United States District Court, E.D. Louisiana
GREAT AMERICAN INSURANCE CO.
TOM'S MARINE & SALVAGE, LLC, ET AL.
ORDER AND REASONS
ZAINEY UNITED STATES DISTRICT JUDGE
following motion is before the Court: Motion for
Summary Judgment (Rec. Doc. 13) filed by Plaintiff,
Great American Insurance Co. Defendant Tom's Marine &
Salvage, LLC opposes the motion. The motion, submitted on May
30, 2018, is before the Court on the briefs without oral
American Insurance filed this declaratory judgment action
seeking a judgment declaring that it has no duty under its
policy to defendant Tom's Marine in connection with a
lawsuit styled Bismark Mairena-Rivera v. Tom's Marine
& Salvage, LLC, Civil Action 17-5823, formerly pending
before Judge Engelhardt and now pending before Judge Vance
(hereinafter “the Underlying Lawsuit”). The
Underlying Lawsuit involves a Fair Labor Standards Act
(“FLSA”) collective action for unpaid overtime
American issued a commercial liability policy (hereinafter
“the Policy”) to Tom's Marine. The policy
includes Coverage A - Bodily Injury and Property Damage
Liability; Coverage B - Personal and Advertising Injury
Liability; Coverage C - Medical Payments. (Rec. Doc. 13-3
Exh. B-1 at 20). The issue before the Court is whether the
Coverage A for property damage liability applies such that
Great American would have a duty to defend and cover the FLSA
claims asserted in the Underlying Lawsuit. Great American
argues that the claims in the Underlying Lawsuit are for
economic loss only, do not pertain to tangible property, and
are not covered by the Policy.
Louisiana law, a liability insurer's duty to defend and
the scope of its coverage are separate and distinct issues.
Mossy Motors, Inc. v. Cameras Am., 898 So.2d 602,
606 (La.App. 4th Cir. 2005) (citing Dennis v.
Finish Line, Inc., 636 So.2d 944, 946 (La.App.
1st Cir. 1994)). The obligation of a liability
insurer to defend suits against its insured is generally
broader than its obligation to provide coverage for damages
claims. Id. (citing Steptore v. Masco Constr.
Co., 643 So.2d 1213, 1218 (La. 1994)). The issue of
whether a liability insurer has the duty to defend a civil
action against its insured is determined by application of
the “eight-corners rule, ” under which an insurer
must look to the “four corners” of the
plaintiff's petition and the “four corners”
of its policy to determine whether it owes that duty.
Id. (citing Vaughn v. Franklin, 785 So.2d
79, 84 (La.App. 1st Cir. 2001)). Under this
analysis, the factual allegations of the plaintiff's
petition must be liberally interpreted to determine whether
they set forth grounds which raise even the possibility of
liability under the policy. Id. In other words, the
test is not whether the allegations unambiguously assert
coverage, but rather whether they do not unambiguously
exclude coverage. Id. Similarly, even though a
plaintiff's petition may allege numerous claims for which
coverage is excluded under an insurer's policy, a duty to
defend may nonetheless exist if there is at least a single
allegation in the petition under which coverage is not
unambiguously excluded. Id. (citing Emp. Ins.
Rep., Inc. v. Emp. Reinsur. Corp., 653 So.2d 27, 29
(La.App. 1st Cir. 1995)).
assuming all the allegations of the petition to be true, if
there would be both coverage under the policy and liability
to the plaintiff, the insurer must defend the lawsuit
regardless of its outcome. Mossy Motors, 898 So.2d
at 607 (citing Yount v. Maisano, 627 So.2d 148 (La.
1993); Matheny v. Ludwig, 742 So.2d 1029 (La.App.
2ndCir. 1999)). The duty to defend arises whenever
the pleadings against the insured disclose even a possibility
of liability under the policy. Id.
crux of the Underlying Lawsuit is that Tom's Marine
required Bismark Mairena-Rivera, and others similarly
situated, to work more than forty hours a week without
receiving overtime pay, all in violation of federal law.
(Rec. Doc. 13-2 Exh. A).
Policy defines property damage as:
A. Physical injury to tangible property, including all
resulting loss of use of that property. All such loss of use
shall be deemed to occur at the time of the physical injury
that caused it; or
B. Loss of use of tangible property that is not physically
injured. All such loss of use shall be deemed to occur at the
time of the “occurrence” that caused it.
(Rec. Doc. 13-3 Exh. B-1 at 51).
means “an accident, including continuous or repeated
exposure to substantially the same general harmful
conditions.” Id. at 50.
Marine does not indicate which aspect of the property damage
portion of the policy, Paragraphs A or B, might apply.
Assuming for the sake of argument that Mairena-Rivera's
unpaid wages constitute “tangible” property,
Paragraph A requires physical injury, and Paragraph B
requires an “occurrence, ” which is an ...