Ducre v. Executive Officers of Halter Marine, Inc.

• Decision Date: 25 January 1985
• Docket Number: No. 83-3784,83-3784
• Citation: 752 F.2d 976
• Parties: Julius DUCRE, et al., Plaintiffs-Appellees, v. The EXECUTIVE OFFICERS OF HALTER MARINE, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 976

752 F.2d 976

Julius DUCRE, et al., Plaintiffs-Appellees, v. The EXECUTIVE OFFICERS OF HALTER MARINE, INC., et al Defendants-Appellants.

No. 83-3784.

United States Court of Appeals Fifth Circuit.

Jan. 25, 1985.

Rehearing and Rehearing En Banc Denied March 14, 1985.

Wayne H. Carlton, Jr., Orlando G. Bendana, New Orleans, La., for julius ducre.

Frank J. Peragine, Daniel J. Caruso, New Orleans, La., for Am. Optical.

Charles Hanemann, Houma, La., for Minnesota Mining.

Craig R. Nelson, New Orleans, La., for Clemco.

Robert M. Johnston, Gary M. Zwain, New Orleans, La., for Pulmosan.

James L. Selman, II, Madeleine Fischer, New Orleans, La., for Mine Safety/Travelers & Ina.

Daniel Frazier, Jr., Marrero, La., for Linda Richardson Johnson.

Lawrence J. Ernst, New Orleans, La., for Pulmosan Safety.

Donald A. Hoffman, Gerolyn P. Roussel, New Orleans, La., for Mine Safety.

Vance E. Ellefson, New Orleans, La., for Executive Officers-Halter Marine.

Thomas E. Loehn, Cynthia P. Conroy, New Orleans, La., for Commercial Union.

Sondra A. Cheek, Bogalusa, La., for Exec. Officers So. Shipbuilding, etc.

Joseph M. Bruno, New Orleans, La., for Avondale plaintiffs.

Charles M. Steen, New Orleans, La., for D.A. Krenz, et al.

William S. Marshall, Jr., Alan Dean Weinberger, New Orleans, La., for Highlands Ins. & Exec. Officers Avondale.

Andrew L. Plauche, Jr., New Orleans, La., Stewart Dalzell, Thomas J. Leach, Philadelphia, Pa., for Am. Motorists Ins.

Leon A. Aucoin, Metairie, La., for intervenor-Continental Ins.

S. Gene Fendler, Robert E. Holden, William W. Pugh, New Orleans, La., for Krenz, et al.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before THORNBERRY, GARWOOD, and HILL, Circuit Judges.

ROBERT MADDEN HILL, Circuit Judge:

This appeal is before us on certified questions ¹ which arise from the district court's orders partially granting and partially denying two principal summary judgment motions. ² More than forty employees of various ship-building companies seek damages resulting from their contraction of silicosis, a progressive lung disease, somewhat similar in origin and development to asbestosis. Involved as defendants, either directly or on third party demand, are the employers' executive officers, their insurers, and the manufacturers of safety equipment used by the employees. The actions were brought by the silicosis victims in various federal courts but were consolidated in the court of Judge George Arceneaux, in the Eastern District of Louisiana, because they involved similar issues. However, two distinct procedural structures are present in the consolidated cases; consequently, some issues are peculiar to one or the other and some are common to both.

The Southern-Halter Cases

After being told that he had contracted silicosis, Julius Ducre, a former employee of Southern Shipbuilding Corporation (Southern) and Halter Marine, Inc. (Halter) brought an action against Mine Safety Appliances Company, Pulmosan Safety Equipment Corporation, Clemco Industries, and Minnesota Mining and Manufacturing Company the manufacturers of respiration safety equipment Ducre allegedly used during his tenure as a sandblaster in the shipyards of Southern and Halter. Inhalation of silica dust while sandblasting allegedly caused him to contract silicosis. Ducre alleged that he inhaled excessive and dangerous amounts of silica dust due to the manufacturers' acts in negligently manufacturing the safety equipment, in placing it in commerce when it was defective and unreasonably dangerous, and in failing to warn of the dangers associated with using the equipment. The manufacturers then brought third party actions against the executive officers of Southern and Halter, alleging that they were negligent in failing to protect Ducre from exposure to silica dust and in failing to properly instruct Ducre in the use of the safety equipment, and that they intentionally caused Ducre's medical disorders by exposing him to silica dust, knowing that this was substantially certain to cause lung damage. On these allegations the manufacturers founded their claims for indemnity and contribution against the executive officers in the event the manufacturers are cast in judgment. Commercial Union Insurance Company (Commercial Union) was named as a third party defendant due to its position as Southern's insurer. ³

The Avondale Cases

In the Avondale cases, more than 40 silicosis victims ⁴, current and former employees of Avondale Shipyards, Inc. (Avondale), brought actions against the executive officers of Avondale for negligent and intentional acts and omissions causing the victims to inhale excessive amounts of silica dust while sandblasting in the Avondale shipyards. Commercial Union, Avondale's only insurer during the years the victims were exposed to silica dust, was joined either as a direct defendant by the victims or as a cross-defendant by the executive officers.

The Motions

The Southern and Halter executive officers sought summary judgment against the equipment manufacturers on three grounds. First, they asserted an affirmative defense based on the 1976 amendment to a provision of the Louisiana Workmen's Compensation Act, La.Rev.Stat.Ann. Sec. 23:1032 (West Supp.1984), as amended by Acts of 1976, No. 147, Sec. 1. ⁵ The Southern and Halter executive officers contended that Sec. 23:1032 foreclosed third party indemnity and contribution actions against them where the third party plaintiff has been sued by the victims only after the effective date of the amendment. Second, the executive officers contended that the manufacturers' third party complaints failed to state claims for indemnity under Louisiana law. Finally, they contended that the manufacturers failed to state claims in intentional tort, on which ground they moved the district court to dismiss the third party actions.

Subsequently, the Avondale executive officers filed a motion to dismiss or, in the alternative, for partial summary judgment in the actions against them. The motion for summary judgment adopted the argument of the Southern and Halter executive officers based on Sec. 23:1032. In the 12(b)(6) motion to dismiss, the Avondale executive officers argued, similarly to the Southern and Halter executive officers, that the victims' complaints failed to allege facts sufficient to state claims in intentional tort.

The district court first granted summary judgment as to the third party claims against the Halter executive officers based on Sec. 23:1032. The court, however, denied summary judgment finding that the third party complaints stated claims in intentional tort. ⁶

After consolidating the Avondale with the Southern-Halter cases in September 1983, the district court reconsidered its earlier rulings, vacated them insofar as they dealt with the liability of the executive officers of Southern and Halter under Sec. 23:1032 and issued a second opinion. Ducre, 573 F.Supp. at 388, 392. Concerning executive officer liability, the court reversed itself and partially granted summary judgment for the executive officers of Southern, Halter and Avondale. ⁷ Ducre, 573 F.Supp. at 392. The court left intact its original ruling on the intentional tort claims in the Southern-Halter cases and, denied the Avondale executive officers' Rule 12(b)(6) motion to dismiss, presumably on similar grounds. For the reasons set forth in parts I. and II., below, we reverse the partial grant of summary judgment as to negligence liability and affirm the denial of summary judgment as to intentional tort liability.

In all cases Commercial Union sought summary judgment, contending that the terms of its policies with Southern and Avondale excluded indemnity and defense coverage for any liability incurred by the executive officers for both negligent and intentional acts. ⁸ It argued that the policies' "occurrence endorsements" excluded coverage where silicosis manifests itself in the victim after the policy term has expired. In its second opinion, the district court partially granted summary judgment as to coverage under the "occurrence endorsement", rejecting Commercial Union's theory of interpretation. Ducre, 573 F.Supp. at 393-94. For the reasons set forth in part III., infra, we reverse the partial grant of summary judgment as to coverage under the "occurrence endorsement."

Finally, in its second opinion, the district court certified the two main issues, viz., the executive officers' liability under Sec. 23:1032 and Commercial Union's liability under its policies, for interlocutory appeal under 28 U.S.C. Sec. 1292(b), ⁹ see Ducre, 573 F.Supp. at 394-98, and several parties petitioned this court for leave to take interlocutory appeals. We granted the petitions and docketed this appeal.

I. THE AVONDALE CASES: EXECUTIVE OFFICER LIABILITY

A. Negligence

Until 1976, Louisiana permitted injured workers to sue the officers of their corporate employers in tort, in addition to recovering under the Louisiana Workmen's Compensation Act. La.Rev.Stat.Ann. Sec. 23:1032 (West 1964); see Canter v. Koehring Co., 283 So.2d 716 (La.1973). The corporate employer itself, however, was immune to similar suits. Id. In 1976, the Louisiana legislature amended the Workmen's Compensation Act so as to preclude such suits against executive officers, except to the extent they are based on intentional acts. The amendment took effect on October 1, 1976, and provides in part, as follows:

The rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights and remedies of such employee, his personal representatives, dependents, or relations, against his employer, or any principal or any officer, director, stockholder, partner or employee of such employer or principal, for said injury, or compensable sickness or disease....

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