Armstrong v. Land & Marine Applicators, Inc.

• Decision Date: 13 November 1984
• Docket Number: Nos. 84-CA-509,84-CA-247,s. 84-CA-509
• Citation: 463 So.2d 1327
• Parties: Billy Wayne ARMSTRONG v. LAND & MARINE APPLICATORS, INC., et al. Billy Wayne ARMSTRONG v. LAND & MARINE APPLICATORS, INC., et al.
• Court: Court of Appeal of Louisiana — District of US

Page 1327

463 So.2d 1327

Billy Wayne ARMSTRONG v. LAND & MARINE APPLICATORS, INC., et al.

Billy Wayne ARMSTRONG v. LAND & MARINE APPLICATORS, INC., et al.

Nos. 84-CA-509, 84-CA-247.

Court of Appeal of Louisiana Fifth Circuit.

Nov. 13, 1984.

Rehearing Denied Feb. 28, 1985.

Craig R. Nelson, Hulse, Nelson & Wanek, New Orleans, for plaintiff-appellee.

Thomas E. Loehn, Joseph L. von Rosenberg, III, Boggs, Loehn & Rodrigue, New Orleans, for defendant-appellant.

Before BOUTALL, CURRAULT and GRISBAUM, JJ.

CURRAULT, Judge.

This is an expedited appeal of a summary judgment granted to third-party plaintiff, Clemco Industries (Clemco) in a worker's compensation case against third-party defendant, Commercial Union Insurance Company (Commercial Union) ¹.

The facts reveal that on or about August 31, 1981, plaintiff, Billy Wayne Armstrong, filed suit against various defendants, including Clemco. Plaintiff alleged that he had contracted a lung disease known as silicosis as a result of his working as a sandblaster-painter for various employers from 1962 through 1979, but that he first learned of his disease on June 19, 1981.

Clemco subsequently filed a third-party demand against Commercial Union, alleging that Commercial Union issued policies of liability insurance to Clemco, effective from August 1, 1970 until September 30, 1976, and that Commercial Union owed indemnification and its pro-rata share of Clemco's future defense costs.

Commercial Union filed an answer denying indemnity and the duty to defend on the basis that the period of coverage expired five years prior to the bodily injury.

Third-party plaintiff, Clemco, subsequently filed a motion for summary judgment on these issues; and on July 3, 1984, the motion was granted and defendant was ordered to defend Clemco in this suit.

As a result, third-party defendant, Commercial Union, perfected this appeal of the summary judgment granted in Clemco's favor.

Appellant, Commercial Union, alleges that the trial court erred in granting the motion of Clemco for summary judgment and ordering Commercial Union to participate in Clemco's defense, where the Commercial Union policy, on its face, clearly does not provide coverage for the injuries alleged by plaintiff.

Prior to resolving the issue raised by appellant, the court must first determine which state law applies as appellee argues that California law is applicable to the duty to defend in this case. We disagree.

The Louisiana Supreme Court in Jagers v. Royal Indemnity Company, 276 So.2d 309 (La.1973) adopted the "interest analysis" theory as the proper approach for resolving choice of law problems in uninsured motorists policies written in other states citing with approval Restatement, Second, Conflict of Laws, 86 (1969). Of interest is the statement by the court as follows:

"Conflict of Laws is that part of the law of each state which determines what effect is given to the fact that the case may have a significant relationship to more than one state." Restatement, Second, Conflict of Laws, Sec. 2 (1969). A false conflict occurs when it is found that only a single state has an interest in the application of its law, and that the other state involved has no interest in the application of its law in the case."

Since the Jagers decision, the interest analysis test has been applied in the following cases involving uninsured motorist insurance coverage in policies written in states other than Louisiana. Wilson v. State Farm Insurance Co., 448 So.2d 1379 (La.App. 2d Cir.1984); Sutton v. Langley, 330 So.2d 321 (La.App. 2d Cir.1976); Brawner v. Kaufman, 496 F.Supp. 961 (E.D.La.1980); Bell v. State Farm Fire & Casualty Co., 527 F.Supp. 300 (W.D.La.1981); Bell v. State Farm Mut. Auto. Ins. Co., 680 F.2d 435 (5th Cir.1982); Jones v. American Fire-Indemnity Insurance Company, 442 So.2d 772 (La.App. 2d Cir.1983). See also Wickham v. Prudential Ins. Co. of America, 366 So.2d 951 (La.App. 1st Cir.1978). In Champion v. Panel Era Mfg. Co., 410 So.2d 1230 (La.App. 3d Cir.1982), the interest analysis was applied in cases involving non-auto insurance policies to find the foreign insurance contract governed by the law of Louisiana. On the other hand, the approach was rejected in Richard v. Beacon Nat. Ins. Co., 442 So.2d 875 (La.App. 3d Cir.1983); and Abel v. White, 430 So.2d 202 (La.App. 4th Cir.1983).

We agree with the court in Wilson, supra, that Jagers and its progeny "represent sound public policy designed to permit Louisiana courts to apply to situations requiring choice of law where Louisiana interest is sufficient to mandate this result." At page 1382.

In this case, the alleged injury occurred in Louisiana, purportedly by a product used for many years in Louisiana. California has no significant interest in the application of its law relative to either the duty to defend or the question of insurance interpretation. Consequently, this is a false conflict and we hold that Louisiana law applies to this case.

Appellant argues that the contract provision and the jurisprudence mandates that the injury manifest itself during the policy term in order to trigger coverage and thus the duty to defend.

In Cute-Togs of New Orleans, Inc. v. Louisiana Health Service & Indemnity Co., 386 So.2d 87, 89 (La.1980), the Louisiana Supreme Court reiterated the rule regarding the insurer's duty to defend as follows:

"In American Home Assurance Co. v. Czarniecki, 255 La. 251, 230 So.2d 253 (1969), we clearly stated the 'duty to defend' rule as follows:

'... the insurer's duty to defend suits brought against its insured is determined by the allegations of the injured plaintiff's petition, with the insurer being obligated to furnish a defense unless the petition unambiguously excludes coverage. * * *

'Thus, if, assuming all the allegations of the petition to be true, there would be both (1) coverage under the policy and (2) liability to the plaintiff, the insurer must defend the insured regardless of the outcome of the suit. Additionally, the allegations of the petition are liberally interpreted in determining whether they set forth grounds which bring the claims within the scope of the insurer's duty to defend the suit brought against its insured. * * * 230 So.2d at 259. [cits. omitted]"

Plaintiff alleges in the petition, in pertinent part, that: ...

III

Plaintiff over the approximate period 1962 through 1979 worked as a sandblaster/painter for various employer-defendants, as hereinafter indicated.

XVIII

During the period of plaintiff's employment in the sandblasting-painting industry, as aforedescribed, plaintiff utilized non-air fed hoods provided by his employers which were manufactured and sold by Pulmosan Safety Equipment Company and/or Clemco Industries.

XXII

As a direct consequence of plaintiff's sandblasting activities as aforedescribed, he was caused to contract the incurable lung disease known as silicosis and, as a direct consequence thereof, plaintiff is permanently and totally disabled.

XXIII

Plaintiff did not become aware of the fact that he had silicosis as a result of the use of silica abrasives and non-air fed hoods until receipt of the report of Dr. Hans Weill on or about June 19, 1981.

XXIV

Plaintiff's contraction of silicosis was a direct result of his use of non-air fed hoods and silica abrasives during the course of his employment in the sandblasting-painting industry.

XXX

Pulmosan Safety Equipment Company and Clemco Industries a/k/a Clemco-Clementina Limited, are absolutely liable unto plaintiff in that the hoods sold by them to plaintiff's employers, and used by plaintiff in his employment for the purpose for which they were sold, were not fit for the purpose for which they were sold (sandblasting) and were the direct cause of plaintiff's contraction of silicosis.

XXXI

Pulmosan Safety Equipment Company and Clemco Industries, a/k/a Clemco-Clementina Limited were negligent proximately causing plaintiff's injuries and disability, in the following particulars, among others that will be shown at the time of trial, to wit:

(a) In defectively designing the hoods;

(b) In defectively manufacturing the hoods;

(c) In failing to warn potential users of the inherent dangers of the hoods;

(d) In failing to warn against the use of the hoods with silica abrasives;

(e) In failing to warn of the danger of contracting silicosis when using the hoods.

The insurance contract at issue provided coverage from August 1, 1960 until September 30, 1976, and the terms of the contract state:

1. COVERAGE A--BODILY INJURY LIABILITY COVERAGE B--PROPERTY DAMAGE LIABILITY

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

Coverage A. bodily injury or

...