Ragusa v. Louisiana Guaranty Insurance Association (E.D. La., Mar. 8, 2023)

Our plain-English summary of Ragusa v. Louisiana Guaranty Insurance Association (U.S. District Court, Eastern District of Louisiana, March 8, 2023).

Frank Ragusa, Jr. sued in Louisiana state court after developing mesothelioma. He had worked on and off from 1972 to 1975 at the Avondale shipyards, operating a "cherry picker." The case was removed to federal court. Defendants included Huntington Ingalls, Avondale's successor, and the Louisiana Insurance Guaranty Association (LIGA), which took over the policies of the insolvent insurer Lamorak. LIGA moved for summary judgment, relying on a state law exclusion for "high net worth" insureds, those with a net worth above $25 million. Avondale stipulated that it exceeded that amount at the relevant date, so the court found no genuine dispute that Avondale was a high net worth insured and granted the motion as to coverage of Avondale. The policy also covered Avondale's executive officers. The court found a genuine issue remained on whether the exclusion applies to them. It denied that part of the motion without prejudice, noting that a trial might give fuller context.

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: March 8, 2023
• Docket: Civil Action No. 21-1971
• Stage: Summary judgment
• State: Louisiana

Outcome. The court granted LIGA's summary judgment motion as to coverage of Avondale itself, because Avondale is a high net worth insured, and denied it without prejudice as to coverage of Avondale's executive officers.

What the court held. Under Louisiana's Net Worth Exclusion, LIGA is not obligated to pay claims or provide a defense under an insolvent insurer's policy when the named insured is a high net worth insured. Whether the exclusion also reaches the named insured's executive officers remained a genuine factual and legal question.

Issues decided: Insurance Coverage.

The people and their exposure

• Frank P. Ragusa, Jr.: mesothelioma

The defendants

• Louisiana Insurance Guaranty Association (LIGA) (insurer)
• Huntington Ingalls Inc. (Avondale) (employer)
• Lamorak Insurance Company (insurer)

Other decisions in this case

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

• Ragusa v. Louisiana Insurance Guaranty Association (March 7, 2022). The court denied plaintiff Frank Ragusa's motion for a preferential trial setting, ruling for defendant Huntington Ingalls because an expedited trial would not allow enough time for discovery and preparation.
• Ragusa v. Louisiana Guaranty Insurance Association (March 20, 2023). The court granted summary judgment to Avondale (Huntington Ingalls) and to Travelers as insurer of Avondale's alleged executive officers, dismissing Ragusa's negligence and intentional tort claims as barred by the LHWCA.
• Ragusa v. Louisiana Guaranty Insurance Association (March 22, 2023). The court granted Avondale's motion for partial summary judgment on strict liability, direct negligence and intentional tort claims for the 1989 exposures, and denied it on vicarious liability, so Ragusa lost on three theories and won on one.
• Ragusa v. Louisiana Guaranty Insurance Association (March 22, 2023). The court granted plaintiff Frank Ragusa Jr.'s motion for summary judgment that he has mesothelioma and that asbestos caused it, over opposition from Amdura, Syngenta, Rubicon and FMC.
• Ragusa v. Louisiana Guaranty Insurance Association (March 27, 2023). The court denied plaintiff Frank Ragusa's motion to remand the case to state court, keeping it in federal court against Avondale (Huntington Ingalls) and the other defendants.
• Ragusa v. Louisiana Guaranty Insurance Association (March 29, 2023). The court denied all nine summary judgment motions by premises owners and product companies, so Ragusa's asbestos claims against Pharmacia, Legacy Vulcan, Syngenta, Marathon, Murphy Oil, International Paper, Westinghouse and Riley Power continue.
• Ragusa v. Louisiana Guaranty Insurance Association (March 30, 2023). The court denied the defendants' Daubert motion to exclude plaintiff Frank Ragusa's experts Dr. Kraus and Dr. Landreneau, so plaintiff's specific-causation testimony on his mesothelioma may be presented at trial.
• Ragusa v. Louisiana Guaranty Insurance Association (March 31, 2023). The court granted the premises-owner defendants' partial summary judgment on strict liability under former article 2317 for crane exposures in 1996 or earlier, and denied it for any later years; Ragusa lost on the earlier years.
• Ragusa v. Louisiana Insurance Guaranty Association (October 8, 2024). The court granted the Louisiana Insurance Guaranty Association's motion for summary judgment and dismissed the Ragusa family's wrongful death claims as not timely "covered claims"; LIGA won and the plaintiffs lost on those claims.

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.

FRANK P. RAGUSA, JR.,

v.

LOUISIANA GUARANTY INSURANCE ASSOCIATION, ET AL. SECTION: "J"(5).

Civil Action No. 21-1971.

March 8, 2023.

United States District Court, E.D. Louisiana.

ORDER AND REASONS

CARL J. BARBIER, District Judge.

Before the Court is a Motion for Summary Judgment (Rec. Doc. 211) filed by Defendant, the Louisiana Insurance Guaranty Association ("LIGA"), as the alleged statutory obligor for policies issued by Lamorak Insurance Company on behalf of Huntington Ingalls Incorporated ("Avondale"), allegedly providing coverages to its alleged executive officers. The motion is opposed by Plaintiff, Frank P. Ragusa (Rec. Doc. 288), and LIGA filed a reply (Rec. Doc. 297). Having considered the motion and legal memoranda, the record, and applicable law, the Court finds that the motion should be GRANTED in part and DENIED in part.

FACTS AND PROCEDURAL BACKGROUND

On and off from June 5, 1972 to March 20, 1975, Plaintiff was an employee of Huntington Ingalls, Inc., where he ran a "cherry picker" at Avondale shipyards. Later in life, he contracted mesothelioma. On July 16, 2021, Plaintiff filed suit in the Civil District Court for the Parish of Orleans, Louisiana, and on October 26, 2021, Defendants removed the case to this Court.

Included as Defendants are Huntington Ingalls Inc., successor to Avondale, and LIGA. On March 11, 2021, Lamorak was declared to be insolvent, and LIGA became the statutory obligor for Lamorak's policies, subject to the provisions and limitations contained in the LIGA Law contained in Louisiana Revised Statutes § 22:2051-22:2070. While Plaintiff worked at Avondale, the Lamorak policy at issue defined "Insured" to include the named insured (Avondale) and any executive officer, director or stockholder of Avondale while acting within their scope of duties as such.

DISCUSSION

Defendant argues that Avondale, as evidenced by its Net Worth Affidavit filed under seal in this matter, is a high net worth insured, and therefore LIGA is not obligated to defend any claims made against Avondale's Lamorak insurance policy, including those claims targeting the officers. Defendant cites to a 2010 amendment to the LIGA Law, the Net Worth Exclusion, which provides that LIGA "shall not be obligated to pay any claims or provide a defense to any claims asserted for coverage under a policy when the insured is a high net worth insured." La. Rev. Stat. § 22:2061.1(B)(1). A high net worth insured is "any policyholder or named insured, other than any state or local governmental agency or subdivision thereof, whose net worth exceeds twenty-five million dollars on December thirty-first of the year prior to the year in which the insurer becomes an insolvent insurer." La. Rev. Stat. § 22:2061.1(A). Avondale has stipulated that its net worth exceeded $25,000,000 as of December 31, 2020, the relevant date for the insolvency. Thus, Defendant contends that the only issue presented is whether the claims against Avondale's executive officers are likewise excluded from LIGA coverage as claims under a policy when the insured is a high net worth insured.

Plaintiff objects to the application of § 22:2061.1 to Avondale's executive officers because LIGA did not provide evidence that any of Avondale's officers have a net worth of over $25,000,000 and because Avondale's executive officers are distinct insureds from Avondale. Plaintiff submits that this Court follow the decisions on similar motions in Legendre v. Lamorak Insurance Company et al., No. 19-14336 (E.D. La. July 26, 2022) and Cortez v. Lamorak Insurance Company et al., No. 20-

2389 (E.D. La. Aug. 9, 2022). In both of those cases, the court denied the motion as to Avondale's executive officers, and the parties settled their claims after the first day of trial.

In reply, Defendant argues that the net worth exclusion shifts recovery from LIGA to the high net worth insured (in these cases, Avondale), rather than to individual insureds, so Plaintiff may still recover for the officers' liability from their employer through vicarious liability. Thus, the issues before the Court are (1) whether Avondale is a high net worth insured excluded from LIGA's obligations and (2) whether Avondale's executive officers are also excluded by the net worth exclusion. First, considering Defendant's deposition testimony; (Rec. Doc. 288-4, at 4) ("LIGA has taken the position [that Avondale has] a net worth over 25 million."); the affidavit of the Assistant Treasurer of Huntington Ingalls submitted to LIGA attesting that "as of December 31, 2020, the consolidated net worth of HII, including the fair market values of all its subsidiaries and affiliates, exceeded Twenty-Five Million and no/100 ($25,000,000) Dollars;" and the plain language of the Net Worth Exclusion contained in La. Rev. Stat. § 22:2601.1; there can be no genuine dispute that Avondale is a high net worth insured. Accordingly, LIGA is not obligated to pay claims under Lamorak's policy on behalf of Avondale. Second, considering the pleadings, discovery, and affidavits, a genuine issue remains as to LIGA's liability arising from Lamorak's coverage of Avondale's executive officers. After a trial, the Court may have a more complete context to evaluate the effect of the parties' conflicting statutory interpretations of the Net Worth Exclusion.

CONCLUSION

Accordingly,

IT IS HEREBY ORDERED that LIGA/Avondale's Motion for Summary Judgment (Rec. Doc. 211) is GRANTED as to liability arising from Lamorak's coverage of Avondale and DENIED without prejudice as to coverage of Avondale's executive officers.

Sources

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