Ruello et al v. JP Morgan Chase Bank NA

Filing 57

ORDER AND REASONS: For the reasons stated herein, the 43 motion is DENIED IN PART and GRANTED IN PART. Summary judgment is DENIED as to the indemnification- and-defense provision in the Agreement. Summary judgment is GRANTED as to the insurance provision requiring AMR to name SMS as an additional insured on its general liability insurance policy. Signed by Judge Sarah S. Vance on 6/4/2021. (mm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DENNIS LOUIS RUELLO, ET AL.
VERSUS

CIVIL ACTION
NO. 20-895

JP MORGAN CHASE BANK, N.A.

SECTION “R” (1)

ORDER AND REASONS
Defendant AMR Lawn and Landscaping, LLC (“AMR”), moves for
summary judgment on SMS Assist L.L.C.’s (“SMS”) third-party complaint for
defense costs and indemnification for plaintiff’s claims. 1 AMR also moves
for summary judgment on SMS’s third-party claim that AMR is required to
name SMS as an additional insured on AMR’s general liability policy.2 SMS
opposes the motion. 3 For the reasons stated below, the motion is denied in
part and granted in part.

R. Doc. 43. AMR, citing Federal Rule of Civil Procedure 56, captions
its motion as a motion to dismiss. R. Doc. 43 at 1. AMR asserts that it is
entitled to a judgment as a matter of law and submits a list of uncontested
facts. The Court construes AMR’s motion as a motion for summary
judgment.
2
R. Doc. 43-2.
3
R. Doc. 45.
1

I.

BACKGROUND
This case arises from a slip and fall. Plaintiff, Dennis Ruello, contends

that he slipped and fell while exiting the JP Morgan Chase, N.A. Bank located
at 1415 Metairie Road, Metairie, Louisiana, 70005 on May 18, 2018 (the
“Bank”). 4 Ruello alleges that his left foot came in contact with a sprinkler
head at the edge of the Bank’s lawn, which caused his fall.5
On May 21, 2019, Ruello filed suit in state court alleging that JP
Morgan Chase Bank, N.A.’s (“JP Morgan”) negligence caused the accident
and resulting injuries. 6 On March 13, 2020, JP Morgan removed to federal
court, contending that it had received materials from plaintiff indicating that
the requirements of diversity jurisdiction under 28 U.S.C. § 1332 were
satisfied.7
On July 29, 2020, JP Morgan filed a third-party complaint against
SMS. 8 The third-party complaint alleges that, before Dennis Ruello’s alleged
injury, JP Morgan entered into a contract with an entity called CBRE, Inc.,
to perform maintenance and inspection of sprinklers at the Bank.9 JP

4
5
6
7
8
9

R. Doc. 1-2 at ¶¶ II-IV.
Id. at 1 ¶ IV.
Id. at 2 ¶ VI.
R. Doc. 1 at 2-4, ¶¶ 5-17.
R. Doc. 23.
Id. at 1-2 ¶ IV.
2

Morgan alleges that CBRE in turn entered into a contract with SMS, under
which SMS was obligated to perform maintenance and inspection of the
sprinklers at the Bank.10 In addition, JP Morgan asserts that, under the
CBRE-SMS contract, SMS is required to defend and indemnify both CBRE
and JP Morgan for plaintiff’s personal injury claims.11
On September 25, 2020, SMS filed a third-party complaint against
AMR.12 SMS asserts that it entered into a contract with AMR under which
AMR was required to perform full maintenance of any irrigation systems at
the Bank. 13 SMS asserts that, under the AMR-SMS Affiliate Master Service
Agreement (“Agreement”), AMR must indemnify SMS for any and all claims
relating to AMR’s work.14 In addition, SMS alleges that AMR was required
to procure general liability coverage and to name SMS as an insured on that
policy.15
AMR moves for summary judgment on SMS’s third-party complaint. 16
AMR asserts that the Louisiana Anti-Indemnity Act (“LAIA”), La. Rev. Stat.
§ 9:2780.1, requires that SMS’s third-party complaint against AMR be

10
11
12
13
14
15
16

Id. at 2 ¶ V.
Id. at 2 ¶ VI.
R. Doc. 34.
Id. at 2 ¶ 4.
Id. at 2 ¶ 5.
Id. at 2 ¶ 6.
R. Doc. 43.
3

dismissed with prejudice.17 Specifically, AMR seeks a judgment from the
Court declaring that (1) the indemnification provision in the Agreement is
void and (2) the provision requiring AMR to name SMS as an additional
insured on its liability insurance is void. The Court considers the motion
below.

II.

LEGAL 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) (en banc) (per curiam). “When assessing whether a
dispute to any material fact exists, [the Court] consider[s] all of the evidence
in the record but refrain[s] from making credibility determinations or
weighing 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.”

17

R. Doc. 43-2 at 3.
4

Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985) (quoting
10A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure
§ 2738 (2d ed. 1983)); see also Little, 37 F.3d at 1075. “No genuine dispute
of fact exists if the record taken as a whole could not lead a rational trier of
fact to find for the non-moving party.” EEOC v. Simbaki, Ltd., 767 F.3d 475,
481 (5th Cir. 2014).
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) (quoting Golden Rule Ins. Co. v. Lease, 755 F. Supp.
948, 951 (D. Colo. 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 by “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
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
5

325.

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
resolution. 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
(emphasis added))).

III. DISCUSSION
A.

The Louisiana Anti-Indemnity Act

In 2010, the Louisiana Legislature enacted the Louisiana AntiIndemnity Act (“LAIA”), La. Rev. Stat. § 9:2780.1.

The LAIA governs

indemnification clauses in “construction contracts” and “motor carrier
transportation contracts.” La. Rev. Stat. § 9:2780.1. The LAIA provides:
[A]ny provision of law to the contrary and except as otherwise
provided in this Section, any provision, clause, covenant, or
agreement contained in, collateral to, or affecting a motor carrier
transportation contract or construction contract which purports
to indemnify, defend, or hold harmless, or has the effect of
indemnifying, defending, or holding harmless, the indemnitee
6

from or against any liability for loss or damage resulting from the
negligence or intentional acts or omissions of the indemnitee, an
agent or employee of the indemnitee, or a third party over which
the indemnitor has no control is contrary to the public policy of
this state and is null, void, and unenforceable.
La. Rev. Stat. § 9:2780.1(B).
In addition, the LAIA voids contractual provisions that require an
indemnitor to procure liability insurance covering the acts or omissions of
the indemnitee. The LAIA provides:
Notwithstanding any provision of law to the contrary and except
as otherwise provided in this Section, any provision, clause,
covenant, or agreement contained in, collateral to, or affecting a
motor carrier transportation contract or construction contract
which purports to require an indemnitor to procure liability
insurance covering the acts or omissions or both of the
indemnitee, its employees or agents, or the acts or omissions of
a third party over whom the indemnitor has no control is null,
void, and unenforceable. However, nothing in this Section shall
be construed to prevent the indemnitee from requiring the
indemnitor to provide proof of insurance for obligations covered
by the contract.
La. Rev. Stat. § 9:2780.1(C).

AMR relies on both §§ 9:2780.1(B) and

9:2780.1(C) to assert that various provisions in the Agreement are void. The
Court considers AMR’s arguments in turn.
B.

The Agreement is a Construction Contract

The LAIA applies only to construction contracts and motor carrier
transportation contracts. See La. Rev. Stat. § 9:2780.1. As a preliminary
matter, the Court must determine whether the Agreement falls into either
7

one of those categories. AMR asserts the Agreement is a construction
contract. 18 The LAIA defines “[c]onstruction contract” as:
[A]ny agreement for the design, construction, alteration,
renovation, repair, or maintenance of a building, structure,
highway, road, bridge, water line, sewer line, oil line, gas line,
appurtenance, or other improvement to real property, or repair
or maintenance of a highway, road, or bridge, including any
moving, demolition, or excavation, except that no deed, lease,
easement, license, or other instrument granting an interest in or
the right to possess property will be deemed to be a construction
contract even if the instrument includes the right to design,
construct, alter, renovate, repair, or maintain improvements on
such real property.
La. Rev. Stat. § 9:2780.1(A)(2)(a). In Atl. Specialty Ins. v. Phillips 66 Co.,
790 F. App’x 598, 600 (5th Cir. 2019), the Fifth Circuit interpreted the LAIA’s
definition of “construction contract.” The Phillips court noted that the
contract at issue, which involved maintenance work on a natural gas
pipeline, qualified as a construction contract, because the natural gas
pipeline could qualify as a “gas line,” “structure,” or an “improvement”
within the meaning of the LAIA. Id. The Phillips court noted that the LAIA
defined the term construction contract “capaciously.” Id.
Here, the Agreement indicates that AMR is to perform “Landscaping
Services” at the Bank.19

18
19

Those services include, for example, AMR’s

Id. at 5.
Id. at 18.
8

obligation to mow and trim the Bank’s lawn to certain specifications,20 prune
and shape vegetation, 21 and perform weed removal and pest control.22 In
addition, the Agreement indicates that AMR must perform “Irrigation
Services” which “requires that [AMR] be responsible . . . for the
maintenance” of “[i]rrigation systems.”23 The Agreement indicates:
The full maintenance of any existing irrigation systems shall
include full maintenance service for all parts and labor and
spring start-up and winterization and shall be the responsibility
of [AMR]. [AMR] shall be responsible to abide by all water usage
regulations as imposed by the local water district. 24
The Court finds that there is no genuine issue of material fact on this
issue; the Agreement is a “construction contract.” First, the LAIA’s definition
of construction contract includes the “maintenance” of “improvement[s] to
real property.” La. Rev. Stat. § 9:2780.1(A)(2)(a). Under Louisiana law,25
the landscaping of trees, bushes, and other vegetation constitutes an
“improvement” to real property. See State Through Dep't of Highways v.
Blair, 285 So. 2d 212, 215 (La. 1973) (noting that trees, plants, and shrubs on

R. Doc. 43-3 at 18.
Id. at 19.
22
Id. at 21.
23
Id. at 18.
24
Id. at 20.
25
There is no dispute that Louisiana law governs this dispute. R. Doc.
43-2 (citing Louisiana law and federal cases applying Louisiana law); R.
Doc. 45 (citing Louisiana law).
9
20
21

the property were improvements); Reagan v. Reagan, 250 So. 3d 1122, 1134
(La. App. 2 Cir. 2018) (considering landscaping to be an “improvement”);
Leblanc v. Trappey, 838 So. 2d 860, 864 (La. App. 3 Cir. 2003) (noting that
the “prevailing meaning” of “improvement” includes “landscaping”), writ
denied, 842 So. 2d 1107 (La. 2003); State through Dep't of Highways v.
Bernard, 271 So. 2d 303, 307 (La. Ct. App. 3 Cir. 1972) (noting that “trees
constitute . . . an ‘improvement’, similar to a building or a fence”); see also
La. Civ. Code art. 493 (referring to “improvements” as “[b]uildings, other
constructions permanently attached to the ground, and plantings made on
the land” (emphasis added)); cf. Hartford Ins. of Midwest v. Am. Automatic
Sprinkler Sys., 201 F.3d 538, 543 (4th Cir. 2000) (noting that landscaping is
an “improvement to real property”).
Second, the parties agree that the Agreement requires AMR to perform
full maintenance of any existing irrigation systems. The Court notes that
“maintenance” of a “water line” is also included within the definition of a
“construction contract.” La. Rev. Stat. § 9:2780.1(A)(2)(a). The obligation
to perform “full maintenance” on “any existing irrigation system” would
include any maintenance to an existing “water line” on the property. Cf.
Phillips 66 Co., 790 F. App'x 598, 600 (5th Cir. 2019) (reasoning that “a
natural gas pipeline is fairly encompassed in the ‘gas line’ provision of the
10

statute”). Thus, the Court finds that there is no genuine issue of material fact
that the Agreement is a “construction contract” within the meaning of LAIA.
C.

The Indemnification and Defense Provision

SMS sued AMR for “full defense costs and indemnity” in the event that
SMS is held liable. 26 AMR moves for summary judgment on that claim. 27 In
doing so, AMR states that the defense-and-indemnity provisions in
paragraph 2128 of the Agreement are void under § 9:2780.1(B).
The determination AMR asks the Court to make at the summary
judgment stage is premature.

Case law interpreting the “almost

indistinguishable” Louisiana Oilfield Indemnity Act (LOIA), La. Rev. Stat.
§ 9:2780, is persuasive. See Louisiana United Bus. Ass'n Cas. Ins. v. J & J

26
27
28

R. Doc. 33 at 2 ¶ 7.
R. Doc. 43.
The provision in the Agreement cited by AMR indicates as follows:
21. INDEMNIFICATION. [AMR] shall defend, indemnify and
hold harmless SMS Assist, [JP Morgan] and their respective
officers . . . from and against any and all claims . . . arising out of
or relating to: (a) [AMR’s] performance of or the failure to
perform the Contract Duties; (b) a breach of this Agreement by
[AMR] . . . ; (c) any negligence or willful misconduct by [AMR]
or any of its affiliates; (d) a violation of law . . . .
Indemnification shall apply regardless of whether any of the
indemnified parties contributed to the claim by their own negligence.

R. Doc. 43-3 at 12.
11

Maint., Inc., 328 F. Supp. 3d 563, 572 (W.D. La. 2018) (referring to the LOIA
as “an almost indistinguishable statute” in terms of its indemnification
provision pertaining to oil, gas, or water wells); Salathe, 300 So. 3d at 471
(La. App. 5 Cir. 2020) (noting that the LOIA “contains similar prohibitions
against indemnity” to the LAIA). The Louisiana Supreme Court in Meloy v.
Conoco, 504 So. 2d 833, 839 (La. 1987), 29 held that when a court is asked to
void an indemnity provision under the LOIA, it may not do so until there has
been a determination of the indemnitee’s fault or liability. See also Borman
v. Shamrock Energy Sols., LLC, No. 17-11720, 2019 WL 670402, at *4 (E.D.
La. Feb. 19, 2019) (noting that because “there has not yet been a
determination regarding whether [the indemnitee] was negligent or at fault
(strict liability) for Plaintiff Borman’s injuries . . . [the court] cannot
determine the enforceability of Defendants’ defense and indemnity
obligations . . . at this time”). At least one court has held that the same
principle applies in the LAIA context. See Louisiana United Bus. Ass'n Cas.
Ins. v. J & J Maint., Inc., 328 F. Supp. 3d 563, 571 (W.D. La. 2018).

In Meloy, The United States Court of Appeals for the Fifth Circuit
certified questions to the Louisiana Supreme Court regarding the application
of the LOIA to an indemnity agreement between an oil company and a
contractor. See 504 So. 2d 833, 834-35.
12

29

The Louisiana Supreme Court based its decision in Meloy on the
principle that “a cause of action for indemnification for cost of defense does
not arise until the lawsuit is concluded and defense costs are paid.” Id. at
839. The Meloy court further noted that “the indemnitor’s obligation for cost
of defense cannot be determined until there has been a judicial finding that
the indemnitee is liable.” Id. The court observed that the LOIA “only
prohibits indemnity for cost of defense where there is negligence or fault
(strict liability) on the part of the indemnitee.” Id. at 839. The court
concluded that the whether an indemnitee “is free from fault and thus
outside the scope of the [LOIA] can only be determined after trial on the
merits.” Id. (emphasis added). Citing Meloy, courts have held that they are
not permitted to void indemnity provisions under the LOIA until there has
been a judicial finding as to the indemnitee’s liability or fault. See Durr v.
GOL, LLC, 393 F. Supp. 3d 476, 490 (E.D. La. 2019) (“[T]he LOIA does not
apply where the indemnitee is not negligent or at fault, which cannot be
determined until after trial on the merits.”); see also Borman, 2019 WL
670402, at *4 (holding that the court cannot make a determination on the
enforceability of an indemnity provision until there has been a finding of
negligence or fault on the part of the indemnitee).

13

The Meloy reasoning applies with equal force in the LAIA context. 30
Indeed, the relevant passages of the LOIA and LAIA are nearly identical: the
LOIA voids provisions in contracts that indemnify an indemnitee for “loss or
liability for damages . . . caused by . . . the sole or concurrent negligence or
fault (strict liability) of the indemnitee.” La. Rev. Stat. § 9:2780. The LAIA
voids provisions that indemnify an indemnitee “for loss or damage resulting
from the negligence or intentional acts or omissions of the indemnitee.” La.
Rev. Stat. § 9:2780.1(B). Further, Meloy’s reasoning is not predicated solely
on the text of the LOIA, but also on the principle that a cause of action for
indemnification does not accrue until a court has made a determination of
liability. See Meloy, 504 So. 2d at 839; see also Appleman on Insurance Law
& Practice Archive § 4261 (2d. ed. 2011) (“The chief difference between a
liability policy and an indemnity policy is that under the former a cause of
action accrues when the liability attaches, while under the latter there is no
cause of action until the liability has been discharged, as by payment of the
judgment by the insured.”). This principle applies equally to both statutes.

The Court notes that Meloy differentiates between the duty to defend
and the duty to indemnify, at least in the insurance context. See Meloy, 504
So.2d at 838-39. Here, AMR moves for summary judgment on SMS’s thirdparty complaint, which is for “full defense costs and indemnity.” R. Doc. 34
at 2 ¶ 7. The Meloy court noted that an action for “defense costs” was part of
the action for indemnification. Id. at 839.
14
30

The Court finds that, because there has not yet been a determination
as to SMS’s liability or fault, AMR’s motion for summary judgment on SMS’s
claim for defense costs and indemnification is premature. See Meloy, 504
So. 2d at 839; Borman, 2019 WL 670402, at *4; J & J Maintenance, Inc.,
328 F. Supp. 3d at 571. Thus, the Court denies AMR’s motion for summary
judgment on SMS’s third-party complaint for defense costs and
indemnification.
D.

Adding SMS as a Named Insured

AMR moves for summary judgment on a provision in the Agreement
that requires AMR to procure general liability coverage and to name SMS as
an additional insured on that policy. This argument invokes La. Rev. Stat.
§ 9:2780.1(C). Section 9:2780.1(C) “renders null, void, and unenforceable,
provisions in construction contracts that require an indemnitor to procure
liability insurance covering the acts or omissions of an indemnitee.” Salathe,
300 So. 3d at 469. AMR contends that § 9:2780.1(C) voids the following
provision in the Agreement:
22. INSURANCE. At all times while performing Work under this
Agreement, [AMR] shall maintain, at its sole cost and expense,
insurance in a form reasonably satisfactory to SMS Assist with
limits of liability and all other requirements not less than stated
in this section . . . . All insurance policies shall be primary and
non-contributory to any other insurance of SMS Assist or [JP

15

Morgan] . . . . [AMR] shall . . . name[] SMS Assist and [JP
Morgan], individually as an additional insured. 31
The Louisiana Fifth Circuit’s analysis in Salathe v. Parish of Jefferson
is instructive. 300 So. 3d at 460. There, the court considered a contract
between Fleming Construction Company and Jefferson Parish, Louisiana.
The contract required Fleming to name Jefferson Parish as an additional
insured “with respect to comprehensive general liability, automobile
liability, and umbrella liability.” Id. at 464. The Salathe court affirmed the
trial court’s grant of summary judgment under § 9:2780.1(C), holding that
the provision was void “to the extent . . . [it could] be interpreted as requiring
Fleming to . . . procure insurance coverage for Jefferson Parish’s own
negligence.” 300 So. 3d at 473.
The insurance provision at issue in this case is similar to the one in
Salathe. It broadly requires AMR to name SMS Assist an “additional
insured[]” on its general liability policy. The Agreement provides that the
policy must contain “minimum general liability” coverage in the amount of
“$1,000,000 each occurrence and $2,000,000 general aggregate.”32 The
Agreement also provides that AMR is to bear the “sole cost and expense” of

31
32

R. Doc. 43-3 at 12-13.
Id. at 12.
16

the policy, 33 which places this provision outside any of the statutory
exceptions to the LAIA that might render the insurance provision
enforceable.34

The Agreement does not exclude coverage for SMS’s own

negligence from the scope of insurance to be obtained.
SMS does not offer any relevant counterarguments in its opposition. It
points to language in § 9:2780.1(C) which allows an indemnitee to “requir[e]
the indemnitor to provide proof of insurance for obligations covered by the
contract.” La. Rev. Stat. § 9:2780.1(C). SMS does not explain how the
Agreement’s language, requiring AMR to name SMS as an additional insured
on its liability policy, amounts to an obligation requiring AMR to provide
“proof of insurance.” Accordingly, the Court finds that there is no genuine
issue of material fact that the Agreement’s requirement that AMR maintain
liability insurance naming SMS as an additional insured is void under
§ 9:2780.1(C). Salathe, 300 So. 3d at 473.

Id.
“[I]f there is evidence that the indemnitor recovered the cost of the
required insurance,” the LAIA does not void certain contractual provisions.
La. Rev. Stat. § 9:2780.1 (I); see also Atl. Specialty Ins. v. Phillips 66 Co., 365
F. Supp. 3d 706, 714 (E.D. La. 2019) (noting that cost-shifting away from the
indemnitor is required for the statutory exceptions under § 9:2780.1(I) to
apply).
17
33

34

IV.

CONCLUSION
For the foregoing reasons, the motion is DENIED IN PART and

GRANTED IN PART.

Summary judgment is DENIED as to the

indemnification-and-defense provision in the Agreement.

Summary

judgment is GRANTED as to the insurance provision requiring AMR to name
SMS as an additional insured on its general liability insurance policy.

4th
New Orleans, Louisiana, this _____ day of June, 2021.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

18