Amaleeta O'neal v. Foremost Insurance Company

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

18-510
consolidated with 18-599

AMALEETA O’NEAL, ET AL.

VERSUS

FOREMOST INSURANCE COMPANY, ET AL.

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APPEAL FROM THE
NINTH JUDICIAL DISTRICT COURT
PARISH OF RAPIDES, NO. 254,445
HONORABLE MONIQUE F. RAULS, DISTRICT JUDGE

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PHYLLIS M. KEATY
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and
Phyllis M. Keaty, Judges.

REVERSED AND REMANDED.

Michael L. Glass
Attorney at Law
1733 White Street
Alexandria, Louisiana 71301
(318) 484-2917
Counsel for Plaintiffs/Appellees:
Amaleeta O’Neal
Jeffery O’Neal

Daniel G. Brenner
Christina S. Slay
Bolen, Parker, Brenner, Lee & Engelsman, Ltd.
Post Office Box 11590
Alexandria, Louisiana 71315-1590
(318) 445-8236
Counsel for Defendants/Appellants:
Foremost Insurance Company
RLN Investments, LLC

Randall B. Keiser
Matthew L. Nowlin
Keiser Law Firm, P.L.C.
Post Office Box 12358
Alexandria, Louisiana 71315-2358
(318) 443-6168
Counsel for Defendant/Appellee:
Don Van Cleef

Stacy Christopher Auzenne
Auzenne Law Firm, L.L.C.
Post Office Box 11817
Alexandria, Louisiana 71315-1817
(318) 880-0087
Counsel for Defendant/Appellee:
Messina Realty, LLC

Ashley E. Gilbert
CNA Coverage Litigation Group
One Galleria Boulevard, Suite 1502
Metairie, Louisiana 70001
(504) 841-5083
Counsel For Defendant/Appellee:
Continental Casualty Company

KEATY, Judge.

RLN Investments, LLC, appeals the trial court’s grant of summary judgment

in favor of Messina Realty, L.L.C., on the issue of defense and indemnity. For the

following reasons, the trial court’s judgment is reversed, and this matter is remanded

to the trial court for further proceedings.

FACTS AND PROCEDURAL HISTORY

This appeal involves the interpretation of a defense and indemnity clause in a

property management agreement. On March 10, 2014, a Petition for Damages was

filed by Plaintiffs, Amaleeta O’Neal and Jeffery O’Neal, against Foremost Insurance

Company and Ronald Nation. Plaintiffs alleged that Amaleeta sustained injuries on

March 31, 2013, when her vehicle collided with a “rotten and defective” tree which

had fallen across Nation Road in Deville, Louisiana. Plaintiffs asserted the tree was

located at 207 Nation Road, which was owned by Nation and insured by Foremost.

Plaintiffs, thereafter, filed an amended petition wherein it dismissed Nation,

individually, and added his business, RLN Investments, LLC, as an additional

defendant. In its amended petition, Plaintiffs alleged the tree was located on property

owned by RLN Investments and requested the matter be transferred from the

Pineville City Court to the trial court. Pursuant to the city court’s order, Nation was

dismissed without prejudice, and the matter was transferred to the trial court.

On May 23, 2016, RLN Investments filed a Third Party Demand against

Messina Realty, asserting that Christopher Mayes was renting the property in

question on the date of the incident. It also alleged that prior to the incident, RLN

Investments and Messina Realty entered into a Property Management Agreement

(hereinafter “the contract”) whereby Messina Realty agreed to manage the property,

which included notifying RLN Investments “of any maintenance issues.” RLN

Investments argued that Messina Realty breached the contract’s terms and should be

liable for any damages that may be assessed against RLN Investments. On July 20,

2016, Messina Realty filed a Motion for Summary Judgment alleging that the

contract contained a clause wherein RLN Investments was required to indemnify

and hold Messina Realty harmless from liability for injury suffered by an employee,

tenant, or guest on or about the property. On April 25, 2017, RLN Investments filed

a First Supplemental and Amended Third Party Demand naming Don Van Cleef and

Continental Casualty Company as additional third party defendants. Van Cleef was

named in his capacity as Messina Realty’s employee and property manager for 207

Nation Road. Continental was named in its capacity as Messina Realty’s Errors and

Omissions insurer.

On June 2, 2017, Van Cleef filed an Answer and Reconventional Demand

against RLN Investments, asserting that he was employed by Messina Realty at the

time of the incident and entitled to defense and indemnity pursuant to the contract.

Van Cleef also asserted a cross-claim against Messina Realty for defense and

indemnity based upon vicarious liability arising from a master/servant relationship.

On September 21, 2017, RLN Investments filed a Peremptory Exception of No

Cause of Action and Peremptory Exception of No Right of Action and Motion to

Strike the declaratory judgment filed by Continental. RLN Investments also filed a

Second Amended Third Party Demand alleging negligence against Messina Realty

and/or Van Cleef. On October 17, 2017, Messina Realty filed an Exception of

Prematurity to Van Cleef’s cross-claim. On November 3, 2017, a Consent Judgment

was executed between RLN Investments and Continental, and the trial court issued

an order sustaining the exceptions and motion to strike filed by RLN Investments.

Therein, the trial court also struck the request for attorneys’ fees asserted in

Continental’s answer to RLN Investments’ third party demand, as supplemented and

amended.
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Van Cleef named RLN Investments and Messina Realty in a Petition for

Declaratory Judgment filed on December 8, 2017, reasserting his claims for defense

and indemnity. On January 9, 2018, RLN Investments and Foremost filed a Petition

for Declaratory Relief against Continental on the issue of coverage of claims. On

January 26, 2018, Continental filed an opposition memorandum and Motion to

Strike RLN Investments’ and Foremost’s Petition for Declaratory Relief. On

February 1, 2018, RLN Investments filed a Second Amended Third Party Demand.

A hearing was held on February 5, 2018, regarding Van Cleef’s Petition for

Declaratory Judgment and Messina Realty’s Motion for Summary Judgment. The

trial court granted both via separate judgments. The judgment granting Messina

Realty’s summary judgment was signed by the trial court on February 23, 2018.

RLN Investments appealed.

On appeal, RLN Investments asserts the following assignments of error:

1. Whether the Honorable Lower Court erred in granting the
Motion for Summary Judgment finding that Messina Realty,
LLC, is entitled to defense and indemnity from RLN Investments,
LLC, when the record demonstrated that Messina Realty, LLC,
and/or its agent, Don Van Cleef, breached the Property
Management Agreement between RLN Investments, LLC, and
Messina Realty, LLC, thus rendering the indemnity clause
therein void.

2. Whether the Honorable Lower Court erred in granting the
Motion for Summary Judgment finding that Messina Realty,
LLC, is entitled to defense and indemnity from RLN Investments,
LLC, when the record demonstrated that there are genuine issues
of material facts concerning the knowledge of Messina Realty,
LLC, or its agent, Van Cleef, about the alleged defective
condition of the tree in question.

3. Whether the indemnity clause in the Property Management
Agreement encompasses the negligence of Messina Realty, LLC,
and/or Don Van Cleef.

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STANDARD OF REVIEW

A summary judgment “is designed to secure the just, speedy, and inexpensive

determination of” an action. La.Code Civ.P. art. 966(A)(2). “After 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.Code Civ.P. art. 966(A)(3). Although the burden of proof rests with the mover,

if the mover does not bear the burden of proof at trial on the issue before the court,

the mover needs to only point out an absence of factual support for one or more

elements of the adverse party’s claim, action, or defense. La.Code Civ.P. art.

966(D)(1). The burden then shifts to 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.” La.Code Civ.P. art. 966 (D)(1).

If the adverse party fails to establish that a genuine issue of material fact exists, the

mover is entitled to summary judgment as a matter of law. Id.

Appellate courts review summary judgments de novo using the same standard

that the trial court applies, i.e., “whether there is a genuine issue of material fact and

whether the mover is entitled to judgment as a matter of law.” Miller v. Acadian

Ambulance Serv., Inc., 17-1096, p. 7 (La.App. 3 Cir. 5/23/18), 248 So.3d 469, 475,

writ denied, 18-1452 (La. 11/20/18), 256 So.3d 990.

DISCUSSION

I. Contractual Breach and Knowledge

In its first assignment of error, RLN Investments contends the trial court erred

in granting Messina Realty’s Motion for Summary Judgment finding that it is

entitled to a defense and indemnity from RLN Investments, as Messina Realty and/or

Van Cleef breached the contract’s terms and rendered it ineffective. In its second
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assignment of error, RLN Investments contends that the trial court erred in granting

summary judgment because genuine issues of material fact exists regarding the

knowledge of Messina Realty or Van Cleef about the alleged defective condition of

the tree. In response, Messina Realty and Van Cleef filed separate appellate briefs

asserting that the trial court’s judgment should be affirmed.

According to the trial court’s oral ruling rendered at the hearing on February 5,

2018:

The Court’s reviewing . . . [the contract], and the Court looks at the
terms of this provision and the wording of this provision. It clearly
states that he [RLN Investments/Nation] holds them harmless. Now
whether or not he intended to hold them harmless from this type of
action, whether or not he, uh, they have been negligent is another issue.
The issue is what does the terms of this contract say?

....

[B]ut the terms and wording of this contract clearly says that he
indemnifies them and hold them harmless. So the Court’s going to
grant the Motion for Summary Judgment.

On review, we note that “[t]he language in an indemnity agreement dictates

the obligations of the parties.” Kinsinger v. Taco Tico, Inc., 03-622, p. 3 (La.App.

5 Cir. 11/12/03), 861 So.2d 669, 671. Indemnity agreements are governed by the

general rules of contract interpretation. Marshall v. Sw. La. Elec. Membership Corp.,

05-328 (La.App. 3 Cir. 11/2/05), 915 So.2d 1026, writ denied, 05-2491 (La. 3/24/06),

925 So.2d 1228. The “[i]nterpretation of a contract is the determination of the

common intent of the parties.” 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.

Summary judgment in matters involving the interpretation of a contract is

appropriate when the document can be construed from the four corners of the

instrument without needing to consider extrinsic evidence, as the matter is answered

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as a matter of law. LaFleur v. Hollier Floor Covering, Inc., 00-969 (La.App. 3 Cir.

12/6/00), 774 So.2d 359.

The contract at issue in this case, i.e., the Property Management Agreement,

was executed on April 26, 2012, between RLN Investments as the “owner” and

Messina Realty as the “manager.” According to its terms, Messina Realty is

obligated to “manage, operate[] control, rent and lease” the property. In paragraph

two under the section entitled “Responsibilities of Manager,” the manager is

required “[t]o make or cause to be made all . . . maintenance, alterations and repairs

to said property and to hire and supervise all employees and other labor for the

accomplishment of same unless owner chooses to maintain own properties.” If the

owner chooses to maintain its own property, the “owner will be contacted

immediately upon maintenance issues being reported and owner will be expected to

respond in a timely manner.” The contract also contains the following clause:

Liability of Manager

[RLN Investments] hereby agrees to hold [Messina Realty] harmless
from any and all claims, charges, debts, demands and lawsuits,
including attorney’s fees related to his management of the herein-
described property, and from any liability for injury on or about the
property which may be suffered by any employee, tenant or guest upon
the property.

The contract was attached to Messina Realty’s Motion for Summary

Judgment along with Van Cleef’s affidavit. Van Cleef attested that he was acting in

his capacity as Messina Realty’s agent when he executed the contract with RLN

Investments. According to his affidavit, Van Cleef “reported all complaints related

to maintenance of the property” made by the property’s tenant, Mayes, to Nation.

Van Cleef “reported the complaints by the tenant regarding the tree to” Nation. Van

Cleef advised that “upon learning of the accident on” March 31, 2013 from Mayes,

Van Cleef “immediately notified” Nation. The affidavit indicates that “Nation

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insisted on personally performing all maintenance work at the” property “and

insisted that he be immediately made aware of any problems . . . of which [Van Cleef]

at all times complied with [Nation’s] wishes.”

Attached to RLN Investments’ opposition memorandum was Mayes’

deposition testimony elicited on June 16, 2015. Therein, Mayes testified that he

notified Van Cleef about the tree on two separate occasions. Mayes revealed that on

the first occasion, he told Van Cleef that “limbs were falling and it looked like [the

tree] had been struck by lightning and it was eventually going to fall.” On the second

occasion according to Mayes’ testimony, he told Van Cleef that “the tree was going

to fall.”

Also attached to RLN Investments’ opposition memorandum was Van Cleef’s

deposition testimony dated October 11, 2016. Therein, Van Cleef denied Mayes’

allegations regarding his complaints and/or reports of a problematic tree. Van Cleef

was unable to “recall anything about [Mayes] having to pick up limbs or a dead tree

or lightning striking a tree or anything like that.” Van Cleef “never heard anything

about a tree” and could not “remember anything getting hit by lightning or [Mayes]

telling [Van Cleef] that there’s limbs falling or any of that.” Van Cleef noted that

had Mayes lodged such a complaint, he would have reported it to Nation. Van Cleef

testified that during his entire time as the property’s manager, he never reported an

issue regarding a tree to Nation.

Nation’s deposition testimony, which was elicited on October 11, 2016, was

also attached to RLN Investments’ opposition memorandum. Therein, Nation

agreed that he expected to be informed by Van Cleef about Mayes’ alleged

complaints regarding the tree. However, Nation revealed that Van Cleef never

informed him about the problems or complaints by the tenant.

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In this case, there is conflicting witness testimony surrounding the knowledge

and actions of Messina Realty’s agent, Van Cleef, regarding the tree in question.

Because of these conflicting views, the credibility of the witnesses must be

determined. “The credibility of a witness is a question of fact.” Hutchinson v.

Knights of Columbus, Council No. 5747, 03-1533, p. 8 (La. 2/20/04), 866 So.2d 228,

234. In determining whether a genuine issue exists, “courts cannot consider the

merits, make credibility determinations, evaluate testimony or weigh evidence.”

Smith v. Our Lady of the Lake Hosp., Inc., 93-2512, p. 27 (La. 7/5/94), 639 So.2d

730, 751. Specifically, “[a] trial judge cannot make credibility determinations on a

motion for summary judgment.” Hutchinson, 866 So.2d at 234. Based on the facts

set forth in the record of this summary judgment and the conflicting witness

testimony presented at trial regarding knowledge of the condition of the tree, we find

that the trial court erred in granting the motion for summary judgment.

II. Negligence

In its third assignment of error, RLN Investments questions whether the

indemnity clause in the contract encompasses the negligence of Messina Realty

and/or Van Cleef. RLN Investments contends that there is no language in the

contract stating that it intended to indemnify Messina Realty or its agents for

damages arising from their own negligence.

In response, Messina Realty asserts that the supreme court has held that an

indemnity contract can indemnify the indemnitee for the negligent acts of its own

employee. In support, Messina Realty cites Polozola v. Garlock, Inc., 343 So.2d

1000 (La.1977), and Berry v. Orleans, 01-3283 (La. 6/21/02), 830 So.2d 283.

In Polozola, 343 So.2d 1000, the issue was whether an industrial maintenance

contractor obligated itself under a maintenance contract with Dow Chemical

Company to indemnify Dow employees against losses caused by their own
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negligence. On review, the supreme court referenced Louisiana law which holds

that an indemnity contract “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.”

Id. at 1003. The indemnity clause in Polozola contained the following language:

“whether caused by Dow’s negligence or otherwise.” Id. at 1002. The supreme

court held that the foregoing language constitutes an unequivocal intention to

indemnify Dow employees against losses caused by their own negligence.

In Berry, 830 So.2d 283, the Orleans Parish School Board executed a contract

with the Lighthouse of the Blind in New Orleans, Inc., for mobility training services

to public school students. The indemnity clause obligated Lighthouse to indemnify

the other parties from claims “arising out of the performance of any of the services

to be performed pursuant to the terms of” the contract, “regardless of whether or not

it is caused in part by a party indemnified hereunder[.]” Id. at 284. In order to

determine whether an indemnitee may be indemnified against its own negligent acts,

the supreme court discussed in Berry the case of Arnold v. Stupp Corp., 205 So.2d

797 (La.App. 1 Cir. 1967), writ not considered, 251 La. 936, 207 So.2d 540 (1968),

wherein the appellate court surveyed the case law and noted the majority and

minority view on this issue:

The general rule is stated thus: ‘A contract of indemnity will not
be construed to indemnify the indemnitee against losses resulting
to him through his own negligent acts, where such intention is
not expressed in unequivocal terms. 27 Am.Jr., Indemnity, § 15,
page 464; 42 C.J.S. Indemnity § 12, page 580.’ The established
principle supporting the rule is that general words alone, i.e., ‘any
and all liability’, do not necessarily import an intent to impose an
obligation so extraordinary and harsh as to render an indemnitor
liable to an indemnitee for damages occasioned by the sole
negligence of the latter.

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The minority view is bottomed on the premise that the words
‘any and all liability’ are unambiguous and the use thereof means
just that and the restrictive interpretation adhered to in the
majority view is violative of the rule of law that a contract freely
entered into, which is not against public policy or prohibited by
law, is the law between the parties and subject to judicial
recognition and enforcement. 77 A.L.R.2d 1134.

For reasons hereinafter stated we are of the opinion and so hold
that Louisiana is committed to the majority view. (Citations
omitted)

Id. at 286. After reviewing Arnold along with other jurisprudence, the supreme court

in Berry held that the plaintiffs’ injuries arose out of the performance of the contract

between Lighthouse and the school board, and Lighthouse was required to indemnify

the school board.

We note that the language in the indemnity contracts in Berry and Polozola

unequivocally expressed an intention to indemnify the others against claims caused

by their own negligence based upon the following terms contained therein: “whether

caused by Dow’s negligence or otherwise” and “regardless of whether or not it is

caused in part by a party indemnified hereunder[.]” Polozola, 343 So.2d at 1002,

and Berry, 830 So.2d at 284. In this case, there lacks similar language showing that

RLN Investments intended to indemnify Messina Realty or its agents for damages

arising from its own negligence. Accordingly, we find merit to this assignment of

error.

III. Attorney’s Fees

On appeal, RLN Investments asserts that Messina Realty is not entitled to

recover attorney’s fees because the contract does not establish the right to

indemnification. In response, Messina Realty contends that RLN Investments

specifically agreed to reimburse their attorney’s fees for any claims brought against

it relating to the contract. In further response, Van Cleef asserts that if the trial

court’s judgment is affirmed, it should be extended to him because he was Messina
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Realty’s employee acting in the course and scope of his employment. Van Cleef

notes that he was not included in the judgment at issue because it was drafted by

RLN Investments’ counsel. Van Cleef further prays for an award of $3,500.00 in

attorney’s fees for all work performed on the instant appeal.

At the outset, we note that the trial court’s judgment at issue dismissed RLN

Investments’ third party demands “with prejudice, at their cost.” In Morris v.

Schlumberger, Ltd., 445 So.2d 1242, 1247 (La.App. 3 Cir.), writ denied, 449 So.2d

1345 (La.1984), this court stated:

The general rule is that the allowance of attorney’s fees is limited
to defense of the claim indemnified against, and no recovery can be had
for attorney’s services and expenses incurred in establishing the right
to indemnity. However, when specifically provided for by contract,
attorney’s fees incurred in establishing the right to indemnity may also
be recovered.

This court noted that the contract between Schlumberger and Phillips provided for

attorney’s fees based upon the following language:

Customer [Phillips] further agrees to protect, indemnify
and hold us and our officers and employees free and
harmless from and against any and all claims, demands,
causes of action, suits or other litigation (including all
costs thereof and attorney’s fees) of every kind and
character whenever arising in favor of Customer or any
third party . . . on account of bodily injury, death, loss of
damage to or loss of use of property . . . and financial loss
of any kind: . . .” (emphasis added)

Id. at 1247. This court revealed that additional contractual language provided: “‘in

any way by act or omission occurring incident to arising out of or in connection with

the presence of our employee or our equipment on premises controlled, leased,

operated or owned by Customer, or its agents or contractors . . . .’” Id. According

to the foregoing language, this court held that “Schlumberger could recover

attorney’s fees only for those services and expenses incurred in defense of the claim

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indemnified against” because the contract failed “to specifically provide for the

recovery of attorney’s fees incurred in establishing the right to indemnification.” Id.

In this case, the contract provides that attorney’s fees are only warranted if:

“[RLN Investments] hereby agrees to hold [Messina Realty] harmless from any and

all claims, charges, debts, demands and lawsuits, including attorney’s fees related to

his management of the herein-described property[.]” This clause, just like the clause

in Schlumberger, fails to specifically provide for the recovery of attorney’s fees

incurred in establishing the right to indemnification. Accordingly, we find that

Messina Realty and/or Van Cleef is not entitled to recover attorney’s fees associated

with establishing the right to indemnification based upon the terms of the contract at

issue.

DECREE

For the above reasons, the trial court’s judgment in favor Messina Realty,

L.L.C., is reversed. The matter is remanded to the trial court for further proceedings.

All costs associated with this appeal are assessed to Messina Realty, L.L.C.

REVERSED AND REMANDED.

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