Barry J. Rafflee, Sr. v. Hurricane Sports, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-0349

BARRY RAFFLEE, SR., ET AL.

VERSUS

HURRICANE SPORTS, INC., ET AL.

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APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF ST. MARTIN, NO. 64,451-D
HONORABLE WILLIAM D. HUNTER, DISTRICT JUDGE

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JIMMIE C. PETERS
JUDGE

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Court composed of John D. Saunders, Jimmie C. Peters, and James T. Genovese,
Judges.

AFFIRMED.

Jason L. Melancon
Melancon | Rimes
8706 Jefferson Hwy., Suite B
Baton Rouge, LA 70809
(225) 303-0455
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Barry Rafflee, Sr., et al.

Frank Tomeny III
Tomeny & Fisher
6709 Perkins Road
Baton Rouge, LA 70808
(225) 767-8333
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Barry Rafflee, Sr., et al.

Thomas R. Hightower, Jr.
Wade Kee
A Professional Law Corporation
P. O. Drawer 51288
Lafayette, LA 70505
(337) 233-0555
COUNSEL FOR DEFENDANT /APPELLEE
Shelter Mutual Insurance Company

PETERS, J.

Barry Rafflee, Sr. and his wife, Linda S. Rafflee, brought suit, individually and

on behalf of their two minor children, to recover damages they sustained as a result

of a motorcycle accident involving Mr. Rafflee. Initially, they named a number of

defendants in the litigation,1 but this appeal involves only one: Shelter Mutual

Insurance Company (Shelter Mutual). The Rafflees appeal a jury verdict finding that

exclusions contained in the Shelter Mutual policy at issue excluded coverage for this

incident. For the following reasons, we affirm the trial court judgment in all respects.

DISCUSSION OF THE RECORD

The accident upon which this litigation is based occurred on November 12,

2000, at the Gravity Alley Motocross track in Breaux Bridge, Louisiana. Mr. Rafflee

sustained significant injuries after being thrown over the handlebars of his motorcycle

while attempting a jump on the track. Shelter Mutual was named as a defendant

based on a homeowner’s insurance policy it issued which purports to cover the

Carencro, Louisiana family home of Chris Van Way, the owner and president of Van

Way Investments, the owner/lessor of the property on which the motocross track is

located.

The only issue presented to the jury at trial was that of insurance coverage

under the Shelter Mutual policy. Prior to the beginning of trial, the litigants

stipulated that Shelter Mutual provided homeowner’s insurance coverage to Mr. Van

Way and that it would be liable to the extent of its $300,000.00 policy limit unless the

jury found that either one of two exclusions were found to apply. At the close of

evidence, the jury returned a verdict finding that both exclusions applied, and,

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Named as defendants in this suit were Hurricane Sports, Inc. d/b/a Gravity Alley Motocross;
Michael J. Shea, Jr.; Charles G. LeBlanc; Van Way Investments; J. P. Oil Company; J. P. Van Way,
Sr.; Shirley Van Way; Chris Van Way; Evanston Insurance Company; American First Insurance
Company; and Shelter Mutual Insurance Company.

therefore, Shelter Mutual had no liability to the Rafflees. In their appeal, the Rafflees

raise two assignments of error:

A. The jury was clearly wrong in finding that Barry Rafflee
suffered bodily injury arising out of a premise owned,
rented or controlled by Chris [Van Way].

B. The jury was clearly wrong finding that Chris Van Way
was engaged in a genuine business pursuit at the time of
Barry Rafflee’s accident.

OPINION

The matter at issue involves the interpretation of an insurance policy. As

insurance policies are contracts, they are interpreted pursuant to the rules of contract

interpretation found in the Louisiana Civil Code. Crabtree v. State Farm Ins. Co.,

93-509 (La. 2/28/94), 632 So.2d 736. Interpreting a contract requires that the

common intent of the parties be divined. La.Civ.Code art. 2045. “When the words

of a contract are clear and explicit and lead to no absurd consequences, no further

interpretation may be made in search of the parties’ intent.” La.Civ.Code art. 2046.

Words within a contract “must be given their generally prevailing meaning.”

La.Civ.Code art. 2047. However, if the words of a contract are susceptible of

different meanings, we must interpret them in the manner that “best conforms to the

object of the contract.” La.Civ.Code art. 2048. A single provision of the insurance

contract “must be interpreted in light of the other provisions so that each is given the

meaning suggested by the contract as a whole.” La.Civ.Code art. 2050. We are

required to interpret a doubtful provision “in light of the nature of the contract,

equity, usages, the conduct of the parties before and after the formation of the

contract, and of other contracts of a like nature between the same parties.”

La.Civ.Code art. 2053. Additionally, where the doubt created by a contract provision

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cannot be removed, we must interpret that provision against the party who furnished

it. La.Civ.Code art. 2056.

The burden of proving that coverage exists under an insurance policy rests with

the plaintiffs. Ho v. State Farm Mut. Auto. Ins. Co., 03-480 (La.App. 3 Cir.

12/31/03), 862 So.2d 1278. Conversely, the burden of proving that coverage is

excluded pursuant to the policy’s terms rests with the insurer. Tunstall v. Stierwald,

01-1765 (La. 2/26/02), 809 So.2d 916.

The two exclusions at issue in this litigation are found in Section II of the

Shelter Mutual policy. They provide that Shelter Mutual will not cover:

3. bodily injury or property damage arising out of business
pursuits of an insured. This exclusion does not apply:
(a) to activities of the insured ordinarily incident
to non-business pursuits.
(b) with respect to coverage to the occasional or
part-time business pursuits of an insured
who is under 19 years of age.

4. bodily injury or property damage arising out of any premises
owned, rented or controlled by an insured which is not an insured
premises. But, we will cover bodily injury to any residence
employee arising out of and in the course of employment by an
insured at such premises.

The Shelter Mutual policy defines “insured premises” in eight different ways:

6. “Insured premises” means:
(a) the residence premises;
(b) any other premises acquired by you during the
term of this policy which you intend to use as
a residence premises;
(c) the part of any other premises where you
reside and which is shown in the
Declarations;
(d) any part of a premises not owned by an
insured where the insured may be temporarily
residing or which an insured may occasionally
rent for non-business purposes;
(e) vacant land, other than farmland, owned by or
rented to an insured;

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(f) cemetery plots or burial vaults owned by an insured;
(g) land on which a single or two family
residence is being built for an insured, if the
land is owned by or rented to the insured;
(h) any structures or grounds used by you in
connection with our residence premises.

The jury verdict form presented the following two questions for the jury’s

deliberation:

Question No. 1

Do you find that Shelter Mutual Insurance Company proved by
a preponderance of the evidence that Chris Van Way was engaged in a
business pursuit at the time of Barry Rafflee’s accdent?

ANSWER: YES NO

Please check the appropriate answer. If you answered
“Yes,” please have the jury foreperson sign the jury
verdict form and request the bailiff.

Question No. 2

Do you find that Shelter Mutual Insurance Company proved by
a preponderance of the evidence that Barry Rafflee suffered bodily
injury arising out of a premise owned, rented or controlled by Chris Van
Way which was not an insured premise?

ANSWER: YES NO

The jury answered the first question in the affirmative. However, rather than signing

the verdict and requesting the bailiff, the jury proceeded to answer the second

question in the affirmative as well. Neither party to the litigation made mention of

this oversight when the jury reported its verdict to the trial court. Instead, the jury’s

verdict was accepted, and judgment was rendered in accordance with that verdict.

Thus, the jury found that both exceptions applied.

In their first assignment of error, the Rafflees address the jury’s response to the

second question and address the jury’s response to the first question in the second

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assignment of error. Specifically, in their first assignment of error, they argue that

there is no reasonable factual basis for the jury’s affirmative answer to the second

question as Mr. Van Way’s testimony clearly established that he did not own, rent,

or control the property on which the motocross track was located. Because we find

no merit in the first assignment of error, we need not consider the second.

In considering the Rafflees’ argument, we first note that there is no dispute but

that Mr. Van Way is the named insured under Shelter Mutual’s policy and that the

property where the motocross track is located is not the insured premises under the

policy. Additionally, the Rafflees do not seriously argue that Mr. Van Way owns or

rents the motocross track property as the evidence establishes that the property is

owned by Van Way Investments and leased by that corporation to Hurricane Sports,

Inc., which does business as Gravity Alley Motocross. Thus, the remaining question

concerning the application of the fourth exclusion in Shelter Mutual’s policy involves

whether Mr. Van Way maintains any control over the property.

With regard to control, the evidence establishes that Van Way Investments was

incorporated on January 25, 2000, and that Mr. Van Way is the president, treasurer,

director, incorporator, and sole shareholder of the corporation. The evidence further

establishes that Van Way Investments acquired the property at issue from Mr. Van

Way’s parents on February 2, 2000, and entered into a lease with Hurricane Sports,

Inc. on February 10, 2000. The lease agreement provided for a five-year term with

a monthly rental of $500.00, with the first payment being due seven months after

execution of the lease. As additional consideration, the lease provided that Hurricane

Sports, Inc. would reimburse Van Way Investments $20,000.00 for costs of

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improvements made to the property before the lease was entered into,2 and would

grant Mr. Van Way and his children the right to “use the track and facilities without

charge for both practice and in racing events.”3 At all times during this litigation, the

leased property was the only property owned by Van Way Investments.

With regard to the significance of the reservation of family rights under the

lease, Mr. Van Way testified that his family involvement in motocross activities is

extensive. His sons are aged seven, nine, eleven, thirteen, fifteen, and seventeen

years respectively, and all participate in motocross racing. Mr. Van Way owned

fifteen motorcycles at the time of trial and had owned as many as twenty in the past.

He estimated that in 2000 and 2001, his sons raced almost every weekend of the year,

and, in 2007, they were still racing ten to twelve weekends out of the year. The

family travels to and from the races in a motor home of sufficient size to haul the

motorcycles in an attached twenty-foot-long covered trailer. According to Mr. Van

Way, the cost for his family’s involvement in 2000 was approximately $50,000.00.

Given the evidence presented, the jury obviously concluded that Mr. Van Way

maintained significant control over the property.

As with all factual determinations of the jury, we review this factual

determination under the manifest error/clearly wrong standard. Under that standard,

in order to reverse the jury’s factual determinations, an appellate court must review

the record in its entirety and meet the following two-part test: (1) find that a

reasonable factual basis does not exist for the finding, and (2) determine that the

record establishes that the jury’s finding is clearly wrong or manifestly erroneous.

2
That amount was to be paid at the rate of $750.00 per month beginning one year after the
execution of the lease.
3
In his testimony, Mr. Van Way asserted that he was granted a reserved parking spot on the
premises which he used free of charge, but the lease itself is silent on this issue.

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Stobart v. State, Through Dep’t of Transp. & Dev., 617 So.2d 880 (La.1993). “[T]he

issue to be resolved by a reviewing court is not whether the trier of fact was right or

wrong, but whether the factfinder’s conclusion was a reasonable one.” Stobart, 617

So.2d at 882. This holds true even if the appellate court would have ruled differently

had it been sitting as the court of first instance. Rosell v. ESCO, 549 So.2d 840

(La.1989).

In reviewing the evidentiary record, we conclude that the jury’s obvious factual

findings on this issue were not manifestly erroneous. While the property transactions

flowed through a corporation, it was a corporation totally controlled by Mr. Van Way,

and all of the concessions found in the lease agreement benefitted him and his family

personally. The corporation was formed as a money making concern, but Mr. Van

Way exerted his authority as the sole owner and officer of the corporation to refrain

from enforcing the monetary terms of the lease for four years—a business decision

which evidenced absolute control over the property. Thus, the jury heard sufficient

evidence from which it could deduce that he in fact did have control over the track.

Accordingly, we find no merit in this assignment of error.

CONCLUSION

For the foregoing reasons, we affirm the trial court’s judgment in favor of

Shelter Mutual Insurance Company dismissing the claims of the plaintiffs, Barry J.

Rafflee, Sr., and Linda S. Rafflee, individually and on behalf of their two minor

children. We assess all costs of this appeal to Barry J. Rafflee, Sr., and Linda S.

Rafflee.

AFFIRMED.

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