, when the petition was filed. The St. Pierre plaintiffs allege
that, as a result of the exposure, they “have suffered personal injury, mental anguish,
health problems,” and other damages. 180 They seek damages for physical and mental pain
and suffering, medical expenses, damage to personal property. 181
Although the state-court petitions do not identify a precise time period during
which the plaintiffs were exposed to the hazardous substances causing bodily injury and
property damage, a review of the petitions and the policies does not unambiguously
preclude a finding that the exposure occurred during the policy periods. “An insured’s
duty to defend arises whenever the pleadings against the insured disclose even a
possibility of liability under the policy.” 182 The petitions clearly allege exposure that was
ongoing and continuous for years, even decades in Adams. The plaintiffs in St. Pierre
allege that they were exposed to the hazardous substances from 2002 to 2010. 183 The
policies Hanover issued to Masse provide coverage during these time periods. 184 The eight
corners of the state-court petitions and the policies do not unambiguously preclude the

Id.
Id. at 2.
182 Steptore, 643 So. 2d at 1218.
183 To determine when property damage or bodily injury “occurs” due to long-term exposure to harmful
substances, Louisiana courts apply the exposure theory. See Cole v. Celotex Corp., 599 So. 2d 1058, 1076–
77 (La. 1992); Norfolk S. Corp. v. California Union Ins. Co., 2002-0369 (La. App. 1 Cir. 9/12/03), 859 So.
2d 167, 192, writ denied, 2003-2742 (La. 12/19/03), 861 So. 2d 579; Grefer v. Travelers Ins. Co., 04-1428
(La. App. 5 Cir. 12/16/05), 919 So. 2d 758, 765. Masse argues in its opposition that the exposure theory
applies. See R. Doc. 254 at 14. Hanover does not dispute this but argues that “any reliance on exposure
theory to suggest that Hanover’s defense obligation is triggered is misleading in the absence of any
allegation of actual exposure during Hanover’s policies.” R. Doc. 291 at 3. Under the exposure theory,
“[e]ven where the damage or injury was not manifested until after an insurer’s policy period, if the insurer’s
policy period fell either at the inception or during the course of exposure, the insurer would be liable.” Oxner
v. Montgomery, 34,727 (La. App. 2 Cir. 8/1/01), 794 So. 2d 86, 93, writ denied, 803 So. 2d 36 (La. 2001).
Thus, applying the exposure theory, the state-court plaintiffs’ bodily injuries and property damage
“occurred” “during the entire course of [the plaintiffs’] exposure.” Id. Thus, “if the insurer’s policy period
fell either at the inception or during the course of exposure, the insurer would be liable.” Id.
184 R. Doc. 228-8 at 1; R. Doc. 228-9 at 1.
180
181

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possibility that the exposure causing the plaintiffs’ personal injuries and property damage
occurred during Hanover’s policy periods. 185
E. Hanover Argues the Policies’ Silicon, Silica, and Silicate Exclusion Unambiguously
Excludes Coverage
Hanover argues separately and alternatively that the eight corners of the petition
and the silicon, silica, and silicate exclusion included in its policies taken together
unambiguously bar coverage for any liability of the state-court plaintiffs’ injuries. 186
The silicon, silica, and silicate exclusion contained in all three policies precludes
coverage for any liability or loss “arising out of the actual, alleged or threatened
contaminative, pathogenic, toxic or other hazardous properties of Silicon.” 187
In their original petition for damages, the Adams plaintiffs allege that their
exposure to “silica sand . . . as well as other toxic substances” 188 and “silica dust and other
harmful products” caused their injuries. 189 The plaintiffs’ third amended petition for
damages alleges that the defendants “have conducted sandblasting and painting
operations and have allowed dangerous byproduct to drift into the neighborhood” and
“[t]he byproduct caused both personal injuries and property damages to all Plaintiffs.”190
The plaintiffs allege their exposure to hazardous substances, in addition to silica dust,
caused their personal injuries and property damage. The petition for damages does not

R. Docs. 228-4, 228-5. See also Duhon v. Nitrogen Pumping & Coiled Tubing Specialists, Inc., 611 So.
2d 158, 161–62 (La. Ct. App. 1992) (From a common sense reading of the plaintiffs’ petition, we cannot say
that the allegations unambiguously rest on an occurrence which began before the policy period. Plaintiffs’
petition generally alleges a period of time when acts of liability took place. However, no particular accident
is detailed, and no specific allegation is made that the plaintiffs were repeatedly exposed to the same
harmful condition prior to the effective date of Lloyd’s policies. . . . Accordingly, because plaintiffs’ petition
does not unambiguously exclude that the occurrence began during the policy period, Lloyd’s must defend
NPACT. . . .”).
186 R. Doc. 228-1 at 12–13.
187 R. Doc. 228-8 at 43; R. Doc. 228-9 at 43; R. Doc. 228-10 at 23.
188 R. Doc. 228-4 at 2.
189 Id. at 3.
190 Id. at 13.
185

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unambiguously limit the cause of their injuries to “contaminative, pathogenic, toxic or
other hazardous properties of Silicon,” to which the exclusion applies. 191
The St. Pierre petition for damages also does not unambiguously limit the cause of
the plaintiffs’ injuries to the hazardous properties of silicon, silica, or silicate. The St.
Pierre plaintiffs allege that Allied’s operations “resulted in the release into the atmosphere
and environment in the neighborhoods surrounding the shipyard of hazardous
substances, including, but not limited to, paint, sand and silica,” 192 which caused the
plaintiffs’ personal injuries and property damage. 193
Considering the Adams petitions for damages, the St. Pierre petition for damages,
and the language of the exclusion found in the policies, the Court does not find that the
silicon, silica, and silicate exclusion unambiguously bars coverage of the damages alleged
in the State-Court Lawsuits.
F. Hanover Argues the Policies’ Pollution Buyback Endorsement Unambiguously
Excludes Coverage
Hanover further argues separately and alternatively that the eight corners of the
petitions and the Pollution Buyback Endorsement found in its policies unambiguously
preclude coverage. 194 The Pollution Buyback Endorsement excludes coverage for “any
claim arising out of the discharge, dispersal, release or escape of smoke, vapors, soot,
fumes, alkalis, toxic chemicals, liquids or gases, waste materials, oil or other petroleum
substance or derivative (including all oil refuse or oil mixed wastes) or other irritants,
contaminants or pollutants into or upon land, the atmosphere, or any watercourse or body

R. Doc. 228-8 at 43; R. Doc. 228-9 at 43; R. Doc. 228-10 at 23.
R. Doc. 228-5 at 1.
193 Id. at 2.
194 R. Doc. 228-1 at 13–17.
191

192

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of water.” 195 The insured may still be entitled to coverage, however, if it establishes five
conditions. 196 The endorsement is a total pollution exclusion on damages caused by
pollutants, with time-element exceptions. 197 Hanover must establish that the exclusion
unambiguously precludes coverage before the Court may consider whether the timeelement conditions have been met. 198
The Louisiana Supreme Court has ruled that a literal application of a total pollution
exclusion “would lead to . . . absurd results” and explained that, “[i]n light of the origin of
pollution exclusions, as well as the ambiguous nature and absurd consequences which
attend a strict reading of these provisions,” a total pollution exclusion is “neither designed
nor intended to be read strictly to exclude coverage for all interactions with irritants or
contaminants of any kind.” 199 As a result, the Louisiana Supreme Court has instructed
that courts must “attempt to determine the true meaning and interpretation of [the]
pollution exclusion.” 200 In Doerr v. Mobil Oil Corporation, the Louisiana Supreme Court
explained that the applicability of such an exclusion in any given case must necessarily
turn on three considerations: (1) whether the insured is a “polluter” within the meaning

R. Doc. 228-8 at 33; R. Doc. 228-9 at 33. The Pollution Buyback Endorsement in the 2011 policy is
worded slightly differently. See R. Doc. 228-10 at 63. (“This policy shall apply to any claim arising out of
the discharge, dispersal, release, or escape of smoke, vapors, soot, fumes . . . provided that the insured
establishes that all of the following conditions have been met . . . .”). Nevertheless, the effect of the
endorsement in the 2011 policy is the same as the effect of the endorsement in the 2009 and 2010 policies.
Hanover does not argue otherwise and indeed analyzes the policies together. See R. Doc. 228-1 at 13–17.
196 R. Doc. 228-8 at 33; R. Doc. 228-9 at 33; R. Doc. 228-10 at 63.
197 See R. Doc. 228-8 at 33 (“This exclusion shall not apply, however, provided that the Assured establishes
that all of the following conditions have been met . . . .”); R. Doc. 228-9 at 33 (same); R. Doc. 228-10 at 63
(“[T]his policy shall apply to any claim arising out of the discharge, dispersal, release or escape of smoke,
vapors, soot, fumes, alkalis, toxic chemicals, liquids or gases, waste materials, oil or other petroleum
substance or derivative (including all oil refuse or oil mixed wastes) or other irritants, contaminants or
pollutants into or upon land, the atmosphere, or any watercourse or body of water provided that the insured
establishes that all of the following conditions have been met . . . .”).
198 See Martco, 588 F.3d at 880, 883–84 (“[The insurer] bears the burden of proving the applicability of an
exclusionary clause within the Policy. If [the insurer] cannot unambiguously show an exclusion applies, the
Policy must be construed in favor of coverage.” (citations omitted)).
199 Doerr, 774 So. 2d at 135.
200 Id. at 125.
195

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of the exclusion; (2) whether the injury-causing substance is a “pollutant” within the
meaning of the exclusion; and (3) whether there was a “discharge, dispersal, seepage,
migration, release or escape” of a pollutant by the insured within the meaning of the
policy. 201 If the insurer fails to show these three questions are answered in the affirmative,
the total pollution exclusion is not applicable and the court need not examine whether the
time-element conditions, or exceptions, contained in the endorsement are met. 202 The
Louisiana Supreme Court expressly stated that these factors must be considered “in any
given case,” 203 which this Court construes to include decisions involving a motion for
summary judgment on the duty to defend, as well as motions involving the duty
to indemnify.
Although the Doerr factors should be considered in the duty-to-defend context,
the Court is nevertheless limited to the eight corners of the petitions and the policies when
deciding whether to apply a total pollution exclusion as written. This is borne out by an
examination of Louisiana state court cases facing this issue. In Lodwick, L.L.C. v. Chevron
U.S.A., Inc., for example, a Louisiana appellate court found that, considering the four
corners of the underlying petitions and the four corners of the time-element pollution

Id. The exclusion in Doerr precluded coverage for bodily or personal injury, advertising injury, or
property damage that “would not have occurred in whole or in part but for the actual, alleged or threatened
discharge, dispersal, seepage, migration, release or escape of pollutants at any time.” Doerr, 774 So. 2d at
122. The Doerr policy defined “pollutants” as “solid[,] liquid, gaseous, or thermal irritant or contaminant
including smoke, vapor, soot, fumes, acid, alkalis, chemicals and waste.” Id. The court instead found it was
“appropriate to construe a pollution exclusion clause in light of its general purpose, which is to exclude
coverage for environmental pollution, and under such interpretation, the clause will not be applied to all
contact with substances that may be classified as pollutants.” Id. at 135.
202 See Smith v. Reliance Ins. Co. of Illinois, 01-888 (La. App. 5 Cir. 1/15/02), 807 So. 2d 1010, 1020 (“[I]n
light of the recent pronouncement by the Supreme Court in Doerr and after consideration of the abovementioned factors, we conclude that the insurer in this case failed to meet its burden of proving the
applicability of Exclusion 10 of the policy, the total pollution exclusion. Additionally, although the parties
extensively dispute the applicability of the limited buy-back endorsement to this exclusion, we find it
unnecessary to reach this issue based on our holding that Exclusion 10 does not unambiguously exclude
coverage based on the facts alleged in this case.”).
203 Doerr, 774 So. 2d at 135.
201

35

exclusion, the insurer had no duty to defend because the exclusion unambiguously
precluded coverage. 204 The court in Lodwick addressed Doerr as “the seminal case
addressing pollution exclusions” and applied the Doerr factors using only the four corners
of the plaintiffs’ petition for damages. 205 For example, the court found that the insureds
were “‘polluters’ under the Doerr test” because “[t]hroughout the plaintiffs’ petition for
damages, all defendants . . . are alleged to be oil field operators and producers.” 206 The
court also found that the substances that caused the plaintiffs’ injuries were “pollutants”
within the meaning of the total pollution exclusion because the plaintiffs “allege[d] that
their property was contaminated by . . . [substances that] qualify as chemicals,
contaminants, irritants, or waste under the various exclusions.” 207 The court concluded
that “[p]laintiffs’ allegations make it clear that all three Doerr factors are met.” 208 The
court thus found that the pollution exclusion in the policies at issue did unambiguously
exclude coverage and granted summary judgment declaring that the insurers had no duty
to defend. 209
In Smith v. Reliance Insurance Company of Illinois, 210 the plaintiffs alleged that
the release of noxious odors carried by the wind to the plaintiffs’ homes and properties
caused their damages. 211 Before the Smith court was a motion for partial summary
judgment on the insurer’s duty to defend. 212 When ruling on the motion, the court used

204 Lodwick, L.L.C. v. Chevron U.S.A., Inc., 48,312 (La. App. 2 Cir. 10/2/13), 126 So. 3d 544, writ denied,
2013-2898 (La. 2/28/14), 134 So. 3d 1176. The plaintiffs in Lodwick alleged that the activities of nearby oil
and gas operators “caused pollution damages on or adjacent to their property.” Id. at 547.
205 Lodwick, 126 So. 3d at 560. Hanover incorrectly argues that the court in Lodwick “not[ed] that Doerr
did not apply.” R. Doc. 228-1 at 16.
206 Lodwick, 126 So. 3d at 561.
207 Id.
208 Id.
209 Id.
210 Smith v. Reliance Ins. Co. of Illinois, 01-888 (La. App. 5 Cir. 1/15/02), 807 So. 2d 1010, 1020.
211 Id. at 1013.
212 Id.

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the eight-corners rule and examined a pollution exclusion with a buyback endorsement
similar to the exclusion and endorsement currently before this Court as well as the
allegations contained in the plaintiff’s petition. 213 The court applied the Doerr factors
based on the facts alleged in the petition and concluded that the insurer “failed to meet
its burden of proving the applicability” of the pollution exclusion. 214 The court explained
that, “although the parties extensively dispute[d] the applicability of the limited buy-back
endorsement to th[e] exclusion,” it was unnecessary to reach the issue of whether the
buyback endorsement applied because the court found the exclusion itself did not
unambiguously exclude coverage given the Doerr analysis. 215 The court affirmed the
judgment of the trial court, which found that the insurer had a duty to defend. 216
To apply the Doerr factors in this case, the Court must first determine whether the
insured is a “polluter” within the meaning of the exclusion, using the eight corners of the
petitions and the policies. The Doerr court described this issue as a fact-based
determination for which courts should consider “the nature of the insured’s business,
whether that type of business presents a risk of pollution, whether the insured has a
separate policy covering the disputed claim, whether the insured should have known from
a read of the exclusion that a separate policy covering pollution damages would be
necessary for the insured’s business, who the insurer typically insures, any other claims
made under the policy, and any other factor the trier of fact deems relevant to this
conclusion.” 217 Hanover is unable to establish from the eight corners that Masse is a

Id. at 1019–20. See also id. at 1015 (explaining that the insurer’s duty to defend “is determined by the
allegations of the plaintiff’s petition with the insurer being obligated to furnish a defense unless the petition
unambiguously excludes coverage”).
214 Id. at 1020.
215 Id.
216 Id. at 1013.
217 Doerr, 774 So. 2d at 135.
213

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“polluter” within the meaning of the exclusion. For example, Hanover is unable to point
to any information within the eight corners regarding the nature of Masse’s business,
whether that type of business presents a risk of pollution, and whether Masse has a
separate pollution policy. Accordingly, the Court is unable to conclude that Masse is a
“polluter” within the meaning of the exclusion.
Second, the Court must determine whether the injury-causing substance is a
“pollutant” within the meaning of the exclusion. The Court should consider “the nature of
the injury-causing substance, its typical usage, the quantity of the discharge, whether the
substance was being used for its intended purpose when the injury took place, whether
the substance is one that would be viewed as a pollutant as the term is generally
understood, and any other factor the trier of fact deems relevant to that conclusion.” 218
Hanover is unable to establish from the eight corners that the substances the State-Court
Lawsuit plaintiffs allege caused their personal injuries and property damage are
“pollutants” within the meaning of the exclusion such that the exclusion unambiguously
precludes coverage. In the Adams and St. Pierre petitions for damages, the plaintiffs
broadly describe the substances causing their injuries. The Adams plaintiffs, for example,
allege that “silica dust and other harmful products” 219 and “dangerous byproduct” 220
caused their injuries. The St. Pierre plaintiffs allege that “hazardous substances,
including, but not limited to, paint, sand and silica” caused their injuries. 221 The Court is
unable to determine the nature of the injury-causing substances, their typical usages, the
quantity of any discharges, whether the substances were being used for their intended

Id.
R. Doc. 228-4 at 3 (emphasis added).
220 Id. at 13.
221 R. Doc. 228-5 at 1.
218
219

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purpose when the injury took place, or whether the substances are ones that would be
viewed as pollutants as the term is generally understood. The Court reiterates that “any
ambiguity should be interpreted in favor of the insured.” 222 Hanover has failed to
establish that the injury-causing substance is a “pollutant” within the meaning of
the exclusion.
Finally, the Court must consider whether there was a “discharge, dispersal,
seepage, migration, release or escape” of a pollutant by the insured within the meaning of
the policy, a fact-based determination. 223 The Court “should consider whether the
pollutant was intentionally or negligently discharged, the amount of the injury-causing
substance discharged, whether the actions of the alleged polluter were active or passive,
and any other factor the trier of fact deems relevant.” 224 The Court is unable to determine
from the eight corners whether a pollutant was intentionally or negligently discharged,
the amount of the injury-causing substance discharged, or whether the actions of the
alleged polluter were active or passive. Hanover has failed to establish that there was a
discharge, dispersal, seepage, migration, release or escape of a pollutant by the insured
within the meaning of the policy.
Because Hanover has failed to establish that Masse is a polluter, that the substance
or substances to which the plaintiffs were exposed were pollutants, or that there was a
discharge within the meaning of the policies, Hanover has failed to establish that the
pollution exclusion unambiguously precludes coverage. Therefore, the Court need not
reach the issue of whether Masse met the time-element conditions necessary to establish

Doerr, 774 So. 2d at 125.
Id. at 135.
224 Id. at 136.
222
223

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the exception to the pollution exclusion. 225 Hanover’s motion for summary judgment on
its duty to defend is denied.
The Court notes that Hanover argues Doerr does not apply to this case because the
exclusion in Hanover’s policies is not a total pollution exclusion as was the provision
examined by the court in Doerr. 226 Hanover cites Bridger Lake, LLC v. Seneca Insurance
Company, Inc. in support of its position, but this case is distinguishable from the matter
before the Court. 227 In Bridger Lake, the Western District of Louisiana found that the
pollution exclusion for damage “arising out of the actual, alleged or threatened discharge,
dispersal, seepage, migration, release or escape of ‘pollutants’” applied to a case in which
a crude oil pipeline ruptured, causing the release of more than 3,000 barrels of crude oil
into the environment. 228 The court, however, applied Wyoming law and thus was not
bound by, and did not consider, the Louisiana Supreme Court’s decision in Doerr. 229
CONCLUSION
IT IS ORDERED that Hanover’s motion for partial summary judgment is
DENIED.
New Orleans, Louisiana, this 31st day of March, 2016.
___________________ _________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

See Smith, 807 So. 2d at 1020 (“[I]n light of the recent pronouncement by the Supreme Court in Doerr
and after consideration of the above-mentioned factors, we conclude that the insurer in this case failed to
meet its burden of proving the applicability of Exclusion 10 of the policy, the total pollution
exclusion. . . . Additionally, although the parties extensively dispute the applicability of the limited buy-back
endorsement to this exclusion, we find it unnecessary to reach this issue based on our holding that
Exclusion 10 does not unambiguously exclude coverage based on the facts alleged in this case.”).
226 R. Doc. 228-1 at 16–18.
227 Bridger Lake, LLC v. Seneca Ins. Co., No. 11-0342, 2013 WL 2458758 (W.D. La. June 6, 2013).
228 Id. at *5.
229 See id. Hanover also cites Lodwick, but as explained supra, Lodwick indeed applied the Doerr factors
when considering a motion for summary judgment on the duty to defend.
225

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