Cortez v. Lamorak Insurance Company (E.D. La., Oct. 4, 2022)

Our plain-English summary of Cortez v. Lamorak Insurance Company (U.S. District Court, Eastern District of Louisiana, October 4, 2022).

The family of Callen Cortez sued, including under Louisiana's Direct Action Statute, in a survival and wrongful death action. Cortez was diagnosed with mesothelioma in June 2020 and died in May 2022. The plaintiffs allege asbestos exposure over his career. He worked at Avondale Shipyards from 1969 to 1974 as a welder and tacker helper and was exposed to materials such as Garlock gaskets. They also allege take-home exposure. His father and brothers worked at Avondale, and he helped beat dust from his brother's work clothes at the family home. Certain London Market Insurers, sued as an excess insurer of Avondale, moved for partial summary judgment. It argued it had no liability for exposures after January 21, 1970. The plaintiffs showed, and the insurer did not dispute, that it issued excess policies covering July 1973 to January 1974. The insurer argued that damages would be unlikely to reach its $15 million threshold. The court denied the motion. It held that this was a prediction about the scope of liability and the amount of damages, which are factual issues for trial.

We wrote this summary from the court's opinion with the help of AI. It is not the court's wording, and it is not legal advice. The full opinion is below.

The decision

• Court: U.S. District Court, Eastern District of Louisiana
• Decided: October 4, 2022
• Docket: Civil Action No. 20-2389
• Stage: Summary judgment
• State: Louisiana

Outcome. The court denied Certain London Market Insurers' motion for partial summary judgment on the plaintiffs' claims arising from Avondale exposures after January 21, 1970, so the plaintiffs prevailed on the motion.

What the court held. An excess insurer's prediction that damages will not reach its policy threshold is not grounds for summary judgment, because the scope of liability and the amount of damages are factual issues for trial.

Issues decided: Insurance Coverage.

The people and their exposure

• Callen J. Cortez: mesothelioma; died

Who	Work	Where	When	Products
Callen J. Cortez	welder and tacker helper (shipyards and maritime work)	Avondale Shipyards, Westwego Yard, Westwego, Louisiana	1969-1974	gaskets and packing, Garlock gaskets
Callen J. Cortez	family member living with brothers who worked at Avondale (shipyards and maritime work); dust brought home	Family home, Kraemer, Kraemer, Louisiana	1967-1972	pipe and block insulation

The defendants

• Certain London Market Insurers (insurer)

Other decisions in this case

Other rulings from the same court in the same case, in our library:

• Cortez v. Lamorak Insurance Co. (November 23, 2020). The court denied Callen Cortez's motion to remand, holding that Avondale (Huntington Ingalls, Lamorak Insurance and Albert Bossier) timely and properly removed the case under the Federal Officer Removal Statute.
• Cortez v. Lamorak Insurance Co. (May 20, 2021). The court granted Lamorak's motion and stayed and administratively closed the whole case until September 12, 2021, over plaintiff Cortez's objection that he needed an expedited trial.
• Cortez v. Lamorak Insurance Company (February 7, 2022). The court denied the Louisiana Insurance Guaranty Association's motion for summary judgment, so plaintiff Callen Cortez's claims arising from the Gabler Insulations insurance coverage go forward.
• Cortez v. Lamorak Insurance Company (April 4, 2022). The court granted Avondale's summary judgment motion in part, dismissing Cortez's tort claims against Avondale as his employer and his intentional-tort claim, but denied it as to his take-home exposure claims against Avondale as his brother's employer.
• Cortez v. Lamorak Insurance Company (April 18, 2022). The court granted plaintiff Callen Cortez's motion for summary judgment that he has mesothelioma and that asbestos caused it, over the defendants' oppositions, while leaving specific causation issues for the jury.
• Cortez v. Lamorak Insurance Company (May 3, 2022). The court granted summary judgment to Entergy, First State, USF&G, Berkshire and Insulations, LLC, granted GE's motion in part (insulation claims) and denied it in part (asbestos gasket claims), and denied Foster Wheeler's motion; it also granted LIGA's motion in limine excluding hearsay.
• Cortez v. Lamorak Insurance Company (May 11, 2022). The district court denied as moot plaintiff Cortez's motion for review of the Magistrate Judge's order allowing Eagle, Inc. to file a supplemental answer, because Eagle's later answer to the third amended complaint made the earlier order irrelevant.
• Cortez v. Lamorak Insurance Company (May 11, 2022). The court granted insurer USF&G's unopposed motion for partial summary judgment and dismissed plaintiff Callen Cortez's punitive-damages claims against it.
• Cortez v. Lamorak Ins. Co. (May 19, 2022). The court granted Continental Insurance Company's summary judgment motion, holding the LHWCA preempted Cortez's state-law tort claims against it as Halter Marine's insurer and that his intentional-tort claims failed for lack of evidence, and dismissed Continental's two other summary-judgment motions as moot.
• Cortez v. Lamorak Insurance Company (May 19, 2022). The court granted Trinity's summary judgment motion and the motions to dismiss by Continental, Liberty Mutual and Travelers, dismissing with prejudice Albert Bossier's third-party claims because no substitution was made within 90 days after notice of his death.
• Cortez v. Lamorak Ins. Co. (July 8, 2022). The court granted Westinghouse (ViacomCBS) partial summary judgment on claims about asbestos insulation used on its turbines and denied it on claims about asbestos gaskets it supplied or specified for those turbines.
• Cortez v. Lamorak Ins. Co. (July 13, 2022). The court granted Westinghouse (ViacomCBS) partial summary judgment dismissing the failure-to-warn claims, but denied it on the Halter Marine exposure and on whether its FRDM was a substantial factor in causing Cortez's mesothelioma.
• Cortez v. Lamorak Insurance Company (July 18, 2022). The court granted plaintiffs' motion to exclude Danny Joyce's hearsay testimony about Walsh-Healey inspectors, but denied it as to Avondale's expert relying on that testimony, so long as Avondale does not disclose the hearsay to the jury.
• Cortez v. Lamorak Insurance Company (July 20, 2022). The court denied as premature the motion in limine by Foster Wheeler, GE and Westinghouse to exclude plaintiffs' two medical causation experts as cumulative, leaving defendants free to object at trial.
• Cortez v. Lamorak Insurance Company (July 20, 2022). The court granted in part the motion by Eagle and LIGA to limit plaintiffs' industrial hygienist Gerard Baril, barring him from testifying that a supplier who puts its name on an insulation box should legally be considered its manufacturer, and denied the motion otherwise.
• Cortez v. Lamorak Insurance Company (July 25, 2022). The court granted partial summary judgment for Westinghouse (ViacomCBS), General Electric and Foster Wheeler, dismissing the plaintiffs' intentional-tort and fraud claims, and dismissed the punitive-damages part of the motion as moot.
• Cortez v. Lamorak Insurance Company (July 27, 2022). The court denied Goodrich's motion for summary judgment (joined by several co-defendants) on Callen Cortez's claim for loss of personal household services, so plaintiffs kept that claim.
• Cortez v. Lamorak Insurance Company (July 28, 2022). The court granted Travelers' summary judgment motion only on whether B&B was a professional vendor of asbestos (and so on strict products liability) and denied it on negligence duty and breach and on Article 2317 liability, so plaintiffs' other claims continued.
• Cortez v. Lamorak Insurance Company (August 10, 2022). The court granted Hopeman Brothers' motion for partial summary judgment, dismissing the plaintiffs' intentional-tort claims and their claims that Wayne Manufacturing was Hopeman's alter ego or part of a single business enterprise.
• Cortez v. Lamorak Insurance Company (August 16, 2022). The court granted third-party defendant Liberty Mutual's unopposed motion for partial summary judgment, ruling that Wayne Manufacturing was not a professional vendor of asbestos-containing wallboards, against third-party plaintiff Avondale; plaintiffs were found to lack standing to oppose.
• Cortez v. Lamorak Insurance Company (August 23, 2022). The court denied Hopeman Brothers and Liberty Mutual's motion to exclude or limit the testimony of plaintiffs' industrial hygienist Gerald Baril, so the plaintiffs' expert may testify.
• Cortez v. Lamorak Insurance Company (August 29, 2022). The court granted Hopeman Brothers partial summary judgment that it was not a manufacturer of the asbestos wallboards, but denied summary judgment on whether it was a professional vendor, so that question goes to trial against the Cortez plaintiffs and Avondale's opposition.
• Cortez v. Lamorak Insurance Company (September 9, 2022). The court denied Riley Power, Inc.'s motion for summary judgment on the statute of repose and exposure-sufficiency grounds, and denied its motion to strike as moot, so plaintiffs (the Cortez family) prevailed over Riley at this stage.
• Cortez v. Lamorak Insurance Company (September 29, 2022). The court granted in part and denied in part plaintiffs' motion in limine, excluding most of Westinghouse's expert Dr. Forman's testimony on insulation and general Navy requirements but allowing his testimony on shipyard asbestos-safety requirements relevant to the sophisticated-purchaser defense.
• Cortez v. Lamorak Insurance Company (October 7, 2022). The court granted defendants' motion for partial summary judgment, ruling that plaintiffs could not recover pre-death lost income or pre-death expenses as wrongful death damages.
• Cortez v. Lamorak Insurance Company (October 12, 2022). The court denied plaintiffs' Daubert motion in limine to limit the testimony of Hopeman Brothers' toxicologist, Dr. Brent Finley, so Hopeman prevailed on the motion.
• Cortez v. Lamorak Ins. Co. (October 14, 2022). The court granted plaintiffs' motion to strike eleven defense expert witnesses, including Hopeman Brothers' witness Max Richard, because no expert reports were produced.
• Cortez v. Lamorak Insurance Company (October 24, 2022). The court granted in part and denied in part defendants' omnibus motion in limine, barring terms like "asbestos industry" and the Bair memorandum, while allowing the "asbestos victim" label and lay testimony about dust.
• Cortez v. Lamorak Insurance Company (October 24, 2022). The court granted Travelers Indemnity Company's unopposed motion to quash the plaintiffs' trial subpoena, ruling against the plaintiffs.

Decisions this opinion cites

Earlier decisions in our library that the court cited:

• Cole v. Celotex Corp. (Louisiana Supreme Court, 1992). The Louisiana Supreme Court affirmed the court of appeal: pre-comparative-fault (virile share) law governed, the nine executive officers counted as nine separate shares, and the insurer INA's annual policies could be stacked, so INA owed each of the three plaintiff workers $135,000 plus interest.

The court's opinion

The text below is Google Scholar's copy of the court's opinion, a public record. Numbers in brackets, such as [*921], mark where each page of the printed reporter begins.

CALLEN J. CORTEZ, ET AL.,

v.

LAMORAK INSURANCE COMPANY, ET AL., Section "R" (1).

Civil Action No. 20-2389.

October 4, 2022.

United States District Court, E.D. Louisiana.

ORDER AND REASONS

SARAH S. VANCE, District Judge.

Before the Court is the motion of defendant Certain London Market Insurers for partial summary judgment as to plaintiffs' claims arising from alleged exposures at Avondale after January 21, 1970.[1] Plaintiffs oppose the motion.[2] For the following reasons, the Court denies defendant's motion.

I. BACKGROUND

This is an asbestos exposure case. Plaintiffs allege that decedent Callen Cortez contracted mesothelioma as a result of exposure to asbestos over the course of his career,[3] as well as take-home exposure resulting from his father's[4] and brothers' work when the family shared a home.[5] Callen Cortez lived in his family home in Kraemer, Louisiana, starting from his birth in 1951, until he married and moved out in May of 1972.[6] Decedent's brothers, Daniel Cortez and Mitchell Cortez, also lived in the home. Daniel began working at the Avondale Shipyards on August 29, 1967,[7] and remained living with Callen Cortez at their family home until Daniel married and moved out in July of 1968.[8] Daniel testified that at Avondale, he worked with asbestos insulation, and that fibers released from the cloth got onto his work clothes.[9] He further testified that, after he came home from work each day, he hung up his clothes, and, with Callen Cortez's help, beat the fibers off his clothes.[10] Mitchell Cortez also lived with decedent until Callen Cortez moved out of their family home in 1972.[11] He likewise testified that he worked at Avondale as an insulator while he lived with decedent,[12] and he brought home asbestos dust on his clothing.[13]

On March 6, 1969, Callen Cortez began working for Avondale.[14] He worked as a welder and tacker helper, primarily at Avondale's Westwego Yard, until May 31, 1974.[15] Cortez testified that through his job at Avondale, he was exposed to asbestos-containing materials such as Garlock gaskets.[16] Callen Cortez was diagnosed with mesothelioma on June 2, 2020, and he passed away on May 26, 2022.[17]

Certain London Market Insurers is a defendant in the survival and wrongful death action brought by Callen Cortez's surviving spouse and children.[18] Defendant is sued as an insurer of Avondale for coverage under policies allegedly covering plaintiff's asbestos exposure. Defendant now seeks summary judgment, asserting that it has no liability under any excess policies issued to Avondale for Callen Cortez's exposures after January 21, 1970.[19] Plaintiffs contend that excess insurance policies that were issued by defendant to Avondale were in effect after January 21, 1970, so summary judgment should be denied.[20]

The Court considers the parties' arguments below.

II. LEGAL STANDARD

Summary judgment is warranted when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam). "When assessing whether a dispute to any material fact exists, [the Court] consider[s] all of the evidence in the record but refrain[s] from making credibility determinations or weighing the evidence." Delta & Pine Land Co. v. Nationwide Agribusiness Ins., 530 F.3d 395, 398-99 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but "unsupported allegations or affidavits setting forth `ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment." Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting 10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2738 (2d ed. 1983)); see also Little, 37 F.3d at 1075. "No genuine dispute of fact exists if the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." EEOC v. Simbaki, Ltd., 767 F.3d 475, 481 (5th Cir. 2014).

If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party "must come forward with evidence which would `entitle it to a directed verdict if the evidence went uncontroverted at trial.'" Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1264-65 (5th Cir. 1991) (quoting Golden Rule Ins. v. Lease, 755 F. Supp. 948, 951 (D. Colo. 1991)). "[T]he nonmoving party can defeat the motion" by either countering with evidence sufficient to demonstrate the "existence of a genuine dispute of material fact," or by "showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party." Id. at 1265. If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for resolution. See, e.g., id.; Little, 37 F.3d at 1075 ("Rule 56 `mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" (quoting Celotex, 477 U.S. at 322)). III. DISCUSSION

"Louisiana law gives an injured person the right to proceed directly against the tortfeasor's insurer." Menard v. Gibson Applied Tech. & Eng'g, Inc., No. 16-498, 2017 WL 6610466, at [*2] (E.D. La. Dec. 27, 2017). Plaintiffs do so pursuant to Louisiana's Direct Action Statute, La. Rev. Stat. § 22:1269 (previously § 22:655), which "permits persons sustaining damages in accidents occurring in Louisiana to bring direct actions against insurers of the individual alleged to have caused the accident." SCF Waxler Marine, LLC v. ARIS T M/V, 902 F.3d 461, 463 (5th Cir. 2018). In asbestos cases, the "exposure theory" applies, which "provides that coverage is triggered by the mere exposure to the harmful conditions during the policy period." Cole v. Celotex Corp., 599 So. 2d 1058, 1076 (La. 1992). Accordingly, plaintiffs must prove that harmful exposures occurred during a policy period in order to recover. Arceneaux v. Amstar Corp., 200 So. 3d 277, 282 (La. 2016). But in the case of excess policies such as those at issue, when the amount of damages does not exceed the limits of other available coverage, the excess insurer will not be held liable. Dean v. State Farm Mut. Auto. Ins. Co., 518 So. 2d 1115, 1118 (La. App. 4 Cir. 1987), writ denied, 522 So. 2d 1096 (La. 1988); see also Rivere v. Heroman, 688 So. 2d 1293, 1295 (La. App. 4 Cir. 1997) (holding that an excess insurance policy "should not be drawn upon unless the damages exceed all preexisting primary coverage"). Further, Louisiana courts employ a "horizontal stacking" approach to insurance policies in toxic-exposure cases. Cole, 599 So. 2d at 1077-80. This means that when an insurer issues primary policies in consecutive years, that insurer is liable for an amount up to the sum of the limits of all the policies for the relevant years. See id. at 1061 n.5 (explaining that horizontal stacking "means to combine all available policies, each of which covers a different period of time, to create a larger pool out of which the injured party may be compensated").

It is undisputed that defendant issued some excess policies that were in effect during the period when Cortez was exposed to asbestos. Defendant contends that no applicable policies were issued to Avondale after January 21, 1970, and it is therefore entitled to summary judgment on claims for any post-1970 exposures.[21] Defendant does not dispute plaintiffs' evidence that it issued excess policies to Avondale covering the period from July 14, 1973 to January 25, 1974.[22] Defendant dispenses with that coverage by asserting that because the threshold for its liability to pay under this excess insurance is so high ($15,000,000), it is implausible that its coverage will be triggered.[23]

Defendant's argument that it is implausible that the pro rata damages allocated to Avondale in this case will exceed $15 million dollars for any single policy period is not proper grounds for summary judgment. Defendant is simply making a prediction about matters that involve factual issues awaiting trial, such as the scope of liability and the amount of plaintiffs' damages. Defendant has failed to carry its burden to show there is no issue of material fact and that it is entitled to summary judgment as a matter of law.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES defendant's motion for partial summary judgment.

[1] R. Doc. 555.

[2] R. Doc. 676.

[3] R. Doc. 1-1 at 3-6 (Complaint ¶¶ 3, 8).

[4] Id. at 7-9 (Complaint ¶¶ 11-16).

[5] R. Doc. 149 at 1-2 (Second Amended Complaint ¶¶ 94-95).

[6] R. Doc. 499-4 at 17-18 (Discovery Deposition of Callen Cortez at 100:11-101:8).

[7] R. Doc. 499-6 at 13 (Deposition of Daniel Cortez at 12:3-13).

[8] Id. at 12-13 (Deposition of Daniel Cortez at 11:21-12:2).

[9] Id. at 37 (Deposition of Daniel Cortez at 36:6-13).

[10] Id. at 18-19 (Deposition of Daniel Cortez at 17:16-18:17).

[11] R. 648-9 at 2 (Deposition of Mitchell Cortez at 14:6-10).

[12] Id. at 4 (Deposition of Mitchell Cortez at 16:6-12).

[13] Id. at 14 (Deposition of Mitchell Cortez at 46:14-25).

[14] R. Doc. 499-4 at 139 at 26-27 (Discovery Deposition of Callen Cortez at 108:25-109:9).

[15] Id.

[16] Id. at 63-64 (Discovery Deposition of Callen Cortez at 146:6-147:10).

[17] R. Doc. 1-1 at 10 (Complaint ¶ 17); R. Doc. 1026 at 2 (Fourth Amended Complaint ¶ 111).

[18] R. Doc. 301.

[19] R. Doc. 555.

[20] R. Doc. 676 at 1-2.

[21] R. Doc. 555-1 at 3.

[22] See R. Docs. 676-3 & 676-4.

[23] R. Doc. 877 at 6.

Sources

• The opinion on Google Scholar
• Louisiana asbestos laws
• Louisiana asbestos exposure sites