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Davis v. Nola Home Construction, L.L.C.

Court of Appeals of Louisiana, Fourth Circuit

June 14, 2017

KARLA D. DAVIS AND DOLLIE DAVIS
v.
NOLA HOME CONSTRUCTION, L.L.C., JOSE GARCIA AND ABC INSURANCE COMPANY

         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2010-04069, DIVISION "N-8" Honorable Ethel Simms Julien, Judge

          Cesar R. Burgos, Robert J. Daigre, Gabriel O. Mondino, George M. McGregor, BURGOS & ASSOCIATES, LLC, Roderick “Rico” Alvendia ALVENDIA KELLY & DEMAREST, L.L.C., COUNSEL FOR PLAINTIFFS/APPELLEES.

          Katie W. Myers, George B. Hall, Jr. PHELPS DUNBAR LLP, COUNSEL FOR DEFENDANT/APPELLANT.

          Court composed of Chief Judge James F. McKay, III, Judge Rosemary Ledet, Judge Sandra Cabrina Jenkins

          Rosemary Ledet Judge.

         AFFIRMED

         This is a suit for a breach of a construction contract and damages coupled with an insurance coverage dispute. The plaintiffs, Karla D. Davis and Dollie Davis (the "Plaintiffs"), filed suit against the general contractor, Eddie Beard, LLC ("Beard"); the subcontractor, Jose Garcia d/b/a NOLA Home Construction, L.L.C. ("NOLA Home"); and Beard's insurer, Catlin Specialty Insurance Company ("Catlin") (collectively the "Defendants"). From the trial court's judgment in the Plaintiffs' favor, Catlin appeals. For the reasons that follow, we affirm.

         FACTUAL AND PROCEDURAL BACKGROUND

         In August 2005, the Plaintiffs' house located at 5155 Marigny Street in New Orleans, Louisiana (the "Property"), sustained severe damage as a result of Hurricane Katrina. Sometime thereafter, the house was demolished. The Plaintiffs secured a construction loan from JPMorgan Chase Bank, N.A. ("Chase Bank") and began the rebuilding process. In the fall of 2008, the Plaintiffs contracted with Beard, NOLA Home, and NOLA Home's managing agent, Mr. Garcia, for the construction of new house at that location.[1] Construction on the Plaintiffs' house began around December 2008 with Beard as the general contractor and NOLA Home as the subcontractor. Catlin issued a commercial general liability insurance policy to Beard with an effective date of January 1, 2009.

         On February 16, 2010, Beard informed Mr. Garcia that NOLA Home was in default of their contract for failing to provide licenses and proof of insurance.[2] At the same time, Beard also notified Mr. Garcia of multiple deficiencies in the construction, as well as uncompleted work, and requested that NOLA Home take immediate remedial measures.[3] On February 22, 2010, Beard notified Mr. Garcia that NOLA Home was terminated from the construction project for failing to provide proof of insurance and failing to correct the deficiencies.

         On April 22, 2010, the Plaintiffs filed a petition for breach of contract and damages against Mr. Garcia, NOLA Home, and NOLA Home's insurance company due to faulty construction, failure to complete construction, and failure to repair the faulty workmanship. On April 28, 2010, the Plaintiffs filed a first supplemental and amending petition adding that the defective construction and failure to complete construction caused the house to sustain further damage, rendering it uninhabitable. On May 11, 2011, the Plaintiffs filed a second supplemental and amending petition adding Beard and its unnamed insurer as defendants. On October 10, 2011, the Plaintiffs filed a third supplemental and amending petition naming Catlin as Beard's insurer.

         On January 10, 2012, Catlin filed a motion for summary judgment on the issue of coverage of the Plaintiffs' claims. Following a hearing, the trial court granted the motion for summary judgment and dismissed Catlin with prejudice. On May 29, 2012, the Plaintiffs filed a motion for new trial, which the trial court granted. In its reasons for judgment, the trial court stated that it reversed "its earlier decision solely on the grounds that defendant [Catlin] failed to produce authentic evidence in the form of certified documents and/or affidavits in support of its Motion for Summary Judgment."[4]

         On September 28, 2015, a jury trial commenced on the issues of liability and coverage. Contemporaneously, a bench trial was held on the issue of Catlin's coverage. At the close of the Plaintiffs' case, Catlin filed a motion for directed verdict or involuntary dismissal.[5] Catlin argued that exclusions j(5) and j(6) (the "Exclusions") barred coverage under its insurance policy.[6] The trial court took the matter under advisement and ordered additional briefing.

         After all the evidence was submitted, the Plaintiffs moved for a directed verdict on multiple issues.[7] The trial court granted the Plaintiffs' motion and found that the Property sustained damage before July 28, 2009.[8] The trial court took the issue of solidary liability under advisement and denied directed verdict as to the remaining issues.

         On October 2, 2015, the jury returned a verdict in the Plaintiffs' favor awarding $1, 397, 018.06 in damages against Beard, Mr. Garcia, and NOLA Home. On October 22, 2015, the trial court entered judgment reflecting the jury's verdict and noted that the issue of coverage was taken under advisement. On December 10, 2015, the trial court granted Catlin's involuntary dismissal regarding coverage. The Plaintiffs thereafter filed a motion for new trial on the involuntary dismissal of Catlin. On February 19, 2016, the matter was heard by the trial court. At the conclusion of the hearing, the trial court held as follows:

As to the motion for new trial, the Court is hereby granting the motion for new trail [sic], finding that specifically the affirmative defenses as relates to J-5 and J-6 were not raised as affirmative defenses; and therefore, Counsel didn't appropriately avail herself of those exclusions. Then given the exclusions that were argued, the burden would have shifted to determine the damage; and there was no testimony specifically as to what damage was caused during the policy period and what damage was caused after the policy period.
So, given those things, the Court is granting a motion for new trial.

         On March 7, 2016, the trial court issued it ruling granting the Plaintiffs' motion for new trial and found coverage under Catlin's policy issued to Beard. From that judgment, Catlin appealed. Finding the judgment lacked definitive decretal language, this court dismissed the appeal without prejudice and remanded the matter for further proceedings. Davis v. NOLA Home Const., LLC, 16-577 (La.App. 4 Cir. 7/29/16) (unpub.).

         On September 1, 2016, the Plaintiffs filed a motion to amend the March 7, 2016 judgment. Following a hearing, the trial court, on September 28, 2016, rendered an amended judgment (the "Amended Judgment") in the Plaintiffs' favor and against Catlin as the insurer of Beard. This appeal followed.

         As Catlin pointed out in its brief on appeal, the Amended Judgment failed to include proper decretal language and thus was not a final judgment. This court, therefore, ordered the parties to supplement the record with a copy of a final, appealable judgment. On May 10, 2017, the trial court issued an amended judgment entitled "Amended Final Judgment, " which the Plaintiffs submitted to this court. The Amended Final Judgment reads, in pertinent part, as follows:

IT IS ORDERED, ADJUDGED, AND DECREED that, for the reasons stated on the record on February 19, 2016, the Motion for Directed Verdict and/or Involuntary Dismissal on behalf of Catlin Specialty Insurance Company be and hereby is denied. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that there is coverage under the policy issued by Catlin Specialty Insurance Company to Eddie Beard, LLC, pursuant to the limits of that policy;
THEREFORE, JUDGMENT BE AND IS HEREBY RENDERED in favor of plaintiffs, Karla D. Davis and Dollie Davis against Eddie Beard, LLC, Jose Garcia d/b/a NOLA Home Constructors, LLC, and Catlin Specialty Insurance Company as the insurer of Eddie Beard, LLC, in the full amount of ONE MILLION ($1, 000, 000.00) DOLLARS together with legal interest on that amount from the date of judicial demand until paid, and for all costs of these proceedings, which costs will be set on motion filed by Plaintiffs. JUDGMENT IS FURTHER RENDERED in favor of plaintiffs, Karla D. Davis and Dollie Davis against Eddie Beard, LLC, Jose Garcia d/b/a NOLA Home Constructors, LLC in the additional amount of THREE HUNDRED THOUSAND NINETY-SEVEN THOUSAND EIGHTEEN AND 06/100 ($397, 018.06) DOLLARS, together with legal interest on that amount from the date of judicial demand.

         STANDARD OF REVIEW

         When the issues presented on appeal involve fact questions or mixed questions of law and fact, the manifest error standard applies; when the issues involve questions of law, the de novo standard applies. Boes Iron Works, Inc. v. Gee Cee Grp., Inc., 16-0207, p. 8 (La.App. 4 Cir. 11/16/16), 206 So.3d 938, 946, writ denied, 17-0040 (La. 2/10/17), ___ So.3d ___, ___, 2017 WL 744658, p.*1. Summarizing the manifest error and de novo standards, this court noted in Spencer v. Chevron Corp., 16-0174, pp. 4-5 (La.App. 4 Cir. 9/28/16), 202 So.3d 1055, 1057-58, as follows:

Appellate courts review findings of fact using the manifest error or clearly wrong standard of review. Hall v. Folger Coffee Co., 03-1734, p. 9 (La. 4/14/04), 874 So.2d 90, 98. Thus, we will not set aside a trial "court's finding of fact unless that finding is clearly wrong in light of the record reviewed in its entirety." Id. "In order to reverse a fact finder's determination of fact, an appellate court must ... (1) find that a reasonable factual basis does not exist for the finding, and (2) further determine that the record establishes that the fact finder is clearly wrong or manifestly erroneous." Coutee v. Glob. Marine Drilling Co., 05-0756, p. 5 (La. 2/22/06), 924 So.2d 112, 116. We "must not re-weigh the evidence or substitute [our] own factual findings because [we] would have decided the case differently." Id. "Where there are two permissible views of the evidence, the fact finder's choice between them cannot be manifestly erroneous or clearly wrong." Id., 05-0756, pp. 5-6, 924 So.2d at 116. "This particular standard of review is based, in part, on the trial court's ability to better evaluate the testimony of live witnesses, compared with an appellate court's sole reliance upon a written record." A.S. v. D.S., 14-1098, p. 9 (La.App. 4 Cir. 4/8/15), 165 So.3d 247, 253. "The manifest error standard of review also applies to mixed questions of law and fact." Id., 14-1098, p. 10, 165 So.3d at 254.
When reviewing legal issues, an appellate court gives "no special weight to the findings of the trial court, but exercises its constitutional duty to review questions of law and renders judgment on the record." Banks v. New Orleans Police Dep't, 01-0859, p. 3 (La.App. 4 Cir. 9/25/02), 829 So.2d 511, 514. "A legal error occurs when a trial court applies the incorrect principles of law and such errors are prejudicial." Id.

         Furthermore, the applicable standard of review in ruling on a motion for new trial is whether the trial court abused its discretion. Pitts v. Louisiana Med. Mut. Ins. Co., 16-1232, p. 10 (La. 3/15/17), ___ So.3d ___, ___, 2017 WL 1041228, p.*10 (citing Davis v. Witt, 02-3102, p. 19 (La. 7/2/03), 851 So.2d 1119, 1131; and Martin v. Heritage Manor S. Nursing Home, 00-1023, p. 6 (La. 4/3/01), 784 So.2d 627, 632).

         DISCUSSION

         For ease of discussion, we divide our analysis of the issues presented by Catlin into the following three categories: (i) motion for new trial; ...


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