Petition for Writ of Certiorari — Steamship Mutual Underwriting Ass'n v. Westchester Fire Insurance

OCT 23 197’

| MICHAEL ROOK IF

IN THE

Supreme Court of the United States

OCTOBER TERM, 1974

NO. 74-473

CHARLES W. FROUST

"VERSUS

COATING SPECIALISTS, INC.

STEAMSHIP MUTUAL UNDERWRITING ASSOCIATION LIMITED

VERSUS

WESTCHESTER FIRE INSURANCE COMPANY, ET AL

PETITION FOR WRIT OF CERTIORARI TO REVIEW THE

DECISION OF THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

TERRIBERRY, CARROLL, YANCEY & FARRELL

Benjamin W. Yancey

John A. Bolies

2141 International Trade Mart

New Orleans, Louisiana 70130

Attorneys for Petitioner

INDEX

Table of Authorities ----------------

Citations to Opinion Below ----------

Jurisdiction ------------------------

Questions Presented -----------------

Statement of the Case ---------------

Facts Adduced at Trial --------------

Reasons for Granting Writ -----------

Conclusion --------------------------

Proof of Service --------------------

Appendix "A"

Minute Entry of U.S. District

Court for Eastern District of

Louisiana - December 27, 1972 ----

Appendix "B" ------------------------

Appendix "C" ------------------------

Appendix "D" ------------------------

21-22

i

TABLE OF AUTHORITIES = Page l

Page

Aetna Life Insurance Company of

Hartford, Conn. v. Maxwell,

89 F.2d 988 (1973) ---------------- 3,45

American Mutual Liability Insurance

Co. v. Agricola Furniture Co.,

(S.Ct. Ala., 1937) 236 Ala. 535,

183 So. 677 ----------------------- 10

Audubon Coin & Stamp Co. v. Alford

Safe & Lock Co. (La. App.,1969)

230 So.2d 278 --------------------- 14

Beryllium Corporation v. American

Mutual Liability Insurance Company,

223 F. 2d 71 (1955) --------------- 42.9,i1

Buckeye Cotton Oil Company v.

Ragland, (5th Cir., 1926)

ll F.2d 231 ----------------------- pe

Canadian Radium & Uranium Corpora-

tion v. Indemnity Insurance Company,

(S. Ct. ILL., 1952) 411 I1l. 334

104 N.E. 2d 256 ------------------- 12

Export §.S. Corp. v. American Ins.

Co., 106 F.2d 9, aff'd on reh.

108 F.2d 1013, cert.den. 309 U.S.

686, 84 L.ed. 1029, 60 S.Ct. 809 -- 3,16

Gentry v. Swann Chemical Co.,

(S.Ct. Ala., 1937) 234 Ala. 313,

174 So. 530 ----------------------- 10

Globe Indemnity Co. of New York v.

Banner Grain Co., (8th Cir., 1937)

90 F.2d 774 ----------------------- 9

ii

TABLE OF AUTHORITIES - Page 2

Page

Jernigan v. Allstate Insurance

Company, (5th Cir., 1959)

269 £.20 353 <qnncccccnncntncncncn= 14

Knight v. L. H. Bossier, Inc.

(La. App. 1960) 118 S0.2d 700 ----- 14

Liberty Mutual Insurance Co. v.

Thompson, (5th Cir., 1948)

171 F.2d 723 ---------------------- 11

Maryland Casualty Co. v. Pioneer

Seafoods Cos, 116 F.2d 38 --------- 2,9,13

Soukop v. Employers Liability

Assurance Corp., Ltd. of London,

England, (S. Ct. Mo., 1937)

108 S.W. 2d 86 -------------------- 10

Woodward Iron Co. v. Minyard,

(5th Cir., 1958) 170 F.2d 508 ----- 9,10

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1974

NO.

CHARLES W. FROUST

VERSUS

COATING SPECIALISTS, INC.

STEAMSHIP MUTUAL UNDERWRITING

ASSOCIATION LIMITED

VERSUS

WESTCHESTER FIRE INSURANCE COMPANY, ET AL

PETITION FOR WRIT OF CERTIORARI TO REVIEW THE

DECISION OF THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Steamship Mutual Underwriting Association

Limited, petitioner, prays that a writ of cer-

tiorari issue to review the judgment of the

United States District Court, Eastern District

of Louisiana, entered on March 12, 1973, and

of the United States Court of Appeals for the

Fifth Circuit, entered on June 6, 1974, and

the judgment denying rehearing entered on July

25, 1974.

2

CITATIONS TO OPINION BELOW

The minute entry of the United States

District Court for the Eastern District of

Louisiana, ordering entry of judgment dated

December 27, 1973 is reproduced as Appendix

"A". The District Court's opinion, printed

in Appendix "B", is reported at 364 F. Supp.

1154.

The opinion of the United States Court of

Appeals for the Fifth Circuit, printed in

Appendix "C", is reported at 494 F.2d 1352.

The opinion of the United States Court of

Appeals for the Fifth Circuit denying defend-

ant's petition for rehearing entered on July

25, 1974, is unreported.

JURISDICTION

The jurisdiction of this court is invoked

pursuant to Title 28, Section 1254(1) of the

United States Code.

QUESTIONS PRESENTED

(1) Was the finding by the court below

that silicosis contracted and aggravated dur-

ing plaintiff's employment by Coating Special-

ists was not a disease resulting “directly from

bodily injury by accident" as was expressly

covered by the policies of certain underwriters

at risk in direct conflict with prior Fifth

Circuit decisions and the decisions of the

Third Circuit in Beryllium Corporation v.

American Mutual Liability Insurance Company,

223 F. 2d 71 (1955); and the Ninth Circuit in

Maryland Casualty Co. v. Pioneer Seafoods Co.,

116 F. 2d 38?

(2) Was the decision of the trial court

3

in holding that Steamship Mutual, the last in-

surer in consecutive time, was obliged to

indemnify its assured, Coating Specialists,

Inc., for the entire judgment rather than a

pro rata share in direct conflict with the

decisions of the Second Circuit in Export

S. S. Corp. v. American Ins. Co., 106 F.2d

9, aff'd on reh. 108 F.2d 1013, cert. den.

309 U.S. 686, 84 L.ed. 1029, 60 S. Ct. 809,

and the Fourth Circuit in Aetna Life Insurance

Company of Hartford, Conn. v. Maxwell, 89 F.

2d 988 (1937)?

STATEMENT OF THE CASE

This is the first of a number of law-

suits brought on behalf of sandblasters/sea-

men seeking recovery of damages for silicosis

contracted during their employment by Coating

Specialists, Inc. (Coating) in the offshore

Oilfields. The outcome of this case will have

a significant impact on those similar cases

which are now pending, many of which are pre-

sently set for trial.

The original plaintiff, Charles Froust,

entered the employ of Coating Specialists dur-

ing March, 1959, and worked intermittently

but for a significant period of time as a

sandblaster until April, 1970. His work was

on fixed offshore platforms, but Froust lived

and ate on various Coating vessels upon which

his sandblasting equipment and materials were

carried. The vessels were tired to the plat-

forms during sandblasting operations and ser-

ved as bases from which the men worked.

During the early years of his employment,

for protection against flying dust and other

particles which were created by the sandblast-

ing operations, Froust was provided with can-

vas "rebound" hoods which were fitted with

glass face plates and screened holes at either

4d

side, the latter being for ventilation and

hearing purposes. From mid-1968 on, air-fed

hoods were provided for use by the men.

On April 7, 1970 Froust completed a 14

day hitch and began his seven days of time

off. He did not return to work. Within the

month, he was seen by Dr. Morton M. Ziskind,

a pulmonary specialist, at which time he com-

plained of shortness of breath and soreness

between the shoulder blades of approximately

one month‘s duration. After examinations and

tests, Dr. Ziskind was able to diagnose that

Froust was suffering from progressive, un-

complicated silicosis.

Original defendants were Coating Special-

ists, Inc. (Coating), its primary insurers,

Westchester Fire Insurance Co. (3/24/64-

3/24/66), North River Insurance Co. (3/24/66-

4/24/67), Insurance Company of North America

(4/24/67-4/24/69), Steamship Mutual Underwrit-

ing Association Limited (Steamship Mutual)

(4/24/69-4/24/70), and various excess under-

writers.

Each of the above named primary insurers

(referred to hereinafter as "prior insurers"),

with the exception of Steamship Mutual, denied

coverage, taking the position that silicosis

is an injury by disease, in which case their

policies would apply only if the plaintiff's

last day of exposure to the conditions causing

his silicosis fell within their period of cov-

erage. Since it was undisputed that Froust

last sandblasted during Steamship Mutual's

period of coverage, it was maintained the ex-

clusion, which was common to each prior in-

surer's policy, rendered them inapplicable.

On April 3, 1972, just prior to the com-

mencement of trial, Froust's claim was settled

for $175,000, plus costs. It was then

5

stipulated that he was employed by Coating

between March, 1959 and April, 1970 as a sea-

man and a member of the crew of various Coat-

ing owned and operated vessels. It was fur-

ther stipulated that during that period Froust

contracted silicosis as a direct result of

Coating's negligence and the unseaworthiness

of the vessels to which he had been assigned.

A judgment was entered against Coating, but

its execution was suspended pending deter-

mination of the questions of insurance cover-

age by the trial court. The case was then

tried to the court alone and taken under sub-

mission.

On December 27, 1972 the court ruled that

silicosis was a disease and that the exclu-

sions of the prior insurers were valid; there-

fore, the plaintiff was entitled to judgment

against Coating and its insurer at the time of

the "manifestation" of the disease, Steamship

Mutual Underwriting Association Limited.

Thereafter, Steamship Mutual's motion for

rehearing was denied on February 14, 1973.

A notice of appeal was filed on April 9,

1973. The appeal came on for hearing on May

1, 1974 and on June 6, 1974, the judgment of

the district court was affirmed without dis-

cussion or consideration of the principles

involved.

Steamship Mutual's petition for rehearing

was denied on July 25, 1974.

FACTS ADDUCED AT TRIAL

To review the facts in greater detail,

sandblasting is designed to strip steel off-

shore structures of paint and rust prior to

the application of new paint. In the process,

sand is directed against the structures at

(pee NEED

6

high pressure, causing the individual parti-

cles to be broken into tiny fragments of

Silicon dioxide, or free silica. During and

after the blasting, the particles of silica

remain suspended in the air in clouds of

dust.

When this dust is inhaled, the smallest

of the foreign particles find their way into

the lungs where they enter certain cells

known as macrophages. The particles are

toxic, or poisonous, and they destroy the

cells creating scar tissue. Subsequently, the

particles may be released from the destroyed

cells and again ingested by other healthy

macrophages which in turn are destroyed. Over

a period of time this process, together with

the continual introduction of new particles

into the lungs, results in a coalescence of

the scarring, forming nodules which are the

distinctive signs of silicosis. The scarring

has the ultimate effect of blocking oxygen in

the lungs from diffusing through the lung wall:

into the blood vessels. In Froust's case,

there was no bacteriological infection and his

disease was characterized only by simple nodu-

lation resulting from a series of insults to

the lungs caused by the silica particles.

At trial it was shown that the protective

equipment with which Froust was provided, that

is, the simple canvas rebound hoods and the

later model air--fed hoods, was inadequate to

protect him from exposure to the poisonous

Silica particles. Equipment which would have

provided a complete protective barrier, or an

encapsulation of his respiratory system, had

been on the market for a number of years,

however.

Dr. Morton Ziskind, a medical expert,

testified that x-rays taken on May 11, 1967,

two years before Steamshi'» Mutual became an

7

insurer of Coating, showed that Froust had

silicosis at that time and had probably been

suffering from the condition for about four

years.

Froust himself indicated he was ignorant

of the nature of silicosis and danger of con-

tracting it until approximately one month be-

fore he first saw Dr. Ziskind on April 10,

1970. He had not received any warnings from

Coating that he could contract such a disease

from sandblasting. Dr. Ziskind's testimony

that the size of the toxic particles which

cause the disease are 3 microns or less in

size, and therefore are incapable of being

seen, felt or tasted, reinforces this asser-

tion.

REASONS FOR GRANTING WRIT

Question 1

The pertinent portions of the policy(s)

in question are attached as Appendix "D"

(using the Insurance Company of North America's

policy, which is identical in form to the

others as an example). The identical provi-

sion which is contained in each policy issued

by the prior insurers and on which they based

their denials of coverage, reads as follows:

"IV. 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 the last expo-

sure, in the employment of the assured,

to conditions causing the disease oc-

curs during the policy period."

Although the language of this provision

aaa amare ee

aa

aa

8

is somewhat confusing, it is argued that if

Froust contracted or aggravated silicosis

during one of the policy periods, there would

be no coverage unless his last day of exposure

to the causal or aggravating conditions fell

within that policy period. On the other hand,

if Froust was injured by accident during any

policy period, coverage would attach regard-

less of considerations of exposure to causal

conditions.

It is of the utmost significance that

the policies do not turn on the simple ques-

tion of whether the injury was the result of

accident or disease alone. Again in idential

language, the policies go on to define the

distinction to be drawn between coverage for

accidental injury as opposed to injury result-

ing from disease in the following terms:

"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

accident.' The term ‘bodily injury

by disease’ includes only such disease

as is not included within the term

‘bodily injury by accident.'"

Although this provision is also somewhat

difficult to understand, a close reading re-

veals that a disease which is the direct re-

sult of an accidental trauma falls within the

accident provisions of the policy to which

the "last exposure" exclusion does not apply.

In other words, each policy applies to acci-

dental injuries occurring during the policy

period regardless of last exposure, anda

disease may be included within the term

accident if it results directly from an

9

accidentally caused bodily injury.

It should be clear that despite the pro-

nouncements of the trial court, the question

of whether silicosis is or is not a disease

is not dispositive of the case. Rather, the

“threshold” question which must be answered

is whether the silicotic condition which

Froust contracted was or is a disease result-

ing directly from an accidentally caused in-

jury to the body or not. The trial court and

the court of appeals simply did not address

themselves to this issue. Even if Froust's

silicosis was a disease, if it resulted direct-

ly from a bodily injury by accident, the deci-

sions below are in error.

It has been argued below that the term

accident is necessarily one which refers to

an event which occurs suddenly and violently

and produces a simultaneous injury to the

physical structure of the body. However, in

tort situations, the term accident has a much

broader meaning than in compensation cases,

where it is often defined statutorily. Globe

Indemnity Co. of New York v. Banner Grain Co.,

(8th Cir., 1937) 90 F. 2d 774. See also

Beryllium Corporation v. American Mutual

Liability Insurance Company, (3rd Cir., 1955)

223 F.2d 71, and Maryland Casualty Co. v.

Pioneer Seafoods Co., (9th Cir., 1940), 116

F. 2d 38.

It is interesting to note that the Fifth

Circuit has been faced with the question of

the nature of silicosis before in a case which

turned on whether it was an occupational dis-

ease, or the normal, expected incident of a

certain line of work. In Woodward Iron Co. v.

Minyard, (5th Cir., 1958) 170 F.2d 508, a

tort suit seeking damages for silicosis con-

tracted by a mine worker in Alabama, it was

shown, as it was in the case at bar, that the

10

plaintiff contracted silicosis because of

his work in an extremely dusty environment

where ventilation and dust control methods

were inadequate or non-existent, despite the

fact that technology made methods of dust

control available. In affirming the trial

court's award of damages to the plaintiff,

the Fifth Circuit commented:

"Silicosis is not an occupational

Cisease, because it does not result

from the ordinarily and generally

known risks inherent to employment

in the mining industry."

See also Gentry v. Swann Chemical Co., (S.Ct.

Ala., 1937) 234 Ala. 313, 174 So. 530; Sou-

kop _v. Employers Liability Assurance Corp.,

Ltd. of London, England, (S.Ct.Mo., 1937)

108 S.W.2d 86.

More importantly, in the Woodward Iron

case the court cited with approval a line of

cases, including American Mutual Liability

Insurance Co. v. Agricola Furniture Co.,

(S.Ct. Ala., 1937) 236 Ala. 535, 183 So. 677,

where it was held that silicosis contracted

by a worker over a ten year period as a

direct result of his employer’s continuous

tortious failure to provide him with a safe

place to work, was accidentally caused. The

court stated:

- « - AN occupational disease is

not an accident even in its broad

sense. The policies cover accidents

which occur within the period of

their respective term. A tort is

often an accident, as when injury

results from negligent conduct, and

it may be of a continuous sort, and,

if so, a recovery may be had for all

damages which occurred within the

11

period of limitations. . . and by

successive action." (citations

omitted)

"When an act is continuous and all

the time tortious and wrongful, it

should not be exempted from such

classification as an accident be-

cause it extends for a iong period

of time, however difficult it may

be to separate the amount of damage

done within the period of the statute

of limitations from that occurring in

the period preceding." (citations

omitted)

At trial it was shown that there was

available modern equipment which was suffici-

ent to protect Froust and his co-workers from

exposure to silica dust. The assured's neg-

ligence and the unseaworthiness of the ves-

sels to which Froust was assigned were stipu-

lated. Therefore, it was uncontested that

Froust was not provided with a safe place to

work. See also Liberty Mutual Insurance Co.

v. Thompson, (5th Cir., 1948) 171 F.2d 723;

Buckeye Cotton Oil Company v. Ragland (5th

Ciz., Zuee) Li F226 Zoi

The Fifth Circuit not only ignored its

own precedents but those applicable cases

decided by the Third and Ninth Circuits.

First, in the Beryllium Corporation case,

supra, an insured company sued its Comprehen-

sive liability insurer for amounts which it

expended in settlement of claims made by its

employees for the deaths of their relatives

which were caused by beryllium poisoning re-

sulting from handling soiled work clothes

Over periods of not less than five years.

There, the court found that the decedents

were ignorant of the meance of beryllium and

ee eam eee) |

the lodging of particles of the substance were.

distinctive events whether or not the victims

were aware of the occurrences; therefore, the

deaths resulted from a series of accidental

causes. In discussing the question of whether

the gradual poisonings were caused by acci-

dent, the Third Circuit stated:

a

a

f

Pert Ses

"While these deaths clearly resulted

from accidental causes, it was not _

just one but a series of causes which

produced them. Appellant contends

that this defeats the claim. Its

theory, as we have mentioned, is that

the policy contemplated that the ac-

cidental means must be an isolated

occurrence."

8 aid) Se

"The policy may have so contemplated

but if that were its purpose, it is

not easy to explain why it did not

Say so. If restriction to covering

accidents resulting from a single

accidental cause was part of the

protection furnished; added into the

premium income, cost, etc., it seems

curious that it was not plainly stated

so that the insurance purchaser would

know the limitations of his policy

and at least have the opportunity to

safeguard himself with more complete

insurance. Supra at page 73. See

also Canadian Radium & Uranium Cor-

ration v. Indemnity Insurance Com-

pany, (S.Ct.I11., 1952) 411 Ill. 234,

104 N.E.2d 256

There is no language in the policies at

issue which purport coverage to Single iso-

lated occurrences The criteria on which the

Third Circuit's determination was made are

identical.

13

In the Ninth Circuit case, Maryland

Casualty Co. v. Pioneer Seafoods Co., supra,

a seaman brought suit against his employer

seeking recovery for tuberculosis contracted

over a period of time as a result of the com-

pany's negligence in providing him with im-

properly constructed'and equipped sleeping

quarters. In affirming the trial court's

finding that the contraction of tuberculosis

was a “bodily injury accidentally suffered",

covered by the policy at issue, the court

stated:

"., . . It is said that an acciden-

tal death is ‘death from an unan-

ticipated event, which happens as—

by chance, or which does not take

place according to the usual course

of things'. Under this broad rule,

the physical weakening of Hanseth was

unforeseen, unexpected and unusual as

to him, and therefore the bodily in-

juries were accidental."

"Under the policy, whether the injury,

was suffered as a result of accident

is to be determined from Hanseth's

standpoint, or in other words, while

the event which caused the injury was

the company's negligence, the occur-

rence of the event as to Hanseth was

accidental." 116 F.2d at 40

The cases cited above follow the majority

rule, and the one adhered to in the Louisiana

jurisprudence, that in order to determine for

purposes of insurance coverage whether a loss

was caused by accident, the occurrence giving

rise to the claim should be viewed from the

standpoint of the person who was injured

rather than the standpoint of the person who

committed the act which caused the loss.

14

or : |

i

:

Knight v. L. H. Bossier, Inc., (La-.App., 1960)

118 S0.2d 700; Audubon Coin & Stamp Co. v.

Alford Safe & Lock Co., (La. App., 1969) 230

So.2d 278; Jernigan v. Allstate Insurance Con-

pany, (5th Cir., 1959) 269 F.2d 353.

The testimony was clear that Froust did

not suspect he would contract or had contract-

ed silicosis until shortly before he was found

to be disabled. The agents which caused his

Silicosis were, because of their microscopic

size, incapable of being seen, felt or tasted.

Since he was both unaware of the nature and

danger of the disease and unable to detect

the presence of the harmful agents through

his senses, from his point of view, the con-

traction of silicosis was plainly an acci-

dent and within the coverage of the policies.

In sum, in a civil action for damages,

the term accident is used in a broad sense,

and has been taken to include a continuing

series of distinctive events, whether they

were noticed by the victim at the time or not.

Froust‘'s silicosis ‘was caused by the lodging

of innumerable tiny particles of silicon

dioxide in his lungs during his long period

of employment by Coating. The particles

poisoned cells creating small scars which, as

exposure continued, grew and coalesced form-

ing nodules. There were no restrictions in

the policies that the accidental cause of

the injury must have been an isolated occur-

rence and since an accident or accidents lead-

ing to bodily injury by disease occurred dur-

ing each policy period, under their own terms

and provisions each policy applies.

Question 2

It is clear from the evidence that Froust

was exposed to the harmful silica particles

from his first day on the job in 1959.

15

Steamship Mutual did not insure Coating until

1969, ten years later, and two years after

Froust is known to have contracted silicosis

according to May, 129607 x-rays.

According to the medical testimony, if

Froust had withdrawn from sandblasting in

1967, when he is known to have had what is

known as grade 1 silicosis (out of three

grades), within ten years he would have been

expected to advance one grade. Yet, after

May, 1967 Froust sandblasted for another

1-1/2 years, and at trial, five years after

the x-rays were made and two years after he

terminated his employment as a sandblaster,

his silicosis had not progressed past grade l.

Despite the fact that Coating's acts of

negligence well before Steamship Mutual's cov-

erage caused the plaintiff to contract sili-

cosis, the trial court ruled that Steamship

Mutual was liable to indemnify the company

for the full amount of the judgment. This

ruling flies in the face of the well settled

principle that an insurer has no liability for

events otherwise covered but which occurred

before or after its policy period. This rule

was well stated by the Fourth Circuit in the

case Of Aetna Life Insurance Company v. Max-

well, 89 F.2d 988 (1937). There, the question

at issue was the responsibility of a profes-

sional liability insurer to a judgment credi-

tor in a suit to enforce a malpractice policy.

At trial it had been determined that the phy-

Sician (assured) had improperly treated the

injured party (plaintiff) from March 26, 1932

to August 7, 1932. In remanding the case for

a determination of the amount of damages caused

during the policy period, the court stated:

16

"The issue decided in the case of

the injured boy (plaintiff) against

the physician (defendant-insured)

was not the same as proposed against

the insurance company in the pending

action. There it was only necessary

for the plaintiff to prove that the

defendant had been negligent at any

time during the treatment of the in-

jury, and it is manifest in much, if

not all, of the neglect which was

proved took place before the policy

was issued. Here, on the other hand,

the defendant insurance company is

liable only for such maltreatment

or neglect as took place between

July 23, the date of the policy and

August 7, when the physician was

discharged from the case. The in-

surance company has no greater lia-

bility for the negligence which took

Place before July 23 than it would

have had if another physician not

covered by the policy had been em-

ployed, or if Howell had been em-

ployed for the first time on July

23 to treat the injury, or if the

prior period had been covered by

the policy of another company."

89 F.2d at 992

Also on point is a Second Circuit deci-

sion, E rt S. S. Corporation by American

Ins. Co., 106 F.2d 9 (1939), aff'd on reh

108 F.2d 1013, cert. den. 309 U.S. 686, 84

L.ed. 1029, 60 §.Ct. 809, involving a cargo

claim. There, a consignment of tobacco was

stowed in a vessel's hold adjacent to a par-

cel of valonia, an acorn used in tanning pro-

cesses. On discharge, the tobacco was found

to be seriously damaged because of its expo-

sure to the valonia during the course of the

17

voyage. The vessel owner settled the case and

then sued its two insurers. The policy of the

first insurer expired during the course of the

voyage and the second policy immediately suc-

ceeded the first. The court determined that

liability had accrued on a continuing basis as

the damage was incurred from the time of stow-

age, throughout the voyage until discharge.

It was held that although an insurer is bound

to make its insured whole on losses due to

liabilities that accrued during the term co-

vered by the policy, conversely an insurer

has no obligation for iosses or liabilities

accruing before and after the term. There-

fore, the damage was divided between the two

insurers.

Although the damage in this case was to

a cargo of tobacco rather than - human body,

nevertheless the principles enunciated in the

decision and in the Maxwell] case are the same

and should be applied here. The Steamship

Mutual policy although written on different

terms than those of the prior insurers, is

a time policy, that is, it has a commencement

and termination date. Because the other con-

tracts exclude coverage where the last expo-

sure does not fall within their periods of

coverage should not mean that Steamship agrees

to accept full coverage because the last ex-

posure is during its policy period. It its

policy had even impliedly accepted coverage

by including the same exclusionary provisions

found in the policy of the prior insurers,

this result might be justified, but there is

nothing in the Steamship Mutual coverage which

would even remotely suggest this.

It is submitted that it is incorrect and

unjust to hold an insurer liable for events,

even if otherwise covered, which occur before

or after its volicy period. It is inconceiv-

able that Steamship Mutual should pay for

18

negligence or unseaworthiness against which

it did not insure. We need not resort to

hypothets to demonstrate the folly of this

result, but only to fact situations in sili-

cosis cases which are now pending. There,

there are claimants who worked as sandblas-

ters for Coating both before and after Steam-

ship Mutual's coverage. There, insurers whose

policies succeed Steamship Mutual's contain

the same exclusionary provisions as the prior

insurers’ contracts here. If the prior in-

surers and insurers at risk immediately after

Steamship Mutual are dismissed, then would

Steamship Mutual be wholly liable for any

award? Would it be liable to share on an

equal basis with the insurer which is unfor-

tunate enough to be last on the risk despite

the fact that there are gaps during which

there is no coverage both before and after its

period of coverage? To make an insurer re-

sponsible for that wnich occurs without its

coverage is clearly, intolerable, but yet

that would be the effect should the decision

be allowed to stand.

CON CLUS ION

In conclusion, the decision below, based

on undisputed facts, is in direct conflict

with the law of Louisiana and raises a sharp

conflict among the circuits on both points on

which Steamship Mutual seeks review. The

case is one of extreme importance in light

of the number of similar cases now pending

in this area and the decision below, if not

reversed, will result in improper, unjust

decisions and prevent a uniform application

of the law to each fact situation.

For the foregoing reasons, this petiton

19

for a writ of certiorari should be granted.

Respectfully submitted,

TERRIBERRY, CARROLL, YANCEY & FARRELL

Benjamin W. Yancey

John A. Bolles

PROOF OF SERVICE

I, Benjamin W. Yancey, attorney for the

petitioner and a member of the bar of the

Supreme Court of the United States, hereby

certify that on this day I have served copies

of the foregoing application for writs on:

Christopher Tompkins, Esq.

One Shell Square

New Orleans, Louisiana 70139

Robert B. Deane, Esq.

National Bank of Commerce Bldg.

New Orleans, Louisiana 70112

Edward P. Lobman, Esq.

1010 Common Street

New Orleans, Louisiana 70112

Felicien P. Lozes, Esq.

1010 Common Street

New Orleans, Louisiana 70112

Rudolph R. Schoemann, Esq.

3670 Gentilly Boulevard

New Orleans, Louisiana 70122

20

by mailing a copy thereof, postage prepaid,

addressed to their respective offices, this

22nd day of October, 1974.

21

APPENDIX A

MINUTE ENTRY

DECEMBER 27, 1972 FILED: JAN. 5, 1973

CHRISTENBERRY, J.

CHARLES W. FROUST SECTION "A"

V. No. 70-2747

COATING SPECIALISTS, INC., CIVIL ACTION

ET AL

This cause came on on a former day for

trial without the intervention of a jury,

after which the court took time to consider,

and counsel were given time to file briefs.

A judgment based on stipulated findings of

fact and conclusions of law had already

been entered in favor of plaintiff Charles

W. Froust and against defendant Coating

Specialists, Inc., so that the only issues

before the court at trial were those among

the defendant insurers and Coating Special-

ists, Inc.

Now, after due consideration of the

evidence and the briefs, the court finds

that silicosis is a disease and that, there-

fore, plaintiff Charles W. Froust is en-

titled to judgment against defendant Coating

Specialists, Inc. and its insurer at the

time of manifestation of the disease, de-

fendant Steamship Mutual Underwriting

Association, Limited. The court further

finds that defendants Great American In-

Surance Company, Westchester Fire Insurance

Company, North River Insurance Company,

Insurance Company of North America, Harbor

Insurance Company, Certain Underwriters at

Lloyds, and Employers Liability Assurance

Corporation, Limited, are entitled to judg-

ments dismissing the claims against them.

22

Accordingly, judgment will be entered in

favor of plaintiff Charles W. Froust and

against Steamship Mutual Underwriting

Association, Limited in the sum of $175,000,

plus the fees and costs specified in the

judgment previously entered, together with

interest from date of judgment until paid.

Counsel for the insurance company de-

fendants which have been dismissed from the

Suit shall, in accordance with Local Rule 23

(B), prepare and submit draft findings of

fact and conclusions of law.

CC: All counsel of record

—

a , my

23

APPENDIX B

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

CHARLES W. FROUST SECTION "A"

vs. No. 70-2747

COATING SPECIALISTS, INC., CIVIL ACTION

ET AL. FILED: JUL 25, 1973

CHARLES W. FROUST No. 71-302

vs. CIVIL ACTION

COATING SPECIALISTS, INC.

(CONSOLIDATED CASES)

CHRISTENBERRY, JR.

Plaintiff sued his employer, Coating

Specialists, Inc., and various insurers of

his employer for damages under the Jones

Act and the General Maritime Law, alleging

that because of negligence of his employer

and unseaworthiness of its equipment he

contracted silicosis while employed as a

sandblaster and spray painter at various

times between March, 1959 and April, 1970.

He brought a separate action against his

employer for maintenance and cure.

The various insurers answered and denied

coverage. Coating Specialists, Inc.,

("Coating") also answered and filed third-

party claims against these insurers. The

actions were consolidated for trial.

Prior to trial, all parties stipulated

that plaintiff was a seaman, employed by

Coating as a sandblaster and spray painter

sv ne hoe ey

24

at various times from March, 1959 through

April 7, 1970; that he contracted silicosis

during the aforesaid period; that it was

proximately caused by negligence on the

part of Coating and unseaworthiness of its

sandblasting equipment; and that plaintiff

was entitled to damages in the amount of

$175,000, plus certain specified fees and

costs, and was due no further payment for

maintenance or cure. Judgment was entered

on this stipulation, in favor of plaintiff

and against Coating, with the question of

liability of the defendant insurers reserved

for trial by the Court without the inter-

vention of a jury.

Now, after due consideration of the

evidence and the arguments and briefs of

counsel, the Court finds that plaintiff,

Charles W. Froust, is entitled to judgment

against defendant Coating Specialists, Inc.,

and its insurer at the time of manifestation

of the silicosis, Steamship Mutual Under-

writing Association, Ltd. The Court further

finds that defendants Great American In-

surance Company, Westchester Fire Insurance

Company, North River Insurance Company,

Insurance Company of North America, Harbor

Insurance Company, Certain Underwriters at

Lloyds of London and Employers' Liability

Assurance Company of Boston are entitled

to dismissal of the claims against them

and, in connection therewith, enters the

following Findings of Fact and Conclusions

of Law:

FINDINGS OF FACT

1. The process of sandblasting calls

for the direction of sand under high pressure

against a surface to be cleaned. As the

sand disintegrates, acting as an abrasive

to clean the surface, a clo®&d of finely

25

fragmented sand called free Silica or

Silicon dioxide is produced. Inhalation of

the silica particles into the human lungs

can lead to silicosis.

Ze Silicosis is a condition that is

characterized by nodulation of tissue and

development of fibrosis in the lungs.

3. While employed by Coating, plain-

tiff's duties consisted of sandblasting or 1/

Spray painting either as a helper, mechanic

or foreman. His exposure to silica comnenced

on the first day of his employment on which

Sandblasting was done and continued through-

out his various periods of employment with

eg i until he left Coating on April 7,

1970.2

4. Plaintiff's prolonged exposure to

Silicon dioxide caused and aggravated the

Silicosis from which he now suffers.

5. During the period April 24, 1969

until April 24, 1970, Steamship Mutual

Underwriting Association, Ltd. ("Steamship

Mutual") insured Coating under a protection

and indemnity policy against legal liabilities

1/ The term “mechanic" is used to de-

Signate one who does the actual sandblasting

or painting.

2/ Although defendant employer effected a

change in the protection afforded to the

Sandblasters during this period, i.e.,

Canvas hoods were supplanted by air-fed

hoods in 1969, the testimony established

that even with this new equipment his

exposure to silica was sufficient to have

caused or aggravated the condition.

{

26

such as herein asserted. The other defend-

ant insurance companies ("prior insurers")

insured Coating under workmen's compensation

and employer's liability policies during

various other periods from March, 1959 until

April 24, 1969, the date that the coverage

afforded by Steamship Mutual became effective.

6. All of the policies of the prior

insurers contain (either directly or, in

the case of the excess insurers, by in-

corporation of the terms of the underlying

policies) an insuring agreement as follows:

"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 the last exposure,

in the employment of the insured,

to conditions causing the disease

occurs during the policy period."

7. All of the policies of the prior

insurers also contain the following pro-

vision:

"Bodily Injury by Accident; Bodily

Injury by Disease.

The contraction of disease is not

an accident within the meaning of the

work ‘accident' in the term ‘bodily

injury by accident' and only such

disease as results directly from a

bodily injury by accident, is in-

cluded within the term ‘bodily injury

by accident.' The term ‘bodily

injury by disease’ includes only such

disease as is not included within the

term ‘bodily injury by accident'."

27

8. Plaintiff's last exposure to con-

ditions causing or aggravating the silicosis

occurred on April 7, 1970, on which date he

quit working for Coating Specialists, Inc:

because of the progress of the silicosis.

CONCLUSIONS OF LAW

1. The threshold consideration in

reaching a determination of which insurer

or’ insurers cover Coating's liability is

whether silicosis is an "injury by accident"

or “injury by disease." If silicosis is

an “injury by disease," then the prior

insurers are entitled to judgment of dis-

missal as a matter of law, under the clear

language of the insuring agreement upon

which they rely.

2. In the first place, silicosis is

generally understood, by laymen as well as

by medical men, to be an insidious disease.

For example, Webster's Third New Inter-

national Dictionary defines silicosis as a

condition of massive fibrosis of the lungs,

marked by shortness of breath and resulting

from prolonged inhalation of silica dust,

and Schmidt's Attorneys Dictionary of

Medicine defines silicosis as a disease of

the lungs caused by the prolonged inhalation

of dust derived from sand, stone, etc. In

addition, silicosis is listed as an occupa-

tional disease in workmen's compensation

laws, (e.g., La. R.S. 23:1031.1) and a

contention that it is the result of bodily

injury by accident was rejected by the

United States Supreme Court in Urie v.

, Thompson, 337 U.S. 163, 69 S. Ci. 1018

(1949). Moreover, in this case, Dr. Morton

N. Ziskind, Professor of Medicine in charge

of the Pulmonary Diseases Section, Depart-

ment of Medicine of Tulane University,

directly testified that silicosis is a

haa EE

ae Sid

28

disease, that it is an occupational disease

and that he could not think of a situation

in which it would not be an occupational

disease.

3. Under the clear terms of their

insuring agreements, therefore, the policies

of the prior insurers do not apply in this

instance because silicosis is an injury by

disease and "the last’'day of the last ex-

posure, ‘in the employment of the insured, to

conditions causing the disease" occurred

during April, 1970, well after the policy

period of any of the prior insurers.

4. On the other hand, the last

exposure to conditions which caused or

aggravated the disease occurred during

the period of coverage provided by Steam-

ship Mutual and it was during this period

that the disease manifested itself. Steam-

ship Mutual must indemnify Coating Specialists,

Inc.

5. Therefore, judgment has been

entered in favor of plaintiff and against

defendants, Coating Specialists, Inc., and

Steamship Mutual Underwriting Association,

Ltd. in the full sum of One Hundred Seventy-

five Thousand ($175,000) Dollars, plus the

fees and costs specified in the judgment

previously entered herein, together with

legal interest at the rate of 7% thereon

from date of judgment until paid. Judgment

has also been entered dismissing with pre-

judice plaintiff's claims, against Great

American Insurance Company, Westchester

Fire Insurance Company, North River Insurance

Company, Insurance Company of North America,

Harbor Insurance Company, Certain Under-

writers at Lloyds of London, and Employers’

Liability Assurance Company of Boston.

29

New Orleans, Louisiana, this 25th day

of July, 1973.

s/Herbert W. Christenberry

UNITED STATES DISTRICT JUDGE

: 30

3 APPENDIX C

4518

Charles W. FROUST, Plaintiff,

Vv.

| COATING SPECIALISTS, INC., et al.,

Defendants-Appellees.

STEAMSHIP MUTUAL UNDERWRITING ASSOCIATION,

LIMITED, Defendant-Appellant,

Vv.

WESTCHESTER FIRE INSURANCE COMPANY, ect

al., Defendants-Appellees.

No. 73-2781.

United States Court of Appeals,

Fifth Circuit.

_ June 6, 1974.

Appeal from the United States District Court for the East-

ern District of Louisiana; Herbert W. Christenberry, Judge.

Before DYER and MORGAN, Circuit Judges, and KRAFT,

District Judge.

PER CURIAM:

The district court’s findings of fact stand undisputed. We

affirm the judgment of the district court for the reasons set

forth in its adjudication, 364 F.Supp. 1154.

Affirmed.

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