Walton Construction - A Core Company v. First Financial Insurance Company

Filing 26

ORDER AND REASONS - the Court DENIES Walton's motion for summary judgment and GRANTS First Financial's motion for summary judgment.. Signed by Chief Judge Sarah S. Vance on 3/12/15. (jjs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
WALTON CONSTRUCTION – A CORE
COMPANY, LLC,

CIVIL ACTION

VERSUS

NO: 14-1781

FIRST FINANCIAL INSURANCE COMPANY

SECTION: R(2)

ORDER AND REASONS
This insurance coverage dispute concerns a commercial
general liability policy issued by defendant First Financial
Insurance Company.

Plaintiff Walton Construction seeks a

declaration that the policy affords it "additional insured"
coverage in an underlying state court tort suit.

First Financial

seeks a declaration that it has no duty to defend or indemnify
Walton.

The parties have filed cross motions for summary

judgment.1

For the following reasons, the Court denies Walton's

motion and grants First Financial's motion.

I. BACKGROUND
This insurance coverage dispute arises out of a personal
injury lawsuit brought by John Maestri against Entergy Louisiana,
LLC, in Louisiana state court.
understand the underlying suit.

Only a few facts are necessary to
Entergy is a power company.

Maestri worked in construction for A-1 Glass Service, Inc., a

1

R. Doc. 9 (First Financial); R. Doc. 14 (Walton).

commercial glazier.

A-1 worked as a subcontractor to Walton on a

construction project for the Jefferson Parish School Board.

In

March 2012, while Maestri was installing glass as part of that
project, an Entergy high-voltage power line electrocuted him,
burning his arms, chest, and hands.
Maestri sued Entergy for his injuries.

After Maestri sued

Entergy, Entergy filed a third-party complaint against A-1 and
Walton, alleging that the companies had violated the Louisiana
Overhead Power Line Safety Act, La. Rev. Stat. §§ 45:141–146, by
failing to give Entergy advance notice that their workers would
be working in close proximity to its power lines.

Entergy argues

that under section 144 of the Act, A-1 and Walton are liable to
Entergy for any damages that Entergy must pay to Maestri.
Section 144 provides:
If a violation of this Chapter results in physical or
electrical contact with any high voltage overhead line,
the person violating this Chapter shall be liable to the
owner or operator of the high voltage overhead line for
all damages, costs, or expenses incurred by the owner or
operator as a result of the contact.
Walton seeks to recover from First Financial the costs it has
expended so far to defend against Entergy's third-party
complaint.

It also seeks a declaration that First Financial has

an ongoing duty to defend and indemnify Walton against Entergy's
third-party complaint.
The parties agree on the following facts about the policy at
issue in these motions.

First Financial issued commercial
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general liability Policy No. HGL0028059, with a policy period of
July 1, 2011 to July 1, 2012, to A-1 as the named insured.2

A-

1's contract with Walton for the School Board project specified
that A-1 would "purchase and maintain insurance," including
commercial general liability insurance, that would "name
Walton . . . as [an] additional insured[] with regard to the
specified project."3
The policy’s Insuring Agreement provides, in relevant part:
We will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily
injury” . . . to which this insurance applies. We will
have the right and duty to defend the insured against any
“suit” seeking those damages. However, we will have no
duty to defend the insured against any “suit” seeking
damages for “bodily injury” . . . to which this insurance
does not apply.4
The policy contains an endorsement allowing for the inclusion of
"additional insureds" by contract.

That endorsement provides, in

relevant part:
Who Is An Insured is amended to include as an additional
insured any . . . organization[] with whom you agreed,
because of a written contract . . . to provide insurance
such as is afforded under this Coverage Part, but only:

2

R. Doc. 16-1 at 1 (First Financial Statement of
Material Facts); R. Doc. 17-1 at 1 (Walton Response to Statement
of Material Facts).
3

R. Doc. 14-4 at 2 (Walton Statement of Material Facts);
R. Doc. 16-1 at 1-2 (First Financial Response to Statement of
Material Facts); R. Doc. 14-2 at 12, 36 (A-1 contract with
Walton).
4

R. Doc 1-3 at 17 (policy).
3

1.

With respect to liability for “bodily injury” . . .
caused by “your work” or maintenance, operations or
use of facilities owned or used by you; and
When such written contract . . . is fully executed
prior to an “occurrence” in [sic] which coverage is
sought under this policy.5

2.

The policy also contains an endorsement adding a "cross
liability" exclusion.

That exclusion provides, in relevant part,

that the policy "does not apply to any actual or alleged 'bodily
injury' . . . to . . . [an] employee of any insured."6

The

parties agree that Maestri was A-1's employee on the date of the
accident.7

First Financial now moves for summary judgment on

Walton's claims for defense and indemnity on the ground that the
cross-liability exclusion unambiguously excludes Walton's claims.
II. STANDARD
Summary judgment is warranted 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(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.
1994).

When assessing whether a dispute as to any material fact

exists, the Court considers “all of the evidence in the record
but refrain[s] from making credibility determinations or weighing

5

Id. at 26.

6

Id. at 28.

7

R. Doc. 9-4 at 1; R. Doc. 17-1 at 1.
4

the evidence.”

Delta & Pine Land Co. v. Nationwide Agribusiness

Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008).

All reasonable

inferences are drawn in favor of the nonmoving party, but
“unsupported allegations or affidavits setting forth ‘ultimate or
conclusory facts and conclusions of law’ are insufficient to
either support or defeat a motion for summary judgment.”

Galindo

v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); see
also Little, 37 F.3d at 1075.
If the dispositive issue is one on which the moving party
will bear the burden of proof at trial, the moving party “must
come forward with evidence which would ‘entitle it to a directed
verdict if the evidence went uncontroverted at trial.’”

Int’l

Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1264-65 (5th
Cir. 1991).

The nonmoving party can then defeat the motion by

either countering with evidence sufficient to demonstrate the
existence of a genuine dispute of material fact, or “showing that
the moving party’s evidence is so sheer that it may not persuade
the reasonable fact-finder to return a verdict in favor of the
moving party.”

Id. at 1265.

If the dispositive issue is one on which the nonmoving party
will bear the burden of proof at trial, the moving party may
satisfy its burden by merely pointing out that the evidence in
the record is insufficient with respect to an essential element
of the nonmoving party's claim.

See Celotex, 477 U.S. at 325.

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The burden then shifts to the nonmoving party, who must, by
submitting or referring to evidence, set out specific facts
showing that a genuine issue exists.

See id. at 324.

The

nonmovant may not rest upon the pleadings, but must identify
specific facts that establish a genuine issue for trial.

See,

e.g., id.; Little, 37 F.3d at 1075 ("Rule 56 'mandates the entry
of summary judgment, after adequate time for discovery and upon
motion, against a party who fails to make a showing sufficient to
establish the existence of an element essential to that party's
case, and on which that party will bear the burden of proof at
trial.'" (quoting Celotex, 477 U.S. at 322)).

III. DISCUSSION
The parties agree that Louisiana law governs this case.

In

Louisiana, an insurance policy "should be construed by using the
general rules of interpretation of contracts set forth in the
Civil Code."

La. Ins. Guar. Ass'n v. Interstate Fire & Cas. Co.,

630 So. 2d 759, 763 (La. 1994).

"The judicial responsibility in

interpreting insurance contracts is to determine the parties'
common intent."

Id. (citing La. Civ. Code art. 2045).

If the

words of the contract are "clear and explicit and lead to no
absurd consequences," the plain meaning of the contract prevails,
and "no further interpretation may be made in search of the
parties' intent."

La. Civ. Code art. 2046; id. art. 2047 (words

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of a contract should be given their "generally prevailing
meaning," unless the words have acquired a technical meaning).
If there is ambiguity in an insurance policy, the ambiguity
must be resolved in favor of the insured.

La. Ins. Guar. Ass'n,

630 So.2d at 764; see also La. Civ. Code art. 2056 ("A contract
executed in a standard form of one party must be interpreted, in
case of doubt, in favor of the other party.").

This rule of

strict construction should be applied only if the contract is
actually ambiguous; it “does not authorize a perversion of
language, or the exercise of inventive powers for the purpose of
creating ambiguity where none exists.”

Reynolds v. Select

Props., Ltd., 634 So. 2d 1180, 1183 (La. 1994) (quoting Union
Ins. Co. v. Advance Coating Co., 351 So. 2d 1183, 1185 (La.
1977)); see also La. Ins. Guar. Ass'n, 630 So. 2d at 764 ("When
the language of an insurance policy is clear, courts lack the
authority to change or alter its terms under the guise of
interpretation.").

Moreover, "insurance companies have the right

to limit coverage in any manner they desire, so long as the
limitations do not conflict with statutory provisions or public
policy.” Reynolds, 634 So. 2d at 1183.
With these principles in mind, the Court turns to the policy
at issue in these motions.

The policy provides coverage for

“bodily injury” to which the insurance applies but excludes
coverage for “bodily injury” to an "employee of any insured."

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The parties do not dispute that Maestri was the employee of A-1.
Nor do they dispute that A-1 was the named insured under the
policy.

Thus, First Financial is correct: since Maestri was the

employee of an insured, the policy categorically excludes
coverage for damages for his bodily injuries.

Walton's claims

are not covered.
Walton attempts to evade the straightforward language of the
cross-liability exclusion by characterizing the damages sought by
Entergy not as damages for Maestri's bodily injuries, but as
damages for Walton's "alleged violations of the [Power Lines
Act]."8

Walton is wrong.

Louisiana Revised Statute § 45:144

allows Entergy to recover its damages from a party that violates
the statute if the violation results in "physical or electrical
contact with any high voltage overhead line," and Entergy incurs
"damages, costs, or expenses" as a result.

Here, the damages

that Entergy may incur--and thus the damages it seeks from
Walton--are damages for Maestri's physical injuries.

See Moreno

v. Entergy Corp., 79 So. 3d 406, 412 (La. Ct. App. 2011)
(rejecting a similar attempt by an insured to characterize
damages sought by Entergy under the Act as damages for its
"contingent liability" under the Act, rather than damages for
"physical injury"), rev'd in part on other grounds, 105 So. 3d 40
(La. 2012).

8

Because the damages for which Walton may be liable

R. Doc. 17 at 9; R. Doc. 23 at 6.
8

are damages for bodily injury to the employee of an insured, the
policy does not cover the damages.
Moreover, even if Walton were right that Entergy's claims
against it could be characterized as damages for Walton's
statutory violation, then Walton's claim would not be covered for
a different reason: the policy covers damages for "physical
injury" (and also "property damage"), not damages for statutory
violations.

Thus, from either angle, this argument fails.

Walton also makes an elaborate argument based on an
unpublished Louisiana trial court opinion interpreting a
different policy exclusion (an "Employer Liability" exclusion) in
a different policy.9

The Court finds the opinion's cursory

treatment of a differently worded policy exclusion unhelpful.

In

addition, this Court is under no duty to defer to state court
trial opinions.

See Tradewinds Envtl. Restoration, Inc. v. St.

Tammany Park, LLC, 578 F.3d 255, 261 n.4 (5th Cir. 2009)) ("[A]
federal court need not defer to state trial court decisions,
particularly when they are unpublished." (citing Roecker v.
United States, 379 F.2d 400, 406 (5th Cir. 1967)).

The

unreported decision does not change the result dictated by the
straightforward language of the policy and the cross-liability
exclusion.

9

Because the damages sought by Walton are entirely

See R. Doc. 14-1 at 8-10; R. Doc 17 at 7-11; R. Doc. 23

at 2-6.
9

excluded under the policy, First Financial has no duty to defend
or indemnify Walton against Entergy's third-party complaint in
the underlying suit.
IV. CONCLUSION
For the foregoing reasons, the Court DENIES Walton's motion
for summary judgment and GRANTS First Financial's motion for
summary judgment.

New Orleans, Louisiana, this 12th day of March, 2015.
__
_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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