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Latour v. Allstate Ins. Co.

Court of Appeals of Louisiana, Third Circuit

December 28, 2018

KERRI A. LATOUR, ET AL.
v.
ALLSTATE INS. CO., ET AL.

          APPLICATION FOR SUPERVISORY WRITS FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2015-4132-F HONORABLE DAVID MICHAEL SMITH, DISTRICT JUDGE

          John William Penny, Jr. Christopher Shannon Hardy Penny & Hardy COUNSEL FOR DEFENDANT/APPLICANT: Allstate Insurance Company

          Christopher Parnell Lawler Donovan & Lawler COUNSEL FOR DEFENDANT/RESPONDENT: Debbie Derouen

          Michael A. Rainey Attorney at Law COUNSEL FOR PLAINTIFFS/RESPONDENTS: Stephen E. Latour, Kerri A. Latour, Individually and on behalf of Averi G. Latour

          Court composed of Sylvia R. Cooks, Marc T. Amy, Elizabeth A. Pickett, Shannon J. Gremillion, and Candyce G. Perret, Judges.

          Pickett, Judge, dissents for the reasons assigned by Judge Cooks.

          SHANNON J. GREMILLION JUDGE

         Steven and Kerri Latour filed suit against Debbie Derouen and Allstate Insurance Company, her homeowners' insurer, seeking damages for bruises and bite marks suffered by their fifteen-month-old daughter, Averi Latour, on August 25, 2014, while she was in the care of Ms. Derouen. Ms. Derouen provided daycare services for children in her home in exchange for compensation. On the day Averi was bitten, Ms. Derouen was caring for two of her grandchildren in addition to six other children, including Averi. When the children were napping, Ms. Derouen heard a child crying and went to check on the child. Upon entering the room where the children were napping, she found Averi crying and two other children, one sitting on either side of her. Averi had been bitten on both of her legs and her sides. One of the children sitting by Averi was Ms. Derouen's grandchild; the other child was one she regularly cared for. Ms. Derouen's testimony indicates Averi may have been bitten by either or both of these two children.

         Allstate filed a motion for summary judgment, seeking to have the Latours' claims against it dismissed. Allstate based its motion on a provision of its policy which excludes liability coverage for injuries "arising out of . . . business activities of any insured." It argues that because Ms. Derouen was providing daycare services for Averi when Averi was injured by another child in her care, Averi's injuries arose out of her business activities; therefore, the Latours' claims are excluded from the personal liability coverage provision of its policy.

         The Latours asserted to the trial court that Averi was bitten by Ms. Derouen's grandchild and that because Allstate's policy definition of "business" excepts daycare services for an insured's relatives from the definition of business activities, the exclusion is inapplicable. Therefore, they urged that a genuine issue of material fact exists as to whether Averi's injuries arose out of Ms. Derouen's daycare business and that this issue precludes summary judgment. They also argued that language contained in Allstate's premises liability exclusion confirms coverage for Averi's injuries or, in the alternative, creates an ambiguity which also precludes summary judgment.

         The trial court denied Allstate's motion, finding that the difference between the pertinent language of the personal liability exclusion as compared to the premises liability exclusion of the policy "create[d] an issue." Allstate filed a writ application, seeking reversal of the trial court's judgment and the grant of summary judgment in its favor. We granted writs and ordered briefing. Latour v. Allstate Ins. Co., 18-395 (La.App. 3 Cir. 8/9/18) (unpublished opinion). For the reasons that follow, we grant Allstate's requested relief.

         ANALYSIS

         "Since the denial of a motion for summary judgment is an interlocutory ruling from which no appeal may be taken, the only practical remedy available to avoid a possibly useless trial on the merits is to request that the appellate court exercise its supervisory jurisdiction to review the propriety of this ruling." Breaux v. Cozy Cottages, LLC, 14-597, p. 4 (La.App. 3 Cir. 11/12/14), 151 So.3d 183, 187. "Ordinarily, an application for supervisory writs is the appropriate vehicle for the review of an interlocutory judgment." McGinn v. Crescent City Connection Bridge Auth., 15-165, p. 4 (La.App. 4 Cir. 7/22/15), 174 So.3d 145, 148.

On appeal, summary judgments are reviewed de novo. Magnon v. Collins, 98–2822 (La.7/7/99), 739 So.2d 191. Thus, the appellate court asks the same questions the trial court asks to determine whether summary judgment is appropriate. Id. This inquiry seeks to determine whether any genuine issues of material fact exist and whether the movant is entitled to judgment as a matter of law. La.Code Civ.P. art. 966(B) and (C). This means that judgment must be rendered in favor of the movant if the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits show a lack of factual support for an essential element of the opposing party's claim. Id. If the opposing party cannot produce any evidence to suggest that he will be able to meet his evidentiary burden at trial, no genuine issues of material fact exist. Id.
Material facts are those that determine the outcome of the legal dispute. Soileau v. D & J Tire, Inc., 97–318 (La.App. 3 Cir. 10/8/97), 702 So.2d 818, writ denied, 97–2737 (La.1/16/98), 706 So.2d 979. In deciding whether facts are material to an action, we look to the applicable substantive law. Id. Finally, summary judgment procedure is favored and designed to secure the just, speedy, and inexpensive determination of every action. La.Code Civ.P. art. 966(A)(2).

Am. Zurich Ins. Co. v. Caterpillar, Inc., 12-270, pp. 4-5 (La.App. 3 Cir. 10/3/12), 99 So.3d 739, 742-43. When considering a motion for summary judgment, the judge should not weigh the evidence or determine the truth of the matter; instead, he must determine whether there is a genuine issue of triable fact. Larson v. XYZ Ins. Co., 16-745 (La. 5/3/17), 226 So.3d 412. "All doubts should be resolved in the non-moving party's favor." Id. at 416.

An insurer seeking to avoid coverage through summary judgment bears the burden of proving that some provision or exclusion applies to preclude coverage. The issue of whether an insurance policy, as a matter of law, provides or precludes coverage is a dispute that can be resolved on summary judgment. However, summary judgment declaring a lack of coverage under an insurance policy may only be rendered if there is no reasonable interpretation of the policy when applied to the undisputed material facts shown by the evidence supporting the motion under which coverage could be afforded.

Chenevert v. Allstate Prop. & Cas. Ins. Co., 17-56, p. 4 (La.App. 3 Cir. 10/11/17), 229 So.3d 937, 940 (citations omitted).

         Allstate's motion for summary judgment is premised upon the following pertinent provisions of its policy titled "Coverage X Family Liability Protection":

Allstate will pay damages for which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence to which this policy applies, and is covered by this part of the policy.
Losses We Do Not Cover Under Coverage X:
12. We do not cover bodily injury or property damage arising out of the past or present business activities of an insured person.

         Recently, in Green ex rel. Peterson v. Johnson, 14-292, p. 4 (La. 10/15/14), 149 So.3d 766, 770-71 (citation omitted), our supreme court reviewed the principles of insurance contract interpretation and explained:

[C]ertain elementary legal principles apply in analyzing an insurance policy. First and foremost is the rule that an insurance policy is a contract between the parties and should be construed using the general rules of interpretation of contracts set forth in the Civil Code. According to those rules, the responsibility of the judiciary in interpreting insurance contracts is to determine the parties' common intent; this analysis is begun by reviewing the words of the insurance contract. When the words of an insurance contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent, and courts must enforce the contract as written. The determination of whether a contract is clear or ambiguous is a question of law.

         "Exclusionary provisions in insurance contracts are strictly construed against the insurer, and any ambiguity is construed in favor of the insured." Ledbetter v. Concord Gen. Corp., 95-809, p. 4 (La. 1/6/96), 665 So.2d 1166, 1169, amended, 95-809 (La. 4/18/96), 671 So.2d 915. Nonetheless, the rule of strict construction does not "authorize a perversion of language, or the exercise of inventive powers for the purpose of creating an ambiguity where none exists[.]" Muse v. Metro. Life Ins. Co., 193 La. 605, 614, 192 So. 72, 75 (1939). Moreover, insurance companies have the right to limit coverage in any manner they choose, if the limitations imposed do not conflict with statutory provisions or public policy. Reynolds v. Select Props., Ltd., 93-1480 (La. 4/11/94), 634 So.2d 1180.

         The Latours argue that the focus should be on the source of their child's injuries. Because the probable source of the child's bite was not a child for whose care the homeowner was compensated, the Latours argue that the injury did not "arise out of" the operation of a daycare facility in Ms. Derouen's home per the terms of the Allstate policy. We disagree.

         Insurance is purchased to protect the insured against exposure from liability. This principle is embodied in the insuring agreement, which, in this case, provides, "Subject to the terms, conditions and limitations of this policy, Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence to which this policy applies, and is covered by this part of the policy." Liability insurance payment is always predicated upon the insured's legal liability. In this matter, the allegations against the homeowner involve failure to supervise "the minor child," which, throughout the petition, refers to the injured child. The risk that a minor child would be injured at the operator's home is precisely the risk Allstate avoided in excluding coverage for operating a daycare. The acts or omissions of the homeowner/insured is the proper focus in determining whether the exclusion applies. This approach mirrors those previously used in similar cases, and it provides a more concrete foundation upon which subsequent homeowners and insurers can structure their dealings in the future.

         Elorza v. Massey, 00-313 (La.App. 5 Cir. 3/14/01), 783 So.2d 453, involved a child injured at a home-based daycare facility while playing on a trampoline that had been purchased by the homeowner for the use of her children. However, she allowed the daycare charges to play on ...


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