Lusco & Lusco, LLC v. Sunu Assurances Liberia, Ltd, Hmia, LLC, and Ryan Specialty Group Services, LLC

LUSCO & LUSCO, LLC * NO. 2024-CA-0187

VERSUS *
COURT OF APPEAL
SUNU ASSURANCES LIBERIA, *
LTD, HMIA, LLC, AND RYAN FOURTH CIRCUIT
SPECIALTY GROUP *
SERVICES, LLC STATE OF LOUISIANA
*******

APPEAL FROM
CIVIL DISTRICT COURT, ORLEANS PARISH
NO. 2021-07220, DIVISION “E”
Honorable Omar Mason, Judge
******
Chief Judge Terri F. Love
******
(Court composed of Chief Judge Terri F. Love, Judge Roland L. Belsome, Judge
Dale N. Atkins)

Joseph M. Bruno
BRUNO & BRUNO, LLP
855 Baronne Street
New Orleans, LA 70113

COUNSEL FOR PLAINTIFF/APPELLANT, LUSCO & LUSCO, LLC

Max J. Cohen
Melanie C. Lockett
LOWE STEIN, LLC
701 Poydras Street, Suite 3600
New Orleans, LA 70139-7735

COUNSEL FOR DEFENDANT/APPELLEE, HMIA, LLC

Beau A. LeBlanc
VOORHIES & LABBE
700 St. John Street, Suite 500
Lafayette, LA 70502

COUNSEL FOR DEFENDANT/APPELLEE, RYAN SPECIALTY GROUP
SERVICES, LLC

REVERSED AND REMANDED
OCTOBER 4, 2024

TFL

RLB

DNA

This appeal arises from a dispute regarding the applicable duty an insurance

broker owes to its insureds. The insured party, Lusco & Lusco, LLC (“Lusco”),

seeks review of the trial court’s judgment, which granted motions for summary

judgment filed by insurance brokers, HMIA, LLC d/b/a Hartwig May Insurance

Agency (“HMIA”) and Ryan Specialty Group Services, LLC d/b/a RT Specialty

(“RSG”), and dismissed Lusco’s claims with prejudice. The trial court found that

HMIA and RSG fulfilled the basic duties to Lusco by securing the insurance

coverage requested. Further, the trial court found that HMIA and RSG should not

be held to a higher standard required for surplus lines insurance because the

insurance policy was not a surplus lines insurance policy.

Upon review, we find the trial court committed legal error and exceeded the

scope of La. C.C.P. art. 966(F) by granting the motions for summary judgment

based upon assertions raised for the first time in the reply memoranda.

1

Accordingly, we reverse the judgment of the trial court and remand for further

proceedings.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Lusco, a company in the business of logging and landholding for

commercial logging, prepared to lease logging equipment worth $1,878,000.00 to

Renaissance, Inc. (“Renaissance”) for use in Monrovia, Liberia. To protect the

investment, Lusco sought to obtain insurance to cover the logging equipment from

HMIA, an insurance broker. Lusco previously utilized HMIA for all insurance

needs.

Initially, HMIA obtained insurance coverage from Certain Underwriters at

Lloyd’s of London (“Lloyd’s”). However, Lloyd’s opted not to renew the policy.

HMIA then contacted RSG, another insurance broker, to assist with procuring a

new policy for Lusco’s logging equipment in Monrovia. Finding no viable

options, RSG contacted Tradewinds Risk Advisors (“Tradewinds”), a

multinational insurance broker, for assistance. Tradewinds contacted Guemas

International (“Guemas”), an international insurance broker. Guemas obtained a

quote from SUNU Assurances Liberia, Ltd. (“SUNU”). The policy with SUNU

was confected for Lusco, effective October 1, 2019.

Once the COVID-19 pandemic began, Liberian authorities restricted who

could remain in the country. Forced to leave, Lusco had the logging equipment

placed in a secure and guarded location. However, the equipment was allegedly

heavily looted and/or stolen. Lusco contacted HMIA in order to file a claim.

2

HMIA facilitated filing the claim, but SUNU denied the claim, stating that fraud or

dishonesty on behalf of Lusco was not a compensable loss.1

Lusco filed a Petition for Damages against SUNU, HMIA, and RSG alleging

breach of contract as to SUNU and breach of duty as to HMIA and RSG. All three

defendants filed answers in response to the Petition. Lusco filed a Motion to Strike

SUNU’s Answer because the attorney was not authorized to practice in Louisiana.

The trial court granted the Motion to Strike.

RSG and HMIA filed Motions for Summary Judgment contending that they

did not breach any duty owed to Lusco, as they successfully procured the requested

insurance policy. Lusco filed an Omnibus Opposition to the Motions for Summary

Judgment. On the day of the hearing, Lusco filed an Exhibit List with additional

exhibits, seeking to supplement the Omnibus Opposition to the Motions for

Summary Judgment. HMIA and RSG filed a Motion to Strike the Exhibit List.

Following the hearing, the trial court signed a judgment granting the Motions for

Summary Judgment filed by HMIA and RSG and dismissed Lusco’s claims with

prejudice.

Lusco filed a Motion for New Trial, asserting that the insurance policy was a

surplus lines insurance policy such that HMIA and RSG owed a more specific duty

to Lusco. The trial court denied Lusco’s Motion for New Trial and granted

HMIA’s and RSG’s Motion to Strike the Exhibit List. Lusco then filed a Notice of

Devolutive Appeal of Judgments concerning both the judgment granting the

Motions for Summary Judgment and the judgment denying the Motion for New

Trial.

1 The record is unclear as to what fraud or dishonesty SUNU references, but the facts central to

this issue are not before the Court or relevant to the present appeal.

3

STANDARD OF REVIEW

“An appellate court reviews summary judgments under the de novo standard

of review, using the same standard applied by the trial court in deciding the motion

for summary judgment.” Strategic Cap. Holdings, LLC v. Bennett, 21-0672, 21-

0673, p. 3 (La. App. 4 Cir. 7/29/22), 366 So. 3d 255, 258, (citing Precept Credit

Opportunities Fund, L.P. v. Elmore, 21-0502, p. 3 (La. App. 4 Cir. 4/20/22), 338

So. 3d 87, 89-90), as clarified on reh’g (9/20/22), writ denied, 22-01572 (La.

1/11/23), 352 So. 3d 983. “[W]e are not required to analyze the facts and evidence

with deference to the judgment of the trial court or its reasons for judgment.” Id.

SUMMARY JUDGMENT

“[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). The motion for summary judgment “is designed to secure

the just, speedy, and inexpensive determination of every action, except those

disallowed by Article 969.” La. C.C.P. art. 966(A)(2). “The procedure is favored

and shall be construed to accomplish these ends.” Id.

The Louisiana Code of Civil Procedure provides that:

[t]he only documents that may be filed or referenced in
support of or in opposition to the motion are pleadings,
memoranda, affidavits, depositions, answers to
interrogatories, certified medical records, certified copies
of public documents or public records, certified copies of
insurance policies, authentic acts, private acts duly
acknowledged, promissory notes and assignments
thereof, written stipulations, and admissions.

La. C.C.P. art. 966(A)(4)(a). “[O]r referenced” was recently added by 2023, La.

Acts 317, §1, as now:

4

Any document listed in Subsubparagraph (a) of this
Subparagraph previously filed into the record of the
cause may be specifically referenced and considered in
support of or in opposition to a motion for summary
judgment by listing with the motion or opposition the
document by title and date of filing. The party shall
concurrently with the filing of the motion or opposition
furnish to the court and the opposing party a copy of the
entire document with the pertinent part designated and
the filing information.

La. C.C.P. art. 966(A)(4)(b).

“The burden of proof rests with the mover.” La. C.C.P. art. 966(D)(1).

However, “if the mover will not bear the burden of proof at trial on the issue that is

before the court on the motion for summary judgment,” the mover is not required

“to negate all essential elements of the adverse party’s claim, action, or defense,

but rather to point out to the court the absence of factual support for one or more

elements essential to the adverse party’s claim, action, or defense.” Id. The

adverse party must then “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. “A summary judgment may be rendered or

affirmed only as to those issues set forth in the motion under consideration by the

court at that time.” La. C.C.P. art. 966(F).

Evidence Presented

RSG’s Motion for Summary Judgment contended that the duty of

“reasonable diligence” owed to Lusco was discharged once the SUNU insurance

policy was obtained. In support, RSG attached Lusco’s Petition for Damages; the

affidavit of Jordan Strange, an Inside Broker for RSG who helped procure the

SUNU insurance policy; and the SUNU insurance policy.

HMIA’s Motion for Summary Judgment also maintained that it owed a duty

5

of “reasonable diligence” to Lusco, which it fulfilled by helping secure the SUNU

insurance policy. In support, HMIA attached Lusco’s Petition for Damages; the

affidavit of Hartwig Moss IV, the manager of HMIA; the SUNU insurance policy;

and documents regarding SUNU’s denial of Lusco’s claim.

RSG filed a motion to supplement the summary judgment with Mr. Moss’s

affidavit, which the trial court granted.

In opposition, Lusco set forth disputed issues of material fact as to HMIA

and RSG. Lusco filed an Omnibus Memorandum in Opposition to Motions for

Summary Judgment countering that HMIA and RSG breached their duty to Lusco

as surplus line brokers dealing with alien insurers. In support, Lusco attached the

affidavit of Suzanne Ganier, an insurance expert; the affidavit of Charlie Lusco,

the owner and operator of Lusco; and excerpts of the La. C.C.P. art. 1442

depositions of HMIA and RSG.

HMIA replied, contending the SUNU insurance policy was not a surplus

lines insurance policy and that HMIA was acting as a retail agent and not as a

surplus lines broker. RSG also filed a reply, asserting that the SUNU insurance

policy was not a surplus lines insurance policy and that RSG was not acting as a

surplus lines broker.

On the day of the hearing, Lusco filed an Exhibit List seeking to introduce

additional excerpts from the La. C.C.P. art. 1442 depositions of HMIA and RSG

based on the new assertion that the SUNU insurance policy was not a surplus lines

insurance policy raised in the reply briefs filed by HMIA and RSG. The trial court

struck Lusco’s Exhibit List in the judgment denying Lusco’s Motion for New

Trial.

Appeal

6

On appeal, Lusco asserts the following:

1. The trial court erroneously granted summary
judgment in favor of Defendants and dismissed all
claims against them despite Defendants’ breach of
the specific duties Defendants owed to Plaintiff
under the Louisiana Insurance Code as surplus
lines brokers procuring insurance from an alien
insurer.

2. The trial court erroneously granted summary
judgment in violation of La. C.C.P. art. 966 by
granting Defendants’ Motions for Summary
Judgment based on issues not raised in the original
Motions.

3. The trial court erred in granting summary
judgment based on the substantively erroneous
conclusion that the SUNU policy was not surplus
lines insurance based on the location of the risk.

4. The trial court erred in granting summary
judgment because genuine issues of material fact
exist as to whether Lusco was informed that
Defendants switched its coverage from Lloyd’s to
SUNU.

5. The trial court erred in granting summary
judgment because, regardless of whether SUNU
was surplus lines insurance, Defendants breached
their duty to Lusco by placing the insurance with
an unauthorized, nonexempt insurer.

Trial Court’s Authority

Because Lusco’s second assignment of error may be dispositive, we begin

by examining whether the trial court exceeded its authority by granting HMIA’s

and RSG’s Motions for Summary Judgment based on legal precepts and arguments

not contained in the original motions.

HMIA and RSG presented a very narrow issue in the Motions for Summary

Judgment: HMIA and RSG fulfilled the duty of reasonable diligence by procuring

the SUNU insurance policy for Lusco. Therefore, there was no breach of duty.

7

However, the transcript reveals that the trial court ruled regarding the

alleged application of surplus line insurance regulations, as follows:2

[I]t’s also clear that the insurance code is to protect the
residents and their property within the confines of the
State of Louisiana, even under title 22 section 46 surplus
lines definition clearly no matter how you read it, the
Court agrees that the property risk or exposure in this
particular matter is not located or to be performed in this
state, or the risk is not in this state because it was
procured in connection with equipment and property that
is located in another country. And because of that, and
there’s no disputed issue of material fact as to where the
property was located when the incident occurred, or the
loss occurred -- the risk was incurred and the exposure
was experienced, the Court does not find that there’s a
material issue of fact as to -- in dispute as to that issue.
As such, the Court finds that summary judgment of
HMIA LLC and RSG Specialty LLC as there is no
specialized duty outside of the general agency and broker
duties as the title 22 statute does not apply in this
particular matter with respect to the insurance provided.
As such, the Court finds that the summary judgments
shall be and are hereby granted.

Louisiana Code of Civil Procedure Article 966(F) states, “[a] summary

judgment may be rendered or affirmed only as to those issues set forth in the

motion under consideration by the court at that time.” While appellate courts

review judgments and not reasons for judgments, there are some exceptions. “The

circumstances presented here, however, fall within a carved-out exception to the

general rule that a trial court’s reasons are not relevant.” Cutrone v. Eng. Turn

Prop. Owners Ass’n, Inc., 19-0896, p. 10 (La. App. 4 Cir. 3/4/20), 293 So. 3d

1209, 1216. “[A] trial court’s reasons for judgment are relevant when, as here,

there is a question posed as to whether the trial court exceeded its authority under

La. C.C.P. art. 966(F).” Id. See also Guilbeau Marine, Inc. v. Ledet, 23-0065, p. 7

(La. App. 1 Cir. 9/15/23), 375 So. 3d 977, 983-84, (citations omitted), writ denied,

2 The trial court’s written judgment provided, “for the oral reasons assigned by the Court.”

8

23-01369 (La. 12/19/23), 375 So. 3d 411.

“The jurisprudence has held that a summary judgment rendered in violation

of La. C.C.P. art. 966(F) is legally erroneous.” Cutrone, 19-0896, p. 8, 293 So. 3d

at 1215 (citations omitted). This Court previously examined the reasoning behind

the enactment of La. C.C.P. art. 966(F) as follows:

Since 2010, the Louisiana summary judgment law
has restricted the trial court’s ability to render a summary
judgment to “those issues set forth in the motion under
consideration.” The 2015 Revision Comments to La.
C.C.P. art. 966 (Comment (l)) offer additional
instruction, stating that “Paragraph F makes clear that, in
deciding a motion for summary judgment, a court can
consider only the issues raised in the motion or
opposition filed by the parties. The court cannot rule on
issues not raised by the parties.”

The purpose of the restriction codified in La.
C.C.P. art. 966(F) is to inform the opponent of the
summary judgment motion of the elements on which
there allegedly is no genuine issue of material fact and to
avoid surprise. See also Louisiana District Court Rule
9.10 (outlining the requirement for a memorandum in
support of a motion for summary judgment). Failure to
enforce the restriction codified in La. C.C.P. art. 966(F)
results in “requir[ing] the non-mover on a motion for
summary judgment, who will not carry the burden of
proof on the issue raised in the motion, to respond to the
motion by submitting evidence that it will be able to
carry its burden of proof as to all essential elements of his
claim, regardless of whether a particular element of his
claim was placed at issue by the motion or not.” Ronald’s
Lawn Serv., LLC v. St. John the Baptist Par. Sch. Bd., 19-
244, p. 10 (La. App. 5 Cir. 12/11/19), 284 So.3d 696, 702
(Chaisson, J., dissenting). Absent the Article 966(F)
restriction, the opponent is forced “to try his entire case
to the court in response to the motion for summary
judgment.” Id.

Id., 19-0896, pp. 8-9, 293 So. 3d at 1215-16 (alteration in original)(footnotes

omitted). See also Brindell v. Carlisle Indus. Brake & Friction, Inc., 22-0153, p. 7

(La. App. 4 Cir. 9/21/22), 349 So. 3d 678, 683. Further, granting summary

9

judgment relief based on an argument advanced for the first time in a reply

memorandum is prohibited. Smith v. Moreau, 17-0003, p. 5 (La. App. 1 Cir.

6/2/17), 222 So. 3d 761, 765-66. See also Wilson v. Two SD, LLC, 15-0477, p. 6

(La. App. 1 Cir. 12/23/15), 186 So. 3d 159, 162, (holding the trial court erred in

rendering summary judgment based on an exclusion first asserted by insurer in a

reply memorandum), writ denied, 16-0306 (La. 4/8/16), 191 So. 3d 588.

As discussed above, HMIA and RSG asserted a narrow issue for relief in the

Motions for Summary Judgment: that they fulfilled the duty of reasonable

diligence in procuring the SUNU insurance policy for Lusco; therefore, no duty

was breached. Lusco countered these assertions, contending that the more specific

duty governing surplus line insurers, as outlined in La. R.S. 22:431, et seq.,

applied. Lusco maintained that HMIA and RSG breached these duties. For the

first time in the reply briefs, HMIA and RSG averred the SUNU insurance policy

was not a surplus lines insurance policy and that they were not acting as surplus

line insurance brokers. Lusco was then prevented, according to summary

judgment procedure, from challenging the replies by the pleadings. See Hoover v.

Hoover, 01-2200, p. 8 (La. 4/3/02), 813 So. 2d 329, 334 (“The court cannot render

a motion for summary judgment dismissing a claim which has not been challenged

by the pleading.”). As such, HMIA and RSG did not properly place Lusco on

notice that the characterization of the SUNU insurance policy as a surplus lines

insurance policy was an issue. Therefore, we find the trial court exceeded the

scope of La. C.C.P. art. 966(F) by granting HMIA’s and RSG’s Motions for

Summary Judgment based on the finding that surplus lines insurance regulations

did not apply. Thus, the judgment was legally erroneous. The judgment of the

trial court is reversed, and we remand for further proceedings.

10

DECREE

For the above-mentioned reasons, we find the trial court committed legal

error by granting HMIA’s and RSG’s Motions for Summary Judgment and

dismissing Lusco’s claims based on a legal issue not properly before the court. We

reverse the judgment of the trial court and remand for further proceedings.

REVERSED AND REMANDED

11