Court Opinion

ID: 10021
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:50:37+00
Date Added: 2024-06-11T10:33:50.478105
License: Public Domain

`

                 IN THE UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT

                             No. 95-30600

DWAYNE BLAIR; GLORIA BLAIR,

                                                Plaintiffs,

                                 versus

SEALIFT, INC.,

                       Defendant——Third Party Plaintiff——Appellant,

                                  versus

LOUISIANA INSURANCE GUARANTY ASSOCIATION,

                       Defendant——Third Party Defendant——Appellee.

          Appeal from the United States District Court
              For the Eastern District of Louisiana

                            August 5, 1996

Before HIGGINBOTHAM, WIENER and PARKER, Circuit Judges.

WIENER, Circuit Judge:

     More than a decade ago, Defendant-Third Party Plaintiff-

Appellant Sealift, Inc. (Sealift) impleaded Defendant-Third Party

Defendant-Appellee Louisiana Insurance Guaranty Association (LIGA)

into the instant action.       Since that time, the case has been
appealed to this court; consolidated with a number of similar

cases; forwarded by us together with a certified case to the

Louisiana Supreme Court; decided by us on the basis of the answer

to the question certified; remanded to the district court; and,

now, appealed once again to this court.                  At the heart of this

ongoing controversy is the question whether LIGA is obligated to

reinsure standard workers' compensation policies when claims are

brought under those policies for maritime-related injuries.                     The

particular issue raised by the instant appeal is whether the

district court on remand properly held that LIGA is not obligated

to cover such claims, and that it therefore need not reimburse

Sealift for its costs, including attorneys' fees.               Notwithstanding

the   fact   that   this    last   holding        by   the   district   court    is

inconsistent with this court's holding in the initial appeal of the

instant case, we affirm because of supervening changes in the law.

                                        I.

                           FACTS AND PROCEEDINGS

A.    LIGA

      In response to an increasing number of insolvencies among

insurance    companies     statewide,       the   1970   Louisiana   Legislature

enacted the Insurance Guaranty Association Law (IGAL).1                 The IGAL

“created LIGA as a non-profit, unincorporated entity to pay valid

claims, up to statutory limits, in the event an insurer who was a

      1
       See LA. REV. STAT. ANN. §§ 22:1375 et seq. (West 1995).

                                        2
member of [LIGA] became insolvent.”2              Specifically, when insurance

companies that are members of LIGA become insolvent, LIGA is

required to “assume . . . the benefits and obligations of the

direct insurance policies underwritten by the defunct carrier.”3

     The IGAL expressly provides, however, that several particular

kinds        of   direct   insurance    will   not   be   reinsured   by   LIGA.4

Significant to the instant appeal is the fact that “ocean marine

insurance” is one of those kinds of insurance excluded from LIGA's

reinsurance obligations.5              Since 1985, the precise meaning of

“ocean marine insurance” has been the subject of much litigation.

That litigation, and the 1989 amendments to the IGAL adopted in

response to it, are discussed below.

B.   PROCEDURAL BACKGROUND

     1.           In District Court:    Phase I

     In November 1984, Plaintiffs Dwayne Blair (Dwayne) and his

wife, Gloria Blair, (collectively, the Blairs) filed suit under the

Jones Act and general maritime law against Sealift, Dwayne's

employer.          The Blairs alleged that Dwayne had been injured in the

course of his employment as a crew member on one of Sealift's

vessels.          At the time of Dwayne's alleged injury, Sealift was

         2
      Deshotels v. SHRM Catering Serv., Inc., 845 F.2d 582, 583
(5th Cir. 1988).
         3
       See Sifers v. Gen. Marine Catering Co., 892 F.2d 386, 388
(5th Cir.), modified on other grounds, 897 F.2d 1288 (5th Cir.
1990).
     4
        See LA. REV. STAT. ANN. § 22:1377 (West 1995).
     5
        See id.

                                          3
insured under a “Standard Workmen's Compensation and Employers'

Liability” insurance policy (the WC/EL policy) issued by Transit

Casualty Company (Transit), a member of LIGA.      Under the WC/EL

policy, Transit owed Sealift the duties of defense and indemnity.

     In December 1985, Transit was declared insolvent by the

Louisiana's Commissioner of Insurance, and Transit's policies were

canceled. As a result, in January 1986, Sealift demanded that LIGA

assume Transit's obligations under the WC/EL policy. LIGA refused,

asserting that the policy constituted “ocean marine insurance”

within the meaning of the statutory exception to its reinsurance

obligations.

     In response, Sealift filed a third party complaint against

LIGA in the Blair lawsuit, and the Blairs named LIGA as an

additional defendant.    In April 1986, Sealift filed a motion for

summary judgment against LIGA, asserting that LIGA was obligated to

pay the full amount of the Blairs' claim.      Sealift also sought

payment from LIGA of any attorneys fees and other costs incurred by

Sealift in its defense against the Blairs' suit, as well as in its

prosecution of the coverage claim against LIGA. In opposing the

motion, LIGA insisted that (1) the WC/EL policy constituted “ocean

marine insurance”; and (2) LIGA was therefore liable for neither

the Blairs' claim nor Sealift's attorneys' fees and costs.

     In October 1986, Sealift and the Blairs reached a settlement

in the amount of $150,000.   The Blairs agreed not to execute on the

settlement against Sealift, however, until LIGA's obligations were

judicially determined.    Based on that settlement, the district

                                  4
court entered a final, summary judgment dismissing the Blairs'

claims against Sealift.    In that judgment, the court also ordered

LIGA to pay the amount owed to the Blairs under the settlement and

to reimburse Sealift for its attorneys’ fees and other costs.

     2.     First Appeal

            a.   Certification

     LIGA timely appealed to this court from the district court's

grant of summary judgment.       We consolidated that appeal with a

number of similar but unrelated cases that also raised the issue of

LIGA's obligation to pay a claim brought for maritime-related

injuries under a general workers' compensation policy.       We then

certified one of the cases, styled Deshotels v. SHRM Services, to

the Louisiana Supreme Court.6    We also suggested that, in answering

the question certified in Deshotels, the Louisiana Supreme Court

“m[ight] . . . find helpful portions of the record in two other

cases pending before this court”——namely, the instant case, Blair

v. Sealift, Inc., as well as another of the consolidated cases,

Sifers v. General Marine Catering.7

    6
     See Deshotels v. SHRM Catering Serv., Inc., 845 F.2d 582, 585
(5th Cir. 1988) (“The style of the case in which certification is
made is Joseph Mike Deshotels, Plaintiff, versus SHRM Catering
Services, Inc. . . . on appeal from the United States District
Court for the Western District of Louisiana.”) (certifying the
following question:     “Does this claim for maritime-related
injuries, brought on the Standard Workmen's Compensation and
Employers' Liability policy with a marine endorsement, involve
'ocean marine insurance' so as to be excluded . . . from the
coverage of the Insurance Guaranty Association Fund?”).
        7
      See id. As a result of our decision to forward the Blair
record to the Louisiana Supreme Court, there is some ambiguity as
to whether we actually certified Blair as well as Deshotels. We
need not resolve this debate, though, as its resolution does not

                                   5
       In January 1989, the Louisiana Supreme Court answered the

question certified in Deshotels. That court held that the disputed

“claim       for     maritime-related    injuries,    brought    on    a    Standard

Workmen's Compensation and Employers' Liability policy . . . does

not involve 'ocean marine insurance' and is not excluded from the

coverage of the Insurance Guaranty Association Fund.”8

                b.     The Legislature's Response

       Within months following the issuance of the Louisiana Supreme

Court's       answer     to   the   question   certified   in    Deshotels,      the

Louisiana Legislature responded by amending the IGAL. Prior to the

enactment of the amendments, the IGAL provided that LIGA would

reinsure "all kinds of direct insurance, except life, health,

mortgage guaranty, and ocean marine insurance."9                 The amendments

added the following language to the statute:                     "The kind and

coverage of insurance afforded by any policy shall be determined by

the coverage specified and established in the provisions of that

policy regardless of any name, label, or marketing designation for

that       policy."10     The   amendments     also   inserted   the       following

definition of "ocean marine insurance":

       “Ocean marine insurance” includes marine insurance as
       defined in R.S. 22:6(13), except for inland marine, as
       well as any other form of insurance, regardless of the

affect our analysis of the merits of the instant appeal.                         See
discussion infra part II.B.
       8
      Deshotels v. SHRM Catering Serv., Inc., 538 So. 2d 988, 993
(La. 1989) [hereinafter Deshotels].
       9
        See LA. REV. STAT. ANN. § 22:1377 (West 1989).
       10
            See LA. REV. STAT. ANN. § 22:1377 (West 1990).

                                          6
      name, label or marketing designation of the insurance
      policy, which insures against maritime perils or risks
      and other related perils or risks . . . . Such perils
      and risks include . . . liability of the insured for
      personal injury, illness or death . . . .11

               c.        Post-Certification

      Soon after the amendments were enacted, and “[w]ith the

benefit       of     th[e       Louisiana       Supreme    Court's]     [pre-amendment]

resolution of our certified question,”12 we again considered the

consolidated appeals.               LIGA argued that we should reject the pre-

amendment      result          reached    by    the   Louisiana       Supreme    Court    on

certification            and   instead    retroactively       apply     the    supervening

amendments          to    the     IGAL,     thereby       releasing     LIGA    from      any

responsibility            to    assume    the    WC/EL    policies     involved      in   the

consolidated cases.

      We rejected LIGA's recommended approach, however, as we “s[aw]

no reason” to depart from the general rule that a state court's

answer to a certified question is “final and binding upon the

parties between whom the issue arose . . . [and thus] generally .

. . the 'law of the case' in any further federal court proceeding

involving those parties.”13 In particular, we “question[ed] whether

the   Louisiana           Supreme    Court      would     conclude     that    the   recent

legislation overruled its decision in Deshotels.”14

      11
           See LA. REV. STAT. ANN. § 22:1379 (West 1990).
      12
      Sifers v. Gen. Marine Catering Co., 892 F.2d 386, 389 (5th
Cir. 1990) [hereinafter Sifers].
      13
           Id. at 391.
      14
           Id. at 392.

                                                 7
      Having determined that the Deshotels decision governed all of

the consolidated           appeals,       we   held   that       LIGA    was     required    to

reinsure the claims arising from the standard workers' compensation

policies involved in the cases.                    We also addressed the issue of

LIGA's obligation to pay the attorneys' fees and other costs of

litigation incurred by the insured employers.                         First, we held that

an insured could not recover attorneys' fees and costs incurred in

the successful prosecution of a claim against LIGA unless on remand

the   district       court    found       that     LIGA    had     acted       “arbitrarily,

capriciously,        or    without    probable        cause.”15          In    addition,    we

concluded that LIGA could not be held liable for fees and costs

incurred by an insured such as Sealift in the defense of claims

brought by plaintiffs such as the Blairs if by statute those claims

are   excluded       from    LIGA's       reinsurance          obligations.16       We    then

remanded each individual case to the district courts in which it

had arisen for further proceedings consistent with our opinion.

      3.         Back In District Court:           Phase II

      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.

                                      II.

                                    ANALYSIS

A.    STANDARD   OF   REVIEW

      When reviewing a grant of summary judgment, we view the facts

and inferences in the light most favorable to the non-moving

party21; and we apply the same standards as those governing the

trial court in its determination.22                 Summary judgment must be

granted if a court determines "that there is no genuine issue as to

any material fact and that the moving party is entitled to a

      20
           See id.
      21
      See Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256,
266 (5th Cir. 1995).
      22
      See Neff v. Am. Dairy Queen Corp., 58 F.3d 1063, 1065 (5th
Cir. 1995), cert. denied, 116 S. Ct. 704 (1996).

                                       10
judgment as a matter of law."23

B.   THE MERITS

     1.       Defining The Issue

     The central issue presented by this appeal is whether the

district court erred in following Tidelands rather than our earlier

Sifers     decision     which    applied    the    Louisiana       Supreme   Court’s

certification response as set out in Deshotels.                     If the district

court properly relied on Tidelands, then any claim by Sealift for

attorneys' fees and related costs must fail.                       First, Sealift’s

demand for fees incurred in the prosecution of its coverage claim

against LIGA would lack foundation, as in the end that claim would

have proved unsuccessful. Accordingly, LIGA's actions in resisting

the claim could not, as a matter of law, be considered arbitrary or

capricious.24       Second,     Sealift's      demand   for    fees    incurred   in

defending     against    the    Blairs'    claim    would     be   unfounded:     If

Tidelands were followed, then the Blairs' suit would comprise a

claim under “ocean marine insurance,” which would be excluded by

the IGAL as amended.           Consequently, under circumstances in which

Tidelands prevails, LIGA would be liable for neither the Blairs'

claim nor for any attorneys’ fees and costs incurred by Sealift in

defending against the claim.25

     At oral argument to this panel, Sealift and LIGA debated the

peripheral question whether Blair itself was certified to the

     23
          FED. R. CIV. P. 56(c).
     24
          Sifers, 892 F.2d at 399.
     25
          Id. at 400.

                                          11
Louisiana Supreme Court together with Deshotels. That, however, is

a debate we need not resolve, as we conclude that regardless of

whether, technically, Blair was or was not certified, the district

court's decision to depart from our earlier ruling in the instant

case should be affirmed.

     2.        The Law of the Case

     Generally, under the “law of the case” doctrine, our prior

rulings on given issues in a particular case must be followed

“without reexamination, both on remand to the district court and on

subsequent      appeals   to   this   court.”26   If   such   a    ruling    has

effectively implemented a state supreme court's response to a

question certified earlier from the case before us, then deference

to the ruling is particularly appropriate:         A certification answer

“provide[s] this [c]ourt with indisputable authority for deciding

difficult and previously unresolved issues of [s]tate law.”27

     26
      N. Mississippi Communications, Inc. v. Jones, 951 F.2d 652,
656 (5th Cir.) (footnotes omitted), cert. denied, 506 U.S. 863
(1992).
     We take this opportunity to note an additional “wrinkle” in
this procedurally complex case. Assuming arguendo that Blair was
not certified, the application of Deshotels opinion to the Blair
case could either be considered the law of the case or the
application of a “prior” panel decision, i.e., the binding
precedent of this circuit.      See Sifers, 892 F.2d at 391-92
(treating the certification response as binding on parties to the
appeal who were not parties to the certified case, for the reason
that the answer is “now the law of this circuit”).           This
distinction is of no moment here, however, as subsequent, clearly
contradictory state law trumps both the law of the case and the
otherwise binding nature of prior decisions of a panel of this
court. See, e.g., Lee v. Frozen Food Express, Inc., 592 F.2d 271,
272 (5th Cir. 1979).
          27
          Nat'l Educ. Ass'n, Inc. v. Lee County                   Bd.   of   Pub.
Instruction, 467 F.2d 447, 449 (5th Cir. 1972).

                                       12
       Nevertheless, our prior rulings may be reexamined both on

remand and on subsequent appeals if “controlling authority has

since made a contrary decision of law applicable to such issues.”28

This    reexamination            principle   applies     even   when   our   earlier

resolution of the issue has followed a certification response by a

state's highest court, for the certification process does not

ultimately relieve us of “our constitutionally imposed duty to

decide cases properly before us for review.”29

       We have in the past reexamined our own rulings that had been

based on a response by a state supreme court to a certified

question.          The most instructive example for today's purposes is

Laubie v. Sonesta Int'l Hotel Corp.30——a case with a procedural

history remarkably similar to that of the instant case——in which we

certified an issue regarding innkeeper liability to the Louisiana

Supreme Court.          With the benefit of that court's response to the

certified question, we ruled on the liability issue and remanded to

the district court.              While the case was on remand, the Louisiana

Legislature amended the Civil Code to counteract the Louisiana

Supreme Court's interpretation of innkeeper liability.

       In its decision on remand, the district court acknowledged our

earlier decision in which we had implemented the Louisiana Supreme

Court's          analysis   of    the   issue,    but   nevertheless   applied   the

       28
            N. Mississippi, 951 F.2d at 656.
            29
        Nat'l Educ. Ass'n, 467 F.2d at 449; see also Laubie v.
Sonesta Int'l Hotel Corp., 752 F.2d 165 (5th Cir. 1985).
       30
            752 F.2d 165.

                                             13
amendments to the Civil Code as superseding the Louisiana Supreme

Court’s      answer     to   our   certified   question   ——   and    did   so

retroactively.        With that case once again before us on appeal, we

affirmed, noting that “[i]n Louisiana, a civil law jurisdiction,

the legislative will, as expressed in the articles of the Code, is

supreme.”31     Thus, even when one of our determinations follows a

certification response, it may be reexamined on remand or on

subsequent appeal when supervening authority has issued.

     It is worth noting that the instant case differs from Laubie

in that, here, the legislative amendments were issued prior to our

earlier ruling in Sifers on the disputed issue.                Nevertheless,

subsequent to our Sifers ruling, the Tidelands court issued an

opinion that directly contradicts our Sifers decision.32             Moreover,

in H & B Construction Co. of Louisiana v. LIGA,33 another state

appellate court independently determined that the IGAL amendments

should be applied retroactively.            The H & B Construction decision

is not directly on point, as it deals with LIGA's obligation to

reinsure protection and indemnity (P & I) policies rather than

WC/EL policies.       Nevertheless, H & B Construction strengthens the

district court's hindsight conclusion that we “got it wrong,” and

the Tidelands court “got it right.”

     State appellate court decisions may constitute subsequent,

     31
          Id. at 167.
     32
          See Tidelands, 645 So. 2d 1240.
     33
      580 So. 2d 931 (La. Ct. App.), writ denied, 587 So. 2d 695
(La. 1991).

                                       14
controlling authority that overrides an earlier determination by

this court.      Specifically,

       state intermediate appellate court decisions constitute
       indicia of state law even when decided after a federal
       court has rendered a contrary opinion if the federal
       court judgment has not yet become final. Such decisions,
       if applicable, should, therefore, be followed absent a
       strong showing that the state supreme court would rule
       differently.34

In the instant case, there has been no “strong showing” that the

Louisiana Supreme Court would depart from the conclusions of the

Tidelands and H & B Construction courts. Indeed, the only showing,

strong or otherwise, is to the contrary: The Louisiana Supreme

Court has denied writs in both Tidelands and H & B Construction.

Although the refusal to grant a writ has no precedential effect,

such     a   refusal    does   provide   “persuasive”   evidence    that   the

Louisiana Supreme Court approves of the legal conclusions reached

by the appellate court.35            Accordingly, in this instance the

district court         properly   determined   that   Tidelands   constitutes

controlling authority which compels a departure from our earlier

certification-based decision on the issue of LIGA's obligation to

       34
      See Lavespere v. Niagara Mach. & Tool Works, Inc., 920 F.2d
259, 260 (5th Cir. 1990) (footnotes omitted), cert. denied, 114 S.
Ct. 171 (1993).
       35
      See Colonial Pipeline Co. v. Agerton, 289 So. 2d 93, 96 (La.
1974) (noting that a refusal to grant a writ is “persuasive,” but
is without the precedential weight of a case in which a writ has
been granted), aff'd, 421 U.S. 100 (1975).

                                         15
reinsure the WC/EL policy.36.549 So.2d 283 (La. 1989).37

                                  III.

                              CONCLUSION

     For the foregoing reasons, the district court's grant of

summary   judgment   dismissing   Sealift's   claim   against   LIGA   for

attorneys' fees and other costs is

AFFIRMED.

    36
      Sealift urges that the Louisiana Supreme Court's decision in
Backhus v. Transit Casualty Co.

 clearly indicates that the Louisiana Supreme Court would reject
the holdings of the Tidelands court. In Backhus, an opinion issued
shortly after the Legislature amended the IGAL, the Louisiana
Supreme Court recited its Deshotels opinion with approval.
Nevertheless, the Backhus opinion never discusses the impact of the
IGAL amendments on the state of the law; in fact, the amendments
are not even mentioned in the opinion. Moreover, the central issue
of the Backhus opinion is whether P & I policies, rather than WC/EL
policies, constitute “ocean marine insurance.”      Thus, standing
alone, Backhus provides no persuasive evidence on the issue of how
the Louisiana Supreme Court would rule on the matter at hand. Any
tentative indication to the contrary that we may have made in our
earlier decision in the instant case, see Sifers, 892 F.2d at 392,
is best characterized as dicta, the accuracy of which has not stood
the test of time.

                                   16