APPEAL FROM THE FORTIETH JUDICIAL DISTRICT COURT PARISH OF
ST. JOHN THE BAPTIST, STATE OF LOUISIANA NO. 68, 458 C/W 68,
849, DIVISION "C" HONORABLE J. STERLING SNOWDY,
COUNSEL FOR PLAINTIFF/APPELLANT, CARDELL ELLIS George R.
COUNSEL FOR PLAINTIFF/APPELLEE-2ND APPELLANT, TRANSMISSIAN
DAVIS W. Paul Wilkins, David H. Hanchey
COUNSEL FOR DEFENDANT/APPELLEE, ASPEN SPECIALITY INSURANCE
COMPANY, James M. Garner, Debra J. Fischman, Stuart D. Kottle
composed of Judges Jude G. Gravois, Marc E. Johnson, and John
J. Molaison, Jr.
J. MOLAISON, JR. JUDGE
consolidated personal injury actions brought by the driver
and a guest passenger in a vehicle that was struck by a truck
owned by Water Works Industrial Services, LLC ("Water
Works"), plaintiffs appeal a judgment dismissing their
claims against Aspen Specialty Insurance Company
("Aspen") after a pre-trial evidentiary hearing to
determine whether the policy limits of the policy underlying
Aspen's excess coverage were exhausted, a condition
precedent to Aspen's liability. The trial court found
that coverage under the excess policy was not triggered
because Water Works' automobile liability policy was not
listed as an underlying policy in the excess policy. For the
following reasons, we reverse the trial court judgment and
remand the matter for further proceedings.
and Procedural History
background facts are undisputed. The accident occurred in St.
John the Baptist Parish on January 16, 2015, when a vehicle
being driven by plaintiff Tramissian Davis, in which
plaintiff Cardell Ellis and another person were guest
passengers, was struck by a truck being driven by Heath
McDonald, a Water Works employee in the course and scope of
his employment. Davis, Ellis and the other guest passenger
were injured in the accident.
in 2015, Davis and Ellis filed separate lawsuits against
McDonald, Water Works, and State National Insurance Company
("State National"), Water Works' automobile
liability insurer, for damages resulting from the accident.
Davis also sued his uninsured motorist carrier, State Farm.
The suits were consolidated.
2016, Aspen was named as a defendant by both plaintiffs, who
alleged that Aspen provided excess automobile liability
coverage to Water Works for the accident. Aspen filed answers
with affirmative defenses and exceptions in both cases. Aspen
averred that its insurance policy contained the best evidence
of its terms, conditions, coverages and exclusions. Aspen did
not assert that the State National policy was not a valid
underlying policy despite the fact that Peerless Indemnity
Insurance Company ("Peerless"), the underlying
automobile liability insurer listed in Aspen's policy,
was not named as a defendant in either lawsuit.
2017, plaintiffs dismissed their claims against State
National with prejudice after State National paid its policy
limits of $1, 000, 000 to settle the claims of Davis, Ellis
and the other guest passenger. In the motion and order to
dismiss, plaintiffs reserved their rights against McDonald,
Water Works and Aspen, with the stipulation that the
reservation of rights as to McDonald and Water Works was
"only to the extent that those parties have valid and
collectible insurance with Aspen Specialty Insurance Company
or any other insurer except State National Insurance Company,
trial was set for October 2017. Shortly after the trial date
was set, Aspen sought leave to file a motion for summary
judgment on the issue of whether the underlying liability
coverage was exhausted in light of the fact that the excess
policy listed Peerless, and not State National, as the
underlying carrier. The trial court found the motion to be
untimely under La. C.C.P. art. 966(B)(1) because it was filed
less than 65 days before trial, but held an evidentiary
hearing on the substance of the motion in advance of the jury
reasons discussed in more detail below, the trial court found
that the underlying automobile liability coverage was not
exhausted, and that Aspen was not liable to plaintiffs,
because State National's policy was not listed as an
underlying policy in Aspen's excess policy and the
Peerless policy that was listed as an underlying policy was
cancelled by Water Works before the date of the accident.
With respect to each plaintiff, the trial court dismissed the
claims against Aspen and also dismissed "this
filed a motion for new trial, which the trial court denied.
Both plaintiffs appealed the judgment, assigning as error the
trial court's ruling on the excess coverage issue and its
dismissal of the entire case when the only issue before the
court concerned the liability of one defendant, Aspen. The
trial court stayed the proceedings pending appellate review
of the judgment of dismissal.
Works purchased the Aspen excess insurance policy with an
initial policy period of 1/1/14 to 1/1/15. The policy
provided additional coverage to Water Works if an underlying
policy listed in the Aspen policy paid its policy limits. The
schedule of underlying policies in the Aspen policy included
an Aspen General Liability and Environmental Exposure policy,
a LUBA worker's compensation policy, and the Peerless
automobile liability policy. The required underlying coverage
limit for the Peerless policy was a combined single limit of
$1, 000, 000. The maximum coverage available under the excess
policy was $5, 000, 000.
Works purchased a Peerless automobile liability policy with
an initial policy period of 1/1/14 to 1/1/15 and a combined
single loss limit of $1, 000, 000. The policy remained in
effect for all of 2014 and was automatically renewed for the
following year, 1/1/15 to 1/1/16. However, Water Works did
not pay the renewal premium. Water Works asked Peerless to
cancel the policy "flat," effective January 1,
2015, which Peerless did on January 15, 2015.
Works purchased an automobile liability policy from State
National for the policy period 1/1/15 to 1/1/16, with a
combined single loss limit of $1, 000, 000, but did not
notify Aspen of this or ask Aspen to list the State National
policy in place of the Peerless policy in Aspen's
schedule of underlying policies. There was no lapse in
coverage because the State National policy took effect on
January 1, 2015, the same date upon which the cancellation of
the Peerless policy took effect.
accident occurred on January 16, 2015. All three insurance
policies in question-the Peerless policy, the State National
policy and the Aspen policy- were introduced in evidence at
the hearing on the coverage issue.
Provisions in Excess Policy
insuring agreement in Aspen's policy stated:
CLAUSE I. INSURING AGREEMENT
The Insurer will pay on the Insured's behalf
ultimate net loss (resulting from bodily
injury, property damage, personal injury, advertising injury,
environmental damage, emergency response costs, clean-up
costs or loss) in excess of, and not in contribution with,
the underlying policies. Except as otherwise
provided in this Policy, this Policy shall follow all
provisions, exclusions, limitations, and all other terms and
conditions of the followed policy. In the
event of a conflict between this Policy and the
followed policy, this Policy shall govern
and control. Notwithstanding any other provision of this
Policy, in no event shall this Policy grant broader coverage
than that provided to the Insured under any
of the underlying policies.
appearing in boldface are defined in the policy. The term
"followed policy" is defined as the policy
identified in Item 8 of the Declarations and the term
"underlying policies" is defined as the followed
policy and all policies set forth in Item 9 of the
Declarations. The Peerless policy appears only in Item 9 of
the Declarations. It is not the followed policy, but it is an
Aspen policy further provides:
CLAUSE IV. EXCLUSIONS
Notwithstanding anything herein to the contrary, this Policy
shall not apply to any coverage provided in any of the
underlying policies to which this Policy
would otherwise respond that ...