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Hickey v. Allstate Ins. Co.

Court of Appeal of Louisiana, Third Circuit

March 4, 2015

RHONDA B. HICKEY, ET AL.
v.
ALLSTATE INS. CO., ET AL

APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT, PARISH OF RAPIDES, NO. 235,775. HONORABLE MARY LAUVE DOGGETT, DISTRICT JUDGE.

L. Lyle Parker, Christina S. Slay, Bolen, Parker, Brenner, Lee & Engelsman, LTD., Alexandria, Louisiana, COUNSEL FOR DEFENDANT/APPELLANT: Allstate Ins. Co.

John P. Wolff, III, Chad A. Sullivan, Virginia J. McLin, Mark T. Assad, Keogh, Cox & Wilson, LTD., Baton Rouge, Louisiana, COUNSEL FOR DEFENDANTS/APPELLEES: Federal Insurance Company, Express Courier International, Inc.

Court composed of Marc T. Amy, John E. Conery, and David Kent Savoie, Judges.

OPINION

Page 1168

[14-1088 La.App. 3 Cir. 1] CONERY, Judge.

The underlying suit filed on behalf of Rhonda B. Hickey, Edward W. Hickey, and Barbara J. Hickey (Hickeys) has settled.[1] The only remaining issue and the subject of this appeal involves cross-motions for partial summary judgment, wherein the trial court found that Allstate Insurance Co. (Allstate) owed a duty to defend Express Courier International, Inc. (Express) for claims which resulted from the accident between the Hickeys and Allstate's insured, Alton G. Croom.[2] For the following reasons, we reverse and render.

FACTS AND PROCEDURAL HISTORY

An automobile accident occurred on February 9, 2009, in Pineville, Louisiana, wherein now deceased defendant, Mr. Croom, crossed the center line while driving a Honda CRV and collided with the Hickeys' vehicle. Allstate, as Mr. Croom's insurer, provided Mr. Croom's estate with a defense and ultimately entered into a settlement with the Hickeys.

During the discovery process, the Hickeys filed a " Fourth Amended and Restated Petition" (Fourth Amended Petition) and alleged that Mr. Croom was operating a

Page 1169

vehicle in the course and scope of his employment with Express, and that Mr. Croom's vehicle, the Honda CRV, was leased to Express and insured under a " Hired and Non-Owned" endorsement issued to Express by Federal Insurance Company (Federal) in accordance with 49 U.S.C. § 14102 and 49 C.F.R. § 376.12. Scottsdale Insurance Company provided excess coverage for Express. The Fourth Amended Petition also alleged that the Federal endorsement provided [14-1088 La.App. 3 Cir. 2] liability coverage to Mr. Croom and Express and that Express " back-charged" Mr. Croom for the endorsement premiums. Allstate was not named as the insurer of Express in the Hickeys' Fourth Amended Petition.

Based on the Hickeys' allegations in the Fourth Amended Petition, Express and Federal filed a cross-claim against Allstate claiming that under the terms of the Allstate policy, Allstate owed Express a duty to defend against the Hickeys' claims.

Express and Federal then filed a motion for partial summary judgment claiming that Allstate owed Express a duty to defend against the allegations in the Fourth Amended Petition. Allstate refused to accept the defense of Express. Federal, as Express' primary insurer, claimed that it was entitled to reimbursement from Allstate for the costs incurred in defending Express. Allstate filed a competing cross-motion for partial summary judgment claiming that the terms of the Allstate policy specifically excluded any duty by Allstate to defend Express for the claims made by the Hickeys in their Fourth Amended Petition.

At a hearing held on February 10, 2014, the trial court admitted three documents into evidence for consideration in connection with the cross-motions for partial summary judgment, the Allstate insurance policy issued to Mr. Croom, the Hickeys' original petition, and the Hickeys' Fourth Amended Petition.

The trial court denied the request by Express to admit into evidence the Independent Contractor Agreement (Agreement) between Express and Mr. Croom. The trial court found the Agreement was " irrelevant and inadmissible" on the issue of Allstate's duty to defend Express. The trial court allowed counsel to submit " legal memorandum on the evidentiary issue," but maintained its original decision not to admit the Agreement into evidence.

[14-1088 La.App. 3 Cir. 3] During the period allowed by the trial court for legal briefing, Express also offered additional evidence for inclusion into the record before the trial court. Express sought the admission of the Hickeys' first, second, and third petitions filed in the case. Allstate objected and the trial court denied their admission into the record, and found that although the record was left open for additional briefing, it was not left open for the submission of additional evidence. No answer to the appeal was filed on behalf of Express and Federal claiming error on these two evidentiary rulings by the trial court.

In reasons for ruling, dated April 4, 2014, the trial court granted the motion for partial summary judgment filed on behalf of Express and Federal and denied the cross-motion for summary judgment filed on behalf of Allstate. Judgment was signed by the trial court on May 12, 2014, wherein the trial court granted Express and Federal's motion for partial summary judgment ordering Allstate to pay expenses incurred by Federal in its defense of Express. Allstate then timely filed a writ application challenging the trial court's ruling.

The Allstate writ application was denied by this court on the basis of La.Code Civ.P art. 1915(B), which requires that a trial court designate as a final appealable judgment

Page 1170

any judgment granting a motion for partial summary judgment. The trial court signed an amended judgment on June 10, 2014, designating the judgment in this matter as final and appealable. It is from the June 10, 2014 judgment that Allstate has timely appealed.

ASSIGNMENTS OF ERROR

On appeal, the defendants assert the following as error:

A. The Trial Court erred in finding the plaintiffs' Fourth Amended and Restated Petition for Damages imposed a duty on Allstate to defend the named insured's employer, Express, despite the pleaded [14-1088 La.App. 3 Cir. 4] facts indicating that the employer failed to meet the definition of a named insured under the Allstate policy.
B. The Trial Court erred in denying the Cross Motion for Partial Summary Judgment filed on behalf of Allstate, despite having found multiple paragraphs in the Fourth Amended Petition containing allegations that Express leased plaintiff's covered auto, which eliminated the Employer from meeting the definition of an insured under the Allstate policy.
C. The Trial Court erred in finding that, in instances where an organization must fit within a specific classification expressly provided in the policy in order to be covered, every paragraph of the petition must contain allegations that " unambiguously exclude" coverage in order to avoid owing a duty to defend the organization, notwithstanding expressly pleaded facts in various paragraphs of the petition which clearly indicate the organization does not meet the requirements of the covered classification.
D. The Trial Court erred in rigidly interpreting the pertinent case law, which led to a decision with absurd consequences i. e. requiring a personal automobile insurer to defend a named insured's employer where the facts pled indicated the employer hired the insured auto, outside the classification of an insured person under the policy.
E. The Trial Court erred in granting the Motion for Partial Summary Judgment filed on behalf of Express and Federal, finding that Allstate had a duty to defend Express based only upon allegations contained in paragraph 8 of plaintiffs' Fourth Amended and Restated Petition for Damages, despite ...

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