Articles Posted in Insurance Dispute

Obtaining insurance coverage to protect a new company purchase can be crucial to preventing financial loss. But does a company have policy coverage on a new purchase when the insurance company provides only a certificate of insurance? A case in the First Circuit Court of Appeal for Louisiana recently addressed the issue. 

J&M Piling Driving (“J&M”) requested a quote for insurance from Chabert Insurance Agency (“Chabert”), in August of 2010. J&M was looking to insure the company’s new vessel, called the Lil Cherie. The Lil Cherie sank one month later, and J&M discovered that Chabert was not willing to provide coverage for the accident despite issuing two certificates of insurance. 

J&M then filed a lawsuit against Chabert. In the lawsuit, J&M alleged that Chabert informed J&M that the vessel was covered by insurance and therefore J&M was under the impression that Lil Cherie was fully insured. J&M sought damages for the value of Lil Cherie, personal items on Lil Cherie, salvaging the sunken vessel, and loss of income. 

Why do we buy insurance? Most people expect that when they buy insurance, they will receive financial reimbursement for losses caused by accidents or many of life’s unexpected circumstances. It can certainly be a surprise when they expect insurance and then the insurance company refuses to provide it. What are their options when this happens? Filing a lawsuit is one, but won’t always guarantee a day in court, as a 2017 case from the Court of Appeal for the Third Circuit illustrates.

Advanced Radiographics Inc., (“ARI”) is a company that stores health records for medical providers in Louisiana. Its corporate office and one of its warehouses are located in Duson, Louisiana, but the company also has eight other locations. For insurance, ARI purchased general liability coverage which covered all ten of ARI’s locations, and property insurance which only covered ARI’s corporate office. Colony Insurance Company (“Colony”) provided the property insurance which was purchased through insurance broker Kellie Stein (“Stein”) of Brown and Brown of Baton Rouge, LLC (“Brown”).

Unfortunately for ARI, in 2014, a car crashed into the Duson warehouse and caused a fire to break out. ARI filed an insurance claim to Colony, but Colony denied it. For refusing to file, ARI sued Colony, Stein, and Brown in the Fifteenth Judicial District Court for Lafayette Parish. Stein and Brown filed a peremptory exception of no cause of action and in 2016, the District Court granted the exception. ARI then appealed, claiming that the exception of no cause of action should not have been granted.

Almost all companies have insurance policies to protect them from liability that may arise during the course of business. In this case, the defendant, Reggie’s, had a commercial general liability (“CGL”) policy through Century Surety Company (“Century”). Generally, an insurance company may limit coverage, so long as the limits to not conflict with any laws or public policy, and when there is a limit, the insurance contract must be strictly construed against the insurer. La. C.C. art. 2056. This means that if there are any ambiguities in the exclusion or limitations, they are construed in favor of the insured. See Edward v. Daugherty, 833 So.2d 932, 940 (La. 2004). Here, the question that arose is whether the August 22 fight at Reggie’s bar was excluded under the policy provided by Century under the assault-and-battery endorsement exclusion.

On August 22, 2010, Juan Mendez (“Mendez”) was at Reggie’s bar when he allegedly threw a drink in another patron’s face. Mendez was then escorted out of the building by Evan Vincent (“Vincent”) a bouncer at Reggie’s, and a defendant in the case. After Mendez was removed from the building, he was injured when Vincent picked him up and forced him to the ground. The police and EMS were called, but Vincent was not charged.

Mendez subsequently filed a civil suit for damages against Vincent, Reggie’s, and Century. Following a hearing, the trial court granted summary judgment in favor, finding that the August 22, incident was not covered by Century. The plaintiff appealed, arguing that the incident was not precluded from coverage because the bodily injuries were intended and resulted from the use of reasonable force to protect persons or property.

Every adult has had to deal with some type of insurance in their life, whether it be home, auto, or life insurance. When it comes to car insurances, there are numerous different types of policies, and, in some situations, automobiles are covered by personal umbrella policies. Similar to any other contract, an insurance policy is a contract between the insurance company and the insured and must be interpreted using the general rules set forth in the Louisiana Civil Code. Reynolds v. Select Properties, Ltd., 634 So.2d 1180, 1183 (La. 1994). When the language of a policy is clear and unambiguous, the policy must be enforced as written, but the determination of whether a contract is unambiguous is a question of law. La. C.C. art. 2046.

In this case, Michael Rodriguez (“Rodriguez”) was driving a 2006 Toyota Tundra (“Tundra”) owned by Rodriguez Crop Consulting, LLC (“RCC”) and insured by Louisiana Farm Bureau Mutual Insurance Company (“Mutual Insurance”) when he struck Marcella Hurst (“Hurst”). Hurst was walking across a parking lot at L.A. Express when she was struck by Rodriguez’s vehicle. In February 2013, Hurst filed a lawsuit against Rodriguez, RCC, and the car insurers. Additionally, Rodriguez asserted that his claim for excess coverage under the umbrella policy was wrongfully denied, and that if the umbrella policy does not cover, then Blane Brignac (“Brignac”) and Kerney Trahan (“Trahan”), employees of Mutual Insurance, were liable because they held that the umbrella policy would provide full protection regardless of whether the vehicle was being used for personal or business reasons.

The Louisiana First Circuit Court of Appeal affirmed the trial court’s holding that the insurance companies were in the right when they denied Rodriguez’s claim for excess coverage under the umbrella policy. The Court of Appeal agreed the policy was not ambiguous and should be enforced as written. Under the policy, the Tundra falls squarely within the scope of a “regular use exclusion” included in the contract. Thus, the trial court correctly held that the car was not covered by the umbrella policy.