Southern Silica of Louisiana, Inc. and Mid State Sand and Gravel Company, L. L. C. VS Louisisana Insurance Guaranty Association

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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NUMBER 2006 CA 2023 SOUTHERN SILICA OF LOUISIANA INC AND MID STATE SAND AND GRAVEL COMPANY L L C VERSUS LOUISIANA INSURANCE GUARANTY ASSOCIATION Judgment Rendered Appealed JUL 1 32007 from the Nineteenth Judicial District Court in and for the Parish of East Baton Rouge State of Louisiana Docket Number 517 372 Honorable Kay Bates Judge Presiding Randal J Robert Counsel for Plaintiffs Richard Zimmerman Jr Southern Silica of Louisiana Inc Baton Rouge Raymond Lafayette LA et al Jackson Counsel for Defendant LA Louisiana Association BEFORE J1N Appellants CARTER C J J Appellee Insurance Guaranty LIGA WHIPPLE AND McDONALD JJ WHIPPLE J This is an appeal by plaintiffs SouthelTI Silica of Louisiana State Sand and Gravel Company LLC from an Inc and Mid adverse grant of summary judgment in plaintiffs suit for declaratory judgment in which plaintiffs sought judicial determination 22 1386 Louisiana recovery statute F or the resolve whether the 2004 amendments to Insurance applied following reasons acclued and plaintiffs to Association Guaranty we reverse render non s pending to and remand the LSA R S of duplication claims a retroactively matter for fmiher proceedings FACTS AND PROCEDURAL HISTORY This Silica appeal arises from suit for a of Louisiana and Mid State Sand and collectively refened to seeking Southenl Silica as declaration that a hereinafter referred to products and Mid State Sand and Gravel and with some they exposure dates During the years Reliance Insurance 2001 Depmiment of cash flow 1977 Insurance was to Febluary 1 2004 and defense in Texas and selling and mining was sand in the business of mining The 1964 to 2003 silica dust 1982 through over plaintiffs in the long periods of time SouthelTI Silica hereinafter refened and excess to was umbrella unable Pennsylvania Depmiment 2 was Reliance as insured to the by under liability policies placed in rehabilitation by Because Reliance claims the on from 1965 to 2003 general liability Reliance to pay exposed ranging Company number of commercial May of were hereinafter them in Louisiana Company producing sand and gravel products from silicosis suits claim Company Guaranty Association Insurance in the business of SouthelTI Silica was Gravel appellants against Mississippi by SouthelTI appellants indemnity owes 500 silicosis suits filed approximately or the Louisiana LIGA as filed declaratory judgment a In Pennsylvania generate sufficient of Insurance subsequently sought final order of a Court of On October 3 liquidation 2001 Pennsylvania declared Reliance insolvent and ordered its liquidation The insurance commissioner of the State of Pennsylvania liquidator and ordered was to take The Reliance damages alleged of Reliance possession policies at issue in the suits for the relevant time insurance coverage for the years of 1977 alleged that judgment and the parties by the Reliance policies have been settled and time peliinent a them with to the Specifically for petition coverage them they or excess have declaratory some of the absolutely no for the years covered SouthelTI Silica obliged for SouthelTI some to pay of the suits the silicosis lack of insurance coverage for the was declaratory statutorily obligated indemnity for those years in the 1 pending to suits indemnify SouthelTI Silica for payment of the prior settled claims to the 2004 LIGA filed petition asserting to LSA R S On to decree that LIGA defense and On March 26 pursuant primary according funds due judicial a to against SouthelTI Silica has Thus SouthelTI Silica filed the instant suit for period judgment seeking in their Southen1 Silica has been out of company plaintiffs answer Further 1982 insurance although appellants have other available insurance coverage either and 2 to since However period liquidated through dispute do not exposure years identified in the 500 suits provide propeliy and s coverage to SouthelTI Silica for the provided Reliance has been declared insolvent and ordered Silica appointed statutory was its assets liquidate no the Commonwealth dilatory exception all affinnative defenses of prematurity available and to LIGA 22 1375 et seq September judgment contending 14 2004 that as a SouthelTI Silica filed matter declaring that the policies in question and that the lawsuits a are of law are covered claims 3 the as they a were motion for summary entitled to a judgment type covered by LSA R S 22 1377 defined by LSA R S 22 1379 3 a As such Southern Silica contended LIGA has with provide Southel11 Silica allegedly occUlTing during On November a the defense andor period of 1977 2004 10 recovery statute had been amended effective August amended to any pending prior to 15 of action August for the exposure claims Silica amended RS 22 1386 A the its non No 108 of the 2004 by Act petition for duplication of Regular Session application of the statute as against LIGA for covered claims accrued deprive Southern 15 2004 would in contravention of the Due Process and to 1982 and that retroactive 2004 causes statutory obligation and duty indemnity Southel11 declaratory judgment alleging that LSA a Silica of vested Contract Clauses of the or or rights state and exception of prematurity and federal constitutions On December 3 2004 answered SoutheI11 Silica R S 22 1386 s LIGA amended Southel11 Silica was re its urged petition contending obligated to was sought against the other coverage to Southel11 Silica any suit 1 provided to LSA indemnity coverage solvent insurers who provided finding as cOUli denied Southel11 Silica follows Regular Legislative Session legislatively overruled the Louisiana Supreme COUli s decision in Hall v 787 Zen Noh Grain COlporation 2001 0324 La 4 27 01 Act 108 of the 2004 So 2d 280 2 Act 108 of the 2004 Regular Legislative Session requires all other insurance for all other before the insUl ed 3 Accordingly can and against LIGA would be premature By judgment dated January 6 2005 the trial motion for summary judgment pursuant first seek defense and from their solvent insurers for the years in which Reliance that until such defense that periods must that be exhausted claim LIGA coverage Southel11 Silica s other solvent insurers must indemnify and defend it for the periods of time that they provided coverage and must also indemnify and defend for the period covered by any insolvent insurers 4 s Act 4 108 divest Regular Legislative Session Silica of any rights and does not of the 2004 Southern is not unconstitutional After this judgment supervisory writs with this denied the writ stating The rendered Southern Silica filed judgment issued by the or not there trial court did was a precluded summary judgment Declaratory Judgment the trial court application On June 17 2005 another panel of this court Petition for by an for court follows as determine whether that was as more than simply issue of material fact genuine All of the issues raised in the have apparently indicated in the oral reasons been ruled for on judgment application Therefore this Court declines exercise its supervisory jurisdiction in regard to this matter submitted with the writ to judgment on the merits of the Petition for Declaratory Judgment is rendered it will be an appealable judgment Once a SouthelTI Silica of Louisiana v LIGA 2005 0057 La App 1st Cir 17 6 05 unpublished writ action On March contending that Southern Silica 13 2006 pursuant LIGA filed to the 2004 a for motion smmnary to LSA R S amendments must first exhaust any and all other insurance policy period for which insurance is available before recovering if an insolvent insurer Reliance of the alleged extent of their must first absorb Reliance s available for any from LIGA coverage for only 22 1386 A a share of defense and period certain Southern Silica even s other indemnity to the policies The matter conclusion of the judgment stating This was argued before the trial comi hearing the trial as comi granted on LIGA May 15 2006 s court finds that the recent amendment to La the other insurance requires IParro dissented and would have companies granted 5 the writ At the motion for summary follows 22 1386 J the LIGA fLUiher contended that exposure solvent insurers provided judgment RS to fill in the gap left application the by of Reliance insolvency amendment This applies retroactively because Southern Silica did have not fulther finds COUlt it is procedural vested right to have a this in nature Louisiana Guaranty Association provide a defense to it therefore there is no genuine issue of material fact that Louisiana Insurance Guaranty Association is not required to provide a defense to Insurance Southern Silica A written judgment signed on SILICA June 19 dismissing Southeln Silica 2006 The OF LOUISIANA COMP ANY LLC shall from LIGA but only INC be not and MID STATE prevented from INC all other Southeln Silica to acclued SAND AND GRAVEL claiming defense and indemnity requirements been periods has namely the of the LIGA statute appeals contending that the Louisiana 2001 0324 Corporation La Supreme 4 27 01 COUlt trial court erred to s in Hall holding S 787 So retroactively applying the amendment Silica requests that this to SOUTHERN fully exhausted and the law in effect at the time that Southern Silica apply was and MID STATE SAND AND GRAVEL COMPANY LLC for any and all coverage satisfying prejudice that SOUTHERN provided after all other insurance coverage available SILICA OF LOUISIANA after fulther judgment claims with s v failing of action cause Zen Noh Grain per curiam 2d 280 in 1 and 2 in Thus Southeln LSA R S 22 1386 A court render judgment in its favor DISCUSSION Summary judgments COUlt using the Inc Hospital summary there is no Insurance judgment 93 2512 judgment is reviewed criteria that same whether summary are a La is on appeal de govern the trial COUlt Smith appropriate 7 5 94 639 So genuine issue of material fact Company 2004 2012 La The summary judgment procedure Granda 10 App 1st Cir 2 is favored and is 6 Lady of 750 2d 730 v a 06 appellate determination of S Our v device used to avoid procedural with the novo the Lake A motion for full scale trial when State Farm Mutual 935 So 2d 698 designed to secure the 701 just and speedy 966 A 2 Rambo Walker 96 2538 v The motion should be 30 32 no judgment issue genuine as a file LSA C C P pleadings depositions together burden of that there is an the adverse pmiy must its proof on proof is on the the motion is satisfied claim action evidentiary burden of proof or at to the Revere case 923 So 2d 101 can v adjudication Chauvin of v 116 rights and nonmoving pmiy satisfy shows that there is no Because it is the whether materiality out to the comi elements essential to 966 C 2 a pmiicular fact only in light of the substantive law applicable La 2004 1758 Inc Wellcheck obligations Inc Tax Commission IS in 2005 1571 The function of or action designed cases App 1st Cir to provide involving stage where either pmiy a to La can App 1st an 9 23 05 seek opinion be done of the ANR 2001 2594 2001 2600 La affirmed and remanded 2002 1479 7 a a coercive Cir 6 9 06 comi on a to La 1 sl 938 So 2d establish the v Cir 3 20 02 7 02 03 for remedy question of Pipeline Company App means actual controversy declaratory judgment is simply express the ordering anything 185 mi moving it will be able to so issues 104 rights of the pmiies 178 seen Dolgencorp that has not reached the without be declaratory judgment A C C P do to on at trial the Thereafter the trial failure substantive law that determines dispute is material 114 one or more defense genuine issue of material fact LSA in show that However by pointing produce factual suppOli sufficient to establish that applicable to is entitled to mover moving pmiy absence of factual suppOli for s answers with any affidavits for which the moving pmiy will not bear the burden of proof s 2d LSA C C P mi 966 B The initial burden of pmiy mi 704 So 7 11 97 material fact and that to as of law matter on action App 1st Cir La if the granted and admissions interrogatories there is of every inexpensive determination 851 So law Louisiana 815 So 2d 2d 1145 However our judgment by holding that controversy and will Wholesale As the courts will render not it undisputed facts burden of proving entitlement required to was Church Point 701 favor 1993 La establish that to required as a Southern Silica could matter LIGA not show that LIGA to defend and indemnify allegedly occUlTing during of not meet the Specifically declaratory judgment a for exposure alleging damages present justiciable a judgment in its to as insolvency s of Tarver 614 So 2d 697 petition s cases establish that SouthelTI Silica could to due to Reliance obligated suits v entitled was dismissing Southern Silica was act in availability of declaratory merely advisory opinions Inc Beverage Company only party seeking summary judgment LIGA under the law has limited the jurisprudence was them in the the gap in coverage Prior to its entitled Nonduplication of recovery A as follows person having a claim against an insurer under any in an insurance policy other than a policy of an insolvent insurer which is also exhaust his insurance shall include or hospitalization under coverage covered claim shall be a a but shall health other medical prohibited from first to be not policies to limited of liability underinsured motorist liability coverage or coverage under self insurance celiificates organization plan or similar plan maintenance preferred provider organization all required Such other rights under such policy coverage uninsured and provided in pati Any provision both Louisiana Revised Statute 22 1386 amendment in 2004 or plan and any All entities that are expense coverage against the association recovering or as specified in shall also be considered insurers for purposes of this Subsection As to the association any amount payable by such other insurance shall act as a credit against the damages of the R S 22 1379 3 b claimant and the association shall the damages of the not be liable for such statute which SouthelTI Silica accrued and Supreme COUli s holding of claimant SouthelTI Silica contends that the trial version of the portion should have applied the law in effect at the time the claims was at the in Hall cOUli time the claims v were Zen Noh Grain 8 asselied Corporation relying this against upon the 2001 0324 La 4 27 01 2d 280 787 So per curiam In Hall the Zen Noh Grain caused by the actions and operations of Zen Noh from Zen Noh filed 2d at 281 insolvency and its of Zen Noh filed an patiy demand failed to prior allege proceeding against a toxic insurer The North West Insurance no cause of action contending LIGA required by as to the Company 787 So 2d at 281 that Zen Noh had exhausted all suit Hall 787 against LIGA due third party demand of tort injuries allegedly 1975 fOlward Casualty Company Hall exception to a primary catTier Transit excess subsequently s for Corporation seeking damages against So filed plaintiff LIGA that the third applicable policies 1386 22 LSA R S Hall 787 So 2d at 281 In response demand July 7 effect a Transit through July claim during carriers the asserting that 1982 not have Zen Noh against that an period Hall 787 So 2d appellate s a supplemental Casualty policies s and were amending third patiy issued for the 1984 and that for that two year insurer under any other than the The at 281 provision policies Supreme which had affirmed the court maintained LIGA 7 filed exception stating as period period Zen Noh did in any insurance issued by policy Court reversed the judgment of judgment of the trial comi follows clearly alleged in its third patiy demand that it does not have a claim against an insurer other than the insolvent insurers under any provision in an insurance policy in effect during the relevant time period July 7 1982 through July 7 1984 Therefore on its face Zen Noh s petition satisfies the requirement under La R S 22 1386 that it exhaust its rights under solvent insurance policies prior to proceeding against LIGA Zen Noh has filed third recognize that party demands LIGA Lexington maintains that the existence of Zen Noh s claims against these solvent insurers establishes on the face of the pleadings that Zen Noh has not exhausted its rights as required by La R S 22 1386 against other However matters July 7 a insurers Republic review of Zen Noh reveals that the 1982 Old applicable through July seeks coverage from LIGA 7 and third patiy demands in these policy periods are outside of the s 1984 time frame for which Zen Noh Nothing 9 in these in the two insolvent Zen Noh We of pleadings contradicts and Zen Noh that it does allegation s have not claim a provision in any insurance policy to July 7 1984 period insurer under any the 7 July 1982 Hall 787 So 2d no indemnity erred matter By of law in Acts 2004 No LSA R S 22 1386 was In the during death caused in the Hall Thus years to policy case there is they contend provide defense and years and the trial court declaring otherwise 108 1 9 which became effective amended to include the case as statutorily obligated is Southern Silica for the Reliance to as a LIGA Hall to here policy other insurance available for the Reliance pursuant in effect an at 281 282 appeal Southern Silica contends that On against of by exposure August 15 2004 following additional language in iury alleging personal claimant a on to asbestos fibers or or other claim from exposure to release of or contamination from any environmental pollutant or contaminant such claimant must first exhaust any and all other insurance available to the resulting insured for said claim for policy period any for which recovering from the association insolvent insurer provided the only coverage for one insurance is available before even if an or more Emphasis policy periods of the alleged exposure added Section 3 of Act 108 further covered claims as defined in R S provides 22 1379 that t pending his Act shall or arising after apply all to the effective date of the Act Thus Southern Silica contends above amendment to LSA R S 2004 rights can to be appeal to that the issue is whether the which became effective 22 1386 A lawfully applied herein defense and on August 15 retroactively divest SouthelTI Silica of indemnity acclued and asserted in February of2004 prior to the effective date of said amendment It is well settled that the to give L LC its enactments 2005 0072 legislature is free within constitutional confines retroactive effect Davis La App 1st Cir 10 2 10 06 v St Francisville 928 So 2d 549 Country 554 Manor writ denied 2006 0604 La 5 26 06 legislature intent when s LSA C C retroactively Inc 2005 2025 whether which La laws interpretative laws the its substantive i Cir 10 25 06 In the instant our pending inquiry has retroactive or its intent the or the on or vested arising its intent to rights if doing so a XIV so 9 1 La Const ali I then in substantive spite of 9 9 2 23 rather than procedural Company 872 So 2d 1133 v 108 classify the even Davis 928 So 11 inquiry If the enactment as as states in Section defined in R S However where the legislature the law may not be or disturb and Due Process Clauses of the Const mi I 1138 a at 554 specifically note that to 9 10 2d U S Const amend at 554 555 the contrary interpretative Noyes and legislature impair contractual obligations or C mi 6 prospective application legislative pronouncements Automobile Insurance 2 23 04 we in violation of the Contract US the enactment law retroactive effect would Federal and State Constitutions the the effective date of the Act after Instead give determining fold two a all covered claims to In p rocedural that requires court must language of Act apply applied legislative expression Davis 928 So 2d interpretive the to retroactively unless there is in case applied retroactively and and 672 guided by LSA C of contrary ascertain whether does not end there expressed are Aliicle 6 3 of the Act that the Act shall 22 1379 comis contrmy not express defer must should be statute a prospectively only regarding generally court 944 So 2d 668 the absence n to the procedural a Amcare Health Plans of Louisiana v apply both prospectively intent legislature did st Wooley applied retroactively comi must expressed 1 apply legislative expression First 6 mi provides that substantive 2d 25 and determining whether App law may be a 930 So 2002 1876 If it does the law is State Farm Mutual La App 1st Cir In granting LIGA that Southern Silica did Thus the trial nature and was comi be to s motion for summary judgment the trial not have a determined vested right were now Reliance Thus have LIGA provide the amendment 22 1386 statutorily obligated to fill the the comi LIGA granted thereby relieving LIGA of its obligation Silica for the claims related to statute left to defend and by the insolvency a against LIGA are substantive vested judgment the Reliance policy years change and defense in the various indemnity of indenmify Southern Southern Silica however contends that the trial comi amendment effects amended as motion for summary s defense that other solvent required gap a found merely procedural in was given retroactive effect Applying the the trial comi detennined that LSA R S insurers to comi in that application s Southell1 Silica prior accrued and pending of the rights s causes to of action Due Process rights protected by the guarantee of the Clauses of the Federal and State Constitutions Specifically Southern Silica notes that the proper documentation the suppOliing indemnification of these claims had been submitted with the applicable statutory requirements amended statute covered claims its actions as reality no and is not procedural already LIGA is to payor upon the amended statute Southell1 Silica fuliher is that Southell1 Silica has pOliion steadfastly refused been settled of settlements required to over policy 500 claims years to justification statute substantive in clearly policy to years it and it has that personally pay to and that unless comply with its statutory duty Southell1 Silica 12 the harsh cases respect required for overruled Hall asserts that in that with the Reliance as of the indemnify these pending against Southell1 Silica has been relating in accordance the enactment to the trial comi then the amendment is by coverage for the Reliance have the eventually relying to LIGA Southell1 Silica contends that if the amended determined nature However LIGA prior request for defense and s assets will continually deplete given the coverage gap created LIGA argues that the amended Although prescribes the priority or not their is not question one of right to attempts incurred defend asselied prior to the defined liabilities causes App 1st Cir is 6 28 96 confer duties legal or Gauthreaux 676 So 2d 213 for enforcing methods liabilities or status maintains redress for invasion of obligation where Waste Environmental 604 So 21n of 2004 and Southern Silica approximately 928 So if Company 1128 However La they had if even policies 13 a were are destroy rights or Trosclair 95 0549 on the other If a a or statute existed procedural If it Department of Cir writs denied law is characterized language evidences which or substantive law State its already 115 964 00 to settle these claims which covered under the Reliance as App 1st declaratory judgment contended that already its acts 2d at 555 v applied retroactively if for rights and administering existed it is 1992 petition applied were right which previously be s v processing previously none and Procedural laws La not Southern Silica a define rights it is classified 597 So 2d 1125 1318 it may 217 Davis Pollution Control Quality 2d 1309 procedural damages that obligation an create merely prescribes the method of enforcing American for We agree that creates one those which of action determining rights a new while it against them Silica contends enactment of the statute as prescribe creates 1982 against LIGA which had accrued and vested and generally hand Southern whether Southern 1977 years 500 lawsuits filed over period A substantive law La policy Southern Silica recover rather merely defense and to the amended statute will divest Southern Silica of valid of action causes that during retroactively against to priority but Silica will have any coverage for the Reliance entitled are 2 insolvency s in that it procedural order in which insureds indemnity from their insurers and counters that the is statute by Reliance was filed in as a February settled 34 lawsuits related to exposure paying periods contrary intent Graham Fmihermore if statute that a change a 478 is Thomassie v The amendments to go or disturb vested 1225 1226 rights La 1985 remedial also has the effect of it will be construed 581 So 2d 1031 1034 to La operate 1 App st La 1991 to LSA R S claim a law Savoie to 2d 1223 procedural writ denied 589 So 2d 493 plaintiff asserting So in the substantive prospectively only Cir retroactivity would operate Sequoya Corporation v making if the or 22 1386 would through seemingly require the formalities of exhausting any any and all other insurance available to Southern Silica for exposure claims for any policy period even for which insurance is available before if the insolvent insurer i e or more policy periods exposure from 1977 of the through Southern Silica for other version of the statute to insurer and the insurers policies and pay claims for they had no provide coverage for the coverage for for any claims providing one alleging coverage to under the amended policy periods of the insolvent proceed against LIGA until all solvent may not undoubtedly periods of creates alleged obligation clearly effect payment of claims Thus 1982 those solvent insurers solvent insurers contractual the amendments So s exposure from LIGA exhausted This amendment vis SouthelTI Silica alleged provided the only policy periods would be required plaintiff are Reliance recovering a or a new obligation or liability by requiring that they provide exposure for Reliance statutory duty substantive to vis coverage when policy years provide coverage Thus change in the law with regard See American Waste and Pollution Control a Company to 597 2d at 1128 In Segura denied sub Louisiana nom Frank 93 1271 93 1401 La 1 14 94 v 511 U S 1142 114 S Ct 2165 Supreme Court determined that the 14 630 So 2d 714 cert 128 L Ed 2d 887 1994 1990 amendments the to LSA 22 1386 were amendments procedural insofar merely prescribed but did not affect However to 2d at 723 724 because the amendments substantive contractual UM Segura while the at 723 724 rights by increasing policies the amendments change method substantive 108 1 S clearly Southern Silica would analogous apply prospectively to those in of the procedural rights obligations enacted a 3 change none s we previously existed Thus in that plaintiffs clearly by effect the a by find that Acts 2004 existing rights in Segura other solvent insurers Accordingly other solvent insurers however the retroactive all covered claims now Comi determined that and created new at least with regard to amendment must be substantive Because regarding s the case rights of Southern Silica and liabilities where as they legislature expressed order of recovery the amendments their duties and obligations classified affect or in the substantive increasing where the apply retroactively the were effective date the amendments 630 So 2d at 725 amendments specifying the to Accordingly We find the facts of the instant must 2d 630 So Segura recover policies issued prior intent that the amendments No order of recovery from defendants plaintiffs under existing under rights 630 So Segura only to or in that the plaintiffs rights apply prospectively only because they clearly would affect the insurers substantive no method plaintiffs rights celiain insurers obligations would a on the Court fmiher determined that because the 1990 amendments clearly affected their their effect as the legislature application herein of the Act i pending on or arising after determine whether the amendment 3See Segura 630 So 2d at 721 725 15 expressed legislative e that the Act shall intent apply the effective date of the Act impairs contractual obligations to we or disturbs vested Southern Silica to such that it may not be rights Reserves Energy 400 410 103 Louisiana State Contract Clause Group S Ct Inc 697 Supreme Comi All v in 74 L Segura 2d Ed comis is determine whether the comi must if four a and 1983 630 So step analysis would in fact whether the whether and significant a determine whether the of the purpose justifying the First contractual creating as imposing amendments file at new issue character the and a determine if the must state determine the court must unlike impairs where existing the Segura for by none had where the contractual insurance contracts and State Rita under the 630 So 2d at 729 the UM insurers for propeliy to other solvent insurers prescriptive period 16 appropriate amendment liabilities insurers damage claims against Katrina that increased existing amendments extended comi adoption Segura note we potentially and liabilities under pertinent Hurricanes a obligations and Moreover previously existed the s detennined previously we third contractual rights and responsibilities of the patiies relationship of Southern Silica and its and obligations legislation comi must purpose exists is based upon reasonable conditions and is of public a first the justifies the regulation and purpose legitimate public adjustment the impairment significant and legitimate public a if finally impairment is found the substantial also see The standard follows impair impainnent is of constitutional dimension a adopted by the 324 as second regulation constitutes Court Authorized and Licensed To Do relationship an we 459 U S at 728 729 2d 937 So 2d 313 state law so by the Supreme Light Company 569 Segura Business In State 2006 2030 La 8 25 06 by reviewing fOlih set Kansas Power v 704 analysis Property and Casualty Ins CalTiers to be used In order to do pending demands against LIGA s employ the appropriate in applied retroactively with regard where policy holders to damage sustained during insurance contracts the amendment reqmres that insurance compames asselied for exposure no in contract where a period place effectively creating constitutes Southern Silica and its for obligation Thus insurers liability an for claims providing period a of time find that this creation of we of the contractual impainnent an coverage of time where the insurance company had obligation had existed before no coverage during provide between relationship coverage before 1977 and after 1982 The next dimension This the legislation to a Segura Spannaus inquiry 438 U S 234 254 impairment does not a pmiy determine the 630 So necessarily constitute severity of severe will impairment citing Allied Structural Steel Company expectations to the constitutional nature and purpose of the state 98 S Ct 2716 Segura of Minimal alteration of contractual at 729 630 So 2d at 729 regulation that restricts contract comi to its first stage while at is impairment careful examination of the Total destruction of contractual substantial the reviewing a 630 So 2d may end the push the inquiry v inquiry requires impairment Segura obligations whether IS mqmry 2727 57 L Ed 2d 727 is not necessary for 2d at 729 finding a On the other hand gains it reasonably expected a substantial 1978 impainnent of state from the 630 Segura So 2d at 729 In measuring reviewing the severity Contracts enable pmiies must to their are entitled placed individuals pmiicular arranged those rights Once an impairment comi must first consider the Framers of the Constitution according of to rely on factors that reflect the on the order their to protection obligations them also consider whether the Segura industry 17 the of obligations high value private a the contracts personal and business affairs needs and interests and of contractual Segura are binding 630 So 2d 630 So 2d at 729 under the law at 729 730 complaining pmiy The and comi has entered has been in the regulated complaining party enters industry expectations severity of Segura In the instant suits and claims insolvency in Reliance um insurers policy prior duties owed a a lessen the contractual s may rights and periods alleged by the plaintiffs in the or to so 1982 1965 to 2003 no liability Due to the coverage for exposures By applying the amended version claims pending paid the statute does more to Notably although provide such LIGA pre by than or at issue before the merely specify ranking a the amendment does not set fOlih coverage the amendment would from LIGA or paid before absurd results an litigation that an illogically indemnity against later where Southern Silica had statutory Thus despite the rights and the amendment retroactive For example although for the solvent insurers to of the amendment would insurer providing pay claims for Likewise a LIGA which had accrued to SouthelTI Silica for the claims application indemnify and even seek to dating the amendment specific duty demand that as 1977 to years asselied retroactive such the exposure Southern Silica has to recovery produce set fOlih later of that patiy where heavily regulated a regulation of the industry easonably require Southern Silica pending in relationship Thus Southern Silica to demand coverage from its other insurers for the rights against would case change duty for the insurers and 2d at 730 630 So 2d at 730 the 500 to of the requiring So against Southern Silica ranged from and claims related enactment of further of Reliance retroactively contractual a subsequent impairment a obligations 630 Segura past alleged insurer later in 2003 pay claims for required providing liability alleged the amendment does not exposure 18 such coverage provide SouthelTI exposure in 1982 Southern Silica would be herein require Southern Silica to coverage application to Silica in some eighteen demand in its to 1965 years pending coverage to SouthelTI Silica thiliy years prior in 1977 While insurance policy up to find that thiliy prior to the extended for premiums amendment a The a public obligations or 108 Hence there is a 630 So 2d step insolvent insurer for the insurer by constitutes was severe policy at 730 731 and State impairments to be of in effect at the time the were in effect period coverage significant and legitimate public purpose we is injure or others through the denial of a simple desire the repudiation to of to enforce them means must determine whether application purpose primarily designed policy motivated by on a to requirement s contractual legitimate public policy Notably imperfect remedy and ones insurer coverage while the insured continued to if SouthelTI Silica even regulation insolvent an public a significant and of Act 108 LIGA contends that it does not have the funds to pay these maximum funds available the provide purpose justifies retroactive Predictably claims and that matter of a statutorily granted to Southern peliinent policies embarking 630 So 2d at 731 legitimate public by Act an that the insurer from state Segura the destruction of contracts or Segura Cf inquiry is whether escape its financial debts by where the Comi found the year to one justifies the regulation prevent as contracted for policy asselied and where the were to the The third to gap created a that had been impainnent of rights underlying claims pay state law premiums had been paid for that policy constitutional dimension where was and State Segura Southern Silica to demand that coverage for 2d at 324 325 So the Comi did in years from the time that the constitutional 937 as requiring provide liability in effect and Silica recogmze industry is traditionally regulated by we and up we to obligations interest in were impaired maintaining the LIGA for the payment of claims which LIGA may acknowledges unfairly the Act presents an burden viable insurers with debts of However LIGA argues that 19 that justifies as a matter of public policy the Act should be as an entity applied retroactively of last Southen1 to ensure that LIGA maintains its resOli Silica contends that the amended significantly impair insurers liability Moreover as providing noted once which insurance does not to coverage it LIGA s Act 108 requires for said claim for any from coverage for LIGA one was not even or more insurance available LIGA if an insolvent policy periods of the even if the coverage Thus retroactive s depletion of LIGA stated purpose of See Segura or to 630 So extent 2d to the by insured policyholders for a period significant and legitimate public Indeed the 20 of time at the LSA R S insurer an purpose which exhaust any where a to serves same time financial loss to claimants avoiding that any LIGA funds would at 731 732 to only As noted LIGA the Act funds while s the provided or 22 1376 legitimate exercise power for the purpose of protecting the state the and death caused exposure application would seemingly constitute police economic harm alleged or was insurer exposed before proceeding against s is of banlauptcy defending alleging personal injury policyholders because of the insolvency of of the state other insurance currently pending against it by requiring claimants minimize the unnecessary fmihering its assume policy period for which insurance is available before above LIGA argues that claimant claimant are 1982 coverage for the Reliance years provide even of cause after that it will promise first exhaust any and all other insurance available exposure to recovering a and Southern Silica has exhausted all 500 lawsuits which over 1977 before little conciliation if Southeln Silica is forced into settling the and vested applied private contractual relationships with its Southeln Silica by statutory obligations its if statute retroactively will divest Southeln Silica of its accrued action and will position s citizens from potentially be used protection of LIGA funds is we are bound to consider a Nonetheless although we find significant and legitimate public a suppOlis the legislation the final inquiry requires adjustment of the rights and responsibilities of contracting pmiies is based reasonable conditions and is of justifying the legislation itself is state social 732 of to burden costs even a without fair attention to The reasonableness legislature application s of over as set fOlih applying Act judgment is entitled of Act 108 the to demand coverage for claims for in both policies receive a were in effect who deference at all peliinent 21 2d at may not be the we a to now provided that the rights of assert such insurance up to brief period of time had Thus s by retroactive contractual premium times and LIGA recogmze period Unlike a s necessity and However private are year time span the period where insurers this 630 So provided liability thiliy eight exposure for premiums during the to issue involve both at examining Segura and State the insurers collected which a who could have alleged as relationships impaired retroactively to proper economic and 630 So 2d at 732 balancing Southern Silica 108 their solvent insurers not of in purpose target group with the imposition contractual above upon Unless the legitimate end it by requiring Southern Silica years from the date of the effect and did a relationships legislature impaired Southern Silica and it insurers against in Segura measure Segura course at 732 reviewing solvent insurers the Accordingly competing interests thiliy private public legislative judgment easy the contractual case entities to 2003 or its interests Southern Silica and those from 1965 to pmiicular a defenseless coverage to Southel11 Silica claims is customary in as the to 2d 630 So when the law addresses politically public and private appropriate Segura properly defer comis In the instant between adoption and reasonableness of However character a contracting pmiy regulation necessity used a s determine whether this to us purpose no and contract in the instant for the case peliinent by virtue of the provided through coverage already subject to some policies responding reasonable purpose would be served in insurers bound to by cover a such claims when contractual SouthelTI Silica to seek for claims arising after these contracts were improper financial burden that would be placed solvent insurers in s in effect at the time those insurers risk In addition to the SouthelTI Silica the relationship expecting they had at the were or related to or time in effect and which arose defense from or in were not requiring subsequent insurers periods occurring years clearly were no solvent s policy in effect and no find we Southern Silica time the claim indemnity payment asserted to such demands on not before or contemplated by the written terms of such contracts Moreover we find retroactive Southern Silica of vested propeliy as duties owed When a right is due process 2d 878 in his a prior right to v 1259 the passage of this to assert vested propeliy Bourgeois A P Thus M Faucheaux 879 right cause La 1985 cmlliot be v of Act rights acquired asserted a cause right which is a cause a retroactive to a as change 2000 1528 once well in the Hospital acquisition to divest the application La 4 3 01 accrued 783 So 2d at 1259 The statutes enacted after the retroactively applied and accrued prior AIton Ochsner Medical Foundation of action because such deprive protected by the guarantee of of action so as 108 would subsequent legislation of action Green Industries Inc by subsequent legislation Bourgeois 4See property a 2d 1251 So divested So LIGA pmiy acquires law that 783 by application cannot be 4 and Clinic of such a 470 vested plaintiff of his vested right would contravene the due TelTebonne v South Lafourche Tidal Control Levee District 445 So process guaranties 2d 1221 1224 La 1984 This vested right could not be impaired by subsequent Legislature simply cannot take away an existing cause of action based upon rights which had clearly been granted by legislation during the preceding session and had become vested on the effective date of the legislation Favrot v Parish of East laintiff cannot be deprived of his vested Baton Rouge 34 La Aml 491 La 1882 P mere action right by legislative legislation The substantive 22 F or the above stated legislative pronouncements contractual character applying the application constitutional Thus the obligations I S 10 matters based of Act on purpose Contract we are compelled to would find that U S 1 Davis 928 So 2d of a conclude and that state obligations although the legislature expressed its claims the applied retroactively S are adoption s federal of contractual due find that the to we violate the because Const amend XIV 630 So 2d at 721 725 standard to all covered effective date of the Act unable are justifying the legislature Clause 108 applied the law may not be we reasonable conditions and prohibitions against impairment intent that the amendment be mi are appropriate to the public retroactive after such on impairments herein Accordingly while mindful of the deference reasons La law pending impairs herein Const art I or contractual See u S S S 2 arising 23 Const Segura at 554 555 CONCLUSION Accordingly the LIGA was LIGA s entitled to a June 19 judgment judgment of the in its favor This matter of the Act do not is remanded in the amount of Louisiana Insurance 3 939 50 are a trial comi matter Judgment is for any fuliher expressed finding of law and granting in the instant proceedings herein REVERSED RENDERED AND REMANDED 23 that Costs of this assessed to the defendant appellee Guaranty Association that hereby rendered apply retroactively to the trial comi may be warranted consistent with the views appeal as motion for summary judgment is reversed declaring that the provisions case 2006 the SOUTHERN SILICA OF STATE OF LOUISIANA LOUISIANA INC AND MID STATE SAND AND GRAVEL COMPANY L L C COURT OF APPEAL VERSUS FIRST CIRCUIT LOUISIANA INSURANCE GUARANTY NUMBER 2006 CA 2023 ASSOCIATION McDONALD J CONCURRING While I the with the majority s ruling I write separately analysis of the competing constitutional interests in this First an concur 2 4 2007 Act to as the majority correctly apply retroactively question of the law determine its So 2d 714 rights or s notes in this or as substantive or once case procedural temporal application becomes 721 impair 1994 La If however the contractual obligations the be weighed separately 22 1386 A may be claims pending the effect otherwise necessary moot new Segura to Frank 630 v law would disturb vested applied retroactively it cannot be before the declared legislature has to clarify case regardless of the legislative declaration Id These interests must to are distinct and legislative amendment to RS retroactively applied IMPAIRMENT OF CONTRACTUAL OBLIGATIONS I The disagree that the amended statute majority reaches the wrong conclusion arguments made by Southern Silica encompass normal long ordinary generally covers coverage during or a single particular These exposure long periods of time any partly based The amended tenn exposure situations torts impairs contractual obligations statute are mass period with insurers who provided insurance for other would the assessed a the effective is intended distinguishable from exposure provided insurance would share the exposure pro rata share of the exposure to Since tort any insurer who exposure on liability periods depending on Each the total 1 time period Thus the coverage no of exposure and the majority s position coverage from the insolvent insurer The majority period of exposure that covered was be liable for this exposure would be situation there would be to no 1977 only If 1982 an that five years and his during that time frame then Because of the if the only Reliance would insolvency of Reliance there In this period uncommon other insurance to exhaust and LIGA would have step in immediately I a new disagree with the obligation or majority exposure for Reliance statutory duty has created a to contractual years when coverage exposure insurers provided during coverage are still coverage This amendment exposure occurred Ifthis his amendment a applies no were The to crux long of the periods of alleged obligation then the legislature cannot they have If exposure occurred liability coverage In periods analysis should be situations term exposure some happen exposure portion of the time period that then by contractual true this creates solvent insurers s only obligated for liability with other insurers who provided periods t they had obligation Obviously actuality the solvent insurers during which they provided assertion that coverage and pay claims for policy provide s vis a vis Southern Silica liability requiring that they provide or however Reliance by other insurance coverage for this no no they still have However conclusions would be correct s they have True of exposure only took place during exposure Reliance worked for Southern Silica employee only 1982 through period from the other insurers who provided previous during earlier periods coverage provided is incorrect that Southern Silica has insurance coverage for the years 1977 coverage for this time of this time the insurer amount on If any of these They will share during during time periods in which any exposure an insurer did 2 not coverage then provide they would have occurred between 1977 and 1982 would have liability no There no the Reliance years being no If exposure liability only then these insurers coverage from anyone but Reliance all other insurance would have been exhausted and LIGA would have provide insurers some the amended But coverage who share will Reliance by more they The still do not majority However policy limits owe more goes obligations new least with regard to to extensive act created s as the law is unnecessary substantive or analysis procedural The to all claims found it necessary determine whether it was had has us not expressed on to procedural its intent in none no case The to procedural change in It is immaterial whether it out analysis of the is that the the statute would be conduct its at majority applied the effective date of the Act or to pay existed previously The statute to substantive because the legislature Since the legislature amending the statute provided for retroactive application of the amendment in the there is have it up change in existing rights and a majority correctly points pending court Segura now analysis using the Segura legislature specifically expressed its intent that retroactively may only share contracted to pay substantive rather than a can share the now other solvent insurers thus classifies the statute This they though they and liabilities where Southern Silica during coverage liability that would have Reliance they that the solvent though they even Even than through detennine that the amended created share the now liability that would have been assigned to the amount of their provides liability because they provided some of the exposure years been covered statute to case before need for any further consideration 3 Segura provides four step a analysis 1 the 2 impair a contractual relationship if an impairment is found the court must determine whether the impairment is of constitutional dimension 3 if the court must regulation state court must determine whether the determine whether purpose justifies the if constitutes a a significant regulation majority finds that the amendment impairs the contractual relationship of Southern Silica obligations and liabilities where classifies this contractual However there is Silica as a to and its solvent insurers none had previously no impairment of increase in coverage provide liability Each contract The amendment does so owe impairment an of the any more a provide an this is insured Southern Silica change They are an regardless liability previously covered by of what owe more issue to might occur than it would have it still does provide amount be raised Even if the that these insurers by the insurers not been affected by the solvent insurers who Reliance This is in fact it could increase in these limits Southern Silica has still insured during certain periods maximum amount of coverage than the amount it contracted to to pay previously mentioned coverage for any exposure While the insurer may obligated on majority The insurers contracted with Southern provides for not As contract amendment did somehow increase the contractual limits The new relationship between Southern Silica and the other insurers the most that the insurer will have to pay do by imposing existed creation of coverage that constitutes there is no of time were and impairment the legitimate public a First the not substantial significant and legitimate public purpose exists the court must determine whether the adjustment of the rights and responsibilities of he contracting parties is based upon reasonable conditions and is of a character appropriate to the public purpose justifying the legislation s adoption Segura at 729 4 not law would in fact state now not by this share the If any claims exceed the these insurers then LIGA steps in to cover the balance the policy Southern 4 Silica has certain not had any of its amount of insurance and still has that Secondly it is not of term insurer pay The cases for light of its application as Southern Silica would be in 2003 pay claims for as This is absolutely incorrect first instance the insurer required there was Any insurer discussed providing the was during the instance if there would incur exposure was coverage no through to cover later pending coverage to Southern Silica what the years statute prior in 1977 provides In the liability during years if would also incur their coverage years analysis is exposure period then there is during these no As previously If there is liability exposure no on however through during the period corresponding liability that insurer even no In the second period 2003 then any insurer years would incur its pro rata share of the later insurers if there Again ensuing If exposure continued was no liability in the exposure in 1977 the insurer that covered this insurer there would be there is coverage coverage liability If there liability demand in its to coverage in 1965 would incur element in this key exposure providing not years exposure in 1965 that continued for the next 18 years into 1982 if there liability This is indemnify and eighteen some alleged exposure thirty providing long require Southern Silica to demand that in 1982 exposure to example that retroactive an litigation that an insurer later providing liability such a previously mentioned the coverage to SouthelTI Silica in 1965 to alleged for of coverage amount As cites majority of the amendment would claims paid impairment of a contractual relationship an consider the amendment in providing Likewise if there is constitutional dimension to exposure application an even a majority fails It contracted for and rights impaired in 2003 covered If there is no by that exposure But continued exposure would pass was exposure during the periods they though each insurer would incur liability for 5 during exposure the the period covered by the insolvent insurer they amount more than the contractual limits Reliance the solvent insurers will but effect up to their only rights not obligations Thirdly are rata I agree with the is to a the a significant a The contracts to the appropriate I do not long Unlike the instant case believe based times Thus in effect at the time risk The instant Segura is not unlike to provide coverage were I have contractual private insurers has been The majority and State the insurers were in effect at all provided through already subject to the some Segura and State it is exactly like potential risk up to justifying colleagues situations coverage those insurers them The insurers calculated the premium in both purpose to my that the term exposure by virtue of the policies case legitimate reasonable upon public premium for the pertinent policies which pertinent and adjustment of rights and is contracting parties cover a If any rights compensates for losses that citizens would relationship between Southern Silica and the solvent collected contractual no insolvency of their insurer character already discussed why maintains their coverage It minimizes the unnecessary by the amendment adoption of the amendment With all deference impaired has actually determination whether the of the conditions and is of that majority funds and also incur due responsibilities during any of their impair not share of Reliance Southern Silica depletion ofLIGA Fourth This liable for any it is the insurers that have incurred these created purpose is fostered normally policy limits include periods covered by any share the pro now Southern Silica and does on additional public During must now not are in addition to their pro rata share for exposure only years and the coverage and period they provided a and collected an appropriate certain maximum value They 6 contracted to coverage for anyone provide If the exposure occUlTed period continually exposed the insurers in have been covered in by Reliance ensuing By having years then period cover the amount will they are still to provide insurance liable for any not be shared by but it celiainly be greater coverage up to was the years that should still cannot exceed the maximum amount of the contract they contracted incurred employee liability would to coverage they If the years then the following years covering those this during liability regardless of what happened exposed during their certain a stated Simply and amount greater than that amount amount VESTED RIGHTS The agree is that the involving Southern Silica would deprivation without first coverage insurers It is this amendment be a cause Celotex Once correct and a party the not s cause The to same question 2d 1058 cause by Justice of action when the prior demand LIGA law provide from its other solvent that must be answered 1063 accrues it becomes be divested Under Louisiana party has the right n 15 La vested a 1992 to sue The Cole majority of action has accrued it cannot be divested subsequent legislation Bourgeois the position taken the constitutionally accrues 599 So once Under rights I right vested before the effective date of the statutory of action Corp of vested majority with which years when Reliance maintained their seeking retroactively applied propeliy right that may law the right of Southern Silica that would be disturbed should the then is this Was this amendment by unquestionably be entitled indemnity and defense regarding the only made only compelling argument 783 So 2d at 1259 Lemmon in his concurrence Further I ascribe in v is by to Bourgeois interpretive legislation occurs when the Legislature upon realizing that a previously enacted law contains an ambiguity or an error amends the prior law to correct the ambiguity or error True 7 before the law has been judicially interpreted However after the judicial branch performs its constitutional function of interpreting a law and the Legislature disagrees with that interpretation a legislative new is enactment substantive a change in the law and is not an interpretive law because the original law as interpreted by the judicial branch no longer applies 783 So 2d at 1261 Bourgeois SouthelTI Silica filed suit 22 1386 A on February became effective on rights SouthelTI Silica had at the on the court August time suit of the interpretation 787 So 2d 280 Corporation legislative s 1 2004 was statute La 4 27 01 and takes away enactment 15 The amendment 2004 filed vested were in Hall that LSA R S whatever Obviously v were rights based Zen Noh The amendment is rights to clearly Grain a new vested in Southern Silica at the time REMAND While I do remand this not necessarily disagree matter to the trial court with the for further majority The trial court to be only issue before the trial these I reverse suit for Since this and it has now respectfully disagree rights and with therefore the not before we or have was the agree with the apply retroactively majority However the decision of the trial court and render the provisions of the Act do a been decided impairs contractual obligations that it does disturb vested to a applied retroactively applied prospectively only court reasons conclusions that this law decision This is question found that it should have retroactive effect and determined that it is For I The issue before the trial court and therefore this court is whether the amended statute should be not decision to proceedings exactly what these further proceedings might involve declaratory judgment s a s I find majority s decision that I also believe all issues 8 have court now been decided and However I do not see no reason to remand the case to the trial necessarily disagree with the decision to remand 9

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