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Labarre v. Occidental Chemical Company

Court of Appeals of Louisiana, First Circuit

June 4, 2018

GUSTAVE J. LABARRE, JR., ET AL.
v.
OCCIDENTAL CHEMICAL COMPANY AND TEXAS BRINE COMPANY, LLC, ET AL.

          On Appeal from the Twenty-Third Judicial District Court In and for the Parish of Assumption State of Louisiana No. 33, 796 The Honorable Jason M. Verdigets, Judge Presiding

          Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Neal J. Kling Jeffrey D. Kessler New Orleans, Louisiana Attorneys for Appellant/ Defendant/Third-Party Plaintiff, Texas Brine Company, LLC

          Robert Ryland Percy, III Gonzales, Louisiana Travis J. Turner Gonzales, Louisiana Eric J. Mayer Houston, Texas Frank H. Spruiell, Jr. Reid A. Jones Seth M. Moyers Shreveport, Louisiana Attorneys for Appellant/ Defendant/Third-Party Plaintiff, Sol Kirschner

          Thear J. Lemoine New Orleans, Louisiana Attorney for Appellee/ Third -Party Defendant, National Surety Corporation

          BEFORE: HIGGINBOTHAM, HOLDRIDGE, AND PENZATO, JJ.

          PENZATO, J.

         Appellant/third-party plaintiff, Texas Brine Company, LLC (Texas Brine), appeals the trial court's judgment granting summary judgment in favor of appellee/third-party defendant, National Surety Corporation (National Surety), and dismissing its claims.[1] For the reasons that follow, we reverse the trial court.

         FACTS AND PROCEDURAL HISTORY

         The underlying litigation in this matter involves the 25-acre sinkhole in Assumption Parish that resulted when the site of a former brine well, known as the Oxy Geismar Well No. 3 (OG3) collapsed. Texas Brine originally drilled OG3 on land owned by Occidental Chemical Corporation (Oxy) in 1982, in order to produce salt from the Napoleonville Salt Dome (Salt Dome), which lies beneath Oxy's land. In 1983, Oxy leased a part of its land to Colorado Crude Company (Colorado Crude Lease) for the purpose of drilling an oil well. In 1986, an oil well was drilled and became known as Hooker #1 Well.[2]

         Numerous plaintiffs filed suit against several defendants, including Texas Brine, for damages to their property. In the course of the litigation, Texas Brine filed an Amended Incidental Demand Against Operators and Lessees of the Hooker #l Well. Sol Kirschner was named as a third-party defendant as a prior operator and/or lessee of Hooker #1 Well, along with several other co-lessees and joint operators. Texas Brine asserted that Mr. Kirschner held an interest in commercial drilling operations near the site of the sinkhole. Texas Brine also claimed that the Salt Dome was breached during the drilling and/or operation of Hooker #1 Well, which shared a common wall with the OG3 cavern. Texas Brine alleged that Mr. Kirschner was a party to the mineral leases under which the Hooker #1 Well was operated, including the Colorado Crude Lease, and that he is liable with his co-lessees to Texas Brine under the Colorado Crude Lease. Texas Brine later amended its incidental demand to add National Surety as a third-party defendant and alleged that it is entitled to damages and other forms of relief from National Surety pursuant to an insurance policy issued to Mr. Kirschner.[3]

         National Surety issued premier insurance policies with homeowner's and excess coverage for Mr. Kirschner's Dallas, Texas home, including the premises and its contents. The policies included both a homeowner's primary policy, with liability limits of $500, 000 (Primary policy), and an excess policy, with liability limits of $5, 000, 000 (Excess policy). National Surety filed a motion for summary judgment seeking a declaration that the applicable policies of insurance excluded coverage for business activities, which would exclude alleged losses associated with Mr. Kirschner's interest in commercial drilling operations near the site of the sinkhole. National Surety maintained that Texas Brine would be unable to carry its burden of proving that the operations at the Hooker #1 Well were not business activities, and thus were excluded from coverage. National Surety argued that the Hooker #1 Well did not constitute a covered incidental business such that the narrow exceptions to the business activities exclusion would apply. In opposition, Texas Brine argued that the policies issued by National Surety were expansive and deluxe offerings, which afforded greater protection to its insureds than a typical homeowner's policy. It was further urged by Texas Brine that there were genuine issues of material fact precluding summary judgment.

         This matter was heard by the trial court on February 1, 2017, and taken under advisement.[4] On April 20, 2017, the trial court issued its reasons for judgment as well as a judgment, which granted the summary judgment in favor of National Surety, but did not dismiss any party or claims. Texas Brine filed a notice of intent to apply for supervisory writ, but the trial court denied the request for a return date. Despite the denial of the trial court, Texas Brine filed its writ application with this court on June 2, 2017, which was assigned No. 2017-CW-0756. Texas Brine also filed a petition for devolutive appeal of the April 20, 2017 judgment, which was granted on May 31, 2017. In light of Texas Brine's filing for supervisory writ, National Surety filed a motion to amend the judgment to include appropriate decretal language on June 5, 2017.[5] On June 28, 2017, the trial court issued an amended judgment granting National Surety's motion for summary judgment and dismissing the claims of Texas Brine against National Surety with prejudice. The trial court issued an order for devolutive appeal of the amended judgment on July 14, 2017. This court referred the writ to the panel to which the appeal was assigned. Labarre, et al. v. Occidental Chemical Company and Texas Brine Company, LLC, 2017-0756 (La.App. 1 Cir. 8/22/17) (unpublished writ action).

         The April 20, 2017 judgment was not a final judgment as it did not contain any decretal language. A valid judgment must be precise, definite, and certain. Laird v. St. Tammany Parish Safe Harbor, 2002-0045 (La.App. 1 Cir. 12/20/02), 836 So.2d 364, 365. A final appealable judgment must contain decretal language, and it must name the party in favor of whom the ruling is ordered, the party against whom the ruling is ordered, and the relief that is granted or denied. See Carter v. Williamson Eye Center, 2001-2016 (La.App. 1 Cir. 11/27/02), 837 So.2d 43, 44. The June 28, 2017 amended judgment cured the defect in the decretal language by dismissing the claims of Texas Brine against National Surety with prejudice. The amended judgment dismissed the suit as to less than all the parties and granted the motion for summary judgment.[6] Therefore, the June 28, 2017 amended judgment is immediately appealable as a partial final judgment pursuant to La. C.C.P. art. 1915(A)(1) and (A)(3). Accordingly, we maintain the appeal and dismiss the writ application as moot.

         SUMMARY JUDGMENT

         Summary judgment procedure is favored and "is designed to secure the just, speedy, and inexpensive determination of every action .... and shall be construed to accomplish these ends." La. C.C.P. art. 966(A)(2).[7] In reviewing the trial court's decision on a motion for summary judgment, this court applies a de novo standard of review using the same criteria applied by the trial courts to determine whether summary judgment is appropriate. Smith v. Our Lady of the Lake Hospital, Inc., 93-2512 (La. 7/5/94), 639 So.2d 730, 750-51.

         The burden of proof rests with the mover. If the mover will not bear the burden of proof at trial, the mover is not required to negate all essential elements of the adverse party's claim, but only to point out to the court the absence of factual support for one or more of the elements necessary to the adverse party's claim. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. C.C.P. art. 966(D)(1).

         "After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law." La. C.C.P. art. 966(A)(3). Moreover, as observed by the Supreme Court in Jackson v. City of New Orleans, 2012-2742 (La. 1/28/14), 144 So.3d 876, 882, cert, denied, ___U.S.___, 135 S.Ct. 197, 190 L.Ed.2d 130 (2014),

A fact is material if it potentially ensures or precludes recovery, affects a litigant's ultimate success, or determines the outcome of the legal dispute. A genuine issue of material fact is one as to which reasonable persons could disagree; if reasonable persons could reach only one conclusion, there is no need for trial on that issue and summary judgment is appropriate.

         A motion for summary judgment is a proper procedural device for determining "whether an insurance policy, as a matter of law, provides or precludes coverage." Dixon v. Direct General Insurance Company of Louisiana, 2008-0907 (La.App. 1 Cir. 3/27/09), 12 So.3d 357, 360.

         LAW AND DISCUSSION

         The Insurance Policy

         National Surety issued policy NZT 02566668 to Mr. Kirschner, providing both primary and excess coverage, subject to certain terms, conditions, and exclusions. The Primary policy provided homeowner's coverage for the premises and the contents of Mr. Kirschner's home, as well as personal liability. However, the personal liability section of the Primary policy excluded coverage for business activities. "Business" is defined by the policy as "an occupation, employment, trade, profession, or other activity performed in exchange for money or other compensation, including farming or ranching operations and property rental." The Primary policy contains an exception to the exclusion of business activities for an "incidental business." An "incidental business" is defined as:

[S]elf-employment or other employment of any insured that:
a. produces a gross annual income of less than $10, 000 in ...

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