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Moreno v. Entergy Corp.

Court of Appeals of Louisiana, Fifth Circuit

November 15, 2017

DANIEL MORENO
v.
ENTERGY CORPORATION, ENTER GULF STATES, INC., ENTERGY LOUISIANA, LLC., EAGLE ENTERPRISES OF JEFFERSON, LAFAYETTE INSURANCE COMPANY, WALGREEN LOUISIANA CO., INC., ABC INSURANCE COMPANY AND THE PARISH OF JEFFERSON LAFAYETTE INSURANCE COMPANY
v.
WOODWARD DESIGN BUILD, LLC

         ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 640-321 C/W 752-253, DIVISION "D" HONORABLE SCOTT U.SCHLEGEL, JUDGE PRESIDING

          COUNSEL FOR DEFENDANT/APPELLEE, WOODWARD DESIGN BUILD, LLC CHRISTOPHER K. LEMIEUX BRETT W. TWEEDEL JONATHAN S. FORESTER JOHANNA E. LAMBERT

          COUNSEL FOR DEFENDANT/APPELLANT, LAFAYETTE INSURANCE COMPANY DAVID V. BATT, BRADLEY S. GROCE

          Panel composed of Judges Susan M. Chehardy, Jude G. Gravois, and Robert A. Chaisson

          SUSAN M. CHEHARDY CHIEF JUDGE

         Lafayette Insurance Company appeals the 24th Judicial District Court's judgment of November 22, 2016, holding that Lafayette is obligated to defend and indemnify Carl E. Woodward, LLC in this litigation. For the reasons that follow, we affirm this judgment of the district court.

         FACTUAL BACKGROUND

         This litigation has been the subject of several reported opinions, including two from this Court and two from the Louisiana Supreme Court. See Moreno v. Entergy Corp., 12-97 (La. 12/4/12), 105 So.3d 40; Moreno v. Entergy Corp., 09-976 (La.App. 5 Cir. 10/27/11), 79 So.3d 406; Moreno v. Entergy Corp., 10-2268, 10-2281 (La. 2/18/11), 64 So.3d 761; Moreno v. Entergy Corp., 09-976 (La. App 5 Cir. 9/10/10), 49 So.3d 418. Our recitation of the factual history here draws from these prior opinions.

         After Hurricane Katrina, Carl E. Woodward, LLC ("Woodward"), a general contractor, entered into a construction contract with Eagle Enterprises of Jefferson, Inc. ("Eagle"), the owner of the Walgreens Shopping Center at 7100 Veterans Memorial Boulevard in Metairie, Louisiana. Woodward subcontracted with Stewart Interior Contractors, LLC ("Stewart") to install framing and exterior wall material at the shopping center. Stewart, in turn, subcontracted with Landaverde Construction, LLC ("Landaverde") to assist with supplying labor. Plaintiff Daniel Moreno was an employee of Landaverde and one of the laborers supplied under this subcontract. While at the work site on January 5, 2006, Mr. Moreno sustained serious injuries as a result of contact with the overheard power lines owned and operated by Entergy Louisiana, LLC ("Entergy").[1]

         PROCEDURAL HISTORY [2]

         On January 4, 2007, Mr. Moreno sued Entergy, Eagle, Woodward, Stewart, Walgreen Louisiana Company, Inc., the Parish of Jefferson, and Stewart's liability insurer, Lafayette Insurance Company ("Lafayette"). On April 2, 2007, Entergy filed an answer denying fault and filed third party demands against Stewart, Landaverde, and Woodward, seeking complete indemnity under the Louisiana Overhead Power Line Safety Act, La. R.S. 45:141-146. Six months later, on October 11, 2007, Lafayette entered into a contract with Woodward, wherein Lafayette agreed to defend and indemnify Woodward up to the policy limits of the insurance contract between Lafayette and Stewart.

         A plethora of cross-claims and motions for summary judgment amongst the parties ensued. These were ultimately resolved with several rulings from the district court in 2009, review of which necessitated two trips to this Court, see Moreno v. Entergy Corp., 09-976 (La. App 5 Cir. 9/10/10), 49 So.3d 418; Moreno v. Entergy Corp., 09-976 (La. App 5. Cir. 10/27/11), 79 So.3d 406, and two to the Louisiana Supreme Court, see Moreno v. Entergy Corp., 10-2268, 10-2281 (La. 2/18/11), 64 So.3d 761; Moreno v. Entergy Corp., 12-97 (La. 12/4/12), 105 So.3d 40. In the end, in 2012, the Louisiana Supreme Court vacated the district court's rulings granting summary judgment in favor of the contractors and remanded the matter to the district court for further proceedings. See Moreno, 105 So.3d at 52. A portion of these proceedings on remand is the subject of this appeal.

         On remand, several parties re-urged and/or re-filed motions for summary judgment. The district court granted summary judgment in favor of Landaverde's insurer, Western World Insurance Company, as to Entergy's third party demand against Landaverde, finding that Western World's insurance policy did not provide coverage for the claims asserted by Entergy against Landaverde. The court also granted summary judgment in favor of Landaverde and dismissed Entergy's third party demand against Landaverde. On December 10, 2014, the court granted summary judgment in favor of Stewart and dismissed Entergy's third party demand against Stewart, but denied Woodward's motion for summary judgment on Entergy's third party demand against Woodward. In this judgment, the court also specified that in accordance with La. C.C.P. art. 966(F), [3] it made "no findings of negligence as to Stewart[.]" On December 11, 2014, counsel that had been representing Lafayette and Woodward enrolled additional counsel on the two companies' behalf.

         On July 6, 2015, Lafayette filed a petition for declaratory judgment, seeking a ruling that Lafayette owes no duty to defend or indemnify Woodward.[4] On August 5, 2015, Entergy filed a supplemental third party demand against Woodward's insurers, Gray Insurance Company ("Gray") and Lafayette. Gray filed a cross-claim against Lafayette and an exception of no right of action as to Entergy's third party demand. Woodward and Lafayette filed cross-motions for summary judgment on Lafayette's petition for declaratory judgment.

         The district court overruled Gray's exception of no right of action and heard the cross-motions for summary judgment on October 31, 2016. The court issued its judgment on November 14, 2016, in which it granted Woodward's motion for summary judgment and denied Lafayette's. The court followed this with an amended judgment on November 22, 2016, in which it held that the October 11, 2007 agreement between Lafayette and Woodward is a valid contract and that Lafayette waived its rights to deny coverage to Woodward. The court designated this a final judgment pursuant to La. C.C.P. art. 1915.

         Lafayette sought and was granted a devolutive appeal from this judgment.

         ASSIGNMENTS OF ERROR

         On appeal, Lafayette assigns three errors:

(1) The district court erred in denying Lafayette's motion for summary judgment.
(2) The district court erred in holding that Lafayette waived its rights to deny coverage to Woodward.
(3) The district court erred in granting Woodward's motion for summary judgment.

         DISCUSSION

         We address these interrelated assignments of error together. Our standard of review for a judgment granting or denying a motion for summary judgment is de novo. Boutin v. Roman Catholic Church of the Diocese of Baton Rouge, 14-313 (La.App. 5 Cir. 10/29/14), 164 So.3d 243, 246, writ denied, 14-2495 (La. 2/13/15), 159 So.3d 469. Under this standard, we use the same criteria as the trial court in determining if summary judgment is appropriate: whether there is a genuine issue as to material fact and whether the mover is entitled to judgment as a matter of law. See id.

         The facts are not in dispute here and at issue is the interpretation of an insurance policy, which, as a matter of contract interpretation, is a question of law. See Safeway Ins. Co. v. Gardner, 15-696 (La.App. 5 Cir. 4/27/16), 191 So.3d 684, 687 (citing Gorman v. City of Opelousas, 13-1734 (La. 7/1/14), 148 So.3d 888, 892; Cutsinger v. Redfern, 08-2607 (La. 5/22/09), 12 So.3d 945, 949). As such, it may be resolved by means of a declaratory judgment. Id. (citing Mapp Constr., LLC v. Amerisure Mut. Ins. Co., 13-1074 (La.App. 1 Cir. 3/24/14), 143 So.3d 520, 528 ("The function of the declaratory judgment is simply to establish the rights of the parties or express the opinion of the court on a question of law without ordering anything to be done."); Poynter v. Fidelity & Casualty Co., 140 So.2d 42, 46-47 (La.App. 3 Cir. 1962) (finding a declaratory judgment was appropriate to determine whether an insurance policy required the liability insurer to defend a suit filed against the insured)).

         Because an insurance policy is a contract between the parties, it is construed with the general rules of contract interpretation. Safeway, supra (citing Louisiana Ins. Guar. Ass'n v. Interstate Fire & Casualty Co., 93-0911 (La. 1/14/94), 630 So.2d 759, 763). Contracts have the effect of law for the parties and the interpretation of a contract is the determination of the common intent of the parties. Clovelly Oil Co., LLC v. Midstates Petroleum Co., LLC, 12-2055 (La. 3/19/13), 112 So.3d 187, 192 (citing Marin v. Exxon Mobil Corp., 09-2368 (La. 10/19/10), 48 So.3d 234, 258; La. C.C. arts. 1983 and 2045). The reasonable intention of the parties to a contract is to be sought by examining the words of the contract itself, and not assumed. Id. (citing Prejean v. Guillory, 10-0740 (La. 7/2/10), 38 So.3d 274, 279). When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. Id. (citing La. C.C. art. 2046). Common intent is determined, therefore, in accordance with the general, ordinary, plain and popular meaning of the words used in the contract. Id. (citing Prejean, 38 So.3d at 279).

         Accordingly, when a clause in a contract is clear and unambiguous, the letter of that clause should not be disregarded under the pretext of pursuing its spirit, as it is not the duty of the courts to bend the meaning of the words of a contract into harmony with a supposed reasonable intention of the parties. Clovelly, supra. However, even when the language of the contract is clear, courts should refrain from construing the contract in such a manner as to lead to absurd consequences. Id. (citing Amend v. McCabe, 95-0316 (La. 12/1/95), 664 So.2d 1183, 1187; La. C.C. art. 2046). Most importantly, a contract must be interpreted in a common-sense fashion, according to the words of the contract their common and usual significance. Id. (citing Prejean, 38 So.3d at 279). Moreover, a contract provision that is susceptible to different meanings must be interpreted with a meaning that renders the provision effective, and not with one that renders it ineffective. Id. (citing Amend, 664 So.2d at 1187; La. C.C. art. 2049). Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole. Id. (citing La. C.C. art. 2050; Amend, 664 So.2d at 1187.)

         An insurance policy should not be interpreted in an unreasonable or a strained manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion. Safeway, supra. Insurers, like any other contracting party, are entitled to contractually limit coverage in any manner they desire, so long as the limitations do not conflict with statutory provisions or public policy. Id.

         With these precepts in mind, we now turn to the relevant contracts. First we look to the contract entered into between Lafayette and Woodward.

         On October 11, 2007, Lafayette and Woodward entered into a contract that provides, in its entirety: "Lafayette Insurance Company, as the insurer of Stewart Interior Contractors, LLC, has agreed to defend and indemnify Carl E. Woodward, LLC in the above-referenced matter up to the policy limits of the insurance contract between Lafayette Insurance Company and Stewart Interior Contractors, LLC."

         Woodward maintains that this obligates Lafayette to defend and indemnify Woodward up to the monetary policy limits of the insurance contract, without any other terms, conditions, reservations, or limitations. By contrast, Lafayette argues that this agreement is derivative of and, therefore, limited by its insurance policy with Stewart and that we ...


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