Innovative Hospitality Systems, LLC v. Abraham

61 So. 3d 740, 10 La.App. 3 Cir. 217, 2011 La. App. LEXIS 400, 2011 WL 1264601
CourtLouisiana Court of Appeal
DecidedApril 6, 2011
DocketNo. 10-217
StatusPublished
Cited by4 cases

This text of 61 So. 3d 740 (Innovative Hospitality Systems, LLC v. Abraham) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Innovative Hospitality Systems, LLC v. Abraham, 61 So. 3d 740, 10 La.App. 3 Cir. 217, 2011 La. App. LEXIS 400, 2011 WL 1264601 (La. Ct. App. 2011).

Opinions

EZELL, Judge.

1 innovative Hospitality Systems, LLC, alleged in its petition that in March 2007, at least 108 of its checks were fraudulently presented for cashing at Abe’s Grocery in Lake Charles, Louisiana. The applicant, First Specialty Insurance Corporation, provided a commercial general liability policy for Abe’s. First Specialty filed a motion for summary judgment asserting that the cashing of these fraudulent checks was not covered by its policy. The trial court denied First Specialty’s motion. First Specialty sought supervisory writs from the judgment denying the motion for summary judgment. This court denied writs. First Specialty then sought relief from the Louisiana Supreme Court, which remanded the case for briefing, argument, and a full opinion. Innovative Hospitality Systems, LLC v. Abraham, 10-1285 (La.11/5/10), 51 So.3d 1. For the reasons that follow, we deny the writ.

ANALYSIS

The original petition in this suit avers that Abe’s Grocery, in addition to functioning as a grocery store, also cashed checks and that numerous fraudulent checks had been negotiated on Innovative Hospitality’s bank account by the various check-cashing businesses-defendants, including Abe’s. In addition to naming the businesses, Innovative Hospitality eventually joined the businesses’ insurers, including First Specialty who provided a commercial general liability (CGL) policy to Abe’s. The suit also was brought against the banks in which the checks had been deposited by the various check-cashing businesses; therefore, these banks filed cross-claims against these businesses and their insurers, including First Specialty.

First Specialty filed a motion for summary judgment claiming that its policy did not provide coverage for the losses at issue because the losses did not constitute either |g“bodily injury” or “property damage” as defined by the policy. In support of its motion, First Specialty attached a certified copy of the policy it issued to Abe’s. Abe’s opposed the motion, not on the basis that any genuine issue of material fact existed, but rather on the basis that the language of the First Specialty policy afforded coverage for its loss.

Louisiana Code of Civil Procedure Article 966(B) provides that summary judgment shall be granted where the pleadings, depositions, answers to interrogatories, admissions on file and affidavits show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. The Louisiana Supreme Court discussed the standard applicable to appellate review of summary judgments involving insurance contracts in Robinson v. Heard, 01-1697, pp. 3-4 (La.2/26/02), 809 So.2d 943, 945:

A reviewing court examines summary judgments de novo under the same criteria that govern the district court’s consideration of whether summary judgment is appropriate. Smith v. Our Lady of the Lake Hospital, Inc., 93-2512 (La.7/5/94), 639 So.2d 730, 750. A reviewing court thus asks the same questions as does the trial court in determining whether summary judgment is appropriate: whether there is any genuine issue of material fact, and whether the mover is entitled to judgment as a matter of law. Smith, 639 So.2d at 750.
Interpretation of an insurance contract is usually a legal question that can be properly resolved in the framework of a motion for summary judgment. [743]*743Sanchez v. Callegan, 99-0137 (La.App. 1 Cir. 2/18/00), 753 So.2d 403, 405. 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. Sanchez, 753 So.2d at 405.

“Summary judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence supporting the motion, under which coverage could be afforded.” Reynolds v. Select Props., Ltd., 93-1480, p. 2 (La4/11/94),3 634 So.2d 1180, 1183.

An insurance policy is a contract between the parties and should be construed employing the general rules of interpretation of contracts set forth in the Louisiana Civil Code. The parties’ intent, as reflected by the words of the policy, determine the extent of coverage. La.Civ.Code art. 2045. Words and phrases used in a policy are to be construed using their plain, ordinary and generally prevailing meaning, unless the words have acquired a technical meaning. La.Civ.Code art. 2047. An insurance policy should not be interpreted in an unreasonable or a strained manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion. Where the language in the policy is clear, unambiguous, and expressive of the intent of the parties, the agreement must be enforced as written. However, if after applying the other rules of construction an ambiguity remains, the ambiguous provision is to be construed against the drafter and in favor of the insured.
The purpose of liability insurance is to afford the insured protection from damage claims. Policies therefore should be construed to effect, and not to deny, coverage. Thus, a provision which seeks to narrow the insurer’s obligation is strictly construed against the insurer, and, if the language of the exclusion is subject to two or more reasonable interpretations, the interpretation which favors coverage must be applied.
It is equally well settled, however, that subject to the above rules of interpretation, insurance companies have the right to limit coverage in any manner they desire, so long as the limitations do not conflict with statutory provisions or public policy.

Id. (case citations omitted).

The policy provides, “We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injur/ or ‘property damage’ to which this insurance applies.” The policy defines “property damage” as:

“Property damage” means:
a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the “occurrence” that caused it.

|4For the purposes of this insurance, electronic data is not tangible property.

As used in this definition, electronic data means information, facts or programs stored as or on, created or used on, or transmitted to or from computer software, including systems and applications software, hard or floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any other media which [744]*744are used with electronically controlled equipment.

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61 So. 3d 740, 10 La.App. 3 Cir. 217, 2011 La. App. LEXIS 400, 2011 WL 1264601, Counsel Stack Legal Research, https://law.counselstack.com/opinion/innovative-hospitality-systems-llc-v-abraham-lactapp-2011.