Lemoine v. American Fidelity Fire Insurance Co.

491 So. 2d 812, 1986 La. App. LEXIS 7459
CourtLouisiana Court of Appeal
DecidedJuly 23, 1986
DocketNo. 85-912
StatusPublished

This text of 491 So. 2d 812 (Lemoine v. American Fidelity Fire Insurance Co.) 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
Lemoine v. American Fidelity Fire Insurance Co., 491 So. 2d 812, 1986 La. App. LEXIS 7459 (La. Ct. App. 1986).

Opinion

DOMENGEAUX, Judge.

This appeal arises from a third party demand filed by American Fidelity Fire Insurance Company, surety-indemnitee, seeking to recover from Karnes Roofing Company, Inc., Steve Karnes, and Beverly Karnes, principals-indemnitors, the amount which American paid as surety to George P. Lemoine and James A. Lemoine, d/b/a Lemoine Brothers General Contractors, the original plaintiffs.

George P. Lemoine and James A. Lem-oine, d/b/a Lemoine Brothers General Contractors, entered into a contract with the State of Louisiana to construct an infirmary building for the Pinecrest State School in Pineville, Louisiana.

Lemoine Brothers then entered into a subcontract with Steve Karnes d/b/a Karnes Roofing Company, to provide and install the damp roofing and waterproofing, rigid roof insulation, built-up roofing, elastomeric sheet flashing system and roof accessories for the building.

Pursuant to the subcontract, American Fidelity Fire Insurance Company issued a performance bond (naming Karnes Roofing Company as principal) insuring Karnes’ performance under the terms of the subcontract. In connection with the bond, American, Steve Karnes d/b/a Karnes Roofing Company and individually, and Beverly Karnes (Steve Karnes’ wife) entered into a general contract of indemnity. The indemnity contract provided generally that the Karnes as indemnitors would indemnify and hold harmless American from any and all damages, loss, costs, charges, expenses and attorney’s fees incurred by American as a result of American’s execution of the performance bond on behalf of Karnes Roofing Company.

The roofing work on the building was commenced on March 29, 1977, and was completed on July 5, 1977. The building was accepted by the architects on December 2, 1977.

Shortly thereafter, the owners of the building began to complain of leaks and [813]*813defects in the roof. Following these complaints began a long series1 of inspections, correspondence, communications and agreements by and between the State, the architects, Lemoine Brothers and Karnes Roofing relative to the repair of the alleged defects and the alleged failure of Karnes Roofing to comply with the architect’s roof design specifications. Indeed, Karnes Roofing made certain attempts at repairing the roof.

Nevertheless, on November 30, 1979, Lemoine Brothers filed suit against Steve Karnes d/b/a Karnes Roofing Company and American Fidelity Fire Insurance Company. The suit alleged that Karnes had breached its subcontract with Lemoine Brothers and was indebted to Lemoine Brothers for the amount of the subcontract, as well as for inconvenience, mental anguish, expenses and attorney’s fees. The petition prayed for a total of $48,-713.00 in damages. The petition stated that American, as surety of a performance bond on the contract, was liable in solido with Karnes Roofing for the damages.

American filed a general denial answer and a third party demand against Steve Karnes, individually and d/b/a Karnes Roofing Company and Beverly Karnes, as third party defendants, alleging that pursuant to the general contract of indemnity and because of legal and conventional sub-rogation the third party defendants would be liable to American for any amounts American would be forced to pay to the Lemoine Brothers on the main demand.

What followed was a myriad of pleadings and procedural jousting which ultimately led to American settling the main demand with the Lemoine Brothers for $10,000.00 and Lemoine Brothers dismissing their suit against Karnes Roofing Company and American.

American filed a supplemental and amended third party demand stating that it had settled with the Lemoine Brothers for $10,000.00 and that as per the indemnity agreement between American and the third party defendants, the third party defendants were liable to American for $10,-000.00, as well as $14,594.83 in investigative fees, costs, and attorney’s fees.

American then made a motion for summary judgment, alleging that based upon the indemnity agreement, the annexed affidavits and the pleadings and exhibits there were no genuine issues of material fact and thus the third party defendants were liable in solido to American.

Following a hearing on the motion for summary judgment the district court granted judgment in favor of American.

The district judge’s written reasons for judgment makes specific reference to clauses one, four, and six of the general contract of indemnity. Those enumerated clauses provide the basis upon which American made its motion for summary judgment. Those three clauses of the indemnity agreement provide:

“FIRST: That they [the Karnes, as indemnitors] will at all times indemnify and keep indemnified the Surety [American], and hold and save it harmless from and against any and all damages, loss, cost, charges and expenses of whatsoever kind or nature, including counsel and attorney fees, whether incurred under retainer of salary or otherwise, which it shall or may at any time sustain or incur by reason or in consequence of its sure-tyship or procurement of suretyship, or which it may sustain or incur in connection with any litigation, investigation, collection of premiums, or other matter connected with such suretyship, including any suit instituted to enforce the obligations of this agreement of indemnity; and the Indemnitor(s) will pay over to the Surety, its successors and assigns, all sums of money which it or its representative shall pay or cause to be paid, or become liable to pay on account of such suretyship, and on account of any dam[814]*814ages, costs, charges, and expenses of whatsoever kind or nature in connection therewith as aforesaid, such payment to be made to the Surety as soon as it shall have become liable therefor, whether it shall have paid out such sum or any part thereof or not, and said Surety is hereby authorized to prove such expenses, costs and attorney fees, in any action or proceeding and to include the same in any judgment....
FOURTH: That the Surety shall have the exclusive right for itself, and for the Indemnitor(s), to decide and determine whether any claim, demand, liability, suit, action, order, judgment or adjudication made or brought against the Surety and/or principal or any bond, jointly or severally, shall or shall not be defended, tried or appealed, and its decision shall be final, conclusive and binding upon the Indemnitor(s) and any order, judgment or adjudication made, entered or affirmed, as a result thereof, or any loss, cost, charge, expense or liability thereby incurred, sustained or paid, including attorneys’ fees, shall be borne by the Indemnitor(s), and the indemnitor(s) especially consent thereto....
SIXTH: The Indemnitor(s) agree to accept vouchers or affidavits of any loss paid by the Surety by reason of such suretyship, together with vouchers or affidavits of payment of all costs and expenses whatever, incurred by the Surety in adjusting such loss, or in completing any contract, as conclusive evidence against the Indemnitor(s) of the fact and extent of the Indemnitor(s)’ liability to the Surety....”

The district judge cited Fidelity and Deposit Company of Maryland v. Thieme, 193 So. 496 (La.App. 2nd Cir.1940) for the general proposition that:

“The contract of indemnity is the controlling law between the parties thereto.

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Jewell v. Thompson
386 So. 2d 689 (Louisiana Court of Appeal, 1980)
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Acme Refrig. of Baton Rouge, Inc. v. Caljoan, Inc.
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Fidelity & Deposit Co. of Maryland v. Thieme
193 So. 496 (Louisiana Court of Appeal, 1940)

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Bluebook (online)
491 So. 2d 812, 1986 La. App. LEXIS 7459, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lemoine-v-american-fidelity-fire-insurance-co-lactapp-1986.