Arceneaux v. Amstar Corp.
161 So. 3d 115
La. Ct. App.2015Background
- Plaintiffs (Barbe and Waguespack) sued American Sugar for occupational hearing loss from long-term noise exposure at its refinery, alleging exposure spanning the 1940s–2000s.
- American Sugar filed a third-party demand against Continental, which issued occurrence-based policies for some years (1963–1978); employee-exclusion endorsements removed coverage for most years except a 26-month window ending March 1, 1978.
- Continental initially did not defend, later paid 25% of defense costs under reservation of rights, and disputed obligation to provide full defense going forward.
- American Sugar sought summary judgment for reimbursement of past defense costs and a court order requiring Continental to provide a full defense; trial court ordered Continental to provide a full (100%) defense prospectively but denied reimbursement and bad-faith claims.
- Continental appealed, arguing under Louisiana long-latency disease law (as in Southern Silica) that its duty to defend should be prorated to the fraction of exposure years its policies cover (~4.3%), not a full defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an insurer in a long-latency disease case must provide a full defense when its occurrence policies cover only part of the alleged exposure period | Duty to defend follows ordinary rule: if petition alleges any coverage under insurer's policy, insurer must defend entire suit | Duty to defend should be prorated like indemnity in long-latency cases (pay/share only for policy period exposure) | Court held duty to defend is not subject to proration; Continental must provide full defense going forward |
Key Cases Cited
- Steptore v. Masco Constr. Co., 643 So.2d 1213 (La. 1994) (insurer’s duty to defend determined by plaintiff’s petition; duty exists unless petition unambiguously excludes coverage)
- Cole v. Celotex Corp., 599 So.2d 1058 (La. 1992) (adopts exposure trigger for long-latency disease coverage)
- Southern Silica of La., Inc. v. La. Ins. Guar. Ass’n, 979 So.2d 460 (La. 2008) (applies pro rata allocation of indemnity among insurers and interprets LIGA statute; decree references reimbursement of defense costs pro rata)
- Arceneaux v. Amstar Corp., 66 So.3d 438 (La. 2011) (discusses Continental’s prior defense conduct and holds its withdrawal breached duty to defend; addresses waiver of coverage defenses)
- Ellis v. Transcon. Ins. Co., 619 So.2d 1130 (La. App. 4th Cir. 1993) (once one claim falls within coverage, insurer must defend whole lawsuit)
- Mossy Motors, Inc. v. Cameras Am., 898 So.2d 602 (La. App. 4th Cir. 2005) (explains eight‑corners/four‑corners rule and liberal interpretation of petition for duty to defend)
- Norfolk S. Corp. v. Cal. Union Ins. Co., 859 So.2d 167 (La. App. 1st Cir. 2003) (applies pro rata allocation of indemnity under exposure theory in long-latency cases)