United States District Court, W.D. Louisiana, Lafayette Division
B. Whitehurst, Magistrate Judge.
the Court is a Motion For Partial Summary Judgment and Motion
In Limine To Exclude Evidence of Collateral Sources
(“the Motions”), filed by Plaintiff, Offshore
Rental, LTD. (“Offshore Rental”) [Rec. Doc. 191].
Defendants, Hartford Fire Insurance Company
(“Hartford”), Louisiana Scrap International, Inc.
(“Louisiana Scrap”), and Southern Recycling,
L.L.C. all opposed the motion [Rec. Docs. 198, 212, and 218].
Plaintiff filed replies to each defendant's opposition.
[Rec. Docs. 223; 229; 231]. Oral argument was conducted by
the Court with Hartford, Louisiana Scrap and Southern Scrap
(collectively “Defendants”) on June 25, 2019. For
the reasons that follow the Court will deny the Motions.
Rental filed this action alleging that “prior to August
2015 and on numerous occasions in the months following,
” defendant, Travis Cormier, the former employee of
Offshore Rental, conspired with defendants, Anthony Harris
and Floyd Tolivour, (collectively “Individual
Defendants”) to misappropriate and transport Offshore
Rental's equipment (the “Property”) from its
facility in Golden Meadow, Louisiana to scrapyards in
Lafayette, Louisiana, owned and operated by Louisiana Scrap
and Southern Recycling. R. 60. In the Complaint, Plaintiff
further alleges that the defendant scrapyards and their
personnel took possession of the Property and converted it
for cash despite the fact that they knew or should have known
it did not belong to the Individual Defendants. Id.
Rental contends that the defendants violated the provisions
of Louisiana Scrap Metal Recyclers Law, La. R.S. 37:1961,
et seq., specifically alleging claims of Conversion,
and/or Unjust Enrichment against them. Id. Plaintiff
further contends it suffered damages totaling $2, 838, 618.53
in connection with the loss of the following Property: 114
cutting boxes, 19 offshore baskets, 2 basket containers, 4
grocery boxes, 2 single pallet boxes, and 85 slings. R. 41.
Plaintiff also seeks all interest, costs, and all other
relief to which it is entitled. R. 60.
on the evidence before the Court, The Modern Group, LTD.
(“The Modern Group”) procured an insurance policy
from Hiscox Insurance Company Inc. (the
“insurer”) to cover inter alia the loss
of property through theft for up to $5, 000, 000 less a $75,
000 deductible amount (“the Policy”). R.191-3,
Declaration of Anne Figuieras, Director of Security for
the Modern Group, Ltd. The Modern Group paid a premium
to the insurer for the coverage afforded by the Policy.
R.191- 3, Decl. of Figuieras. The Modern Group made
a claim under the Policy for the Property at issue.
Id. The insurer made an initial payment (less the
Policy's deducible amount) to The Modern Group on June
30, 2016. Id. An additional payment under the Policy
was made by the insurer to The Modern Group for an amount
totaling approximately $2, 100, 000. R. 212. On November 22,
2018, the insurer and The Modern Group executed a Claim
Release in which the insurer waived any subrogation rights
against The Modern Group. R. 213-3.
Rental filed the Motions before the Court, R. 191, contending
that “Offshore Rental (through one of its partners and
its parent entity) made a claim under [the Policy] which
included coverage for losses sustained by Offshore Rental due
to theft.” R. 191-1, p. 1. Offshore Rental
further contends that it “was paid money under the
terms of the Policy and ultimately reached a settlement with
[the insurer] to resolve the insurance claim.”
THE PARTIES CONTENTIONS
filed the instant motion for partial summary judgment stating
that the Court should rule that Defendants are not entitled
to any offset or credit against it under Louisiana's
Collateral Source Rule. Plaintiff also moves in limine to
exclude any evidence of collateral source from being
introduced by Defendants at the trial of this matter.
filed separate oppositions to Plaintiff's motions
asserting various arguments as to why the Court should deny
the Motions. At the oral argument Defendants indicated that
while they separately addressed specific defenses to avoid
duplicative arguments, each Defendant adopts all defenses.
argues that this case does not come within the Collateral
source rule because (1) the Policy contains a subrogation
clause transferring all recovery rights to the insurer; and,
(2) The Modern Group, not Plaintiff, paid the insurance
premium covering the Property, submitted the insurance claim
for damages allegedly resulting from the loss of the
Property, and received settlement payments from the insured
relating to the Property.
Scrap argues that the Collateral Source rule does not apply
because (1) the insurer made an initial payment of $1.39
million on June 30, 2016 without a waiver of subrogation,
and, therefore, Plaintiff's claim was assigned to the
insurer pursuant to the language in the Policy; and (2) the
application of collateral source to the insurance payment at
issue in this case fails to serve the two major policy goals
of the collateral source rule-tort deterrence and
discouraging double recovery; and (3) because Offshore Rental
did not pay for or suffer some diminution in its patrimony
for the benefit from the insurance payment, a windfall or
double recovery will result, contrary to the application of
the collateral source rule.
Recycling argues that (1) the exceptions to the collateral
source rule make the insurance payment admissible in this
case in order to: i. show Plaintiff's lack of
entitlement to damages (i.e. loss of income, loss of rental
proceeds and costs of replacing the Property), ii.
prove its affirmative defenses (i.e. failure to mitigate,
intervening and superseding cause, waiver, fault, latches
and/or estoppel), iii. show value of the Property,
and, iv. impeach Plaintiff's credibility; (2)
the application of collateral source to the insurance payment
at issue in this case will not further the major policy
goals-tort deterrence and discouraging a windfall; and (3)
the insurer received subrogation rights in the insurance
payment pursuant to the subrogation provision in the Policy
and the Collateral source rule is inapplicable.