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Ilgenfritz v. Canopius U.S. Insurance

Court of Appeals of Louisiana, Second Circuit

August 9, 2017

THOMAS CHRISTOPHER ILGENFRITZ Plaintiff-Appellee
v.
CANOPIUS U.S. INSURANCE, A LOYD'S PLAN INSURER Defendant-Appellant

         Appealed from the Fourth Judicial District Court for the Parish of Ouachita, Louisiana Trial Court No. 20143343 Honorable Hamilton Stephens Winters, Judge

          NEAL LAW FIRM By: Mark J. Neal Counsel for Appellant.

          J. MICHAEL RHYMES Counsel for Appellee.

          Before MOORE, PITMAN, and COX, JJ.

          COX, J.

         The defendant, Canopius U.S. Insurance ("Canopius"), appeals from a judgment for the plaintiff, Thomas Christopher Ilgenfritz ("Ilgenfritz"), finding that Canopius's denial of Ilgenfritz's claim was improper. The trial court found that the entrustment exclusion in the Canopius policy was inapplicable and awarded Ilgenfritz $40, 177.11 for his loss, plus interest. For the following reasons, we respectfully reverse the ruling of the trial court.

         FACTS

         In the summer of 2012, Ilgenfritz met Chad Matrana ("Matrana") in Miramar Beach, Florida. Ilgenfritz was residing in Florida when he learned that his next door neighbor, Matrana, was an experienced chef and planned to move to Monroe, Louisiana, to open a restaurant by the name of Bacco. Matrana told Ilgenfritz he had come across a great opportunity on a lease for restaurant space at Washington Plaza in downtown Monroe. He asked Ilgenfritz to be an investor in Bacco. Ilgenfritz agreed and made a "handshake deal" with Matrana. According to Ilgenfritz, the parties' deal contemplated that he would serve as the investor and Matrana would serve as the chef and manager.

         Matrana established Bacco Corporation, LLC, and served as its sole member, agent, and officer. Ilgenfritz invested in Bacco, purchasing between $50, 000 and $100, 000 worth of equipment and property to open the restaurant. Bacco opened with Matrana having full control over the restaurant's operations and finances.

         At the time of Bacco's opening in Fall 2012, Ilgenfritz purchased a commercial insurance policy in the name of Bacco, LLC, with liability and contents or property coverage from Scottsdale.[1] Ilgenfritz obtained the insurance policy through his friend and insurance agent, Derek Canchola ("Canchola"). The Scottsdale policy provided $50, 000 in coverage for the restaurant. Although Ilgenfritz obtained the policy, he entrusted Matrana to pay the premiums. After two or three months, however, Matrana stopped paying the premiums, and Scottsdale cancelled the policy on April 22, 2013.

         On November 1, 2012, Matrana signed the Washington Plaza lease for the restaurant. Although he furnished his financial statement to the property manager, Stuart Scalia ("Scalia"), Ilgenfritz refused to sign the lease. Scalia informed Ilgenfritz that by refusing to sign the lease, he would have limited access to the building and would have to obtain Matrana's permission to enter the restaurant during off-hours.

         In early 2013, Ilgenfritz began to suspect that the restaurant was suffering. He traveled to Monroe with a financial consultant to meet with Matrana. Ilgenfritz testified that he wanted a hand in operating the restaurant, but Matrana was opposed to the idea. This meeting began the downward spiral of Ilgenfritz and Matrana's relationship. Two days after the meeting, Matrana sent an email to Ilgenfritz highlighting his problems with Ilgenfritz's behavior. He offered Ilgenfritz the opportunity to remain a "silent investor" or to "sell out." Ilgenfritz refused to "sell out, " and only spoke to Matrana once or twice after receiving the email.

         Ilgenfritz later learned Matrana was using his credit card, without permission, to purchase food for the restaurant. Additionally, Matrana had issued a hot check to Ilgenfritz, prompting Ilgenfritz to report Matrana to the district attorney. Their relationship became so volatile that Matrana's attorney informed Ilgenfritz that Matrana would have him arrested if he entered the restaurant.

         Ilgenfritz called Scalia on a few occasions to check the status of the restaurant, only to learn that Matrana was not paying the utility bills. He testified that he asked Scalia's permission to obtain his belongings from the restaurant. Scalia told Ilgenfritz she had no right to allow him into the ...


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