Certain Underwriters at LLoyd's London v. Covington Flooring Company, Inc.

CourtDistrict Court, E.D. Louisiana
DecidedJanuary 17, 2024
Docket2:22-cv-05292
StatusUnknown

This text of Certain Underwriters at LLoyd's London v. Covington Flooring Company, Inc. (Certain Underwriters at LLoyd's London v. Covington Flooring Company, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Certain Underwriters at LLoyd's London v. Covington Flooring Company, Inc., (E.D. La. 2024).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

CERTAIN UNDERWRITERS AT LLOYDS, CIVIL ACTION LONDON, ET AL.

VERSUS NO. 22-5292 c/w 23-371

COVINGTON FLOORING CO., INC., ET SECTION: “G”(1) AL.

ORDER AND REASONS Before the Court are Defendants Covington Flooring Company, Inc., The Charter Oak Fire Insurance Company, and Travelers Property Casualty Company of America’s (collectively “Defendants”) “Motion for Partial Summary Judgment”1 and Plaintiff St. Augustine High School, Inc.’s (“St. Augustine”) “Motion for Extension of Deadlines for Experts.”2 St. Augustine brings claims against Defendants for damages to a gymnasium leased by St. Augustine.3 Defendants argue that St. Augustine does not have a right to recover damages for: (1) loss of property value; (2) betterment and improvement costs; (3) increased cost of property and casualty insurance coverage and limited property and casualty insurance coverage; (4) property damage; (5) non- compliance with loan covenants, and (6) past, present, and future mental pain and suffering.4 In opposition, St. Augustine argues that it does have the right to recover damages as a result of the

1 Rec. Doc. 31. 2 Rec. Doc. 32. 3 Rec. Doc. 1. 4 Rec. Doc. 31. fire to the gymnasium based on certain language of the lease agreement.5 Considering the motions, the oppositions, the reply memoranda, the record, and the applicable law, the Court grants in part and denies in part Defendants’ Motion for Partial Summary Judgment and grants St. Augustine’s Motion for Extension of Deadlines for Experts. I. Background St. Augustine contracted with Defendant Covington Flooring Company, Inc. (“Covington”) to replace the hardwood floors in the gymnasium located at 2600 A P Tureaud Avenue, New Orleans, Louisiana 70119, after it was damaged during a hurricane.6 It is alleged

that Covington’s employees were utilizing cloth rags to apply Bona DriFast Stain and Bona Sport Seal products which contain compounds that are susceptible to self-heating and spontaneous ignition if the rags are not properly disposed.7 The Complaint provides that shortly after Covington’s employees left the project for the day on November 25, 2021, a fire was discovered at the gym.8 It is alleged that the fire occurred as a result of the self-heating and combustion of the improperly discarded stain rags.9 As a result of the fire, St. Augustine submitted a first-party claim for repairs and additional expenses incurred as a result of the fire.10 At the time of the fire, the gymnasium was insured by Certain Underwriters at Lloyds, London, Indian Harbor Insurance Company, QBE Specialty Insurance Company, Steadfast Insurance Company, General Security

5 Rec. Doc. 34. 6 Rec. Doc. 1-2 at 4. 7 Id. 8 Id. 9 Id. 10 Id. Indemnity of Arizona, United Specialty Insurance Company, Lexington Insurance Company, HDI Global Specialty SE, Old Republic Union Insurance Company, Geovera Specialty Insurance Company, and Transverse Specialty Insurance Company (“Insurance Plaintiffs”).11 On November 10, 2022, Insurance Plaintiffs filed suit against Covington in the Civil District Court for the Parish of Orleans.12 On December 14, 2022, Covington removed the matter to this Court, and it was assigned docket number 22-5292.13 On November 24, 2022, St. Augustine filed suit against Covington, The Phoenix Insurance Company, and Travelers Indemnity Company of Connecticut.14 On January 30, 2023, Covington

removed the matter to this Court, and it was assigned docket number 23-371.15 On May 24, 2023, St. Augustine filed an Amended Complaint, which added The Charter Oak Fire Insurance Company and Travelers Property Casualty Company of America as defendants and removed The Phoenix Insurance Company and Travelers Indemnity Company of Connecticut as defendants.16 On June 9, 2023, Covington filed a Motion to Consolidate both cases.17 On June 14, 2023, the Court granted the motion and consolidated the matters.18

11 Rec. Doc. 1-2 at 1–3. 12 Rec. Doc. 1-2. 13 Rec. Doc. 1. 14 Case No. 23-371, Rec. Doc. 1-2. 15 Case No. 23-371, Rec. Doc. 1. 16 Case No. 23-371, Rec. Doc. 13. 17 Rec. Doc. 24. 18 Rec. Doc. 25. On November 7, 2023, Defendants filed the instant Motion for Partial Summary Judgment referencing docket number 23- 371.19 On November 17, 2023, St. Augustine filed the instant Motion for Extension of Deadlines for Experts.20 On November 22, 2023, St. Augustine filed an opposition to Defendants’ Motion for Partial Summary Judgment.21 On November 29, 2023, Defendants filed a reply memorandum in further support of the Motion for Partial Summary Judgment.22 On November 29, 2023, the parties filed a Stipulation of Dismissal, dismissing all claims in docket number 22-5292.23 On December 4, 2023, Defendants filed an opposition to St. Augustine’s Motion for Extension of Deadlines for Experts.24

II. Parties’ Arguments A. Defendants’ Arguments in Support of the Motion for Partial Summary Judgment First, Defendants argue that St. Augustine, as the lessee of the gymnasium building, has no right to recovery for property damages to the gymnasium.25 Defendants submit that at the time of the November 25, 2021 fire, St. Joseph’s Society of the Sacred Heart, Inc. (“St. Joseph”) owned the property, and St. Augustine was the tenant of the premises.26 Defendants contend that it is St. Joseph that has a personal right to seek repair for the damage.27 Defendants aver that the lease

19 Rec. Doc. 31. 20 Rec. Doc. 32. 21 Rec. Doc. 34. 22 Rec. Doc. 40. 23 Rec. Doc. 38. 24 Rec. Doc. 41. 25 Rec. Doc. 31-3 at 4. 26 Id. 27 Id. at 6. agreement between St. Augustine and St. Joseph does not contain an assignment or subrogation of rights provision for St. Augustine to pursue claims of St. Joseph.28 Defendants assert that the lease agreement provides that St. Joseph maintains all the rights as owner of the property in the event of a loss or damage to the property, and St. Joseph is listed at the sole loss payee.29 As such, Defendants argue that St. Augustine’s claims for property damage should be dismissed.30 Next, Defendants argue that if the Court finds that St. Augustine does have a personal right to pursue a claim for damages to the gymnasium building, then St. Augustine has no claim for damages for betterment and improvements to the gymnasium building.31 Defendants contend that

St. Augustine renamed the gymnasium building and made an announcement that it would rebuild a “new and improved Health and Wellness Center” consisting of three levels, new “modernized” products, a wellness room, additional bathrooms, a coaches’ office, championship pavilion, and a mezzanine area.32 Defendants contend that St. Augustine seeks from Defendants the full cost of its new Health and Wellness Center project as property damages in this case.33 Assuming that St. Augustine has the right to recover for property damage, Defendants aver that St. Augustine can only recover damages to restore the property to its pre-damage condition, not a better condition.34

28Id. 29 Id. at 7. 30 Id. at 8. 31 Id. 32 Id. at 9–10. 33 Id. at 10. 34 Id. at 11. Next, Defendants argue that St. Augustine has no legal right to pursue damages for the loss of property value.35 Defendants contend that since St. Augustine is not the owner of the gymnasium building, it has no ownership interest in the property, and thus no legal right to damages for loss of property value.36 Defendants assert that any loss of value of the gymnasium building would be a loss by St. Joseph.37 Next, Defendants argue that St. Augustine has no legal right to pursue damages for increased cost of insurance (higher insurance premiums) as a result of a loss since such claims are not recoverable elements of damages in Louisiana.38 Defendants contend that Louisiana courts

have repeatedly ruled that no cause of action exists for a plaintiff’s claim for increased insurance premiums.39 Defendants assert that St.

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Certain Underwriters at LLoyd's London v. Covington Flooring Company, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/certain-underwriters-at-lloyds-london-v-covington-flooring-company-inc-laed-2024.