United States District Court, W.D. Louisiana, Lafayette Division
Consent of the Parties
B. WHITEHURST, UNITED STATES MAGISTRATE JUDGE
the Court is a Motion for Summary Judgment filed by
Youngsville II Housing LLLP (“Youngsville”) and
Morrow Realty Company (“Morrow Realty”)
(collectively “Defendants”) [Rec. Doc. 65], an
Opposition Memorandum filed by Page Properties &
Construction LLC (“Page”) [Rec. Doc. 99], an
Opposition Memorandum filed by United Fire and Casualty
Company (“United Fire”) [Rec. Doc. 106], and
Defendants' Reply thereto [Rec. Docs. 109 and 110]; as
well as a Cross Motion for Summary Judgment filed by Page
[Rec. Doc. 86], Defendants' Response in Opposition to the
Cross Motion [Rec. Doc. 96], Page's Reply thereto [Rec.
103], an Opposition Memorandum filed by Bob Morrow
Construction Company (“BMCC”) [Rec. Doc.
108], and Page's Reply to BMCC's
Opposition [Rec. Doc. 120]. For the following reasons,
Defendants' motion will be granted in part and denied in
part and Page's Cross Motion will be denied.
action involves a personal injury claim by Plaintiff, Beverly
J. Carter (“Carter”), that was initiated in the
Fifteenth Judicial District Court, Parish of Lafayette,
Louisiana. The case was removed to this Court on October 26,
2016. R. 1. Carter alleges she sustained physical
injuries as a result of stepping on a nail in a flower bed on
the premises of her apartment building, the Somerset
Apartments in Youngsville, Louisiana. Plaintiff alleges that
her injury occurred on July 15, 2015. R.
Somerset Apartments in Youngsville, Louisiana, are owned by
Youngsville, an Alabama limited liability limited
partnership, and managed on behalf of Youngsville by Morrow
Realty, an Alabama corporation. Plaintiff alleges that she
sustained injuries on July 15, 2013, when she stepped on a
rusty nail negligently left on the premises of the Somerset
Apartments by Page, an Alabama limited liability
company. R. 1-2; R. 11 at ¶ 6. Page
was the subcontractor of BMCC. R. 65-4, Exh B. BMCC
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
that performed the work at the Somerset Apartment contracted
by BMCC. 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.
Subcontracts between Page and BMCC identifies BMCC as
“Contractor, ” Page as “Subcontractor,
” and Youngsville as “Owner” (the
“Subcontracts”). 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. Page was also required to name Youngsville as an
Additional Insured, and to maintain Completed Operations
coverage for Youngsville for that duration. Id.
Page's insurance coverage was to apply as primary and
non-contributory before any other coverage provided to the
Additional Insureds. Id. Further, pursuant to the
Subcontracts, Page's insurer, United Fire, was obligated
to waive subrogation against Youngsville. Id. § 9.6
at p. 10. In addition, the Subcontracts also provided in
pertinent part, “Subcontractor [Page] shall defend,
indemnify and hold harmless the Owner [Youngsville],
Contractor [BMCC], . . . and agents and employees of any of
them [Morrow Realty] from and against claims . . . arising
out of or resulting from performance of [Page's] work
under this Subcontract. . . attributable to bodily injury . .
. caused in whole or in part by the negligent acts or
omissions of [Page] . . . regardless of whether or not such
claim . . . is caused in part by a party indemnified.”
Id., § 11.1 at p. 11. Finally, the Subcontracts
provided that they are governed by the laws of the state of
Alabama. Id., § 5.2 at p. 4.
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.
to the removal of this litigation, Youngsville, Morrow Realty
and Ironside filed a Cross-Claim against United Fire. The
Cross-Claim also made demands for additional insured status
and indemnity demands. BMCC filed a Cross-Claim naming Page
and United Fire, making similar demands for additional
insured status and indemnity demands.
Contentions of the Parties
contend that Youngsville, as Owner of the Somerset
Apartments, and Morrow Realty, as the agent of the Owner
managing the Somerset Apartments, are entitled to defense,
indemnification and insurance coverage 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. Defendants contend that they
are intended third-party beneficiaries to the Subcontracts;
that the Subcontracts provide primary and noncontributory
insurance coverage to Youngsville, without subrogation; that
Page agreed to defend and indemnify Youngsville and Morrow
Realty 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.
Defendants submit that based on the foregoing, they are
entitled to summary judgment as a matter of law.
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. Page
contends that, while Paragraph 11.1 of the Subcontracts
provides indemnity to the “owner” of the
property, the owner is not adequately identified in the
Subcontracts. R. 86-2, p. 6.
Defendants' contentions that United Fire owes them a
defense under the Policy, 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. As to Defendants' contractual indemnity
contentions, United Fire states that genuine issues of fact
exist as to whether or not Plaintiff's claim arises out
of Page's work.
Summary Judgment Standard
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).
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).
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.
Defendants 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.
R. 99. A federal court sitting in diversity applies
the choice-of-law rules of the state in which it sits.
Pioneer Exploration, L.L.C. v. Steadfast Ins. Co.,
767 F.3d 503, 511 (5th Cir. 2014). Therefore,
Louisiana choice-of-law rules apply in this case.
Louisiana Choice of Law
Louisiana a choice-of-law provision is presumed valid.
Barnett v. Am. Const. Hoist, Inc., 91 So.3d 345, 349
(La.App. 1 Cir. 2012). The party challenging a choice-of-law
provision bears the burden of proving that the law chosen by
the parties is invalid. Id. A choice-of-law
provision is invalid if it violates the public policy of the
state whose law would otherwise apply. La. Civ. Code Art.
3540; Sentilles v. Kwik-Kopy Corp., 652 So.2d 79, 81
(La. Ct. App. 1995). Furthermore, it is well established that
where the parties stipulate the state law governing the
contract, Louisiana conflict of laws principles require that
the stipulation be given effect, unless there is statutory or
jurisprudential law to the contrary or strong public policy
considerations justifying the refusal to honor the contract
as written. O'Bannon v. Moriah Technologies,
Inc., 2018 WL 1561333, at *8 (La.App. 1 Cir., 2018).
and United Fire argue that the choice-of-law provision in the
Subcontracts violates Louisiana's public policy against a
construction contract which protects the
indemnitor/contractor that becomes obligated to pay for
another's own fault-based liability, because Alabama does
not have such an anti-indemnity law. R. 99. A state
law does not violate another state's public policy merely
because the two states have different laws. Cherokee Pump
& Equip. Inc. v. Aurora Pump, 38 F.3d 246, 252 (5th
rule governing Louisiana's conflict of law analysis
regarding an insurance policy is codified in Louisiana Civil
Code articles 3515 and 3537. Article 3515 provides, in
pertinent part, that “an issue in a case having
contacts with other states is governed by the law of the
state whose policies would be most seriously impaired if its
law were not applied to that ...