Herbert P. Richard and Bridget Richard v. Metro Bingo of Lafayette, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CW 05-293
consolidated with 05-1304

HERBERT P. RICHARD
AND BRIDGET RICHARD

VERSUS

METRO BINGO OF LAFAYETTE, INC., ET AL.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT,
PARISH OF LAFAYETTE, NO. 2004-0891,
HONORABLE DURWOOD W. CONQUE, DISTRICT JUDGE

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MICHAEL G. SULLIVAN
JUDGE

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Court composed of John D. Saunders, Michael G. Sullivan, and J. David Painter,
Judges.

Saunders, J., dissents and assigns written reasons.

WRIT DENIED; JUDGMENTS AFFIRMED.

Melvin A. Eiden
Rabalais, Hanna & Hebert
701 Robley Drive, Suite 210
Lafayette, Louisiana 70503
(337) 981-0309
Counsel for Defendants/Appellants:
Metro Bingo of Lafayette, Inc.
Western World Insurance Company

Robert M. Kallam
Jennifer A. Wells
Jonathan L. Woods
Preis, Kraft & Roy
Post Office Drawer 94-C
Lafayette, Louisiana 70509
(337) 237-6062
Counsel for Defendants/Appellees:
Lafayette Athletic Association of the Deaf, Inc.
Alea London Limited

Allen R. Ingram
Attorney at Law
Post Office Box 53233
Lafayette, Louisiana 70505
(337) 233-7092
Counsel for Plaintiffs:
Herbert P. Richard
Bridget Richard

SULLIVAN, Judge.

All Defendants in this slip-and-fall litigation filed motions for summary

judgment. The motion filed by Defendants, Metro Bingo of Lafayette (Metro Bingo)

and its insurer, Western World Insurance Company (Western World), was denied,

while the motion for summary judgment filed by Defendants, Lafayette Athletic

Association of the Deaf (LAAD) and its insurer, Alea London Limited (Alea), was

granted. Metro Bingo filed a writ application, seeking reversal of the trial court’s

denial of its motion for summary judgment, and appealed the trial court’s grant of

summary judgment in favor of LAAD and Alea. The two matters were consolidated

by order of this court. For the following reasons, the writ application is denied, and

the judgments of the trial court are affirmed.

Facts

On Sunday, June 15, 2003, Herbert Richard drove his mother to Metro Bingo

in Lafayette for her to play bingo. He escorted her into the establishment, carrying

her bingo supplies, which he placed upon the table where she was going to sit. While

he was in the establishment, one of his feet slipped in water on the floor, and he fell,

hitting the floor. Mr. Richard’s back and right leg were injured in the incident. All

parties agree this occurred at approximately 1:15 p.m.

Metro Bingo owns the building where Mr. Richard was injured. It leases the

building to various charitable and non-profit organizations to operate bingo games;

LAAD is one of its lessees. Metro Bingo prepared the lease with LAAD. It is

responsible for maintenance of the leased premises, and its manager is in charge of

the building at all times. The manager controls access to the building; he opens the

doors which allows the public to enter the building for bingo games.

The day of Mr. Richard’s accident LAAD had two leases with Metro Bingo.

One lease was for the period from 10:30 a.m. to 2:30 p.m. “every Tuesday of each

week during the years stated.” The second lease was for the period from 1:30 p.m.

to 5:30 p.m. on Sunday, June 15, 2003. LAAD’s rent is $675.00 per bingo session.

On June 15, 2003, LAAD could not begin selling tickets until 1:30 p.m., or it would

have been in violation of the charitable gaming license it was issued to operate bingo

games. Its bingo games for that day did not begin until 2:30 p.m.; they were the first

games of the day.

Mr. Richard and his wife filed suit against Metro Bingo and LAAD and their

insurers, seeking damages. Metro Bingo and Western World filed a cross claim

against LAAD and Alea for defense and indemnity. Metro Bingo alleged that,

pursuant to its lease agreement with LAAD and the Additional Insured endorsement

of an insurance policy issued in favor of LAAD by Alea, LAAD and Alea owed it

indemnity for the Richards’ claims and for its own defense costs and attorney fees.

LAAD and Alea filed a motion for summary judgment, asserting that Alea’s

policy did not provide coverage to Metro Bingo and that LAAD was not liable for the

Richards’ damages. Metro Bingo and Western World then filed a motion for

summary judgment, asserting that Alea owes it a defense and indemnity. The trial

court granted LAAD and Alea’s motion for summary judgment but denied Metro

Bingo and Western World’s motion for summary judgment.

Standard of Review

Appellate courts review motions for summary judgments de novo, asking the

same questions the trial court asks to determine whether summary judgment is

appropriate. Champagne v. Ward, 03-3211 (La. 1/19/05), 893 So.2d 773. This

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inquiry seeks to determine whether any genuine issue of material fact exists and

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

966(B). “[F]acts are material if they potentially insure or preclude recovery, affect

a litigant’s ultimate success, or determine the outcome of a legal dispute.” Smith v.

Our Lady of the Lake Hosp., Inc., 93-2512, p. 27 (La. 7/5/94), 639 So.2d 730, 751,

(quoting S. La. Bank v. Williams, 591 So.2d 375, 377 (La.App. 3 Cir. 1991), writ

denied, 596 So.2d 211 (La.1992)).

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 of material fact and that the mover is entitled to

judgment as a matter of law. La.Code Civ.P. art. 966(B). Summary judgment is

favored and shall be construed “to secure the just, speedy, and inexpensive

determination of every action.” La.Code Civ.P. art. 966(A)(2).

The initial burden of proof remains with the mover to show that no genuine

issue of material fact exists. However, if the mover will not bear the burden of proof

at trial, he need not negate all essential elements of the adverse party’s claim, but he

must point out that there is an absence of factual support for one or more elements

essential to the claim. La.Code Civ.P. art. 966(C)(2). Once the mover has met his

initial burden of proof, the burden shifts to the non-moving party to produce factual

support sufficient to establish that he will be able to satisfy his evidentiary burden at

trial. Id.

Discussion

In its writ and appeal, Metro Bingo argues the trial court erred in finding that

it was not entitled to additional insured status and coverage under the Alea policy for

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the claims of Mr. Richard and that Alea did not have a duty to defend it in this

litigation. In its appeal, Metro Bingo contends the trial court erred in determining

that LAAD did not have independent or concurrent tort liability and that it was not

an additional insured under Alea’s policy.

LAAD’s Liability and Alea’s Coverage

The trial court determined that LAAD had no liability herein and that Metro

Bingo was not an additional insured under Alea’s policy. Metro Bingo argues that,

pursuant to the terms of LAAD’s lease and Alea’s policy, Mr. Richard’s incident

“arises out of” LAAD’s use of the premises; therefore, LAAD has liability for the

Richards’ claims, and it is an Additional Insured under Alea’s policy.

Metro Bingo’s lease agreement obligates LAAD as follows:

Lessee has inspected the leased premises thoroughly and agrees
that the bingo hall is suitably equipped and in safe and proper condition
for the safe conduct of Lessee’s bingo sessions and agrees to provide
Lessor with certificates of insurance in an insurance company carrying
Comprehensive General Liability with $500,000.00 and which names
Lessor as an additional insured, and further which policy will hold
Lessor harmless against any and all claims for bodily injury and/or
property damage, including cost of attorney fees for defending and all
claims arising out of Lessee’s occupation of the Leased premises and the
conduct of their bingo sessions.

LAAD purchased a policy from Alea which named Metro Bingo as an

Additional Insured. The Additional Insured endorsement reads:

“WHO IS AN INSURED (Section II) is amended to include as an
insured the person or organization shown in the Schedule but only with
respect to liability arising out of the ownership, maintenance or use of
that part of the premises leased to you and shown in the Schedule and
subject to the following additional exclusions:

This insurance does not apply to:

1. Any “occurrence” which takes place after you cease to be
a tenant in that premises.

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2. Structural alterations, new construction or demolition
operations performed by or on behalf of the person or
organization shown in the Schedule.

The trial court determined that because LAAD’s lease with Metro Bingo did not

begin until 1:30 p.m. and Mr. Richard was injured at 1:15 p.m., no lease was in effect,

and Mr. Richard’s arriving early to drop off his mother for a bingo game did not

“aris[e] out of” LAAD’s use of the premises; therefore, LAAD has no liability for the

Richards’ damages and Alea’s policy did not provide coverage to Metro Bingo for the

accident.

Metro Bingo focuses its argument on the “arising out of” phrase in the

Additional Insured provision. It asserts that because Mr. Richard was at the Metro

Bingo facility to bring his mother to the bingo games operated by LAAD, his accident

arises out of LAAD’s activities on the premises, even though his accident occurred

before LAAD was lessee of the premises. It also argues that, if Alea wanted to limit

its coverage under the Additional Insured endorsement to LAAD’s four-hour lease

period, it could have but did not.

Metro Bingo cites three cases in support of its position. The first is a workers’

compensation case in which it was determined that an employee’s fall in her

employer’s parking lot fifteen minutes before her shift began was an accident arising

out of her employment and covered by workers’ compensation. Francisco v. Harris

Mgmt. Co., 94-126 (La.App. 3 Cir. 10/05/94), 643 So.2d 386. In Francisco, this court

observed that an accident on the employer’s premises before the employee’s shift

began was an exception to the general rule that an employee is not in the course and

scope of employment and her injuries do not arise out of her employment when

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traveling to and from work. The other two cases cited do not involve a temporal

element; therefore, we find them inapplicable to the facts herein.

Metro Bingo seeks to extend the broad interpretation of workers’ compensation

law to contract law. However, leases and insurance policies are contracts between the

parties and have the effect of law between them. La.Civ.Code arts. 9-13 and 2045-

2057. “The intention of the parties is to be determined in accordance with the plain,

ordinary, and popular sense of the language used in the agreement and by giving

consideration on a practical basis to the instrument in its entirety.” Fleniken v.

Entergy Corp., 99-3023, 99-3024, p. 6 (La.App. 1 Cir. 2/16/01), 790 So.2d 64, 68,

writs denied, 01-1269, 01-1295 (La. 6/15/01), 793 So.2d 1250, 1252. “When the

language of an insurance policy is clear and unambiguous, a reasonable interpretation

consistent with the obvious meaning and intent of the policy must be given.”

Robinson v. Heard, 01-1697, p. 3 (La. 2/26/02), 809 So.2d 943, 945.

The lease requires LAAD to purchase insurance to indemnify and hold Metro

Bingo harmless against claims for bodily injury; it does not obligate LAAD to

indemnify and hold Metro Bingo harmless. The lease also does not obligate or

transfer responsibility for maintenance of the premises or liability for the premises to

LAAD.

The Additional Insured endorsement in Alea’s policy contemplates the existence

of a lease for there to be coverage, providing in part: “WHO IS AN INSURED . . . is

amended to include [Metro Bingo] but only with respect to liability arising out of the

ownership, maintenance or use of that part of the premises leased to you.” No lease

was in effect at the time of Mr. Richard’s accident. Accordingly, we find no error with

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the trial court’s conclusion that Metro Bingo was not an additional insured under

Alea’s policy.

We also find no error with the trial court’s conclusion that LAAD has no

liability for the Richards’ claims. As the trial court observed, if LAAD’s liability

under the lease is extended beyond the terms of the lease based on the “arising out of”

phrase, the question becomes where does its liability end. Metro Bingo prepared the

lease and controlled LAAD’s and the public’s access to its premises at all times. It

allowed LAAD employees and members of the public onto its premises before

LAAD’s lease became effective. LAAD was not responsible for maintenance of the

premises under the lease. We agree with the trial court that there must be a bright line

to determine when LAAD’s liability under the lease began and ended and that bright

line is the lease itself.

Alea’s Duty to Defend

Metro Bingo also urges that the trial court erred in denying its claim for Alea

to provide it a defense. In American Home Assurance Co. v. Czarniecki, 255 La. 251,

269, 230 So.2d 253, 259 (La.1969), the supreme court outlined an insurer’s duty to

defend, explaining:

Generally the insurer’s obligation to defend suits against its
insured is broader than its liability for damage claims. And 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. Benoit v. Fuselier, 195 So.2d 679 (La.App.1967).

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. Additionally, the allegations of the petition are liberally
interpreted in determining whether they set forth grounds which bring the
claims within the scope of the insurer’s duty to defend the suit brought
against its insured. Benoit v. Fuselier, ibid.

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The only evidence that can be considered in a duty to defend claim is the

petition and the policy. Czarniecki, 255 La. 251, 230 So.2d 253. Therefore, we can

only consider the allegations in the Richards’ petition and the Additional Insured

endorsement of Alea’s policy. An insurer has a duty to defend “whenever the

pleadings against its insured discloses even a possibility of liability under the policy.”

Steptore v. Masco Const. Co. Inc., 93-2064, pp. 8-9 (La. 8/18/94), 643 So.2d 1213,

1218.

The Richards’ petition states in pertinent part:

Petitioners aver that the negligence of the defendants, METRO
BINGO OF LAFAYETTE, INC., WESTERN WORLD INSURANCE
COMPANY, LAFAYETTE ATHLETIC ASSOCIATION OF THE
DEAF, INC., ALEA LONDON LIMITED, and/or their agents,
employees, servants and representatives, either individually or
collectively, consists of the following, though non-exclusive acts of
omission or commission:

1) having knowledge of the vice or defect in the
roof of the building in question;

2) having knowledge that the roof of the building
in question was leaking and thereafter failing
to adequately maintain and/or make repairs to
it, thereby placing patrons in a dangerous
situation;

3) being inattentive in their responsibilities to
provide a safe environment to patrons of the
bingo hall in question;

4) all other acts of omissions or commission
constituting negligence, which will be proven
at a trial of this matter.

As previously discussed, Alea’s Additional Insured endorsement contemplates

the existence of a lease. The Richards do not allege the existence of a lease. And as

previously discussed, LAAD’s lease for June 15, 2003, did not begin until after

Mr. Richard fell. Thus, assuming all of the above allegations to be true, there is no

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basis for coverage under Alea’s policy. The trial court’s denial of Metro Bingo’s

demand for a defense by Alea was not error.

Disposition

For the foregoing reasons, the trial court’s grant of the motion for summary

judgment filed by LAAD and Alea and its denial of the motion for summary judgment

filed by Metro Bingo and Western World are affirmed. All costs of this appeal are

assessed to Metro Bingo and Western World.

WRIT DENIED; JUDGMENTS AFFIRMED.

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