Orleans Parish School Board v. Lexington Insurance Co.

76 So. 3d 592, 2011 La.App. 4 Cir. 0009, 2011 La. App. LEXIS 1137, 2011 WL 4582442
CourtLouisiana Court of Appeal
DecidedOctober 5, 2011
DocketNos. 2011-CA-0009, 2010-C-1662
StatusPublished
Cited by2 cases

This text of 76 So. 3d 592 (Orleans Parish School Board v. Lexington 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
Orleans Parish School Board v. Lexington Insurance Co., 76 So. 3d 592, 2011 La.App. 4 Cir. 0009, 2011 La. App. LEXIS 1137, 2011 WL 4582442 (La. Ct. App. 2011).

Opinion

KIRBY, Judge.

|Jn this consolidated case, intervenors, the Louisiana State Board of Elementary and Secondary Education, the Louisiana Department of Education and the Recovery School District (hereinafter collectively referred to as “RSD”), appeal the July 7, 2010 trial court judgment granting partial summary judgment in favor of plaintiff, Orleans Parish School Board (hereinafter referred to as “OPSB”), and denying inter-venors’ motion for summary judgment. The judgment appealed from involves a ruling regarding the applicability to RSD’s intervention claims of Act 35 of the First Extraordinary Session of 2005 of the Louisiana Legislature. By order dated January 10, 2011, a writ application taken by RSD from the October 22, 2010 trial court judgment was consolidated with the appeal of the July 7, 2010 judgment. The judgment that is the subject of the writ application includes an order issued by the trial court regarding the handling of insurance proceeds currently on deposit in a joint bank account held by OPSB and RSD, and the handling of insurance proceeds received in the future for losses from damage to certain properties caused by Hurricane Katrina.

This litigation began when OPSB filed a lawsuit against its commercial property insurer on August 9, 2006, seeking recovery for damages sustained to |2certain insured properties as a result of Hurricane Katrina’s August 29, 2005 landfall and its aftermath. As of the time of filing of the original petition, OPSB claimed to have received only half of the policy limits on its primary commercial property policy. OPSB later amended its petition to include as defendants its excess commercial prop[594]*594erty insurers. RSD intervened in the lawsuit, claiming to have an interest in OPSB’s pending action due to the November 2005 enactment by the Louisiana Legislature of La. R.S. 17:10.7 and the amendment to La. R.S. 17:1990 (both contained in Act 35), which resulted in the transfer to RSD of 107 schools that had previously been under the jurisdiction of OPSB, and in changes to rules regarding the rights and responsibilities of RSD.

OPSB subsequently filed a second supplemental and amending petition, instituting a concursus proceeding for the insurance proceeds at issue, and alternatively, seeking a declaratory judgment that OPSB is the sole owner of proceeds from its insurance policies in effect at the time of Hurricane Katrina. In this pleading, OPSB acknowledged that funds already received by its primary insurance carrier were being held in a joint bank account in the names of both OPSB and RSD, but that OPSB was the sole signatory at that time. RSD then filed its own supplemental and amending petition seeking a declaratory judgment that, pursuant to La. R.S. 17:1990(4)(b)(iii), it has the right to receive any and all insurance proceeds paid in connection with damages caused by Hurricane Katrina to properties now under the jurisdiction of RSD.

After filing the above pleadings, both OPSB and RSD filed motions for summary judgment. The central issue of the summary judgment motions filed by OPSB and RSD is whether or not certain provisions of Act 35 of the First Extraordinary Session of 2005 of the Louisiana Legislature can be applied to |sRSD’s intervention claims against OPSB. Act 35, effective on November 30, 2005, enacted La. R.S. 17:10.7, which, as stated above, resulted in the transfer to the RSD of 107 OPSB schools, and amended La. R.S. 17:1990, which changed certain provisions regarding the rights and responsibilities of RSD, and added new provisions. R.S. 17:1990 includes the following sections that are pertinent to this appeal:

(4)(a) The school district [RSD] shall have the right to use any school building and all facilities and property otherwise part of the school and recognized as part of the facilities or assets of the school prior to its placement in the school district and shall have access to such additional facilities as are typically available to the school, its students, and faculty and staff prior to its placement in the school district. Such use shall be unrestricted, except that the school district shall be responsible for and obligated to provide for routine maintenance and repair such that the facilities and property are maintained in as good an order as when the right of use was acquired by the district. There shall be no requirement for the district to provide for the type of extensive repair to buildings or facilities that would be considered to be a capital expense. Such extensive repairs shall be provided by the governing authority of the city, parish, or other local public school system or other public entity which is responsible for the facility.
(b)(i) In the case of the transfer of schools pursuant to R.S. 17:10.7, the school district may, at the discretion of the administering agency and notwithstanding the provisions of Subparagraph (a) of this Paragraph, acquire with the transfer of the schools all the rights and responsibilities of ownership regarding all land, buildings, facilities, and other property that is part of the school being transferred, except that the school district may not transfer the ownership of the land or usable buildings constructed on the land to another, other than in the manner and under the circumstances provided for in Item (iv) of this Subpara-[595]*595graph, save returning the land and such buildings to the stewardship of the prior system. The district may lease land or property, dispose of property other than the land as is necessary to properly manage the operation of the schools, rebuild school buildings, or renovate school buildings.
U(ii) No building shall be destroyed pursuant to the authority of the school district unless the destruction of the building has been approved by the office of facility planning in the division of administration.
(iii) In the case that the rights and responsibilities provided for in this Sub-paragraph are acquired by the school district, the school district, through its administering agency, shall be the exclusive authority to receive, manage, and expend any and all state, local, or federal funding dedicated to or available for the purpose of repairing, renovating, or rebuilding, or building a school building or facility and any and all insurance proceeds attributable to damage done to any property, except that portion of such insurance proceeds used to pay debt owed by the prior system. A portion of all revenues available to the prior system which are dedicated to the repair, maintenance, or capital projects regarding a transferred school whether such revenue is available from tax proceeds, was borrowed, bonded, or was otherwise acquired shall be transferred by the system to the recovery district in an amount equal to the proportion that the number of schools transferred from such school system bears to the total number of schools operated by the school system during the school year immediately proceeding the school year in which the transfer occurred.

OPSB asked for summary judgment declaring that RSD has no right to the insurance proceeds arising out of damages sustained by property owned and controlled by OPSB at the time of Hurricane Katrina. In its memorandum in support of its motion for summary judgment, OPSB argued that ownership rights to the insurance proceeds at issue vested in the OPSB at the time of the loss, i.e. the landfall of Hurricane Katrina and its aftermath. OPSB also argued that the language set forth in the November 2005 amendment to La. R.S. 17:1990, included in Act 35, failed to assign ownership of the insurance proceeds to RSD.

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Related

Orleans Parish School Board v. Lexington Insurance Co.
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95 So. 3d 497 (Louisiana Court of Appeal, 2012)

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Bluebook (online)
76 So. 3d 592, 2011 La.App. 4 Cir. 0009, 2011 La. App. LEXIS 1137, 2011 WL 4582442, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orleans-parish-school-board-v-lexington-insurance-co-lactapp-2011.