Donahue et al v. Republic National Distributing Company, LLC et al
Filing
254
ORDER AND REASONS - IT IS ORDERED that Republic National Distribution Company, LLC's Motion for Partial Summary Judgment (Rec. Doc. 100 ) is GRANTED; and United States Fire Insurance Company's Cross Motion for Summary Judgment (Rec. Doc. [ 104]) is DENIED, as set forth in document. US Fire must defend and cover Republic to the extent that Republic incurs liability for damages caused in whole or in part by W&H or those working on its behalf. Signed by Judge Jane Triche Milazzo on 1/8/2019. (sa)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOSHUA DONAHUE ET AL.
CIVIL ACTION
VERSUS
NO: 16-13948
REPUBLIC NATIONAL
DISTRIBUTING COMPANY,
LLC ET AL.
SECTION: “H”(1)
ORDER AND REASONS
Before the Court are a Motion for Partial Summary Judgment by
Defendant Republic National Distribution Company, LLC (“Republic”) (Doc.
100) and a Cross Motion for Summary Judgment by Third Party Defendant
United States Fire Insurance Company (“US Fire”) (Doc. 104). For the
following reasons, Republic’s Motion is GRANTED, and US Fire’s Motion is
DENIED.
BACKGROUND
This action arises from injuries that Plaintiff Joshua Donahue suffered
while working in the beverage distribution facility of Defendant Republic. To
replace an outdated conveyor system in its warehouse in Jefferson Parish,
Louisiana, Republic contracted with Defendant W&H Systems, Inc. (“W&H”).
The Court will refer to this contract between Republic and W&H as the “Project
Agreement.” To fulfill its obligations under the Project Agreement, W&H
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subcontracted with Defendant Darana Hybrid, Inc. (“Darana”), which was
hired to perform electrical work on the conveyor system. At the time, Darana
had an outstanding contract with Defendant American ManPower Services,
Inc. (“AMPS”) whereby AMPS provided labor to Darana. Plaintiff worked for
AMPS and under the contract with Darana was assigned to Darana’s electrical
project for W&H at the Republic facility.
On July 29, 2015, while descending a scaffold in Republic’s facility,
Donahue was injured when blades of an unguarded overhead fan struck him
in the head. Donahue filed this negligence and premises liability suit seeking
damages from the Defendants on June 8, 2016, in Civil District Court for the
Parish of Orleans. Defendants removed the action to this Court on August 18,
2016. The case initially was assigned to Chief Judge Kurt D. Engelhardt.
At the time Donahue suffered his injury, the Project Agreement required
W&H to obtain liability insurance coverage for the work it performed for
Republic and to name Republic as an additional insured under the insurance
policy. 1 W&H obtained the required coverage from US Fire. 2 An endorsement
to W&H’s policy with US Fire included as “additional insureds” entities whom
W&H was required by written contract to add as additional insureds. 3 A
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2
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See Doc. 66-3 at 4. Although the contract uses the term “co-insured” and not “additional
insured,” US Fire effectively concedes that the agreement between W&H and Republic
requires W&H to name Republic as an additional insured under its policy with US Fire.
Doc. 104-1 at 2 (“The Project Agreement also contains an insurance provision which states
[Republic] will be named as an additional insured.”). The issue before this Court is not
whether Republic is an additional insured under its agreement with W&H but whether the
policy itself limits the coverage US Fire must provide to Republic as an additional insured
under the policy.
See Doc. 66-4.
Id. at 9 (“Who Is An Insured is amended to include as an additional insured, any person or
organization whom [W&H is] required to add as an additional insured to this policy by
written contract or written agreement . . . .”). An “endorsement” is an amendment to an
insurance policy.
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subsequent endorsement amended the policy’s coverage of additional
insureds. 4 The amended policy provides:
Who Is An Insured is amended to include as an additional insured
the person(s) or organization(s) shown in the Schedule, but only
with respect to liability for “bodily injury,” “property damage” or
“personal and advertising injury” caused, in whole or in part, by:
1. [W&H] acts or omissions; or
2. The acts or omissions of those acting on [W&H’s] behalf;
in the performance of [W&H’s] ongoing operations for the
additional insured(s) . . . . 5
On March 27, 2017, Republic filed a Third Party Complaint against US
Fire seeking defense and indemnity. 6 Republic first alleged that US Fire as
W&H’s insurer owed Republic “contractual indemnification for the claims
made the basis of this suit.” 7 Second, Republic alleged that it was entitled to
“coverage and defense” by US Fire as an additional insured under W&H’s
insurance policy with US Fire. 8
On November 11, 2017, US Fire filed a Motion for Summary Judgment
to Dismiss the Third Party Complaint. 9 US Fire argued both that the Project
Agreement did not require it to indemnify Republic and that its policy with
W&H did not require it to cover and defend Republic as an additional insured.
A few days later, on November 22, 2017, Republic filed a Cross Motion for
Summary Judgment seeking defense and indemnity from US Fire under its
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6
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See id. at 15.
Id. “Schedule” refers to the original endorsement that described the policy’s coverage of
additional insureds. Doc. 66-4 at 5.
Doc. 22.
Id.
Id.
Doc. 61.
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Third Party Complaint. 10 The Court will refer collectively to these Cross
Motions as the “Initial Cross Motions.”
At the time the Initial Cross Motions were filed, Judge Engelhardt
presided over this action. Before he ruled on the Initial Cross Motions, both
parties filed new cross motions (the “Subsequent Cross Motions”) on the same
issues. 11 It is the Subsequent Cross Motions that are pending before this Court.
After the Subsequent Cross Motions were filed but before they came
under submission, Judge Engelhardt ruled on the Initial Cross Motions. 12 In
his ruling, Judge Engelhardt granted US Fire’s Motion for Summary
Judgment in part, holding that the agreement between Republic and W&H did
not entitle Republic to contractual indemnification from US Fire. 13 The Order
and Reasons denied the parties’ other requests in the Initial Cross Motions,
reasoning that it would be more appropriate for this Court to handle them in
analyzing the Subsequent Cross Motions. As such, this Court will now consider
the Subsequent Cross Motions.
LEGAL STANDARD
Summary judgment is appropriate if “the record, including depositions,
documents, electronically stored information, affidavits or declarations,
stipulations. . . , admissions, interrogatory answers, or other materials” “shows
that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” 14 A genuine issue of fact exists only
Doc. 66.
Docs. 100, 104.
12 Doc. 125.
13 Id.
14 FED. R. CIV. P. 56 (2012).
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“if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” 15
In determining whether the movant is entitled to summary judgment,
the Court views facts in the light most favorable to the non-movant and draws
all reasonable inferences in his favor. 16 “If the moving party meets the initial
burden of showing that there is no genuine issue of material fact, the burden
shifts to the non-moving party to produce evidence or designate specific facts
showing the existence of a genuine issue for trial.” 17 Summary judgment is
appropriate if the non-movant “fails to make a showing sufficient to establish
the existence of an element essential to that party’s case.” 18 “In response to a
properly supported motion for summary judgment, the nonmovant must
identify specific evidence in the record and articulate the manner in which that
evidence supports that party’s claim, and such evidence must be sufficient to
sustain a finding in favor of the nonmovant on all issues as to which the
nonmovant would bear the burden of proof at trial.” 19 The Court does “not . . .
in the absence of any proof, assume that the nonmoving party could or would
prove the necessary facts.” 20 Additionally, “[t]he mere argued existence of a
factual dispute will not defeat an otherwise properly supported motion.” 21
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Coleman v. Houston Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir. 1997).
17 Engstrom v. First Nat’l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995).
18 Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
19 Johnson v. Deep E. Tex. Reg. Narcotics Trafficking Task Force, 379 F.3d 293, 301 (5th Cir.
2004) (internal citations omitted).
20 Badon v. R J R Nabisco, Inc., 224 F.3d 382, 393–94 (5th Cir. 2000) (quoting Little v. Liquid
Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)).
21 Boudreaux v. Banctec, Inc., 366 F. Supp. 2d 425, 430 (E.D. La. 2005).
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LAW AND ANALYSIS
As an initial matter, the Court notes that because Judge Engelhardt’s
May 18, 2018 Order and Reasons granted US Fire’s Motion for Summary
Judgment as to Republic’s claims for contractual indemnification, to the extent
Republic seeks such relief in its Motion for Partial Summary Judgment, this
Court has already denied that request. The issue before this Court, then, is
whether US Fire must cover and defend Republic as an additional insured to
US Fire’s insurance policy with W&H.
US Fire argues that the policy only requires it to cover and defend
additional insureds to the extent they may incur vicarious liability for harm
caused by W&H. Because Plaintiffs do not claim Republic is vicariously liable
for W&H, US Fire argues that Republic is not covered by its policy, and that it
does not owe Republic anything. Republic responds that the language of the
policy provides no such limit, and that US Fire must provide it coverage under
the policy for any liability—not just vicarious liability—it may incur because
of damages caused in whole or in part by W&H or others who acted on W&H’s
behalf.
“Because this is a diversity action, . . . [this Court] must apply Louisiana
law in an attempt to rule as a Louisiana court would if presented with the same
issues.” 22 Under Louisiana law, “[a]n insurance policy is a conventional
obligation that constitutes the law between the insured and insurer, and the
agreement governs the nature of their relationship. 23 Insurance policies,
therefore, “should be construed . . . using the general rules for the
interpretation of contracts” under Louisiana law. 24 “The role of the judiciary in
Musser Davis Land Co. v. Union Pac. Res., 201 F.3d 561, 563 (5th Cir. 2000).
Peterson v. Schimek, 729 So. 2d 1024, 1028 (La. 1999) (citing LA. CIV. CODE art. 1983).
24 Carbon v. Allstate Ins. Co., 719 So. 2d 437, 439 (La. 1998).
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interpreting insurance contracts is to ascertain the common intent of the
parties to the contract.” 25 “When the words of an insurance contract are clear
and explicit and lead to no absurd consequences, courts must enforce the
contract as written and may make no further interpretation in search of the
parties’ intent.” 26
Here, US Fire’s policy is clear and leads to no absurd consequences. The
policy covers additional insureds for liability they may incur for damages
caused in whole or in part by W&H or those acting on its behalf. 27 Donahue
alleges that he suffered injuries caused in part by the alleged negligence of
W&H and others working on its behalf to fulfill its obligations under the
Project Agreement. 28 Even though this Court granted summary judgment in
W&H’s favor on immunity grounds, 29 and even though Plaintiffs do not allege
that Republic is vicariously liable for W&H, 30 Republic could incur liability for
damages caused in part by the negligence of W&H or someone working on its
behalf.
A court in Louisiana’s Middle District recently faced this exact issue
when interpreting policy language materially identical to that before the Court
in this case. 31 In Moore v. Home Depot USA, Inc., the court rejected the same
argument advanced by US Fire here—that the policy’s language limits
additional insured coverage to vicarious liability—because such a reading of
the language would have required the court “to read into the policy a limit on
Id. (citing LA. CIV. CODE art. 2045).
Peterson, 729 So. 2d at 1028.
27 Doc. 66-4 at 15.
28 See Doc. 203.
29 See Doc. 207.
30 See Doc. 203.
31 See Moore v. Home Depot USA, Inc., No. 16-810, 2018 WL 4976811, at *2, 5 (M.D. La. Oct.
15, 2018).
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coverage that is not in the policy’s text.” 32 As stated in Moore, if US Fire wanted
to limit its additional insured coverage to vicarious liability, “it could have used
language reflecting that intent.” 33 Other federal district courts have rejected
the same argument advanced by US Fire here. 34
Even if this Court were to find that the policy’s language is ambiguous,
Louisiana law would require the Court to interpret the policy language against
US Fire, the insurer that furnished the policy’s text. 35 For that reason and
those explained in Moore, this Court finds that the additional insured coverage
US Fire must afford to Republic under its policy with W&H extends beyond
mere vicarious liability. 36
Id. at *6.
Id. See Merchants Ins. Co. of New Hampshire v. U.S. Fid. & Guar. Co., 143 F.3d 5, 10 (1st
Cir. 1998) (“[I]f [the insurer] had really intended to limit coverage under the additional
insured Endorsement to those situations in which an added insured . . . was to be held
vicariously liable only for the negligence of a principal insured . . . , [the insurer] was free
to draft a policy with qualifying language that expressly implemented that intention.”).
34 See, e.g., Pro Con, Inc. v. Interstate Fire & Cas. Co., 794 F. Supp. 2d 242, 254–56 (D. Me.
2011) (extending additional insured coverage beyond vicarious liability when interpreting
identical policy language); Am. Guarantee & Liab. Ins. Co. v. Norfolk S. Ry. Co., 278 F.
Supp. 3d 1025, 1042 (E.D. Tenn. 2017) (extending additional insured coverage beyond
vicarious liability when interpreting materially identical policy language); First Mercury
Ins. Co. v. Shawmut Woodworking & Supply, Inc., 48 F. Supp. 3d 158, 174 (D. Conn. 2014)
(extending additional insured coverage beyond vicarious liability when interpreting
materially identical policy language).
35 Peterson, 729 So. 2d at 1029 (“If, after applying the other general rules of construction, an
ambiguity remains, the ambiguous contractual provision is to be construed against the
insurer who furnished the policy’s text and in favor of the insured finding coverage.”); LA.
CIV. CODE art. 2056 (“In case of doubt that cannot be otherwise resolved, a provision in a
contract must be interpreted against the party who furnished its text.”).
36 US Fire cites to the decision by another section of this court in Pellegrin v. Ansley Place
Apartments, L.L.C., No. 11-289, 2012 WL 831468 (E.D. La. Mar. 12, 2012), to support its
argument that the policy’s language limits additional insured coverage to vicarious
liability. But for the reasons explained in Moore, 2018 WL 4976811, at *6 n. 9, the holding
in Pellegrin was not so limited. See Pellegrin, 2012 WL 831468, at *4 (“[To the degree that
either [additional insured] were to be held liable because of the fault of [the principal
insured], then the [insurer’s] policy must respond.”). Pellegrin, therefore, does not support
US Fire’s position. See id.
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CONCLUSION
For the foregoing reasons, Republic’s Motion is GRANTED, and US
Fire’s Motion is DENIED. US Fire must defend and cover Republic to the
extent that Republic incurs liability for damages caused in whole or in part by
W&H or those working on its behalf. 37
New Orleans, Louisiana this 8th day of January, 2019.
____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE
37
Of course, the coverage only applies to the damages covered by the policy itself, which
includes damages for “bodily injury,” “property damage,” or “personal and advertising
injury.” Doc. 66-4 at 15.
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