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Blackmon v. Bracken Construction Co., Inc.

United States District Court, M.D. Louisiana

June 3, 2019

TED BLACKMON ET AL.
v.
BRACKEN CONSTRUCTION COMPANY ET AL.

          RULING AND ORDER

          BRIAN A. JACKSON JUDGE

         Before the Court is the Motion for Partial Summary Judgment (Doc. 136) filed by Plaintiffs Ted and Ruthie Blackmon. For the reasons that follow, the Motion (Doc. 136) is GRANTED IN PART and DENIED IN PART.

         I. BACKGROUND

         The Blackmons executed settlements resolving claims arising from a car accident. They contend that Defendants fraudulently induced them to execute the settlements. At issue is whether provisions in those settlements require the Blackmons to indemnify Defendants[1] against the Blackmons' fraud and bad-faith claims.[2]

         A head-on collision between a truck and a sedan on a two-lane highway claimed two lives. (Doc. 79). This suit arises from that collision and an insurer's efforts to settle the claims that resulted from it. (Id.).

         The collision occurred on June 15, 2016 near Mobile, Alabama. (Docs. 136-2 at ¶ 1; 143-1 at ¶ 1; 145-1 at ¶ 1). That day, Jhon Jaramillo drove a Dodge Ram pickup truck between Louisiana and Alabama for his employers, C3 Construction Services and Bracken Construction Company. (Id.). Around 3:55 P.M., Jaramillo's westbound Dodge Ram entered the eastbound lane and struck a Lexus sedan driven by Ted Blackmon and carrying two passengers, Shemika Robinson and Khance Blackmon. (Id.). The collision killed Khance Blackmon and Robinson; it injured Ted Blackmon. (Docs. 136-2 at ¶ 2; 143-1 at ¶ 2; 145-1 at ¶ 2).

         Less than six months later, Ted Blackmon executed a settlement releasing his claims for $20, 563.26. (Docs. 136-2 at ¶ 3; 143-1 at ¶ 3; 145-1 at ¶ 3). Ruthie Blackmon, as the representative for Khance Blackmon's estate, executed a settlement releasing the estate's claims for $650, 000. (Docs. 136-2 at ¶ 4; 143-1 at ¶ 4; 145-1 at ¶ 4). Other than the amounts paid in settlement, the terms of the settlements are the same. (Docs. 136-5, 136-6).

         The first paragraph of the settlements obliges the Blackmons to

release and forever discharge Jhon Evelio Jaramillo, C3 Construction Services, Inc., Bracken Construction Company, Inc., The Charter Oak Fire Insurance Company and Travelers Property Casualty Company of America, and (his/her/their/its) successors and assigns (hereafter "Releasee(s)") and any other person, corporation, association or partnership allegedly responsible for injuries to the person and/or property of the Releasors, and any other claims, demands, causes of action, damages, losses, judgments, actions, or lawsuits, known or unknown, anticipated or unanticipated against Releasee(s) as the result of an accident, incident, casualty or event (the "Incident") which occurred or is alleged to have occurred on June 15, 2016 on U.S. Hwy 9 in Mobile County, AL.

(Docs. 136-5 at p. 1; 136-6 at p. 1) (emphasis added).

         In the third paragraph, the Blackmons acknowledge that the "payment is full and final settlement of all claims for injuries and other damages incurred as a result of the Incident." (Docs. 136-5 at p. 1; 136-6 at p. 1) (emphasis added).

         The fourth paragraph contains an indemnification provision, which obliges the Blackmons to

indemnify the Releasee(s) in the event that Releasee(s) are obligated to make payment resulting from other lawsuits, liens or claims, asserted by any person or entity as a result of the Incident and for the cost incurred in defending same.

(Docs. 136-5 at p. 1; 136-6 at p. 1) (emphasis added).

         The seventh paragraph contains another indemnification provision, which obliges the Blackmons to

hold harmless, indemnify, and defend Releasee(s) with respect to any and all other claims that may be presented by Releasor(s), Medicare, and/or any other party acting on Releasor(s)' or Medicare's behalf, including, but not limited to, administrative or civil fines, penalties, and interest, as well as any damages that arise out of, result from, and/or occur as a consequence of any adverse administrative of legal actions, up to and including the loss of Releasor(s)' future Medicare benefits and/or Medicare eligibility.

(Docs. 136-5 at p. 2; 136-6 at p. 2) (emphasis added).

         Eighteen months after the collision, the Blackmons sued (1) the Insurer Defendants to rescind the settlements and recover damages for fraud and bad faith and (2) the Insured Defendants for negligence. (Doc. 1-2). The fraud, rescission, and bad-faith claims center on the allegation that the Insurer Defendants fraudulently induced the Blackmons to settle their claims arising from the collision by misrepresenting the amount of available insurance coverage. (Doc. 79). The negligence claims center on the allegation that the Insured Defendants caused the collision. (Id.).

         Defendants responded by tendering the suit to Ruthie Blackmon for defense and indemnity.[3] (Doc. 136-9) (Insurer Defendants); (Doc. 143-2) (Insured Defendants). In letters to Ruthie Blackmon, Defendants pointed to the seventh paragraph of the settlements and demanded that Ruthie Blackmon ...


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