### STATE OF LOUISIANA 

### COURT OF APPEAL FIRST CIRCUIT

2021 CA 1471 

### BRILLIANT NATIONAL SERVICES, INC. VERSUS 

### THE TRAVELERS INDEMNITY COMPANY AND LEXINGTON INSURANCE COMPANY
JUDGMENT RENDERED: 

# SEP 072022

Appealed from The Nineteenth Judicial District Court Parish ofEast Baton Rouge • State ofLouisiana Docket Number 656,308 • Section 24 

### The Honorable Donald Johnson, Presiding Judge

James K. Ordeneaux COUNSEL FORAPPELLANT Scott H. Mason PLAINTIFF/DEFENDANT-ING. Bruce Parkerson RECONVENTION— Brilliant New Orleans, Louisiana National Services, Inc. Amy S. Malish Maura Z. Pelleteri New Orleans, Louisiana COUNSEL FOR APPELLANTS DEFENDANTS-INRECONVENTION— Brilliant EFENDANTS- INRECONVENTION— Brilliant National Services, Inc. and Coastal Chemical Company, LLC Jonathan B. Womack COUNSEL FORAPPELLEE Paul M.Wellons DEFENDANT/PLAINTIFF-INNew Orleans, Louisiana RECONVENTION— Lexington Insurance Company

BEFORE: MCCLENDON,WELCH,AND THERIOT,JJ. 

### Tit,.

### ae' 

# 9 - (-* V. 4-* AAWELCH,J. In this insurance coverage dispute, the plaintiff,Brilliant National Services, Inc. (" Brilliant"), 

### appeals a summaryjudgment rendered in favor ofthe defendant, 

### Lexington Insurance Company (" Lexington"), which dismissed all of Brilliant' s 

### claims against Lexington with prejudice anddeclaredthat Lexington hasno dutyto defend or indemnifyCoastal Chemical Company,LLC ("CCC, LLC"). We affirm. In a related appeal - 2021 CA 1472— Brilliant and CCC, LLC challenge the 

### summaryjudgment rendered in favor ofThe Travelers Indemnity Company, The Charter Oak Fire Insurance Company, 

### The Phoenix Insurance Company, and 

### United States Fidelity and Guaranty Company—which dismissed all of Brilliant's 

### claims against the Travelers companies with prejudice and declared they had no 

### dutyto provide insurance coverage to Brilliant or CCC, LLC underthe policies at

issue. FACTS AND PROCEDURAL HISTORY Brilliant filed suit against Lexington ( 

### among other defendants), seeking 

### contribution for the costs of defending CCC, LLC in a number of asbestos - 

### exposure personal injury lawsuits filed in various state courts in Louisiana, 

### beginning in 2011. Brilliant alleged that Lexington issued a general liability insurance policy to its insureds forthe period ofAugust 20, 1986, through August 201 1987 (" Lexington policy"). Brilliant alleged that certain plaintiffs in the 

### asbestos lawsuits claimed that CCC, LLC was the successor to an insured entity 

### under the Lexington policy that was alleged to have manufactured, distributed, marketed, or sold asbestos -containing products. Brilliant claimed that if CCC, 

### LLC was found to be the successor to an insured entity under that Lexington 

### policy,then the insured entity's rights underthe policytransferred to CCC, LLC by operation of law. Brilliant further alleged that regardless of whether CCC, LLC 

### was the successor of an entity insured under the policy, Lexington owed CCC,

2

### LLC a duty to defend based on the allegations raised in the asbestos lawsuits and

the terms and conditions ofthe Lexington policy. Accordingly, Brilliant sought 

### declaratory judgment that Lexington owed a duty to defend CCC, LLC in the asbestos lawsuits. Brilliant also sought judgment in its favor and against 

### Lexington for 1/7 ofall attorney's fees and costs paid by Brilliant in defense of CCC, LLC in the asbestos lawsuits, together with legal interest, costs, and all other 

### relieftowhich Brilliant may be entitled. 

### In response, Lexington filed a peremptory exception of no right of action, 

### arguing that Brilliant had no right to raise a claim under the Lexington policy. Following ahearing,thetrial court overruled the exception. Thereafter, Lexington answered, 

### raising numerous affirmative defenses, and filed a reconventional demand against Brilliant and CCC, LLC. In its reconventional demand, Lexington 

### sought a declaration that it owed no duty to defend, indemnify, or provide any 

### benefitto BrilliantorCCC,LLC underthe Lexington policy.' Lexington moved for summaryjudgment, seeking ajudgment in its favor declaring that CCC, LLC has no rights underthe Lexington policy; dismissing the claims asserted by Brilliant; and awardingjudgment in favor ofLexington on its reconventional demand against Brilliant and CCC, LLC. Brilliant and CCC, LLC opposed the motion.' 

### Following a hearing, the trial court took the matter under advisement and ordered the parties to submit post - hearing proposed findings of fact, burdens of proof,conclusions oflaw, and a proposedjudgment. In ajudgment signed on October 7, 2020, the trial court granted Lexington' s

motion for 

### summary judgment; dismissed all of Brilliant' s claims against 

### 1 Brilliant and CCC, LLC answered Lexington's reconventional demand, raising a dilatory exception ofprematurity and affirmative defenses. The trial court granted Brilliant and CCC, LLC' s ex parte motion to file their memorandum and exhibits in opposition under seal.
3Lexington with prejudice; 

### and declared that Lexington has no duty to defend or

indemnify CCC, LLC. The trial court adopted Lexington' s proposed findings of fact and conclusions of law as its reasons forjudgment. Brilliant and CCC, LLC

now appeal.'

SUMMARY JUDGMENT ON INSURANCE COVERAGE 

### Whether an insurance policy, as a matter of law, provides or precludes 

### coverage is a dispute that can be properly resolved within the framework of a motion for summaryjudgment. George S. May Int'1 Co.v.Arrowpoint Capital Corp., 2011- 1865 ( 

### La. App. 1St Cir. 8/ 10/ 12), 97 So.3d 1167, 1171. 

### Summary 

### judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation under which coverage could 

### be afforded when applied to the undisputed material facts shown by the evidence supporting the motion. Smith v. Moreau, 2017-0003 ( 

### La. App. 11t Cir. 6/2/ 17), 222 So.3d 761, 765. 

### Absent a conflict with statutory provisions or public policy, 

### insurers are entitled to limit their liability and impose and enforce reasonable conditions upon the policy obligations they contractually assume. 

### Hickey v. 

### Centenary Oyster House, 97- 1074 ( La. 10/20/98), 719 So.2d 421, 425. An 

### insurer seeking to avoid coverage through summaryjudgment bears the burden of proving some exclusion applies to preclude coverage. Smith, 222 So.3d at 765. 

### Appellate courts review summaryjudgments de novo underthe same criteria that govern the district court's consideration of whether summary judgment is appropriate. Guste v. Lirette, 2017- 1248 ( 

### La. App. 1st Cir. 6/4/18), 251 So.3d 1126, 1129. 

### Where the facts are undisputed and the matterpresents a purely legal question, summaryjudgment is appropriate. See Landry v. Progressive Sec. Ins. Co., 2021- 00621 ( La. 1/ 28/22), So.3d , 2022 WL 263003, at * 3.
3 Brilliant and CCC, LLC filed a motion for devolutive appeal on December 10, 2020. The trial court signed an order ofappeal on December 10, 2020, notice ofwhich was transmitted bythe Clerk ofCourt to the parties on December 11, 2020. MDISCUSSION



### In their first assignment oferror, Brilliant and CCC, LLC argue that the trial 

## court erred in declaring that Lexington had no dutyto defend or indemnify CCC, LLC in the asbestos lawsuits. In their related second assignment of error, the 

### appellants argue that genuine issues ofmaterial fact exist as to whether CCC, LLC is the successor to Lexington' s insured, i.e., 

### the entitythat allegedly distributedthe 

### products at issue in the underlying asbestos lawsuits. The appellants argue these 

### genuine issues ofmaterial fact should have precluded the trial court from granting summaryjudgment in Lexington's favor. An 

### insurer's duty to defend its insured arises solely under contract. Arceneaux v. 

### Amstar Corp., 2015-0588 ( La. 9/7/ 16), 200 So.3d 277, 286. 

### Generally, the insurer's obligation to defend suits against its insured is broader than its liability for damage claims. Yount v. Maisano, 627 So.2d 148, 153 ( La. 1993). 

### An insurer's dutyto defend its insured is determined by the allegations of the plaintiff's petition, with the insurer obligated to furnish a defense unless from 

### the petition, it is clear the policy unambiguously excludes coverage. Guste, 251 So.3d at 1133. 

### If,assuming the allegations ofthe petition are true, there is both 

### coverage underthe policy and liabilityto the plaintiff,the insurer must defend the insured regardless of the outcome of the suit. Guste, 251 So.3d at 1133. An 

### insurer's duty to defend suits on behalf of an insured presents a separate and distinct inquiry from that ofthe insurer's dutyto indemnify a covered claim after judgment againstthe insured inthe underlying liability case. See Elliott v. Cont' l Cas. Co., 2006- 1505 (La.2/22/07), 949 So.2d 1247, 1250. Lexington' s Insureds 

### In moving for summaryjudgment, Lexington argued that it had no duty to 

### defend or indemnify CCC, LLC, nor its subrogee, Brilliant,because CCC, LLC is not and has never been one of Lexington' s " insureds." Lexington' s evidence

5

## submitted in support of its motion shows that Lexington issued policy number

GL919- 1272 to Coastal, Inc. and Coastal Chemical Co. 

### The policy was effective from August 20, 1986, to August 20, 1987. 

### The policy's " 

### duty to defend" provision set forth:

I. COVERAGE A—BODILY INJURY LIABILITY COVERAGE B—PROPERTY DAMAGE LIABILITY 

### The company will pay on behalfofthe insured all 

### sums whichthe insured shall become legally obligated to pay as damages because of

A.bodily injuryor B. property damage 

### towhichthis insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages 

### on account of such bodily injury or property damage, even ifany ofthe allegations ofthis suit are groundless, false[,] 

### or fraudulent, and may make such investigation and settlement ofany claim orsuitas it deems expedient, but the company shall not be obligated to pay any claim 

### or judgment or to defend any suit after the applicable 

### limit of the company's liability has been exhausted by payment ofjudgments or settlements. Emphasis added). 

### The Lexington policydefined "named insured" as:

named insured" means the person or organization 

### named in Item 1 ofthe declarations ofthis policy[.] Item 1 of the policy lists the " named insured" as Coastal, Inc. and Coastal Chemical Co. 

### The Lexington policy defined "insured" as:

insured" means anyperson ororganization qualifying as an insured in the " Persons Insured" provision of the applicable insurance coverage. 

### The Lexington policy defined "Persons Insured" as:

II. PERSONS INSURED 

### Each of the following is an insured under this insurance to the extent set forth below[:] a) ifthe named insured is designated in the declarations 

### as an individual, the person so designated but only with respect to the conduct of a business ofwhich he is the sole proprietor, and the spouse of the named insured with respect to the conduct ofsuch a business; b) ifthe named insured is designated in the declarations 

### as a partnership or joint venture, the partnership or joint venture so designated[,] and any partner or

mmember thereof[,] 

## but onlywith respecttohis liability as such; c) ifthe named insured is designated in the declarations as other than an individual, partnership[,] or joint venture, the organization so designated[,] and any executive officer, director[,] or stockholder thereof 

### while actingwithinthe scope ofthis duties as such; 

### d)any person ( other than an employee of the named insured) or organization while acting as real estate manager forthe named insured; and e) with respect to the operation, for the purpose of locomotion upon a public 

### highway, of mobile equipment registered under any motor vehicle registration law.... Coastal, Inc. and Coastal Chemical Co. were the " Persons Insured" under 

### the Lexington Policy. 

### The parties do notdispute thatthe Lexington policy expired prior to the formation of CCC, LLC' s predecessor, the second Coastal Chemical Co., Inc., which was incorporated on December 8, 1987. Because neither CCC, 

### LLC nor its predecessorwas apartytothe Lexington policy,CCC, LLC cannot be

a " named insured" 

### under the Lexington policy. Furthermore, neither CCC, LLC
nor its predecessor falls into the definition of " Persons Insured" under the 

### Lexington Policy. Successor Liability 

### Lexington argued nextthat CCC, LLC could only be entitled to defense and 

### indemnity underthe Lexington policy ifCCC, LLC or its predecessor acquired the named insureds'— Coastal, Inc. or Coastal Chemical Co.— rights and interests in 

### the Lexington policy. 

### Lexington argues that its policy has never been transferred to CCC, LLC or its predecessor. In 1987, Coastal Chemical Co., Inc. acquired the chemical distribution business of Lexington' s insured, Coastal, Inc. Lexington 

### submitted evidence showing that Brilliant and CCC, LLC identified the 1987 asset 

### transfer agreement as the only documents through which the Lexington policy could have been conveyed, sold, or otherwise transferred from Lexington' s insured to Coastal Chemical Co., Inc. The 1987 asset transfer agreement documents

7

### submitted by Lexington in support ofits motion shows a list oftransferred assets;



### however, the Lexington policy is not listed nor referenced in the asset transfer
agreement. 

### Lexington avers that because its policy was not transferred from its insureds to Coastal Chemical Co., 

### Inc. in the 1987 asset transfer agreement, CCC, 

### LLC never acquired the policy nor any rights thereunder from its predecessor. 

### Accordingly, Lexington argues it has no obligation to defend or indemnify CCC, LLC or its subrogee, Brilliant. 

### The following facts are pertinent to the issue of successor liability. The 

### company alleged to have distributed the asbestos -containing products in the asbestos lawsuits was incorporated in 1958 as the first " Coastal Chemical Co., Inc." In 1974, Coastal Chemical Co., Inc. amended its charter to change its corporation' s name to " Coastal, Inc." In 1987, a new corporation named " Coastal Chemical Co., Inc." was incorporated. 

### In December 1987, the newly incorporated Coastal Chemical Co., Inc. acquired the chemical distribution business of Coastal, Inc. (i.e., 

### all usable inventory), which was transferred from Coastal, Inc. to Coastal Chemical Co., Inc. in a 1987 asset transfer agreement. 

### The Lexington policy was 

### not included in and not acquired by Coastal Chemical Co., Inc. in the 1987 asset transfer. Coastal, Inc. remained in business and continued to operate after the 1987
asset transfer. In 2010, Coastal, Inc. merged with Coastal ofAbbeville, LLC. In 2015, Coastal of Abbeville, 

### LLC declared bankruptcy, and its assets were 

### liquidated in bankruptcy proceedings. Coastal Chemical Co., Inc. later merged with CCC, LLC. The 1987 assettransfer agreement provided, in pertinent part: 

### 1. Coastal Chemical Company, Inc. offers to acquire the list ofassets outlined in Attachment A.... 2. Coastal, Inc. will 

### keep all assets not listed in Attachment A.

### 3. Coastal Chemical Company, Inc. will not assume any liabilities known or unknown prior to close of business midnight December 31, 1987. Louisiana Civil Code article 1821 provides that one person' s assumption of 

### the obligation ofanother must be in writing to be enforceable againstthird parties. 

### The Civil Code further provides that a person who assumes, by agreement, the obligation ofanother "is bound onlyto the extent ofhis assumption." La. C.C. art. 1822. 

### Applying this law to the above -quoted language ofthe 1987 asset transfer agreement, it is undisputable that Coastal Chemical Co., 

### Inc. did not assume any of the liabilities or obligations of Coastal, Inc. when Coastal Chemical Co., Inc. purchased certain assets ofCoastal, Inc. in the 1987 asset transfer. Despite this, appellants argue in opposition that because certain plaintiffs in 

### the underlying asbestos lawsuits alleged that CCC, LLC is the successor to Coastal, Inc., 

### Lexington owes CCC, LLC a dutyto defend, irrespective ofwhether the allegations ofsuccessor liability are ultimatelyproven, orwhetherthe plaintiffs
prevail.' Even though CCC, 

### LLC expressly denies that it is Coastal, Inc.' s successor, the appellants argue that the plaintiffs in the asbestos lawsuits would 

### haveto establish CCC, LLC's successorliability in orderto recover. Regardless of whether the plaintiffs prevail, the appellants contend that Lexington owes CCC, 

### LLC adutyto defend based onthe asbestos plaintiffs' allegations. The basic principle of corporate successor liability was set forth by the 

### United States Supreme Court in Golden State Bottling Co., Inc. v. National Labor Relations Board:



### T]he general rule of corporate liability is that, when a corporation sells all of its assets to another, the latter is not responsible for the seller' s debts or liabilities, except where ( 1) 

### the purchaser expressly or impliedly agrees to assume the obligations; ( 2) 

### the purchaser is merely a Brilliant and CCC, LLC statethat inthe underlying asbestos lawsuits,the courts neverresolved the issue of which entity succeeded to Coastal, Inc.'s liabilities and that all but one of the 

### underlying asbestos lawsuits has been dismissed. Econtinuation of the selling corporation; or ( 3) the 

### transaction is entered intoto escape liability. 414 U.S. 168, 182 n.5, 

### 94 S.Ct. 4145 424, 38 L.Ed.2d 388 ( 1973). Louisiana 

## Courts have followedthis general rule ofcorporate successorliability. J.D. Fields Co. v. Nottingham Const. Co., LLC, 2015- 0723 ( 

### La. App. 1St Cir. 11/ 9/ 15), 184 So.3d 99, 102. Herein, 

### the key consideration is whether the successor is in fact a
continuation" of the predecessor. See J.D. Fields & Co., 184 So.3d at 103. Brilliant and CCC, LLC point out that certain asbestos plaintiffs alleged that CCC, LLC is a " continuation" ofCoastal, Inc. and its former division, Coastal Chemical Co. The extent to which a predecessor and a successor have common shareholders, directors, officers, or even employees are pertinent considerations. 

### Further, prior business relationships should be considered, as shouldthe continuity ofthe identity ofthe business in the eyes ofthe public. J.D. Fields & Co., 184 So.3d at 103. However, the threshold requirement to trigger a determination of 

### whether successor liability is applicable underthe " continuation" exception is that 

### one corporation must have purchased all or substantially all the assets ofanother. J.D. Fields & Co., 184 So.3d at 103 ( citing Pichon v. Asbestos Defendants, 

### 2010-0570 (La.App. 4th Cir. 11/ 17/ 10), 52 So.3d 240, 244, writ denied, 2010-2771 La. 2/4/11), 57 So.3d 317). In the instant case, CCC, LLC admits that Coastal Chemical Co., Inc. did not purchase all the assets of Coastal, Inc., 

### only all the

assets " 

### necessaryto operate a chemical distribution business." There is no dispute that Coastal, Inc. retained assets and remained in business after the 1987 asset transfer. 

### The appellants argue that summaryjudgment was improper because there are genuine issues of material fact as to whether CCC, LLC is the successor to Coastal, Inc.; 

### however,there is no actual dispute onthe issue ofsuccessor liability.

10

### CCC, LLC admits that the Lexington policy was not among the assets transferred

from Lexington's insured to CCC, LLC' s predecessor in the 1987 asset transfer agreement. 

### There are no allegations in the underlying asbestos lawsuits that CCC, LLC' s predecessor acquired all of Coastal, Inc.' s assets and liabilities. 

### Finally, 

### CCC, LLC has expressly and repeatedly denied that CCC, LLC is the successorto Coastal, Inc. The asbestos plaintiffs' allegations that CCC, LLC is the successor to Coastal, Inc. are legal conclusions, not factual allegations. 

### Any legal conclusions 

### regarding successor liability are irrelevant to any determination of Lexington's defense obligation. It is well settled that allegations offact contained in a petition, and not the conclusions, determine the obligation to defend. 

### Henly v. Phillips Abita Lumber Co.,

### 2006-1856 (La.App. 1St Cir. 10/3/07), 971 So.2d 1104, 1114. Coverage Follows Liability" 

### Brilliant and CCC, LLC further argue that under the theory of " coverage 

### follows liability," 

### the right to recover under an insurance policy transfers by operation oflaw when the liability forwhich the coverage is sought also transfers 

### by operation oflaw. " 

### The right to recover under an insurance policy follows the liabilitythatthe insurer underwrote." See P.R.Mallory & Co., Inc.v. Am. States Ins. Co., No. 54C01 -0005 -CP - 00156 ( Ind. Cir. Ct. 

### July 29, 2004), 2004 WL 1737489, at * 5 ( unpublished) ( citing Northern Insurance Co. of New York v. Allied Mut. Ins. Co., 955 F.2d 1353, 1357 (9th Cir. 1992) (" 

### the rightto indemnity arising from [the policy] transferred togetherwith the potential liability.This right 

### to indemnity followed the liability rather than the policy itself')). We note, 

### however, that the Northern Insurance case from which this theory of "coverage follows liability" 

## derives mayno longerbegood law.5

5 See Axis Reinsurance Co. v. Telekenex, Inc., 913 F.Supp.2d 793, 808 ( N.D. Cal. 2012). 

### Subsequent decisions by Californiastate courts raise questions astothevalidityofthe Northern Insurance rule, even in California. At least one California court of appeals has rejected outright
11

### As noted by Lexington, the " 

### coverage follows liability" theory has never

been adopted in Louisiana.6 Louisiana law is clear that liabilities do not 

### automatically transfer, but must be in writing. La. C.C. art. 1821. Successor 

### liability does not entitle asuccessor, by operation oflaw,tothe insurance coverage of its predecessor in Louisiana. 

### Any person alleging that CCC, LLC assumed Coastal, Inc.' s delictual obligations must demonstrate that the assumption was in writing. Courts must look to the contract itself to determine whether liabilities

were transferred.' See La. C.C. art. 1821; J.D. Fields & Co., 184 So.3d at 102. 

### As stated previously, the 1987 asset transfer agreement excluded the 

### Lexington policy from the list ofassets acquired by CCC, LLC's predecessor from Lexington' s insured. 

### To conclude that CCC, LLC acquired the Lexington policy,
we would have to ignore the parties' contract.'

the Northern Insurance rule. See Gen. Accident Ins. Co. v. Superior Ct., 55 Cal. App. 4th 1444, 1454, 64 Cal. Rptr. 2d 781, 788 ( 1997). 6 The U.S. Fifth Circuit Court of Appeals has also rejected the " coverage follows liability" 

### theory in a case similarto the current matter, where a purchase agreement between two parties did not transfer a policy of insurance. The Fifth Circuit noted that the purchase agreement 

### specifically excluded the insurance policy from the asset transfer agreement, holding that the parties clearly intended forthe insurance coverage to remain with [the policyholder]." Keller Foundations, Inc.v. Wausau Underwriters Ins. Co., 626 F.3d 871, 876-78 ( 5th Cir. 2010). 

### 7 Louisianamayenforce certain post - losstransfers ofliability insurance, entitlingthe assigneeto certain rights: 

### There is no public policy in Louisiana which precludes an anti - assignment clause from applying to post - loss assignments. However, the language of the anti - 

### assignment clause mustclearly and unambiguously expressthat itapplies to post - 

### loss assignments. Thus, it is necessary forthe federal district courtto evaluate the relevant anti -

assignment clauses on apolicy - by - policy basisto determine whether the language is sufficient to prohibit post - loss assignments. In re Katrina Canal Breaches Litig.,2010- 1823 (La.5110111), 63 So.3d 955, 964. 8 In support of the " coverage follows liability" theory, the appellants cite to AMEC Constr. Mgmt., Inc. v. Fireman' s Fund Ins. Co., No. CIV.A. 13-718-JJB ( M.D. La. May 9, 2014), 2014 WL 1875264 (unpublished). In AMEC,the insurerfiled a Fed. R. Civ. P. 12(b)(6) motion, seeking a dismissal ofan alleged successor entity's complaintfor "failure to state a claim upon which relief can be granted," which is similar to an exception ofno cause ofaction in Louisiana state courts. The federal district court found that the complaint alleged facts sufficient to show that successor liability may exist under the corporate successor liability " continuation" exception, and that the alleged successor entity may be able to establish that its alleged predecessor's insurer may have a duty to defend and indemnify under the policy at issue. AMEC Constr. Mgmt., Inc., 2014 WL 1875264, at * 3. The appellants mischaracterize the 

### AMEC case, however,byclaiming thatthe federal district court held that rights undera liability policytransferbyoperation oflaw. TheAMEC courtmerely denied an insurer's Fed. R.Civ.P.
12Eight - Corners Rule" Brilliant and CCC, LLC argue that based on the " eight - corners rule," the 

### allegations ofthe petitions inthe underlying asbestos lawsuits and the terms ofthe 

### Lexington policy determine whether Lexington owes CCC, LLC adutyto defend. The plaintiffs in the underlying asbestos lawsuits alleged they were exposed to asbestos -containing products that were supplied and distributed by CCC, LLC 

### during the time period when Lexington's policy was issued to Coastal, Inc. and Coastal Chemical Co. 

### Overlapping with successor liability issues, certain asbestos plaintiffs alleged that CCC, LLC is the successor to Coastal, Inc. 

### Accepting the asbestos plaintiffs' allegations as true, CCC, LLC would be liable for conduct that 

### took place during the effective dates of the Lexington policy. In contrast, 

### Lexington arguesthatthere are no allegations against CCC, LLC inthe underlying asbestos lawsuits that trigger coverage under the Lexington policy. Lexington 

### contends that the appellants cannot point to any factual allegations made by the plaintiffs in the underlying asbestos lawsuits which, if assumed true, transforms CCC, LLC into a " Persons Insured" underthe Lexington policy. Referred to as the " eight - corners rule" 

### by our Supreme Court in American Home Assurance Co. v. Czarniecki, 230 So.2d 253, 259 ( La. 1969), an insurer 

### must lookto the four corners ofthe petition and the four corners ofthe policy to determine whether it has a duty to defend. Vaughn v. Franklin, 2000-0291 ( La. 

### App. 1St Cir. 3/28/01), 785 So.2d 79, 84, writ denied, 2001- 1551 ( La. 10/5/01), 798 So. 2d 969. 

### Cases applying the " eight - corners rule" hold that an insurer owes a 

### dutyto defend if,assuming the factual allegations are true,there would be both ( 1) 

### coverage underthe policy, and (2) 

### liabilityto the plaintiff. Maldonado v. Kiewit Louisiana Co., 2013-0756 ( 

### La. App. 1St Cir. 3/24/14), 146 So.3d 210, 218- 19.

12(b)(6) motion. 

### The court did not make any substantive holding on the " coverage follows liability" theory,noron an insurer'sdutyto defend.
13

### When making this analysis, the allegations ofthe petition are liberally interpreted

in determining whether they set forth grounds that bring the claims within the scope ofthe insurer's dutyto defend. An insurer's dutyto defend arises whenever 

### the pleadings against the insured disclose even a possibility ofliability underthe policy. 

### Although the allegations of the petition may ultimately turn out to be incorrect or untrue, the insurer is still obligated to provide a defense. Vaughn, 785 So.2d at 84. If, however, a petition does not allege facts within the scope of coverage, an insurer is not required to defend a suit against its insured. Guste, 251 So.3d at 1134. Even though the asbestos plaintiffs allege that CCC, LLC " negligently and 

### defectively designed, manufactured, marketed, distributed, supplied, sold and

used" the " asbestos products," those allegations do not trigger coverage under the 

### four corners ofthe Lexington policy. The pertinent Lexington policy provision 

### clearly defines " Persons Insured" 

### and includes only specific individuals.' None of

The Lexington policy defined "named insured" as:

named insured" means the person or organization named in Item I of the declarations ofthis policy. 

### Item 1 ofthe policy lists the " named insured" as Coastal, Inc. and Coastal Chemical Co. The 

### Lexington policy defined "insured" as:

insured" means any person or organization qualifying as an insured in the Persons Insured" provision ofthe applicable insurance coverage. 

### The Lexington policydefined "Persons Insured" as:

II. PERSONS INSURED Each ofthe following is an insured under this insurance to the extent set forth below[:] a) if the named insured is designated in the declarations as an individual, the person so designated but only with respect to the conduct ofa business ofwhich he is the sole proprietor, and the spouse ofthe named insured with respect to the conduct ofsuch a business; b) ifthe named insured is designated in the declarations as a partnership orjoint 

### venture, the partnership or joint venture so designated[,] and any partner or memberthereofj,] butonlywith respectto his liabilityas such; c) if the named insured is designated in the declarations as other than an individual, partnership[,] or joint venture, the organization so designated[,] and 

### any executive officer, director[,] or stockholder thereof while acting within the scope ofhis duties as such; d) any person (other than an employee ofthe named insured) or organization while acting as real estate managerforthe named insured; and
14the asbestos plaintiffs' allegations could, even ifproven, transform CCC, LLC into

an individual defined as a " Persons Insured" 

### underthe Lexington Policy—i.e., an executive officer, director, or stockholder ofthe " named insured" Coastal, Inc. or Coastal Chemical Co. DECREE Forthe reasons discussed herein, we affirm the trial court' s October 7, 2020 judgment. All costs of this appeal are assessed against the appellants, Brilliant 

### National Services Inc.and Coastal Chemical Company, LLC. AFFIRMED.

e) with respect to the operation, for the purpose of locomotion upon a public 

### highway, or mobile equipment registered under any motor vehicle registration law....
15