ADVANCED SLEEP CENTER, INC. AND ADVANCED NEURODIAGNOSTIC CENTER, INC.
CERTAIN UNDERWRITERS AT LLOYD'S, LONDON
APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH
OF JEFFERSON, STATE OF LOUISIANA NO. 735-606, DIVISION
"P" HONORABLE LEE V. FAULKNER, JR., JUDGE PRESIDING
COUNSEL FOR PLAINTIFF/APPELLANT, ADVANCED SLEEP CENTER, INC.
AND ADVANCED NEURODIAGNOSTIC CENTER, INC. Conrad Meyer Glenn
S. Newbauer Michael S. Brandner David D. Bravo
COUNSEL FOR DEFENDANT/APPELLEE, CERTAIN UNDERWRITERS AT
LLOYD'S, LONDON L. Lane Roy Kelly F. Walsh
composed of Jude G. Gravois, Robert M. Murphy, and Hans J.
M. MURPHY JUDGE
Advanced Sleep Center, Inc. and Advanced Neurodiagnostic
Center, Inc., have appealed the trial court judgment in favor
of defendant, Certain Underwriters at Lloyd's
London. For the reasons that follow, we affirm the
judgment of the trial court.
AND PROCEDURAL HISTORY
issued a policy of insurance to insure plaintiffs'
property, (hereinafter referred to as "the subject
property"), which consists of a three-story stucco
building, located at 2905 Kingman Street in Metairie,
Louisiana, for the policy period from June 29, 2012 to June
29, 2013. Hurricane Isaac struck the area where the subject
property is located on August 29, 2012. On October 11, 2012,
Dr. Morteza Shamsnia, one of the owners of the plaintiff
corporations, submitted a property loss notice to their
insurance broker asserting that winds from the hurricane
caused damage to the subject property's roof, which
resulted in damaged flooring, and that "damage to the
building caused power outage and medicines were
destroyed." Defendant denied coverage for the alleged
losses and plaintiffs filed suit.
trial, Daniel Onofrey testified that he is a licensed
commercial contractor and has worked in the construction
industry for forty years. Prior to 2008, he was an insurance
adjuster and handled property damage claims for insurance
companies and property owners. Mr. Onofrey had a long
standing relationship with Dr. Shamsnia. At the time
Hurricane Isaac struck, he was in the process of constructing
a building for Dr. Shamsnia, located next door to the subject
property. Dr. Shamsnia asked Mr. Onofrey to look at the
subject property after Hurricane Isaac. Mr. Onofrey met with
Dr. Shamsnia's maintenance man, identified as Mohammad
Tareh, to repair the roof of the subject property. In
repairing the roof, Mr. Tareh applied an elastomeric coating
to the roof.
Onofrey testified that there was widespread water damage to
the building, which was caused by water intrusion from
Hurricane Isaac. In his deposition, Mr. Onofrey stated that
the leaks into the building were caused by the parapet wall
surrounding the roof. At trial, Mr. Onofrey testified that
water came in through the flashing for the parapet wall,
explaining that the flashing "waffled up" allowing
water to enter. Mr. Onofrey stated that he had recently
realized that the flashing "was lifting and a breach of
the counter flashing caused water intrusion" and this
was the only thing that could cause so much widespread
damage. Mr. Onofrey stated that this damage to the flashing
was visible, and referred to pictures of the flashing, which
Mr. Onofrey stated was "waffling up."
Shamsnia's request, Mr. Onofrey prepared a repair
estimate for damage to the building alleged to be caused by
the hurricane. The estimate includes the costs to repair roof
leaks and the exterior stucco, as well as numerous interior
repairs throughout the building including replacing
insulation, ceiling tiles, flooring, cabinetry, countertops,
sinks, light fixtures, cameras, smoke detectors, blinds,
window hardware, replace and/or repair and paint drywall, and
paint molding and doors. The total estimated cost of these
repairs was $369, 693.89. Mr. Onofrey explained that this
estimate was compiled from items Dr. Shamsnia pointed out as
they walked through the building. Mr. Onofrey took notes
during this inspection but he no longer had the notes at the
time of trial. Mr. Onofrey testified that he did not take
pictures during this inspection. Mr. Onofrey was listed as
the insured's contact person on the property loss claim
Onofrey testified that he inspected the building with the
adjuster assigned to the claim by defendant, J. Scott
McClary. Mr. Onofrey pointed out damage to the building as he
walked through the building with Mr. McClary. Mr. Onofrey
accompanied Mr. McClary to the roof of the building.
Shamsnia, a professor of neurology, testified that he and his
wife work in the subject building, where they operate a sleep
study center and a neurodiagnostic center. He testified that
defendant inspected the property twenty-eight days before the
storm and determined the building was in "good
Shamsnia stated that he and his wife, Simin Mirtaheri,
evacuated to Los Angeles for Hurricane Isaac. When he went
into the building after the storm, there were multiple areas
of damage on the second and third floors from water getting
into the building from the windows and roof. He instructed
his "superintendent, " Mohammad Tareh, to make the
necessary repairs to stop water from leaking into the
building from the roof. Mr. Tareh tightened the screws on the
roof and changed the seals at the bottom of windows. Mr.
Tareh also picked up wet carpet and dried it. Some of the
carpet was replaced with laminate flooring. The minimum
amount of repairs were done to make the building functional
so Dr. Shamsnia and his wife could resume patient care. Dr.
Shamsnia did not have an invoice or a list of the repairs
performed by Mr. Tareh.
Mr. Tareh worked on the roof, Dr. Shamsnia had roofing work
performed by the roofing contractor who was working on his
new building. Dr. Shamsnia was told by this contractor that
the roof needed to be replaced. Dr. Shamsnia testified that
the roof had not been replaced and it can be observed that
the "flanges and all of that are bent." Dr.
Shamsnia testified that the water damage inside the building
is obvious - there are water stains on the ceiling and walls
throughout the building, some of the windows are
"buckled, " and the building smells from the water
damage. In Dr. Shamsnia's view the pictures of the
building that were entered into evidence do not show all of
the damage to the building.
addition to the damage to the building, plaintiffs also
submitted a claim for loss of medications. Dr. Shamsnia
testified that there were medications in the building which
had to be stored at a constant temperature. These medications
are ruined if they are not held at the recommended
temperature for more than twenty-four hours. Dr. Shamsnia
retained the ruined medications and pictures of the ruined
medication were submitted into evidence at trial. Dr.
Shamsnia testified that there was a "direct power
loss" to the building based on the inspection performed
by "his" electrician. He gave a copy of the
electrician's report to defendant's adjuster.
Although defendant denied that this report was dated, Dr.
Shamsnia testified that the report was dated.
Shamsnia received the letter denying his claim for damages in
December 2012. In July 2013, he contacted Daniel Scott
Claire, a public insurance adjuster, to inspect the building.
Mr. Claire prepared a second repair estimate which totals
$142, 597.00. On July 30, 2013, Dr. Shamsnia mailed this
repair estimate, along with a letter, to defendant stating
that he disagreed with the decision to deny the claim and
requested to proceed under the "request for
appraisal" provision of the policy. Dr. Shamsnia
testified that he did not receive a response to this letter
from defendant; however, the property was re-inspected by
defendant in August 2013.
Scarsone, an engineer for Entergy, which supplied power to
the subject building, testified that there was a widespread
power outage in Metairie which began at 6:01 a.m. on August
29, 2012 and lasted over twenty-four hours. He explained that
the subject property was located in the area that was
affected by the power outage.
Scott McClary testified that he works for Worley Catastrophe
Response. This claim was assigned to Worley on October 15,
2012. Mr. McClary testified that the initial adjuster
assigned to the claim was unable to get in touch with
plaintiffs to inspect the property before the claim was
reassigned to Mr. McClary. Mr. McClary was assigned the claim
on November 4, 2012 and he inspected the property on November
13, 2012. Mr. Onofrey accompanied Mr. McClary during his
inspection of the building. Mr. McClary took numerous
photographs of the property during the inspection, which were
admitted into evidence.
McClary testified that Mr. Onofrey told him that repairs were
made to the second floor of the building, including replacing
the flooring and ceiling tiles. Mr. McClary asked for
pictures of the building prior to repairs being made and Mr.
Onofrey stated he would provide the pictures. However,
pictures of the building prior to repairs were never
provided. Mr. McClary was told that repairs had not been made
to the third floor of the building. Mr. McClary was not able
to access all areas of the third floor due to patients being
present. Photographs taken by Mr. McClary depict the lobby
and hallways of the third floor. The carpet and ceiling tiles
have not been replaced. Mr. McClary testified that he did not
see any water damage on the third floor of the building.
McClary testified that the pictures of the front of the
building do not show any exterior damage to the building,
including the roof. Mr. McClary explained that the roof of
the building is made of sheet metal consisting of panels that
are held down with screws and held at the edges by fasteners.
While inspecting the roof, he looked for evidence of movement
of the panels, such as loosened fasteners, and movement of
the seams. He explained that if the panel moved, the area of
the panel which the fastener previously covered would be
cleaner than the surrounding area. He did not see any
evidence of movement of the panels. He inspected the area
around the parapet wall, noting that this area can be a
"problem" on this type of roof. He did not see any
loosening of the seams or fasteners. He went over the
numerous pictures he took of the roof and explained that they
did not show any damage to the roof. Mr. McClary referred to
pictures of the flashing which Mr. Onofrey stated was
"waffling up." Mr. McClary was unsure of what
"waffling up" meant, but testified that the
flashing on this building looked normal. Mr. McClary pointed
out that the pictures show maintenance on the roof such as
elastometric sealant around the roof vents; this is normal
maintenance for this type of roof.
McClary explained that the insurance policy issued by
defendant on this property only covers interior damage if it
is caused by water entering the building due to damage to the
roof or exterior of the building. Mr. McClary recommended
that the claim be denied because he saw no damage to the roof
or exterior of the building. Mr. McClary further explained
that the policy only covered losses for contents of the
property that were caused by a power failure that occurred on
the premises. He recommended that the claim for the ruined
medications also be denied because the power failure was
caused by an off premises, widespread power outage in the
McClary inspected the property for the second time on August
15, 2013. At that inspection, he was accompanied by Dr.
Shamsnia and Mr. Claire. Mr. McClary again took numerous
pictures of the property. Mr. McClary went over these
pictures during trial and testified that there was no
difference in the building between his initial inspection on
November 13, 2012 and the second inspection on August 15,
2013. Mr. McClary went over several pictures of the roof
taken during the second inspection. Referring to the south
and southwestern areas of the roof, he explained that there
was no evidence of wind damage. He testified that there was
no evidence of any movement of the panels, flashing or screws
of the roof.
McClary testified that the third floor of the building was in
the same condition as it was on his prior inspection of
November 2012. The same carpet ...