Hotard v. Avondale Industries, Inc. et al

Filing 213

ORDER AND REASONS GRANTING 196 Motion to Enforce Stay and Notice of Liquidation and Statutory Stay. IT IS FURTHER ORDERED that the above-captioned action is STAYED AND ADMINISTRATIVELY CLOSED. IT IS FURTHER ORDERED that a status conference is set for 9/29/2021 at 4:00 PM. Signed by Chief Judge Nannette Jolivette Brown on 7/15/2021.(pp)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
PAUL HOTARD

CIVIL ACTION

VERSUS

CASE NO. 20-1877

AVONDALE INDUSTRIES, INC. ET AL.

SECTION: “G”(1)

ORDER AND REASONS
In this litigation, Plaintiff Paul Hotard (“Plaintiff”) alleges that he suffered exposure to
injurious levels of asbestos and asbestos-containing products designed, manufactured, sold and/or
supplied by several defendant companies while employed by Avondale Industries, Inc.
(“Avondale”).1 Pending before the Court is the “Motion to Enforce Stay and Notice of Liquidation
and Statutory Stay” filed by Defendant Lamorak Insurance Company (“Lamorak”).2 Considering
the motion, the memoranda in support and opposition, the record, and the applicable law, the Court
stays and administratively closes the instant action and sets a status conference for September 29,
2021.
I. Background
Plaintiff filed a “Petition for Damages” (the “Petition”) in the Civil District Court for the
Parish of Orleans, State of Louisiana, on June 29, 2020.3 Avondale removed the case to this Court

1

Rec. Doc. 1-2 at 2.

2

Rec. Doc. 196.

3

Rec. Doc. 1-2 at 1.

1

on July 2, 2020, asserting diversity jurisdiction pursuant to 28 U.S.C. § 1332.4 Plaintiff alleges
that he “work[ed] for Avondale Shipyards at its Main Yard during the mid 1960s.” 5 Plaintiff
contends that during that time he handled asbestos and asbestos-containing products in various
locations and work sites, resulting in Plaintiff inhaling asbestos fibers and later developing diffuse
malignant pleural mesothelioma.6 Plaintiff alleges that he was diagnosed with mesothelioma in or
around April 2020.7 Plaintiff brings Louisiana state law negligence and strict liability tort claims
against Avondale.8 Plaintiff also brings claims against Lamorak as alleged insurers of Avondale
executive officers pursuant to the Louisiana Direct Action Statute.9
On May 5, 2021, Lamorak filed the instant “Motion to Enforce Stay and Notice of
Liquidation and Statutory Stay.”10 Plaintiff filed an opposition to the instant motion on May 25,
2021.11 On May 28, 2021, with leave of Court, Lamorak filed a reply memorandum in further
support of the instant motion. 12 On June 2, 2021, with leave of Court, Avondale, Defendant
ViacomCBS Inc. (“Viacom”), and Defendant General Electric Company (“General Electric”) filed

4

Rec. Doc. 1.

5

Rec. Doc. 1-2 at 2.

6

Id. at 3.

7

Id.

8

See Rec. Doc. 60.

9
Id. at 9. Plaintiff cites La. Rev. Stat. § 22:655, the previous citation for the Louisiana Direct Action
Statute prior to the 2011 amendment. See La. Rev. Stat. § 22:1269.
10

Rec. Doc. 196.

11

Rec. Doc. 200.

12

Rec. Doc. 205.

2

reply memoranda to Plaintiff’s opposition to the instant motion.13
II. Parties’ Arguments
A.

Lamorak’s Arguments in Support of the Motion to Stay
Lamorak moves the Court to stay all proceedings in the instant matter due to Lamorak

being declared insolvent and placed into liquidation by the Commonwealth Court of Pennsylvania
on March 11, 2021.14 Lamorak also seeks to continue the November 1, 2021 trial date.15 Lamorak
raises three arguments in support of this motion.
First, Lamorak asserts that it has been declared insolvent and placed into liquidation.16
Specifically, Lamorak avers that Bedivere Insurance Company (“Bedivere”), a foreign insurance
company that includes by merger Lamorak, was declared insolvent and placed into liquidation on
March 11, 2021 by Judge Brobson in the Commonwealth Court of Pennsylvania. 17 Lamorak
points to the Liquidation Order issued by the Commonwealth Court of Pennsylvania, which states:
All above-enumerated actions currently pending against Bedivere in the courts of
the Commonwealth of Pennsylvania or elsewhere are hereby stayed; relief sought
in these actions shall be pursued by filing a proof of claim against the estate of
Bedivere pursuant to Section 538 of Article V, 40 P.S. § 221.38.18
Lamorak urges the Court enforce the permanent stay of claims against Lamorak instituted by the

13

Rec. Docs. 207, 209.

14

Rec. Doc. 196.

15

Rec. Doc. 196-2 at 11.

16

Id. at 1.

17

Id.

18

Id. at 2.

3

Commonwealth Court of Pennsylvania.19
Second, Lamorak argues that under Louisiana Revised Statute § 22:2068 (“La. R.S.
22:2068”), claims against Lamorak and any party Lamorak is obligated to defend are subject to an
automatic statutory stay of claims.20 Lamorak contends that it is an “insolvent insurer” under the
terms of Louisiana Revised Statute § 22:2055(7), the Louisiana Insurance Guaranty Association
Law.21 Therefore, Lamorak asserts that the Louisiana Insurance Guaranty Association (“LIGA”)
“has all rights, duties and obligations of the insolvent insurer, herein Bedivere Insurance
Company/Lamorak, as if the insurer had not become insolvent, including the obligation to defend
the insured(s).” 22 Lamorak claims that as an insolvent insurer, La. R.S. 22:2068 mandates an
automatic statutory six month stay of claims against Lamorak and any party it is obliged to defend,
including defendants Eagle, Inc. (“Eagle”) and McCarty Corporation (“McCarty”).23
Third, and finally, Lamorak argues that this Court “has inherent authority to stay
proceedings to control the disposition of the causes on its docket with economy of time and effort
for itself, for counsel, and for litigants.”24 Lamorak contends that a “stay of all proceedings is
justified under the court’s inherent authority.”25

19

Id.

20

Id.

21

Id. at 3.

22

Id.

23

Id. at 2–7.

24

Id. at 6 (internal quotation marks omitted).

25

Id. at 7.

4

B.

Plaintiff’s Arguments in Opposition to the Motion to Stay
Plaintiff does not dispute that a stay of the claims pending against Lamorak is appropriate

in light of the Pennsylvania order.26 Rather, Plaintiff argues that the Court should deny Lamorak’s
motion to stay “as to all defendants save Lamorak itself” because La. R.S. 22:2068 is a state
procedural law and does not apply in federal court pursuant to the Erie doctrine.27 Plaintiff also
contends that it would not be prudent to stay this case because “[b]ringing Plaintiff’s case to a
screeching halt would not further the interests of justice” and “Lamorak cannot be liable unless its
[i]nsureds are liable, and they already have representation in this matter separate from Lamorak.”28
According to Plaintiff, a separate trial against Lamorak will be necessary only if Plaintiff is unable
to collect a judgment from its insureds and Lamorak is unwilling to pay on their behalf.
In the alternative, Plaintiff moves “to dismiss Lamorak and the [i]nsureds without
prejudice, to sever all cross-claims to which the [i]nsureds are parties, and to therefore dismiss
Lamorak’s Motion to Stay as moot.”29 Plaintiff avers that Lamorak and its insureds, as solidary
tortfeasors, are not indispensable parties to the instant litigation.30
C.

Lamorak’s Arguments in Further Support of the Motion to Stay
In reply, Lamorak urges the Court to enforce the automatic statutory stay of claims against

parties for whom Lamorak was providing a defense under La. R.S. 22:2068.31 Lamorak contends

26

Rec. Doc. 200 at 2.

27

Id. at 3–5.

28

Id. at 4.

29

Id. at 4–5.

30

Id. at 5.

31

Rec. Doc. 205 at 1.

5

that “[t]he Louisiana statute is not merely a procedural stay as an attempt to control a federal
court’s docket. Rather, the six months stay provided by the statute provides substantive rights to
insureds who are adversely affected by the insolvency of their insurer.”32 Specifically, according
to Lamorak, the stay prevents claims from proceeding against insureds who “will be prejudiced by
not having insurance to pay for the defense of the suit” and “provides the time necessary for
[LIGA] to evaluate its obligations and provide access to the insolvent insurer’s records to
determine whether it will assume defense and indemnity in a case.”33 Lamorak points out that it
was providing a defense to Eagle prior to its insolvency and there is “no one currently paying for
the defense of Eagle,” which Lamorak contends will prejudice Eagle if the case against it
proceeds.34
D.

Avondale’s Arguments in Opposition to Severance
Avondale contends that Plaintiff’s request for severance of all cross-claims to which

Lamorak or its insureds are parties is “procedurally improper” under Federal Rule of Civil
Procedure 7(b) because it was not properly raised by motion but instead asserted in Plaintiff’s
opposition brief. 35 Avondale further contends that it would be prejudiced by the proposed
severance because it has asserted crossclaims and third-party demands against other parties in this
case.36 Avondale also argues that “conducting two trials would result in a tremendous waste of

32

Id. at 1–2.

33

Id. at 2.

34

Id.

35

Rec. Doc. 209 at 2–3.

36

Id. at 3–4.

6

resources.”37 According to Avondale, a brief stay of this litigation is the “best course of action” to
“preserve the status quo and allow for a single trial in this matter.”38
E.

Viacom and General Electric’s Arguments in Opposition to Severance
Viacom and General Electric also argue that Plaintiff’s request for severance is

procedurally improper.39 Viacom and General Electric contend that severance is not justified in
this matter because Plaintiff’s claims against Lamorak, Lamorak’s insureds, and the other
defendants all arise from the same transaction or occurrence and involve common questions of law
and fact.40 Viacom and General Electric also argue that severing the claims against Lamorak and
its insureds will not promote judicial economy and will cause undue prejudice to defendants.41
Finally, Viacom and General Electric note that the case against Lamorak and its insureds involves
the same witnesses and evidence as the case against several other defendants.42
III. Legal Standards
A.

Legal Standard for a Motion to Stay
In Landis v. North American Co., the Supreme Court recognized that “the power to stay

proceedings is incidental to the power inherent in every court to control the disposition of the
causes on its docket with economy of time and effort for itself, for counsel, and for litigants.”43

37

Id. at 4.

38

Id. at 5.

39

Rec. Doc. 207 at 2.

40

Id. at 2–4.

41

Id. at 4–6.

42

Id. at 6.

43

299 U.S. 248, 254 (1936).

7

The Supreme Court noted that “how this can best be done calls for the exercise of judgment, which
must weigh competing interests and maintain an even balance.”44 Therefore, a district court has
“discretionary power to stay proceedings before it in the control of its docket and in the interests
of justice.”45 Furthermore, a district court may exercise this discretionary power sua sponte.46
B.

Legal Standard for Severance
1.

Legal Standard Under Rule 21

Motions to sever are generally governed by Federal Rule of Civil Procedure 21, which
provides that “any claim against a party may be severed and proceeded with separately.”47 This
Court has “broad discretion to sever issues to be tried before it.”48 Accordingly, a court’s decision
to sever a claim will be reviewed for abuse of discretion.49 Although courts have looked to Rule
20 for guidance in the absence of any standards in Rule 21,50 courts may sever claims even where
the requirements of Rule 20(a) for permissive joinder have been satisfied.51 To determine whether
a claim should be severed, a court may consider the following factors: (1) whether the claim arose
out of the same transaction or occurrence; (2) whether the claims present common questions of
law or fact; (3) whether settlement or judicial economy would be promoted; (4) whether prejudice

44

Id. at 254–55.

45

McKnight v. Blanchard, 667 F.2d 477, 479 (5th Cir. 1982).

See Begum v. Miner, 213 F.3d 639, at *1 n.1 (2000) (unpublished) (citing Murphy v. Uncle Ben’s, Inc.,
168 F.3d 734, 737 n.1 (5th Cir.1999)) (“We have held that the district court may sua sponte stay a suit as a form of
abstention.”).
46

47

Fed. R. Civ. P. 21.

48

Brunet v. United Gas Pipeline Co., 15 F.3d 500, 504 (5th Cir. 1994).

49

Acevedo v. Allsup's Convenience Stores, Inc., 600 F.3d 516, 520 (5th Cir. 2010) (citing Jolley v. Welch,
904 F.2d 988, 994 (5th Cir. 1990)).
50

Id. at 521.

51

United States v. O'Neil, 709 F.2d 361, 369 (5th Cir. 1983).

8

would be averted by severance; and (5) whether different witnesses and documentary proof are
required for separate claims.52 It is notable that the first two factors track the “two-prong test”
created by Rule 20, which permits joinder of plaintiffs when “(1) the claims arise out of the same
transaction, occurrence, or series of transactions or occurrences and when (2) there is at least one
common question of law or fact linking all claims.”53 Therefore, application of these five factors
accounts for whether joinder was appropriate, but it also allows for the exercise of judicial
discretion in instances where joinder was permissible but severance is warranted.
2.

Legal Standard Under Rule 42(b)

Federal Rule of Civil Procedure 42 gives a district court discretion, “[f]or convenience, to
avoid prejudice, or to expedite and economize, . . . [to] order a separate trial of one or more separate
issues, claims, crossclaims, counterclaims, or third-party claims.” 54 The Fifth Circuit has
explained that:
The procedure authorized by Rule 42(b) should be distinguished from severance
under Rule 21. Separate trials will usually result in one judgment, but severed
claims become entirely independent actions to be tried, and judgment entered
thereon, independently. Unfortunately, this distinction, clear enough in theory, is
often obscured in practice since at times the courts talk of separate trial and
severance interchangeably.55
Some district courts in the Fifth Circuit apply the same considerations to Rule 21 requests

52

Vaz v. Allstate Prop. & Cas. Co., No. 06-481, 2006 WL 2583733, at *1 (S.D. Miss. Sept. 6, 2006) (citing
Morris v. Northrop Grumman Corp., 37 F. Supp. 2d 556, 580 (S.D.N.Y. 1999)); Corkern v. Hammond City, No. 111828, 2012 WL 2597561, at *2 (E.D. La. July 5, 2012) (citing Kreger v. General Steel Corp., No. 07-575, 2011 WL
1594839, at *2 (E.D. La. Apr. 25, 2011)).
53

Acevedo, 600 F.3d at 521 (citations omitted). Even when the test for joinder is satisfied, district courts
have the discretion to refuse joinder in the interest of avoiding prejudice and delay. Id. (citing Applewhite v. Reichhold
Chems., Inc., 67 F.3d 571, 574 (5th Cir. 1995)).
54

Fed. R. Civ. P. 42(b).

55

McDaniel v. Anheuser–Busch, Inc., 987 F.2d 298, 304 n.19 (5th Cir.1993) (quoting 9 Wright & Miller,
Federal Practice and Procedure: Civil § 2387 (1971)).

9

for severance and Rule 42(b) requests for separate trials.56 However, other district courts in the
Fifth Circuit find that “[t]he standards for separate trials and severance differ, and although both
consider prejudice to the parties to be a key factor . . . the application of Rule 42(b) involves
primarily the consideration of convenience and fairness, [while] that of Rule 21 also presupposes
basic conditions of separability in law and logic.”57
IV. Analysis
Lamorak moves the Court to stay all proceedings in the instant matter due to Lamorak
being declared insolvent and placed into liquidation by the Commonwealth Court of Pennsylvania
on March 11, 2021.58 Lamorak also seeks to continue the November 1, 2021 trial date.59 Plaintiff
opposes Lamorak’s motion to stay “as to all defendants save Lamorak itself.”60 In the alternative,
Plaintiff moves “to dismiss Lamorak and the [i]nsureds without prejudice, to sever all cross-claims
to which the [i]nsureds are parties, and to therefore dismiss Lamorak’s Motion to Stay as moot.”61
Avondale, Viacom, and General Electric oppose Plaintiff’s alternative request for severance.62
The Court first addresses Lamorak’s request for a stay of proceedings and then turns to the

56

Beechgrove Redevelopment, L.L.C. v. Carter & Sons Plumbing, Heating & Air Conditioning, Inc., No.
07-8446, 2009 WL 382713, at *5 (E.D. La. Feb. 11, 2009) (Barbier, J.); see also Abrams v. Integrated Pro Servs.,
LLC, 07-8426, 2015 WL 7458604, at *2 (E.D. La. Nov. 24, 2015) (Lemelle, J.) (“As the concepts of convenience
and fairness fall under the prejudice umbrella and are not inapposite to the concept of separability, this Court finds
no need to apply different standards.”).
57

Id. (quoting David v. M & E Food Mart, Inc., 1995 WL 55306, *1 (E.D. Tex. Jan. 31, 1995)).

58

Rec. Doc. 196.

59

Rec. Doc. 310-2 at 7.

60

Rec. Doc. 200 at 5.

61

Id. at 4–5.

62

Rec. Docs. 207, 209.

10

issue of whether the claims involving Lamorak and its insureds should be severed from the claims
pending against other defendants in this litigation.
A.

Lamorak’s Motion to Stay
Lamorak urges this Court to (1) enforce the permanent stay of claims against it initiated by

the Commonwealth Court of Pennsylvania; (2) enforce the automatic statutory six-month stay of
claims against it and any party it is obligated to defend as set forth by La. R.S. 22:2068; and (3)
use its inherent authority to stay proceedings for judicial economy and allow LIGA time to
determine its obligations in this matter.63 In opposition, Plaintiff contends that La. R.S. 22:2068
is procedural rather than substantive and therefore does not apply to the instant federal
proceedings.64 Plaintiff also argues that it would not be prudent to stay this case because separate
trials will result in minimal “duplication of effort,” Lamorak’s insureds “already have
representation in this matter,” and “[b]ringing Plaintiff’s case to a screeching halt would not further
the interests of justice.”65
As this Court recently observed in a similar case, 66 Fifth Circuit precedent holds that
“insolvent insurers are subject to the comprehensive oversight of state administrative agencies and
courts” and “[f]ederal law consigns to the states the primary responsibility for regulating the

Rec. Doc. 196-2. La. Rev. Stat. 22:2068(A) provides: “All proceedings in which the insolvent insurer is
a party or is obligated to defend a party in any court in this state shall be stayed for six months and such additional
time as may be determined by the court from the date the insolvency is determined to permit proper defense by the
association of all pending causes of action.”
63

64

Rec. Doc. 200 at 2–4.

65

Id. at 4.

66

Gooding v. Liberty Mut. Ins., No. 20-1133, 2021 WL 2002463, at *1 (E.D. La. May 19, 2021) (Brown,

C.J.).

11

insurance industry.”67 Accordingly, the Fifth Circuit, in Clark v. Fitzgibbons, held that “allowing
a creditor or claimant to proceed against an insolvent insurer in federal court while a state
insolvency proceeding is pending would usurp [the state’s] control over the liquidation proceeding
by allowing [the claimant] to preempt others in the distribution of [the insurance company’s]
assets.” 68 The Fifth Circuit, relying on the Full Faith and Credit Clause of the United States
Constitution, explained that “a federal court judgment against [an Arizona insolvent insurer]
inevitably would destabilize Arizona’s efforts to manage [the] insolvency.”69
Similarly, in Anshutz v. J. Ray McDermott Co., an insurer was placed under a “Final Order
of Liquidation” by the Circuit Court of Cook County, Illinois while an appeal against it was
pending in federal court. 70 The Fifth Circuit stayed the appeal, holding that “[a]n orderly
liquidation requires that this Court not interfere with the order of the Circuit Court of Cook
County” and explaining that “[r]ecognition by this Court of the effectuation of the liquidation of
this insurance company by the State of Illinois is in accordance with federal policy which directs
that the control over the insurance business remain in the hands of the states.”71 Accordingly, in
light of Fifth Circuit precedent admonishing courts to avoid interfering with state administrative
processes involving insolvent insurers and the Court’s broad discretion to stay proceedings, the
Court will stay the claims pending against Lamorak.72

67

Clark v. Fitzgibbons, 105 F.3d 1049, 1051 (5th Cir. 1997) (citing the McCarran–Ferguson Act).

68

Id. (internal citation and quotation omitted).

69

Id. at 1053.

70

Anshutz v. J. Ray McDermott Co., 642 F.2d 94, 95 (5th Cir. 1981).

71

Id.

72

See Cortez v. Lamorak Ins. Co., No. 20-2389, 2021 WL 2018073 (E.D. La. May 20, 2021) (Vance, J.)
(staying an action in which Lamorak is a defendant in light of the Commonwealth Court of Pennsylvania’s

12

The Court will also exercise its inherent authority to stay this matter as to all other
defendants. There is no question that a district court has inherent power to “control the disposition
of the causes on its docket with economy of time and effort for itself, for counsel, and for
litigants,”73 and that this authority includes the district court’s wide discretion to grant a stay in a
pending matter. 74 When “the interests of justice seem[] to require such action,” a court may
exercise its discretion to stay civil proceedings.75 In determining whether to grant a stay, courts
consider the following factors as set out in Landis v. North American Co.: (1) any hardship imposed
on the moving party by proceeding with the action, (2) any prejudice to the non-moving party if
the stay is granted, and (3) the interests of judicial economy.”76 Applying the Landis factors here,
the Court finds a stay is warranted.
Under the first factor, as noted above, because Lamorak, the moving party, was declared
insolvent in liquidation proceedings, “a stay is required so as not to interfere with its orderly
liquidation.”77 Moreover, Lamorak is obliged to defend the Eagle, Inc., and McCarty Corporation.
Staying claims against Lamorak but proceeding against Lamorak’s insureds would be highly

Liquidation Order and finding that “a stay is required so as not to interfere with [Lamorak’s] orderly liquidation.”);
Olin Corp. v. Lamorak Ins. Co., No. 84-CV-1968 (JSR), 2021 WL 982426 (S.D.N.Y. Mar. 15, 2021) (staying an
action in which Lamorak is a defendant in light of the Commonwealth Court of Pennsylvania’s Liquidation Order in
part under the “principles of comity.”).
73

Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).

74

In re Ramu Corp., 903 F.2d 312, 318 (5th Cir. 1990).

75

United States v. Kordel, 397 U.S. 1, 12 n.27 (1970); see also, Mayo v. Tri-Bell Indus., 787 F.2d 1007,
1012 (5th Cir. 1986).
76
Cortez v. Lamorak Ins. Co., No. 20-2389, 2021 WL 2018073, at *4 (E.D. La. May 20, 2021) (Vance, J.)
(quoting Maples v. Donzinger, No. 13-223, 2014 WL 688965, at *2 (E.D. La. Feb. 21, 2014)) (internal quotation
marks omitted).
77

Id.

13

prejudicial to such insured parties. Furthermore, “absent a stay, LIGA would not have sufficient
time to investigate the claims against Lamorak, now that LIGA stands in Lamorak’s shoes as to
those claims.”78 Given that the Court should “take into account the hardships these litigants and
LIGA would experience were litigation to proceed before LIGA had the opportunity to prepare a
defense” in weighing a stay,79 the Court finds that the first Landis factor favors a stay.
Under the second Landis factor, Plaintiff argues that a stay would be prejudicial because it
would bring “discovery and motion practice in the matter . . . to a halt.” 80 However, even
considering the potential prejudice to Plaintiff under the second Landis factor, the third Landis
factor weighs in favor of granting a stay. Proceeding with this case against parties other than
Lamorak would frustrate judicial economy. Plaintiffs’ claims against the non-Lamorak parties in
this action all arise from the same transaction or occurrence, namely Plaintiff’s alleged asbestos
exposure while working for Avondale in the 1960s. Consequently, all claims involve common
questions of fact and law. A stay against only Lamorak would result in litigation “proceed[ing] in
a haphazard and inefficient manner.” 81 Accordingly, considering the three Landis factors, the
Court finds that a stay against all parties is necessary.
B.

Plaintiff’s Request to Sever Claims Involving Lamorak
In the alternative, Plaintiff requests that this Court “dismiss Lamorak and the [i]nsureds

without prejudice, to sever all cross-claims to which the [i]nsureds are parties, and to therefore

78

Id.

79

Id.

80

Rec. Doc. 200 at 1.

81

Id.

14

dismiss Lamorak’s Motion to Stay as moot”82 effectively seeks a severance of claims involving
Lamorak and its insureds from the remaining claims in this action. In support of this request,
Plaintiff avers that Lamorak and its insureds, as solidary tortfeasors, are not indispensable parties
to the instant litigation.83 In opposition, Avondale, Viacom, and General Electric contend that (1)
Plaintiff’s request is procedurally improper; and (2) severance of the claims involving Lamorak
and its insureds is not appropriate under Rule 21.84
Under the overlapping standards applicable to Rule 21 and Rule 42(b), the Court finds that
severance is inappropriate in this case. First, severing the claims against only Lamorak without
severing the claims against its insureds would be highly prejudicial to Lamorak’s insureds who
have tendered their defenses to Lamorak.
Second, severing the claims against Lamorak and its insureds while proceeding to trial
against the remaining defendants in this action would result in the risk of inconsistent jury verdicts.
Additionally, as noted by the Avondale Interests, Plaintiff’s claims in this action arise from the
same transaction or occurrence, namely Plaintiff’s alleged asbestos exposure while working for
Avondale in the 1960s. Consequently, all claims involve common questions of fact and law,
meaning that separate trials would likely frustrate judicial economy. In addition, under the
Louisiana law applicable to the survival claims raised in this case, damages are allocated among
defendants according to virile share principles.85 Severing claims against certain defendants would

82

Rec. Doc. 200 at 4–5.

83

Id. at 5.

84

Rec. Docs. 207, 209.

85

See Cole v. Celotex Corp., 599 So. 2d 1058 (La. 1992).

15

therefore frustrate the parties’ ability to resolve this case as a whole and may result in undue
prejudice to both Plaintiff and Defendants, who would have to bear the increased costs of litigating
this case twice. Accordingly, the Court declines to sever the claims involving Lamorak and its
insureds from the claims against the remaining defendants in this litigation.
Finally, Lamorak requests a continuance of the November 1, 2021 trial date in this matter.
Rather than continuing the trial date at this time, the Court will schedule a status conference for
September 29, 2021 to discuss the status of the case.
V. Conclusion
For the foregoing reasons,
IT IS HEREBY ORDERED that the “Motion to Enforce Stay and Notice of Liquidation
and Statutory Stay”86 filed by Defendant Lamorak Insurance Company is GRANTED.
IT IS FURTHER ORDERED that the above-captioned action is STAYED AND
ADMINISTRATIVELY CLOSED.
IT IS FURTHER ORDERED that a status conference is set for September 29, 2021 at
4:00 PM.
NEW ORLEANS, LOUISIANA, this 15th day of July, 2021.
____

_________________________________
NANNETTE JOLIVETTE BROWN
CHIEF JUDGE
UNITED STATES DISTRICT COURT

86

Rec. Doc. 196.

16