Melba Elaine Jessop v. City of Alexandria

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

03-1500

MELBA ELAINE JESSOP, ET AL.

VERSUS

CITY OF ALEXANDRIA, ET AL.

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APPEAL FROM THE
NINTH JUDICIAL DISTRICT COURT
PARISH OF RAPIDES, NO. 203,781
HONORABLE WILLIAM ROSS FOOTE, DISTRICT JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of Glenn B. Gremillion, Billy Howard Ezell, and *Arthur J.
Planchard, Judges.

* Honorable Arthur J. Planchard, Retired, participated in this decision by
appointment of the Louisiana Supreme Court as Judge Pro Tempore.

AFFIRMED IN PART; REVERSED IN PART; REMANDED.

Paul Holliday Fleming Baker
Law Office of Nan Landry
2014 W. Pinhook Rd., #403
Lafayette, LA 70508
(337) 234-7200
Counsel for: Defendants/Appellees
City of Alexandria
Alexandria/Pineville AreaConvention & Visitors Bureau

Hon. Chris Smith, III
Leesville City Court Judge
P. O. Box 1486
Leesville, LA 71446
(337) 238-1531
Counsel for: Plaintiffs/Appellees
Melba Elaine Jessop
Richard Allan Jessop

Mark L. Ross
Attorney at Law
600 Jefferson, #512, Box 23
Lafayette, LA 70501
(337) 266-2345
Counsel for: Third-Party Defendants/Appellants
Scottsdale Ins. Co.
M & M Enterprises, Inc.
Arena Productions

EZELL, JUDGE.

This is a tort action arising from injuries sustained by a patron while attending

a sale show at the Alexandria Riverfront Center, Arena Productions, Inc. M & M

Enterprises, Inc., and Scottsdale Insurance Company appeal a judgment granting a

motion for summary judgment in favor of the Alexandria/Pineville Area Convention

and Visitors Bureau and the City of Alexandria.

FACTS

Melba and Richard Jessop initiated this lawsuit for damages claiming Melba

tripped and fell, injuring herself while at a “sale show” at the Riverfront Center. The

show was promoted by Michael Okashah of Arena Productions, Inc. and M & M

Enterprises, Inc. The Jessops filed suit against Arena, M & M, Scottsdale Insurance

Company, the Alexandria Convention and Visitors Bureau, and the City of

Alexandria.

The Convention and Visitors Bureau and the City (Third-Party Plaintiffs) filed

a third-party demand against Arena, M & M and Scottsdale (Third-Party Defendants)

requesting a defense and indemnification. Third-Party Plaintiffs later amended their

claim alleging that they detrimentally relied on representations by Arena and M & M

that they were additional insureds under the Scottsdale policy.

Subsequently, Third-Party Defendants filed a motion for a partial summary

judgment seeking to dismiss the third-party demand. Thereafter, Third-Party

Plaintiffs also filed a motion for summary judgment seeking a defense and

indemnification from Scottsdale.

A hearing was held on August 6, 2002. The trial court rendered judgment

granting Third-Party Plaintiffs’ motion for summary judgment and denying the

motion for summary judgment of Third-Party Defendants. A joint motion for

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certification of judgment was signed on June 18, 2003. Third-Party Defendants then

appealed the judgment. They basically allege two assignments of error. Third-Party

Defendants first claim that the trial court erred in finding that Third-Party Plaintiffs

were entitled to additional insured status under the Scottsdale policy. Third-Party

Defendants also claim the trial court erred in finding that the terms of the Scottsdale

policy entitle Third-Party Plaintiffs to a defense and indemnification.

STANDARD OF REVIEW

“Appellate courts review summary judgments de novo under the same criteria

that govern the district court’s consideration of whether summary judgment is

appropriate.” Ross v. Conoco, Inc., 02-299, p.5 (La. 10/15/02), 828 So.2d 546, 550.

A motion for summary judgment will 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.Code Civ. P. art. 966(B). The facts at this point

in the case are not in dispute. The decision in this case turns on the interpretation of

an insurance policy and the actions of the parties in entering into the lease of the

Riverfront Center for the show.

Interpretation of an insurance policy is usually a legal question that can
be properly resolved by means of a motion for summary judgment.
When determining whether a policy affords coverage for an incident, the
insured bears the burden of proving the incident falls within the policy’s
terms. Summary judgment declaring a lack of coverage under an
insurance policy may be rendered only if there is no reasonable
interpretation of the policy, when applied to the undisputed material
facts shown by the evidence supporting the motion, under which
coverage could be afforded.

Miller v. Superior Shipyard and Fabrication, Inc., 01-2907, p. 4 (La.App. 1 Cir.

8/20/03), 859 So.2d 159, 162, writ denied, 03-2643 (La. 12/12/03), 860 So.2d 1159

(citations omitted).

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ADDITIONAL INSURED STATUS

Third-Party Defendants argue that the trial court erred in finding that there was

a verbal agreement promising to name Third-Party Plaintiffs as additional insureds.

Third-Party Defendants further claim that, even if there was a verbal agreement, the

written lease between Okashah and Third-Party Plaintiffs provided that the lease

“supersedes any verbal agreement that may have been made between the parties.”

There is an additional claim by Third-Party Defendants that a certificate of insurance

issued by the insurance agent could not add to or change the coverage provided for

by the Scottsdale policy.

An insurance policy is a contract between the insured and the
insurer and has the effect of law between the parties. Because an
insurance policy is a contract, the rules established for the construction
of written instruments apply to contracts of insurance. The parties’
intent, as reflected by the words of an insurance policy, determines the
extent of coverage, and the intent is to be determined in accordance with
the plain, ordinary, and popular sense of the language used in the policy,
unless the words have acquired a technical meaning. LSA-C.C.
art.2047. If the language in an insurance contract is clear and
unambiguous, the agreement must be enforced as written and a
reasonable interpretation consistent with the obvious meaning and intent
of the policy must be given. The determination of whether a contract is
clear or ambiguous is a question of law.

Id. at 162-63 (case citations omitted).

The Scottsdale policy at issue in this case contained a “BLANKET

ADDITIONAL INSURED ENDORSEMENT”. The pertinent language relating to

the definition of an insured provides:

WHO IS AN INSURED (SECTION II) is amended to include as an
insured any person or organization (called additional insured) whom you
are required to add as an additional insured on this policy under a
written contract, agreement or permit which must be:

a. currently in effect or becoming effective during the
term of the policy; and

b. executed prior to the “bodily injury,” “property
damage,” “personal injury,” or “advertising injury.”

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A review of the lease signed by Okashah reveals that there was no direct

requirement in the lease that he add Third-Party Plaintiffs as additional insureds to

the Scottsdale policy. Paragraph nineteen provided only that “The Lessee shall

provide to the Alexandria Riverfront Center manager, the Alexandria/Pineville

Convention and Visitor’s Bureau, proof of adequate comprehensive public liability

insurance in the amount of $1 million to paid for solely by Lessee.”

However, paragraph seventeen (emphasis supplied) relating to the lessee and

a decorator or other agent provides as follows:

(17) Lessee and the decorator or other agent hired by the Lessee must
comply with applicable local, state, and national fire and safety codes.
Decorators must be approved prior to entering the facility. Approval
may be obtained by having an insurance certificate on file for
general liability, product liability, and workmen’s compensation
insurance, with the Alexandria Riverfront Center,
Alexandria/Pineville Area Convention and Visitors Bureau, and the
City of Alexandria named as additional insured. Lessee shall not
allow any open flames in the center unless enclosed by glass. Lessee
must not bring any gasoline or other flammable substances into the
center. Decorations used by the Lessee shall be of approved flame
resistant materials.

While at first blush it appears that only the decorator need add Third-Party

Plaintiffs as additional insureds, paragraph seventeen refers to the lessee, decorator,

or an agent. Paragraph seventeen also lays out further obligations of the lessee.

Additionally, paragraph seventeen does not state who is required to have the insurance

certificate on file. One can surmise that all three, lessee, decorator, and agent, must

have a certificate of insurance on file listing Third-Party Plaintiffs as additional

insureds. While we agree that the lease language is somewhat ambiguous, there are

additional facts which support this proposition.

Okashah’s deposition testimony indicates that he purchased the Scottsdale

policy through Given/Woods. He explained that he usually worked with David or

Mildred at Given/Woods. Okashah stated that he usually gives the information to

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Given/Woods on how the party is to be named as an additional insured and the

company takes care of the matter.

Excerpts of the deposition of Cindy Hastings, the business director for the

Bureau who handled contractual agreements, was introduced by both parties. She

explained that Okashah signed the lease as a last-minute booking. He signed the lease

on March 27, 2000, for the event to be held three days: March 31 to April 2, 2000.

She explained that once a person signs the lease and she gets the money, she informs

the person that she needs the balance of the money prior to moving in and that she

needs a copy of their liability insurance that lists the entities as additional insured.

Hastings further testified that she has a standard form in her computer that lists

the items she still needs before the event. A document in the record entitled

“Documents/Information Needed to Complete Contract” indicates that it was faxed on

March 30, 2000 to Mildred. The document shows that the general liability insurance

in the amount of $1,000,000 had not been received. This document shows that the

insurance certificate must list three entities as additional insureds and gives the name

of the three entities. Hasting’s name and phone and fax numbers are handwritten on

the document.

On that same day a certificate of insurance was issued by Given/Woods &

Associates, Inc., showing the dates of the event and listing the three entities as

additional insureds. Mildred Wayne’s fax number is handwritten on the bottom.

In Miller, 859 So.2d at 163, the first circuit found that policy language

pertaining to an additional insured “if required by written contract” granted additional

insured status to a party when its insured had a written contract with the party that

required the insured to add the party as an additional insured under the policy even

though the party was not specifically named as an additional insured in the policy.

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The first circuit further held that “[t]he plain wording of the endorsement shows that

it applies to any potential liability sought to be imposed upon the additional insured

. . . because of something the named insured . . . is alleged to have done or failed to

have done in connection with the named insured’s . . . operations.” Id. at 163-64.

Therefore, it is obvious that when there is a written contract that requires that a party

be named as an additional insured, the policy language automatically includes the

party as an additional insured pursuant to any conditions under the additional insured

provisions.

An Illinois court interpreted almost identical policy language in United States

Fire Ins. Co. v. Hartford Ins. Co., 726 N.E.2d 126 (Ill.App. 3 Div. 2000). In that case,

there was also an oral agreement to provide additional insured status to a party.

However, a certificate of insurance was not issued until after the accident at issue.

The court concluded:

When reading the policy phrase within the context of the entire
provision, as we must, the only reasonable construction is that there must
be a written document - contract, agreement, or permit - which evidences
the insured’s intention to provide insurance coverage to another person
or organization before the Hartford policy will cover that person or
organization as an additional insured.

Id. at 129.

The court further held:

The only reasonable interpretation of the Hartford policy provision
is that an “additional insured” will include only those persons or
organizations which have received written confirmation - in the form of
a contract, agreement, or permit - of the insured’s promise to provide
insurance coverage prior to the event for which coverage is being
claimed. It would be unreasonable to hold any “contract” or “permit”
must be evidence by a writing, but an “agreement” would not.

Id. at 129-30.

Subsequently, another Illinois court was once again faced with the similar

policy language. West Am. Ins. Co. v. J.R. Constr. Co., 777 N.E.2d 610 (Ill.App. 2

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Div. 2002). It distinguished United States Fire Ins. Co., noting that the insured in that

case denied that insurance coverage was a part of an oral agreement. The court also

observed that the certificate of insurance was not requested and received until two

days after the accident. In West. Am. Ins. Co., written documents, prepared before the

accident, existed which evidenced the insured’s intent to include the party as an

additional insured. These documents consisted of a certificate of insurance and a

letter.

In the present case, although the actual lease itself did not necessarily require

that Okashah list Third-Party Plaintiffs as additional insureds, we agree with the trial

court that there was clearly an oral agreement between Hastings and Okashah to list

Third-Party Plaintiffs as parties. Hastings stated that she would have told Okashah

that she needed proof of liability insurance which listed the three entities as additional

insureds. Okashah also agreed in his deposition that it was his understanding that he

was supposed to have insurance for the facility where the event was held.

This oral agreement was followed by written confirmation of the agreement.

A written request was made by Hastings to Given/Woods for proof of insurance listing

the three entities as additional insureds. Obviously, Hastings got the information from

Okashah as to where the request should be submitted. In response, Given/Woods

issued a certificate of insurance prior to the event, indicating that three entities were

additional insureds for the date of the event.

In addition to the fact that the lease itself contained a requirement of a certificate

of insurance listing Third-Party Plaintiffs as additional insureds, we agree with the

result reached in West. Am. Ins. and find that there were sufficient written documents

evidencing an agreement that Okashah list Third-Party Plaintiffs as additional insureds

for the event. All of the written documents were executed prior to the event and make

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it clear that the entities were required to be named as additional insureds under the

Scottsdale policy and were actually named on the certificate of insurance.

COVERAGE

Third-Party Defendants also claim that the trial court erred in failing to find that

the insurance provided by Scottsdale was excess to any other liability insurance for an

additional insured. It claims that Third-Party Plaintiffs’ own insurance is primary to

Scottsdale’s.

The other insurance provision in the additional insured endorsement provides:

“Any coverage provided hereunder will be excess over any other valid and collectible

insurance available to the additional insured whether primary, excess, contingent or

on any other basis unless a contract specifically requires that this insurance be

primary.”

Third-Party Plaintiffs argue that the trial court was correct in concluding that

provision conflicted with the “other insurance” provision found in the main policy.

We disagree.

It is well-settled that the specific controls the general in the interpretation of

statutes and contracts. Corbello v. Iowa Prod., 02-826 (La. 2/25/03), 850 So.2d 686.

The “other insurance” provision found in the additional insured endorsement is very

clear that, for any coverage provided to an additional insured, the additional insurance

provided by the Scottsdale police is excess unless a contract specifically states

otherwise. This is a limitation for the additional insured only. It does not apply to any

other insureds.

None of the written documents in this case state otherwise. Therefore, we find

the trial court erred in finding that the coverage provided by the Scottsdale policy was

primary.

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INDEMNIFICATION AND DEFENSE

While not addressing the issue in its reasons for judgment, the judgment did

declare that Third-Party Defendants had to provide both a defense and indemnity to

Third-Party Plaintiffs. Third-Party Defendants argue that the issue of negligence is

contested, and, therefore, the issue of indemnification was prematurely decided.

The pertinent paragraphs of the Lease are as follows:

(9) Lessor shall not be liable or responsible for and Lessee shall save and
hold harmless Lessor from and against any and all claims and damages
of every kind, for injury to or death of any person or persons and for
damages to or loss of property arising out of or attributed directly or
indirectly to the operations of the Lessee hereunder. Lessee shall
likewise indemnify Lessor for any and all injury or damage to property
belonging to Lessor, arising out or in connection with or result from any
and all acts or omissions of the Lessee hereunder, its agents, employees,
or invitees. Lessee assumes responsibility for the condition of the leased
premises under La. R.S. 9:3221.

(24) Lessor assumes no responsibility whatsoever for any property placed
in or on said premises, and said Lessor is hereby expressly released and
discharged from any and all liabilities for any loss, injury or damages to
person or property that may be sustained by reason of the occupancy on
said premises under this agreement. Lessee must receive or make
arrangements with a transfer company for the receipt of shipments of
exhibits, equipment or other items. Lessor shall not accept shipments
directly unless arranged in advance with the Alexandria Riverfront
Center Manager.

Quoting from Polozola v. Garlock, Inc., 343 So.2d 1000, 1003 (La.1977), the

supreme court in Home Ins. Co. v. National Tea Co., 588 So.2d 361, 364 (La.1991)

(citations omitted), reviewed the rules of interpretation of contracts governing

indemnity provisions as set forth in a lease as follows:

A contract of indemnity whereby the indemnitee is
indemnified against the consequences of his own negligence
is strictly construed, and such a contract will not be
construed to indemnify an indemnitee against losses
resulting to him through his own negligent act, unless such
an intention was expressed in unequivocal terms.

. . . .Continuing, Polozola holds that the general rules which govern the
interpretation of other contracts apply in interpreting indemnity contracts.

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Regarding an owner-lessor’s responsibility when a lessee contractually

assumes the lessor’s responsibility for the condition of the leased premises pursuant

to La.R.S. 9:3221, this court in O’Neill v. Thibodeaux, 97-1065, p. 23 (La.App. 3 Cir.

3/6/98), 709 So.2d 962, 974, writs denied, 98-741, 98-870 (La. 5/1/98), 718 So.2d

416, 420, recognized that:

[I]n order for an owner-lessor to escape liability under a lease pursuant
to La.R.S. 9:3221, he must prove that the lessee assumed responsibility
for the condition of the premises under the contract of lease, that the
injury must have occurred either to the lessee or anyone on the premises
with the permission of the lessee, and that he did not know nor should
have known of the defect.

A reading of the pertinent lease provisions reveals that there is no requirement

that the lessee indemnify the lessor for the lessor’s own fault. We find that Third-

Party Defendants are not required to indemnify Third-Party Plaintiffs for their own

negligence or knowledge of a defect in the premises which may have contributed to

Mrs. Jessop’s fall. The record indicates that there is a dispute as to the allocation of

fault for Mrs. Jessop’s fall. Therefore, the existence of genuine issues of material fact

regarding fault preclude granting Third-Party Plaintiffs’ motion for summary judgment

on the issue of indemnification. Burns v. McDermott, Inc., 95-195 (La.App. 1 Cir.

11/9/95), 665 So.2d 76.

Regarding Third-Party Defendants’ duty to defend, we first note that the

additional insured endorsement provides for the duty to defend as follows:

When this insurance is excess, we will have no duty under Coverage A
or B to defend the additional insured against any “suit” if any other
insurer has a duty to defend the additional insured against that “suit.” If
no other insurer defends, we will undertake to do so, but we will be
entitled to the additional insured’s rights against all those other insurers.

Therefore, since we have already ruled that Scottsdale’s policy is excess in this

case, there is no duty to defend, based on the policy language, for any claims arising

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under Coverage A or B. We must now look at whether the lease itself provides for the

duty to defend.

“The language in an indemnity agreement dictates the obligations of the

parties.” Kinsinger v. Taco Tico, Inc., 03-622, p. 1 (La.App. 5 Cir. 11/12/03), 861

So.2d 669, 671 (citing Meloy v. Conoco, Inc., 504 So.2d 833 (La. 1987)). We see

nothing in the lease that states anything about a defense. It only speaks in the terms

of indemnification. We find that the trial court erred in granting Third-Party

Plaintiffs’ motion for summary judgment finding that they were entitled to a defense

from Third-Party Defendants.

For these reasons, we agree with the trial court’s grant of summary judgment in

favor of the Alexandria/Pineville Area Convention and Visitors Bureau and the City

of Alexandria insofar as ruling that they are additional insureds under the Scottsdale

policy. However, we reverse the summary judgment insofar as it declares that the

Scottsdale policy was primary and that Scottsdale owes a defense under the policy.

We also find that any determination of indemnification is premature until liability is

established. Costs of these proceedings are split between the parties.

AFFIRMED IN PART; REVERSED IN PART; REMANDED.

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