Jurisdiction: Court of Appeal of Louisiana, Fourth Circuit
Mr. May died from Mesothelioma and the plaintiffs filed a wrongful death and survival action alleging the decedent was exposed to asbestos while working as a Stevedore between the mid-1960s and through the 1970s. One of the defendants sued was the decedent’s past employer, Louisiana Stevedores , Inc. Liberty and Employers National Insurance Co. (“ENIC”) insured the company for workers’ compensation and employer’s liability. LIGA assumed statutory obligation for ENIC after it became insolvent.
In their answers, Liberty and LIGA (“Defendants”) contended that “Mr. May’s contraction of mesothelioma was not a covered claim within the WC/EL policy pursuant to “Exclusion (e).” The exclusion limited coverage for bodily injury by disease claims to those made within thirty-six months of the policy’s expiration date. The plaintiffs subsequently filed a motion for partial summary judgment, arguing that the policy’s definition of a bodily injury by disease and a bodily injury by disease caused by an accident was ambiguous and should be construed against the defendants. The defendants opposed and cross-moved for summary judgment, arguing the language was not ambiguous and barred recovery by the plaintiffs. The trial court denied the plaintiffs’ motion and granted the defendants’ motion, resulting in a plaintiffs’ appeal.
The Court of Appeal of Louisiana, Fourth Circuit, addressed several key issues regarding insurance coverage under workers’ compensation and employer’s liability policies (“WC/EL”), including whether summary judgment may be premised solely on secondary evidence of a lost policy, and whether the policy (as submitted by the insurer) was ambiguous regarding whether asbestos-related illnesses are bodily injury by accident or disease.
Regarding the lost policy issue, summary judgment was granted to the insurer defendant based on policy terms established by secondary evidence, including affidavits from its legal department and claims examiner, and an affidavit and deposition from an expert in an earlier matter. The actual policies were not placed into evidence. The May court held that the failure to produce actual policies meant that genuine issues of fact existed regarding the policy’s terms and exclusions. Thus, summary judgment was inappropriate.
With regard to the ambiguity issue, the May court noted that insurance policies are to be interpreted according to contract interpretation rules, and any ambiguity should be construed against the insurer. The policy at issue defined “bodily injury by accident” to include that “the contraction of a disease is not an accident within the meaning of the word ‘accident,’” and also stated that “only such disease as results directly from bodily injury by accident is included within the term ‘bodily injury by accident.’” Notably, the policy apparently did not define either “bodily injury by accident” or “bodily injury by disease.” The court held the policy did not provide any guidance to determine whether a bodily injury was caused by accident or disease, and that those were not commonly understood terms. Noting that the policy terms did allow for some diseases to be classified as accidental injury, the court found the language ambiguous regarding mesothelioma and ruled in the claimants’/plaintiffs’ favor.
Read the full decision here
