Kacie Renee Spears v. Shelter Mutual Insurance Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

14-1191

KACIE RENEE SPEARS

VERSUS

SHELTER MUTUAL INSURANCE COMPAMY, ET AL.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. C-20055112
HONORABLE JULES D. EDWARDS, III, DISTRICT JUDGE

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MARC T. AMY
JUDGE

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Court composed of Jimmie C. Peters, Marc T. Amy, and Elizabeth A. Pickett,
Judges.

AFFIRMED.

Thomas Hightower, Jr.
Patrick Wade Kee
Post Office Drawer 51288
Lafayette, LA 70505
(337) 233-0555
COUNSEL FOR DEFENDANT/APPELLANT:
Shelter Mutual Insurance Co.

Kraig Thomas Strenge
Post Ofice Box 52292
Lafayette, LA 70502-2292
(337) 261-9722
COUNSEL FOR DEFENDANT/APPELLEE:
Louis Houston

Linda Law Clark
Decuir, Clark & Adams, LLP
732 North Boulevard
Baton Rouge, LA 70802
(225) 346-8716
COUNSEL FOR DEFENDANT/APPELLEE:
University of Louisiana System

John M. Jefcoat
Galloway Jefcoat, LLP
Post Office Box 61550
Lafayette, LA 70596-1550
(337) 984-8020
COUNSEL FOR PLAINTIFF/APPELLEE:
Kacie Renee Spears

AMY, Judge.

The plaintiff filed suit against her professor, his homeowner’s insurer, and

the university where she was attending classes and alleged that she sustained

damages after the professor became enraged during a class and acted in a

threatening manner. The professor filed a cross-claim against his homeowner’s

insurer, seeking a defense and penalties associated with the denial of the defense.

The insurer asserted that the petition did not allege that the damages resulted from

an accident and, furthermore, that the necessary coverage was excluded as the

purported actions were intentional in nature and/or undertaken as part of a business

pursuit. The trial court entered partial summary judgment. The insurer appeals.

For the following reasons, we affirm.

Factual and Procedural Background

The plaintiff, Kacie Renee Spears, filed the initial petition in this matter and

alleged that she was a student in the physics classroom of Dr. Louis Houston in

2004 when he threatened to kill her, spit in her face, struck a fellow student, and

“held her captive through threats of death if she or any other students attempted to

leave the classroom.” The plaintiff sought damages associated with “emotional

and psychological trauma,” including medical expenses.

In an amended petition, the plaintiff named Dr. Houston’s homeowner’s

insurer, Shelter Mutual Insurance Company, as a defendant. In turn, Shelter filed a

motion for summary judgment, contesting coverage under the subject policy. It

argued that the actions, as alleged, were intentional and occurred during a business

pursuit insofar as Dr. Houston was a university professor. The trial court denied

Shelter’s motion for summary judgment, finding the existence of genuine issues of

material fact. Shelter’s subsequent application for supervisory writs was denied by

a panel of this court. Spears v. Houston, 10-187 (La.App. 3 Cir. 5/4/10) (an

unpublished writ opinion).

As Shelter’s motion for summary judgment proceeded, the plaintiff amended

her petition, re-naming Dr. Houston and Shelter as defendants and adding the

Board of Supervisors for the University of Louisiana System (hereinafter the

University) as a defendant as well. This petition alleged that the University was

liable for, among other things, negligently hiring, retaining, and supervising Dr.

Houston given an alleged history of “delusional and outrageous acts” and an

alleged “previous delusional episode while in the classroom at the University of

Louisiana.” By a fourth supplemental and amended petition, the plaintiff included

a paragraph alleging that Dr. Houston suffered from “bipolar disorder, a mental

illness which causes delusions.” The plaintiff further alleged that, at the time Dr.

Houston “exhibited the behavior described herein against [the plaintiff], he was

suffering from a delusion, thus his actions could have been the result of a mental

disorder.”

Thereafter, Dr. Houston filed a cross-claim against Shelter, asserting that his

homeowner’s insurance policy afforded coverage for the underlying incident. Dr.

Houston further sought a defense for the claims proceeding against him, stating

that Shelter failed to either provide a defense or agree to indemnify him. As a

result of this refusal, Dr. Houston sought penalties associated with La.R.S. 22:1973

and/or La.R.S. 22:1892.

In keeping with the cross-claim, Dr. Houston filed a motion for partial

summary judgment, asking the trial court to order Shelter to pay for and assume his

defense. He also sought penalties and costs. In support, Dr. Houston included his

demand letter for a defense to Shelter and his attorney fee records. At the hearing,

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Dr. Houston also introduced the petitions filed in the matter as well as exhibits

previously introduced by Shelter in support of its own motion for summary

judgment. In opposition, Shelter again argued that, by their nature, the alleged

incident did not occur as an accident and that, furthermore, it was intentional and

involved Dr. Houston’s business pursuits. Shelter introduced excerpts from the

depositions of both Dr. Houston and the plaintiff.

Following a hearing, the trial court granted the partial motion for summary

judgment. The court observed that the mental health aspect of the plaintiff’s claim

related to the question of whether the allegedly tortious actions were intentional.

The trial court further ordered statutory penalties, deferring a finding as to the

amount of those fees pending a further hearing. Shelter initially sought review of

that ruling by application for supervisory writs. However, the panel denied that

application, finding that Shelter had an adequate remedy by appeal. See Spears v.

Houston, 14-0562 (La.App. 3 Cir. 8/8/14) (an unpublished writ opinion wherein

the panel explained that “the relator has an adequate remedy through an ordinary

appeal, either by obtaining a designation of this ruling as a final, appealable

judgment for express reasons given by the trial court or by seeking review of this

ruling upon the complete adjudication of this suit. La.Code Civ.P. art. 1915(B).”).

Subsequently, the trial court entered an order finding “no just reason for delay” and

making “an express determination that the Judgment . . . is designated as a Final

Judgment pursuant to La. C.C.P. Art. 1915.”1

Shelter now appeals, asserting that:
1
We note here that, in his appellee’s brief, Dr. Houston asserts that this matter is not
appropriate for appeal pursuant to La.Code Civ.P. art. 1915(B)(1) as the trial court did not make
“an express determination that there is no just reason for delay.” While the trial court’s order did
not explain its ultimate determination that there was no just reason for delay, this court has
maintained the appeal after independent review of the factors enunciated in R.J. Messinger, Inc.
v. Rosenblum, 04-1664 (La. 3/2/05), 894 So.2d 1113.

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The Trial Court erred in granting the Partial Motion for
Summary Judgment and imposing a duty to defend and awarding
attorney fees and penalties when the clear and unambiguous language
in the policy specifically excludes coverage for damages arising out of
“business pursuits” of the insured and for actions “expected or
intended by an insured” to cause injury, and as a threshold issue, when
no “accident” occurs.

Discussion

Motion for Summary Judgment

Louisiana Code of Civil Procedure Article 966(A)(2) explains that the

motion for summary judgment is favored and is to be construed to secure the just,

speedy, and inexpensive determination of actions. A summary judgment “shall be

rendered forthwith if the pleadings, depositions, answers to interrogatories, and

admissions, together with the affidavits, if any, admitted for purposes of the motion

for summary judgment, show that there is no genuine issue as to material fact, and

that mover is entitled to judgment as a matter of law.” La.Code Civ.P. art.

966(B)(2). While the moving party bears the burden of proof, if the movant will

not bear the burden of proof at trial on the matter at issue, he or she is not required

to negate all essential elements of the adverse party's claim, action, or defense.

La.Code Civ.P. art. 966(C)(2). Instead, the movant’s burden is “to point out to the

court that there is an absence of factual support for one or more elements essential

to the adverse party's claim, action, or defense.” Id. In turn, if the adverse party

does not produce factual support sufficient to establish that “he will be able to

satisfy his evidentiary burden of proof at trial, there is no genuine issue of material

fact.” Id. An appellate court reviews a motion for summary judgment de novo,

using the same criteria that governed the trial court’s determination of whether

summary judgment is appropriate. Peironnet v. Matador Res. Co., 12-2292 (La.

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6/28/13), 144 So.3d 791. Thus, we turn to consideration of the trial court’s entry

of summary judgment in favor of Dr. Houston.

Merits

As noted above, and also as pointed out by Dr. Houston in his brief to this

court, this summary judgment involves whether Shelter owes Dr. Houston, its

insured, a duty to defend him in the suit filed by Ms. Spears. Referencing

jurisprudence addressing an insurer’s duty to defend, the supreme court has stated:

As explained in Yount v. Maisano, 627 So.2d 148, 153 (La.1993), “the
insurer’s obligation to defend suits against its insured is broader than
its liability for damage claims.” “The 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.” Id.
(Citing American Home Assur. Co. v. Czarniecki, 255 La. 251, 230
So.2d 253 (1969); Meloy v. Conoco, Inc., 504 So.2d 833 (La.1987)).
“Thus, if assuming all the allegations of the petition to be true, there
would be both (1) coverage under the policy and (2) liability to the
plaintiff, the insurer must defend the insured regardless of the
outcome of the suit.” Id. The allegations of the petition are liberally
construed to determine whether they set forth grounds which bring the
claim within the insurer’s duty to defend. Id.

Arceneaux v. Amstar Corp., 10-2329, p. 17 (La. 7/1/11), 66 So.3d 438, 450.

The Shelter homeowner’s policy at issue provides, in pertinent part,

SECTION II
COMPREHENSIVE PERSONAL LIABILITY PROTECTION

COVERAGE E – PERSONAL LIABILITY
We will pay all sums arising out of any one loss which an insured
becomes legally obligated to pay as damages because of bodily
injury or property damage and caused by an occurrence covered by
this policy. If a claim is made or suit is brought against the insured
for liability under this coverage; we will defend the insured at our
expense, using lawyers of our choice. We are not obligated to defend
after we have paid an amount equal to the limit of our liability. We
may investigate or settle any claim or suit as we think appropriate.

(Italics added; bold in the original). The policy otherwise defines an “occurrence”

as “an accident including injurious exposure to conditions, which results, during

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the policy term, in bodily injury or property damage.” (Italics added; bold in the

original).

EXCLUSIONS – SECTION II
Under Personal Liability and Medical Payments to Others, we do 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.

....

5. bodily injury or property damage expected or intended by an
insured.

In support of his motion for summary judgment, Dr. Houston submitted,

among other things, the petitions filed in this matter. Dr. Houston referenced those

aspects of the petitions alleging that he “suffers and has suffered from” certain

mental illness, causing delusions and that on the date of the underlying incident

“he was suffering from a delusion, thus his actions could have been the result of

his mental disorder.” Additionally, Dr. Houston filed into evidence deposition

excerpts previously offered at the time of Shelter’s unsuccessful motion for

summary judgment. Therein, Dr. Houston described aspects of the episodes

alleged and his mental health condition at that time.

In response, Shelter pointed to the petitions’ allegations that Dr. Houston’s

actions included threatening behavior, spitting, and striking another student. These

actions, Shelter asserted, cannot be said to fit within the coverage for an

“occurrence” to the extent they were not an “accident.” Shelter attached deposition

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excerpts from Dr. Houston, wherein he described the state of his mental health at

the time and he explained that, when he was questioned about the occurrence with

a fellow professor, he stated that he was conducting an “experiment.” 2

Additionally, Shelter attached a portion of the plaintiff’s deposition in which she

stated that Dr. Houston’s actions appeared intentional.

Having reviewed the parties’ submissions in light of the insurance policy

and the allegations of the plaintiff’s petitions, we find no error in the trial court’s

entry of summary judgment in favor of Dr. Houston. Although the parties attached

various exhibits to their submissions in support of and in opposition to the motion

for summary judgment, we are mindful that the supreme court has explained that

the duty to defend is determined by the allegations of the injured plaintiff’s petition

and that the insurer has a duty to defend unless that petition unambiguously

excludes coverage. See Arceneaux, 66 So.3d 438. See also Henly v. Phillips Abita

Lumber Co., 06-1856 (La.App. 1 Cir. 10/3/07), 971 So.2d 1104 (wherein the first

circuit explained that a duty to defend a civil action is determined by consideration

of the “eight corners” of the plaintiff’s petition and the insurance policy).

Here, the petitions, and in particular the fourth supplemental and amending

petition, starkly allege that Dr. Houston suffered from a mental health issue that

“causes delusions[,]” that “he was suffering from a delusion[,]” at the time of the

complained-of actions, and that “his actions could have been the result of his

mental disorder.” Accepting these facts as true, the trial court correctly observed

that the mental health allegations necessarily factored into the question of whether

the specific conduct could be viewed as accidental.

2
Dr. Houston subsequently explained in the deposition that he was still in the midst of a
delusion at the time he spoke with his fellow professor.

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For this reason, we find no error in the trial court’s rejection of Shelter’s

alternative contention that the conduct was excluded either as an intentional act or

as undertaken as part of a business pursuit. Though the petitions allege outrageous

conduct and that it occurred in the classroom where Dr. Houston was conducting a

class, those circumstances cannot be viewed absent the allegation of the delusional

episode. Such a view undercuts both arguments that the petition alleges only

intentional acts and that they were undertaken as part of a business pursuit.

For these reasons, we do not disturb the trial court’s entry of summary

judgment in favor of Dr. Houston.

DECREE

For the foregoing reasons, the summary judgment entered in favor of the

cross-claimant/appellee, Dr. Louis Houston is affirmed. Costs of this appeal are

assessed to the defendant/appellant, Shelter Mutual Insurance Company.

AFFIRMED.

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