If you worked with drywall, plaster, or insulation in New Orleans between the 1960s and 1980s, you likely handled products from Eagle Incorporated. Unfortunately, many of these materials were packed with toxic asbestos. When victims file lawsuits against Eagle Inc. today, a massive ‘invisible’ war often breaks out between insurance companies over who has to pay for the defense. While these companies fight in the Fourth Circuit Court of Appeal, your family’s future hangs in the balance.
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The Eagle Incorporated Legacy in New Orleans
When the injury alleged arrises over the course of many years and several insurance companies had polices with the defendant over that time, the insurance companies will split the cost to defend. In this case, USFG was the provider for three of the twenty-one year injury period so they would typically pay for that proportion of defense costs. When the employee brought the lawsuit, OneBeacon was the only listed insurance company set to defend Eagle. OneBeacon then asked the court to join USFG so they could split the cost to defend. However, USFG and Eagle had been parties of a prior lawsuit wherein they reached a settlement agreement stating that USFG would pay Eagle an undisclosed amount and in exchange their insurance policy would be altered to free them of the obligation to pay for past, present, or future defense costs. USFG brought this agreement to the court’s attention as a reason why they should not be liable for the present case.
hy Insurance Companies Fight Over Your Claim
OneBeacon did not want to shoulder the entire cost of defending so it asked the court for a summary judgment voiding the effects of the settlement agreement and ordering USFG to participate. USFG then asked for their own summary judgment validating the settlement agreement and freeing them from defense costs. The trial court sided with OneBeacon, finding that Louisiana disfavors insurance contract alteration when it will prejudice an injured third party and that allowing the settlement agreement alteration to stand would surely affect the other parties. An appeal of the Louisiana Fourth Circuit Court of Appeal followed.
Freedom to Contract vs. Your Right to Compensation
The Fourth Circuit Court of Appeal reasoned the trial court made one critical error. They applied the law to protect an insurance company, OneBeacon, when it was intended only to protect tort victims. See Fruge v Amerisure 663 F3d 743 and further La. R.S. 22:1262. Accordingly the Court of Appeals for the Fourth Circuit reversed the decision and upheld the alteration freeing USFG of their obligation to absorb defense costs and leaving OneBeacon to solely defend Eagle.
The law generally favors the freedom to contract and that includes the freedom for an insurer and their client to alter their policy agreement. That is exactly what happened here, USFG and Eagle came to a mutual agreement to alter the contract. The only time this alteration would not be upheld (absent fraud, duress, etc.) is if it would leave the injured employee with no-one to compensate him. This may seem like an unfair outcome if you are sympathetic towards OneBeacon, but I am sure that had the shoe been on the other foot and OneBeacon came to a similar agreement with Eagle before USFG had, they would find no injustice in this outcome.
What This Means for Your Family
In this case, the court allowed one insurance company (USFG) to walk away because of a private deal they made with Eagle Inc. years ago. This might sound like bad news, but the court was clear: these ‘deals’ are only allowed as long as they don’t leave the injured worker with NO ONE to pay their claim. At the end of the day, someone must be held accountable. If you are a former Eagle Inc. employee or contractor, you need a lawyer who knows how to navigate these insurance traps so your compensation doesn’t get lost in the shuffle
Additional Sources:
PEARSON LONG VERSUS EAGLE, INC., ET AL.
Additional Berniard Law Firm Articles on Asbestos: Asbestos Cases Always Difficult, Involve Negligence and Diverse Defendant Groups
Written by Berniard Law Firm Blog Writer: Connor Hansen
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