Opinion ID: 10021
Heading Depth: 3
Heading Rank: 3

Heading: Back In District Court: Phase II

Text: While the instant case was pending on remand, LIGA agreed to cover the amount owed by Sealift to the Blairs under the settlement. LIGA refused, however, to cover Sealift's costs and attorneys' fees. Filing a motion for a summary judgment of dismissal of Sealift's claim for costs and attorneys fees, LIGA argued once again that the IGAL amendments should be applied 15 Id. at 399. 16 Id. at 399-400 (noting that “LIGA's statutory obligation is coextensive with that of the insolvent insurer”). 8 retroactively to exclude the WC/EL policy from LIGA’s reinsurance obligations. As noted by LIGA at the time, if the amendments were applied retroactively then any claim by Sealift for costs and attorneys' fees must fail for the following reasons: First, this court had held that LIGA cannot be liable for legal services rendered in the defense of nonrecoverable claims17; and second, as a matter of law, LIGA cannot be considered to have acted “arbitrarily, capriciously, or without probable cause” in contesting unsuccessful prosecutions of coverage claims.18 After considering LIGA's motion, the district court agreed that the IGAL amendments should be applied retroactively. Accordingly, it granted summary judgment dismissing Sealift's remaining claim for attorneys' fees and other costs of litigation. The district court acknowledged that, in the earlier appeal of the instant case, this court had expressly rejected the argument that the IGAL amendments should be interpreted as overriding the Louisiana Supreme Court's decision in Deshotels. Nevertheless, the district court followed a contrary but supervening Louisiana appellate court decision, Tidelands Ltd I v. Louisiana Ins. Guaranty Ass'n,19 which had been issued after Deshotels, after the amendments, and after the remand of the instant case. The Tidelands decision squarely holds that (1) under the IGAL 17 Id. 18 Id. at 399. 19 645 So.2d 1240 (La. Ct. App. 1994), writ denied, 650 So. 2d 252 (La 1995). 9 amendments, WC/EL policies constitute “ocean marine insurance,” and (2) the IGAL amendments should be applied retroactively.20 Explaining its decision to follow Tidelands, the district court stated: This Court finds that Tidelands is the only post- amendments decision which directly addresses the matter before this Court, that is, whether WC/EL insurance should be considered ocean marine insurance when its coverage involves maritime claims. As such, it expresses the current interpretation of state law on the matter before this Court and should be followed absent a strong showing that the state supreme court would rule differently. Understandably displeased with the district court's decision to depart from this court's earlier decision to abide by Deshotels, Sealift timely appealed. The issue is thus before us for the third time.