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Ledet v. Fabianmartins Construction LLC

Court of Appeals of Louisiana, Fifth Circuit

October 17, 2018

MARK C. LEDET
v.
FABIANMARTINS CONSTRUCTION LLC, CERTAIN UNDERWRITERS AT LLOYD'S, LONDON SUBSCRIBING TO POLICY NO. LAL-000012346, ANDREW W. BURSTEN, ET ALS

          ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 769-681, DIVISION "B" HONORABLE CORNELIUS E. REGAN, JUDGE PRESIDING

          COUNSEL FOR PLAINTIFF/APPELLANT, MARK C. LEDET Jack E. Morris

          COUNSEL FOR DEFENDANT/APPELLEE, CERTAIN UNDERWRITERS AT LLOYD'S LONDON SEVERALLY SUBSCRIBING TO POLICY NO. 17-75900829233-S-00 AND NATIONAL FIRE AND MARINE INSURANCE COMPANY Virginia Y. Dodd Kevin W. Welsh

          Panel composed of Judges Susan M. Chehardy, Jude G. Gravois, and John J. Molaison, Jr.

          JOHN J. MOLAISON, JR. JUDGE

         Plaintiff-Appellant, Mark C. Ledet, appeals the trial court's November 28, 2017 partial final judgment granting summary judgment in favor of defendants, Certain Underwriters at Lloyd's, London Subscribing to Policy No. 17-7590089233-S-00, and National Fire and Marine Insurance Company (collectively "Insurers"), dismissing Mr. Ledet's claims against the Insurers for breach of an insurance contract and bad faith claims adjusting, with prejudice. For the reasons that follow, we affirm the trial court's judgment.

         FACTUAL BACKGROUND AND PROCEDURAL HISTORY

         This action arises out of flooding that occurred at The Carol Condominium (the "Carol")[1] in March 2016 as a result of a ruptured water pipe caused by renovation work being performed in the one of the units.[2] "[V]irtually all of the units and common elements on the floors of the [Carol] below the tenth floor" sustained water damage due to the broken pipe, including the unit owned by Mr. Ledet.[3]

         Defendant, Carol Condominium Association, Inc. (the "Association"), is a Louisiana non-profit corporation created pursuant to the Louisiana Condominium Act, La. R.S. 9:1121.101 et seq. (the "Act").[4] All Carol unit owners are automatically members of the Association, and no other persons or entities are entitled to membership. Each unit owner's membership interest in the Association is equal to his respective percentage of ownership interest in the common elements of the Carol as set forth in the Declaration of Condominium of Carol Condominium (the "Declaration").

         According to the Association's By-Laws, the Association is required to "obtain adequate and appropriate kinds of insurance" in accordance with the Declaration.[5] The Act also mandates that the Association obtain insurance insuring the condominium property.[6] The Declaration specifically provides that "the [Carol] Property is submitted to the provisions of the [Act]." Accordingly, the Association purchased a commercial property insurance policy (the "Policy") from the Insurers providing coverage for "direct physical loss of or damage to Covered Property" at the Carol caused or resulting from any covered cause of loss.[7] The only named insured identified in the Policy is the "Carol Condominium Association, Inc.," with a single stated limit of liability for the building, and a separately stated limit for business personal property. There is no separately stated limit of liability for each individual unit.[8] The premiums for the Policy are paid for through the common expenses, which are paid for by each unit owner according to his percentage interest in the common elements. The Policy was in effect from February 1, 2016 to February 1, 2017, including the date the water pipe in the Carol ruptured causing damage to Mr. Ledet's unit.

         Mr. Ledet avers that he presented to the Insurers satisfactory proof of loss of the damage sustained to his unit.[9] While it appears the Association also presented a claim to the Insurers for damages occasioned to the Carol-and that the Insurers adjusted the loss and issued payment to the Association-the Insurers denied payment to Mr. Ledet on his individual claim on the basis that he is not a named insured, an additional insured, or a third party beneficiary under the Policy.

         On March 6, 2017, Mr. Ledet filed suit against FabianMartins and its liability insurer, the owners of Unit 10-C and their liability insurer, Mr. Ledet's own personal property insurer, [10] the Association, and the Insurers, seeking damages caused to his unit as a result of the flooding. As against the Insurers, Mr. Ledet claims he is entitled to "relief and damages for bad faith breach of contract pursuant to Louisiana contract law, La. C.C. art. 1953 et seq., including but not limited to the amounts owed under the … Policy" for the property damage sustained to his individual unit, and for "pre- and post-judgment legal interest, mitigation costs, inconvenience and aggravation, litigation costs and expenses, statutory penalties, and attorney fees pursuant to the Louisiana Insurance Code Unfair Trade Practices statutes," La. R.S. 22:1982 and La. R.S. 22:1973.

         In answer to Mr. Ledet's petition, the Insurers averred that they "were notified of the loss by [the Association] and adjusted same in accordance with the terms of the Policy and Louisiana law." The Insurers then filed an exception of no cause of action and/or motion for summary judgment on the basis that Mr. Ledet, who is not a named insured or an additional named insured, has no right under the Policy to sue the Insurers for losses sustained to his individual unit. According to the Insurers, absent proof that Mr. Ledet is a third party beneficiary of the Policy, the "right to sue [the Insurers] belongs to their insured," the Association.

         In opposition, Mr. Ledet argued that the Act, the Policy, and the Declaration, when read collectively, establish that, under the theory of stipulation pour autrui, he is a third party beneficiary of the Policy. As such, he averred that his petition states a cause of action against the Insurers for breach of the Policy and bad faith claims adjusting. Alternatively, Mr. Ledet argued that, as a "beneficiary of an express contractual insurance trust administered by the Association as trustee," he is entitled to enforce the Association's rights under the Policy in order to protect his interest in the insurance proceeds owed by the Insurers for damage to his unit.

         The Insurers' exception and motion came for hearing on October 19, 2017. Following oral argument, the trial court took the matter under advisement. On November 28, 2017, the trial court issued judgment in favor of the Insurers, granting their motion for summary judgment and dismissing with prejudice Mr. Ledet's claims against them, incorporating the following written reasons:

After careful consideration of the applicable law, memoranda, and exhibits submitted by the parties, the Court finds that, under the policy at issue herein, there is no clear expression of intent to benefit the Plaintiff, and any benefit which may accrue to the Plaintiff is merely incidental to the contract. Thus, the Plaintiff is not a third party beneficiary and has no standing to assert a claim under the policy.

         From this judgment, Mr. Ledet filed the instant appeal.

         ASSIGNMENT OF ERROR

         In his sole assignment of error, Mr. Ledet contends the trial court erred in failing to find that, although he is not a named insured or an additional named insured, the Association's Policy contains "manifestly clear, certain, and direct stipulations of insurance coverage and other benefits in his favor as the owner of a condominium unit insured by the [P]olicy," and thus, under a theory of stipulation pour autrui, he is a third party beneficiary of the Policy to the extent of his [undivided .6643] interest in the insurance proceeds owed by the Insurers for damage to his unit. Alternatively, Mr. Ledet avers the trial court erred in failing to find that he is a beneficiary of an "express contractual insurance trust" administered by the Association as trustee for the benefit of the unit owners, including himself, and as such, he is entitled to enforce the Association's rights under the Policy in order to protect his interest in the insurance proceeds that are owed by the Insurers for damage to his condominium unit.

         LAW AND ANALYSIS

         It is well settled that the appellate review of summary judgment is de novo, using the same criteria governing the trial court's consideration of whether summary judgment is appropriate. Hebert v. Jefferson Parish Hosp. Dist. #1, 11-943 (La.App. 5 Cir. 3/27/12), 91 So.3d 1126, 1127. The party bringing the summary judgment motion bears the burden of proof. La. C.C.P. art. 966(D)(1). However, "if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment," then the mover must merely "point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense." Id. Then, the burden shifts to 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." Id. Both the evidence and all inferences drawn from the evidence must be construed in favor of the party opposing the motion, and all doubt must be resolved in his favor. Hebert, 91 So.3d at 1127.

         A "material fact" is one that potentially insures or prevents recovery, affects a litigant's ultimate success, or determines the outcome of the lawsuit. An issue is genuine if it is such that reasonable persons could disagree; if only one conclusion could be reached by reasonable persons, summary judgment is appropriate as there is no need to go to trial on that issue. Upton v. Rouse's Enterprises, LLC, et al., 15-484 (La.App. 5 Cir. 2/24/16), 186 So.3d 1195, 1198, writ denied, 16-0580 (La. 5/13/16), 191 So.3d 1057. Whether a particular fact is material can be seen only in light of the substantive law applicable to the case. Triche v. McDonald's Corp., 14-318 (La.App. 5 Cir. 10/29/14), 164 So.3d 253, 256.

         Interpretation of an insurance policy usually involves a legal question which can be resolved properly in the framework of a motion for summary judgment. Simon v. State Farm Mut. Auto. Ins. Co., 16-46 (La.App. 5 Cir. 9/8/16), 201 So.3d 1007, 1009. An insurance policy is a contract between the insurer and the insured and has the effect of law between them. See La. C.C. arts. 1906 and 1983; Gorman v. City of Opelousas, 13-1734 (La. 7/1/14), 148 So.3d 888, 892. The judiciary's role in interpreting an insurance contract is "to ascertain the common intent of the insured and the insurer as reflected by the words in the policy." Peterson v. Schimek, 98-1712 (La. 3/2/99), 729 So.2d 1024, 1028; see La. C.C. art. 2045. The parties' intent, as reflected by the words in the policy, determines the extent of coverage. Farciert v. U.S. Agencies Cas. Ins. Co., 13-626 (La.App. 5 Cir. 12/19/13), 131 So.3d 1020, 1024. Such intent is to be determined in accordance with the plain, ordinary and generally prevailing meaning of the words used in the policy, unless the words have acquired a technical meaning. Id.; La. C.C. art. 2047.

         An insurance contract is construed as a whole and each provision of the policy must be interpreted in light of the other provisions so that each is given meaning. Gange v. Hamed, 12-510, 12-511 (La.App. 5 Cir. 5/30/13), 118 So.3d 36, 41, writ denied, 13-2050 (La. 11/15/13), 126 So.3d 472 (citing Peterson v. Schimek, 729 So.2d at 1029); see also La. C.C. art. 2050. A single provision or portion of the policy should not be construed separately at the expense of disregarding other provisions. Id. When the words of an insurance contract are clear and explicit and lead to no absurd consequences, courts must enforce the contract as written and may make no further interpretation in search of the parties' intent. See La. C.C. art. 2046; Peterson v. Schimek, 729 So.2d at 1027. Insurance policies should not be interpreted in an unreasonable or a strained manner under the guise of contractual interpretation to enlarge or to restrict its provisions beyond what is reasonably contemplated by unambiguous terms or to achieve an absurd conclusion. Carrier v. Reliance Ins. Co., 99-2573 (La. 4/11/00), 759 So.2d 37, 43. That is, the rules of construction do not authorize a perversion of the words or the exercise of inventive powers to create an ambiguity where none exists or the making of a new contract when the terms express with sufficient clearness the parties' intent. Peterson v. Schimek, 729 So.2d at 1029. If, however, an ambiguity remains after applying the general rules of contractual interpretation to an insurance contract, the ambiguous contractual provision must be construed against the insurer who furnished the wording of the contract and in favor of the insured. Id.; La. C.C. art. 2056. Unless a policy conflicts with statutory provisions or public policy, insurers may limit their liability and are entitled to impose and enforce reasonable conditions upon the policy obligations that the insurer contractually assumes. Louisiana Ins. Guar. Ass'n v. Interstate Fire & Casualty Co., 93-911 (La. 1/14/94), 630 So.2d 759, 763.

         In the instant case, the parties do not dispute that the Association is the only named insured under the Policy, and that there is no express contractual language therein (or obligation mandated by the provisions of the Act, or those stated in the Declaration), which creates a direct obligation from the Insurers to Mr. Ledet. Mr. Ledet's claims against the Insurers for breach of the insurance contract and bad faith claims adjusting rests solely on his asserted status as a third party beneficiary of the Policy or, alternatively, as a beneficiary of an express contractual insurance trust. Thus, this Court must determine whether the applicable provisions of the Act, Declaration, and Policy, when read together, create a stipulation pour autrui in favor of Mr. Ledet, a third party unit owner, including giving him a direct right of action against the Insurers under the Policy for the relief he seeks.[11]

         Stipulation Pour Autrui

         In Louisiana, a plaintiff may sue under an insurance policy when he is a named insured, additional insured, or a third party beneficiary of the contract. Haddad v. Elkhateeb, 10-0214, 10-0308 (La.App. 4 Cir. 8/11/10), 46 So.3d 244, 257 n. 11, writ denied, 10-2076 (La. 11/12/10), 49 So.3d 895. Because Mr. Ledet is neither a named insured nor an additional named insured, he can only avail himself to the benefits of the Policy if he can establish that he is a third party beneficiary.[12] Joseph v. Hospital Service District No. 2 of the Parish of St. Mary, 05-2364 (La. 10/16/06), 939 So.2d 1206, 1211. The Louisiana Civil Code provides that "[a] contracting party may stipulate a benefit for a third person called a third party beneficiary." La. C.C. art. 1978. In Louisiana, such a contract for the benefit of a third party is commonly referred to as a "stipulation pour autrui."

         The Civil Code does not provide an "analytic framework for determining whether a third party beneficiary contract exists" in a particular case. Joseph, 939 So.2d at 1211. The Louisiana Supreme Court, however, has held that there are three criteria for determining whether contracting parties have provided a benefit for a third party and requires a review of whether: (1) the stipulation for a third party is manifestly clear; (2) there is certainty as to the benefit provided the third party; and (3) the benefit is not a mere incident of the contract between the promisor and the promisee. Id., 939 So.2d at 1212. Pursuant to La. C.C. Art. 1981, "[t]he stipulation gives the third party beneficiary the right to demand performance from the promisor." Joseph, 939 So.2d at 1211. Each case must be decided on a case-by-case basis, and "[e]ach contract must be evaluated on its own terms and conditions in order to determine if the contract stipulates a benefit for a third person." Joseph, 939 So.2d at 1212; see also Scarberry v. Entergy Corp., 14-1256 (La.App. 4 Cir. 5/6/16), 172 So.3d 51, 57. A stipulation pour autrui is never presumed, and the party claiming the benefit bears the burden of proof. Joseph, 939 So.2d at 1212. Thus, Mr. Ledet bears the burden of establishing all three criteria. Id.; see also La. C.C. art. 1831.[13]

         1. Manifestly Clear Stipulation

         "The most basic requirement of a stipulation pour autrui is that the contract manifests a clear intention to benefit the third party; absent such a clear manifestation, a party claiming to be a third party beneficiary cannot meet his burden of proof." Joseph, 939 So.2d at 1212 [citations omitted]. Based upon our de novo review, we find that the Policy, when considered together with the mandates of the Act and the Declaration, lacks a manifestly clear stipulation of coverage intended by the parties to benefit individual unit owners, including Mr. Ledet, so as to give them a direct right of enforcement against the Insurers. As the Supreme Court noted in Joseph, "[a] person may derive a benefit from a contract to which he is not a party without being a third party beneficiary." Joseph, 939 So.2d at 1214. Such is the situation in the instant case.

         The Act mandates that any loss covered by the Policy "shall be adjusted with the [A]ssociation," and that any proceeds for that loss "shall be payable to any insurance trustee designated for that purpose, or otherwise to the [A]ssociation … ." [Emphasis supplied.] La. R.S. 9:1123.112(D). Also, section 13(a) of the Declaration requires that the Policy "shall be written in the name of, and the proceeds thereof shall be payable to … the Association, as the [designated] trustee for each of the Unit Owners ... ." [Emphasis supplied.] Thus, pursuant to the express provisions of the Act and the Declaration, it is clear that all property losses sustained by the Carol must be adjusted with the Association-not with individual unit owners-and that all proceeds recoverable under the Policy for those losses must be paid to the Association, as the designated trustee-not to the individual unit owners.

         Further, while recognizing that the Policy covers property owned by the Association as well as property that may be owned by a unit owner, we disagree with Mr. Ledet's contention that the Policy's loss payment provisions stipulate a benefit in his favor because those provisions provide the Insurers with the option to adjust losses directly with unit owners. To the contrary, we find these provisions give to the Insurers the exclusive right to either adjust and settle covered losses directly with the Association (which is in accord with the Act and the Declaration) or with the unit owners. Our review of the entire Policy has revealed no provision which entitles the unit owners to receive direct payment for losses that may include their individual units. Moreover, it is clear from the Policy's unambiguous language that the Insurers are not obligated to pay directly to Mr. Ledet any part of the indemnity that may be due for the loss he claims to have sustained. Thus, even though the Policy benefits Mr. Ledet and other third party unit owners by providing coverage for certain types of property that may belong to them, we find that its express language, which confers solely upon the Insurers the power to regard all contractual obligations due under the Policy as extending only to the named insured (i.e. the Association), specifically negates the existence of a stipulation pour autrui, or any enforceable obligation, in favor of the individual unit owners as third party beneficiaries.

         Other provisions of the Policy, as well as those contained in the Act and the Declaration, further support a finding that the Insurers and the Association did not intend to confer on any third party unit owner a legally enforceable right of recovery against the Insurers. The Policy expressly states that the Association is the "Named Insured" and provides, throughout the Policy, that "the words 'you' and 'your' refer to the Named Insured." Paragraph 4 of the General Provisions provides that "[t]he insurance described herein shall not be assigned in whole or in part without the written consent" of the Insurers. Further, paragraph F of the Common Policy Provisions provides "[y]our rights and duties under this policy may not be transferred without our written consent." Additionally, paragraph F of the Commercial Property Conditions specifically states that "[n]o party other than you [the Association, the named insured], having custody of Covered Property will benefit from this insurance." [Emphasis supplied.]

         In addition to the Policy's provisions, the Act provides that "[a]n insurance policy issued to the [A]ssociation does not prevent a unit owner from obtaining insurance for his own benefit." [Emphasis supplied.] La. R.S. 9:1123.112(E). Further, section 13(d) of the Declaration states that "[e]ach Unit Owner is responsible for obtaining his own insurance" covering damage to the contents, additions and improvements to his unit, and may obtain additional insurance covering his personal liability and loss or damage to his unit "above and beyond the extent that his liability loss or damage" is covered by the Policy obtained by the Association. Lastly, while the Act requires that unit owners be insured persons under the Association's liability coverage, it does not require that unit owners be named insureds under the Association's property insurance coverage. See La. R.S. 9:1123.112(C)(1).

         Mr. Ledet has not directed this Court to any ambiguity in the Policy, and we have found none. Therefore, considering the Policy provisions as a whole, together with the applicable provisions of the Act and the Declaration, we find the Policy lacks a manifestly clear stipulation of coverage in favor of individual unit owners, including Mr. Ledet, or that the Insurers and the Association intended to give them an enforceable benefit under the insurance contract.[14] Accordingly, the trial judge correctly determined that the Policy lacks a manifestly clear stipulation intending to establish a benefit in favor of Mr. Ledet or other unit owners.

         2. Certainty as to the Benefit Provided

         The second factor in determining whether a stipulation pour autrui exists (i.e., that there is certainty as to the benefit provided to the third party), is based on the principle that, in order "[t]o create a legal obligation enforceable by the beneficiary, there must be certainty as to the benefit to accrue to the beneficiary." Joseph, 939 So.2d at 1212 (citing Berry v. Berry, 371 So.2d 1346, 1347 (La.App. 1 Cir.), writ denied, 373 So.2d 511 (1979)).[15] As to this factor, we find no language in the Policy that obligates the Insurers to provide any benefit directly to individual unit owners such as Mr. Ledet. Pursuant to La. R.S. 9:1123.112(D) of the Act, the unit owners may only recover proceeds under the Policy from the Association-not the Insurers-and even then, only if surplus proceeds remain after repairs are made by the Association to the common elements and covered portions of the units. Thus, whether the unit owners are able to recover any proceeds at all is contingent upon the extent of damage occasioned to the common elements and covered portion of the units, and is triggered only when the loss payment made by the Insurers to the Association exceeds the Association's cost to repair that damage.

         We find this benefit of the insurance proceeds to the unit owners, if any, is an indirect benefit, purely speculative, and is an obligation imposed by the Act upon the Association, not an obligation imposed upon the Insurers under the provisions of the Policy. Moreover, absent an express provision in the Policy, we find that a third party unit owner's potential entitlement to a portion of the insurance proceeds paid by the Insurers to the Association is insufficient to confer a benefit in favor of the unit owner to demand those proceeds directly from the Insurer. Because no express provision in the Policy exists in the case sub judice, we will not read one into it.

         3. Benefit Not a Mere Incident of the Contract

         The third requirement-that the benefit to the third party cannot be a mere incident of the contract-requires the reviewing court to distinguish those instances where an advantage has actually been stipulated on behalf of a third party from those where the advantage relied upon is "merely an incident of the contract between the parties." Joseph, 939 So.2d at 1212-1213 (quoting Smith, 11 Tul. L. Rev. at 28).[16] See also Estate v. Bernice Mayeaux v. Glover, 08-2031, 08-2032 (La.App. 1 Cir. 1/12/10), 31 So.3d 1090, 1096. "Not every promise, performance which may be advantageous to a third person, will create in him an actionable right." Joseph, 939 So.2d at 1212-1213 (quoting Smith, 11 Tul. L. Rev. at 28).

         While acknowledging that Mr. Ledet does derive some benefit under the Policy, we find that any such benefit is merely incidental to the contract and is insufficient to establish a third party beneficiary relationship under the facts presented herein. To establish a stipulation pour autrui, the third party relationship must form the consideration for a condition of the contract. Rivnor Properties v. Herbert O'Donnell, Inc., 92-1103 (La.App. 5th Cir. 1994), 633 So.2d 735, 742. Here, the plain language of the Policy, when viewed in its entirety, shows that the primary purpose of the Policy was not to directly benefit unit owners or to insure their individual units, but rather, was to discharge the Association's obligation under the Act and the Declaration to obtain insurance for the common elements and units against damage and loss, and to protect the Association's interests and property.

         Also, the mere mention of "unit owners" in the Policy does not make the unit owners third party beneficiaries. They are not individually identified in the Policy, nor is there a separately stated limit of liability for each unit owner. Consequently, we find that the benefit alleged by Mr. Ledet-i.e., coverage under the Policy for property he individually owns-was not consideration for a condition of the Policy, but rather, was merely incidental to the primary purpose for which the Insurers and the Association entered into the insurance contract. And, even though Mr. Ledet clearly benefits under the Policy, he is not an intended third party beneficiary with the right to make direct claims against the Insurers for individual losses; his potential benefits are merely incidental. Put another way, the Insurers did not intend to confer or obligate themselves to provide benefits to individual unit owners directly, nor was making unit owners third party beneficiaries consideration for the insurance contract.

         Moreover, if we were to adopt Mr. Ledet's argument-that the Policy language intentionally stipulates a benefit in favor of the individual unit owners- we can envision a situation where insurers of condominium complexes in this state would not only be exposed to the insured's claim (i.e., the Association's claim), but potentially, would also be exposed to multiple claims by the individual unit owners, non-signatories to the insurance contract, seeking recovery and payment for the same loss. Additionally, unless 100% of the unit owners agreed and signed off on a settlement, a lone unit owner could potentially hold up the entire settlement, thus preventing finality to any of the claims and/or repair and restoration of the damaged property. Instead, we find that under the Act, the intention is to have the Association, as trustee for the unit owners, as the only party entitled to receive payment under the Policy for losses or damage to covered property (whether owned by the unit owner or by the Association), so that the Association may then ascertain how and when to distribute those funds, if ever, to unit owners in the event a surplus of proceeds remains after all repairs to the damaged common elements and units have been made.

         In sum, following our de novo review, we find Mr. Ledet has failed to satisfy the three-prong test for establishing a stipulation pour autrui as set forth by the Supreme Court in Joseph, supra. We conclude the Policy contains no provision which establishes a stipulation in favor of individual unit owners, such as Mr. Ledet, in a manifestly clear manner. We find there is no certainty in the Policy as to any benefit provided to the individual unit owners, and conclude that any such benefit derived is not intentional, but instead, a mere incident of the insurance contract between the Insurers and the Association. Put simply, we find the Policy devoid of any benefit flowing directly in favor of individual unit owners, which would create in them a direct right of action against the Insurers to either enforce the Policy or demand its performance. Accordingly, in the absence of a direct benefit conferred by the Policy, pursuant to La. C.C. art. 1978, as a matter of law, the unit owners [i.e., Mr. Ledet] cannot be third party beneficiaries. Joseph, 939 So.2d at 1214. The trial court did not err in finding that Mr. Ledet is not a third party beneficiary under the Policy.

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