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Exxon Corp. v. St. Paul Fire & Marine Ins. Co.

Citation: 28 ELR 20389
No. 96-31309, 129 F.3d 781/(5th Cir., 12/05/1997)

The court denies an insurer's motion to stay the proceedings and grants partial summary judgment to the insured corporation in an indemnification suit for personal injury damages resulting from the inhalation of sludge fumes. The court first denies the corporation's motion to dismiss the insurer's appeal. It is a well-settled rule of law that an appeal from a final judgment raises all antecedent issues previously decided. Thus, once a final judgment is entered, all earlier non-final orders affecting that judgment may properly be appealed. In addition, the case should not be dismissed for untimeliness. The corporation is appealing the final judgment and not the interlocutory orders. Thus, the court has appellate jurisdiction to hear the case. The court next holds that the district court was well within its discretion in refusing the insurer's request to stay the instant proceedings. The insurer's suggestion that the determination of the corporation's liability in state court suits is a prerequisite to a determination of coverage in this case is not supported by law. The circuit has clearly held that in order to consider the propriety of a stay pending disposition of state court actions, the federal and state cases must be parallel, meaning that they involve the same parties and the same issues. There are no parallel state court proceedings where the issues of coverage, policy interpretation, and bad faith are being litigated. The underlying state court proceedings are strictly personal injury actions to which the insurer is not a party. Moreover, the general rule that an indemnitee must establish actual liability to recover from an indemnitor is not absolute. An indemnitee may recover indemnity if it is able to demonstrate that its claim is based on a written contract of insurance or indemnification. Here, the corporation's claim is based on a written contract for insurance or indemnification. In addition, there can be no question that the corporation has already become liable to pay damages to three of the five plaintiffs in the underlying personal injury actions as a result of the settlement agreements. Because a loss has been suffered that is covered by the terms of the insurance contract, the insurer is required to indemnify the corporation for damages.

Next, the court holds that the district court's grant of summary judgment to the corporation with respect to attorneys fees was proper. That the corporation did not file a proper motion for summary judgment does not preclude the district court from granting summary judgment in its favor. The court rejects the insurer's argument that the existence of genuine issues of material fact preclude the grant of summary judgment. The interpretation of the insurance policy is a purely legal issue that turns on specific policy language. The court also rejects the argument that the insurer was not provided notice of the district court's intention to render summary judgment on the attorneys fees issue. The insurer had ample opportunity to present all evidence of disputed issues of material fact. The court also rejects the insurer's argument that attorneys fees can be deducted from the policy limit. Inclusion of attorneys fees is presumed to be the intent of the drafter unless the agreement explicitly says otherwise. Last, the court holds that the district court properly concluded that the personal injuries underlying the action constituted five occurrences under the terms of the insurance policy. The alleged injuries were discrete and occurred over a period of time. Further, because the policy contains no definition of occurrence, the ambiguity of the contract should be resolved in favor of the corporation.

Counsel for Plaintiff
Louise V. White
Litigation Section
Exxon Corporation
3900 N. Causeway Blvd., New Orleans LA 70140
(504) 830-3500

Counsel for Defendant
William E. O'Neil
O'Neil, Eichin, Miller, Saporito & Harris
639 Loyola Ave., Ste. 2200, New Orleans LA 70113
(504) 525-3200

Before Reavley and Barksdale, JJ.