Housing Authority of New Orleans v. Landmark American Insurance Company
Filing
23
OPINION: Ordered that the 12 MOTION for Summary Judgment filed by Landmark American Insurance Company is Granted in Part and Denied in Part. Further Ordered that the 14 MOTION for Partial Summary Judgment filed by Housing Authority of New Orleans is Denied. Signed by Judge Ivan L.R. Lemelle.(ijg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HOUSING AUTHORITY OF NEW ORLEANS
CIVIL ACTION
VERSUS
NO. 15-1080
LANDMARK INSURANCE COMPANY
SECTION "B"(5)
OPINION
Before the Court are cross-motions for summary judgment.
Landmark American Insurance Company (hereinafter “Landmark” or
“Defendant”) filed a motion for summary judgment on January 11,
2016. Rec. Doc. 12. Thereafter, Plaintiff, the Housing Authority
of New Orleans (hereinafter “HANO” or “Plaintiff”), filed an
opposition (Rec. Doc. 17), and Landmark filed a reply brief. Rec.
Doc. 22. HANO also filed a motion for partial summary judgment on
January 15, 2016. Rec. Doc. 14. Landmark then filed an opposition
thereto. Rec. Doc. 16. For the reasons outlined below,
IT IS ORDERED that Landmark’s motion for summary judgment is
GRANTED IN PART and DENIED IN PART.
IT IS FURTHER ORDERED that HANO’s motion for summary judgment
is DENIED.
I.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
At issue in this litigation is the coverage of a Directors’
and Officers’ Liability Policy (hereinafter “the Landmark policy”)
issued by Landmark to HANO on November 1, 2005. Rec. Doc. 14-2 at
1
2. However, this case’s roots go back to the aftermath of Hurricane
Katrina.
1. History of this Litigation
In an earlier case before this section of the Court, Yolanda
Anderson and additional plaintiffs sued HANO and the Department of
Housing and Urban Development (“HUD”), among others, due to the
demolition of the “the Big Four”1 public housing developments in
New Orleans after Katrina (hereinafter “the Anderson litigation”).2
On January 18, 2012, this Court dismissed that case after the
parties reached a settlement agreement.
On March 2, 2015, HANO filed the instant suit against Landmark
in the Civil District Court for the Parish of Orleans alleging
that it requested defense and indemnity from Landmark under the
policy for the claims raised in the Anderson litigation. Rec. Doc.
1-4 at 1. On April 6, 2015, Landmark removed the action based on
diversity of citizenship. Rec. Doc. 1. Subsequently, the case was
transferred
to
this
section
of
the
Court
because
of
its
relationship to the Anderson litigation. Rec. Doc. 18.
HANO’s petition claims that Landmark acknowledged the request
for defense and indemnity early on in the Anderson litigation and
advised that it “would defend under reservation of rights.” Rec.
Doc. 1-4 at 1-2. Additionally, HANO claims that, in December of
The Big Four included the B.W. Cooper, the C.J. Peete, the Lafitte, and the
St. Bernard developments.
2 See Yolanda Anderson, et al. v. Alfonso Jackson, et al, Civ. A. No. 06-3298.
1
2
2006, Landmark confirmed that there “appears to be coverage” for
certain claims brought against HANO in the Anderson action. Rec.
Doc. 1-4 at 2. However, approximately three years later, Landmark
refused further coverage. Rec. Doc. 1-4 at 2. According to HANO,
Landmark incorrectly “concluded that since it was not liable for
any loss incurred by the insureds in connection with the lawsuit
including defense expenses, it no longer had a duty to defend the
lawsuits and that all defense costs were the responsibility of
HANO.” Rec. Doc. 1-4 at 3. Thereafter, HANO purportedly resolved
the case in its entirety, without payment of settlement funds.
Rec. Doc. 1-4 at 3. HANO’s current suit seeks a judgment declaring
that it was entitled to defense and indemnity from Landmark. Rec.
Doc. 1-4 at 4. HANO also seeks reasonable damages, statutory
penalties, attorney’s fees, and costs. Rec. Doc. 1-4 at 4. Landmark
contends that an allocation clause within the policy justified its
limited defense of HANO in the Anderson suit.
2. The Landmark Policy
The policy contains two primary clauses that are relevant for
the resolution of these motions: the “Duty to Defend” clause and
the “Allocation” clause. The Duty to Defend clause in Section V.A.
provides in relevant part:
Duty to Defend
It shall be the right and duty of the Insurer
to defend any Claim against the Insured for
which coverage applies under this policy. No
3
Insured may incur any Defense Expenses, admit
liability for or settle any Claim or negotiate
any settlement without the Insurer’s prior
written consent, such consent not to be
unreasonably withheld.
Rec. Doc. 12-4 at 98. The Allocation clause addresses the amount
of Defense Expenses to be allocated to the insurer based upon which
parties and claims in the action are covered by the policy. Section
V.F. of the policy provides:
Allocation
If both Loss covered under this policy and
loss not covered under this policy are jointly
incurred either because a Claim includes both
covered and non-covered matters or covered and
non-covered causes of action or because a
Claim is made against both an Insured and any
other parties not insured by this policy, then
the Insured and the Insurer shall use their
best efforts to fairly and reasonably allocate
payment under this policy between covered Loss
and non-covered loss based on the relative
legal exposures of the parties with respect to
covered and non-covered matters or covered and
non-covered causes of action.
If the Insurer and the Insured agree on an
allocation of Defense Expenses, based on
covered and non-covered matters or persons,
the Insurer shall advance Defense Expenses
allocated to covered Loss. If there is no
agreement
on
an
allocation
of
Defense
Expenses, the Insurer shall advance Defense
Expenses that the Insurer believes to be
covered under this policy until a different
allocation
agreement
is
negotiated,
arbitrated, or judicially determined.
Any negotiated, arbitrated or judicially
determined allocation of Defense Expenses on
account
of
a
Claim
shall
be
applied
retroactively to all Defense Expenses on
4
account of such Claim, notwithstanding any
prior advancement to the contrary. Any
advancement or allocation of Defense Expenses
on account of a Claim shall not apply to or
create any presumption with respect to the
allocation of other loss on account of such
Claim.3
Rec. Doc. 12-4 at 100. In essence, these provisions attempt to
limit, though not eliminate, the typically-broad duty to defend
included within most general liability policies.4
II.
THE PARTIES’ CONTENTIONS
Landmark
policy
seeks
contained
a
summary
valid
judgment
and
declaring:
enforceable
(1)
that
allocation
the
clause
permitting the allocation of defense costs between covered and
non-covered claims; and (2) that Landmark proposed, and HANO
accepted, a fifty-fifty allocation of defense costs in accordance
with the parameters of the allocation provision. Rec. Doc. 12 at
1. Landmark claims that the parties then implemented the fiftyfifty allocation. Rec. Doc. 12 at 1.
HANO
opposes
such
a
judgment
on
the
grounds
that:
(1)
allocation clauses are against Louisiana public policy and not
Also relevant for interpreting the enforceability of these clauses are the
definitions of Loss and Defense Expenses. “Defenses Expenses means reasonable
and necessary legal fees and expenses incurred, with the Insurer’s consent,
by any Insured in defense of a Claim, including any appeal therefrom.” Rec.
Doc. 12-4 at 95. “Loss means damages (including back pay and front pay),
settlements, judgments (including pre- and post-judgment interests on a
covered judgment) and Defense Expenses.” Rec Doc. 12-4 at 96.
4 The duty to defend refers to an insurer’s obligation to defend suits against
its insured. Typically, that duty “is broader than [the insurer’s] liability
for damage claims,” meaning that an insurer may have a duty to defend even if
there is ultimately no duty to indemnify the insured. Am. Home Assurance Co.
v. Czarniecki, 230 So. 2d 253, 269 (La. 1969).
3
5
enforceable; (2) even if permissible under Louisiana law, the
clause is so ambiguous so as to be unenforceable; and (3) even if
it is enforceable, HANO never agreed to a fifty-fifty allocation.
Rec. Doc. 17 at 1-2. HANO also seeks summary judgment in its favor,
urging the Court to declare the allocation clause unenforceable as
against Louisiana public policy. Rec. Doc. 14 at 1. HANO maintains
that Riley Stoker Corporation v. Fidelity and Guaranty Insurance
Underwriters, Inc., 26 F.3d 581, 589 (5th Cir. 1994), supports the
claim that Louisiana prohibits the allocation of defense costs
between an insurer and an insured. Rec. Doc. 14-2 at 4.
In response to HANO’s motion for partial summary judgment,
and also in its original motion for summary judgment, Landmark
contends that while Louisiana law does provide for a broadlyinterpreted duty to defend, there is no bar to contractually
limiting that duty. Rec. Docs. 12-1 at 3-4; 16 at 3-5.
III. LAW AND ANALYSIS
Under Federal Rule of Civil Procedure 56, summary judgment is
appropriate
only
interrogatories,
if
and
“the
pleadings,
admissions
on
depositions,
file,
together
answers
to
with
the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (quoting FED. R. CIV. P. 56(c)). See also TIG Ins. Co. v.
Sedgwick James of Washington, 276 F.3d 754, 759 (5th Cir. 2002).
6
A genuine issue exists if the evidence would allow a reasonable
jury to return a verdict for the nonmoving party.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Anderson v.
The movant must
point to “portions of ‘the pleadings, depositions, answers to
interrogatories,
and
admissions
on
file,
together
with
the
affidavits, if any,’ which it believes demonstrate the absence of
a genuine issue of material fact.” Celotex, 477 U.S. at 323. If
and when the movant carries this burden, the non-movant must then
go beyond the pleadings and present other evidence to establish a
genuine issue.
Matsushita Elec. Indus. Co., Ltd. V. Zenith Radio
Corp., 475 U.S. 574, 586 (1986).
However, “where the non-movant bears the burden of proof at
trial, the movant may merely point to an absence of evidence, thus
shifting to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material fact
warranting trial.” Lindsey v. Sears Roebuck & Co., 16 F.3d 616,
618 (5th Cir. 1994). Conclusory rebuttals of the pleadings are
insufficient to avoid summary judgment.
Travelers Ins. Co. v.
Liljeberg Enter., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993). The
primary legal issue here is the enforceability of the Allocation
clause. This Court will begin by addressing the alleged ambiguity.
a. Whether the Policy is Ambiguous
The parties do not contest that Louisiana substantive law
governs this case under Erie Railroad Company v. Thompkins, 304
7
U.S.
64
(1938).
Under
Louisiana
law,
this
Court’s
ultimate
objective is to determine the common intent of the parties. LA.
CIV. CODE. art. 2045. See also Carrier v. Reliance Ins. Co., 992573, p. 11 (La. 4/11/00); 759 So. 2d 37, 43. The parties’ intent
concerning the extent of coverage is reflected in the words of the
policy. Louisiana Ins. Guar. Ass’n v. Interstate Fire & Casualty
Co., 93-0911 (La. 1/14/94), 630 So. 2d 759, 763. Courts should
look to the plain and ordinary meaning of the words used, unless
they have acquired a technical meaning. Id. “An insurance policy
should not be interpreted in an unreasonable or a strained manner
so as to enlarge or to restrict its provisions beyond what is
reasonably contemplated by its terms or so as to achieve an absurd
conclusion.” Id.
Ambiguity must be resolved by “construing the policy as a
whole.”
Id.
construction
“If
an
after
applying
ambiguity
the
remains,
other
the
general
ambiguous
rules
of
contractual
provision is to be construed . . . in favor of the insured. Id. at
764. However, courts should also interpret policies “to fulfill
the reasonable expectations of the parties in the light of the
customs
and
usages
of
the
industry.”
Id.
(quoting
Trinity
Industries, Inc. v. In. Co. of North America, 916 F.2d 267, 269
(5th Cir. 1990)). This is known as the reasonable expectations
doctrine.
Louisiana
Ins.
Guar.
Ass’n,
630
So.
2d
at
764.
Nevertheless, if the policy is clear and unambiguous, the court
8
must enforce it as written. Id. Contractual ambiguity is an issue
of law. Id.
With these principles in mind, the Court now turns to the
question of the extent of Landmark’s duty to defend HANO under the
policy.
As
an
initial
matter,
most
directors’
and
officers’
policies (“D & O” policies) do not contain the broad duty to defend
found in most general liability policies. See Julie J. Bisceglia,
Practical Aspects of Directors’ and Officers’ Liability Insurance—
Allocating and Advancing Legal Fees and the Duty to Defend, 32
UCLA L. REV. 690, 702-08 (1985). Therefore, under the reasonable
expectations doctrine, the customs and usage of the industry
instruct that HANO should not have expected the Landmark policy to
include such a duty. Yet, this Court must still examine the text
of the policy to determine the actual intent of the parties.
One
potential
source
of
confusion
is
that
the
policy’s
“Conditions” section contains both a “Duty to Defend” provision
and an “Allocation” provision that requires proration of defense
expenses. However, when read in the context of one another, the
provisions do not present a conflict. First, the Duty to Defend
clause states only that Landmark has “the right and the duty . .
. to defend any Claim against the Insured for which coverage
applies under this policy.” Rec. Doc. 12-4 at 98 (emphasis added).
By its own terms, the Duty to Defend clause does not require
Landmark to defend any claim against HANO that could potentially
9
fall within the policy as does the typical duty to defend in a
general liability policy, which is construed to be broader than
the insurer’s duty to indemnify. See 15 La. Civ. L. Treatise,
Insurance Law and Practices § 7:2 (4th ed.). This reading of the
Duty to Defend clause is confirmed by the Allocation clause.
The
Allocation
clause
addresses
situations
in
which
a
plaintiff brings a claim against the insured that includes covered
and non-covered matters, covered and non-covered causes of action,
or covered and non-covered parties. Rec. Doc. 12-4 at 100. In such
a situation, the insured and the insurer are required to use their
best efforts to allocate defense expenses to the covered and noncovered claims. Rec. Doc. 12-4 at 100. If they can agree on
allocation,
then
the
insurer
must
advance
defense
expenses
allocated to covered “Loss.” Rec. Doc. 12-4 at 100. If there is no
agreement, then the insurer must advance defense expenses that the
insurer believes to be covered under the policy. Rec. Doc. 12-4 at
100. Finally, any future determination regarding allocation will
be applied retroactively, taking into account expenses already
advanced. Rec. Doc. 12-4 at 100. Read together, Landmark’s duty to
defend is apparent. If the claim is covered, the insurer must
provide a defense. If the claim is only partly covered, the parties
need to work to allocate expenses. If the claim is not covered,
then there is no duty to defend.
10
HANO’s opposition asserts a laundry list of reasons for the
contract’s
ambiguity.
Rec.
Doc.
17
at
2-8.
Some
are
simply
conclusory, while others are unconvincing. For one, HANO claims
that the allocation clause itself cannot be understood. Rec. Doc.
17 at 5, 7-8. As demonstrated above, the clause provides a basic
framework for allocating costs based on the extent of coverage.
That argument lacks merit. HANO also claims that the definitions
of “Loss” and “Defense Expenses” fail to address allocation, making
the contract ambiguous. Rec. Doc. 17 at 6. This argument also fails
because the conditions section addresses it clearly, rendering no
need for further explanation in the definitions section. Finally,
while poorly articulated, HANO’s most cogent argument is that the
insuring agreement requires Landmark to cover all Loss that HANO
is obligated by law to pay. Rec. Doc. 17 at 7. Defense Expenses
are included within the definition of Loss, leading HANO to contend
that Landmark must pay for all Defense Expenses. As a result of
that structure, HANO is correct that the allocation clause would
have been more properly included as an exclusion. Yet, despite the
imperfect structure of the agreement, this Court finds the intent
of the parties clear: Landmark had the right to allocate defense
expenses under the agreement. However, the question still remains
whether such allocation is permissible under Louisiana law.
11
b. Whether Allocation Clauses Such as the One at Issue Here
are Against Louisiana Public Policy
“To determine state law, federal courts sitting in diversity
look to the final decisions of the state’s highest court.” American
Int’l Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d 254,
260 (5th Cir. 2003) (citing Transcon. Gas Pipe Line Corp. v.
Transp. Ins. Co., 953 F.2d 985, 988 (5th Cir. 1992)). Here,
however, the parties concede that they have found no Louisiana
cases at any level that address the enforceability of such a
clause. Rec. Docs. 12-1 at 5; 14-2 at 4. This Court has also been
unable to identify any cases directly on point. Therefore, in the
absence of such a decision, it is this Court’s duty to make an
“Erie guess.” In other words, “it is the duty of the federal court
to determine, in its best judgment, how the highest court of the
state would resolve the issue if presented with the same case.”
American Int’l, 352 F.3d at 260.
As Louisiana law governs, this Court must follow the Louisiana
civilian methodology to resolve the issue, looking first to the
authoritative sources of law under the Louisiana Civil Code—
legislation and custom. LA. CIV. CODE art. 1. “Jurisprudence, even
when so cohesive and entrenched as to rise to the level of
jurisprudence
constante,
is
merely
a
secondary
law
source.”
American Int’l, 352 F.3d at 261 (quoting Transcon. Gas Pipe Line
Corp.,
953
F.2d
at
988)
(internal
12
quotation
marks
omitted).
Accordingly, this Court muse use primary sources such as codes and
statutes to initially guide its inquiry.
All conventional obligations or contracts are subject to the
rules of Title IV of the Louisiana Civil Code. LA. CIV. CODE. art.
1915. However, as an insurance contract is a nominate contract,
special rules under the Insurance Code also apply. See LA. CIV. CODE
arts. 1914, 1916. Under the general rule for contracts, “[p]arties
are free to contract for any object that is lawful, possible, and
determined or determinable.” LA. CIV. CODE art. 1971. As no provision
within the Louisiana Insurance Code contradicts this general rule,
Louisiana courts agree that this well-established principal also
applies
to
insurance
contracts:
“an
insurance
contract
is
a
voluntary agreement between the parties and . . . any provisions
may be inserted in the contract as the parties see fit provided
they are not repugnant to law or against public policy.” Clerk v.
Conn. Fire Ins. Co., 203 So. 2d 866, 868 (La. App. 2 Cir. 1967).
See also Burgett v. Stuyvesant Life Ins. Co., 236 So. 2d 306, 308
(La. App. 4 Cir. 1970). Thus, this Court must determine whether
any
Louisiana
sources
recognize
a
public
policy
against
contractual limitations on the broad duty to defend.
This Court has not identified any primary source of law in
Louisiana that prohibits parties from limiting the duty to defend.
Neither has HANO pointed to one. Instead, the Plaintiff directs
this Court’s attention to the case of Riley Stoker Corporation v.
13
Fidelity and Guaranty Insurance Underwriters, Inc., 26 F.3d 581,
589 (5th Cir. 1994), as support for the proposition that allocation
clauses are against public policy in Louisiana. Rec. Doc. 14-2 at
4-6. In Riley Stoker, the Fifth Circuit stated that “[u]nder
Louisiana law, when an insurer has a duty to defend any claim
asserted, the insurer must defend the entire action brought against
its insured.” Riley Stoker, 26 F.3d at 589. This concept has been
reiterated over and over by Louisiana courts. See 15 La. Civ. L.
Treatise, Insurance Law and Practices § 7:2 (4th ed.) and cases
cited therein. However, the Riley Stoker Court did not go so far
as to patently say that Louisiana public policy prohibits any
attempt to contractually limit the duty to defend. See Riley
Stoker, 26 F.3d at 589-90.
This Court and others have recognized that the obligation to
defend is a contractual one, indicating it is not absolutely
guaranteed by state policy. See Chopp v. United Services Auto.
Ass’n, No. 86-5668, 1987 WL 9799, at *1 (E.D. La. Apr. 23, 1987);
Hartford Acc. & Indem. Co. v. United General Ins. Co., 855 F.2d
228, 231 (5th Cir. 1988). In Pareti v. Sentry Indemnity Company,
536 So. 2d 417, 421-23 (La. 1988), the Louisiana Supreme Court
explicitly discussed Louisiana public policy as it relates to the
duty to defend, albeit in a somewhat different context. The Pareti
court
discussed
whether
Louisiana
public
policy
bars
an
unambiguous policy provision stating that the insurer’s duty to
14
defend terminates upon payment of policy limits. Id. The court
ultimately
concluded
that
no
such
public
policy
exists
in
Louisiana, which suggests that Louisiana law would support other
forms of contractual limitation concerning the duty to defend. Id.
at 423.
Another important takeaway from Pareti is that the Louisiana
high court looked to other jurisdictions as references for how to
decide that res nova issue. Id. at 421-22. That serves as a
significant indicator to this Court that the Louisiana Supreme
Court would also look to other jurisdictions for guidance in
deciding the res nova issue presently before this Court. Moreover,
the United States Court of Appeals for the Fifth Circuit also
recognized the relevance of cases from other jurisdictions in
interpreting Louisiana insurance law, primarily because “the law
of insurance is the same in Louisiana as other states.” CalcasieuMarine Nat’l Bank of Lake Charles v. Am. Employers’ Ins. Co., 533
F.2d 290, 295 (5th Cir. 1976) (quoting Brown v. Life and Cas. Ins.
Co. of Tenn., 146 So. 332, 334 (La. App. 2 Cir. 1933)) (internal
alterations omitted).
Notably then, the United States District Court for the
Central
District
of
California
considered
a
very
similar
allocation clause to the one in question here and decided that the
clause was enforceable under California state law. Commercial
Capital Bankcorp. Inc. v. St. Paul Mercury Ins. Co., 419 F. Supp.
15
2d 1173, 1177, 1182-85 (C.D. Cal. 2006). Although the structure of
that policy differed, the rationale still applies here because the
Landmark policy was similarly unambiguous in not providing a full
duty to defend. As the Central District of California stated there:
[R]ather than paying for premiums for the
right to defense of all potentially covered
claims,
Plaintiff
in
this
case
paid
(presumably lower) premiums for a lesser
right. What Plaintiff agreed and bargained for
was nothing more than the right to allocate
Defense Costs to covered and uncovered claims
and, if no such allocation could be agreed on,
to have Defendant advance whatever Defense
Costs it believed were covered subject to a
later allocation determination. To require
Defendant to advance all of Plaintiff’s
defense costs on a current basis despite [the
allocation clause’s] clear indication of the
parties’ contrary intent would give Plaintiff
an un-bargained-for windfall.
Id. at 1182. The same result would transpire here if this Court
found the allocation clause unenforceable: HANO would receive an
un-bargained-for windfall.
Finally, the Louisiana Department of Insurance has, since
this policy was issued, approved policies with nearly identical
clauses to the allocation provision in this policy. See Rec. Doc
12-5. While the Louisiana Department of Insurance does not have
final say over the validity of insurance contracts, the Louisiana
Supreme Court has indicated that the position of the Commissioner
of
Insurance
is
persuasive
in
these
matters,
even
if
not
dispositive. Doerr v. Mobil Oil Corp., 2000-0947, p. 23 (La.
16
12/19/00); 774 So. 2d 119, 134. Due to the lack of primary legal
sources identifying a public policy against allocation clauses,
their acceptance in other jurisdictions, and their acceptance by
the Louisiana Department of Insurance, this Court is convinced
that the Louisiana Supreme Court would find the Allocation clause
enforceable. Consequently, this Court’s final inquiry is whether
the parties came to an agreement on a fifty-fifty allocation as
Landmark alleges.
c. Whether the Parties Came to An Agreement on Allocation
Landmark cites to a string of emails between its agents and
HANO’s in-house counsel as well as HANO’s defense counsel in the
Anderson litigation for the purpose of demonstrating that the
parties agreed to a fifty-fifty allocation of defense costs in
that matter. Rec. Doc. 12-6. HANO contends that the parties never
reached such an agreement and that, in any event, only HANO’s
Executive Director could agree to terms and contracts, not its
attorneys.
Rec.
Doc.
17
at
9.
The
emails
cited
by
Landmark
certainly discuss a fifty percent allocation of defense costs. See
Rec. Doc. 12-6 at 11, 32, 34. However, while HANO’s attorneys’
emails demonstrate their belief that HANO agreed to a fifty-fifty
allocation, no email from any HANO agent ever explicitly accepts
that arrangement on behalf of HANO. See, e.g., Rec. Doc. 12-6 at
32, 34, 41. More importantly, Landmark has failed to specifically
allege,
let
alone
show,
that
17
any
of
the
HANO
attorneys
communicating in those emails had actual or apparent authority to
bind HANO to a fifty-fifty allocation. In fact, there is no
evidence that anyone with authority to bind HANO actually accepted
such an agreement. Consequently, there remains a genuine issue of
material fact as to whether the parties ever reached an allocation
agreement.
IV.
CONCLUSION
For the reasons discussed above,
This Court finds that the Landmark policy is unambiguous with
regard to Landmark’s duty to defend HANO. Further, the Court finds
that the allocation clause limiting that duty is not prohibited by
Louisiana public policy. Finally, the Court finds that there
remains a genuine issue of material fact as to whether HANO ever
agreed to a fifty-fifty allocation of defense costs. Accordingly,
IT IS ORDERED that Landmark’s motion for summary judgment is
GRANTED IN PART and DENIED IN PART.
IT IS FURTHER ORDERED that HANO’s motion for summary judgment
is DENIED.
New Orleans, Louisiana, this 29th day of February, 2016.
____________________________
UNITED STATES DISTRICT JUDGE
18
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