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FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #025 FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 5th day of May, 2009, are as follows:

BY GUIDRY, J.:

2008-C -1111

ARSENIO ARIAS AND LORENA ARIAS v. STOLTHAVEN NEW ORLEANS, L.C.C., ABC INSURANCE COMPANY, STOLT-NIELSEN TRANSPORTATION GROUP, INC. A/K/A STOLT-NIELSEN S.A., DEF INSURANCE COMPANY, CERTIFIED COATING INC., GHI INSURANCE COMPANY, KENNETH R. HEBERT, ET AL. (Parish of Orleans) For the foregoing reasons, we reverse the decision by the court of appeal and vacate the default judgment rendered and confirmed by the trial court in favor of Arsenio and Lorena Arias and against American Home Assurance Company. The matter is remanded to the trial court for further proceedings. COURT OF APPEAL JUDGMENT REVERSED; TRIAL COURT JUDGMENT VACATED; CASE REMANDED.

05/05/09

SUPREME COURT OF LOUISIANA No. 08-C-1111 ARSENIO ARIAS AND LORENA ARIAS v. STOLTHAVEN NEW ORLEANS, L.L.C., ABC INSURANCE COMPANY, STOLT-NIELSEN TRANSPORTATION GROUP, INC. A/K/A STOLTNIELSEN S.A., DEF INSURANCE COMPANY, CERTIFIED COATING INC, GHI INSURANCE COMPANY, KENNETH R. HEBERT, ET AL ON WRIT OF CERTIORARI TO THE COURT OF APPEAL FOURTH CIRCUIT, PARISH OF ORLEANS

GUIDRY, Justice The issue presented in this case is whether the evidence introduced by the plaintiffs, Arsenio and Lorena Arias, against an insurance carrier to confirm a default judgment was sufficient to establish a prima facie case under Louisiana Code of Civil Procedure article 1702. After reviewing the record and the applicable law, we find that the plaintiffs failed to sustain their burden of proof for confirmation of the default judgment. Accordingly, we reverse the decision of the court of appeal and vacate the trial court judgment. The matter is remanded to the trial court for further proceedings. FACTS AND PROCEDURAL HISTORY On January 12, 2004, Arsenio Arias and his wife, Lorena Arias, instituted a personal injury suit alleging Mr. Arias was injured during his employment with Certified Coating, Inc. (hereafter, "Certified Coating"). Specifically, the plaintiffs asserted Mr. Arias was exposed to acrylonitrile, a dangerous and potentially fatal chemical, while working at the facilities of Stolthaven New Orleans, L.L.C. (hereafter, "Stolthaven"). Among others, the suit was filed against Stolthaven and its

unknown insurer, referenced as ABC Insurance Company.1 In response, Stolthaven filed exceptions, an answer and defenses to the plaintiffs' suit. Several months later, on October 27, 2004, Stolthaven filed a motion for an extension of time to respond to the plaintiffs' discovery requests. The request for three additional weeks to answer was granted. On August 22, 2005, the plaintiffs filed a First Amending and Supplemental Petition for Damages, wherein they added a claim on behalf of their five minor children2 and named additional defendants.3 Specifically, the plaintiffs included American Home Assurance Company (hereafter, "American") as a defendant alleging that it provided a policy of liability insurance covering Stolthaven during the period of Mr. Arias's alleged exposure. Service of process was effectuated on American through its agent, the Louisiana Secretary of State. On June 22, 2006, following American's failure to answer the amending petition, the plaintiffs filed a Motion for Preliminary Default against the insurer, which was granted by the trial court on June 26, 2006. Seven months later, on January 31, 2007, a hearing was conducted for confirmation of the default where the plaintiffs submitted documentary evidence to sustain their burden of establishing a prima facie case against American under Louisiana Code of Civil Procedure article 1702. Particularly, as evidence of the insurance carrier's liability and in lieu of a

The name of Stolthaven's insurer was unknown to the plaintiffs when suit was filed. Also named as defendants, but not relevant to the issues pending before this Court, were StoltNielsen Transportation Group Inc. a/k/a Stolt-Nielsen, its unknown insurer, DEF Insurance Company, Certified Coating, Inc., its unknown insurer, GHI Insurance Company, Kenneth Hebert, Per Voy, and Kirk Skiles. Mr. Arias represented the interests of his minor children: Joseph, Jeremy, Natalie, Mayra, and David Arias. While not subject of the instant proceedings, the additional defendants named in the litigation were the Louisiana Workers' Compensation Corporation (hereafter, "LWCC"), Joe Woods, and Barbara Gilchrist. The LWCC had already filed a motion for intervention in the lawsuit. 2
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policy of insurance, the plaintiffs produced a memorandum of insurance, which suggested that a general liability policy was issued to Stolthaven by American covering the period of the alleged acrylonitrile exposure. The memorandum was directed, with accompanying correspondence, on two separate occasions to plaintiffs' counsel by Stolthaven's attorneys during the course of discovery. As proof of causation, the plaintiffs submitted the reported decision of Arias v. Certified Coating, Inc., 05-446 (La. App. 5 Cir. 2/14/06), 924 So.2d 298, which was rendered by an appellate court in Mr. Arias's related workers' compensation action filed in connection with the acrylonitrile exposure at Stolthaven.4 Finally, the plaintiffs produced as evidence of Mr. Arias's damages, his medical records certified under Louisiana Revised Statute 13:3714. Based on the evidence as a whole, the trial court rendered judgment in favor of the plaintiffs and against American confirming the default in the total amount of $3,711,079.17,5 plus legal interest and court costs. American timely sought appellate relief. On appeal, American alleged the trial court erred in confirming the default judgment in favor of the plaintiffs, citing the insufficiency of the evidence. More specifically, American argued that the evidence was deficient in four respects: (1) proof of liability was insufficient without admission of the insurance policy into evidence; (2) proof of causation in the form of an appellate decision from another circuit in Mr. Arias's workers' compensation case was not sufficient; (3) medical records, certified under Louisiana Revised Statute 13:3714, were inadmissible to prove damages; and (4) proof of general damages was not supported by the admitted
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In this decision, the court of appeal affirmed the Office of Workers' Compensation ruling that Mr. Arias was entitled to compensation benefits as a result of the acrylonitrile exposure at issue in these proceedings, but amended the amount of the award. Damages were apportioned as follows: $2,338,140.10 in general damages; $439,512.07 in medical specials; $858,427.00 in lost wages; $50,000.00 for Mrs. Arias and $5,000.00 for each of the five children representing loss of consortium and financial support. 3
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evidence. American also maintained the trial court erred in ignoring the limits of liability specified in the submitted evidence. The court of appeal rendered a decision affirming in part, and reversing in part. Arias v. Stolthaven New Orleans, L.L.C., 07-0650 (La. App. 4 Cir. 3/19/08), 980 So.2d 791. The court concluded that the memorandum of insurance along with the accompanying cover letters produced during discovery were sufficient to establish coverage and, thus, a prima facie case for American's liability. The court of appeal also held that submission of Mr. Arias's reported workers' compensation decision adequately proved causation. Finally, the court of appeal determined that the production of medical records, certified under Louisiana Revised Statute 13:3714, constituted adequate proof of Mr. Arias's damages, with the exception of his medical expenses. Based on its finding that the record failed to demonstrate prima facie evidence of Mr. Arias's medical costs, the court of appeal remanded the case to the lower court for a trial on the medical damages award. American sought supervisory relief in this court. We granted certiorari in this matter to address American's claim that the evidence used to support the confirmation of the default judgment was not sufficient to establish a prima facie case under Louisiana Code of Civil Procedure article 1702 against the insurer. Arias v. Stolthaven New Orleans, L.L.C., 08-1111 (La. 9/26/08), 992 So.2d 972. Specifically, at issue is whether an insurance carrier's coverage and liability can be proven under Louisiana Code of Civil Procedure article 1702 without admission into evidence of the actual contract of insurance between the insurer and its insured.

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DISCUSSION Applicable Law The appellate jurisdiction of courts of appeal extends to both law and facts. La. Const. art. V,

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