Novak et al v. St. Maxent-Wimberly House Condominium, Inc. et al
ORDER AND REASONS granting 225 Motion for Summary Judgment. Signed by Judge Carl Barbier on 9/14/20. (cg)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
TODD NOVAK, ET AL.
INC., ET AL.
SECTION: “J” (3)
ORDER & REASONS
Before the Court are a Motion for Summary Judgment (Rec. Doc. 225) filed
by Intervenor State Farm Fire and Casualty Company (“State Farm”), an opposition
thereto (Rec. Doc. 232) filed by Defendants Jenny and Michael Tilbury filed an
opposition, and a reply (Rec. Doc. 234) by State Farm. Having considered the motion
and memoranda, the record, and the applicable law, the Court finds that the Motion
should be GRANTED.
FACTS AND PROCEDURAL BACKGROUND
This litigation arises from a dispute over a condominium located at 919
Governor Nicholls Street purchased by Plaintiffs, Todd and Kate Novak, from
Defendants Jenny and Michael Tilbury. The Court previously granted summary
judgment to the Tilburys on all of Plaintiffs’ claims against them.1 On appeal, the
Fifth Circuit reversed summary judgment on Plaintiffs’ claims for intentional
misrepresentation, negligent misrepresentation, and detrimental reliance. Novak v.
Tilbury, 815 F. App’x 775, 759 (5th Cir. 2020) (per curiam).
(Rec. Docs. 193, 194).
On remand, State Farm intervened seeking a declaratory judgment that it is
not required to defend or indemnify the Tilburys under a condominium unit owner’s
policy (the “Policy”) it issued to them for a different property, 632 Pirates Alley, which
is not the subject of this dispute. State Farm avers that it has been providing a
defense to the Tilburys under a reservation of rights. State Farm now contends that
the Policy does not cover the Tilburys for the instant dispute because there was no
“occurrence,” as defined by the Policy. State Farm’s motion for summary judgment is
before the Court on the briefs and without oral argument.
Summary judgment is appropriate when “the pleadings, the discovery and
disclosure materials on file, and any affidavits show that there is no genuine issue as
to any material fact and that the movant is entitled to judgment as a matter of law.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56); see Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a
dispute as to any material fact exists, a court considers “all of the evidence in the
record but refrains from making credibility determinations or weighing the evidence.”
Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th
Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but
a party cannot defeat summary judgment with conclusory allegations or
unsubstantiated assertions. Little, 37 F.3d at 1075. A court ultimately must be
satisfied that “a reasonable jury could not return a verdict for the nonmoving party.”
Delta, 530 F.3d at 399.
The parties agree that the following is the coverage provision relevant to the
COVERAGE L – PERSONAL LIABILITY
If a claim is made or a suit is brought against an insured for damages
because of bodily injury or property damage to which this coverage
applies, caused by an occurrence, we will:
1. pay up to our limit of liability for the damages for which the insured
is legally liable; and
2. provide a defense at our expense by counsel of our choice. We may
make any investigation and settle any claim or suit that we decide is
appropriate. Our obligation to defend any claim or suit ends when the
amount we pay for damages, to effect settlement or satisfy a judgment
resulting from the occurrence, equals our limit of liability.2
The Policy defines “occurrence” as “an accident, including exposure to conditions,
which results in: a. bodily injury; or b. property damage; during the policy period.
Repeated or continuous exposure to the same general conditions is considered to be
one occurrence.”3 Additionally, the Policy defines “property damage” as “physical
damage to or destruction of tangible property, including loss of use of this property.”4
State Farm contends that the Policy does not provide coverage to the Tilburys
with respect to the claims raised by Plaintiffs because there was no “accident” in
connection with the act of sale, which is the basis of Plaintiffs’ claims, and therefore
there was no “occurrence” that triggered coverage.
(Rec. Doc. 225-3, at 30-31).
Id. at 18.
“Under Louisiana law, the insurer’s duty to defend is generally broader than
its liability for damage claims.” T.H.E. Ins. Co. v. Larsen Intermodal Servs., Inc., 242
F.3d 667, 677 (5th Cir. 2001). “‘[T]he insurer’s duty to defend . . . is determined by the
allegations of the injured plaintiff’s petition, with the insurer being obligated to
furnish a defense unless the petition unambiguously excludes coverage.’” Id.
(alterations in original) (quoting Am. Home Assurance Co. v. Czarniecki, 255 La. 251,
230 So. 2d 253, 259 (1969)).
In Lawyer v. Kountz, 97-2701, p. 8 (La. App. 4th Cir. 7/29/98), 716 So. 2d 493,
496-97, the court considered policy language identical to that at issue here. The
plaintiff brought claims for breach of warranty and misrepresentation arising from
the act of sale of a residential property, alleging that the property contained
redhibitory defects. Id. at 497. The defendant-insureds brought third-party claims
against their insurers, seeking indemnity and a legal defense against plaintiff’s
lawsuit. Id. at 495. As here, State Farm argued that the act of sale did not constitute
an occurrence that would be covered by the policy at issue. Id.
The court agreed, stating, “An occurrence is defined as an ‘accident’ in . . . the
State Farm policy. The basis for the demands against defendants is the sale of the
property, and we fail to consider the sale of residential property to be an ‘accident.’”
Id. at 497. The court further held that “[t]he defects in the property which allegedly
existed prior to [the sale] cannot be considered an ‘occurrence’ sufficient to trigger
coverage for plaintiff’s demands under the express terms of the homeowner’s policies.”
Id.; accord Brewster v. Hunter, 09-932, p. 7 (La. App. 5th Cir. 3/9/10), 38 So. 3d 912,
917; Pierce v. Rodriguez, 17-681, p. 6 (La. App. 3d Cir. 7/18/18), 2018 WL 3479209, at
In opposition, the Tilburys fail to address this line of cases but merely argue
that the First Circuit has, on at least one occasion, found that claims for negligent
misrepresentation were covered by a homeowner’s insurance policy. However, both
Brewster and Pierce involved claims for negligent misrepresentation, and both found
such claims were not covered when a plaintiff brought claims for redhibitory defects
against an insured. Pierce, 2018 WL 3479209, at *4; Brewster, 38 So. 3d at 919. The
Tilburys also assert that Plaintiffs may be seeking damages for physical damage to
and loss of use of the condominium. While physical damage and loss of use may
constitute “property damage” under the Policy, the Tilburys fail to explain how this
damage could be considered to be caused by an “occurrence” covered by the Policy.
Finally, the Tilburys contend that there is no specific exclusion in the Policy for claims
in redhibition or based on negligent misrepresentation or detrimental reliance. But
as the party asserting coverage, it is the Tilburys’ burden to prove coverage, see
Brewster, 38 So. 3d at 919, and they have failed to do so here.
Therefore, the Court holds that the Policy “unambiguously excludes coverage”
of Plaintiffs’ claims, T.H.E. Ins. Co., 242 F.3d at 677, because the Tilburys’ “alleged
failure to disclose the defects in the [condominium] prior to and at the time of the act
of sale . . . do not constitute an ‘occurrence’ under” the Policy, Brewster, 38 So. 3d at
IT IS HEREBY ORDERED that State Farm Fire and Casualty Company’s
Motion for Summary Judgment (Rec. Doc. 225) is GRANTED.
New Orleans, Louisiana, this 14th day of September, 2020.
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
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