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McGehee v. Wal-Mart Louisiana LLC

United States District Court, W.D. Louisiana, Lake Charles Division

October 25, 2019

PAIGE PORTIER MCGEHEE, INDIVIDUALLY AND ON BEHALF OF THE MINOR CHILDREN, COOPER JAMES MCGEHEE AND RAYMOND JAMES MCGEHEE, IV
v.
WAL-MART LOUISIANA LLC ET AL

          KAY MAGISTRATE JUDGE.

          MEMORANDUM RULING

          JAMES D. CAIN, JR. JUDGE.

         Before the Court is "AGCS Marine Insurance Company's Motion for Summary Judgment" (Doc. 47) wherein third-party defendant, AGCS Marine Insurance Company ("AGCS") moves for summary judgment seeking the dismissal of Wal-Mart Louisiana, LLC and Wal-Mart Stores, Inc.'s ("Wal-Mart") third-party demand against it. AGCS maintains that the terms of its additional insured coverage are not met due to Louisiana's Construction Anti-Indemnity Statute ("LCAIS"). For the following reasons, the motion will be denied.

         FACTUAL STATEMENT

         AGCS provided a general insurance policy to Sealand[1] which afforded Sealand insurance coverage for bodily injury and property damage from February 20, 2016 to February 20, 2017. The policy contained a Blanket Additional Insured provision which stated that "this policy shall include as additional insureds any person or organization to whom the named insured has agreed by contract or agreement to provide coverage[.]"[2] Pursuant to a Master Services Agreement ("MSA"), Sealand as the named insured of the AGCS policy, agreed to maintain insurance coverage and name Wal-Mart and all subsidiaries and affiliates as additional insureds, including defense coverage.[3] In its answer to the third party demand, Sealand has declined to defend, indemnify, and hold harmless the Wal-Mart Defendants.[4]

         Through the MSA, Sealand and Wal-Mart entered a contract for services wherein Sealand contracted to provide services to Wal-Mart.[5] In conjunction with a service request to Sealand from Wal-Mart, an accident occurred that resulted in bodily injury and death of a Sealand employee at a Wal-Mart Store in Lake Charles, Louisiana.

         In this lawsuit, Wal-Mart has filed a third-party demand against Sealand and its insurer AGCS seeking defense and indemnification for the accident.

         SUMMARY JUDGMENT STANDARD

         A court should grant a motion for summary judgment when the movant shows "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56. The party moving for summary judgment is initially responsible for identifying portions of pleadings and discovery that show the lack of a genuine issue of material fact. Tubacex, Inc. v. M/VRisan, 45 F.3d 951, 954 (5th Cir. 1995). The court must deny the motion for summary judgment if the movant fails to meet this burden. Id.

         If the movant makes this showing, however, the burden then shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quotations omitted). This requires more than mere allegations or denials of the adverse party's pleadings. Instead, the nonmovant must submit "significant probative evidence" in support of his claim. State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249 (citations omitted).

         A court may not make credibility determinations or weigh the evidence in ruling on a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). The court is also required to view all evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Clift v. Clift, 210 F.3d 268, 270 (5th Cir. 2000). Under this standard, a genuine issue of material fact exists if a reasonable trier of fact could render a verdict for the nonmoving party. Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008).

         LAW AND ANALYSIS

         Relying on an exemption in the LCAIS, AGCS maintains that because Wal-Mart did not pay or reimburse Sealand for insurance premiums, Wal-Mart is not entitled to defense and indemnity. AGCS argues that it is entitled to a declaration that Wal-Mart is not an additional insured on its policy of insurance issued to Sealand because the insurance requirements in the MSA that would trigger that coverage are void and unenforceable under Louisiana Revised Statute 9:2780.1.[6] The portion of the LCAIS which prohibits indemnification provides as follows:

B. Notwithstanding any provision of law to the contrary and except as otherwise provided in this Section, any provision, clause, covenant, or agreement contained in, collateral to, or affecting a ... construction contract which purports to indemnify, defend, or hold harmless, or has the effect of indemnifying, defending, or holding harmless, the indemnitee from or against any liability for loss or damage resulting from the negligence or intentional acts or omissions of the indemnitee, an agent or employee of the indemnitee, or a third party over which the indemnitor has no control is contrary to the public policy of this state and is null, void and unenforceable.
C. Notwithstanding any provision of law to the contrary and except as otherwise provided in this Section, any provision, clause, covenant, or agreement contained in, collateral to, or affecting a ... construction contract which purports to require an indemnitor to procure liability insurance covering the acts or omissions of a third party over whom the indemnitor has no control is null, void, and unenforceable. However, nothing in this Section shall be construed to prevent the indemnitee from requiring the indemnitor to provide proof of insurance for obligations covered by the contract.

         AGCS asserts that the LCAIS applies to the MSA because it is a construction contract. AGCS relies on the definition of "construction contract" provided in the statute as follows:

(2)(a) "Construction contract" shall mean any agreement for the design, construction, alteration, renovation, repair, or maintenance of a building, structure, highway, road, bridge, water line, sewer line, oil line, gas line, appurtenance, or other improvement to real property, or easement, license, or other instrument granting an interest in or the right to possess property will be deemed to be a construction contract even if the instrument includes the right to design, construct, alter, renovate, repair, or maintain improvements on such real property.

         AGCS suggests that the MSA between Wal-Mart and Sealand did not obligate Wal-Mart for payment or reimbursement of insurance premiums. AGCS relies on the following provisions in the policy and the MSA regarding additional insureds:

1. Blanket Additional Insureds
In consideration of the premium charged, it is agreed that this policy shall include as additional insureds any person or organization to whom the named insured has agreed by contract or agreement to provide coverage, but only with respect to operations performed by or on behalf of the named insured and only with ...

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