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Nucor Steel Louisiana, LLC v. Zurich American Insurance Co.

Court of Appeals of Louisiana, Fifth Circuit

January 9, 2020

NUCOR STEEL LOUISIANA, LLC AND NUCOR CORPORATION
v.
ZURICH AMERICAN INSURANCE COMPANY, ET AL. IN RE NUCOR STEEL LOUISIANA, LLC AND NUCOR CORPORATION

          APPLYING FOR SUPERVISORY WRIT FROM THE TWENTY-THIRD JUDICIAL DISTRICT COURT, PARISH OF ST JAMES, STATE OF LOUISIANA, DIRECTED TO THE HONORABLE KATHERINE TESS STROMBERG, DIVISION "C", NUMBER 37, 964

          Panel composed of Judges Susan M. Chehardy, Jude G. Gravois, and John J. Molaison, Jr.

         WRIT GRANTED; JUDGMENT REVERSED; REMANDED.

         In this writ application, relators, Nucor Steel Louisiana LLC and Nucor Corporation (collectively "Nucor') seek this Court's supervisory review of the trial court's ruling granting a partial summary judgment in favor of respondents, Lexington Insurance Company, ACE American Insurance Company, Aspen Specialty Insurance Company, Axis Insurance Company Policy, Certain Underwriters at Lloyd's, London subscribing to Policy No. AJY100809D13, Certain Underwriters at Lloyd's, London subscribing to Policy No. DP960613, Certain Underwriters at Lloyd's, London subscribing to Policy No. DP940313, General Security Indemnity Company at Arizona, Liberty Mutual Fire Insurance Company, Liberty Surplus Insurance Corporation, Tokio Marine and Nichido Fire Insurance Company, Ltd. Policy No. LCP648001-01, Starstone Specialty Insurance Company (f/k/a Torus Specialty Insurance Company), Westport Insurance Corporation Policy No. 31-3-75521, and Zurich American Insurance Company (collectively "Property Insurers"). For the following reasons, we grant this writ application, reverse the partial summary judgment rendered in favor of Property Insurers, and remand to the trial court for further proceedings.

         Facts and Procedural History

         This dispute concerns the rights and obligations of Nucor and Property Insurers under insurance contracts to be interpreted under North Carolina law.[1]

         Nucor, based in North Carolina, is a manufacturer of steel and steel products. In 2011, Nucor began construction of a direct reduced iron ("DRI") processing facility in Convent, Louisiana (the "Convent Site"). In May 2011, Nucor contracted with Dome Technology, Inc. to construct three iron ore storage domes at the Convent Site. Nucor entered into several insurance contracts related to its Louisiana Convent Site: namely, a Builder's Risk policy designed to provide coverage for losses arising during the course of construction and testing of the facility, and an all-risk property policy referred to as Nucor's Property Insurance Program. In September 2013, before completion of the facility and before any of the domes had been fully loaded, one of the domes collapsed. The collapse allegedly destroyed the dome, its associated systems, and a substantial amount of the iron ore pellets stored therein. In February 2017, Nucor filed suit against the various insurers seeking coverage under the policies for the losses it sustained as a result of the dome collapse.[2] Property Insurers reconvened seeking a declaration that the Convent Site was not covered under the Property Insurance Program because the facility had not been 100% accepted by Nucor as of the date of loss. Alternatively, Property Insurers sought equitable reformation of the policies on the basis that the parties labored under a mutual mistake.

         Nucor and Property Insurers filed cross motions for partial summary judgment each seeking to enforce the plain language of the insurance contracts, with each party arguing that the subject language was consistent with the parties' mutual intent as to insurance coverage for the Convent Site. The specific policy language at issue provides that the Convent Site would be added to the Property Insurance Program "effective the latter of April 15, 2013 or when the project is 100% accepted by the Named Insured, but not to surpass July 15, 2013."

         The matter came for hearing on the parties' cross motions on December 13, 2018. At the close of the hearing, the trial judge took the matter under advisement and ordered a briefing schedule. On February 22, 2019, the trial court issued judgment, with written reasons, granting Property Insurers' motion for partial summary judgment and denying Nucor's motion for partial summary judgment, holding that the property policies comprising the 2013 Nucor Property Insurance Program did not cover the Convent Site at the time of the 2013 dome collapse. Specifically, the trial court held that the "100% accepted" policy language was clear and unambiguous that coverage for the Convent Site would not attach until the dome construction was complete and Nucor accepted 100% of the work.[3]Nucor seeks review of that ruling.[4]

          Legal Analysis

         Appellate courts review a judgment granting or denying a motion for summary judgment de novo, asking the same questions as the trial court to determine whether summary judgment is appropriate. Champagne v. Ward, 03-3211 (La. 1/19/05), 893 So.2d 773, 776; Mealy v. Lopez, 16-77 (La.App. 5 Cir. 5/26/16, 193 So.3d 539, 542. Specifically, an appellate court must determine whether any genuine issues of material fact exist and whether the mover is entitled to judgment as a matter of law. La. C.C.P. art. 944(A)(3). A fact is "material" if it potentially insures or precludes recovery, affects a litigant's ultimate success, or determines the outcome of a legal dispute. Smith v. Our Lady of the Lake Hosp., Inc., 93-2512 (La. 7/5/94), 639 So.2d 730, 751. An issue is "genuine" if it is such that reasonable persons could disagree. Summary judgment is not appropriate unless only one conclusion could be reached by reasonable persons. Foster v. Pinnacle Entm't, Inc., 16-8 (La.App. 5 Cir. 4/27/16), 193 So.3d 288, 294. In determining whether there are any genuine issues of material fact, courts cannot consider the merits, make credibility determinations, evaluate testimony, or weigh evidence. Boros v. Lobell, 15-55 (La.App. 5 Cir. 9/23/15), 176 So.3d 689, 693.[5]

         The interpretation of and application of insurance policy provisions to undisputed facts is a question of law that can properly be resolved on a motion for summary judgment. Integon Nat. Ins. Co. v. Phillips, 212 N.C.App. 623, 625, 712 S.E.2d 381, 383 (2011); McGuire v. Draughon, 170 N.C.App. 422, 424-25, 612 S.E.2d 428, 430 (2005). However, a summary judgment declaring lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence in support of the motion for summary judgment, under which coverage could be afforded. Davis v. Scottsdale Ins. Co., 13-255 (La.App. 5 Cir. 10/30/13), 128 So.3d 471, 475-77.

         Under North Carolina law, it is a "well-established principle that 'an insurance policy is a contract and its provisions govern the right and duties of the parties thereto, '" and should be construed in accordance with the intentions of the parties. Gaston County Dyeing Machine Co. v. Northfield Ins. Co., 351 N.C. 293, 299-300, 524 S.E.2d 558, 563 (2000) (quoting Fidelity Bankers Life Ins. Co. v. Dortch, 318 N.C. 378, 380, 348 S.E.2d 794, 796 (1986)). "The various terms of the policy are to be harmoniously construed, and if possible, every word and every provision is to be given effect … [I]f the meaning of the policy is clear and only one reasonable interpretation exists, the courts must enforce the contract as written; they may not, under the guise of construing an ambiguous term, rewrite the contract or impose liabilities on the parties not bargained for and found therein." Gaston County, 351 N.C. at 299-300, 524 S.E.2d at 563 (quoting Woods v. Nationwide Mut. Ins. Co., 295 N.C. 500, 505-06, 246 S.E.2d 773, 777 (1981). No ambiguity exists in a contract unless the court finds that the language of the policy is fairly and reasonably susceptible to either of the constructions for which the parties contend. Wachovia Bank & Trust Co. v. Westchester Fire Insurance Co., 276 N.C. 348, 354172 S.E.2d 518, 522 (1970). As in other contracts, the goal of construction of terms in the insurance policy is to arrive at the insurance coverage intended by the parties when the policy was issued. Id.

         Upon de novo review of the documentation submitted in support and in opposition to Property Insurers' partial motion for summary judgment on the issue of coverage for the Convent Site under the 2013 Nucor Property Insurance Program, we find that genuine issues of material fact exist that preclude granting partial summary judgment at this stage of the litigation. Specifically, we find the particular policy language that the Convent Site would be added to the Property Insurance Program "effective the latter of April 15, 2013 or when the project is 100% accepted by the Named Insured, but not to surpass July 15, 2013" [emphasis added] is fairly and reasonably susceptible to either of the constructions proposed by Nucor and the Property Insurers. The Property Insurers contend, and the trial court agreed, that the policy language is clear and unambiguous "in that the Convent [S]ite would not be added to the Property Insurance Program until it was [completed and] 100% accepted by Nucor." Because it is ...


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