Louisiana Work. Comp. v. Louis. Ins. Guar.
| Decision Date | 13 May 2009 |
| Docket Number | No. 2008 CA 0885.,2008 CA 0885. |
| Citation | 20 So.3d 1047 |
| Parties | LOUISIANA WORKERS' COMPENSATION CORPORATION v. LOUISIANA INSURANCE GUARANTY ASSOCIATION. |
| Court | Court of Appeal of Louisiana — District of US |
Michael H. Rubin, Rodolfo J. Aguilar, Ronnie L. Johnson, Juston M. O'Brien, Jamie D. Seymour, Baton Rouge, Louisiana, for Plaintiff/Appellee, Louisiana Workers' Compensation Corporation.
James H. Gibson, David J. Ayo, Lafayette, Louisiana, for Defendant/Appellant, Louisiana Insurance Guaranty Association.
Before: KUHN, GUIDRY, and GAIDRY, JJ.
The Louisiana Insurance Guaranty Association (LIGA) appeals a partial summary judgment in favor of one of its member insurers, Louisiana Workers' Compensation Corporation (LWCC), as well as a judgment denying its cross-motion for summary judgment on the same legal issue. For the reasons described below, we reverse those judgments, granting summary judgment in favor of LIGA and dismissing LWCC's cause of action.
We are called upon in this matter to resolve a dispute between LIGA and LWCC, a member insurer of LIGA, regarding LWCC's legal liability for assessments made by LIGA. The central issue of the controversy is whether the 1999 constitutional amendment and enabling legislation that authorized LWCC to join LIGA mandate a special method of assessment, unique to LWCC.
All property and casualty insurers licensed and authorized to sell insurance in Louisiana are generally required to be members of LIGA, which by law imposes assessments upon its member insurers to fund its operations. LWCC was created by the legislature in 1991 upon the passage of a constitutional amendment adopting La. Const, art. XII, § 8.1, authorizing such action. LWCC was intended to fill the need for a workers' compensation insurer of last resort for certain employers, in response to a crisis in availability of such insurance on the open market, and provides only workers' compensation coverage. Upon its creation, it was expressly prohibited from becoming a member insurer of LIGA. Instead, the state itself guaranteed LWCC's obligations with its full faith and credit, pending approval by the U.S. Department of Labor for LWCC to provide federal Longshore and Harbor Worker's Compensation coverage without the state's guarantee.1
By 1999, LWCC was successful in becoming financially stable, and sought the introduction of legislation to terminate the state's full faith and credit guarantee and to remove the constitutional and statutory prohibition of LWCC's participation in LIGA and other restrictions on its operations. Accordingly, a constitutional amendment was proposed by the legislature and approved by the voters, removing LWCC's exemption and prohibition from joining LIGA upon the termination of the full faith and credit guarantee. The legislature also enacted appropriate statutory amendments, which became effective upon the approval of the constitutional amendment. Both the constitutional amendment and the enabling legislation provided that LWCC's "participation in, contribution to, and protection under" LIGA would be "on a prospective basis only," applicable to "claims arising from injuries after the extinguishment of the full faith and credit guarantee." On May 1, 2000, LWCC was authorized by the U.S. Department of Labor to provide federal Longshore and Harbor Worker's Compensation coverage without the state's guarantee, and the state's guarantee of its obligations ended. As of that date, LWCC also became a member insurer of LIGA.
LIGA did not assess its member insurers in 2000 or 2001. However, because of insurer insolvencies in 2001 and 2002, it imposed assessments in 2002. LIGA's first assessment to LWCC was made on May 7, 2002, in the amount of $1,864,911.97, representing 1% of LWCC's premiums of $186,491,197.00 for the year 2001. By check dated June 4, 2002, LWCC paid that assessment without protest. On December 20, 2002, LIGA made another assessment to LWCC in the same amount of $1,864,911.97. By check dated January 17, 2003, LWCC paid that assessment without protest.
On December 5, 2003, LIGA made another assessment to LWCC in the amount of $2,102,139.20, representing 1% of LWCC's premiums of $210,213,920.00 for the year 2002. At some point, LWCC chose to contest the amount of LIGA's assessments to it, based upon its interpretation that the 1999 constitutional amendment and legislation exempted LWCC from assessment by LIGA to the extent that the assessment was based upon any claims against insolvent insurers due to injuries occurring prior to the termination of the state's guarantee (on May 1, 2000), with which its membership in LIGA coincided.
On February 27, 2004, Cherie A. Pinac, LWCC's director of corporate legal services, wrote to Gillis C. Hill, LIGA's executive director, enclosing LWCC's check in the amount of $1,051,069.60, described as representing "a significant partial payment" of the December 5, 2003 assessment. Citing La. Const. Art. XII, § 8.1, Ms. Pinac requested that LIGA provide a "constitutionally-mandated analysis" of those claims upon which the assessment was based, "arising from injuries occurring after [May 1, 2000]."
On March 8, 2004, Ms. Pinac wrote to J. Robert Wooley, the Louisiana commissioner of insurance, advising him of LWCC's interpretation of its "pro rata" liability to LIGA for assessments, and requested his department's "guidance and assistance" in determining the "proper accrual" of its liability, based upon the "prospective" nature of its "contribution" to the LIGA fund. In that letter, Ms. Pinac characterized LWCC's partial payment as "a good faith payment of one-half of the assessment."
On March 15, 2004, Mr. Hill submitted LIGA's response to Ms. Pinac's letter of February 27. Mr. Hill advised her that LIGA disagreed with LWCC's interpretation of the effect of La. Const, art. XII, § 8.1 and La. R.S. 23:1395(D)(2). He summarized LIGA's position that no constitutional or statutory authority supported LWCC's interpretation of its obligation to LIGA for assessments, and that no exceptions or adjustments to assessments were made based upon the year of any insurer's admission to membership or its subsequent withdrawal before the end of the year. Mr. Hill emphasized that "LIGA's assessment authority applies equally to each and every insurer authorized to transact insurance in Louisiana," and that "LWCC, just like any other [m]ember [i]nsurer, is obligated to pay the entirety of any assessment imposed after May 1, 2000." Finally, he enclosed a "past due notice" for the unpaid balance of the assessment.
On the same date as Mr. Hill's above letter, Ms. Pinac wrote to Mr. Hill, enclosing LWCC's check for the assessment balance of $1,051,069.60, and reiterated LWCC's position regarding its interpretation of its liability and its right to a "constitutionally mandated analysis unique to [LWCC] regarding its LIGA contribution."
On September 1, 2004, LIGA again assessed its member insurers. LIGA issued an assessment of $2,315,230.63 to LWCC, representing 1% of its premiums of $251,523,063.00 for the year 2003. LWCC has never paid that assessment.
On December 14, 2004, Mr. Wooley wrote to Ms. Pinac in response to her letter of March 8. Observing that "this matter presents de novo legal issues that will require constitutional construction, statutory interpretation, and interplay between the applicable provisions," he advised that as commissioner of insurance, he would take no action relating to the status of LWCC's license or imposition of penalties pending an expected judicial determination of the dispute.
On December 23, 2004, LWCC filed a petition seeking the recovery of those portions of the three assessments relating to covered claims against LIGA arising prior to May 1, 2000, with accrued interest since LWCC's payments. It also sought declaratory and injunctive relief. In addition to allegations relating to the history and legal status of both LIGA and LWCC, LWCC's petition alleged that following the 1999 constitutional amendment "LIGA could not collect any moneys, in 1999 or at any point in the future, from LWCC for matters relating to anything connected with claims from injuries occurring prior to the extinguishment of the State guarantee [May 1, 2000]." Similarly, it alleged that under both La. Const, art. XII, § 8.1(F) and La. R.S. 23:1395(D), "LIGA could not seek premiums or assessments from LWCC for any claims or injuries that arose prior to the lapse of the full faith and credit guarantee [May 1, 2000]."
LWCC subsequently amended its petition three times before eventually filing a motion for partial summary judgment on October 26, 2007. LIGA responded with a cross-motion for summary judgment. Both motions were heard on December 3, 2007. The trial court granted LWCC's motion and denied LIGA's cross-motion. The trial court's oral reasons for judgment also set forth its reasons for certifying the partial summary judgment in favor of LWCC as final and appealable.2 On December 17, 2007, the trial court signed a combined judgment incorporating its rulings on both motions and certifying its judgment as final and appealable.3 LIGA now appeals the partial summary judgment in favor of LWCC, as well as the denial of its motion for summary judgment.4
LIGA assigns the following errors by the trial court in rendering its judgment:
I. The trial court erred in its construction of La. Const, art. XII, § 8.1(F) and La. R.S. 23:1395(D)(2).
II. The trial court erred in denying LIGA's Motion for Summary Judgment seeking dismissal of LWCC's claim for refund of assessments paid without objection.
III. The trial court erred in denying LIGA's Motion for Summary Judgment seeking dismissal of LWCC's claims for payment of a thing not due and unjust enrichment.
The judgment from which this appeal is taken is a partial summary judgment. Appellate courts review summary...
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