Mark v. Sunshine Plaza, Inc.

Filing 43

ORDER and REASONS granting 31 Motion for Judgment on the Pleadings. IT IS ORDERED that MUSIC's motion for judgment on the pleadings is GRANTED and all claims against MUSIC are hereby DISMISSED WITH PREJUDICE. Signed by Judge Susie Morgan on 11/22/2016. (cg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
YADI MARK,
Plaintiff

CIVIL ACTION

VERSUS

NO. 16-455

SUNSHINE PLAZA, INC.
Defendant

SECTION: “E” (2)
ORDER AND REASONS

Before the Court is a motion for judgment on the pleadings 1 filed by Third-Party
Defendant, Mesa Underwriters Specialty Insurance Co. (“MUSIC”). Defendant and ThirdParty Plaintiff, Sunshine Plaza, Inc. (“Sunshine”), opposes this motion. 2 For the reasons
that follow, the motion for judgment on the pleadings 3 is GRANTED.
BACKGROUND
On January 19, 2016, Plaintiff, Yadi Mark, filed her complaint against Defendant,
and Third-Party Plaintiff, Sunshine under the Americans with Disabilities Act, 42 U.S.C.
§ 12181 et seq (“ADA”). 4 According to her complaint, Ms. Mark alleges Sunshine owns and
operates commercial property that does not comply with the regulatory requirements
established under the ADA. 5 As a result of the alleged infractions, Ms. Mark seeks
declaratory and injunctive relief, attorney’s fees, and costs pursuant to Title III of the
ADA. 6

R. Doc. 31.
R. Doc. 32.
3 R. Doc. 31.
4 R. Doc. 1.
5 Id. at 2-3.
6 Id. at 1.
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On July 18, 2016, Defendant, and Third-Party Plaintiff, Sunshine filed a ThirdParty Complaint against MUSIC. 7 Sunshine alleges MUSIC is liable for defense and
indemnity as a result of the insurance policy MUSIC provided to Sunshine. 8 Sunshine
argues it notified MUSIC of the claims made by Ms. Mark in this matter, and demanded
its defense, indemnity, and coverage for any damages as a result of claims alleged by
Plaintiff but MUSIC denied coverage. 9 Sunshine alleges it has sustained expenses and
damages for which MUSIC is liable, including without limitation all attorneys’ fees, costs,
interest, and penalties that may or must be assessed under Louisiana Revised Statutes
section 22:1892 and/or section 22:1973. 10 In response, Third-Party Defendant, MUSIC,
filed its motion for judgment on the pleadings 11 arguing Ms. Mark’s claims fall outside the
coverage of the policy 12 in question and that MUSIC has no obligation to defend or
indemnify Sunshine against non-covered claims. 13 Sunshine opposes MUSIC’s motion. 14
Coverage A of the Policy extends to “sums that the insured becomes legally
obligated to pay as damages” because of “bodily injury” or “property damage” “caused by
an ‘occurrence.’” 15 Coverage A excludes damage to Sunshine’s own property. 16 Coverage

R. Doc. 26.
Id. at 2.
9 Id.
10 Id. at 2-3.
11 R. Doc. 31.
12 MUSIC issued two successive policies of commercial general liability insurance coverage to Sunshine. R.
Doc. 31-1, at 2. In its Third-Party Complaint, Sunshine alleges the policy in question is Policy No.
MP0017008000466. R. Doc. 26, at 2. As MUSIC explains in its memorandum in support of its motion for
judgment on the pleadings, “Although Sunshine alleges that the claims are covered under Policy No.
MP00017008000466, this contract was not issued until after this action was filed. It is therefore unclear
whether Sunshine has sought or intends to seek coverage under the Policy No. MP00017008000242.
Aside from the policy period, the Policies are substantively identical.” R. Doc. 31-1, at 2 n.1. The Court will
assume the Third-Party Plaintiff is pursuing coverage under Policy No. MP000178000242 (the “Policy”)
as this was the active policy during the time when the Ms. Mark filed her initial complaint.
13 R. Doc. 31-1.
14 R. Doc. 32.
15 R. Doc. 31-2, at 25.
16 R. Doc. 31-2, at 28.
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B of the Policy encompasses “sums that the insured becomes legally obligated to pay as
damages because of ‘personal and advertising injury’ . . .” 17
The Policy defines “bodily injury” as “bodily injury sustained by a person, including
death resulting from any of these at any time.” 18 The term “property damage” means
either “physical damage to tangible property, including all resulting loss of use of that
property. All such loss of use shall be deemed to occur at the time of the physical injury
that caused it” or “loss of use of tangible property that is not physically injured. All such
loss of use shall be deemed to occur at the time of the ‘occurrence’ that caused it.” 19 The
term “Occurrence” means an accident, including continuous or repeated exposure to
substantially the same general harmful conditions. 20 “Personal and advertising injury” is
defined to include injuries arising out of seven specific acts of wrongful conduct:
(a) false arrest, detention or imprisonment; (b) malicious prosecution; (c)
the wrongful eviction from, wrongful entry into, or invasion of the right of
private occupancy of a room, dwelling or premises that a person occupies,
committed by or on behalf of its owner, landlord or lessor; (d) oral or written
publication, in any matter, of material that slanders or libels a person or
organization or disparages a person’s or organization’s goods, products or
services; (e) oral or written publication, in any matter, of material that
violates a person’s right or privacy; (f) the use of another’s advertising idea
in your “advertisement”; (g) infringing upon another’s copyright, trade
dress or slogan in your “advertisement.” 21
LEGAL STANDARD
Rule 12(c) provides: “After the pleadings are closed but within such a time as to
not delay the trial, any party may move for judgment on the pleadings.” 22 “A motion
brought pursuant to [Rule] 12(c) is designed to dispose of cases where the material facts

R. Doc. 31-2, at 30.
R. Doc. 31-2, at 37; R. Doc. 31-3, at 37.
19 R. Doc. 31-2, at 39; R. Doc. 31-3, at 39.
20 Id.
21 Id.
22 FED. R. CIV. P. 12(c).
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are not in dispute and a judgment on the merits can be rendered by looking to the
substance of the pleadings and any judicially noticed facts.” 23
The standard for deciding a Rule 12(c) motion for judgment on the pleadings is the
same as the standard for deciding a motion under Rule 12(b)(6). 24 Under Rule 12(b)(6),
and thus under Rule 12(c), “[t]o avoid dismissal, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.” 25
“To be plausible, the complaint’s ‘[f]actual allegations must be enough to raise a right to
relief above the speculative level.’” 26 “In deciding whether the complaint states a valid
claim for relief, we accept all well-pleaded facts as true and construe the complaint in the
light most favorable to the plaintiff.” 27 “We do not accept as true conclusory allegations,
unwarranted factual inferences, or legal conclusions.” 28
LAW AND ANALYSIS
I.

Duty to Defend
The parties agree Louisiana law applies. 29 “Under Louisiana law, ‘[a]n insurance

policy is a contract between the parties and should be construed by using the general rules
of interpretation of contracts set forth in the Louisiana Civil Code.” 30 “The Louisiana Civil
Code provides that ‘[t]he judiciary’s role in interpreting insurance contracts is to ascertain
23 Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir. 2002)
(quoting Herbert Abstract Co. v. Touchstone Props., Ltd. 914 F.2d 74, 76 (5th Cir. 1990)).
24 In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007). See also Gentilello v. Rege, 627
F.3d 540, 543–44 (5th Cir. 2010). See also, Great Plains Trust Co., 313 F.3d at 312 (“[T]he central issue is
whether, in the light most favorable to the plaintiff, the complaint states a valid claim for relief.”)
25 In re Great Lakes Dredge & Dock Co., LLC, 624 F.3d 201, 210 (5th Cir. 2010) (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)).
26 Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
27 Id. (quoting Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008)) (internal quotation marks omitted).
28 Id. (citations and internal quotation marks omitted).
29 See R. Doc. 26 (alleging damages under Louisiana Revised Statutes section 22:1892 and/or section
22:1973); R. Doc. 31-1, at 3 n.2 (“The policy was issued in Louisiana to a Louisiana insured and is
therefore governed by Louisiana law.”).
30 Wisznia Co. v. Gen. Star Indem. Co., 759 F.3d 446, 448 (5th Cir. 2014) (quoting Mayo v. State farm
Mut. Auto. Ins. Co., 2003-1801, p. 3 (La. 2/25/04); 869 So.2d 96, 99).

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the common intent of the parties to the contract’ by construing words and phrases ‘using
their plain, ordinary and generally prevailing meaning.’” 31
“Insurance policies generally provide that the insurer has the right and, indeed, the
duty to defend the insured.” 32 As the Fifth Circuit has explained, “When the insurance
policy clearly provides coverage for damages allegedly caused by the insured, the insurer
is usually eager to defend the insured to limit its liabilities; difficulties arise when the
insurer concludes there is no coverage.” 33
In Wisznia, the Fifth Circuit explained:
Under Louisiana law, the insurer’s duty to defend suits against its insured
is broader than its liability for damage claims. Thus, Louisiana courts decide
the scope of the insurer’s duty to defend by comparing the insurance policy
to the allegations in the injured plaintiff’s petition, with the insurer being
obligated to furnish a defense unless the petition unambiguously excludes
coverage. Under the “eight-corners rule,” courts compare the four corners
of the petition with the four corners of the insurance policy without resort
to extrinsic evidence.
In applying the eight-corners rule, ambiguous terms in the insurance policy
are strictly construed against the insurer. Although the allegations in the
petition are “liberally interpreted” in favor of the insured, it is well settled
that the allegations of fact, and not conclusions, contained in the petition
determine the obligation to defend. 34
“When determining whether or not a policy affords coverage for an incident, it is the
burden of the insured to prove the incident falls within the policy’s terms.” 35 The duty to
defend “arises whenever the pleadings against the insured disclose even a possibility of
liability under the policy.” 36 The insurer has a duty to defend unless the allegations in the

Id.
Id. at 449 (citing Hartford Accident & Indem. Co. v. United Gen. Ins. Co., 855 F.2d 228, 231 (5th Cir.
1988)).
33 Id. (internal citations omitted).
34 Id. (internal citations and quotations omitted).
35 Doerr v. Mobil Oil Corp., 2000-0947 (La. 12/19/00), 774 So. 2d 119, 124.
36 Steptore v. Masco Const. Co., 93-2064 (La. 8/18/94), 643 So. 2d 1213, 1218. See also United Nat’l Ins.
Co. v. Paul and Mar’s Inc., No. 10-799, 2010 WL 2690615, at *2 (E.D. La. July 11, 2011).
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petition for damages, as applied to the policy, unambiguously preclude coverage. 37 “Once
a complaint states one claim within the policy’s coverage, the insurer has a duty to accept
defense of the entire lawsuit, even though other claims in the complaint fall outside the
policy’s coverage.” 38
A. Allegations of the Underlying Complaint
Ms. Mark filed suit against Sunshine seeking declaratory and injunctive relief,
attorneys’ fees, and costs pursuant to the ADA. 39 The Plaintiff’s complaint alleges
Sunshine is the “owner and lessor of the real properties and improvements which are
subject of this action, to wit: a shopping center called the Sunshine Plaza generally located
at 2980 Highway 190, Mandeville, Louisiana 70471” (the “Property”). 40 The Property is
alleged to be a place of public accommodation subject to regulation under the ADA. 41
Plaintiff alleges she is a qualified individual with a disability under the ADA 42 and that
the Property is not accessible due to a number of “mobility-related architectural barriers”
and other features that are non-compliant with ADA Regulations. 43
B. Whether the Complaint Alleges a Set of Facts that Would Fall Within
the Policy’s Coverage
As Defendant, and Third-Party Plaintiff, Sunshine explains, “There is no dispute
that MUSIC issued the Policy to Sunshine Plaza, Inc. Nor is there any dispute over the
terms of the Policy – just over how to interpret it.” 44 Third Party Defendant, MUSIC,
argues the Policy does not cover Ms. Mark’s complaint against Sunshine. 45 Under the
Martco Ltd. P’ship v. Wellons, Inc., 588 F.3d 864, 872 (5th Cir. 2009).
Treadway v. Vaughn, 633 So. 2d 626, 628 (La. Ct. App. 1993), writ denied, 635 So. 2d 233 (La. 1994).
39 R. Doc. 1, at 1.
40 Id. at 2 ¶ 8.
41 Id. at 3, ¶ 13.
42 Id. at 2, ¶ 4.
43 Id. at 3-4, ¶ 21.
44 R. Doc. 32, at 3.
45 See R. Docs. 31, 41.
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Policy, MUSIC is required to pay for damages that occur as a result of “bodily injury”,
“property damage” or “personal and advertising injury” as defined in the agreement. 46
i.

Property Damage

The Policy specifies that it will apply, inter alia, “to ‘bodily injury’ and ‘property
damage’ . . . caused by an ‘occurrence’ that takes place in the ‘coverage territory’ . . . during
the policy period.” 47 “Property damage” is defined as follows:
a. Physical injury to tangible property, including all resulting loss of use
that property. All such loss of use shall be deemed to occur at the time of
the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such
loss of use shall be deemed to occur at the time of the “occurrence” that
caused it. 48
“Occurrence” is defined as “an accident, including continuous or repeated exposure to
substantially the same general harmful conditions.” 49 In addition, the exclusion j(1) of the
Policy bars coverage of “property damage” to property owned by Sunshine, including “any
costs or expenses . . . for repair, replacement, enhancement, restoration or maintenance
of such property for any reason, including prevention of injury to person or damage to
another’s property.” 50
Sunshine argues Ms. Mark alleges property damage in her complaint. 51 Sunshine
maintains, “While an individual’s actual interactions with discriminatory barriers has
been found to be considered undoubtedly an injury, courts have additionally found that
the ADA expressly contemplates loss of opportunity as an actionable injury.” 52 Although

See R. Doc. 31-2.
Id. at 25.
48 Id. at 39.
49 Id.
50 Id. at 28.
51 R. Doc. 32, at 7.
52 Id. (citing Betancourt v. Federated Dep’t Stores, 732 F. Supp. 2d 693, 707 (W.D. Tex. 2010).
46
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loss of opportunity is an actionably injury, with respect to Article III standing
requirements, 53 in examining Ms. Mark’s Complaint, it is clear there is no allegation of
any property damage. 54 As MUSIC correctly identifies, “The only ‘property’ referenced in
the Complaint is Sunshine’s own premises.” 55
In addition, Sunshine argues the underlying suit is covered because there was an
“occurrence.” 56 Sunshine argues the Policy defines an “occurrence” as “an accident” 57 and
therefore Sunshine is covered because its alleged noncompliance with the ADA was
unintentional. Sunshine maintains, “Under no circumstance can it be argued that
Sunshine Plaza, Inc., intended to cause harm to Yadi Mark, or prevent access to its
property,” and it believed the Property complied “with ADA standards as it was granted a
Certificate of Occupancy by the Fire Marshal.” 58
“Louisiana courts interpret ‘occurrence’ to include ‘an unforeseen and unexpected
loss.’” 59 Federal courts have held ADA violations are not an “occurrence,” because the
conduct giving rise to liability – the failure to accommodate the disabled – is intentional,
not some fortuitous circumstance. 60 As MUSIC correctly identifies:
The harm allegedly sustained by Ms. Mark – the inability to access the
property – is the expected and foreseeable consequence of Sunshine’s
alleged failure to operate an ADA-compliant facility. The statue and
accompanying regulations exist to ensure that those with physical
limitations will have full use of public accommodations. If Sunshine has
failed to adhere to its obligations under these regulations, it was imminently

See, e.g., Betancourt, 732 F. Supp. 2d at 707.
See R. Doc. 1.
55 R. Doc. 31-1, at 7.
56 See R. Doc. 41, at 1-2.
57 Id. at 2.
58 Id. (arguing “Therefore, any ‘defects Yadi Mark alleges in her Petition, is an ‘accident’ as defined by the
terms of the policy.’”).
59 Travelers Cas. & Sur. Co. of Am. V. Univ. Facilities, Inc., No. CIV.A. 10-1682, 2012 WL 1198611, at *4
(E.D. La. Apr. 10, 2012) (quoting North Amer. Treat. Sys. V. Scottsdale Ins., 2005-0081 (La. App. 1 Cir.
8/23/06), 943 So. 2d 429, 444).
60 See, e.g., Allstate Ins. Co. v. Martin, 34 F. Supp. 3d 955 (W.D. Ark. 2014);
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foreseeable that those with disabilities would sustain the exact harms
alleged by Ms. Mark in this lawsuit. 61
Furthermore, as explained above, Ms. Mark does not allege any damage of property as
defined by the Policy. As a result, after examining both the four corners of the Complaint
and the Policy, it is clear that the claims against Sunshine is not covered under either
definition of “property damage” as defined by the Policy.
ii.

Personal and Advertising Injury

The Policy specifies that it will apply, inter alia, “to ‘personal and advertising
injury; caused by an offense arising out of [Sunshine’s] business but only if the offense
was committed in the ‘coverage territory’ during the policy period.” 62 “Personal and
advertising injury” is defined to include injuries arising out of seven specific acts of
wrongful conduct:
(a) false arrest, detention or imprisonment; (b) malicious prosecution; (c)
the wrongful eviction from, wrongful entry into, or invasion of the right of
private occupancy of a room, dwelling or premises that a person occupies,
committed by or on behalf of its owner, landlord or lessor; (d) oral or written
publication, in any matter, of material that slanders or libels a person or
organization or disparages a person’s or organization’s goods, products or
services; (e) oral or written publication, in any matter, of material that
violates a person’s right or privacy; (f) the use of another’s advertising idea
in your “advertisement”; (g) infringing upon another’s copyright, trade
dress or slogan in your “advertisement.” 63
In its opposition, Sunshine states it believes Ms. Mark alleges personal and advertising
injury as defined by the Policy. 64 Sunshine provides no further explanation to substantiate
this claim. Of the seven specific acts of wrongful conduct that fall under the policy
coverage for “personal and advertising injury,” only wrongful eviction seems to have any

R. Doc. 31-3, at 8.
R. Doc. 31-2, at 30.
63 Id.
64 R. Doc. 32, at 4.
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possible connection to Ms. Mark’s claims. As MUSIC correctly identifies, “Wrongful
eviction requires ‘actual impingement’ of the plaintiff’s ‘possessory rights.’” 65 Ms. Mark
does not allege a possessory interest in Sunshine’s property. 66 Instead, Ms. Mark alleges
the property in question violates federal regulations governing accessibility. As a result,
after examining both the four corners of the Complaint and the Policy, it is clear that the
claims against Sunshine are not claims for “personal and advertising injury” as defined
by the Policy.
II.

Duty to Indemnify
An insurer’s duty to indemnify, however, generally cannot be determined until

after the underlying suit has been resolved and the insurer is found liable. 67 The duty to
indemnify is “triggered by actual facts that establish liability in the underlying lawsuit.”68
As a result, courts have found the duty to indemnify is often not ripe when the underlying
lawsuit has not yet been completed. 69 The exception to this general rule is that the duty
to indemnify is justiciable before the insurer’s liability is determined if “the insurer has
no duty to defend and the same reasons that negate the duty to defend will likewise negate
any possibility the insurer will ever have a duty to indemnify.” 70

65 R. Doc. 35, at 3 (quoting Regency Motors of Metairie, L.L.C. v. Hibernia-Rosenthal Ins. Agency, L.L.C.,
03-1312 (La. App. 5 Cir. 2/23/04), 868 So. 2d 905, 909).
66 See R. Doc. 1.
67 Allstate Ins. Co. v. Emp. Liab. Assurance Corp., 445 F.2d 1278, 1281 (5th Cir. 1971); see also Corgeis Ins.
Co. v. Sch. Bd. of Allen Parish, No. 07-30844, 2008 WL 2325632, at *2–3 (5th Cir. June 6, 2008) (“[A]fter
the district court concludes that the insurer has a duty to defend, the indemnity issue is nonjusticiable
pending resolution of the liability suit.”). Unlike the duty to defend, the duty to indemnify “is triggered by
the actual facts that establish liability in the underlying lawsuit. Guar. Nat’l Ins. Co. v. Azrock Indus. Inc.,
211 F.3d 239, 243 (5th Cir. 2000), overruled on other grounds as recognized by OneBeacon Ins. Co. v. Don's
Bldg. Supply Inc., 553 F.3d 901, 903 (5th Cir. 2008) (per curiam).
68 Guar. Nat’l Ins. Co. v. Azrock Indus. Inc., 211 F.3d 239, 243 (5th Cir. 2000), overruled on other
grounds as recognized by OneBeacon Ins. Co. v. Don's Bldg. Supply Inc., 553 F.3d 901, 903 (5th Cir.
2008) (per curiam).
69 Travelers Cas. And Sur. Co. of America, 2012 WL 1198611, at *11 (citing Coregis Ins. Co. v. Sch. Bd. Of
Allen Parish, No. 07-30844, 2008 WL 2325632, at *2 (5th Cir. June 6, 2008) (applying Louisiana law)).
70 Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 529 (5th Cir. 2004); Med. Protective Co. v.
Turner, No. 15-0366, 2015 WL 3631701, at *4 (N.D. Tex. June 10, 2015).

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With respect to the case currently before this Court, the Court finds it is clear that
the same reasons that negate the duty to defend likewise negate any possibility MUSIC
will ever have a duty to indemnify Sunshine for payments related to the claims alleged by
Ms. Mark. Therefore, the Court finds MUSIC owes Sunshine no duty to indemnify.
CONCLUSION
The Court finds it is unambiguously clear under the eight-corner rule that the
Policy issued by MUSIC does not include coverage regarding Ms. Mark’s claims against
Sunshine for violations of the ADA. As a result, MUSIC owes no duty to defend. The Court
also finds it is clear that the same reasons MUSIC has no duty to defend likewise negate
any possibility MUSIC will ever have a duty to indemnify. As a result, the Court finds that
Sunshine, Defendant and Third-Party Plaintiff, has not stated a claim for defense and
indemnity upon which relief may be granted. 71
For the foregoing reasons;
IT IS ORDERED that MUSIC’s motion for judgment on the pleadings 72 is
GRANTED and all claims against MUSIC are hereby DISMISSED WITH
PREJUDICE.
New Orleans, Louisiana, this 22nd day of November, 2016.
______________ ________ ________
SUSIE MORGAN
UNITED STATES DISTRICT JUDGE

Under Louisiana law, the duty to defend is broader than its liability for damage claims. See e.g., Wisznia
Co., 769 F.3d at 449. As the Court has found MUSIC owes no duty to defend in the case currently before
this Court, the Court need not further address Sunshine’s claims that MUSIC improperly denied coverage
or the viability of Sunshine’s claims against MUSIC under Louisiana Revised Statutes sections 22:1892
and 22:1973.
72 R. Doc. 31.
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