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Kinsale Insurance Co. v. Georgia-Pacific, L.L.C.

United States Court of Appeals, Fifth Circuit

July 27, 2015

KINSALE INSURANCE COMPANY, Plaintiff - Appellee
v.
GEORGIA-PACIFIC, L.L.C., Defendant - Appellant

Appeal from the United States District Court for the Southern District of Mississippi.

For Kinsale Insurance Company, Plaintiff - Appellee: Jeffrey Edward Richardson, Chris D'Amour, Adams & Reese, L.L.P., New Orleans, LA.

For Georgia-Pacific, L.L.C., Defendant - Appellant: Michael James Bentley, Esq., W. Wayne Drinkwater Jr., Esq., John Alexander Purvis, Esq., Bradley Arant Boult Cummings, L.L.P., Jackson, MS.

Before HIGGINBOTHAM, DAVIS, and SOUTHWICK, Circuit Judges.

OPINION

LESLIE H. SOUTHWICK, Circuit Judge:

The district court entered a declaratory judgment that Kinsale Insurance Company owed no indemnity under a policy it had issued to Georgia-Pacific, L.L.C. The court found that a policy exclusion applied that related to claims brought by one insured against another. We REVERSE and REMAND.

The insurance issues in this case arose after Georgia-Pacific hired Advanced Services, Inc. for demolition work on Georgia-Pacific's idled plywood plant in Gloster, Mississippi. Advanced was covered by a Commercial General Liability policy written by Kinsale Insurance Company. Georgia-Pacific was an additional insured under the policy. A fire occurred at the plant, damaging equipment Advanced had leased from H& E Equipment Services for the demolition work. Several lawsuits followed. Among them was one brought by H& E against Advanced. In that suit, Advanced filed a third-party demand for indemnification against Georgia-Pacific for any damages Advanced was required to pay H& E. Georgia-Pacific filed a claim for coverage under the Kinsale policy for any indemnification it might be found to owe Advanced. Kinsale denied coverage and cited a policy exclusion that applies to suits brought by one insured against another.

Kinsale then filed suit in the United States District Court for the Southern District of Mississippi. That is the suit before us on appeal. It sought a declaratory judgment that it did not owe indemnity to Georgia-Pacific. Georgia-Pacific counterclaimed for a declaration that the insured-versus-insured exclusion was inapplicable.

After cross-motions for summary judgment, the district court found that the exclusion was not ambiguous and that the third-party demand arose as a result of property damage. Consequently, the claim was barred by the exclusion's plain meaning. It granted summary judgment in favor of Kinsale. Georgia-Pacific appealed.

DISCUSSION

This court reviews " a grant of summary judgment de novo, applying the same standard as the district court." Martco Ltd. P'ship v. Wellons, Inc., 588 F.3d 864, 871 (5th Cir. 2009). We review a district court's interpretation of an insurance contract de novo because it is a matter of law. Id. at 877-78. The district court applied Louisiana law, which the parties agree applies.

The Louisiana Supreme Court interprets insurance contracts under the same analysis used to interpret other contracts. Cadwallader v. Allstate Ins. Co., 848 So.2d 577, 580 (La. 2003). A judge's role is to determine the " common intent" of the parties. Id. Words should be given their " generally prevailing meaning, unless the words have acquired a technical meaning." Id. A policy should be enforced according to its terms if it is not ambiguous. Id.

The relevant exclusion states: " This insurance does not apply to claims or 'suits' for 'bodily injury,' 'property damage' or 'personal and advertising injury' brought by one insured against any other insured." Georgia-Pacific argues that the exclusion is inapplicable because Advanced's claim or suit is not one for property damage brought by one insured against another. The original property-damage claim was brought by H& E, who was a stranger to the policy. It claimed that Advanced was liable for destruction of H& E's equipment as a result of the fire at the plywood plant. Advanced did not, in turn, seek damages from Georgia-Pacific due to a property loss; it sought indemnity based on general tort principles for the property damage that occurred to another party. Advanced had no property damage, but it seeks protection from a potential duty to pay for someone else's property damages.

Though Advanced does not claim property damage, the same suit contains H& E's claim for such damages. Is that enough? The district court thought it was. The court partly relied on the policy definition of a " suit," which is " a civil proceeding in which damages because of 'bodily injury,' 'property damage,' or 'personal and advertising injury' to which this insurance applies are alleged." We agree the litigation was a " suit" under the policy, as it was a civil proceeding in which property damage was alleged. The exclusion itself, though, requires that the claim or suit for property damage be brought by one of the insureds against another insured. The district court applied the exclusion because the court concluded that Advanced's third-party demand was both a suit and a civil proceeding that " essentially seeks reimbursement ...


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