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

Filing 347

ORDER AND REASONS granting State National's 242 Motion for Summary Judgment Finding No Duty to Defend Masse or Allied in the Underlying Adams Lawsuit and 244 Motion for Summary Judgment Finding No Duty to Defend Superior or Allied in the Underlying Adams Lawsuit AND denying State National's 243 Motion for Summary Judgment Finding No Duty to Defend Masse or Allied in the Underlying St. Pierre Lawsuit and 245 Motion for Summary Judgment Finding No Duty to Defend Superior or Allied in the Underlying St. Pierre Lawsuit, as stated herein. Signed by Judge Susie Morgan on 4/8/2016. (Reference: 11-2375, 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: 11-2375, 14-1933
ORDER AND REASONS
Before the Court are four motions for summary judgment filed by State National
Insurance Company regarding its duty to defend Superior and Masse as insureds and
Allied as an additional insured under Superior’s and Masse’s policies. 1
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

1 R. Docs. 242, 243, 244, 245. Unless otherwise indicated, “R. Doc.” refers to record documents in the
consolidated matter, No. 11-2375.
2 The petitions for damages from each State-Court Lawsuit are attached to State National’s motions for
summary judgment. See R. Docs. 242-7, 244-7 (Adams Petition for Damages); R. Docs. 242-8, 244-8
(Adams First Amended Petition for Damages); R. Docs. 242-9, 244-9 (Adams Second Amended Petition
for Damages); R. Docs. 242-10, 244-10 (Adams Third Amended Petition for Damages); R. Docs. 242-11,
244-11 (Adams Fourth Amended Petition for Damages); R. Docs. 243-7, 245-7 (St. Pierre Petition for
Damages).
3 See R. Docs. 242-7, 244-7, 243-7, 245-7.

1

suffering, medical expenses, property damage, and other damages as a result of their
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 insured 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

See R. Docs. 242-7, 244-7, 243-7, 245-7.
See R. Doc. 261-5.
6 See R. Docs. 244-12, 245-8.
7 See R. Docs. 242-12, 242-13, 243-8, 243-9.
8 See R. Docs. 242-12, 242-13, 243-8, 243-9, 244-12, 245-8.
9 See R. Docs. 242-12, 242-13, 243-8, 243-9, 244-12, 245-8.
10 See R. Docs. 242-12, 242-13, 243-8, 243-9, 244-12, 245-8. See also R. Doc. 135 at ¶¶ 50–53.
11 See R. Doc. 242-10, 244-10.
12 R. Doc. 174-1 at 2.
4
5

2

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
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

See R. Doc. 108.
Hanover Ins. Co. v. Superior Labor Servs., Inc., et al., No. 11-2375.
15 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.
13

14

3

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
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, and 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
On March 8, 2012, State National filed a crossclaim for declaratory judgment
against Superior. 25 State National filed its first amended crossclaim for declaratory
judgment on September 27, 2012. 26 State National filed a second amended crossclaim for
declaratory judgment on January 14, 2015, naming Allied as a defendant-in-crossclaim. 27
State National seeks judgment declaring that there is no coverage afforded to Superior
under the State National policies issued to Superior and that State National has no duty
to defend or indemnify Superior in the State-Court Lawsuits. 28 State National also seeks

R. Doc. 125.
Id. at ¶ 79.
23 Id. at 9.
24 Id.
25 R. Doc. 29.
26 R. Doc. 67.
27 R. Doc. 135.
28 Id. at ¶ 19.
21

22

4

a declaration that the State National policies afford no coverage to Allied as a purported
additional insured and that State National does not owe a duty to defend or indemnify
Allied in the State-Court Lawsuits. 29
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. 30
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. 31 Arch seeks a declaration against
Superior and Allied that Arch has no defense or indemnity obligation to Superior in the
State-Court Lawsuits. 32 Arch also seeks recovery of the portion of defense costs already
incurred by it on behalf of Superior. 33
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. 34 Arch also seeks a declaration of its rights

Id.
No. 14-1930, R. Doc. 1 at ¶ 3.
31 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.
32 Id. at ¶¶ 21, 47.
33 Id. at ¶ 47.
34 No. 14-1933, R. Doc. 1 at ¶ 3.
29

30

5

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. 35
Arch seeks a declaration against Masse and Allied that Arch has no defense or indemnity
obligation to Masse in the State-Court Lawsuits. 36
On January 14, 2015, Hanover filed a complaint in intervention in Case No. 141933 against Defendants Masse and Allied. 37 Hanover seeks judgment declaring that
Hanover has no obligation to defend or indemnify Masse or Allied in the StateCourt Lawsuits. 38
State National Insurance Company (“State National”) also filed a petition for
intervention for declaratory judgment on January 14, 2015. 39 State National issued two
marine general liability policies to Masse that provided coverage from November 15,
2006, to November 15, 2007, and from November 15, 2007, to November 15, 2008. 40
Allied seeks additional insured status under the policies issued by State National to
Masse. 41 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. 42 State National also seeks a declaration
that “there is no coverage afforded to Allied under the [State National] policies as a

35 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.
36 Id. at ¶ 46.
37 R. Doc. 128.
38 Id.
39 R. Doc. 132.
40 Id. at ¶ 14.
41 Id. at ¶ 3.
42 Id. at ¶ 19.

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purported additional insured” and that State National does not owe a duty to defend or
indemnify Allied in the State-Court Lawsuits. 43
C. State National’s Motions for Summary Judgment
State National filed four motions for summary judgment on December 1, 2015,
regarding its duty to defend Masse and Superior as insureds and Allied as an additional
insured under the policies issued to Masse and Superior. 44
The first motion pertains to State National’s duty to defend Masse and Allied in the
Adams lawsuit. 45 State National argues it has no duty to defend Masse or Allied in Adams
under the policies. 46 State National argues in the alternative that, if the Court finds State
National has a duty to defend Masse or Allied, the duty is subject to the rule of proration
requiring allocation of defense costs based on the insurer’s time on the risk only. 47
The second motion pertains to State National’s duty to defend Masse and Allied in
the St. Pierre lawsuit. 48 State National argues it has no duty to defend Masse or Allied in
St. Pierre under the policies. 49 State National argues in the alternative that, if the Court
finds State National has a duty to defend Masse or Allied, the duty is subject to the rule of
proration requiring allocation of defense costs based on the insurer’s time on the
risk only. 50
The third motion pertains to State National’s duty to defend Superior and Allied in
the Adams lawsuit. 51 State National argues it has no duty to defend Superior or Allied in

Id.
R. Docs. 242, 243, 244, 245.
45 R. Doc. 242.
46 R. Doc. 242-1 at 23.
47 Id. The Court defers ruling on whether the rule of proration applies.
48 R. Doc. 243.
49 Id. at 24.
50 Id.
51 R. Doc. 243.
43

44

7

Adams under the policies. 52 State National argues in the alternative that, if the Court finds
State National has a duty to defend Superior or Allied, the duty is subject to the rule of
proration requiring allocation of defense costs based on the insurer’s time on the
risk only. 53
The fourth motion pertains to State National’s duty to defend Superior and Allied
in the St. Pierre lawsuit. 54 State National argues that it has no duty to defend Superior or
Allied in St. Pierre under the policies. 55 State National argues in the alternative that, if the
Court finds State National has a duty to defend Superior or Allied, the duty is subject to
the rule of proration requiring allocation of defense costs based on the insurer’s time on
the risk only. 56
On December 8, 2015, Masse and Superior filed their respective oppositions. 57
Allied filed an opposition to the motions on December 14, 2015, adopting the oppositions
filed by Masse and Superior. 58 State National filed a reply in support of its motions for
summary judgment on December 15, 2015. 59 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. 60 State National filed
a response on March 1, 2016, arguing that the deposition of Anthony Boudreaux has no
bearing on the four pending motions for summary judgment. 61

Id. at 23.
Id.
54 R. Doc. 245.
55 Id. at 23.
56 Id.
57 R. Doc. 258 (Masse’s Opposition); R. Doc. 261 (Superior’s Opposition).
58 R. Doc. 280.
59 R. Doc. 295.
60 R. Doc. 312.
61 R. Doc. 319.
52
53

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STATE NATIONAL’S INTERVENTION
The Court must determine whether State National’s intervention in No. 14-1933 is
permissible under Rule 24. Rule 24(a) provides for intervention as of right, while Rule
24(b) provides for permissive intervention. State National filed a supplemental
memorandum on March 29, 2016, arguing intervention is proper under both Rule 24(a)
and Rule 24(b). 62 Masse argues the intervention is improper. 63
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
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. 64
State National 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.” 65

62

R. Doc. 335.

filed an ex parte motion for leave to file a complaint in intervention on January
12, 2015. R. Doc. 118. Masse and Arch had no opposition to the intervention. R. Doc. 118 at 3. The Court
granted the motion for leave to intervene on January 14, 2015, R. Doc. 131, and State National filed its
complaint in intervention against Masse and Allied in No. 14-1933 on January 14, 2015. R. Doc. 132.
64 FED. R. CIV. P. 24(a).
65 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).
63 R. Doc. 337. State National

9

To show it has an interest relating to the subject matter of the main action, State
National 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.’” 66 State National argues that it has shown
it has an interest relating to the subject matter of the main action because it “asserts
coverage defenses against Masse arising out of the same Adams and St. Pierre underlying
lawsuits for which Arch seeks to deny coverage.” 67 State National argues, “[s]hould
coverage be found under the [State National] policies, then [State National] has an
interest in making sure coverage also exists under the Arch policies to support its
arguments on allocation or to subsequently pursue contribution and subrogation claims
against Arch and/or potential reimbursement claims against Arch and Masse.” 68 State
National 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.” 69 State National’s purported
interest is insufficient to establish an “interest” relating to the subject matter of the main
action under Rule 24(a). 70
State National 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.” 71 State National has failed to establish that its interest would
be potentially impaired if the main action is resolved without it, as State National has not

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)).
67 R. Doc. 335 at 7.
68 Id. at 7–8.
69 Texas v. United States, 805 F.3d 653, 657 (5th Cir. 2015).
70 See id. at 657–60.
71 Vallejo, 2013 WL 391163, at *5.
66

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demonstrated that “the disposition of [the main] suit will . . . bar [State National] from
asserting [its] rights in a separate action.” 72
Because State National fails to demonstrate at least two of the four prongs
necessary to establish intervention of right, the Court finds State National 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. 73 “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.” 74 If the intervenor has a claim
or defense that shares with the main action a common question of law or fact, district
courts have “broad discretion” in allowing intervention. 75 “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.’” 76

The

rule

on

permissive

intervention

“should

be

liberally construed.” 77

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.”).
73 FED. R. CIV. P. 24(b)(1).
74 Liberty Mut. Fire Ins. Co. v. Lumber Liquidators, Inc., No. 15-34, 2016 WL 554830, at *6 (E.D. Va. Feb.
9, 2016).
75 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.
76 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).
77 Moore v. Tangipahoa Parish Sch. Bd., 298 F. Supp. 288, 292 (E.D. La. 1969).
72

11

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. 78 In Perlberg, Penn
National issued a commercial general liability policy to the Perlbergs, defendants in an
underlying personal injury lawsuit. 79 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. 80 New Hampshire, another insurer
that provided a separate commercial general liability policy to the Perlbergs, had been
defending the Perlbergs in the underlying lawsuit. 81 New Hampshire filed a motion to
intervene in Penn National’s declaratory judgment action to protect its potential
contribution rights. 82 The court granted the motion to intervene, concluding that
permissive intervention under Rule 24(b) was appropriate. 83 The court explained that the
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. 84
The court also explained that the intervention would avoid a competing suit in
state court. 85
Several issues of law and fact in State National’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 State National seek declaratory judgment that

Pennsylvania Nat. Mut. Cas. Ins. Co. v. Perlberg, 268 F.R.D. 218, 226 (D. Md. 2010).
Id. at 220.
80 Id.
81 Id.
82 Id.
83 Id. at 226.
84 Id.
85 Id.
78
79

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they have no duty to defend or indemnify Masse or Allied in the State-Court Lawsuits. 86
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 State National 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 State National’s
declaratory judgment action in one proceeding while allowing all parties to be heard. The
Court finds the application of the approach taken by the court in Perlberg to this case 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. 87 The Court finds that judicial economy will be served by allowing State
National to intervene in this action and that allowing State National’s claim in
intervention to proceed will not unduly delay or prejudice any parties. 88 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.
Further, the issue of whether State National has a duty to defend Masse and Superior as

R. Doc. 132; No. 14-1933, R. Doc. 1.
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))).
88 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.
86
87

13

insureds and Allied as an additional insured is fully briefed before this Court. State
National’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.” 89
C. Independent Basis for Jurisdiction
State National must also establish an independent basis for jurisdiction to
intervene in No. 14-1933. “It is well-established . . . that a party must have independent
jurisdictional grounds to intervene permissively under Rule 24(b).” 90 State National avers
that this Court has subject-matter jurisdiction over its intervention pursuant to 28 U.S.C.
§ 1332(a). 91 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. 92
The parties are completely diverse when “the citizenship of each plaintiff is diverse
from the citizenship of each defendant.” 93 State National, Superior, and Allied are all

89

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).
90 Harris v. Amoco Prod. Co., 768 F.2d 669, 675 (5th Cir. 1985) (internal quotation marks omitted). See
also E.E.O.C. v. Nat’l Children’s Ctr., Inc., 146 F.3d 1042, 1046 (D.C. Cir. 1998) (“The first requirement for
permissive intervention—an independent basis for jurisdiction—stems not from any explicit language in
Rule 24(b), but rather from the basic principle that a court may not adjudicate claims over which it lacks
subject matter jurisdiction.” (citing FED. R. CIV. P. 82)).
91 R. Doc. 132 at ¶ 6.
92 See 28 U.S.C. § 1332(a).
93 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).

14

corporations. 94 For purposes of diversity jurisdiction, a corporation is a citizen of (1) its
state of incorporation, and (2) the state in which its principal place of business is
located. 95 According to the complaint in intervention, State National is a citizen of Texas,
the state of its incorporation and the state in which its principal place of business is
located. 96 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.97
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. 98 Because neither
defendant-in-intervention is a citizen of Texas, the state in which State National 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, State National
bears the burden of establishing the amount in controversy by a preponderance of the
evidence. 99 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. 100 If not, the Court may examine summary judgmenttype evidence. 101
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

See R. Doc. 135.
28 U.S.C. § 1332(c)(1).
96 R. Doc. 132 at ¶ 4.
97 Id. at ¶ 5.
98 Id.
99 See Garcia v. Koch Oil Co. of Tex. Inc., 351 F.3d 636, 639 (5th Cir. 2003).
100 See Hartford Ins. Grp. v. Lou-Con Inc., 293 F.3d 908, 910 (5th Cir. 2002).
101 Id.
94
95

15

attorneys’ fees, penalties, statutory damages, and punitive damages.” 102 As set forth in
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 State
National’s derivative indemnity liability—could easily exceed $75,000. When coupled
with State National’s potential defense obligations, the Court concludes the amount in
controversy exceeded the jurisdictional amount at the time this action was filed. 103
Therefore, the Court has an independent basis for jurisdiction over State National’s
complaint in intervention pursuant to 28 U.S.C. § 1332(a).
CONSIDERATION OF DECLARATORY JUDGMENT ACTIONS
State National 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. 104
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
dismiss a complaint for declaratory relief. 105 First, the Court must determine whether the

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.
103 Jurisdictional facts are judged as of the time the complaint is filed. St. Paul Reinsurance Co. Ltd., 134
F.3d 1250, 1253 (5th Cir. 1998).
104 28 U.S.C. § 2201.
105 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).
102

16

action is justiciable. 106 Second, the Court must determine whether it has the authority to
grant declaratory relief. 107 Third, the Court must determine “how to exercise its broad
discretion to decide or dismiss a declaratory judgment action.” 108 If State National’s
claims survive this analysis, the Court will then consider whether State National 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. 109 In a declaratory judgment
action, justiciability often turns on ripeness. 110 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.” 111 The purpose of this
doctrine is to forestall “entangl[ement] . . . in abstract disagreements” through
“avoidance of premature adjudication.” 112 “The key considerations are ‘the fitness of the
issues for judicial decision and the hardship to the parties of withholding
court consideration.’” 113
The Fifth Circuit has recognized that “applying the ripeness doctrine in the
declaratory judgment context presents a unique challenge.” 114 This stems primarily from
the fact that declaratory relief often involves an ex ante determination of rights, i.e., a

Id.
Id.
108 Id.
109 Choice Inc. of Tex. v. Greenstein, 691 F.3d 710, 714–15 (5th Cir. 2012).
110 See id; Orix, 212 F.3d at 895; Rowan Cos., Inc. v. Griffin, 876 F.2d 26, 27–28 (5th Cir. 1989).
111 Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993).
112 Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967), abrogated on other grounds by Califano v. Sanders,
430 U.S. 99 (1977).
113 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).
114 Orix, 212 F.3d at 896 (internal quotation marks omitted).
106
107

17

determination of rights before an injury has occurred, that “exists in some tension with
traditional notions of ripeness.” 115 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, 116 a duty-to-defend claim is ripe when the underlying suit is filed. 117 Accordingly,
State National’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.” 118 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
those involved in the federal case; and (3) the district court is prohibited from enjoining
the state proceedings under the Anti-Injunction Act. 119 “The presence of all three factors
mandates abstention. The want of any one factor defeats mandatory abstention.” 120
Id.
Suire v. Lafayette City-Parish Consol. Gov’t, 907 So. 2d 37, 52 (La. 2005).
117 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).
118 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.
119 Travelers, 996 F.2d at 776; Sherwin-Williams Co. v. Holmes Cty., 343 F.3d 383, 387 (5th Cir. 2003).
120 AIX Specialty Ins. Co. v. W. States Asset Mgmt., Inc., No. 12-4342, 2013 WL 4603775, at *2 (N.D. Tex.
Aug. 29, 2013).
115

116

18

On March 25, 2016, the Court struck from the record Masse’s third-party
complaint and amended third-party complaint in which Masse named several of its
insurers, including State National. 121 Masse subsequently filed a third-party demand in
the State-Court Lawsuits against State National and other insurers on March 28, 2016. As
a result, there is a state-court proceeding that involves some of the same parties and issues
currently before this Court. 122 State National’s intervention against Masse, however, has
been pending since January 2015. 123 Thus, there was no “previously filed” cause of action
in state court against State National at the time State National filed its intervention.
Because all three factors have not been met, the Court is not required to abstain from
this matter. 124
C. Discretion to Exercise Jurisdiction
The Court still must consider, in its discretion, whether to exercise jurisdiction over
this matter. “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. 125 In

121 R. Doc. 321 (Order); R. Doc. 130 (Third-Party Complaint); R. Doc. 169 (Amended Third-Party
Complaint).
122 Superior has not filed an action against State National in the State-Court Lawsuits.
123 R. Doc. 132.
124 Sealed v. Sealed, 33 F.3d 1379 (5th Cir. 1994) (“[W]e hold that the date at which appellee filed the
declaratory action (July 6) is controlling as to the application of the mandatory abstention factors. Because
appellant did not file its third-party demand in the state court proceeding until October 7, we find that there
was no pending state court action addressing the same issue as that raised in the declaratory judgment and
thus affirm the district court’s decision to reject mandatory abstention.”); St. Paul Fire & Marine Ins. Co.,
No. 94-253, 1994 WL 261935, at *2 (E.D. La. June 3, 1994) (“St. Paul filed its complaint for declaratory
relief before the Lupins filed their third-party demand against St. Paul in the state court action. Thus, this
is not a case where the declaratory defendant has been first in raising the issue in state court against the
declaratory plaintiff. Because the state court claim regarding coverage was not ‘previously filed’, the Court
is not technically required to abstain from this case.”); Chevron U.S.A., Inc. v. Cureington, No. 10-0764,
2011 WL 1085661, at *6 (W.D. La. Feb. 18, 2011), report and recommendation adopted, No. 10-0764, 2011
WL 1044639 (W.D. La. Mar. 21, 2011) (“[A]bstention is not required because [the plaintiff] filed the instant
declaratory judgment action before the [defendants] commenced their suit in state court.”).
125 Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995).

19

Wilton v. Seven Falls Co., the Supreme Court held that the discretionary standard of
Brillhart v. Excess Ins. Co. of America 126 governs a district court’s decision to stay a
declaratory judgment action during the pendency of parallel state-court proceedings. 127
“Although Brillhart did not set out an exclusive list of factors governing the district court’s
exercise of this discretion, it did provide some useful guidance in that regard.” 128 There
are three overarching considerations in the Supreme Court’s analysis in Brillhart:
federalism, fairness, and efficiency. 129 “Despite the circuits’ different expressions of the
Brillhart factors, each circuit’s formulation addresses the same three aspects of
the analysis.” 130
The Fifth Circuit uses the Trejo factors to guide a district court’s exercise of
discretion to accept or decline jurisdiction over a declaratory judgment suit:
(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;
(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

Brillhart v. Excess Ins. Co. of America, 316 U.S. 491 (1942).
Wilton v. Seven Falls Co., 515 U.S. 277, 284 (1995).
128 Id. at 282.
129 Sherwin-Williams, 343 F.3d at 390.
130 Id.
126
127

20

(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. 131
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. 132 “If there is a pending related state proceeding but it
is not ‘parallel’ because it does not involve all the same parties or issues, the federal
district court properly considers the extent of similarity between the pending state court
and federal court cases in deciding which court should decide the dispute, rather than
relying on a per se rule.” 133
On March 28, 2016, more than one year after State National filed its complaint in
intervention against Masse and Allied in federal court, Masse filed a third-party
complaint in the State-Court Lawsuits against State National and other insurers for
declaratory judgment regarding the duty to defend and indemnify Masse. Whether State
National has a duty to defend or indemnify Superior, however, is not before the state
court; thus, the proceedings are not parallel with respect to those issues. Further, whereas
the State-Court Lawsuits involve issues of fact, fault, and causation and numerous other
parties, the determination of whether State National has a duty to defend Masse,
Superior, or Allied as an additional insured involves a straightforward examination of the
state-court petitions and the insurance policies State National issued to Masse and

Sherwin-Williams, 343 F.3d at 388, 390.
See id. at 393–94.
133 See Sherwin-Williams, 343 F.3d at 394 n.5.
131

132

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Superior. The issue of whether State National has a duty to defend Masse, Superior, or
Allied under the policies State National issued to Masse and Superior has been fully
briefed before this Court. Furthermore, the resolution of the State-Court Lawsuits,
including Masse’s third-party claim against State National, will not determine State
National’s duty to provide coverage to Superior, a determination this Court will have to
make. The state and federal proceedings are clearly not parallel, as they do not involve all
of the same parties and issues. 134 The extent of dissimilarity between the state and federal
cases convinces the Court that it should decide the dispute before it. The first Trejo factor
weighs in favor of exercising jurisdiction.
2.

Order of Filing

The St. Pierre lawsuit was filed on December 8, 2010, 135 and the Adams lawsuit
was filed on December 28, 2010. 136 State National filed its crossclaim against Superior on
March 8, 2012, and filed its complaint in intervention against Masse on January 14,
2015. 137 State National likely was aware that its insurance coverage of Superior and Masse
would become an issue in the pending State-Court Lawsuits. Therefore, State National
may have filed its crossclaim and complaint in intervention in anticipation of becoming a
party to the pending State-Court Lawsuits. 138 The second Trejo factor weighs against
exercising jurisdiction. 139

Id. at 394 (finding that the lack of a pending parallel state proceeding “weighs strongly against
dismissal”).
135 R. Doc. 228-5 at 3.
136 R. Doc. 228-4 at 5.
137 R. Doc. 132.
138 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).
139 See U.S. Fire, 2015 WL 1416490, at *4.
134

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3.

Forum Shopping

That State National could have intervened and requested declaratory judgment in
the State-Court Lawsuits does not necessarily demonstrate forum shopping. 140 As a
preliminary matter, there is no guarantee State National would have been allowed to
intervene in the State-Court Lawsuits. 141 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. 142 “The record
does not support a finding that [State National] engaged in impermissible forum
shopping by filing this declaratory judgment suit.” 143 The third Trejo factor weighs in
favor of exercising jurisdiction.
4.

Inequities

The Court cannot conceive of any inequities that flow from allowing State National
to proceed in this action while the State-Court Lawsuits remain pending. 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. 144 The state courthouse for the 17th Judicial
District Court for Lafourche Parish is approximately 60 miles west of the federal

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)).
142 See Sherwin-Williams, 343 F.3d at 399.
143 Id. at 400. See also Ironshore Specialty Ins. Co. v. Tractor Supply Co., 624 F. App’x 159, 167 (5th Cir.
2015) (per curiam).
144 See R. Docs. 228-5, 228-6.
140
141

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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. 145
6.

Judicial Economy

State National’s crossclaims against Superior have been pending for more than
four years, 146 and its crossclaims against Allied have been pending for more than one
year. 147 State National’s claims in intervention against Masse have been pending for more
than one year. 148 The issue of whether State National has a duty to defend Superior,
Masse, or Allied as an additional insured in the State-Court Lawsuits has been fully
briefed before this Court. It would be a waste of judicial resources to dismiss this action
and require State National to refile in another forum. Exercising jurisdiction is clearly in
the interest of judicial economy. 149 This factor weighs in favor of exercising jurisdiction.
7.

Interpretation of Decree from Parallel State Proceeding

Although some of the issues with respect to the duty to defend and provide
coverage to Masse are before both the state court and this Court, there currently are no
state-court rulings affecting this Court’s determination of whether State National has a
duty to defend or indemnify Masse. Masse only recently filed its third-party demand in
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).
146 R. Doc. 29.
147 R. Doc. 135.
148 R. Doc. 132.
149 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”).
145

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state court on March 28, 2016. Meanwhile, the issue of whether State National has a duty
to defend or indemnify Masse has been pending before this Court for more than one year,
and the parties have already fully briefed the issue of whether State National has a duty
to defend Masse. More importantly, the issue of whether State National owes Superior a
duty to defend or indemnify is not at issue in state court, and the Court clearly will not
need to interpret any decree issued in the State-Court Lawsuits with respect to Superior.
The Court finds the seventh Trejo factor is neutral. 150
Four of the Trejo factors weigh in favor of exercising jurisdiction, while one weighs
against and two are neutral. Accordingly, the Court will exercise jurisdiction over
this matter. 151
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. 152 A liability insurer’s duty to defend and the scope of its coverage are separate and
distinct issues. 153 Under Louisiana law, an insurer’s duty to defend is broader than its
obligation to indemnify for damage claims. 154 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
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.
151 Applying this same analysis to the declaratory judgment action filed by Hanover against Superior and
State National (No. 11-2375) and to the declaratory judgment action filed by Arch against Masse and Allied
(No. 14-1933) would result in the same conclusion.
152 Sher v. Lafayette Ins. Co., 2007-2441 (La. 4/8/08), 988 So. 2d 186, 192, on reh’g in part (July 7, 2008).
153 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.
154 Henly v. Phillips Abita Lumber Co., 2006-1856 (La. App. 1 Cir. 10/3/07), 971 So. 2d 1104, 1109.
150

25

and the “four corners” of the insurance policy to determine whether the insurer owes its
insured a duty to defend. 155 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. 156
The duty to defend “arises whenever the pleadings against the insured disclose even a
possibility of liability under the policy.” 157 The insurer has a duty to defend unless the
allegations in the petition for damages, as applied to the policy, unambiguously preclude
coverage. 158 “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.” 159
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. 160 Factual inquiries beyond
the petition for damages and the relevant insurance policy are prohibited with respect to
the duty to defend. 161 Any ambiguities within the policy are resolved in favor of the insured
to effect, not deny, coverage. 162

Mossy, 898 So. 2d at 606.
Id. (citations omitted).
157 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).
158 Martco Ltd. P’ship v. Wellons, Inc., 588 F.3d 864, 872 (5th Cir. 2009).
159 Treadway v. Vaughn, 633 So. 2d 626, 628 (La. Ct. App. 1993), writ denied, 635 So. 2d 233 (La. 1994).
160 Milano v. Bd. of Comm’rs of Orleans Levee Dist., 96-1368 (La. App. 4 Cir. 3/26/97), 691 So. 2d
1311, 1314.
161 Martco, 588 F.3d at 872.
162 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
155

156

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B. The Policies
State National issued two marine general liability insurance policies to Masse: one
that provided coverage from November 15, 2006, through November 15, 2007, 163 and
another that provided coverage from November 15, 2007, through November 15, 2008
(collectively, “the Masse policies”). 164 State National issued two marine general liability
insurance policies to Superior: one that provided coverage from July 11, 2007, through
July 11, 2008, 165 and another that provided coverage from July 11, 2008, through July 11,
2009 (collectively, “the Superior policies”). 166
1. General Liability
The Masse policies and the Superior policies contained the following insuring
agreement for bodily injury and property damage liability:
We 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. We will have the right and duty to defend the insured against any “suit”
seeking those damages. However, we will have no duty to defend the insured
against any ”suit” seeking damages for “bodily injury” or “property damage” to
which this insurance does not apply. 167
The policies define “suit” as “a civil proceeding in which damages because of ‘bodily
injury’, ‘property damage’, ‘personal injury’ or ‘advertising injury’ to which this insurance
applies are alleged.” 168 The policies define “bodily injury” as “bodily injury, sickness or
disease sustained by a person, including death resulting from any of these at any time.”169
The policies provide the following definition of “property damage”: “(a) Physical injury to
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.
163 R. Docs. 242-3, 242-4; R. Docs. 243-3, 243-4.
164 R. Docs. 242-5, 242-6; R. Docs. 243-5, 243-6.
165 R. Docs. 244-3, 244-4; R. Docs. 245-3, 245-4.
166 R. Docs. 244-5, 244-6; R. Docs. 245-5, 245-6.
167 R. Docs. 242-3 at 4, 242-5 at 4 (Masse policies); R. Docs. 244-3 at 7, 244-5 at 9 (Superior policies).
168 R. Docs. 242-3 at 16, 242-5 at 16 (Masse policies); R. Docs. 244-3 at 19, 244-5 at 21 (Superior policies).
169 R. Docs. 242-3 at 13, 242-5 at 13 (Masse policies); R. Docs. 244-3 at 16, 244-5 at 18 (Superior policies).

27

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.” 170 The policies define “occurrence”
as “an accident, including continuous or repeated exposure to substantially the same
general harmful conditions.” 171
The policies further provide that they apply to bodily injury and property damage
only if the bodily injury or property damage “is caused by an occurrence which takes place
during the policy period regardless [of] whether such occurrence is known to the insured”
and the bodily injury or property damage “first takes place during the policy period.” 172
Under the policies, any property damage or bodily injury “arising from, caused by or
contributed to by, or in consequence of an occurrence shall be deemed to take place at the
time of the first such damage, . . . even though the occurrence causing such [b]odily
[i]njury or [p]roperty [d]amage may be continuous or repeated exposure to substantially
the same general harm.” 173
2. Silicon, Silica, and Silicate Exclusion
The Masse policies and the Superior policies contain the same exclusion for silica
and silica-related dust:
This insurance does not apply to:
Silica Or Silica-Related Dust
a. “Bodily injury” arising, in whole or in part, out of the actual, alleged,
threatened or suspected inhalation of, or ingestion of, “silica” or
“silica-related dust”.
R. Docs. 242-3 at 16, 242-5 at 16 (Masse policies); R. Docs. 244-3 at 19, 244-5 at 21 (Superior policies).
R. Docs. 242-3 at 15, 242-5 at 15 (Masse policies); R. Docs. 244-3 at 18, 244-5 at 20 (Superior policies).
172 R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
173 R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
170
171

28

b. “Property damage” arising, in whole or in part, out of the actual,
alleged, threatened or suspected contact with, exposure to, existence
of, or presence of, “silica” or “silica-related dust”.
c. Any loss, cost or expense arising, in whole or in part, out of the
abating, testing for, monitoring, cleaning up, removing, containing,
treating, detoxifying, neutralizing, remediating or disposing of, or in
any way responding to or assessing the effects of, “silica” or “silicarelated dust”, by any insured or by any other person or entity. 174
The exclusion defines “silica” as “silicon dioxide (occurring in crystalline, amorphous and
impure forms), silica particles, silica dust or silica compounds” and defines “silica-related
dust” as “a mixture or combination of silica and other dust or particles.” 175
3. Pollution Exclusion and Pollution Buyback Endorsement
The policies issued to Masse and Superior also contain the same pollution
exclusion and Pollution Buyback Endorsement. The pollution exclusion provides in
relevant part:
2. This insurance does not apply to . . .
f. Pollution
(1) “Bodily injury” or “property damage” arising out of the actual, alleged or
threatened discharge, dispersal, seepage, migration, release or escape of
pollutants:
(a) At or from any premises, site or location which is or was at any
time owned or occupied by[,] or rented or loaned to, any insured;
(b) At or from any premises, site or location which is or was at any
time used by or for any insured or others for the handling, storage,
disposal, processing or treatment of waste;
(c) Which are or were at any time transported, handled, stored,
treated, disposed of, or processed as waste by or for any insured or
any person or organization for whom you may be legally responsible;
or
174
175

R. Docs. 242-4 at 28, 242-6 at 21 (Masse policies); R. Docs. 244-4 at 26, 244-6 at 27 (Superior policies).
R. Docs. 242-4 at 28, 242-6 at 21 (Masse policies); R. Docs. 244-4 at 26, 244-6 at 27 (Superior policies).

29

(d) At or from any premises, site or location on which any insured or
any contractors or subcontractors working directly or indirectly on
any insured’s behalf are performing operations:
(i)

If the pollutants are brought on or to the premises, site
or location in connection with such operations by such
insured, contractor or subcontractor; or

(ii)

If the operations are to test for, monitor, clean up,
remove, contain, treat, detoxify or neutralize, or in any
way respond to, or assess the effects of pollutants. 176

The exclusion defines “pollutant” as “any solid, liquid, gaseous or thermal irritant or
contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.” 177
The Pollution Buyback Endorsement contained in the Masse and Superior policies
provide in relevant part:
Notwithstanding any Pollution Exclusion attached to this policy, the exclusion(s)
shall not apply provided that the insured establishes that all of the following
conditions have been met:
A. The “occurrence” was accidental and was neither expected nor intended by
the Insured. An accident shall not be considered unintended or unexpected
unless caused by some intervening event neither expected nor intended by
the Insured.
B. The “occurrence” can be identified as commencing at a specific time and
date during the term of this policy.
C. The “occurrence” became known to the Insured within 72 hours after its
commencement and is reported to the Company within 21 days thereafter.
D. The “occurrence” did not result from the Insured’s intentional and willful
violation of any government statute, rule or regulation. 178

176 R. Docs. 242-3 at 4–5, 242-5 at 4–5 (Masse policies); R. Docs. 244-3 at 7–8, 244-5 at 9–10 (Superior
policies).
177 R. Docs. 242-3 at 6, 242-5 at 6 (Masse policies); R. Docs. 244-3 at 9, 244-5 at 11 (Superior policies).
178 R. Docs. 242-4 at 13, 242-6 at 8 (Masse policies); R. Docs. 244-4 at 13, 244-6 at 14 (Superior policies).

30

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. 179 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.” 180 Allied’s alleged negligence has
“expos[ed] the residents to dust containing silica sand, a very dangerous substance, as
well as other toxic substances.” 181 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. 182 In the plaintiffs’ third amended petition for damages, the plaintiffs
named Masse as a defendant. 183 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.” 184
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. 185 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. 242-7 at 2.
Id. at 3.
181 Id.
182 Id. at 3–4.
183 R. Doc. 242-10.
184 Id. at 4.
185 R. Doc. 243-7 at 2.
179

180

31

surrounding the shipyard of hazardous substances, including, but not limited to, paint,
sand and silica.” 186 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.” 187
D. State National Argues that Allied’s Third-Party Demands Against Masse and Superior
Do Not Allege an “Occurrence” and, Thus, Coverage is Unambiguously Excluded
The State National policies apply to bodily injury and property damage only if the
bodily injury or property damage “is caused by an occurrence which takes place during
the policy period regardless [of] whether such occurrence is known to the insured.” 188 The
policies define “occurrence” as “an accident, including continuous or repeated exposure
to substantially the same general harmful conditions.” 189 The policies do not define the
term “accident.”
Allied filed third-party demands against Masse and Superior in both the Adams
and St. Pierre lawsuits. State National argues that Allied’s third-party demands against
Masse and Superior in the State-Court Lawsuits do not allege an “occurrence” within the
meaning of the policies because they do not allege an “accident” and, therefore, that
coverage for Masse and Superior is unambiguously excluded. 190 In effect, State National
is asking that the Court consider not only the petitions filed in Adams and St. Pierre but
also the third-party demands filed by Allied. In Louisiana, the issue of whether an insurer
has a duty to defend is determined solely by the “‘four corners’ of the plaintiff’s petition

Id.
Id.
188 R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
189 R. Docs. 242-3 at 15, 242-5 at 15 (Masse policies); R. Docs. 244-3 at 18, 244-5 at 20 (Superior policies).
190 R. Doc. 243-1 at 11–12; R. Doc. 245-1 at 11.
186
187

32

and the ‘four corners’ of [the insurance] policy.” 191 State National has not cited any
authority, and the Court is not aware of any, that provides that the Court may look beyond
the “eight corners” of the petitions filed by the plaintiffs in Adams and St. Pierre and the
insurance policies issued by State National to determine whether State National owes a
duty to defend. 192 State National’s argument that the third-party demands against Masse
and Superior in the State-Court Lawsuits do not allege an “occurrence” within the
meaning of the policies pertains only to Allied’s third-party demands. Because the Court
cannot consider Allied’s third-party demands, State National’s argument fails.
E. State National Argues the Policies’ Silica or Silica-Related Dust Exclusion
Unambiguously Excludes Coverage
State National argues that the eight corners of the petition and the silica or silicarelated dust exclusion included in its policies taken together unambiguously bar coverage
for any liability of the state-court plaintiffs’ injuries. 193
The silica or silica-related dust exclusion contained in the Masse policies and the
Superior policies precludes coverage for bodily injury “arising, in whole or in part, out of
the actual, alleged, threatened, or suspected inhalation of, or ingestion of, ‘silica’ or ‘silicarelated dust’” and for property damage “arising, in whole or in part, out of the actual,
alleged, threatened, or suspected contact with, exposure to, existence of, or presence of,
‘silica’ or ‘silica-related dust.’” 194

Mossy Motors, 898 So. 2d at 606.
See R. Doc. 243 and 245. In a supplemental memorandum on the application of the “eight-corners rule,”
State National argued as follows: “In determining whether an insurer owes a duty to defend, Louisiana
utilizes the eight corners rule, ‘which means that the court must look at the four corners of the petition and
the four corners of the policy in question.’ Louisiana law is absolutely unequivocal on this issue. Whether
the insurer owes a duty to defend ‘is determined solely from the plaintiff’s pleadings and the face
of the policy, without consideration of extraneous evidence.” R. Doc. 336 at 1–2 (emphasis in original)
(citations omitted).
193 R. Doc. 242-1 at 12–15; R. Doc. 243-1 at 12–15; R. Doc. 244-1 at 12–15; R. Doc. 245-1 at 11–14.
194 R. Docs. 242-4 at 28, 242-6 at 21 (Masse policies); R. Docs. 244-4 at 26, 244-6 at 27 (Superior policies).
191

192

33

In their original petition for damages, the Adams plaintiffs allege that they have
been exposed to “silica sand . . . as well as other toxic substances” 195 and “silica dust and
other harmful products.” 196 The plaintiffs allege that, as a result of Allied’s operations, the
plaintiffs “have been exposed and made ill by inhalation of the silica dust.” 197 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.” 198 The plaintiffs unambiguously allege their personal
injuries and property damage were caused at least in part by silica dust. Therefore, based
on the four corners of the Adams petition for damages and the four corners of the silica
or silica-related dust exclusion contained in the policies issued to Superior and Masse,
which together unambiguously bar coverage for damages arising “in whole or in part” out
of inhalation of or exposure to silica or silica-related dust, 199 the Court finds coverage for
the bodily injury and property damage the Adams plaintiffs allege is unambiguously
excluded by the policies. As a result, State National has no duty to defend Masse, Superior,
or Allied as an additional insured in the Adams lawsuit. 200
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.” 201 The St.

R. Doc. 242-7 at 3.
Id. at 4.
197 Id. at 3.
198 R. Doc. 242-10 at 4.
199 R. Docs. 242-4 at 28, 242-6 at 21 (Masse policies); R. Docs. 244-4 at 26, 244-6 at 27 (Superior policies).
200 There is no need for the Court to analyze the other arguments of State National regarding its duty to
defend Masse, Superior, or Allied in the Adams lawsuit.
201 R. Doc. 243-7 at 2.
195

196

34

Pierre plaintiffs allege that they were “exposed to these substances and have suffered
personal injury . . . and other damages.” 202 The plaintiffs, however, never specify which
substances caused their injuries. The petition alleges as follows: “The Defendant owed a
duty of care to the plaintiffs and breached that duty of care by releasing hazardous
substances into the neighborhood environment. This breach is the legal cause of the harm
suffered by the plaintiffs and entitles plaintiffs to damages.” 203 Thus, it is not
unambiguously clear that silica or silica-related dust caused the St. Pierre plaintiffs’
damages in whole or in part. Considering the four corners St. Pierre petition for damages
and the four corners of the exclusion found in the policies, the Court does not find that
the silica exclusion unambiguously bars coverage of the damages alleged in St. Pierre.
F. State National Argues the Alleged Damages Occurred Prior to the Policy Periods and,
Thus, Recovery is Unambiguously Excluded under the Policies
The State National policies impose on State National 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” to which the policies apply. 204 The policies further
provide that they apply to bodily injury and property damage only if the bodily injury or
property damage “is caused by an occurrence which takes place during the policy period
regardless [of] whether such occurrence is known to the insured” and the bodily injury or
property damage “first takes place during the policy period.” 205 The policies contain a socalled “Deemer Clause,” which states that any property damage or bodily injury “arising
from, caused by or contributed to by, or in consequence of an occurrence shall be deemed
to take place at the time of the first such damage, . . . even though the occurrence causing
Id. at 3.
Id.
204 See R. Docs. 242-3 at 4, 242-5 at 4 (Masse policies); R. Docs. 244-3 at 7, 244-5 at 9 (Superior policies).
205 R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
202
203

35

such [b]odily [i]njury or [p]roperty [d]amage may be continuous or repeated exposure to
substantially the same general harm.” 206
State National argues that the policies State National issued to Masse and Superior
“were not the policies on the risk at the time of the first injurious exposure, [and] therefore
the [State National] policies do not provide coverage” to Masse and Superior
in St. Pierre. 207
The St. Pierre lawsuit was filed on December 8, 2010. 208 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. 209 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
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. 210 They seek damages for physical and mental pain
and suffering, medical expenses, damage to personal property. 211
State National argues that the Deemer Clause “means that all damages are deemed
to have occurred . . . at the time of the first injurious exposure.” 212 This reading, however,
misinterprets the plain language of the clause. The Deemer Clause states that all property
damage or bodily injury, even if caused by “continuous or repeated exposure to
substantially the same general harm,” is “deemed to take place at the time of the first such

R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
R. Doc. 243-1 at 9; R. Doc. 245-1 at 8–9.
208 See R. Doc. 243-7 at 4.
209 Id. at 2.
210 Id.
211 Id. at 3.
212 R. Doc. 243-1 at 9; R. Doc. 245-1 at 8–9.
206
207

36

damage,” 213 not the first time there was exposure to harmful substances. The policies
require only that the injury or damages first take place during the policy periods. 214 With
respect to the cause of those injuries or damages, the policies provide only that the
occurrence causing the alleged bodily injury or property damage—in this case, the alleged
exposure to harmful substances—must “take[] place during the policy period.” 215
A review of the petitions and the policies does not unambiguously preclude a
finding that the “first such damage” took place during the policy periods. The Masse
policies provided coverage from November 15, 2006, through November 15, 2008. The
Superior policies provided coverage from July 11, 2007, through July 11, 2009. Although
the four corners of the St. Pierre petition state that the plaintiffs’ exposure began in
2002, 216 it is not unambiguously clear when the bodily injury or property damage first
took place. For example, the petitions do not state when the plaintiffs developed their
alleged “personal injur[ies]” and “health problems.” 217 “An insured’s duty to defend arises
whenever the pleadings against the insured disclose even a possibility of liability under
the policy.” 218 Therefore, the eight corners of the state-court petitions and the policies do

R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
215 R. Docs. 242-4 at 3, 242-5 at 21 (Masse policies); R. Docs. 244-4 at 3, 244-6 at 3 (Superior policies).
216 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. 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.”216 Thus, “if the insurer’s policy period fell either at the inception
or during the course of exposure, the insurer would be liable.” Id.
217 See R. Doc. 243-7; R. Doc. 245-7.
218 Steptore, 643 So. 2d at 1218.
213

214

37

not unambiguously preclude the possibility that the plaintiffs’ “first such damage” took
place during the State National policy periods. 219
G. State National Argues the Policies’ Pollution Exclusion and Pollution Buyback
Endorsement Unambiguously Exclude Coverage
State National further argues that the eight corners of the petitions and the
pollution exclusion and Pollution Buyback Endorsement found in its policies
unambiguously preclude coverage. 220 The policies exclude coverage for “any ‘[b]odily
injury’ or ‘property damage’ arising out of the actual, alleged or threatened discharge,
dispersal, seepage, migration, release or escape of pollutants.” 221 The policies define
“pollutants” as “any solid, liquid, gaseous or thermal irritant or contaminant, including
smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.” 222 The insured may still
be entitled to coverage, however, if it establishes the four conditions enumerated in the
Pollution Buyback Endorsement. 223 The endorsement provides an exception to the total
pollution exclusion contained in the policies. 224 State National must establish that the

219 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. . . .”).
220 R. Doc. 243-1 at 15–20; R. Doc. 245-1 at 15–20.
221 R. Docs. 242-3 at 4–5, 242-5 at 4–5 (Masse policies); R. Docs. 244-3 at 7–8, 244-5 at 9–10 (Superior
policies).
222 R. Docs. 242-3 at 6, 242-5 at 6 (Masse policies); R. Docs. 244-3 at 9, 244-5 at 11 (Superior policies).
223 R. Doc. 242-4 at 13 (“Notwithstanding any Pollution Exclusion attached to this policy, the exclusion(s)
shall not apply provided that the insured establishes that all of the following conditions have been
met . . . .”); R. Doc. 242-6 at 8 (same); R. Doc. 244-4 at 13 (same), 244-6 at 14 (same).
224 See R. Docs. 242-4 at 13, 242-6 at 8 (Masse policies); R. Docs. 244-4 at 13, 244-6 at 14 (Superior policies).

38

exclusion unambiguously precludes coverage before the Court may consider whether the
time-element conditions have been met. 225
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.” 226 As a result, the Louisiana Supreme Court has instructed
that courts must “attempt to determine the true meaning and interpretation of [the]
pollution exclusion.” 227 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
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. 228 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

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)).
226 Doerr, 774 So. 2d at 135.
227 Id. at 125.
228 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.
225

39

time-element conditions, or exceptions, contained in the endorsement are met. 229 The
Louisiana Supreme Court expressly stated that these factors must be considered “in any
given case,” 230 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
exclusion, the insurer had no duty to defend because the exclusion unambiguously
precluded coverage. 231 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. 232 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.” 233 The

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.”).
230 Doerr, 774 So. 2d at 135.
231 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.
232 Lodwick, 126 So. 3d at 560.
233 Id. at 561.
229

40

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.” 234 The court concluded
that “[p]laintiffs’ allegations make it clear that all three Doerr factors are met.” 235 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. 236
In Smith v. Reliance Insurance Company of Illinois, 237 the plaintiffs alleged that
the release of noxious odors carried by the wind to the plaintiffs’ homes and properties
caused their damages. 238 Before the Smith court was a motion for partial summary
judgment on the insurer’s duty to defend. 239 When ruling on the motion, the court used
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. 240 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. 241 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
Id.
Id.
236 Id.
237 Smith v. Reliance Ins. Co. of Illinois, 01-888 (La. App. 5 Cir. 1/15/02), 807 So. 2d 1010, 1020.
238 Id. at 1013.
239 Id.
240 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”).
241 Id. at 1020.
234
235

41

buyback endorsement applied because the court found the exclusion itself did not
unambiguously exclude coverage given the Doerr analysis. 242 The court affirmed the
judgment of the trial court, which found that the insurer had a duty to defend. 243
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.” 244 State National is unable to establish from the eight corners that either
Superior or Masse is a “polluter” within the meaning of the exclusion. For example, State
National is unable to point to any information within the eight corners regarding the
nature of Superior’s or Masse’s business, whether that type of business presents a risk of
pollution, and whether Superior or Masse has a separate pollution policy. Accordingly,
the Court is unable to conclude that Superior and Masse are “polluters” within the
meaning of the exclusion contained in the policies.
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
Id.
Id. at 1013.
244 Doerr, 774 So. 2d at 135.
242
243

42

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.” 245
State National is unable to establish from the eight corners that the substances the St.
Pierre 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 St. Pierre petitions for damages, the plaintiffs broadly describe
the substances causing their injuries. The St. Pierre plaintiffs allege that they were
exposed to “hazardous substances, including, but not limited to, paint, sand and silica.” 246
The St. Pierre plaintiffs allege that Allied breached its “duty of care by releasing hazardous
substances into the neighborhood environment, . . . [which] is the legal cause of the harm
suffered by the plaintiffs.” 247 The Court is unable to determine the nature of the injurycausing substances, their typical usages, the quantity of any discharges, whether the
substances were being used for their intended 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.” 248 State National has failed to establish that the injury-causing
substance in St. Pierre 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. 249 The Court “should consider whether the

Id.
R. Doc. 243-7 at 2.
247 Id. at 3.
248 Doerr, 774 So. 2d at 125.
249 Id. at 135.
245

246

43

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.” 250 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. State National 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 State National has failed to establish that Masse and Superior are
polluters, that the substance or substances to which the St. Pierre plaintiffs were exposed
were pollutants, or that there was a discharge within the meaning of the policies, State
National has failed to establish that the pollution exclusion unambiguously precludes
coverage. Therefore, the Court need not reach the issue of whether Masse or Superior met
the time-element conditions necessary to establish the exception to the pollution
exclusion. 251 State National’s motion for summary judgment on its duty to defend
Superior, Masse, or Allied in the St. Pierre suit is denied.
CONCLUSION
IT IS ORDERED that State National’s Motion for Summary Judgment Finding
No Duty to Defend Masse or Allied in the Underlying Adams Lawsuit is GRANTED. 252

Id. at 136.
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.”).
252 R. Doc. 242.
250
251

44

IT IS FURTHER ORDERED that State National’s Motion for Summary
Judgment Finding No Duty to Defend Superior or Allied in the Underlying Adams
Lawsuit is GRANTED. 253
IT IS FURTHER ORDERED that State National’s Motion for Summary
Judgment Finding No Duty to Defend Masse or Allied in the Underlying St. Pierre
Lawsuit is DENIED. 254
IT IS FURTHER ORDERED that State National’s Motion for Summary
Judgment Finding No Duty to Defend Superior or Allied in the Underlying St. Pierre
Lawsuit is DENIED. 255
New Orleans, Louisiana, this 8th day of April, 2016.
______________________ ______
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

R. Doc. 244.
R. Doc. 243.
255 R. Doc. 245.
253

254

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