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Liberty Mutual Fire Ins. Co. v. Hebert

Court of Appeals of Louisiana, Third Circuit

February 6, 2019



          Dan Boudreaux Keith R. Giardina COUNSEL FOR PLAINTIFF/APPELLANT: Liberty Mutual Fire Ins. Co.

          Kevin S. Mosley Grotefeld Hoffman COUNSEL FOR DEFENDANT/APPELLEE: Hanover Ins. Co.

          Charles E. Riley, IV Simon, Peragine, Smith & Redfern, LLP COUNSEL FOR DEFENDANT/APPELLEE: Hanover Ins. Co.

          Allan L. Durand COUNSEL FOR DEFENDANT/APPELLEE: St. Martin Economic Development Authority

          Court composed of Elizabeth A. Pickett, John E. Conery, and Candyce G. Perret, Judges.


         Liberty Mutual Fire Insurance Company (Liberty Mutual) appealed, and Hanover Insurance Company (Hanover) filed a brief in support of Liberty Mutual's appeal of the December 4, 2017 judgment of the trial court granting summary judgment in favor of the St. Martin Economic Development Authority (SMEDA), thereby dismissing Liberty Mutual and Hanover's claims for flood damage to the building of their insured, Waukesha Pearce Industries, LLC (WPI). For the following reasons, we affirm.


         SMEDA is a Louisiana non-profit corporation created in 1994 to encourage economic growth in St. Martin Parish, Louisiana. In 2003, the St. Martin Parish Government (Parish), not SMEDA, received a grant from the U.S. Economic Development Agency that the Parish used to purchase a 160 acre tract of land to create a light industrial park in St. Martin Parish, later named the Highway 90 Industrial Park (the Park). WPI purchased Lot 21-A in the Park and constructed a building on Petroleum Parkway. On November 6, and 7, 2015, the WPI building located in the Park suffered flood damage, which was covered and paid for by its insurers, Liberty Mutual and Hanover.

         Prior to the flood damage to the WPI building, the Parish had acquired a right-of-way and entered into a construction contract in order to construct Petroleum Parkway, as well as other streets in the Park. SMEDA was neither a party to the contract to acquire the right-of-way nor to the construction contract for Petroleum Parkway.

         The Parish further contracted for the installation of the water and sewer lines in the Park, which ran parallel to and within twenty-five feet of Petroleum Parkway. The right-of-way for the water and sewer lines was also owned by the Parish and SMEDA was not a party to that contract either.

         Liberty Mutual and Hanover each filed petitions for damages against SMEDA, along with five other entities, alleging that these defendants were responsible for the flooding of the WPI building because "[t]he drainage and elevation system on or surrounding properties were negligently designed, created installed, and/or maintained" by the defendants. Both petitions alleged negligence and res ipsa loquitur against all defendants, including SMEDA. A joint motion to transfer and consolidate the two cases was filed and signed by the trial court.

         SMEDA filed a motion for summary judgment claiming that based on the pleadings, affidavits and evidence in the record, there is no genuine dispute as to material facts and it is entitled to judgment as a matter of law.[1] SMEDA's motion was ultimately heard by the trial court on November 3, 2017.

         SMEDA filed the affidavit of Fred H. Mills, Jr. in support of its motion. Mr. Mills is the President of SMEDA and also serves on its Board of Directors. Mr. Mills has served in both capacities since prior to 2005, and therefore had personal knowledge of the sale of Lot 21-A in the Park to WPI in 2007. SMEDA also filed an affidavit from Ms. Beth Guidry, the duly appointed Executive Director of SMEDA since October 31, 2001. During that time period, Ms. Guidry has served as SMEDA's only employee. The attestations contained in the two affidavits in support of the motion for summary judgment submitted by SMEDA were unopposed by Liberty Mutual and Hanover. Mr. Mills' affidavit provides that, "In connection with the installation of the streets as well as the water and sewer lines, neither SMEDA nor anyone acting on behalf of SMEDA performed any work which altered the contours or the surface of Lot 21-A [(later)] purchased by WPI." No dirt work was done by SMEDA on Lot 21-A and any dirt work done on any of the lots located in the Park was conducted by the Parish.

         Ms. Guidry attested in her affidavit that SMEDA did not own Lot 21-A or any other lot in the Park developed by the Parish. SMEDA bought the lot from the prior owner on May 18, 2007 and immediately sold Lot 21-A to WPI. Lot 21-A, consisted of 8.915 acres, as evidenced by the "Plat attached to the Act of Sale at Conveyance Book 1470, page 623, Entry No. 400116 of the Conveyance Records of St. Martin Parish."

         The above described Act of Sale, which was attached to Mr. Mills' affidavit, provided: "The above-described property is conveyed to the Purchaser 'as-is where is' without any warranties whatsoever as to fitness or condition." There have been no acts ...

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