Arceneaux v. Amstar Corp.
66 So. 3d 438
La.2011Background
- Arceneaux sued by T&L employees for noise exposure at Domino Sugar Refinery (1947–1994).
- Continental issued eight GL policies to T&L (1963–1978); last policy excluded employee injuries but exclusion removed 1975–1978.
- Continental defended without reservation of rights starting in 1999–2003; defense withdrawn June 6, 2003, based on erroneous employee exclusion belief.
- Post-denial plaintiffs (added 2003–2004) were not defended by Continental; trial court found waiver of policy defenses for pre-denial claims.
- Trial court and Fourth Circuit found waiver of policy defenses as to post-denial claims; remanded for recalculation and remaining issues.
- Louisiana Supreme Court reversed in part, holding no waiver of coverage defenses for post-denial claims and remanding for pro rata indemnity calculation and related issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Continental waived policy defenses for post-denial claims | Arceneaux argues waiver due to defense of T&L | Continental:warranted denial; continued defense does not waive coverage defenses | No waiver for post-denial claims; remit pro rata indemnity. |
| Law of the case applicability on remand | T&L argues law of the case supports waiver | Continental argues remand allowed new determinations | Law of the case not controlling; de novo review on cross-motions allowed. |
| Amount of indemnity for post-denial claims | T&L seeks full indemnity for post-denial settlements | Continental liable pro rata per policy periods and employee exclusions | Indemnity limited to pro rata share; $174,090.92 awarded. |
| Settlement criteria for remanded post-denial claimants | All 12 remanded plaintiffs met criteria | 11 may not; need specific determinations | Remanded to determine whether each of 12 claimants met criteria. |
| Attorney fees for late payment under La. R.S. 22:658 | T&L seeks fees for collecting late payments | Fees limited to those incurred in collecting late payments | Remand to determine exact fees; time-based calculation guided by statute. |
Key Cases Cited
- Steptore v. Masco Const. Co., Inc., 643 So.2d 1213 (La. 1994) (waiver when insurer knowingly relinquishes rights by defending without reservation)
- Hooley v. Zurich General Accident & Liability Ins. Co., 103 So.2d 449 (La. 1958) (breach of defense duty can affect action, but not extend waivers beyond contract terms; no-action rationale)
- Yount v. Maisano, 627 So.2d 148 (La. 1993) (insurer's duty to defend is broader than indemnity; petition dictates defense unless unambiguous exclusion)
- American Home Assur. Co. v. Czarniecki, 230 So.2d 253 (La. 1969) (liberal construction of allegations to determine defense obligation)
- Meloy v. Conoco, Inc., 504 So.2d 833 (La. 1987) (coverage determinations based on petition allegations)