STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
11-693
ROBERT G. NUGENT, ET UX
VERSUS
J&A AUTO SUPPLY, INC., ET AL.
**********
APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT PARISH OF RAPIDES, NO. 233,999 HONORABLE GEORGE CLARENCE METOYER JR, DISTRICT JUDGE
ULYSSES GENE THIBODEAUX CHIEF JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Billy Howard Ezell, and J. David Painter, Judges.
REVERSED AND REMANDED.
Charles Gregory Gravel Gravel, Cespiva & Wilkerson P. O. Box 1792 Alexandria, LA 71309-1792 Telephone: (318) 487-4501 COUNSEL FOR: Plaintiffs/Appellants - Robert G. Nugent and Marion Elaine Chandler Nugent
Sidney Wallis Degan, III Degan, Blanchard & Nash 400 Poydras Street – Suite 2600 New Orleans, LA 70130 Telephone: (504) 529-3333 COUNSEL FOR: Defendants/Appellees - Safeco Insurance Company and American Economy Insurance Nan Maria Landry 303 W. Vermilion Street - #210 Lafayette, LA 70501-6869 Telephone: (337) 234-7000 COUNSEL FOR: Defendant/Appellee - J&A Auto Supply, Inc.
Micah A. Gautreaux Degan, Blanchard & Nash 6421 Perkins – Building C, Suite B Baton Rouge, LA 70808 Telephone: (225) 610-1110 COUNSEL FOR: Defendants/Appellees - Safeco Insurance Company and American Economy Insurance THIBODEAUX, Chief Judge.
Robert G. Nugent and Marion Elaine Chandler Nugent (Lessors), claim
that the trial court erred by granting a summary judgment in favor of Safeco Insurance
Company (Safeco). Lessors’ building was damaged in a fire while under lease to
J&A Auto Supply, Inc. (J&A). The trial court found that there was no coverage under
Safeco’s policy for losses the Lessors claimed. We reverse because there is a question
of material fact as to the cause of the fire.
I.
ISSUE
We shall consider whether there is a genuine issue of material fact
regarding the cause of the fire where: (1) because of the fire’s intensity and the
resulting destruction of the evidence, the cause could not be established with
certainty; and, the fire’s genesis was in the area where a person not licensed as an
electrician installed electrical wires.
II.
FACTS
Lessors owned a building that they were renting to J&A at the time of the
fire. James Morrison owned J&A and operated its auto supply business. At the time
of the fire, an insurance policy issued by Safeco, with J&A as an insured, was in
effect. Under the policy, J&A had both loss and liability coverage. The policy also
contained an endorsement that included managers or lessors of the premises as
additional insureds for liability purposes.
Morrison was not a licensed electrician, but, sometime after he rented the
building from the Lessors, he installed electrical wiring in the building. This work
was not inspected or approved by anyone. Morrison could not state with certainty what gauge wire he installed but admitted that an installation of a wrong gauge wire
could lead to an overheating.
On April 27, 2008, a fire erupted in the rented building. The fire started
in the area of the building where Morrison installed the electrical wiring. There were
flammable substances near that area.
The insurance company conducted two investigations of the fire. A fire
scene analyst conducted the first investigation. He could not determine the cause of
the fire but could not rule out an electrical malfunction. The report stated that the
stored fuel additives and paint thinners contributed to the intensity of the fire severely
damaging the content of the building and making the evaluation very difficult.
An engineering examination of electrical equipment at the building was
conducted next because an electrical failure was suspected of being the ignition
source. The engineer similarly concluded that because of the numerous petroleum
products inside the building, the fire reached “extremely high temperatures.” The
wiring was burned, scattered around, and was missing. This “made it impossible to
make a complete analysis of the electrical systems inside the store.” Thus, the
engineer found no conclusive evidence as to how the fire began.
Safeco moved for summary judgment claiming that because Lessors were
the additional insureds only on the liability portion of the insurance and not on the
loss portion of the policy, they could not claim coverage under the loss provisions.
Furthermore, because Lessors were not the ones being sued, they could not claim
coverage under the liability portion of the insurance. Thus, Safeco argued, the only
way for Lessors to establish coverage was to show J&A’s liability. Because the cause
of the fire could not be established, Safeco averred that Lessors could not show that it
was J&A’s negligence that caused the fire.
Lessors, on the other hand, argued that there was sufficient circumstantial
evidence showing J&A’s liability for the summary judgment purposes. Furthermore,
2 they asserted that their loss was covered even without a showing of J&A’s negligence
because as a Lessee, J&A had a contractual and a statutory obligation, under
La.Civ.Code art. 2683, to return the leased premises in their original condition,
excluding ordinary wear and tear. Safeco, on the other hand, argued that there was an
exclusion in the policy of the contractually-assumed liability.
The trial court found no coverage for Lessors’ loss under Safeco’s policy.
Lessors appealed. We now consider the appeal.
III.
STANDARD OF REVIEW
An appellate court reviews summary judgment de novo. Guilbeaux v.
Times of Acadiana, Inc., 96-360 (La.App. 3 Cir. 3/26/97), 693 So.2d 1183, writ
denied, 97-1840 (La. 10/17/97), 701 So.2d 1327.
IV.
LAW AND DISCUSSION
Despite the parties’ arguments to resolve this case, we need not decide
whether, absent negligence on the part of the Lessee, Lessee is nevertheless statutorily
liable for damages to the leased property.1 Nor do we need to consider whether J&A
contractually accepted an obligation to return the property the way it received it
irrespective of the company’s negligence. Therefore, we do reach the question of
whether Safeco sustained its burden of proof that an exception in its insurance policy,
disguised as a definition, applies. This case is resolved by considering whether there
is a genuine issue of material fact as to the cause of the fire.
1 The resolution of this question could be important because Lessors claim that there is an independent statutory obligation under La.Civ.Code art. 2683 to return the leased premises the way they were received, excepting ordinary wear and tear. If there is indeed this statutory obligation, then the exclusion of the contractually-accepted obligation to return property the way it was received may be inapplicable.
3 Summary judgment shall be rendered if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue of material fact and the mover is entitled to
judgment as a matter of law. La.Code Civ.P. art. 966(B). “The burden of proof
remains with the movant.” La.Code Civ.P. art. 966(C)(2). If the movant will not bear
the burden of proof at trial, the movant need not negate all essential elements of the
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
11-693
ROBERT G. NUGENT, ET UX
VERSUS
J&A AUTO SUPPLY, INC., ET AL.
**********
APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT PARISH OF RAPIDES, NO. 233,999 HONORABLE GEORGE CLARENCE METOYER JR, DISTRICT JUDGE
ULYSSES GENE THIBODEAUX CHIEF JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Billy Howard Ezell, and J. David Painter, Judges.
REVERSED AND REMANDED.
Charles Gregory Gravel Gravel, Cespiva & Wilkerson P. O. Box 1792 Alexandria, LA 71309-1792 Telephone: (318) 487-4501 COUNSEL FOR: Plaintiffs/Appellants - Robert G. Nugent and Marion Elaine Chandler Nugent
Sidney Wallis Degan, III Degan, Blanchard & Nash 400 Poydras Street – Suite 2600 New Orleans, LA 70130 Telephone: (504) 529-3333 COUNSEL FOR: Defendants/Appellees - Safeco Insurance Company and American Economy Insurance Nan Maria Landry 303 W. Vermilion Street - #210 Lafayette, LA 70501-6869 Telephone: (337) 234-7000 COUNSEL FOR: Defendant/Appellee - J&A Auto Supply, Inc.
Micah A. Gautreaux Degan, Blanchard & Nash 6421 Perkins – Building C, Suite B Baton Rouge, LA 70808 Telephone: (225) 610-1110 COUNSEL FOR: Defendants/Appellees - Safeco Insurance Company and American Economy Insurance THIBODEAUX, Chief Judge.
Robert G. Nugent and Marion Elaine Chandler Nugent (Lessors), claim
that the trial court erred by granting a summary judgment in favor of Safeco Insurance
Company (Safeco). Lessors’ building was damaged in a fire while under lease to
J&A Auto Supply, Inc. (J&A). The trial court found that there was no coverage under
Safeco’s policy for losses the Lessors claimed. We reverse because there is a question
of material fact as to the cause of the fire.
I.
ISSUE
We shall consider whether there is a genuine issue of material fact
regarding the cause of the fire where: (1) because of the fire’s intensity and the
resulting destruction of the evidence, the cause could not be established with
certainty; and, the fire’s genesis was in the area where a person not licensed as an
electrician installed electrical wires.
II.
FACTS
Lessors owned a building that they were renting to J&A at the time of the
fire. James Morrison owned J&A and operated its auto supply business. At the time
of the fire, an insurance policy issued by Safeco, with J&A as an insured, was in
effect. Under the policy, J&A had both loss and liability coverage. The policy also
contained an endorsement that included managers or lessors of the premises as
additional insureds for liability purposes.
Morrison was not a licensed electrician, but, sometime after he rented the
building from the Lessors, he installed electrical wiring in the building. This work
was not inspected or approved by anyone. Morrison could not state with certainty what gauge wire he installed but admitted that an installation of a wrong gauge wire
could lead to an overheating.
On April 27, 2008, a fire erupted in the rented building. The fire started
in the area of the building where Morrison installed the electrical wiring. There were
flammable substances near that area.
The insurance company conducted two investigations of the fire. A fire
scene analyst conducted the first investigation. He could not determine the cause of
the fire but could not rule out an electrical malfunction. The report stated that the
stored fuel additives and paint thinners contributed to the intensity of the fire severely
damaging the content of the building and making the evaluation very difficult.
An engineering examination of electrical equipment at the building was
conducted next because an electrical failure was suspected of being the ignition
source. The engineer similarly concluded that because of the numerous petroleum
products inside the building, the fire reached “extremely high temperatures.” The
wiring was burned, scattered around, and was missing. This “made it impossible to
make a complete analysis of the electrical systems inside the store.” Thus, the
engineer found no conclusive evidence as to how the fire began.
Safeco moved for summary judgment claiming that because Lessors were
the additional insureds only on the liability portion of the insurance and not on the
loss portion of the policy, they could not claim coverage under the loss provisions.
Furthermore, because Lessors were not the ones being sued, they could not claim
coverage under the liability portion of the insurance. Thus, Safeco argued, the only
way for Lessors to establish coverage was to show J&A’s liability. Because the cause
of the fire could not be established, Safeco averred that Lessors could not show that it
was J&A’s negligence that caused the fire.
Lessors, on the other hand, argued that there was sufficient circumstantial
evidence showing J&A’s liability for the summary judgment purposes. Furthermore,
2 they asserted that their loss was covered even without a showing of J&A’s negligence
because as a Lessee, J&A had a contractual and a statutory obligation, under
La.Civ.Code art. 2683, to return the leased premises in their original condition,
excluding ordinary wear and tear. Safeco, on the other hand, argued that there was an
exclusion in the policy of the contractually-assumed liability.
The trial court found no coverage for Lessors’ loss under Safeco’s policy.
Lessors appealed. We now consider the appeal.
III.
STANDARD OF REVIEW
An appellate court reviews summary judgment de novo. Guilbeaux v.
Times of Acadiana, Inc., 96-360 (La.App. 3 Cir. 3/26/97), 693 So.2d 1183, writ
denied, 97-1840 (La. 10/17/97), 701 So.2d 1327.
IV.
LAW AND DISCUSSION
Despite the parties’ arguments to resolve this case, we need not decide
whether, absent negligence on the part of the Lessee, Lessee is nevertheless statutorily
liable for damages to the leased property.1 Nor do we need to consider whether J&A
contractually accepted an obligation to return the property the way it received it
irrespective of the company’s negligence. Therefore, we do reach the question of
whether Safeco sustained its burden of proof that an exception in its insurance policy,
disguised as a definition, applies. This case is resolved by considering whether there
is a genuine issue of material fact as to the cause of the fire.
1 The resolution of this question could be important because Lessors claim that there is an independent statutory obligation under La.Civ.Code art. 2683 to return the leased premises the way they were received, excepting ordinary wear and tear. If there is indeed this statutory obligation, then the exclusion of the contractually-accepted obligation to return property the way it was received may be inapplicable.
3 Summary judgment shall be rendered if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue of material fact and the mover is entitled to
judgment as a matter of law. La.Code Civ.P. art. 966(B). “The burden of proof
remains with the movant.” La.Code Civ.P. art. 966(C)(2). If the movant will not bear
the burden of proof at trial, the movant need not negate all essential elements of the
adverse party’s claim, action, or defense. Id. Instead, the movant must demonstrate
that there is an absence of factual support for one or more elements essential to the
adverse party’s claim, action, or defense. Id. Then, the adverse party must produce
enough factual support to establish that he will be able to satisfy his evidentiary
burden of proof at trial. Id. There is no genuine issue of material fact if the adverse
party fails to produce the factual support. Id.
The movant’s burden is an onerous one. Only when reasonable persons,
after considering the evidence, could not disagree as to whether a genuine issue of
material fact exists, the movant’s burden of persuasion is satisfied. See Suire v.
Lafayette City-Parish Consol. Gov’t, 04-1459, 04-1460, 04-1466 (La. 4/12/05), 907
So.2d 37. On the other hand, the adverse party’s burden is one of production, not
persuasion: the adverse party must “produce factual support sufficient to establish
that he will be able to satisfy his evidentiary burden of proof at trial . . . .” La.Code
Civ.P. art. 966(C)(2) (emphasis added). As the legislature clearly stated, the burden
of persuasion never shifts to the adverse party but “remains with the movant.” Id.
Here, Safeco did not carry its burden to show that there is an absence of
factual support for one or more elements essential to the Lessors’ claim. Safeco
argues that Lessors have no support for the causation element, i.e., that J&A’s
negligence caused the fire. This assertion is inaccurate. The Lessors’ evidence sets
forth the following specific facts. J&A’s owner, who is not a licensed electrician,
4 installed electrical wires at the leased building. This installation was not approved by
any authority. The fire started in the area of the building where the wires were
installed, and Morrison himself testified at his deposition that the installation of
improper-gauge wires may lead to overheating. Furthermore, Morrison could not
remember what gauge wire he installed, and, as Safeco’s experts articulated, the wires
were destroyed in the fire and were missing.
Lessors point out that almost all the evidence was destroyed in the fire,
making it very difficult to determine with any certainty what caused the fire.
Nevertheless, they claim that they have enough circumstantial evidence, described
above, to support the causation element at the summary judgment stage of the
proceedings.
Ultimately it is Safeco’s burden to persuade that there is no genuine issue
of material fact. Lessors need only satisfy their burden of producing evidence that
sets forth specific facts that there is a genuine issue for trial. Based on these
considerations, summary judgment was improper in this case.
V. CONCLUSION The trial court’s judgment granting a summary judgment in favor of
Safeco Insurance Company is reversed. Costs of this appeal are assessed to Safeco
Insurance Company.