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Louisiana Citizens Property Insurance Corp. v. LAA Shoring, LLC

Court of Appeals of Louisiana, Fourth Circuit

June 14, 2017

LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION
v.
LAA SHORING, LLC, LUIS ACOSTA & ABC INSURANCE COMPANY RONALD AND ANTOINETTE JOHNSTON
v.
STATE OF LOUISIANA, DIVISION OF ADMINISTRATION, OFFICE OF COMMUNITY DEVELOPMENTS DISASTER RECOVERY UNIT, HAZARD MITIGATION GRANT PROGRAM; SHAW ENVIRONMENTAL & INFRASTRUCTURE, INC.; LAA SHORING, LLC; LUIS A. ACOSTA; ABC INSURANCE COMPANY, ACI CONSTRUCTION; DEF INSURANCE COMPANY; DON A GARLAND; GHI INSURANCE COMPANY; GREG PIERSON; DAVID KNIGHT; FRANCIS KING; MINOLA BUTLER; LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2012-01632 C\W 2012-04520, DIVISION "M" Honorable Paulette R. Irons, Judge

          Wayne J. Fontana, Skye S. Fantaci, ROEDEL PARSONS KOCH BLACHE BALHOFF & MCCOLLISTER, COUNSEL FOR CROSS-CLAIM PLAINTIFF/APPELLANT, LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION

          M. David Kurtz, Brian M. Ballay, Laura E. Carlisle, BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ, PC, COUNSEL FOR DEFENDANT/APPELLEE, CB&I GOVERNMENTAL, SOLUTIONS, INC.

          W. Nicholas Dietzen, IV Kevin R. Tully CHRISTOVICH & KEARNEY, LLP New Orleans, LA 70130--6078 COUNSEL FOR DEFENDANT/APPELLEE, STATE OF LOUISIANA, THROUGH THE DIVISION OF ADMINISTRATION, OFFICE OF COMMUNITY DEVELOPMENT, DISASTER RECOVERY UNIT

          Court composed of Judge Terri F. Love, Judge Madeleine M. Landrieu, Judge Joy Cossich Lobrano

          Terri F. Love Judge.

         This appeal arises from damages sustained during the elevation of plaintiffs' home following Hurricane Katrina. Plaintiffs filed suit contending that the elevation contractor was negligent, as well as the State of Louisiana, who administered the elevation program. Plaintiffs' insurer, that paid proceeds under their homeowners' insurance policy, filed a cross-claim against the defendants sued by the plaintiffs. The State of Louisiana filed an exception of no right of action, which maintained that the State was not liable for the contractor's alleged negligence. The trial court granted the exception of no right of action, dismissing the claims against the State with prejudice.

         Plaintiffs' insurer appealed, asserting that it was partially subrogated to plaintiffs' rights, which permitted the appeal. The State filed a motion to dismiss contending that plaintiffs' insurer did not have a right to appeal without plaintiffs. Plaintiffs' insurer also avers that the State's administration of the elevation program was sufficient to negate the exception of no right of action.

         We find that plaintiffs' insurer was partially subrogated to plaintiffs' claims, which allowed it to exercise appellate rights, and deny the motion to dismiss appeal. Further, we find that plaintiffs' insurer failed to show that a stipulation pour autrui existed, as any benefit derived by the plaintiffs from the contract between the State and the elevation contractor was incidental. Lastly, we find that the State did not assume a duty to the plaintiffs. Therefore, the trial court did not err by granting the State's exception of no right of action. The judgment of the trial court is affirmed.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         Ronald and Antoinette Johnston own a home damaged by Hurricane Katrina. As a part of the recovery process, the Johnstons decided to elevate their home. The State of Louisiana, Division of Administration, Office of Community Development, Disaster Recovery Unit (hereinafter referred to as "State") administered the Hazard Mitigation Grant Program ("HMGP"), which provided home elevation grants to homeowners who met certain criteria. The Johnstons received an HMGP grant and selected Luis Acosta with LAA Shoring, LLC ("LAA") to complete their elevation. LAA was paid $80, 000 by the Johnstons from monies received from the HMGP.

         The Johnstons then alleged that LAA damaged their home such that the home was uninhabitable. Subsequently, the Johnstons filed a claim with their homeowners' insurance provider, Louisiana Citizens Property Insurance Corporation ("LCPIC"), for the damage. LCPIC paid the Johnstons $65, 230.20[1]under the policy.

         LCPIC then filed suit against LAA, Mr. Acosta, and their insurer, Hermitage Insurance Company, seeking the monies it extended. A few months later, the Johnstons filed a suit for damages against the State; CB&I Solutions, Inc. f/k/a Shaw Environmental & Infrastructure, Inc. ("CB&I"); LAA; Mr. Acosta; LAA's insurer; ACI Construction; Michael Brown; ACI's insurer; Don Garland; Garland's insurer; Greg Pierson; David Knight; Francis King; Minola Butler; and LCPIC. Once the Johnstons' petition was filed, LCPIC filed an Unopposed Motion to Transfer and Consolidate its case with the Johnstons. The trial court granted the consolidation.

         Around the same time as the consolidation, LCPIC filed a cross-claim against the defendants sued by the Johnstons alleging that they were liable via subrogation to LCPIC for the $65, 230.20 paid to the Johnstons. The State filed an Exception of No Right of Action contending that the Johnstons' claims and LCPIC's cross-claims against the State should be dismissed. The State alleged that the Johnstons did not have a contract or third-party beneficiary relationship with the State. The trial court sustained the State's Exception of No Right of Action, and dismissed all claims against it with prejudice. LCPIC's devolutive appeal followed.[2]

         LCPIC contends that the trial court erred by sustaining the State's Exception of No Right of Action because the petition asserted a valid cause of action and because the State may have ...


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