O.V. Smith, Dawn Smith, Fawn Smith and Daniel Smith, Charles R. Landry, II and Dean Hunt VS Skip Noel, Individually and d/b/a Outdoor Living, Carl E. Woodward, LLC, Carl E. Woodward, Inc., Sunrise Baton Rouge Assisted Living, LLC, Sunrise Assisted Living, Inc., Warren R. Ruiz d/b/a Ruiz Contractors
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NiJMBER 2012 CA 1216 V O SMITH DAWN SMITH FAWN SMITH AND DAr SMITH CHARLES R LANDRY II IEL DEAN IIUNT j VERSUS i lD j SKIP NOEL INDIVIDUALLY AND DB OUTDOOR A G i LIVING CARL E WOODWARD LLC AND CARL E WOODWARD INC WARREN R RUIZ DB RUIZ CONTRACTORS A SUNRISE BATON ROUGE ASSISTED LNING LLC AND SUNRISE ASSISTED LNING INC Judgment Rendered aPR 2 3 2013 Appealea from the 19 Judicial District Court In and for the Parish of East Baton Rouge Louisiana Trial Court Number 484 881 Honorable Timothy E Kelley Judge Regel L Bisso Metairie LA Attorney for Appellants Claim Sunrise Cross Plaintiffs Baton Rouge Assisted Living LLC and Sunrise Assisted Living Inc Amos H Davis Baton Rouge LA Attorney for Appellees Claim Skip Cross Defendants Noel d Outdoor a b Living and Colony Insurance Company Leon Aucoin Attorney for Appellee Covington Claim Carl Cross Defendant E Woodward Inc LA BEFORE PARRO WELCH AND KLINE JJ 1 Hon William E Kline Jr refired is serving as judge ad hoc by special appointment of the Louisiana Supreme Court WELCH J Sunrise Baton Rouge Assisted Living LLC and Sunrise Assisted Living Inc collectively referred to as Sunrise cross plaintiffs appeal a claim summary judgment rendered in favor of cross defendants Carl E claim Woodward Ina Woodward and Skip Noel d Outdoor Living Outdoor a b Living and its insurer Colony Insurance Cornpany and a judgment sustaining a peremptory exception raising the objection of no cause of action in favor of Woodward We reverse BACKGROUND On June 14 2001 O Smith Charles R Landry II and Dean Hunt filed a V lawsuit seeking damages for injuries they allegedly sustained after having been exposed to certain chemicals while working on the construction of Sunrise s assisted living facility in Baton Rouge Louisiana The workers along with O V s Smith wife and children named as defendants Sunrise the owner of the facility Woodward the general contractor on the construction project Outdoor Living which entered into a subcontract with Woodward to fizrnish all landscaping and landscaping materials for the construction project and its insurer Colony Insurance Company sometimes collectively referred to as Outdoor Living and Warren Ruiz d Ruiz Contractors Ruiz a subcontractor engaged to provide a b carpentry services on the project who was the workers employer Plaintiffs alleged that the hazardous chemicals to which the workers had been exposed were disbursed on the ground and in the air by Outdoor Living On August 15 2003 plaintiffs dismissed Ruiz from the litigation following a settlement and agreement on Ruiz part to pay workers compensation At some point in the litigation s Charles Landry and Dean Hunt abandoned their claims leaving O Smith his V wife and their children as the only remaining plaintiffs 2 On October 28 2004 Sunrise filed a third party demand against Woodward and Outdoor Living seeking indemnification for any and all sums for which it may be cast including attorney sfees and costs incurred in defending the main demand and in prosecuting the third party demand On November 28 2006 Sunrise filed a motion for summary judgment contending that it was not liable to O Smith for V the acts of its contractors and subcontractors as a matter of law On Apri19 2007 the trial court signed a judgment dismissing all of plaintiffs claims against Sunrise with prejudice On February 22 2008 Outdoor Living filed a motion for summary judgment on the issue of liability urging that plaintiffs could not establish the medical causation element of their claim On May 19 2008 the trial court granted summary judgment dismissing plaintiffs claim with prejudice for lack of evidence of inedical causation Plaintiffs appealed that judgment but the appeal was dismissed after they failed to timely file a brief Smith v Noel 2008 La 2358 App l Cir 3 unpublished 09 2 On March 10 2009 Outdoor Living filed a motion for summary judgment on Sunrise third party demand against it claiming that it does not owe a defense s or indemnity to Sunrise under the language of an indemnity provision contained in Outdoor Living subcontract with Woodward Woodward also filed a motion for s summary judgment on Sunrise third party demand relying on the language ofthe s indemnification provisions found in the Woodward Living subcontract Outdoor and in its general contract with Sunrise On April 29 2009 counsel for Sunrise notified the court that Sunrise had no opposition to Outdoor Living and s Woodward motions for summary judgment which had been set far hearing on May 4 2009 On April 30 2009 Sunrise sought leave of court to file a cross claim against Woodward and Outdoor Living In its cross claims Sunrise urged that Outdoor 3 Living and Woodward are liable for breach of contract Specifically Sunrise claimed that it is a third party beneficiary to the Woodward Living Outdoor contract which specifically required Outdoor Living to carry insurance and provide endorsements naming Sunrise as an additional insured under its policies of insurance Sunrise asserted that Outdoor Living breached the contract by failing to name Sunrise as an additional insured rendering Outdoar Living liable for all damages caused by that breach The cross claim against Woodward was premised on Woodward contract with Sunrise pursuant to which Sunrise argued s Woodward is responsible to Sunrise for all damages caused by Outdoor Living s breach of its subcontract with Woodward On May 4 2009 the trial court signed an order allowing the cross claim to be filed as prayed for On May 19 2009 the trial court signed judgments granting Woodward and Outdoor Living motions for summary judgment on Sunrise third party s s demands Thereafter Woodward filed a peremptory exception raising the objections of res judicata and no cause of action and a motion for summary judgment with respect to Sunrise cross claims against it s In support of its exception of no cause of action and motion for summary judgment Woodward argued that all of Sunrise claims for breach of contract for the failure to provide s insurance coverage must necessarily fail because the underlying claims were not caused by the negligence of Woodward or its subcontractor Outdoar Living It also insisted that Louisiana law does not provide for additional insured coverage in cases in which indemnity and defense have been denied or when the underlying claim bears no connexity to the work performed under the contract Outdoor Living also filed a peremptory exception of res judicata and a motion for summary judgment In support of its exception and motion Outdoor Living attached the order granting its motion for summary judgment on the issue of medical causation this court order dismissing the plaintiffs appeal of the s 4 medical causation ruling Sunrise October 2004 third party demand the Apri129 s 2009 letter from Sunrise attomey advising that it had no oppositions to Outdoor s Living and Woodward motions for summary judgment on Sunrise third party s s demand the May 19 2009 judgment granting its motion for summary judgment and dismissing Sunrise third party demand and Sunrise cross claim s s Outdoar Living argued that Sunrise should have raised its claim for breach of contract for failing to name Sunrise as an additional insured when it filed its third party demand against Outdoor Living seeking a defense and indemnity in October 2004 and that it is barred by the doctrine of res judicata from raising the breach of contract claims On the merits of the breach of contract claim Outdoor Living admitted that it is undisputed for the purpose of the breach of contract claim that 1 the subcontract between Woodward and Outdoor Living required that both Woodward and Sunrise be named as additional insureds on Outdoor Living policies of s insurance and 2 Outdoor Living did not name Sunrise as an additional insured on its policies of insurance Outdoor Living argued that because Sunrise had consented to the summary judgment dismissing its third party demand for indemnity and a defense against Outdoor Living Sunrise cannot be entitled to damages for breach of contract for Outdoor Living failure to provide additional s insured coverage when that coverage would not have existed in this case where there was no duty to provide indemnity and a defense It asserted that as a matter of law Sunrise is not entitled to additional insured coverage broader than the s contract defense and indemnity coverage Lastly Outdoor Livin contended that even if it breached its obligation to name Sunrise as an additional insured under its policies of insurance Sunrise suffered no damage as any additional insured coverage Sunrise may have received would not have covered the plaintiffs claims because the trial court held that those claims did not arise out of the wark performed by Outdoor Living in dismissing the underlying claims 5 In opposition to the motions for summ jucigment with respect to its cross ary claims Sunrise argued the doctrine of res judicata did not bar the prosecution of its cross claims because the third party claims were filed before the dismissal of the third party actions As to the merits of its breach of contract claim Sunrise argued that the cross claim defendants arguments were based on a misinterpretation of its claims as claims seeking indemnity or insurance coverage Instead Sunrise argued it seeks neither but is seeking damages arising from the defendants failure to name Sunrise as an additional insured Sunrise submitted that the damages it seeks in the cross claims are best illustrated by the following statements of Outdoar s Living attorney in a letter to Woodward attorney dated February 5 2009 s attached to the motion for suimnary judgment I note that a settlement has been reached between Contractar Woodward and Subcontractor Outdoor Living for partial reimbursement of attorneys fees and defense costs This decision was made due to Contractor additional insured status s Although arguably no indemnity is owed under the terms of the contract Contractor additional insured status a separate s inquiry would require such reimbursement Sunrise asserted that if Outdoor Living had not breached the contractual provision requiring that it be named as an additional insured Sunrise would be entitled to the same partial reimbursement as Woodward not for indemnity but solely because of its status as an additional insured an entirely separate inquiry Regarding Woodward liability Sunrise contended that Woodward is s responsible to it for Outdoor Living failure to name it as an additional insured s relying on Section 33 of the Sunrise contract attached to its motion 2 Wootlward in opposition to summary judgment which provides that 2 33 The Contractor shall be responsible to the Owner for the acts and omissions of his employees Subcontractors and their agents and employees and all other persons performing or supplying the Work under a contract with the Contractor or a Subcontractor at any tier and for any damages losses costs and expenses including but not limited to attorneys fees resulting from such acts and omissions 6 Sunrise argued that this language clearly renders Woodward liable for Outdoor s Living omission in failing to name it as an additional insured on Outdoor s Living insurance policies Alternatively Sunrise submitted that the matter is not appropriate for summary judgmetit because there are genuine issues of material fact relating to Outdoor Living decision t settle with Woodward for a partial s reimbursement of attorney sfees and defense costs paid by Woodward On November 9 2009 the trial coun signed a judgment denying Outdoor s Living exception of res judicata and granting Outdoor Living and Woodward s motions for summary judgment In oral reasons for judgment the trial court noted only that there could be no recovery and there was no damage The court also concluded that the exception ofno cause of action was moot because of its rulings on the motions for summary judgment On August 3 2010 this court issued an interim order remanding the matter for the purpose of ha the trial court sign a ing valid written judgment containing decretal language and disposing of the exception of no cause of action Smith v Noel 2010 La App l Cir 859 unpublished 10 3 8 On October 19 2010 the trial court signed a judgment granting the motions for summary judgment denying Outdoor Living exception s of res judicata decreeing that the exception of no cause of action was moot and declaring that the judgment was an interlocutory ruling and not a final appealable judgment Thereafter this court dismissed the appeal again finding it lacked decretal language but noting that Sunrise right to appeal the ruling of the trial s court was preserved until a fnal appealable judgment containing appropriate decretal language was rendered Smith v Noel 2010 La App 1 St Cir 0859 unpublished 10 23 12 On November 21 2011 the trial court signed a revised and amended judgment granting Outdoor Living and Woodward motions for s summary judgment sustaining Woodward exception of no cause of action and s denying Outdoar s Living exception of 7 res judicata Sunrise appealed the November 21 2011 judgment Noting that the November 21 2011 judgment appeared to lack decretal language this court issued a rule to show cause order as to whether this appeal should be maintained On December 17 2012 this court maintained the appeal Smith v Noel 2012 La App 1216 l Cir unpublished 17 12 SUMMARY JUDGMENT An appellate court reviews a trial court grant of a motion far summary s judgment de novo using the same criteria that govern the trial court s consideration of whether summary judgment is appropriate Boland v West Feliciana Parish Police Jury 2003 La App l Cir 6 878 So 1297 04 25 2d 808 812 writ denied 2004 La 11 888 So 231 2286 04 24 2d A motion for summary judgment should be granted if the pleadings depositions answers to interrogatories and admissions on file together with the affidavits if any show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law La C art 966 The trial court role in ruling P B s on the motion for summary judgment is not to evaluate the weight of the evidence ar determine the truth of the matter but to determine whether there is a genuine issue of triable fact Peak Performance Physical Therapy Fitness LLC v Hibernia Corporation 2007 La App 1 Cir 6 992 So 527 530 2206 08 2d writ denied 2008 La 10 992 So 1018 1478 08 3 2d Sunrise contends that the trial court ruling dismissing its cross claims s against Woodward and Outdoor Living is based on a fundamental misinterpretation of the claims being asserted by Sunrise therein Sunrise claims 2 In its appellate brief Outdoar Living challenges that portion of the trial court judgment s overruling its peremptory exception of res judicata An appellee who seeks to have a judgment modified revised or reversed in part on appeal must file an answer in accordance with La P C art 2133 Outdoor Living failure to answer the appeal precludes this court from s consideration of its argument that the trial court erred in overruling the exception of resjudicata See Wilbert v Wilbert 155 La 197 202 99 So 36 38 La 1923 Hoag v State ex rel Kennedy 2001 La App l Cir 11 836 So 207 234 writ denied 2002 1076 02 20 2d 3199 La 3840 So 570 Keith v Lee 127 So 139 143 La App 2 Cir 1930 03 28 2d 8 that its third party demands were based on La C art I 111 which permits the P defendant in the principal action to bring in any person who may be liable to him for all or part of the principal demand Sunrise contends that because recovery by a third party plaintiff is conditioned upon reco in the main demand it did not ery object to the dismissal of its third party demands against Woodward and Outdoor Living when the claims of the plaintiffs in the xnain dernand were dismissed and neither Woodward or Outdoar Living were cast in judgment However Sunrise urges the same is not true of the cross claims it filed under La C art 1071 P which permits a party to assert a claim against a co arising out of the party transaction or occurrence that is the subject of the ariginal action Article 1071 also permits a co to assert a demand against a party who may be liable to the party claimant cross for all ar part of the demand asserted in the action against the cross claimant Sunrise argues that while Article 1071 permits a claim for indemnity such is not necessary as a cross claim need only be related to the subject matter of the original action Thus it insists any claims for indemnity or other damages in a cross claim are not dependent upon the original defendant being cast in judgment Sunrise argues that in its crQSS claims it is seeking damages for breach of the subcontract entered into by Woodward and Outdoor Living as a third party beneficiary of that contract It relies on Paragraph 13 of the Woodward Outdoor Living subcontract in which Outdoor Living agreed to defend indemnify and hold harmless Woodward and Sunrise from and against any claim cost expense ar liability including attorneys fees attributable to bodily injury arising out of resulting from or occurring in connection with the performance of the Work by Outdoor Living It also relies on the specific insurance obligations of Outdoor Living set forth in Paragraph 13 of the Woodward Living subcontract Outdoor which imposes an obligation on Outdoor Living to name Sunrise as an additional insured on its general liability policies of insurance 9 Sunrise submits that the benefits conferred upon it by the Woodward Living contract are specific Uutdoor and express It contends that it was damaged bv two breaches of the third party beneficiary contract 1 the breach of Outdoor Living obligation to defend it s and 2 the breach of Ontdoor Living obligation to name it as an additional s insured on all required insurance policies Sunrise argues that both of these breaches resulted in its incurring attorney fees it would not have incurred if the s contract had not been breached Sunrise contends that if Outdoor Living had fulfilled its obligation to defend Sunrise would not have had to hire its own attorneys to do so and had Outdoor Living named Sunrise as an additional insured on Outdoor Living liability policy Outdoor Living insurance company would s s have provided attorneys to represent Sunrise and paid for the cost of defending Sunrise and Outdoor Living This would have occurred Sunrise posits regardless of the outcome of the underlying litigation for it is well established in Louisiana law that the dutiy to defend is broader than the duty to provide coverage We first address Outdoor Living motion for summary judgment s The Outdoor oodward Living subcontract specifically obligated Outdoor Living to indemnify Sunrise from any claims costs or expenses including attorney fees s arising out of resulting from or occurring in connection with the performance of the work by Outdoar Living Moreover the Outdoor Woodward Living subcontract also specifically obligated Outdoor Living to provide endorsements naming Sunrise on its insurance policies as an additional insured and Outdoor Living did not do so Outdoor Living admitted in support of its motion for summary judgment on the cross claims that the Woodward and Outdoor Living subcontract required that Sunrise be named as an additional insured on Outdoor spolicies of insurance and that Outdoor Living did not name Sunrise as an Living additional insured Despite its admitted breach of this obligation Outdoor Living contends that as a matter of law it cannot be held liable to Sunrise It insists that 10 the plaintiffs claims bore no connexity to the work it performed under the contract and therefore no duty to defend or indemnify Sunrise exists Further Outdoor Living argues that Louisiana law does not permit additional insured coverage where the underlying claim bears no connexity to the work performed under the contract or where defense and in have been denied I demnity inally Outdoor Living argues that even if it breached its obligation to name Sunrise as an additional insured Sunrise suffered no damage as the additional insured cc verage it would have received would not have covered the plaintiffs claims in any event Outdoor Living sargument must fail for two reasons First the language of the Woodward Living contractual indemniry provision does not require Outdoor that the loss actually arise out of or result from the performance of the subcontract it also provides that Outdoor Living must defend and indemnify Sunrise for s attorney fees with respect to claims for bodily injury occurring in connection with the performance of the contract by Outdoor Living It does not condition this contractual obligation on a finding that Outdoor Living was in fact negligent in causing the loss 3 Moreover it is well settled in Louisiana law that an insurer s obligation to defend lawsuits brought against its insured is much broader in scope than the duty to provide coverage for damage claims ar is determined by the d allegations of the plaintiff petition with the insurer being obligated to provide a s defense unless the petition unambiguously excludes coverage See Elliott v Continental Casualty Company 2006 La 2 949 So 1247 1250 1505 07 22 2d and cases cited therein See also Waste Management of Louisiana L v C Labor Finders International 43 La App 2 Cir 2978 So 1058 052 08 27 2d concluding 1062 that the real issue in the case of a breach of contract claim for the failure to name a party as an additional insured is the duty to defend which can 3 In contrast Paragraph 3 of the Woodward general contract plainly limited 1 18 Sunrise s Woodward obligation to indemnify Sunrise from damages including attorney fees arising oat s of or resulting from the performance of the Work but only to the extent that the loss was caused by the negligent acts or omission of Woodwazd or a subcontractor 11 only be determined by examinin the well allegations of the plaintiff pleaded s petition In this case examining the allegations of the underlying petition as to the liability of Outdoor Living it cannot be said as a matter of law that Outdoor Living would not have been obligated to rSunrise with a defense to the i claims asserted by the plaintiffs in the main demand Whether ur incurred rise s attorney fees in connection with ihe performance of the work by nutdoor Living whether Colony would in fact have had an obligation to defend Sunrise had Outdoor Living named Sunrise as an additional insured on the Colony policy and whether Sunrise incurred damages as a result of Outdoar Living asserted breach s of the contract are questions that can only be determined on the merits of the breach of contract claims Because there are genuine issues of material fact regarding Outdoor Living contractual liability to Sunrise we find that the trial s court erred in granting sarnmary judgment dismissing Sunrise breach of contract s claims against Outdoor Living and we reverse that judgment As to Woodward smotion for summary judgment Sunrise has admitted that there is nothing in the WoodwardlOutdoar Living subcontract obligating Woodward to name Sunrise as an additional insured on its policies of insurance We aiso note that the indemnification provision of the V Sunrise oodward general contract specifically conditioned Woodward obligation to pay attorney fees in s s connection with claims arising under the contract on a finding of negligence on the part of Woodward or a subcontractor As the underlying claims have been dismissed for failure of proof there can be no liability on Woodward part for the s cost of Sunrise defense ofthe underlying demand pursuant to Paragraph 13 of the s Outdoor Woodward Living contract or the indemnity provision of the Woodward Sunrise contract H in its motion for summary judgment wever Sunrise urged that Woodward breached paragraph 3 of the Sunrzse 2 Woodward contract which plainly provides that Woodward shall be responsible to Sunrise for 12 the acts and omissions of its subcontractors for any damages losses costs expenses including but not limited to attomey sfees resulting from such acts and omissions Because the question of Woodward liability to Sunrise for breach of s the general contract is contingent on Outdoor Living liability to Sunrise under the s subcontract there are genuine issues of material fact as to Woodward liability to s Sunrise precluding suminary judgment in its favor Therefore we find that the trial court erred in ganting summary judgment in favor of Woodward on Sunrise s cross claims Furthermore because Woodward exception of no cause of action s was based on the same arguments as its motion for summary judgment we also reverse the trial court action in sustaining Woodward s sexception of no cause of action CONCLUSION For the foregoing reasons the judgment appealed from is reversed The case is remanded to the trial court for proceedings consistent with this opinion All costs of this appeal are assessed to Skip Noel d Outdoor Living and Carl E a b Woodward Inc REVERSED AND REMANDEDo 13
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