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Carter v. Youngsville II Housing LLLP

United States District Court, W.D. Louisiana, Lafayette Division

May 25, 2018

Carter
v.
Youngsville II Housing LLLP et al

         By Consent of the Parties

          MEMORANDUM RULING

          CAROL B. WHITEHURST, UNITED STATES MAGISTRATE JUDGE

         Before the Court is a Motion for Summary Judgment filed by Bob Morrow Construction Company (“BMCC”) [Rec. Doc. 79], an Opposition Memorandum filed by Page Properties & Construction LLC (“Page”) [Rec. Doc. 100], an Opposition Memorandum filed by United Fire and Casualty Company (“United Fire”) [Rec. Doc. 107] and BMCC's Reply thereto [Rec. Doc. 116]. For the following reasons, BMCC's motion will be granted.

         I. Background

         Plaintiff, Beverly J. Carter (“Carter”) alleges she sustained physical injuries on July 15, 2013, when she stepped on a rusty nail negligently left on the premises of the Somerset Apartments by Page Properties and Construction LLC (“Page”), an Alabama limited liability company.[1] R. 1-2; R. 11 at ¶ 6. As this motion was filed by BMCC, the Court will discuss only those facts pertinent to BMCC.

         The Somerset Apartments in Youngsville, Louisiana, are owned by Youngsville, an Alabama limited liability limited partnership. BMCC, an Alabama corporation, was the general contractor that contracted with Youngsville for construction, roofing and renovation work at the Somerset Apartments. Id., Exh. A. Page was the subcontractor of BMCC, that performed the work at the Somerset Apartments. Id., Exh B; Exh C, R. 65-5, Admission Nos. 3, 4. Certificates of Substantial Completion for the work at issue are dated December 22, 2013; January 10, 2014; April 18, 2014; July 22, 2014. R. 65-4, Exh. D.

         The Subcontracts between Page and BMCC identifies BMCC as “Contractor, ” Page as “Subcontractor, ” and Youngsville as “Owner” (the “Subcontracts”).[2] R. 65-4, Exh B, p. 1. The Subcontracts refer to the “Prime Contract” between Youngsville and BMCC dated August 28, 2013, and identify the “Project” as “the Renovations to Somerset Apartments.” Id. United Fire was the general liability insurer of Page. Pursuant to the Subcontracts, Page was required to carry Completed Operations insurance coverage in the amount of $1 Million per occurrence, and to maintain said coverage for three (3) years after completion of the work. Id. § 9.1 at p. 9. In addition, pursuant to Section 9.5 of the Subcontracts, Page agreed to defend and indemnify the Contractor, BMCC, from claims arising out of or resulting from Page's performance under the subcontract, whether meritorious or not, and also agreed to insure all of the contractual indemnities contained therein. Id., § 9.5. Page also agreed to defend, indemnify, and hold BMCC harmless from and against claims, damages, losses and expenses, including but not limited to attorney's fees, arising out of or resulting from Page's performance of the work. 1d., § 11.1. Finally, the Subcontracts provided that they are governed by the laws of the state of Alabama. Id., § 5.2 at p. 4.

         Prior to the removal of this litigation, Defendants filed a Third Party Demand against Page in the Fifteenth Judicial District Court proceeding. The Third Party Demand makes claims of additional insured status under a general liability policy, and contractual indemnity pursuant to the Subcontract agreements between Page and BMCC. R. 65-4. Subsequent to the removal of this litigation, BMCC filed a Cross-Claim naming Page and United Fire, making demands for additional insured status and indemnity demands.

         II. Contentions of the Parties

         BMCC contends that, as General Contractor for Youngsville, it is entitled to defense, indemnification pursuant to the terms of the Subcontracts between BMCC, as General Contractor for Youngsville, and Page, for work performed on the premises which is alleged to be the source of the rusty nail that caused Plaintiff's injury. BMCC contends that Page agreed to defend and indemnify it from claims such as those asserted by Plaintiff in the instant case, and that the Subcontracts are governed by Alabama law which does not prohibit the provisions for defense, indemnity and insurance coverage contained therein. BMCC further contends that it is entitled to insurance coverage from United Fire pursuant to Section 9.1 of the Subcontracts.

         Page argues that Louisiana law applies to the Subcontracts. Specifically, Page contends that Louisiana's anti-indemnity statute, La. R.S. 9:2780.1, applies and voids, as against public policy, the insurance and indemnity requirements contained in the construction Subcontracts.

         As to BMCC's contractual indemnity contentions, United Fire states that genuine issues of fact exist as to whether or not Plaintiff's claim arose out of Page's work. United Fire also argues that Louisiana law applies to the Subcontracts, and therefore, La. R.S. 9:2780.1 voids the additional insured provision of the Policy. Alternatively, United Fire contends that the allegations against Youngsville in Plaintiff's petition fail to “impute Page's fault to Youngsville” as required under the additional insured provision of the Policy.

         III. Summary Judgment Standard

         Summary judgment is appropriate “[i]f the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P.56(c). A genuine issue of fact exists only “[i]f the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1986).

         In determining whether the movant is entitled to summary judgment, the Court views facts in the light most favorable to the nonmovant and draws all reasonable inferences in his favor. Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528 (5thCir.1997). “If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial.” Engstrom v. First Nat'l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir.1995). Once the burden shifts to the respondent, he must direct the attention of the court to evidence in the record and set forth specific facts sufficient to establish that there is a genuine issue of material fact requiring a trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). There must be sufficient evidence favoring the non-moving party to support a verdict for that party. Wood v. Houston Belt & Terminal Ry., 958 F.2d 95, 97 (5th Cir. 1992). “We do not ... in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts.” Badon v. RJR Nabisco, Inc., 224 F.3d 382, 394 (5th Cir.2000).

         III. Analysis

         The Subcontracts at issue in this matter contain an express choice-of-law provision which states, “This Subcontract shall be governed by the laws of the State of Alabama.” R. 65-4, § 5.2, p. 4. BMCC filed this motion moving the Court to find that Alabama law should govern the Subcontracts. Page and United Fire argue that Louisiana law applies to the Subcontracts, and therefore, the application of Louisiana's Anti-Indemnity Statute, La. R.S. 9:2780.1, prohibits the defense and indemnification provisions in the Subcontracts.

         The Court has previously addressed these same issues in the Motion For Summary Judgment filed by Youngsville and Morrow Reality Company, R. 65, and opposed by Page and United Fire, R. 99, 106. There, the Court held that because Alabama has the most pertinent contacts in this action, Alabama law applies to the contracts. As Louisiana has no interest in the application of its laws to this contractual dispute, La. R.S. 9:2780.1 is not applicable.[3]

         A. Defense, Indemnity and Insurance Coverage

         Pursuant to the Subcontracts, Page was obligated to carry CGL insurance with the General Contractor, BMCC, to provide defense and indemnity and insurance coverage.

         Section 9.5 of the Subcontracts provides in pertinent part.

9.5. INDEMNIFICATION. The Subcontractor agrees to assume the entire responsibility and liability for all damages or injury to all persons, and to all property, arising out of or in any manner connected with the execution of the Work under this Subcontract and to the fullest extent permitted by law, the Subcontractor shall defend and indemnify the Contractor from all such claims, whether meritorious or not, allegations of its own independent negligence or the alleged negligence of others, including without ...

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