United States District Court, W.D. Louisiana, Lake Charles Division
MAURICE HICKS, JR., CHIEF JUDGE UNITED STATES DISTRICT COURT
the Court is a Motion to Dismiss filed by one of the
defendants, Arch Insurance Company (“Arch” or
“the Defendant”). See Record Document
25. Arch contends that coverage did not exist under policies
issued by it to Gilchrist Construction Company, LLC
(“Gilchrist”) and therefore it also had no duty
to defend Gilchrist. See Id. For the reasons that
follow, the Motion to Dismiss is GRANTED.
matter arises from a petition filed by Gilchrist in the
Thirty-Third Judicial District Court, Allen Parish,
Louisiana, against The Travelers Indemnity Company and Arch
Insurance Company, and individual defendants Juanita Fontenot
(“Fontenot”) and T. June Wilder
(“Wilder”). See Record Document 1, Ex. 3
(state court record). Gilchrist asserts breach of contract
claims against the insurers and seeks declaratory judgments
against them based on their denial of defense and indemnity
to Gilchrist, in alleged violation of commercial general
liability policies acquired by Gilchrist from those insurers.
See id. at 4-9. Gilchrist's claims against Arch
are in connection with a lawsuit brought by Fontenot and
Wilder to recover damages from Gilchrist for trespass and
breach of contract. The Fontenot/Wilder lawsuit arose from an
agreement between the parties to buy and sell dirt from the
Fontenot/Wilder property and to temporarily store debris on
their property from a nearby road construction project.
See id. at 5-7. Gilchrist alleges that it was forced
to defend itself in the Fontenot/Wilder suit and that neither
of its insurers has indemnified it for the $5, 559, 000
verdict, plus costs and fees, awarded to Fontenot and Wilder.
instant suit, Gilchrist raised no claims against Fontenot and
Wilder but instead named them as “interested
parties” in its claim for declaratory judgment against
the insurers. See id. at 8-9, ¶¶ 39 &
49. The insurers removed the suit to this court on the basis
of diversity jurisdiction, 28 U.S.C. § 1332, alleging
that Fontenot and Wilder were improperly joined to defeat
jurisdiction. See Record Document 1. Gilchrist moved
to remand, contesting the allegations of improper joinder.
See Record Document 19. Magistrate Judge Kay
recommended that the motion to remand be denied and that
Fontenot and Wilder be dismissed without prejudice as
improperly joined, and this Court adopted her recommendation.
See Record Documents 34 and 40.
the motion to remand was pending, Arch filed the instant
motion to dismiss for failure to state a claim. See
Record Document 25. Gilchrist sought, and was granted, an
extension of time to file an opposition to Arch's motion
to dismiss, requesting ten days after a ruling issued as to
the motion to remand to file its opposition. See
Record Documents 31 and 32. Gilchrist has now filed an
opposition to Arch's motion and Arch has filed a reply.
See Record Documents 41 and 43.
Relevant Allegations and Policy Provisions.
insured Gilchrist through a commercial general liability
policy, which was renewed twice. See Record Document
25 at Exs. C, D and E. After the underlying Fontenot/Wilder
lawsuit was filed in 2012, Gilchrist requested that Arch
provide a defense and indemnity under the policies. Arch
denied defense and indemnity coverage for the claims.
their state court complaint, Fontenot and Wilder asserted
that Gilchrist's actions violated Louisiana law through
failure to perform the contract with them in good faith and
failure to perform its duties and obligations under the
contract. See Record Document 25, Ex. 2 at ¶
13. They alleged that “Gilchrist  filled in the pit
from which they extracted Petitioner's dirt with
worthless dirt, debris, concrete, wood and trash from
elsewhere” and that Gilchrist “under-measured and
underpaid for the dirt that it did haul from Petitioner's
land.” Id. at ¶¶ 7 and 9. They
further asserted that “Gilchrist has continually and
maliciously made an outright refusal to pay Petitioner the
amounts owed under contract or to remove the debris they
dumped on Petitioner's land in violation of the
contract.” Id. at ¶ 12. They alleged that
the “continual presence of the dirt, debris, concrete,
wood, and trash on Petitioner's property also constitutes
an ongoing and continuing trespass by Gilchrist.”
Id. at ¶ 13. Fontenot and Wilder referred to
“Gilchrist's bad faith refusal to faithfully
perform its obligations” when detailing the damages
they had suffered. Id. at ¶ 14.
Arch policy provides coverage to Gilchrist for “bodily
injury” and “property damage.” See
Record Document 25 at Ex. C. The relevant coverage provisions
and exclusions of the policies state:
I - COVERAGES
A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
a. We will pay those sums that the insured
becomes legally obligated to pay as damages because of
“bodily injury” or “property damage”
to which this insurance applies. We will have the right and
duty to defend the insured against any “suit”
seeking those damages. However, we will have no duty to
defend the insured against any “suit” seeking
damages for “bodily injury” or “property
damage” to which this insurance does not apply. . . .
b. This insurance applies to “bodily
injury” and “property damage” only if:
(1) The “bodily injury” or
“property damage” is caused by an
“occurrence” that takes place in the
(2) The “bodily injury” or
“property damage” occurs during the policy
period. . . .