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

Filing 510

ORDER AND REASONS granting 445 Motion for Summary Judgment; granting 446 Motion for Summary Judgment. Signed by Judge Susie Morgan on 7/12/2017. (Reference: 11,2375, 14-1933)(clc)

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

CIVIL ACTION
No. 11-2375 c/w
14-1930, 14-1933,
16-2490

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

SECTION “E”

Applies to: 11-2375, 14-1933
ORDER AND REASONS
Before the Court are two motions for summary judgment filed by State National
Insurance Company (“State National”) regarding its duty to defend Allied Shipyard, Inc.
(“Allied”) as an additional insured under its policies issued to Masse Contracting, Inc.
(“Masse”)1 and Superior Labor Services, Inc. (“Superior”)2 against claims made in the
underlying Adams3 and St. Pierre4 state-court lawsuits. Allied opposes the motions.5 For
the reasons set forth below, State National’s motions are GRANTED.

R. Doc. 445.
R. Doc. 446.
3 In its previous ruling on motions for summary judgment filed by State National, the Court found State
National has no duty to defend Masse or Superior as insureds or Allied as an additional insured in the
Adams lawsuit. R. Doc. 347. The Court based its finding on the eight corners of the Adams petitions and
State National’s policies issued to Masse and Superior, specifically the silica exclusion. Id. The Court’s
decision on the instant motion relates to Allied’s status as an additional insured and reaches the same result
as its decision in Record Document 347 with respect to State National’s duty to defend Allied as an
additional insured in the Adams lawsuit.
4 In its previous ruling on State National’s motions for summary judgment, the Court found State National
has a duty to defend Masse and Superior as insureds and Allied as an additional insured in the St. Pierre
lawsuit because State National’s policies issued to Masse and Superior did not unambiguously preclude
coverage. R. Doc. 347. The Court’s opinion on the instant motions for summary judgment deals whether
Allied is an additional insured under State National’s policies issued to Masse and Superior. Although the
Court finds Allied is not an additional insured under the Masse and Superior policies, and State National
therefore has no duty to defend Allied for claims in the St. Pierre lawsuit, State National nevertheless has a
duty to defend Masse and Superior in the St. Pierre lawsuit.
5 R. Docs. 452, 453.
1

2

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BACKGROUND
A. Consolidated State-Court Lawsuit
The case originates from two state-court personal-injury actions, now
consolidated6 (“Consolidated State-Court Lawsuit”) against Allied Shipyard, Inc.
(“Allied”): (1) Adams, et al. v. Allied Shipyard, Inc., et al. and (2) St. Pierre, et al. v. Allied
Shipyard, Inc.7 The plaintiffs in the Consolidated State-Court Lawsuit allege Allied
negligently performed sandblasting activities and they seek resulting damages.
In the Consolidated State-Court Lawsuit, Allied filed a third-party demand
against its contractors who performed the sandblasting jobs, including Superior and
Masse.8 Specifically, Allied alleges that Superior and Masse contracted with Allied to
perform certain tasks and to indemnify Allied under master work contracts.9 Allied seeks
to be named as an additional insured on Superior and Masse’s insurance policies, and
seeks indemnity from Superior and from Masse with respect to the claims in the
Consolidated State-Court Lawsuit.10
The plaintiffs in Adams amended their petition to name Superior, Masse, other
subcontractors, and Gray Insurance Company as direct defendants.11
The third-party-defendant contractors “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

The two cases were consolidated in state court on September 9, 2013. See R. Doc. 261-5.
R. Docs. 443-3, 443-4, 443-5, 443-6, 443-7, 443-8, 443-9 (Adams Petitions for Damages); R. Doc. 443-12
(St. Pierre Petition for Damages).
8 See R. Docs. 443-10, 443-11, 443-13, 443-14.
9 See R. Docs. 443-10, 443-11, 443-13, 443-14.
10 See R. Docs. 443-10, 443-11, 443-13, 443-14.
11 See R. Docs. 443-3, 443-4, 443-5, 443-6, 443-7, 443-8, 443-9.
12 R. Doc. 174-1 at 2.
6
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On August 18, 2016, Allied filed a cross-claim and third-party demand in state
court against its direct insurer, Gray, and against Masse and Superior’s insurers,
including State National, seeking a declaration that it has a right to defense and indemnity
as well as a declaration of its status as an additional insured under Masse and Superior’s
policies.13
The Adams plaintiffs filed their sixth amended petition in state court on April 29,
2016.14 The St. Pierre plaintiffs have not amended their original petition, which was filed
on December 8, 2010.15
B. Declaratory Actions in Federal Court
Four federal actions related to the Consolidated State-Court Lawsuit are pending
in this Court. The Court consolidated the first three cases—11-2375, 14-1930, and 141933—on November 21, 2014, and consolidated 16-2490 with those cases on August 10,
2016.16
1. No. 11-2375
On September 21, 2011, Hanover Insurance Company (“Hanover”) filed a
complaint in this Court.17 Hanover filed an amended complaint on September 27, 2012.18
Hanover alleges it has been participating in the defense of Superior against Allied’s thirdparty demands in the Consolidated State-Court Lawsuit.19 Hanover maintains the other
insurers it names in its federal suit “are not participating in Superior’s defense” in the

See R. Doc. 443-15.
R. Doc. 443-9.
15 R. Doc. 443-12.
16 See R. Docs. 108, 368.
17 Hanover Ins. Co. v. Superior Labor Servs., Inc., et al., No. 11-2375.
18 R. Doc. 69.
19 Id. at ¶¶ 23–24.
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Consolidated State-Court Lawsuit.20 Hanover seeks judgment against Superior declaring
that it has no duty to defend or indemnify Superior in the Consolidated State-Court
Lawsuit.21 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 Consolidated State-Court Lawsuit.22 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 Consolidated State-Court Lawsuit that, Hanover argues, should
have been paid by those insurance companies.23
On January 14, 2015, Hanover filed a second supplemental and amending
complaint naming Allied as a defendant.24 Hanover alleges that “Allied has tendered the
[Consolidated State-Court Lawsuit] 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 Consolidated State-Court Lawsuit subject to a full
reservation of rights.25 Hanover alleges that Allied is not an additional insured under
Hanover’s policies, and Hanover seeks judgment against Allied declaring that it has no
duty to defend or indemnify Allied in the Consolidated State-Court Lawsuit.26 In the
alternative, if the Court finds Hanover has a duty to defend or indemnify Allied, Hanover

Id. at ¶ 26.
Id. at ¶¶ 22–23.
22 Id. at ¶ 2.
23 Id. at ¶ 3.
24 R. Doc. 125.
25 Id. at ¶ 79.
26 Id. at 9.
20
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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 Consolidated State-Court Lawsuit.27
On March 8, 2012, State National filed a crossclaim for declaratory judgment
against Superior.28 State National filed its first amended crossclaim for declaratory
judgment on September 27, 2012.29 State National filed a second amended crossclaim for
declaratory judgment on January 14, 2015, naming Allied as a defendant-in-crossclaim.30
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 Consolidated State-Court Lawsuit.31 State National
also seeks 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 Consolidated State-Court Lawsuit.32
2. No. 14-1930
On August 22, 2014, Arch Insurance Company brought an action for declaratory
judgment against Superior and Allied.33 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 Consolidated State-Court
Lawsuit.34 Arch also seeks a declaration of its rights and responsibilities with respect to

Id. The Court denied Hanover’s motions for partial summary judgment on its duty to defend Masse,
Superior, and Allied as an additional insured in both the Adams and St. Pierre lawsuits. R. Docs. 341, 342.
28 R. Doc. 29.
29 R. Doc. 67.
30 R. Doc. 135.
31 Id. at ¶ 19.
32 Id. See also, supra, notes 3, 4.
33 Arch Ins. Co. v. Superior Labor Servs., Inc. et al., No. 14-1930.
34 No. 14-1930, R. Doc. 1 at ¶ 3.
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Allied’s request for additional insured status under the Superior policies and defense and
indemnity of Allied in the Consolidated State-Court Lawsuit.35 Arch seeks a declaration
against Superior and Allied that Arch has no defense or indemnity obligation to Superior
or Allied in the Consolidated State-Court Lawsuit.36 Arch also seeks recovery of the
portion of defense costs already incurred by it on behalf of Superior.37
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 Consolidated State-Court Lawsuit.38 Arch also seeks a declaration
of its rights and responsibilities with respect to Allied’s request for additional insured
status under the Masse policies and defense and indemnity of Allied in the Consolidated
State-Court Lawsuit.39 Arch seeks a declaration against Masse and Allied that Arch has
no defense or indemnity obligation to Masse in the Consolidated State-Court Lawsuit.40
On January 14, 2015, Hanover filed a complaint in intervention in Case No. 141933 against Defendants Masse and Allied.41 Hanover seeks judgment declaring that
Hanover has no obligation to defend or indemnify Masse or Allied in the StateCourt Lawsuits.42

Id. at ¶ 4.
Id. at ¶¶ 21, 47.
37 Id. at ¶ 47. The Court denied with prejudice Arch’s motions for summary judgment finding it had a duty
to defend Masse and Superior as insureds and Allied as an additional insured in the Adams and St. Pierre
lawsuits. R. Doc. 418. The Court denied without prejudice Arch’s motions for summary judgment with
respect to Arch’s duty to indemnify Masse and Superior as insureds and Allied as an additional insured.
38 No. 14-1933, R. Doc. 1 at ¶ 3.
39 Id. at ¶ 4.
40 Id. at ¶ 46.
41 R. Doc. 128.
42 Id.
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State National also filed a complaint in intervention for declaratory judgment on
January 14, 2015 naming as defendants Masse and Allied.43 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, 2008.44
Allied seeks additional insured status under the policies issued by State National to
Masse.45 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 Consolidated State-Court Lawsuit.46 State National also seeks a
declaration that “there is no coverage afforded to Allied under the [State National] policies
as a purported additional insured” and that State National does not owe a duty to defend
or indemnify Allied in the Consolidated State-Court Lawsuit.47
On April 13, 2016, Lexington intervened in Arch’s declaratory judgment action in
its capacity as an insurer of Masse, and likewise, sought determinations of coverage for
Masse as an insured and Allied as an additional insured for the claims asserted in the
underlying Consolidated State-Court Lawsuit.48 Lexington issued two commercial
general liability policies to Masse—one in effect from February 16, 2000 to February 16,
2001 (“2000-2001 Lexington Policy”) and another in effect from November 15, 2008 to
November 15, 2009 (“2008-2009 Lexington Policy”).49

R. Doc. 132.
Id. at ¶ 14.
45 Id. at ¶ 3.
46 Id. at ¶ 19.
47 Id.
48 No. 11-2375, R. Doc. 354.
49 Id.
43

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4. 16-2490
On March 25, 2016, Great American E&S Insurance Company (“Great American”)
filed a complaint in this Court.50 Great American filed an amended complaint on August
26, 2016, adding Gray as a defendant.51 Great American seeks a declaration of its rights
and responsibilities as it relates to its duties to defend or indemnify Masse as an insured
or Allied as an additional insured under the Great American Policies with respect to the
claims in the Adams and St. Pierre lawsuits.52 If Great American has a duty to defend or
indemnify Masse as an insured or Allied as an additional insured in the Consolidated
State-Court Lawsuit, Great American seeks declaratory judgment that “any such
obligation should be proportionate to its time on the risk as compared to the period of
time during which the underlying Plaintiff’s toxic exposures allegedly occurred.” 53
Alternatively, if Great American has a duty to defend or indemnify Masse as an insured
or Allied as an additional insured, Great American seeks declaratory judgment that Great
American is entitled to contribution from Arch Insurance Company, United Capitol
Insurance Company, Lexington Insurance Company, Atlantic Insurance Company, State
National Insurance Company, Underwriters at Lloyd’s, London, and Clarendon National
Insurance Company.54
C. State National’s Motions for Summary Judgment
State National filed its motions for summary judgment on January 23, 2017
seeking summary judgment that Allied is not an additional insured under the State

Great American E&S Ins. Co. v. Masse Contracting, Inc., et al., No. 16-2490 (E.D. La.).
R. Doc. 371.
52 Id. at ¶¶ 38–48.
53 Id. at ¶ 50.
54 Id. at ¶ 52. In its opposition to Gray’s motion to dismiss, Great American states Gray was “inadvertently
omitted from the list of insurers that are alleged to owe contribution.” R. Doc. 480 at 3, n.7. Paragraph 7 of
the prayer for relief in the amended complaint, however, includes Gray as a defendant. R. Doc. 371.
50
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National Policies issued to Masse or Superior, and that State National has no duty to
defend Allied against the claims made in the underlying St. Pierre and Adams lawsuits as
an additional insured under State National’s policies issued to Masse55 and Superior.56
CONSIDERATION OF DECLARATORY JUDGMENT ACTIONS
State National has filed cross-claims for declaratory judgment against Superior
and Allied.57 State National has intervened in Arch’s action for declaratory judgment
against Masse and Allied58 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.59
The Court must determine whether it will hear State National’s declaratory judgment
actions before considering the motions for summary judgment. 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.60 First, the Court must determine whether the action is justiciable.61
Second, the Court must determine whether it has the authority to grant declaratory
relief.62 Third, the Court must determine “how to exercise its broad discretion to decide

R. Doc. 445.
R. Doc. 446.
57 No. 11-2375, R. Docs. 29 (cross-claim against Superior), 67 (amended cross-claim against Superior), 135
(second amended cross-claim to add Allied as a defendant).
58 No. 14-1933. State National’s complaint in intervention can be found at Record Document 132 in the
master case, 11-2375.
59 28 U.S.C. § 2201.
60 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).
61 Id.
62 Id.
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or dismiss a declaratory judgment action.”63 State National is seeking declaratory relief
on its duty to defend Allied as an additional insured. The Court will determine whether to
exercise its discretion to hear State National’s declaratory judgment actions on its duty to
defend Allied as an additional insured.
A.

Justiciability
The justiciability doctrines of standing, mootness, political question, and ripeness

derive from Article III’s “case or controversy” requirement. 64 In a declaratory judgment
action, justiciability often turns on ripeness.65 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.”66 The purpose of this
doctrine is to forestall “entangl[ement] . . . in abstract disagreements” through
“avoidance of premature adjudication.”67 “The key considerations are ‘the fitness of the
issues for judicial decision and the hardship to the parties of withholding
court consideration.’”68
The Fifth Circuit has recognized that “applying the ripeness doctrine in the
declaratory judgment context presents a unique challenge.” 69 This stems primarily from
the fact that declaratory relief often involves an ex ante determination of rights, i.e., a
determination of rights before an injury has occurred, that “exists in some tension with
traditional notions of ripeness.”70 Fortunately, this challenge is not presented today,
Id.
Choice Inc. of Tex. v. Greenstein, 691 F.3d 710, 714–15 (5th Cir. 2012).
65 See id; Orix, 212 F.3d at 895; Rowan Cos., Inc. v. Griffin, 876 F.2d 26, 27–28 (5th Cir. 1989).
66 Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993).
67 Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967), abrogated on other grounds by Califano v. Sanders,
430 U.S. 99 (1977).
68 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).
69 Orix, 212 F.3d at 896 (internal quotation marks omitted).
70 Id.
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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,71 a duty-to-defend claim is ripe when the underlying suit is filed.72 Accordingly, State
National’s duty-to-defend claims are ripe, and the Court finds the actions are justiciable.
B.

Mandatory Abstention
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.”73 The Fifth Circuit has provided an analysis with respect to a district
court’s authority to issue a declaratory judgment so as to not allow a declaratory plaintiff
an end run around the requirements of the Anti-Injunction Act. 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 AntiInjunction Act.74 The Fifth Circuit in Jackson held “if an injunction would be barred by

Suire v. Lafayette City-Parish Consol. Gov’t, 907 So. 2d 37, 52 (La. 2005).
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).
73 Travelers Ins. Co. v. Louisiana Farm Bureau Fed’n, Inc., 996 F.2d 774, 776 (5th Cir. 1993) (citing Tex.
Emps. Ins. Ass’n v. Jackson, 862 F.2d 491, 506 (5th Cir. 1988)). The Anti-Injunction 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.
74 Travelers, 996 F.2d at 776 (citing Jackson, 862 F.2d at 506); Sherwin-Williams Co. v. Holmes Cty., 343
F.3d 383, 387 (5th Cir. 2003).
71

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[the Anti-Injunction Act], this should also bar the issuance of a declaratory judgment that
would have the same effect as an injunction.”75 The first factor in this analysis is not met
in this case. State National, the declaratory judgment plaintiff in the federal action, filed
cross-claim against Superior on March 8, 2012 and against Allied on January 14, 2015.76
State National filed its complaint in intervention against Masse and Allied in January of
2015.77 Both of these filings occurred well before Allied, the declaratory defendant in the
federal action, filed its cause of action against State National in state court on August 18,
2016.78 The presence of all three factors mandates abstention. The want of any one factor
defeats mandatory abstention.79 Because the first factor has not been met, abstention is
not mandatory.
C.

Discretion to Exercise Jurisdiction on the Duty to Defend
Because there is no mandatory abstention, the Court 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.80 In Wilton v. Seven Falls Co., the
Supreme Court held that the discretionary standard of Brillhart v. Excess Ins. Co. of
America81 governs a district court’s decision to stay a declaratory judgment action during
the pendency of parallel state-court proceedings.82 “Although Brillhart did not set out an
Jackson, 862 F.2d at 506.
No. 11-2375, R. Docs. 29, 135.
77 No. 14-1933. The complaint in intervention can be found at Record Document 132 in the master case, 112375.
78 Allied filed a cross-claim and third-party demand in state court seeking a declaration that the insurers of
Masse and Superior owe Allied a duty to defend and a duty to indemnify. R. Doc. 444-15.
79 Sealed v. Sealed, 33 F.3d 1379 (5th Cir. 1994).
80 Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995).
81 Brillhart v. Excess Ins. Co. of America, 316 U.S. 491 (1942).
82 Wilton v. Seven Falls Co., 515 U.S. 277, 284 (1995).
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exclusive list of factors governing the district court’s exercise of this discretion, it did
provide some useful guidance in that regard.”83 There are three overarching
considerations in the Supreme Court’s analysis in Brillhart: federalism, fairness, and
efficiency.84 “Despite the circuits’ different expressions of the Brillhart factors, each
circuit’s formulation addresses the same three aspects of the analysis.”85
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
(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.86

Id. at 282.
Sherwin-Williams, 343 F.3d at 390.
85 Id.
86 Sherwin-Williams, 343 F.3d at 388, 390.
83

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1.

Nature of Pending State Court Action

The first Trejo factor requires comparison of the declaratory judgment action with
the underlying state-court action.87 “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.”88
On March 8, 2012, State National filed its cross-claim against Superior in this
court, seeking a declaration of whether State National has a duty to defend or indemnify
Superior as an insured.89 On January 14, 2015, State National filed an amended crossclaim, adding Allied as a defendant, and seeking a declaration of whether State National
has a duty to defend or indemnify Allied as an additional insured. 90 On the same day,
State National filed its complaint in intervention against Masse or Allied, seeking a
declaration of whether State National has a duty to defend or indemnify Masse as an
insured or Allied as an additional insured.91 At the time State National filed its crossclaims and complaint for intervention in this court, the question of State National’s duty
to defend or indemnify Masse or Superior as insureds and Allied as an additional insured
was not before the state court. After State National filed its cross-claims and complaint in
intervention in this court, Allied filed a cross-claim and third-party demand in state court
seeking a declaration that the insurers of Masse and Superior, including State National,

See id. at 393–94.
See Sherwin-Williams, 343 F.3d at 394 n.5.
89 The cross-claim was filed in 11-2375. R. Doc. 29.
90 No. 11-2375, R. Doc. 135.
91 State National’s complaint in intervention was filed in 14-1933. The complaint in intervention can be
found at Record Document 132 in the master case, 11-2375.
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owe Allied duties to defend and indemnify.92 State National’s federal cross-claims, its
complaint in intervention, and Allied’s third-party demand filed in state court are parallel,
as they all seek a declaration as to State National’s duty to defend and indemnify Allied as
an additional insured under State National’s policies issued to Masse and Superior. As a
result, the first Trejo factor weighs against exercising jurisdiction.
2.

Suit Filed in Anticipation of Lawsuit

The St. Pierre lawsuit was filed on December 8, 2010,93 and the Adams lawsuit was
filed on December 28, 2010.94 In this Court, State National filed its cross-claim against
Superior on March 8, 2012 and against Allied on January 14, 2015.95 State National filed
its complaint in intervention against Masse and Allied in federal court on April 13, 2016.96
Allied’s cross-claim against State National was filed in state court on August 18, 2016.97
State National likely was aware that its insurance coverage of Masse and Superior as
insureds or Allied as an additional insured would become an issue in the pending
Consolidated State-Court Lawsuit. Therefore, State National may have filed its crossclaims and complaint in intervention in anticipation of becoming a party to the pending
Consolidated State-Court Lawsuit.98 The second Trejo factor weighs against exercising
jurisdiction.99

See R. Doc. 443-15.
R. Doc. 443-12.
94 R. Doc. 443-3.
95 R. Docs. 29, 135.
96 Great American E&S Ins. Co. v. Masse Contracting, Inc., et al., No. 16-2490 (E.D. La.).
97 R. Doc. 443-15.
98 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).
99 See U.S. Fire, 2015 WL 1416490, at *4.
92
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3.

Forum Shopping

That State National could have intervened and requested declaratory judgment in
the Consolidated State-Court Lawsuit does not necessarily demonstrate forum
shopping.100 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.101 “The record does not support a finding that [State
National] engaged in impermissible forum shopping by filing this declaratory judgment
suit.”102 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 Consolidated State-Court Lawsuit remains pending.
No party will be prejudiced if this Court decides whether State National has a duty to
defend Masse or Superior as insureds or Allied as an additional insured before resolution
of the Consolidated State-Court Lawsuit. The fourth Trejo factor weighs in favor of
exercising jurisdiction.
5.

Convenience of Federal Forum

The Consolidated State-Court Lawsuit is pending in the 17th Judicial District Court
for the Parish of Lafourche, State of Louisiana.103 The state courthouse for the 17th
Judicial District Court for Lafourche Parish is approximately 60 miles west of the federal
courthouse in New Orleans. No party argues that this forum is inconvenient or that either

See id.
See Sherwin-Williams, 343 F.3d at 399.
102 Id. at 400. See also Ironshore Specialty Ins. Co. v. Tractor Supply Co., 624 F. App’x 159, 167 (5th Cir.
2015) (per curiam).
103 See R. Docs. 443-3, 443-4, 443-5, 443-6, 443-7, 443-8, 443-9 (Adams Petitions for Damages); R. Doc.
443-12 (St. Pierre Petition for Damages).
100
101

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forum is more convenient than the other for the parties or for the witnesses. This factor
is neutral.104
6.

Judicial Economy

State National’s cross-claim against Superior has been pending for more than five
years,105 and its cross-claim against Allied has been pending for more than two years.106
State National’s complaint in intervention against Masse has been pending for more than
two years.107 All cases surrounding this controversy have been before this Court for over
five years. The issue of whether State National has a duty to defend Masse or Superior as
insureds or Allied as an additional insured in the Consolidated State-Court Lawsuit has
been fully briefed before this Court. Exercising jurisdiction is in the interest of judicial
economy.108 This factor weighs in favor of exercising jurisdiction.
7.

Interpretation of Decree from Parallel State Proceeding

Although a part of the Consolidated State-Court Lawsuit and this action are
parallel, filings by Allied in state court seeking a declaration of its rights to defense and
indemnity were made after the filing of State National’s cross-claims and complaint in
intervention in this Court.109 This Court is unaware of a ruling by the state court on the

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).
105 R. Doc. 29.
106 R. Doc. 135.
107 R. Doc. 132.
108 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”).
109 R. Doc. 443-15. Allied filed its third-party demand on August 18, 2016, months after State National filed
its complaint in intervention in federal court on January 14, 2015.
104

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issue of Allied’s rights to defense or indemnity, and there is no indication that such a
ruling is imminent. This Court need not interpret any decree issued in the Consolidated
State-Court Lawsuit to determine whether State National has a duty to defend Allied. The
seventh Trejo factor weighs in favor exercising jurisdiction.110
Four of the Trejo factors weigh in favor of exercising jurisdiction, while two weigh
against and one is neutral. The Court will exercise its discretion to hear the declaratory
judgment action on State National’s duty to defend Allied.
ALLIED’S STATUS AS AN ADDITIONAL INSURED UNDER STATE
NATIONAL’S POLICIES
State National seeks summary judgment on Allied’s status as an additional insured
under its policies issued to Masse and Superior and its duty to defend Allied as an
additional insured under the State National policies with respect to claims made in the
Adams and St. Pierre state-court lawsuits. Allied bears the burden of proving it is an
“additional insured” under State National’s policies.111
1. State National’s Policies Issued to Masse
State National issued two marine general liability insurance policies to Masse that
provided coverage from November 15, 2006 through November 15, 2007 and November
15, 2007 through November 15, 2008 (“Masse Policies”).112

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.
111 Because the Court finds that Allied is not an additional insured under State National’s policies, the Court
did not engage in an analysis with respect to Louisiana’s “Eight-Corners Rule.” If the Court had engaged in
this analysis, the result would be the same, as the State National policies unambiguously exclude coverage
for the allegations of the Adams and St. Pierre plaintiffs.
112 R. Docs. 242-3, 242-5.
110

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State National argues Allied does not qualify as an “Insured” under the Masse
Policies, and as a result, State National owes no duty to defend Allied in the Adams or St.
Pierre lawsuits.113
The Masse Policies contain 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 because of “bodily
injury” or “property damage” to which this insurance does not apply.114
The Masse Policies define an “Insured” as “any person or organization qualifying
as such under SECTION II – WHO IS AN INSURED.”115 The “Who is an Insured”
provision of the Masse Policies provides:
I. If you are designated in the Declarations as:
***
d. An organization other than a partnership, joint venture or limited
liability company, you are an insured. Your “executive officers” and
directors are insureds, but only with respect to their duties as your
officers or directors. Your stockholders are also insureds, but only
with respect to their liability as stockholders.116
Thus, to qualify as an “Insured” under the Masse Policies, Allied must either be
named as an insured in the Declarations, an executive officer, director, or stockholder of
the insured named in the Declarations, or Allied must be granted additional insured
status by an endorsement in the policy.

R. Doc. 445-1.
R. Docs. 242-3 at 4; 242-5 at 4.
115 R. Doc. 242-3 at 4; R. Doc. 242-5 at 10.
116 R. Doc. 242-3 at 4; R. Doc. 242-5 at 10.
113

114

19

In the Declarations section of the policy, the Named Insured is Masse Contracting
Inc.117 Allied has offered no evidence or argument that it was an executive officer, director,
or stockholder of Masse Contracting, Inc. during the period the Masse Policies were in
effect.118 The issue, then, is whether the Masse Policies contain an endorsement under
which Allied qualifies as an additional insured such that it is entitled to coverage from
State National.
a. Additional Insured Endorsement
The Masse Policies contain an endorsement entitled “Additional Insured –
Owners, Lessees or Contractors (Form B)” (“Additional Insured Endorsement”).119 The
Additional Insured Endorsement provides:
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person or Organization: As Required by written contract.
***
WHO IS AN INSURED (Section II) is amended to include as an insured the
person or organization shown in the Schedule, but only with respect to
liability arising out of “your work” for that insured by or for you.120
State National argues Allied does not qualify as an additional insured under the
Masse Policies because there exists no complete, enforceable written contract requiring
Masse to name Allied as an additional insured, and thus the Additional Insured

R. Doc. 242-3 at 2; R. Doc. 242-3 at 3.
R. Doc. 444-2 at 3, ¶ 8; R. Doc. 492 at 2, ¶ 8.
119 R. Doc. 242-4 at 25; R. Doc. 242-6 at 15.
120 R. Doc. 242-4 at 25; R. Doc. 242-6 at 15. The Masse Policies define “your work” as “(1) [w]ork or
operations performed by you or on your behalf; and (2) [m]aterials, parts or equipment furnished in
connection with such work or operations.” R. Doc. 242-3 at 16; R. Doc. 242-5 at 16. “Your work” includes
“(1) Warranties or representations made at any time with respect to the fitness, quality, durability,
performance or use of ‘your work’; and (2) [t]he providing of or failure to provide warnings and
instructions.” Id.
117

118

20

Endorsement is not triggered.121 State National argues the 1995 Master Work Contract,
under which Allied claims it should be afforded additional insured status, does not require
“by written contract” that Allied be named as an additional insured because it does not
constitute a complete and enforceable agreement for Masse to perform work for Allied.122
According to State National, Allied must present evidence of purchase orders or other
agreements to prove the existence of a written contract between Allied and Masse.
The 1995 Master Work Contract provides Allied and Masse “desire to make an
agreement whereby [Masse] would furnish labor, services, equipment, and/or materials .
. . to [Allied’s] customers.”123 Further, the Master Work Contract provides “If at any time
during the term hereof, [Allied] desires work to be performed for a particular job or
project, [Allied] shall advise [Masse] of the particulars of the work and the location
thereof. . . . Nothing herein shall require that [Allied] use [Masse’s] services, and [Masse]
shall not be required to work for [Allied] hereunder.”124
Master service contracts like the 1995 Master Work Contract between Masse and
Allied “do not provide for any specific work or services to be performed, but refer in
general terms of a need by one party for labor, services or materials, and the desire on the
part of the other to furnish the same. Specific services are later called for under the master
services agreement by work orders, purchase orders or simply invoices.”125

R. Doc. 465-1.
R. Doc. 465-1.
123 R. Doc. 234-7 at 1.
124 Id. at 1–2.
125 Livings v. Service Truck Lines of Tex., Inc., 467 So. 2d 595, 600 (La. Ct. App. 3 Cir. 4/10/1985).
121

122

21

The 1995 Master Work Contract—standing alone—is not a binding contract
between Masse and Allied.126 The Master Work Contract provided only the framework for
subsequent contracts resulting from purchase orders or other agreements that both
Masse and Allied remained free to accept or reject.127 Put another way, the Master Work
Contract only “sets forth [Masse and Allied’s] agreement to abide by certain terms should
they enter into contractual relations in the future.”128
A binding contract under the Master Work Contract “[does] not come into
existence until after the offer and acceptance of an individual work order.”129 “Each work
order issued that incorporates the terms of the [Master Work Contract] is . . . a separate
and independent contract.”130 No valid obligation arises until Allied requests the services
of Masse, and, at that point, the terms of the Master Work Contract are incorporated
automatically into the contract to perform the specified services. 131 The Master Work
Contract does not state whether, when, or where Masse would be required to perform
services for Allied; nor does the Master Work Contract state whether, when, or where
Allied was required to request services from Masse.132 For a contractual obligation to

Hebert v. Kerr-McGee Corp., 618 F. Supp. 767, 772–73 (W.D. La. Aug 22, 1985) (“[A] master service
agreement does not itself bind the parties to perform any services. It merely sets forth their agreement to
abide by certain terms should they contract to perform services in the future.”).
127 See Matte v. Zapata Offshore Co. v. Timco, Inc., 784 F.2d 628, 630 (5th Cir. 1986); see also Page v. Gulf
Oil Corp., 775 F.2d 1311 (5th Cir. 1985) (finding the master service agreement “merely sets out the rules of
the game in the event that the parties decide to play ball”).
128 Moser v. Aminoil, U.S.A., Inc., 618 F. Supp. 774, 779 (W.D. La. Aug. 22, 1985). “At best, the master
service agreement creates a contingent and speculative obligation that is subject to a purely potestative
suspensive condition on the part of the obligee, which obligation does not become valid and enforceable
until the condition is fulfilled.” Id.
129 Matte, 784 F.2d at 630.
130 Hebert, 718 F. Supp. at 773.
131 See Moser, 618 F. Supp. at 779.
132 Page, 755 F.2d at 1315.
126

22

arise, Allied would have to request the services of Masse, and Masse would have to accept
such a request.133
Allied, as the party seeking additional insured status, bears the burden at trial of
proving its insured status. State National, as the moving party on summary judgment,
must submit affirmative evidence that negates an essential element of Allied’s claim or
demonstrate there exists no record evidence to establish an essential element of Allied’s
claim. State National proceeds under the second option, arguing there are no purchase
orders or other agreements between Allied and Masse in the record that would create a
complete and enforceable contractual relationship sufficient to satisfy the “As Required
by written contract” requirement of the Additional Insured Endorsement.134 Because
State National demonstrated no record evidence exists with respect to purchase orders or
other agreements between Masse and Allied, the burden shifts to Allied to present
summary-judgment evidence of purchase orders or other agreements between it and
Masse sufficient to create a genuine factual dispute with respect to whether an enforceable
contractual relationship exists that would satisfy the “As Required by written contract”
requirement in the Additional Insured Endorsement. In its opposition to State National’s
motion for summary judgment, Allied failed to address State National’s argument with
respect to this issue, and more importantly, failed to attach summary-judgment evidence
of purchase orders or other agreements between Masse and Allied.
As a result, Allied has not raised a genuine issue of material fact with respect to
whether there is a binding contract requiring Masse to name Allied as an additional

In fact, the Master Work Contract states “In the event of a conflict between the terms of a[n] [Allied]
purchase order issued in connection herewith and this [Master Work] Contract, the terms and conditions
of the purchase order shall govern the agreement of the parties.” R. Doc. 234-7 at 2.
134 R. Doc. 465-1 at 10–12.
133

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insured. Allied has not met its burden of proving its status as an additional insured under
the Masse Policies. As a result, State National is entitled to summary judgment that Allied
is not an additional insured under the Additional Insured Endorsement. State National
has no duty to defend Allied as an additional insured on the Masse Policies against claims
in the Adams or St. Pierre lawsuits.
2. State National’s Policies Issued to Superior
State National issued two marine general liability insurance policies to Superior
that provided coverage from July 11, 2007 through July 11, 2008 and July 11, 2008
through July 11, 2009 (“Superior Policies”).135
State National argues Allied does not qualify as an “Insured” under the Superior
Policies, and as a result, State National owes no duty to defend Allied in the Adams or St.
Pierre lawsuits.136
The Superior Policies contain 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 because of “bodily
injury” or “property damage” to which this insurance does not apply.137
The “Who is an Insured” provision of the Superior Policies provides:
I. If you are designated in the Declarations as:
***
d. An organization other than a partnership, joint venture or limited
liability company, you are an insured. Your “executive officers” and
directors are insureds, but only with respect to their duties as your
R. Docs. 245-3; 245-5.
R. Doc. 446-1.
137 R. Docs. 245-3 at 7; 245-5 at 9.
135

136

24

officers or directors. Your stockholders are also insureds, but only
with respect to their liability as stockholders.138
Thus, to qualify as an “Insured” under the Superior Policies, Allied must either be
named as an insured in the Declarations, an executive officer, director, or stockholder of
the insured named in the Declarations, or Allied must be granted additional insured
status by an endorsement in the policy.
In the Declarations section of the policy, the Named Insured is Superior Labor
Services, Inc.139 Allied has offered no evidence or argument that it was an executive
officer, director, or stockholder of Superior Labor Services, Inc. during the period the
Superior Policies were in effect. The issue, then, is whether the Superior Policies contain
an endorsement under which Allied qualifies as an additional insured such that it is
entitled to coverage from State National.
The Superior Policies contain an endorsement entitled “Additional Insured –
Owners, Lessees or Contractors (Form B)” (“Additional Insured Endorsement”). 140 The
Additional Insured Endorsement provides:
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person or Organization: As Required by written contract.
***
WHO IS AN INSURED (Section II) is amended to include as an insured the
person or organization shown in the Schedule, but only with respect to
liability arising out of “your work” for that insured by or for you.141
R. Doc. 245-3 at 13; R. Doc. 245-5 at 15.
R. Doc. 245-3 at 4; R. Doc. 245-3 at 4.
140 R. Doc. 245-4 at 23; R. Doc. 245-6 at 24.
141 R. Doc. 242-4 at 25; R. Doc. 242-6 at 15. The Superior Policies define “your work” as “(1) [w]ork or
operations performed by you or on your behalf; and (2) [m]aterials, parts or equipment furnished in
connection with such work or operations.” R. Doc. 245-3 at 19; R. Doc. 245-5 at 21. “Your work” includes
“(1) Warranties or representations made at any time with respect to the fitness, quality, durability,
138
139

25

State National argues Allied does not qualify as an additional insured under the
Superior Policies because there exists no complete, enforceable written contract requiring
Superior to name Allied as an additional insured, thus triggering the Additional Insured
Endorsement.142 State National argues the 2006 Master Work Contract, under which
Allied claims it should be afforded additional insured status, cannot alone bind Allied and
Superior because it does not constitute a complete and enforceable agreement for
Superior to perform work for Allied.143 According to State National, Allied must present
evidence of purchase order or other agreements to prove the existence of a contract
between Allied and Superior.
The 2006 Master Work Contract states Allied and Superior “desire to make an
agreement whereby [Superior] would furnish labor, services, equipment, and/or
materials . . . to [Allied’s] customers.”144 Further, the 2006 Master Work Contract
provides “If at any time during the term hereof, [Allied] desires work to be performed for
a particular job or project, [Allied] shall advise [Superior] of the particulars of the work
and the location thereof. . . . Nothing herein shall require that [Allied] use [Superior’s]
services, and [Superior] shall not be required to work for [Allied] hereunder.” 145
The relevant language of the Superior Policies and 2006 Master Work Contract
between Superior and Allied are identical to the language of the Masse Policies and 1996
Master Work Contract between Masse and Allied. As a result, the Court’s analysis with
respect to Allied’s status as an additional insured under the Masse Policies applies to the

performance or use of ‘your work’; and (2) [t]he providing of or failure to provide warnings and
instructions.” Id.
142 R. Doc. 466-1.
143 R. Doc. 466-1.
144 R. Doc. 234-7 at 1.
145 Id. at 1–2.

26

Superior Policies, as well. With respect to State National’s motion for summary judgment
that Allied is not an additional insured under the Superior Policies, Allied has failed to
present summary-judgment evidence of purchase orders or other agreements between
Allied and Superior to create a genuine factual dispute with respect to whether the “As
Required by written contract” requirement in the Additional Insured Endorsement is
satisfied. As a result, there exists no genuine dispute of material fact with respect to
whether an enforceable contractual relationship between Superior and Allied exists that
would trigger coverage for Allied under the Additional Insured Endorsement.
Accordingly, State National is entitled to summary judgment that Allied is not an
additional insured under the Superior Policies. State National has no duty to defend Allied
as an additional insured on the Superior Policies against claims in the Adams or St. Pierre
lawsuits.
CONCLUSION
IT IS ORDERED that State National’s Motion for Summary Judgment with
respect to Allied’s status as an additional insured and to State National’s duty to defend
Allied in the Adams and St. Pierre lawsuits as an additional insured under its policies
issued to Masse is GRANTED.146

146

R. Doc. 445.

27

IT IS FURTHER ORDERED that State National’s Motion for Summary
Judgment with respect to Allied’s status as an additional insured and State National’s
duty to defend Allied in the Adams and St. Pierre lawsuits as an additional insured under
its policies issued to Superior is GRANTED.147
New Orleans, Louisiana, this 12th day of July, 2017.
_____________________________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

147

R. Doc. 446.

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