Harvey v. Baton Rouge Marine ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 4, 2009
No. 08-31164 Charles R. Fulbruge III
Clerk
ROBERT HARVEY
Plaintiff - Appellee
v.
LOUISIANA INSURANCE GUARANTEE ASSOCIATION
Defendant - Appellant
Appeal from the United States District Court
for the Middle District of Louisiana
USDC No. 3:08-cv-00459
Before KING, GARWOOD, and DAVIS, Circuit Judges.
PER CURIAM:*
The Louisiana Insurance Guaranty Association (“LIGA”) appeals the
district court’s order granting summary judgment against it in an enforcement
action. Because the supplemental default order filed with the district court is
“in accordance with law,” we affirm the district court.
I.
Robert Harvey was an employee of Baton Rouge Marine Contractors
(“BRMC”) from 1965-1977, during which time he was exposed to asbestos. An
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 08-31164
administrative law judge (“ALJ”) determined that under the Longshoremen and
Harbor Workers’ Compensation Act (“LHWCA”), BRMC and LIGA, which was
in the role of BRMC’s insurer, were liable for Harvey’s claims related to this
exposure. BRMC’s liability insurer at the time of Harvey’s employment,
Employer’s National Insurance Corporation (“Employer’s”), had been declared
insolvent, and the ALJ determined that LIGA stepped into Employer’s shoes and
took on Employer’s obligations. LIGA was created by the Louisiana legislature
to pay claims against insurance companies that have been declared insolvent.
Neither LIGA nor BRMC paid Harvey’s claims, and Harvey filed a request
for a supplemental order to be issued under section 18 of the LHWCA. Under
§ 918(a), an individual may receive a supplemental order of default if payment
under an award of compensation is not made within thirty days. 33 U.S.C.A.
§918(a). The District Director issued a Supplemental Default Order, requiring
LIGA to pay the claim amount. The order also added a twenty percent penalty
for LIGA’s failure to timely pay, and declared both the penalty and the original
claim amount in default. Harvey filed the current action to enforce the
Supplemental Default Order. LIGA then filed Third-Party Demands against a
number of insurers who issued liability policies to BRMC for years other then
when Harvey was employed. Both Harvey and BRMC moved for summary
judgment, which the district court granted, and the district court also dismissed
the Third-Party Demands for lack of subject matter jurisdiction. LIGA sought
a stay of the district court’s judgment, which was granted by this court, and now
appeals the grant of summary judgment.
II
The district court shall “enter judgment for the amount declared in default
by the supplementary order if such supplementary order is in accordance with
law.” § 918(a). We review a grant of summary judgment de novo, applying the
same standards as the district court. Hayward v. U.S. Dep’t of Labor, 536 F.3d
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376, 379 (5th Cir. 2008). Therefore, we review the Supplemental Default Order
to determine if it is in accordance with law.
In Abbott v. Louisiana Insurance Guaranty Ass’n, 889 F.2d 626 (5th Cir.
1989), this court examined the standards for determining if a supplemental
order issued under § 918(a) is in accordance with law. There, we said “a
supplemental order of default is ‘in accordance with law’ as required by section
18(a) [of the LHWCA] if the Deputy Commissioner has correctly followed the
procedures outlined”in that section.1 “The Deputy Commissioner must
investigate the claimant’s application, provide notice of the claim to interested
parties, and give the parties an opportunity for a hearing in the manner
specified in section 19 of the [LHWCA].” Abbott, 889 F.2d at 629. The amount
of the award must be calculated, and the supplemental order must be filed in the
same manner as a compensation order, and the Deputy Commissioner must
notify the responsible parties. § 918(a); Abbott, 889 F.2d at 629.
Here, LIGA presents no argument that the Supplemental Default Order
is not in accordance with law under these criteria. LIGA does not allege that the
commissioner failed to investigate Harvey’s claim, or that it did not receive
notice. The undisputed facts establish that all necessary steps were taken. The
parties received notice of the claim, and were all represented at a conference
before the ALJ.
1
Section 918(a) provides the procedures that are to be followed in obtaining a
supplemental order:
(a) In case of default by the employer in the payment of compensation due under any
award of compensation for a period of thirty days after the compensation is due and
payable, the person to whom such compensation is payable may, within one year after
such default, make application to the deputy commissioner making the compensation
order or a supplementary order declaring the amount of the default. After
investigation, notice, and hearing, as provided in section 919 of this title, the deputy
commissioner shall make a supplementary order, declaring the amount of the default,
which shall be filed in the same manner as the compensation order.
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No. 08-31164
Instead, LIGA argues that the insurance companies which covered BRMC
for years other than when Harvey was employed should be held liable. These
insurance companies appeared on behalf of themselves and BRMC at the
hearing before the ALJ without any “reservation of rights” to deny coverage.
LIGA argues that these insurance companies have therefore waived any
coverage defense available to them; thus they have coverage and must pay
Harvey’s claims. Under the statute creating LIGA, individuals must exhaust
their claims against all other available insurance before proceeding against
LIGA. L A. R EV. S TAT. A NN. § 22:2062(A) (2005). It follows, according to LIGA, that
Harvey must pursue his claims against these other insurance companies before
Harvey can collect from LIGA. LIGA also argues that the district court’s
dismissal of its Third-Party Demands against the other insurance companies for
lack of subject matter jurisdiction was improper.
Despite LIGA’s arguments, this court’s review is limited to whether the
Supplemental Default Order is in accordance with law. It is not within this
court’s purview to determine “the procedural or substantive correctness of the
underlying compensation orders.” Abbott, 889 F.2d at 630. Therefore, the grant
of summary judgment and the dismissal of LIGA’s Third-Party Demands were
proper. Review of the substantive correctness of an order is left to the Benefits
Review Board (“BRB”), and LIGA’s appeal to that body is currently pending. See
Jourdan v. Equitable Equip. Co., 889 F.2d 637, 640 (5th Cir. 1989) (“The issue
of which carrier is ultimately liable. . . should have been raised in the
proceedings before the ALJ and appealed to the BRB after the ALJ issued the
Compensation Order.”). In its appeal before the BRB, LIGA is presenting the
same arguments it presents here. After the BRB reviews the merits of LIGA’s
claims and issues its order, LIGA can then appeal that order to this court under
the provisions of 33 U.S.C. § 921(c), at which this time the court can determine
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No. 08-31164
if the ALJ’s decision was supported by substantial evidence. See La. Ins. Guar.
Ass’n v. Abbott, 40 F.3d 122, 124 (5th Cir. 1994).
LIGA also argues that enforcing the judgment against it while its appeal
before the BRB is pending violates its due process rights. Under § 921(b)(3), the
BRB can issue a stay as to the payment of an award amount if “irreparable
injury” can be demonstrated by the payor. LIGA did not file a motion for stay,
and argues that the irreparable injury standard is impossibly high. However,
a high standard does make receiving a stay impossible. The “comprehensive
system of review” provided for by the LHWCA, which “includ[es] the opportunity
to petition for a stay” protects a payor’s due process rights. Abbott, 889 F.2d at
632.
III.
We therefore conclude that the Supplemental Default Order is “in
accordance with law” and that summary judgment was appropriate. The
dismissal of the Third-Party Claims was proper, and LIGA’s argument that its
due process rights are being violated is without merit.
The judgment of the district court is AFFIRMED and the stay is LIFTED.
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