Court Opinion

ID: 222616
Source: CourtListenerOpinion
Date Created: 2011-08-05 17:29:21+00
Date Added: 2024-06-11T17:28:55.712634
License: Public Domain

Case: 11-30049     Document: 00511563262         Page: 1     Date Filed: 08/05/2011

            IN THE UNITED STATES COURT OF APPEALS
                     FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                     Fifth Circuit

                                                                            FILED
                                                                           August 5, 2011

                                     No. 11-30049                          Lyle W. Cayce
                                   Summary Calendar                             Clerk

CONTINENTAL HOLDINGS, INCORPORATED,

                                                  Plaintiff–Appellant
v.

LIBERTY MUTUAL INSURANCE COMPANY; AMERICAN MOTORISTS
INSURANCE COMPANY,

                                                  Defendants–Appellees

                   Appeal from the United States District Court
                      for the Western District of Louisiana
                             USDC No. 3:09-CV-595

Before WIENER, PRADO, and OWEN, Circuit Judges.
PER CURIAM:*
        Continental Holdings, Inc. (“Continental”) appeals the district court’s
grant of Liberty Mutual Insurance Co. and American Motorists Insurance Co.
(collectively “Liberty”)’s motions for summary judgment. Continental took out
an insurance policy with Liberty for its employees’ workplace injuries, and was
sued by its employees for hearing-loss injuries after the Policy lapsed.

        *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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                                     No. 11-30049

Continental subsequently sought defense and indemnification from Liberty,
which declined on the ground that the claims were barred by a thirty-six month
exclusion for “bodily injuries by disease.” The district court ruled, inter alia, that
the employees’ noise-induced hearing loss was a “disease” under the Policy
rather than an “accident,” and therefore their claims were excluded from
coverage under the Policy. On appeal, Continental argues that the district court
impermissibly failed to consider extrinsic medical evidence in determining the
nature of the employees’ noise-induced hearing-loss injuries, and impermissibly
granted summary judgment based solely on the “eight corners” of the pleadings.
We affirm the district court.
            I. FACTUAL AND PROCEDURAL BACKGROUND
       Continental took out a Workers Compensation/Employers’ Liability Policy
(collectively known as “the Policy”) from Liberty beginning October 1, 1964 and
running to July 1, 1973.1 The Policy covers two kinds of work-related injuries:
bodily injury by accident, and bodily injury by disease. The Policy exclusions at
issue here provide:
       APPLICATION OF POLICY. This policy applies only to injury
       (1) by accident occurring during the policy period, or
       (2) by disease caused or aggravated by exposure of which the last
       day of exposure, in the employment of the insured, to conditions
       causing the disease occurs during the policy period.

Bodily injury by accident and bodily injury by disease are defined as:
       DEFINITIONS. (c) Bodily Injury By Accident; Bodily Injury
       By Disease. The contraction of disease is not an accident within
       the meaning of the word “accident” in the term “bodily injury by
       accident” and only such disease as results directly from a bodily
       injury by accident is included within the term “bodily injury by

      1
         Continental took out a materially indistinguishable policy with American Motorists
Insurance Co. from 1973 to 1983. The language and terms in each policy are the same, so we
treat them as one policy.

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      accident.” The term “bodily in jury by disease” includes only such
      disease as is not included within the term “bodily injury by
      accident.”

The Policy also specifically excludes coverage for bodily-injury-by-disease claims
not made within thirty-six months of the Policy expiring:
      EXCLUSIONS
      This policy does not apply: . . .
      ....
      (e) . . . to bodily injury by disease unless prior to thirty-six months
      after the end of the policy period written claim is made or suit is
      brought against the insured for damages because of such injury or
      death resulting therefrom;

      In 2009, a class of former employees sued Continental for hearing-loss
injuries caused by their long-term exposure to industrial noise while working for
Continental. The employees alleged that “the hearing loss [they] suffered . . .
was painless, and occurred gradually over a long period of time as a result of
their continuous long term exposure to hazardous industrial noise at the
defendant’s facility.” The suit is currently pending in state court. See Bell et al.
v. Level 3 Commc’ns, LLC (Individually and as Successor-in-Interest to
Continental Holdings, Inc.) et al., No. 31.663 (La. 2d Dist.).         Continental
subsequently filed the instant suit claiming that Liberty must defend and
indemnify it against the Bell plaintiffs’ claims under the Policy. Continental
filed a motion for partial summary judgment, and Liberty filed a cross motion
for summary judgment asserting that it does not owe Continental a duty to
defend or a duty to indemnify. The district court stayed this case pending a
decision from this Court on an appeal from the Western District of Louisiana on
a similar issue. After we issued the opinion in Bridgestone Firestone North
American Tire, LLC v. Liberty Mutual Insurance Co., 381 F. App’x 467 (5th Cir.
2010) (per curiam) (unpublished), the district court lifted the stay and
Continental withdrew its motion seeking partial summary judgment and filed

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a supplemental memorandum opposing defendants’ motions. Relying on our
decision in Bridgestone, the district court granted Liberty’s motion for summary
judgment on both the duty to defend and the duty to indemnify claims.
Continental timely appealed the grant of summary judgment on the duty to
indemnify issue and does not appeal the ruling on Liberty’s duty to defend.
                                  II. ANALYSIS
        We review the district court’s grant of a motion for summary judgment de
novo, applying the same standard as the district court. Apache v. W & T
Offshore, Inc., 626 F.3d 789, 793 (5th Cir. 2010).        Summary judgment is
appropriate when, viewing the evidence in the light most favorable to the
non-movant, “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). We may affirm
summary judgment on any basis supported by the record, “even if it is different
from that relied on by the district court.” Holtzclaw v. DSC Commc’ns Corp., 255
F.3d 254, 258 (5th Cir. 2001) (citation omitted).
A.      The District Court         Should    Have     Considered      Appellant’s
        Extrinsic Evidence
        Continental argues that the district court erred when it failed to consider
extrinsic evidence that described the cause and nature of the Bell plaintiffs’
alleged hearing-loss injuries.     Appellants cite Martco Ltd. Partnership v.
Wellons, Inc., in which we held that considering evidence beyond the complaint
is “indispensable in assessing the duty to indemnify.” 588 F.3d 864, 872 (5th
Cir. 2009).      In Martco, Wellons Inc. (“Wellons”) sought defense and
indemnification from its insurer, Admiral Insurance, in a loss-of-profits suit
against it by Martco Ltd. (“Martco”). Id. at 870. The duty to defend and
indemnify suit and the underlying liability suit were bifurcated before trial, and
after the trial on the underlying liability claims was completed, the district court

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held on summary judgment that Admiral owed Martco a duty to indemnify but
not a duty to defend. Id. at 871.
      Martco involved a situation similar to the present case. There, the issue
was whether Martco’s injuries were considered “property damage” under
Louisiana law. Id. at 879. On review, we held that Admiral had a duty to
defend based solely on the “eight corners” of the pleadings. Id. at 872–77. On
review of the indemnification claim, however, we held that “we are not limited
by the eight corners rule in assessing the duty to indemnify. Instead, we must
apply the Policy to the actual evidence adduced at the underlying liability trial
together with any evidence introduced in the coverage case.” Id. at 877.
      In this case, Continental seeks to clarify the nature of its employees’
injuries through extrinsic medical evidence to determine whether those injuries
fall under the definition of “injury by accident” as defined by Louisiana law
during the time period of the policy coverage. Liberty attempts to distinguish
Martco on the grounds that in that case the insurer’s motion for summary
judgment on indemnity was filed after a full trial on the underlying liability
issues. This argument is unpersuasive. Martco held that a court is not limited
to the eight corners rule in reviewing a duty to indemnify claim, and should take
“factual inquiries beyond the complaint” into account in its determination. Id.
at 872.     This conclusion is not rendered inapplicable because a final
determination on the underlying liability suit is still pending in state court.
      Liberty also argues that our decision in Bridgestone2 renders a Martco
analysis unnecessary. The facts in Bridgestone are nearly identical to those in
the present case. See Bridgestone, 381 F. App’x at 468–69. Former Bridgestone
Firestone (“Bridgestone”) employees filed suit against the employer for damages
related to hearing loss from exposure to loud noises during the course of their

      2
        Bridgestone is an unpublished, per curiam opinion and is therefore not precedent
under 5TH CIR. R. 47.5.

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employment.      Id. at 468.   After a settlement with the former employees,
Bridgestone filed suit against its insurers, claiming that they failed to honor
their defense and indemnity obligations. Id. The district court found that the
thirty-six month exclusion in the policy applied because hearing loss was not
characterized as an “accident” under Louisiana law, and we affirmed. Id. at 474.
We held that the district court was correct when it did not consider extrinsic
evidence to interpret clear and unambiguous policy language. Id. In this case,
however, there is no dispute that the policy terms are unambiguous. Rather
than seeking to admit extrinsic evidence to interpret the Policy terms
themselves, as was the case in Bridgestone, Continental seeks to admit extrinsic
evidence to properly understand and classify the injuries suffered by the Bell
plaintiffs under the Policy’s unambiguous terms. Bridgestone therefore does not
control.
        Our decision in Martco controls, and the district court should have
considered Continental’s extrinsic evidence in its summary judgment ruling.
The district court therefore erred when it did not consider Continental’s extrinsic
evidence related to the physical process of industrial hearing loss. Because we
find that Continental’s employees’ alleged injuries as described in the affidavit
are not an “injury by accident” under the applicable Louisiana statute, however,
the district court nevertheless properly granted summary judgment in favor of
Liberty.
B.      Gradual Hearing Loss Is Not an “Accident” Under Louisiana Law
        The    parties   agree    and       we   have      held   that    Workers
Compensation/Employers’ Liability policies incorporate the law and definition
of Louisiana’s Worker’s Compensation Act (“LWCA”) at the time the policies
were sold. See, e.g., Bridgestone, 391 F. App’x at 471. We therefore look to the
version of the LWCA in effect at the time the Policy was sold to interpret the
Policy.

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       When the Policy with Liberty was sold, LWCA defined “accident” as “an
unexpected or unforeseen event happening suddenly or violently with or without
human fault and producing at the time objective symptoms of an injury.” LA.
REV. STAT. ANN. § 23.1021(1) (1975).3 Continental argues that gradual hearing
loss is a “bodily injury by accident” under the then-existing statute as
interpreted by Louisiana courts. Continental introduced Dr. Robert A. Dobie’s
affidavit, in which he explains that the symptoms accompanying noise-induced
hearing loss can be measured at the moment the noise is heard, through the
administration of an audiogram.             Continental contends that because the
workers’ hearing loss could have been measured by an audiogram, the industrial
noises to which they were exposed produced an objective symptom of injury and
therefore fell under Louisiana’s then-existing statutory definition of “accident.”
But the vast majority of Louisiana cases reach a contrary conclusion. See, e.g.,
Becker, 2011 WL 2164151, at *16 (finding “gradual hearing loss resulting from
occupational noise exposure . . . cannot meet the definition of an ‘accident’ under
any version of the LWCA”); Gaspard v. Petroservice, Inc., 266 So. 2d 453, 454
(La. App. Ct. 1972) (finding no “accident,” under the pre-1989 version of the
LWCA, when there is not a single, identifiable event that appears to have caused
the condition).
       In the underlying liability suit, Continental’s employees do not claim that
a single event caused their accident, nor do they claim that they experienced
symptoms during the period of time that the Policy was in effect. Appellant cites

       3
         The statute was revised in 1989. The revised version defines “accident” as “an
unexpected or unforeseen actual, identifiable, precipitous event happening suddenly or
violently, with or without human fault, and directly producing at the time objective findings
of an injury which is more than simply a gradual deterioration or progressive degeneration.”
LA. REV. STAT. ANN. § 23.1021(1) (1989) (emphasis added). Continental’s argument that this
change in the law necessarily shows that the version of the LWCA in effect during the Policy
period included gradual hearing loss as an “accident” is without merit. See Becker v. Murphy
Oil Corp., No. 2010-CA-1519, 2011 WL 2164151, at *14 n.44 (La. App. Ct. June 2, 2011).

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four cases that, it argues, represent that occupational hearing-loss could be an
accident under LWCA. Each case, however, is distinguishable. While two of the
cases, Chatelain v. American Can Co., 344 So. 2d 1180 (La. App. Ct. 1977) and
Quine v. Ideal Cement Co., 351 So. 2d 1303 (La. App. Ct. 1977), explain that
physical strain is not needed for an injury to be considered an “accident” under
the LWCA and that regular workplace conditions can cause or contribute to an
“accident,” in each of those cases the plaintiff complained of hearing loss during
the period of employment—that is, there was an acute, identifiable occurrence
of injury.    The Louisiana Supreme Court has explained that sudden
manifestations of an injury—like a heart attack or stroke—are “accidents” even
if there they are the culmination of a chronic condition. See Ferguson v. HDE,
Inc., 270 So. 2d 867 (La. 1972). As we explained in Bridgestone, even under this
interpretation the Louisiana courts “at least require some identifiable event or
incident within the policy term where the employee can demonstrate a palpable
injury.” 381 F. App’x at 472.
      The other two cases are also distinguishable on the ground that the
employee–plaintiff experienced a sudden, acute, and identifiable injury during
the period of employment. See Romero v. Otis Int’l, 343 So. 2d 405 (La. App. Ct.
1977) (employees experienced sudden onset of noticeable symptoms in addition
to hearing loss during the course of their employment); Whitworth v. Kaiser
Aluminum & Chem. Corp., 135 So. 2d 584 (La. App. Ct. 1961) (employee
complained of ear injury immediately after noise-exposure and requested and
was denied a transfer, after which he experienced nearly total deafness over the
course of a few months).
      Likewise, the analysis of the LWCA in Bridgestone is persuasive. After a
thorough examination of cases interpreting the pre-1989 version of the LWCA,
we found that “the vast majority of the Louisiana appellate courts at least
require some identifiable event or incident within the policy term where the

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employee can demonstrate a palpable injury.” 381 F. App’x at 472. We then
concluded that hearing loss was not considered an “accident” under the pre-1989
version of the LWCA. Id. at 474. We agree with this reasoning and conclude
that noise-induced hearing-loss is not an “accident” under the LWCA. Therefore,
the thirty-six month exclusion applies and summary judgment is appropriate.
C. Continental’s Request for Certification
      Continental requests as an alternative that we certify the question of
whether hearing loss is an “accident” under the LWCA to the Louisiana Supreme
Court. To determine Louisiana law, we look to the final decisions of the
Louisiana Supreme Court. Moore v. State Farm Fire & Cas. Co., 556 F.3d 264,
269 (5th Cir. 2009) (citing In re Katrina Canal Breaches Lit., 495 F.3d 191, 206
(5th Cir. 2007)). When there is no final decision by the Louisiana Supreme
Court on the issue, “we must make an Erie guess and determine, in our best
judgment, how that court would resolve the issue if presented with the same
case.” Id. While there is no Louisiana Supreme Court authority, the decisions
from the lower courts are persuasive, and on this issue they are uniform. The
issue here is sufficiently clear and not “so complex [as] to warrant certification.”
Id. at 270 n.7. We decline to certify this question to the Louisiana Supreme
Court.
                              III. CONCLUSION
      For the foregoing reasons, the decision of the district court is AFFIRMED.

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