Choice Foundation v. Law Industries, LLC

CORRECTED COPY
CHOICE FOUNDATION * NO. 2022-C-0411

VERSUS *
COURT OF APPEAL
LAW INDUSTRIES, LLC *
FOURTH CIRCUIT
*
STATE OF LOUISIANA
*******

ON SUPERVISORY WRIT FROM THE
CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2019-04985, DIVISION “0”
Honorable D. Nicole Sheppard,
******
Judge Rachael D. Johnson
******
(Court composed of Chief Judge Terri F. Love, Judge Joy Cossich Lobrano, Judge
Sandra Cabrina Jenkins, Judge Paula A. Brown, Judge Rachael D. Johnson)

LOVE, C.J., CONCURS IN THE RESULT
LOBRANO, J., DISSENTS

Céleste D. Elliott
Shaundra M. Schudmark
LUGENBUHL, WHEATON, PECK, RANKIN & HUBBARD
601 Poydras Street, Suite 2775
New Orleans, LA 70130

COUNSEL FOR APPLICANT/DEFENDANTS

Kerry J. Miller
Rebekka C. Veith
C. Hogan Paschal
Paul C. Thibodeaux
Danielle C. Teutonico
FISHMAN HAYGOOD, LLP
201 St. Charles Avenue, 46th Floor
New Orleans, LA 70170

Christopher K. LeMieux
Jonathan S. Forester
Alex S. Dunn, Jr.
1100 Poydras Street, Suite 1100
New Orleans, Louisiana 70163

COUNSEL FOR PLAINTIFFS/RESPONDENTS

WRIT GRANTED; RELIEF DENIED
October 26, 2022

RDJ
Applicants/Defendants, The Travelers Indemnity Company and Travelers
SCJ
PAB Property Casualty Company of America (“Travelers”), solely in their capacity as

alleged insurers of Tuna Construction, LLC (“Tuna”), seek review of the trial

court’s May 25, 2022 judgment denying, in part, Travelers’ motion for summary

judgment and granting, in part, Tuna’s cross-motion for partial summary judgment.

For the reasons that follow, we grant the Writ Application but deny the relief

requested.

Facts and Procedural History

This is an insurance coverage dispute arising from construction work at a

school campus on Carollton Avenue in New Orleans, Louisiana, known as the

Lafayette Academy Charter School (“Lafayette Academy”) that Choice

Foundation, a charter school management organization, operates. The Recovery

School District leased the campus to Choice Foundation to operate the Lafayette

Academy.

During the 2016-2017 school year, the Recovery School District executed a

contract with Tuna to act as general contractor for the first phase of construction.

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Tuna subcontracted with V. Keeler & Associates (“Keeler”) to perform asbestos

abatement work. With respect to that work, Travelers issued Umbrella Insurance

Policy No. DT-CO-6G506887-IND-17 (the “Policy”), naming Tuna as a direct

insured. The Policy contains the following asbestos exclusion:

This insurance does not apply to “bodily injury,”
“property damage,” “personal injury” or “advertising
injury” arising out of the actual or alleged presence or
actual or alleged or threatened dispersal of asbestos,
asbestos fibers or products containing asbestos, provided
that the injury or damage is caused or contributed to by
the hazardous properties of asbestos. This includes:

a. Any supervision, instructions, recommendations,
warnings or advice given or which should have been
given in connection with the above; and

b. Any obligation to share damages with or repay
someone else who must pay damages because of such
injury or damage.

In March of 2017, the Louisiana Department of Environmental Quality

(“LDEQ”) visited Lafayette Academy and observed multiple asbestos violations.

Plaintiffs Choice Foundation and Orleans Parish School Board (“OPSB”)

(collectively, “Plaintiffs”) filed suit against numerous construction defendants on

May 10, 2019, including Tuna and Keeler, seeking damages for contamination of

equipment, furniture, and classroom materials as well as remediation expenses,

damages for disruption of operations, relocation expenses from the removal of

asbestos-containing materials from Lafayette Academy, and reputational damages

stemming from the release of the LDEQ report to the public in June 2018.

On August 18, 2021, Travelers filed Travelers’ motion for summary

judgment (“Travelers’ Motion”), seeking dismissal of Plaintiffs’ claims as well as

Tuna’s cross-claim based on the asbestos exclusion in the Policy issued to Tuna.

On October 19, 2021, Tuna filed Tuna’s partial cross-motion for summary

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judgment (“Tuna’s Partial Cross-Motion”) and an opposition to Travelers’ Motion.

On November 18, 2021, Plaintiffs filed their opposition to Travelers’ Motion. At

the hearing on March 10, 2022, the trial court denied in part Travelers’ Motion and

granted in part Tuna’s Partial Cross-Motion. The trial court rendered judgment

concerning Travelers’ Motion and Tuna’s Partial Cross-Motion on May 25, 2022.

The trial court judgment granted Travelers’ Motion “as to claims falling within

cited asbestos exclusion” but denied the Motion “as it relates to the other claims.”

Additionally, the trial court judgment granted Tuna’s Partial Cross-Motion “as it

relates to requiring Travelers to provide a defense to Tuna” and denied Tuna’s

Partial Cross-Motion “as to claims falling within cited asbestos exclusion.”

Discussion

I. Travelers’ Motion to Strike

As a preliminary matter, Travelers filed a Motion to Strike concerning

certain Exhibits that Tuna included in Tuna’s Opposition to Travelers’ Writ

Application. In the Motion to Strike, Travelers asserts that this Court cannot

consider Exhibits C and D because they were not filed in the district court in

support of or in opposition to any motions for summary judgment in accordance

with La. C.C.P. 966(D)(2). This Court agrees. La. C.C.P. art. 966(D)(2) provides

that the only documents that this Court can consider are those filed in support of or

in opposition to motions for summary judgment. Accordingly, Travelers’ Motion

to Strike is granted, and it is ordered that Tuna’s Exhibits C and D attached to its

Opposition be struck from the record.

II. Travelers’ Writ Application

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Turning to Travelers’ Writ Application, Travelers contends that the trial

court erred when it failed to adhere to its own prior rulings as well as this Court’s

decision in Choice Foundation v. Law Industries, LLC, (“Choice Foundation I”)

pursuant to the law of the case doctrine. 21-0431 (La. App. 4 Cir. 3/2/22), 336

So.3d 501. Travelers further argues that district court erred in denying Travelers’

Motion in part and granting Tuna’s Partial Cross-Motion in part. We disagree.

“Appellate courts review the grant or denial of a motion for summary

judgment de novo, using the same criteria applied by trial courts to determine

whether summary judgment is appropriate.” Chatelain v. Fluor Daniel Const. Co.,

14-1312, p. 3 (La. App. 4 Cir. 11/10/15), 179 So.3d 791, 793 (quoting Mandina,

Inc. v. O’Brien, 13-0085, p. 8 (La. App. 4 Cir. 7/31/13), 156 So.3d 99, 104). The

standard for granting a motion for summary judgment is set forth in La. C.C.P. art.

966(A)(3), which provides that, “[a]fter an opportunity for adequate discovery, a

motion for summary judgment shall be granted if the motion, memorandum, and

supporting documents 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.C.P. art.

966(A)(3). Generally, the burden of proof on a motion for summary judgment lies

with the mover. If the moving party will not bear the burden of proof on the issue

at trial, however, the mover need only point out an “absence of factual support for

one or more essential elements of the adverse party’s claim, action, or defense.”

La. C.C.P. art. 966(D)(1). The burden of proof remains on “the adverse party to

produce factual support sufficient to establish the existence of a genuine issue of

material fact or that the mover is not entitled to judgment as a matter of law.” Id.

If the non-moving party fails to do so, then summary judgment will be granted.

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As to Travelers’ first argument, while the law of the case doctrine is a

“discretionary guide,” its main purpose is “to avoid relitigation of the same issue;

to promote consistency of result in the same litigation; and to promote efficiency

and fairness to both parties by affording a single opportunity for the argument and

decision of the matter at issue.” Washington v. Aetna Life Ins. Co., 03-0790, p. 3

(La. App. 4 Cir. 7/2/03), 853 So.2d 34, 36-37 (citation omitted). It is not, however,

“applied in cases of palpable error or where, if the law of the case were applied,

manifest injustice would occur.” Id. at p. 3, 853 So.2d at 37 (citing Glenwood

Hosp., Inc. v. La. Hosp. Serv., Inc., 419 So.2d 1269, 1271 (La. App. 1 Cir. 1982)).

We agree with the trial court’s decision not to follow this Court’s prior ruling in

Choice Foundation I because, as explained in more detail infra, this case is

factually distinguishable from Choice Foundation I. 21-0431 (La. App. 4 Cir.

3/2/22), 336 So.3d 501. Accordingly, we find that the law of the case doctrine is

inapplicable to the instant action.

Travelers next argues that the district court erred in denying Travelers’

Motion in part and granting Tuna’s Partial Cross-Motion in part. Travelers

contends that this Court has already determined that all of Plaintiffs’ allegations in

their petition are asbestos-related and that, accordingly, the trial court erred when it

ruled that Travelers had a duty to provide Tuna with a defense for non-asbestos

related claims. We disagree.

In Choice Foundation I, Tuna appealed the trial court’s granting of a motion

for summary judgment in favor of one of Keeler’s insurers, dismissing Tuna’s

cross-claims against the insurer due to the existence of an asbestos exclusion in the

policy at issue. 21-0431 (La. App. 4 Cir. 3/2/22); 336 So.3d 501. Tuna’s

arguments were remarkably similar to those in the instant Writ Application,

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including that Plaintiffs’ petition contains allegations that fall outside the scope of

the asbestos policy at issue as well as that Tuna never performed any of the

asbestos abatement work. Id. at pp. 6-7, 336 So.3d at 506-07. In affirming the

trial court’s ruling, this Court found that “all allegations of Tuna’s negligence

within the petition are asbestos-related,” Tuna’s claims were “unambiguously

excluded from coverage,” and that Keeler’s insurer did not have a duty to defend

against Plaintiffs’ claims. Id. at p. 8, 11, 336 So.3d at 507, 509.

We find that Choice Foundation I is factually distinguishable from the case

sub judice. While this Court’s language in Choice Foundation I broadly

characterizes “all allegations of Tuna’s negligence” in Plaintiffs’ petition to be

“asbestos-related,” this Court’s prior inquiry was narrower in scope than the instant

action. This Court’s sole concern in Choice Foundation I was to determine

whether an insurer for Keeler, an asbestos abatement subcontractor, owed a duty to

defend or indemnify Tuna. Id. p. 8, 336 So.3d at 507. Here, the issue is whether

Travelers, as an insurer for Tuna, the general contractor for the first phase of

construction at Lafayette Academy, owes Tuna a duty to defend and indemnify

against Plaintiffs’ suit. Tuna’s more expansive role concerning construction at

Lafayette Academy renders summary judgment inappropriate as to whether

Travelers owes Tuna a duty to defend against Plaintiffs’ claims.

Prior jurisprudence supports our conclusion that summary judgment is

inappropriate in this suit, as “Louisiana has a long history of cases, which assert an

insurer’s duty to defend its insured.” Mossy Motors, Inc. v. Cameras Am., 04-

0726, p. 5 (La. App. 4 Cir. 3/2/05), 898 So.2d 602, 606 (citation omitted). “The

issue of whether a liability insurer has the duty to defend a civil action against its

insured is determined by application of the ‘eight corners rule,’ under which an

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insurer must look to the ‘four corners’ of the plaintiff’s petition and the ‘four

corners’ of its policy to determine whether it owes that duty.” Plaia v. Stewart

Enter., Inc., 2014-0159, p. 35 (La. App. 4 Cir. 10/26/16), 229. So.3d 480, 504

(citation omitted). “Generally the insurer’s obligation to defend suits against its

insured is broader than its liability for damage claims” because “[t]he insurer’s

duty to defend suits brought against its insured 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.” Yount v. Maisano, 627

So.2d 148, 153 (La. 1993) (citations omitted). “The allegations of the petition

should be liberally construed in determining whether they set forth grounds which

bring the claims within the scope of the insurer’s duty to defend suit against its

insured.” Mossy Motors, 04-0726, p. 5, 898 So.2d at 606. “[T]he duty to defend

does not depend upon the outcome of the suit, as it does where the purported

source of the duty is an indemnity agreement; rather, where the pleadings disclose

‘even a possibility of liability’ under the contract, the duty is triggered.” Suire v.

Lafayette City-Parish Consol. Gov’t, 04-1459, p. 18 (La. 4/12/05), 907 So.2d 37,

52 (quoting Steptore v. Masco Constr. Co., 93-2064, p. 8 (La. 8/18/94), 643 So.2d

1213, 1218).

Concerning the ‘four corners’ of Plaintiffs’ petition, Tuna contends that

Plaintiffs’ petition contains numerous allegations unrelated to asbestos, including:

a. The failure of Jacobs, N-Y, Tuna, and Keeler to
properly oversee, manage, coordinate and/or complete
the project in a safe and compliant manner led to
Choice[] [Foundation’s] and OPSB’s damages.
b. Tuna was negligent, causing damage to Choice
[Foundation] and OPSB by, including but not limited
to, failing to fallow generally accepted construction
practices and by negligently performing
renovations/work, by failing to properly oversee and

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undertake the construction of its work, by causing or
contributing to delays, and by failing to adhere to
standards for a reasonably prudent contractor in the
Orleans Parish area.
c. “negligence . . . with respect to the construction;”
d. complaints of “smells and sounds that disrupted
teaching;”
e. “fail[ing] to submit necessary reports;”
f. failure “to properly oversee, manage, coordinate,
and/or complete the project;”
g. “failing to follow generally accepted construction
practices;”
h. “negligently performing renovations/work;”
i. “failing to properly oversee and undertake the
construction of its work;”
j. “causing and/or contributing to delays;”
k. “failing to adhere to standards for a reasonably
prudent contractor in the Orleans Parish area;” and
l. failing to “complete a schedule of renovation project
in a safe and untimely manner.” [sic]

Tuna further contends that Plaintiffs’ petition alleges that Phase 1, for which

Tuna was hired as a general contractor, consisted of “various improvements,

including, but not limited to, replacing windows” at Lafayette Academy.

Regarding the ‘four corners’ of the Policy, it is undisputed that the plain language

of the asbestos exclusion excludes coverage for any “‘property damage’ . . . arising

out of the actual or alleged presence . . . of asbestos.”

Liberally construing Plaintiffs’ allegations, in light of Tuna’s role as the

general contractor for the project, this Court concludes that summary judgment is

inappropriate because genuine issues of material fact exist concerning the

possibility of coverage for allegations which fall outside the scope of the Policy’s

asbestos exclusion. Thus, the trial court correctly concluded Travelers had a duty

to defend Tuna in the instant action concerning non-asbestos related claims.

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Decree

For the foregoing reasons, we grant the Writ application but deny the relief

requested. Further, Travelers’ Motion to Strike is granted. It is ordered that

Tuna’s Exhibits C and D attached to its Opposition be struck from the record.

WRIT GRANTED; RELIEF DENIED

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