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A federal appeals court has overturned a lower court decision and ruled against an insurer in a silicosis wrongful death case involving a bankrupt company.
Dorothy L. Barnett filed a wrongful-death action in Mississippi state court against defendants including Mississippi Valley Silica Co. alleging her husband contracted and died of silicosis while he was employed from 1957 to 1988 by Mississippi Steel & Iron Co. in Jackson, Mississippi, according to Wednesday’s ruling by the 5th U.S. Circuit Court of appeals in New Orleans in OneBeacon America Insurance Co. v. Dorothy L. Barnett.
In 2012, a jury found in favor of Ms. Barnett and against MSVC and two other defendants on her negligent-failure-to-warn claim, and awarded her $1, 095,000 in compensatory and punitive damages, according to the ruling.
MSCV, however, had stopped operating in 1978 and filed for bankruptcy in 1998. “Functionally, MVSC exists only through its insurance carriers,” said the ruling.
Ms. Barnett has sought to collect her judgment against OneBeacon America, among other insurers who are not party to the litigation. OneBeacon America, which was formerly a unit of Plymouth, Minnesota-based OneBeacon Insurance Group Inc., was sold to Hamilton, Bermuda-based Armour Group Holdings Ltd. in 2014, and its name was changed to Lamorak Insurance Co.
OneBeacon filed a petition in Louisiana state court in 2013 against MVSC, seeking a declaration that the policies it issued to the company do not provide coverage for Ms. Barnett’s Mississippi state court judgment, which the court granted. Ms. Barnett said she was not informed of this action, according to the ruling.
OneBeacon then filed suit in U.S. District Court in Jackson seeking enforcement of the Louisiana state court’s action, which the district court granted.
This was overturned on appeal by a unanimous three-judge appeals court panel. “Because Barnett was not a party to the Louisiana state-court action, she is not bound by the prior judgment, nor does it preclude her bringing this action,” said the ruling.
“Genuine issues of material fact and issues of law exist regarding coverage,” said the ruling also, in vacating the lower court’s ruling and remanding the case for further proceedings.
Ms. Barnett’s attorney, John T. Givens, an associate with Porter & Malouf PA in Jackson Mississippi, said his client was pleased with the decision “and we look forward to having the opportunity to try this case on the merits.”
OneBeacon’s attorney could not immediately be reached for comment.
A federal appellate court has overturned a lower court ruling and ruled in favor of a OneBeacon Insurance Group unit in a dispute with a protection and indemnity insurer over insurance coverage for a sunken tug boat.