Anco Insulations, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh

• Decision Date: 25 February 2015
• Docket Number: No. 13–31313.,13–31313.
• Citation: 787 F.3d 276
• Parties: ANCO INSULATIONS, INCORPORATED, a Louisiana Corporation, Plaintiff–Appellant v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Defendant–Cross Defendant–Appellee Royal Indemnity Company, a Delaware Corporation; Zurich American Insurance Company; American Guarantee; Liability Insurance Company, Cross Claimants–Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

787 F.3d 276

ANCO INSULATIONS, INCORPORATED, a Louisiana Corporation, Plaintiff–Appellant

v.NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Defendant–Cross Defendant–Appellee

Royal Indemnity Company, a Delaware Corporation; Zurich American Insurance Company; American Guarantee; Liability Insurance Company, Cross Claimants–Appellants.

No. 13–31313.

United States Court of Appeals, Fifth Circuit.

Feb. 25, 2015.

Glen E. Mercer, Esq. (argued), Salley, Hite, Mercer & Resor, L.L.C., New Orleans, LA, for Plaintiff–Appellant.

Lawrence Goode Pugh, III, Pugh, Accardo, Haas, Radecker, Carey & Hymel, L.L.C., New Orleans, LA, Sarah J. Edwards, Robert L. Joyce, Littleton, Joyce, Ughetta, Park, & Kelly, L.L.P., New York, N.Y., for Cross Claimants–Appellants.

Richard A. Cozad (argued), McAlpine & Cozad, Robert I. Siegel, Gieger, Laborde & Laperouse, L.L.C., New Orleans, LA, for Defendant–Cross Defendant–Appellee.

Appeal from the United States District Court for the Middle District of Louisiana.

Before DAVIS, WIENER, and HAYNES, Circuit Judges.

Opinion

PER CURIAM:

In this insurance coverage dispute, the district court granted a motion for partial summary judgment to Defendant–Appellee National Union Fire Company of Pittsburgh, Pennsylvania (“National Union”). The court reasoned that, because Plaintiff–Appellant Anco Insulations, Incorporated (“Anco”) had failed to tender claims timely under the terms of its insurance policy, National Union was not obligated to reimburse Anco for any legal costs that it incurred in defending the untimely tendered lawsuits. The district court also granted National Union's motion for partial summary judgment on Anco's claim for statutory penalties under La.R.S. §§ 22:1973, 22:1892. We affirm.

I. FACTS & PROCEEDINGS

A. Factual background

From approximately 1972 through the early 1980s, Anco sold, installed, repaired, and distributed insulation materials that contained asbestos. As a result, Anco was named a defendant in approximately 2,700 asbestos-related lawsuits filed in Louisiana, Texas, and Mississippi. In 1987, National Union issued a primary general liability insurance policy to Anco (“the Policy”), for the policy period January 1, 1987 to January 1, 1988. The Policy did not contain an asbestos exclusion.

The following factual background is contested; we summarize it only to provide the context of Anco's claim that the district court erred in granting National Union's motions for partial summary judgment. We begin with Anco's allegation that, at “some point” during the late 1980s, National Union told Anco's corporate representative, Mr. Bourgeois, that Anco had no asbestos coverage. In March of 2000, Robert Kuehn, a manager at the AIG Toxic Tort Claims department,¹ requested permission from Anco's counsel, Thomas Balhoff, to visit Zurich's offices and review its files on Anco's asbestos claims. Mr. Balhoff granted permission on behalf of Anco. In that same year, Anco tendered two asbestos lawsuits to National Union for defense by the insurer, as evidenced by the insurer's two letters acknowledging the claims. The claims were tendered under other policies, however, not under the Policy.²

In August 2000, Mr. Spadacenta, a National Union representative, allegedly advised Mr. Nilson, a Zurich claims handler, that Anco had not reported the asbestos bodily injury claims under its primary policies.³ In January 2001, Anco's counsel wrote to Greg Mayer of AIG Toxic Tort Claims, a part of National Union Insurance Company, advising National Union of the pending asbestos litigation and putting National Union on notice that it had issued excess coverage to Anco under a different policy.

B. District court proceedings

In September 2007, Anco filed a complaint seeking a declaratory judgment against several of its excess liability insurers. National Union was not named as a defendant in that initial complaint. During the course of discovery, Anco became aware of the existence of the Policy and of the fact that it did not contain an asbestos exclusion. On April 23, 2009, Anco forwarded all suits to National Union that had been served on Anco and tendered them to National Union under the Policy. In May 2009, Anco added National Union as a party-defendant to its pending declaratory judgment action against its excess insurers. In January 2010, Anco began forwarding all lawsuits that were or had been served on it to National Union. In February 2010, Anco filed its third amended complaint to add a claim against National Union for statutory penalties under La.R.S. §§ 22:1892, 22:1973, asserting that National Union had failed to participate timely in Anco's defense of the underlying lawsuits.

In December 2011, National Union filed a motion for partial summary judgment, contending that it was not liable for any of Anco's defense costs in the underlying asbestos lawsuits; or, alternatively, that National Union was not obligated to reimburse Anco or any of its other primary insurers for legal fees or costs incurred prior to April 23, 2009—the date on which Anco first forwarded its asbestos lawsuits to National Union. Several months later, in April 2012, National Union filed a motion for partial summary judgment on Anco's claim for statutory penalties, asserting that (1) National Union had assumed its share of defense costs following Anco's tender of the lawsuits in 2009; and (2) Anco had not suffered any loss that would entitle it to statutory penalties.

In February 2013, the district court granted National Union's first-filed motion for partial summary judgment, concluding that the record established that Anco first tendered its claims under the Policy on April 23, 2009. Relying on that date as the first tender of claims, the court ruled that Anco's failure to tender defense of the lawsuits to National Union timely constituted a breach of the Policy's requirement that Anco “immediately” forward any lawsuits to National Union. The district court therefore held that National Union was not obligated to reimburse Anco for any legal fees and costs it incurred in or after 1987 in the defense of approximately 2,700 asbestos lawsuits filed between 1987 and 2008.

The district court also granted National Union's motion for partial summary judgment on Anco's request for statutory penalties. The court reasoned that, as Anco had not shown that it suffered any loss from National Union's failure to participate in the defense, it could not recover penalties under Section 22:1892 for the lawsuits filed after April 23, 2009.⁴ The court also ruled in favor of National Union on Anco's request for statutory penalties under Section 22:1973(A), concluding that National Union's alleged failure to participate in Anco's defense is not one of the six enumerated claims-settlement practices that would constitute a violation of that statute.

Anco, along with Cross–Claimants–Appellants Royal Indemnity Company, Zurich American Insurance Company, and American Guarantee & Liability Insurance Company, timely appealed both rulings.⁵

On appeal, Anco contends that the district court erred (1) in holding that National Union is not obligated to reimburse Anco for costs it incurred in defending lawsuits filed between 1987 and 2008, because, Anco insists, a genuine dispute of material fact exists as to the date that Anco first tendered the claims; and, (2) in denying Anco's request for Section 22:1892 penalties because, according to Anco, that statute does not require it to show that it sustained losses to recover such penalties.

II. ANALYSIS

A. Standard of review

We review a district court's summary judgment de novo, applying the same standards as the district court. We apply state substantive law when we interpret an insurance policy, and we review the district court's conclusions on state law de novo.⁶ Under Louisiana law, an insurance policy is a contract that must be construed using the general rules of contract interpretation set forth in the Civil Code; the court's role is to determine the common intent of the parties.⁷ An insurance policy may limit an insurer's liability and impose and enforce a reasonable condition on the policy obligations that the insurer contractually assumes unless doing so conflicts with state law or public policy.⁸ When interpreting Louisiana law, we are bound by this court's prior interpretation, so long as it has not been superseded by Louisiana case law or statute.⁹

B. Partial summary judgment on duty to reimburse Anco for legal fees and costs

As noted, National Union filed a motion for partial summary judgment that it was not obligated to assume any of Anco's defense costs in the underlying asbestos lawsuits; or, alternatively, that it was not obligated to reimburse Anco or its other primary insurers for any legal fees or costs incurred prior to April 23, 2009—the date on which Anco first forwarded its asbestos lawsuits to National Union. The district court granted National Union's motion, and Anco appeals that summary judgment on the following grounds: (1) A genuine dispute of material fact exists as to the date that Anco first tendered claims under the Policy; (2) even if Anco's tender of the claims was untimely, the district court erred in not excusing Anco's tardiness; and, (3) the court erred in concluding that Anco's failure to tender claims timely under the terms of the Policy relieved National Union of its defense obligations because National Union did not claim that it was prejudiced by Anco's late tender.

1. Anco's April 23, 2009 tender of the underlying lawsuits

The district court found that Anco first tendered the underlying lawsuits to National Union on April 23, 2009—a finding supported by Anco's responses to interrogatories.¹⁰ Anco disputes this determination, claiming that the district court improperly weighed the evidence and made credibility determinations.

Anco asserts that the following evidence creates a genuine dispute of material fact as to the date that Anco first tendered the underlying claims to...