La. United Bus. Ass'n Cas. Ins. Co. v. J & J Maint., Inc.
La. United Bus. Ass'n Cas. Ins. Co. v. J & J Maint., Inc.
Opinion of the Court
Before the Court are two motions: (1) Migues Deloach Company, LLC's ("Deloach") "Motion for Summary Judgment" (Record Document 151) and (2) J & J Maintenance, Inc.'s ("J & J") "Motion for Partial Summary Judgment" (Record Document 155), each seeking a determination of whether Deloach is liable to J & J for attorney's fees and costs incurred by J & J in defense of the underlying claims against it in this matter, as well as attorney's fees and costs incurred in pursuit of reimbursement of those fees against Deloach. For the reasons contained herein, Deloach's motion is DENIED and J & J's motion is GRANTED IN PART and DENIED IN PART .
*566FACTUAL AND PROCEDURAL BACKGROUND
This matter arises out of an accident which occurred on January 24, 2012, wherein Jonathan West ("West"), an employee of Deloach, was electrocuted while transporting construction materials at a remodeling project at a dental clinic in Fort Polk. See Record Document 31-4. On the day of the accident, West was working with his supervisor, Mark Hale ("Hale"), installing metal finish work on the soffit of the clinic. See Record Document 155-4 at 41. Although instructed not to do so, West used a manlift, boomed it away from the building, and caught the power line. See Record Document 157-3 at 41.
J & J was the general contractor of the remodeling project, and Deloach, West's employer, was operating pursuant to a Subcontract Agreement (the "Subcontract") under which Deloach was due to supply the earthwork foundation, steel supports, and other items for the project. See Record Document 137-1. The Subcontract contained the following provisions, in pertinent part:
10.(a) To the fullest extent permitted by law, subcontractor (Deloach) shall unconditionally indemnify, defend (with counsel selected by contractor (J & J) ) and hold harmless owner, contractor, architect and/or engineer and their subconsultants and all of their affiliates, parents, subsidiaries, officers, directors, employees, successors and assigns (all of which are hereinafter collectively referred to as "indemnitites"), from and against all claims, damages, losses, costs and expenses, including but not limited to attorneys' fees and expenses of dispute resolution (collectively, "indemnified claims") arising out of or resulting from the performance of subcontractor's work, acts or omissions of subcontractor, negligence, breach of contract and/or breach of warranty by subcontractor, even though such damages are caused in part by the negligence (whether sole, joint or concurrent), strict liability or other legal fault of the contractor of any other indemnitee ... Nothwithstanding the foregoing, the indemnification obligation shall be limited to the extent that the subcontractor's indemnification of the indemnitee for the indemnitee's own negligence is specifically prohibited by applicable laws for a particular type of project.
20. In the event Contractor (J & J) employs an attorney to enforce any of the provisions hereof, or to protect its interest in any matter arising under this Agreement, or to collect damages for breach of this Agreement, or to prosecute or defend any suit resulting from this Agreement, or to recover on the surety bond given by Subcontractor under this Agreement, Subcontractor (Deloach) and his surety, jointly and severally, agree to pay Contractor all costs, charges, expenses and attorneys' fees expended or incurred therein ...
Id.
Following the accident, Louisiana United Business Association Casualty Insurance Company ("LUBACI") paid workers' compensation death benefits to West's heirs. LUBACI then filed suit to recoup those benefits, asserting it was entitled to reimbursement because the accident was caused by the negligence of several defendants, including J & J, Entergy Louisiana, LLC ("Entergy"), and Volvo Construction Equipment Rents, Inc. ("Volvo"). See Record Document 31-4.
On December 26, 2012, J & J filed its first Third-Party Demand against Deloach alleging that J & J and Deloach entered into a subcontract to perform several aspects of the remodeling project. See Record Document 151-1. J & J alleged under the Subcontract that Deloach agreed to *567defend and indemnify J & J against any damages arising out of the performance of Deloach's work. See id. Deloach filed an Exception of Prematurity regarding these defense and indemnity claims, which was sustained by the 30th Judicial District Court, Vernon Parish, on September 3, 2013. See Record Document 137. Additionally, J & J was named as a cross-defendant on a related claim in Entergy's cross-claim filed on March 26, 2013. See Record Document 151-2. Subsequent to this cross-claim, J & J filed a First Supplemental and Amending Third-Party Demand against Deloach, asserting that Deloach was liable for defense and indemnification against Entergy's claims as well. See Record Document 151-3.
After J & J filed an Exception of No Right of Action asserting Louisiana's workers' compensation immunity under La. R.S. 23:1032 ("LWCA immunity"), the claims presented by LUBACI against J & J were dismissed in a Consent Judgment signed on February 24, 2014. See Record Document 155-6. On May 27, 2015, this case was removed to this Court pursuant to
On December 19, 2017, Deloach filed its Motion for Summary Judgment on J & J's cross-claims. See Record Document 151. J & J filed its opposition on December 29, 2017, to which Deloach replied on January 5, 2017. See Record Documents 157 and 158. The Court allowed J & J to file a sur-reply, which it did so on January 17, 2018. See Record Document 164. In addition to its opposition, J & J filed its own Motion for Partial Summary Judgment on December 29, 2017. See Record Document 155. Deloach opposed the motion on January 12, 2018, and J & J replied on January 18, 2018. See Record Document 160 and 161. Deloach also filed a sur-reply on January 22, 2018. See Record Document 169. The issues have been briefed extensively by the parties; therefore, the matter is ripe for decision.
LAW AND ANALYSIS
I. Summary Judgment Standard
Rule 56 of the F.R.C.P. governs summary judgment. This rule provides that the court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." F.R.C.P. 56(a). Also, "a party asserting that a fact cannot be or is genuinely disputed must support the motion by citing to particular parts of materials in the record, including ... affidavits ... or showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." F.R.C.P. 56(c)(1)(A) and (B). "If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), the court may ... grant summary judgment." F.R.C.P. 56(e)(3).
*568In a summary judgment motion, "a party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings ... [and] affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett,
Additionally, in deciding a summary judgment motion, courts "resolve factual controversies in favor of the nonmoving party, but only when there is an actual controversy, that is when both parties have submitted evidence of contradictory facts."
II. Analysis
A. Timeliness
Deloach argues J & J's motion for partial summary judgment is untimely; therefore, the Court should dismiss it. See Record Document 160 at 4. Conversely, J & J argues its motion is a motion for "partial summary judgment" and is beyond the scope of the dispositive motion deadline as set forth in the Court's Scheduling Order. See Record Document 161. J & J's argument is incorrect. First, a "dispositive motion" includes a motion that, if granted, would result in the determination of a particular claim on the merits. See Tripoli Rocketry Ass'n, Inc. v. Bureau of Alcohol, Tobacco, Firearms & Explosives,
Per the Court's Scheduling Order, all dispositive motions were due ninety (90) days before trial. See Record Document 136 at 1. With a trial date of March 19, 2018, this made all dispositive motions due on December 19, 2017. See Record Document 135. J & J filed its Motion for Partial Summary Judgment on December 29, 2017, ten (10) days after the deadline. See Record Document 155. Therefore, J & J's motion is considered untimely. However, under the circumstances in the instant matter, the Court does not believe dismissal would be proper. J & J's motion seeks a ruling on the same legal question posed in *569Deloach's motion-whether Deloach is liable for the costs of defense incurred in defending and prosecuting claims arising from the subcontract-and there are no facts in dispute between the parties. While J & J's motion was filed late, the Court finds that considering the motion will not unduly prejudice Deloach and will allow the Court to render judgment on a purely legal question without requiring this issue to go to trial. See Pratt Paper (LA), LLC v. JLM Advanced Tech. Servs., Inc.,
B. Interpretation of the Subcontract's Indemnity Provision
In its motion for summary judgment, Deloach argues that the Subcontract limits reimbursement of defense costs to situations of negligence or breach committed only by Deloach. See Record Document 151-6 at 6-7. Conversely, J & J asserts Deloach's indemnification obligations are triggered not just by its own negligence, but also by any claims "arising out of or resulting from the performance of [Deloach's] work." Record Document 157 at 4. In its Reply, Deloach argues that J & J has not shown the "connexity" between the accident and the work to trigger the indemnity provision.
Under Louisiana law, the language in an indemnity agreement dictates the obligations of the parties. See Bollinger Marine Fabricators, LLC v. Marine Travelift, Inc.,
The pertinent provision provides as follows:
10.(a) To the fullest extent permitted by law, subcontractor (Deloach) shall unconditionally indemnify, defend (with counsel selected by contractor (J & J) and hold harmless owner, contractor, architect and/or engineer and their subconsultants and all of their affiliates, parents, subsidiaries, officers, directors, employees, successors and assigns (all of which are hereinafter collectively referred to as "indemnitites"), from and against all claims, damages, losses, costs and expenses, including but not limited to attorneys' fees and expenses of dispute resolution (collectively, "indemnified claims") arising out of or resulting from the performance of subcontractor's work, acts or omissions of subcontractor, negligence, breach of contract and/or breach of warranty by subcontractor, even though such damages are *570caused in part by the negligence (whether sole, joint or concurrent), strict liability or other legal fault of the contractor of any other indemnitee ....
Record Document 137-1 (emphasis added).
Under this provision, Deloach agreed to unconditionally defend and indemnify and hold J & J harmless from any and all claims "arising out of or resulting from the performance of (Deloach's) work" even though "such damages are caused by the negligence ... of (J & J)."
The Louisiana Supreme Court has held such "arising out of" language requires "a connexity similar to that required for determining cause-in-fact: Would the particular injury have occurred but for the performance of work under the contract?" Perkins v. Rubicon, Inc.,
According to the "Accident Report," West was "working" with his supervisor, Hale, installing metal finish work on the soffit of the dental clinic when he was electrocuted while operating a manlift. See Record Document 155-4 at 41. Although West was instructed to go to the ground and remove the plastic covering some trim, his work involved "installing metal finish work." See ibr.US_Case_Law.Schema.Case_Body:v1">id
Deloach argues that West's accident had no connexity to Deloach's work, since the work "required the workers to carry by hand soffit panels up a scaffold," and West "was never instructed to use the lift." Record Document 158 at 5. However, Deloach's argument as to how West was attempting to perform part of Deloach's work, i.e. , the use of a manlift as opposed to carrying up soffit panels up a ladder, *571does not change the fact that he was doing Deloach's work. Additionally, Deloach fails to cite any legal authority to support its position. Deloach's citation to Spencer v. Chevron Corporation, 216-0174 (La. App. 4 Cir. 9/28/16),
The Subcontract expressly provides that Deloach's indemnification obligations is triggered not just by its own negligence, but also by any claims "arising out of or resulting from the performance of [Deloach's] work." The Court finds sufficient connexity between West's accident and Deloach's work. Therefore, the indemnity provision is triggered and J & J would be entitled to entitled to indemnity from Deloach for J & J's costs of defense and expenses if the Court need not adjudicate fault on behalf of J & J, discussed infra.
C. Adjudication of J & J's Fault
The main issue in this matter is whether a determination of fault on the part of J & J
The indemnity provision of the Subcontract, in accord with La. R.S. 9:2780.1,
10.(a) ... Nothwithstanding the foregoing, the indemnification obligation shall be limited to the extent that the subcontractor's indemnification of the indemnitee for the indemnitee's own *572negligence is specifically prohibited by applicable laws for a particular type of project.
Record Document 137-1. Under the statute, any agreement whereby Deloach provided defense or indemnity against loss or damage resulting from the negligence of J & J is null, void, and unenforceable. Although courts have not addressed La. R.S. 9:2780.1 as it pertains to the requirement of the finding of negligence, courts have analyzed an almost indistinguishable statute, the Louisiana Oilfield Indemnity Act ("LOIA"), La. R.S. 9:2780.
After trial on the merits , if the indemnitee is found free from fault, the Act does not prohibit the indemnitee from recovering its cost of defense. Whether the injury is found to have resulted in whole or in part from the fault of the indemnitor does not affect the indemnitee's right to recover its cost of defense provided it is free from fault.
Meloy v. Conoco, Inc.,
In Hefren, the plaintiff filed suit against Murphy Exploration & Production Company, USA ("Murphy") and McDermott, Inc. ("McDermott") for personal injuries under the Longshore and Harbor Workers' Compensation Act ("LHWCA").See Hefren,
Before reaching her conclusion, Judge Doherty analyzed the two legal frameworks *573instituted by the Fifth Circuit to address the instant issue. See Hefren,
In the case at bar, the Melancons alleged that the negligence and/or legal fault of the indemnitee, Amoco, caused Mr. Melancon's injuries. However, the Louisiana Supreme Court has held after certification from this Court that under the Louisiana Oilfield Indemnity Act "[t]he allegations of the plaintiff's suit against the indemnitee are irrelevant to the indemnitor's obligation to pay. Rather it is the terms of the indemnity agreement which govern the obligations of the parties." Meloy v. Conoco, Inc.,817 F.2d 275 , 280 (5th Cir. 1987). Here there exists no holding that Amoco was negligent or at fault for Mr. Melancon's injuries. The case never reached the issue of Amoco's negligence because of the LHWCA's bar. For that reason Amoco is entitled to indemnity from Beraud for the costs of its defense. Provision 10 of the Amoco-Beraud contract so provides, and the Louisiana Oilfield Indemnity Act does not apply absent a finding of negligence or fault against Amoco.
Next, Judge Doherty addressed the second line of cases, beginning with Tanksley v. Gulf Oil Corp.,
The essential difference between the factual scenario in Melancon and that here presented relates to the legal availability of a determination of the negligence or fault of the indemnitee. Once the court decided that Melancon was an Amoco borrowed employee, the Longshore and Harbor Workers' Act proscribed any judicial inquiry into Amoco's fault or negligence. Thus, as a matter of law, there could never be a "trial on the merits" to determine whether Amoco was "free from fault and thus outside the scope of the [Louisiana Oilfield Indemnity] Act." Meloy v. Conoco, Inc.,504 So.2d 833 , 839 (1987). In that setting, we concluded that the Oilfield Indemnity Act did not annul the indemnity provision and that Amoco was entitled to recover its costs of defense of the tort suit brought by Melancon, and the costs it incurred in pressing its indemnification demands.834 F.2d at 1248 .
In the case at bar, a trial on the merits to determine Chevron's fault or negligence was not only legally possible, it was imminent and was foreclosed only by the compromise settlement with Tanksley. The parties undoubtedly reached this settlement after a careful weighing of all relevant factors and risks. For reasons it deemed sufficient, Chevron opted to forego a trial at which it would either have been found liable or exonerated. The appeal of the certainty of settlement overrode the contending appeal of the uncertainty of trial. As a consequence, because of Chevron's choice, there will be no trial on the merits of Tanksley's claims to determine whether Chevron was "free from fault and thus outside the scope of the Act." Absent such a finding, or a legal bar *574preventing the finding, as in Melancon, we must conclude that the Oilfield Indemnity Act nullifies, in this instance, the indemnity agreement between Chevron and SEE.
Tanksley,
Judge Doherty noted the rejection of Tanksley by two of the five Louisiana appellate courts in Ridings v. Danos & Curole Marine Contractors, Inc.,
Judge Doherty concluded that peremption, like LHWCA immunity, was a legal bar to reaching the issue of negligence in the claims asserted by plaintiff and granted McDermott's motion for partial summary judgment on the issue of attorneys' fees. See Hefren,
Deloach urges the Court to adopt the reasoning of the Louisiana appellate courts, arguing its duty to defend must be deferred until liability is determined. See Record Document 160 at 5-6. However, Deloach does not address Judge Doherty's analysis, nor that of the Fifth Circuit in its opinion affirming her decision. In fact, Judge Doherty specifically distinguished Ridings and Phillips-cases that involved settlement of claims-from cases involving legal bars, as is the case here. See Hefren,
Deloach next argues that Melancon and Hefren are inapposite because this matter involves the application of LWCA immunity and Louisiana law. See Record Document 160 at 6. However, the immunities provided by the LHWCA and LWCA are virtually the same. The LHWCA is a federal workers' compensation scheme designed to provide exclusive remedies for longshoremen and harbor workers that are injured in the course of employment. See
*575Lastly, Deloach argues J & J's fault must be determined pursuant to La. Civ. Code art. 2323.
i. LUBACI's Negligence Claims Against J & J
Here, LUBACI's claims never reached the issue of J & J's negligence because LUBACI's claims against J & J were dismissed pursuant to LWCA immunity. Thus, as a matter of law, there could never be a "trial on the merits" to determine whether J & J was "free from fault" and thus outside the scope of La. R.S. 9:2780.1. The LWCA's legal bar is nearly identical to the LHWCA's bar in Melancon, discussed supra. Therefore, as with the legal bar of the LHWCA in Melancon and the legal bar of peremption in Hefren, the Court could not have reached the issue of negligence here. Accordingly, the Court's failure to find J & J free from fault does not bar J & J's right to indemnity as it pertains to J & J's claims against Deloach for the costs of defense, including attorneys' fees, incurred in defending against claims of LUBACI.
ii. Entergy's Cross-Claims Against J & J
J & J's claims against Deloach for the costs of defense incurred in defending against claims of Entergy do not enjoy a smiliar fate. Entergy's claims were not dismissed pursuant to a legal bar, but rather a settlement agreement. Accordingly, the Court finds Tanksley applicable in this instance.
*576settled Entergy's claims without a determination of fault, it is precluded by La. R.S. 9:2780.1 from seeking indemnity from its indemnitor, Deloach.
J & J argues that a determination of its freedom of fault was determined by the Court when it denied Entergy's motion for summary judgment. See Record Document 155-1 at 15. J & J concedes that the Court's ruling was merely a denial of a motion for summary judgment by Entergy and not an affirmative grant of summary judgment; however, it suggests a "cursory review" of the Court's ruling "reveals that, as a matter of law, J & J was not negligent or at fault with respect to the OPLSA."
Because J & J, through Deloach, settled Entergy's cross-claims without a determination of fault (as opposed to a legal bar-LWCA immunity in this case-preventing such a determination), J & J is precluded from seeking indemnity for its costs incurred in defending against Entergy's cross-claims. See BJ Servs. Co., USA v. Thompson,
D. J & J is Entitled to Recover Attorneys' Fees and Costs in Pursuing Indemnification
J & J also asserts it is entitled to recover the amount of attorneys' fees and expenses incurred in pursuing its defense and indemnification from Deloach under the Subcontract. See Record Documet 155-1 at 16. Deloach does not address this issue in any of its briefs.
Paragraph 20 of the Subcontract provides:
20. In the event Contractor (J & J) employs an attorney to enforce any of the provisions hereof, or to protect its interest in any matter arising under this Agreement, or to collect damages for breach of this Agreement, or to prosecute or defend any suit resulting from this Agreement, or to recover on the surety bond given by Subcontractor under this Agreement, Subcontractor (Deloach) and his surety, jointly and severally, agree to pay Contractor all costs, charges, expenses and attorneys' fees expended or incurred therein ...
Record Document 137-1.
Attorneys' fees are generally not allowed except where authorized by statute *577or contract; however, Louisiana law is well settled that clauses like this are enforceable. See Naquin v. Louisiana Power & Light Co., 2005-2104 (La. App. 1 Cir. 11/17/06),
As Deloach asserts, and J & J does not dispute, J & J is entitled to recover reasonable defense costs and attorneys' fees. See Record Document 160 at 11, citing Nassif v. Sunrise Homes, Inc., 98-3193 (La. 6/29/99),
CONCLUSION
Based on the foregoing, Deloach's "Motion for Summary Judgment" is DENIED and J & J's "Motion for Partial Summary Judgment" is GRANTED IN PART and DENIED IN PART . Regarding LUBACI's negligence claim, the case never reached the issue of J & J's negligence because of a legal bar-LWCA immunity. For this reason, J & J is entitled to recover its costs of defense, attorneys' fees, and expenses incurred in defending against LUBACI's claim. J & J is also entitled to its costs and attorneys' fees in pursuing indemnification against Deloach, including fees and costs incurred in this Motion. Conversely, because J & J settled Entergy's claim without a determination of fault, J & J is precluded from seeking indemnity from Deloach for its costs of defense, attorneys' fees, and expenses incurred in defending against Entergy's claim.
THUS DONE AND SIGNED in Shreveport, Louisiana, this 11th day of July, 2018.
Entergy released its claims in exchange for payment issued by LUBACI, the workers' compensation insurer of Deloach. Deloach submits that the terms of the settlement agreement are confidential. See Record Document 160 at 7.
Counsel for J & J is cautioned that, in the future, they should move for an extension of the dispositive motion deadline prior to the expiration of the deadline.
This same argument is presented in Deloach's opposition to J & J's motion for summary judgment. See Record Document 160 at 8-11.
Deloach's cited case, Ponder v. SDT Waste & Debris Services, LLC, 2015-1656 (La. App. 1 Cir. 8/16/17),
J & J defended two claims in this matter: (1) a negligence claim asserted by LUBACI and (2) a cross-claim asserted by Entergy for J & J's alleged violation of the Overhead Powerline Safety Act ("OPLSA"), La. R.S. 45:141, et. seq.
The pertinent provision of La. R.S. 9:2780.1 states:
B. Notwithstanding any provision of law to the contrary and except as otherwise provided in this Section, any provision, clause, covenant, or agreement contained in, collateral to, or affecting a motor carrier transportation contract or construction contract which purports to indemnify, defend, or hold harmless, or has the effect of indemnifying, defending, or holding harmless, the indemnitee from or against any liability for loss or damage resulting from the negligence or intentional acts or omissions of the indemnitee, an agent or employee of the indemnitee, or a third party over which the indemnitor has no control is contrary to the public policy of this state and is null, void, and unenforceable.
The relevant provision of the LOIA states as follows:
B. Any provision contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, is void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages arising out of or resulting from death or bodily injury to persons, which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee, or an agent, employee, or an independent contractor who is directly responsible to the indemnitee.
La. Civ. Code art. 2323 provides, in pertinent part:
A. In any action for damages where a person suffers injury, death, or loss, the degree or percentage of fault of all persons causing or contributing to the injury, death, or loss shall be determined, regardless of whether the person is a party to the action or a nonparty, and regardless of the person's insolvency, ability to pay, immunity by statute, including but not limited to the provisions of R.S. 23:1032, or that the other person's identity is not known or reasonably ascertainable.
Since Entergy's claims were dismissed by a settlement agreement, the Court acknowledges the state appellate decisions of Ridings and Phillips could be applicable. However, this is a federal court; therefore, we are bound by jurisprudence set forth by the Fifth Circuit. Accordingly, the Court must apply Tanksley in its analysis. As the Fifth Circuit stated in American Home Assur. Co. v. Chevron, USA, Inc.,
J & J argues the Court's "finding" of its no fault was the likely reason Deloach was able to obtain a dismissal of this claim. See
Reference
- Full Case Name
- LOUISIANA UNITED BUSINESS ASSOCIATION CASUALTY INSURANCE CO. v. J & J MAINTENANCE, INC.
- Cited By
- 4 cases
- Status
- Published