STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
13-224
SHANE EADS, ET. AL.
VERSUS
CHARTIS SPECIALTY INS. CO., ET. AL.
**********
APPEAL FROM THE TWENTY-SEVENTH JUDICIAL DISTRICT COURT PARISH OF ST. LANDRY, NO. 11-870 HONORABLE DONALD WAYNE HEBERT, DISTRICT JUDGE
ELIZABETH A. PICKETT JUDGE
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Elizabeth A. Pickett, Shannon J. Gremillion, Judges.
THIBODEAUX, Chief Judge, dissents and assigns written reasons.
AFFIRMED.
Patrick C. Morrow James P. Ryan Morrow, Morrow, Ryan & Bassett P. O. Drawer 1787 Opelousas, LA 70571-1787 Telephone: (337) 948-4483 COUNSEL FOR: Plaintiffs/Appellants - Shane Eads, et al. Edward O. Taulbee, IV Taulbee & Associates P. O. Box 2038 Lafayette, LA 70502-2038 Telephone: (337) 269-5005 COUNSEL FOR: Defendants/Appellees - Ricky Boyle and Louisiana Farm Bureau Mutual Insurance Company
Mary McCrory Hamilton Julie Anne Scheib Voorhies & Labbé P. O. Box 3527 Lafayette, LA 70502-3527 Telephone: (337) 232-9700 COUNSEL FOR: Defendant/Appellee - Atlantic Casualty Insurance Company
Patrick J. McShane Lara N. Dicristina Frilot LLC 1100 Poydras Street – Suite #3700 New Orleans, LA 70163 Telephone: (504) 599-8000 COUNSEL FOR: Defendant/Appellee - Chartis Specialty Insurance Company
Vincent Lee Bowers Morris Bart, LLC 909 Poydras Street – 20th Floor New Orleans, LA 70112 Telephone: (504) 525-8000 COUNSEL FOR: Defendant/Appellee - Gregory Holroyd
Katherine P. Martin Gretchen H. Mayard Martin Mayard, L.L.C. P. O. Box 81338 Lafayette, LA 70598-1338 Telephone: (337) 291-2440 COUNSEL FOR: Defendant/Appellee - State Farm Mutual Automobile Insurance Company
2 David Oliver Way Oliver & Way, L.L.C. P. O. Box 82447 Lafayette, LA 70598-2447 Telephone: (337) 988-3500 COUNSEL FOR: Defendant/Appellee - Dewayne K. Spriggs, Individually
Brad Jeremy Brumfield Law Office of Keith S. Giardina 9100 Bluebonnet Centre Boulevard - Suite 300 Baton Rouge, LA 70809 Telephone: (225) 293-7272 COUNSEL FOR: Defendant/Appellee - Mallard Environmental, Inc.
Michael J. Williamson Plauche, Smith & Nieset P. O. Drawer 1705 Lake Charles, LA 70602 Telephone: (337) 436-0522 COUNSEL FOR: Defendant/Appellee - Dewayne K. Spriggs, Individually
Erin N. Hargrave Borne & Wilkes, LLP P. O. Box 4305 Lafayette, LA 70502-4305 Telephone: (337) 232-1604 COUNSEL FOR: Defendants/Appellees - Gregory Holroyd and Town of Sunset
Prezemek Lubecki Morris Bart, LLC 909 Poydras Street - 20th Floor New Orleans, LA 70112-4030 Telephone: (504) 599-3212 COUNSEL FOR: Defendant/Appellee - Gregory Holroyd
Catherine Fornias Giarrusso Barrasso, Usdin, et al. 909 Poydras Street - Suite 2400 New Orleans, LA 70112 Telephone: (504) 589-9700 COUNSEL FOR: Defendant/Appellee - Wausau Business Insurance Company
3 PICKETT, Judge.
Shane Eads, an offshore diver, was providing temporary help to his wife‟s
step-father in an unrelated business in a highway work zone when he was caught
between a crashing vehicle and a stationary trailer. He sustained crushing injuries
and the loss of his right leg. Mr. Eads appeals the granting of a motion for
summary judgment in favor of Atlantic Casualty Insurance Company (Atlantic),
arguing an ambiguity exists in the coverage extended to a “temporary worker”
such as Mr. Eads which renders the policy inapplicable to him. We have reviewed
Atlantic‟s policy in light of Mr. Eads‟ contentions and find that Atlantic‟s policy is
not ambiguous. Accordingly, we affirm the trial court‟s grant of summary
judgment. For the same reasons, we affirm the trial court‟s denial of Mr. Eads‟
cross-motion for summary judgment and his motion for new trial.
ASSIGNMENTS OF ERROR
We must decide whether the trial court erred in granting summary judgment
to Atlantic and in denying Mr. Eads‟ cross-motion for summary judgment and
motion for new trial.
FACTS AND PROCEDURAL HISTORY
Mr. Eads had been permanently employed as an offshore diving supervisor
for six years when he agreed to provide his wife‟s step-father, Dewayne Spriggs,
with temporary labor on a commercial job in the Town of Sunset, Louisiana.
Mr. Spriggs owned a one-man sewer clean-out company, Dewayne K. Spriggs,
LLC, d/b/a D/Von‟s Jetter Rooter Service.
On January 25, 2011, Mr. Eads was working with Spriggs on Duffy Avenue
on a sewer clean-out for the Town of Sunset. Using Spriggs‟s truck, they had
pulled an equipped jetting trailer over the manhole and fed a protective sleeve
4 down into a pipe to protect the jetting hose. Mr. Eads tied the sleeve to the trailer.
Mr. Spriggs fed the hose out, and Mr. Eads worked it into the sewer line. They
were retracting the hose when a motorist suddenly crashed into the work zone,
striking the Town of Sunset‟s parked truck and propelling it into Mr. Eads, pinning
him between the Sunset truck and the jetting trailer.
Mr. Eads suffered numerous serious injuries, including a crushed pelvis,
fractured lumbar vertebrae, severed urethra, and injuries so severe to his right leg
that it had to be amputated. He sought workers‟ compensation benefits from
Spriggs LLC‟s insurer, Louisiana Workers‟ Compensation Corporation (LWCC),
but learned that Spriggs LLC did not have workers‟ compensation coverage in
force because his policy had lapsed and was cancelled in December 2010.
Mr. Eads and his wife, on behalf of themselves and their two minor children
(collectively referred to as “Eads” or “Mr. Eads”), brought suit against the
defendants and their insurers. Pursuant to the original and supplemental petitions,
the Eads filed suit against the motorist and his insurer; the Town of Sunset and its
employee at the work site; trailer owner, Mallard Environmental, Inc., and its
primary and excess insurers; Spriggs LLC, Spriggs individually; and three
insurance carriers providing insurance to Spriggs and/or his LLC. Eads settled
with the motorist and his insurer; the Town of Sunset and its employee; State Farm
Mutual Automobile Insurance Company, the automobile insurer of Spriggs
individually; and Spriggs LLC‟s excess liability insurer, Chartis Specialty
Insurance Company. Eads also obtained a default judgment against Spriggs LLC
for workers‟ compensation benefits which were not available. The judgment was
not paid, and Eads sued Spriggs LLC in tort pursuant to La.R.S. 23:1032.1.
5 Spriggs LLC was the named insured on a commercial general liability
(CGL) policy written by Atlantic. The trial court granted Atlantic‟s motion for
summary judgment and denied Eads‟s cross-motion, finding that an endorsement
to the policy replaced the definition of “employee” and that Mr. Eads was not
covered under the policy. Eads‟s claims for general liability coverage from
Atlantic were dismissed with prejudice. A subsequent judgment denied Eads‟s
motion for a new trial on the Atlantic policy. Eads appeals both judgments.
The trial court granted an exception of no cause or right of action to
Dewayne Spriggs, individually. While Eads‟s motion for appeal indicated that the
judgment granting the exception was being appealed, Eads did not assign error or
mention the exception in any manner in his appellate brief to this court.
Mr. Spriggs filed an appellee brief asserting that Eads‟s objection to the exception
in his favor had been abandoned. We agree and do not address the exception and
dismissal granted to Dewayne Spriggs, individually.
STANDARD OF REVIEW
Whether the language of a contract is ambiguous is a question of law that
subjects the judgment to a de novo standard of review on appeal. Cluse v. H & E
Equipment Servs., Inc., 09-574 (La.App. 3 Cir. 3/31/10), 34 So.3d 959, writ
denied, 10-994 (La. 9/17/10), 45 So.3d 1043. “When an appellate court reviews a
district court judgment on a motion for summary judgment, it applies the de novo
standard of review, „using the same criteria that govern the trial court‟s
consideration of whether summary judgment is appropriate.‟” Gray v. Am. Nat’l
Prop. & Cas. Co., 07-1670, p. 6 (La. 2/26/08), 977 So.2d 839, 844 (quoting
Supreme Servs. & Specialty Co., Inc. v. Sonny Greer, 06-1827, p. 4 (La. 5/22/07),
958 So.2d 634, 638). The motion for summary judgment shall be granted if the
6 pleadings, depositions, answers to interrogatories, admissions, and affidavits, if
any, show that there is no genuine issue of material fact and that the mover is
entitled to judgment as a matter of law. La.Code Civ.P. art. 966(B).
LAW AND DISCUSSION
Mr. Eads initially sought workers‟ compensation benefits from Spriggs LLC
but obtained a default judgment against the company that was not paid or appealed
because the company‟s workers‟ compensation policy lapsed for nonpayment
before he was injured. After the delays for an appeal had run and the sixty days for
paying the judgment had expired, Mr. Eads amended his tort petition and added
Spriggs LLC as a defendant, asserting negligence claims and a tort cause of action
under La.R.S. 23:1032.1.1 The Office of Workers‟ Compensation (OWC) file is
part of this record and contains documents supporting the default judgment
obtained by Mr. Eads against Spriggs LLC. Specifically, the file contains the 1 Louisiana Revised Statutes 23:1032.1 provides in pertinent part:
A. When a direct employer, not the statutory employer or special employer, knowingly fails to secure workers‟ compensation insurance or proper certification of self-insured status pursuant to R.S. 23:1168, and fails to pay a final judgment for sixty days after the parties have exhausted their rights of appeal and no other insurance or self-insurance policy or contract of workers‟ compensation coverage has paid the benefits due under this Chapter, then the employee or the legal dependent of a deceased employee may elect to sue the direct employer for all legal damages. Should the direct employer offer to pay the judgment for workers‟ compensation benefits and the employee or the legal dependent of a deceased employee accepts the offer of payment, such payment shall also discharge and satisfy the direct employer‟s obligation for legal damages under this Section, if the direct employer also reimburses the employee or the legal dependent of a deceased employee for all costs and expenses, including attorney fees, incurred by the employee or the legal dependent of a deceased employee in connection with the claim for legal damages to the date of the payment of the workers‟ compensation judgment. Should the employee or the legal dependent of a deceased employee obtain a judgment on the cause of action for legal damages, the employee or the legal dependent of a deceased employee may elect to recover from the direct employer the greater of the judgment for legal damages or the judgment for workers‟ compensation benefits, but the employee or the legal dependent of a deceased employee shall be limited to recovery of only one such judgment, and the payment of the judgment elected shall discharge both judgments.
7 cancellation notice dated December 9, 2010, stating that Spriggs LLC‟s workers‟
compensation coverage would be cancelled as of noon on December 23, 2010, for
failure to pay the premium and the default judgment against Spriggs LLC. Atlantic
does not contest that Mr. Eads is entitled to sue Spriggs LLC in tort pursuant to
La.R.S. 23:1032.1 and the OWC default judgment. Accordingly, we consider only
whether Atlantic‟s policy excludes Mr. Eads from coverage.
Because the issues presented on de novo review involve insurance coverage,
we apply the rules on the interpretation of contracts.
An insurance policy is a contract between the parties and should be construed using the general rules of interpretation of contracts set forth in the Civil Code. If the words of the policy are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties‟ intent and the agreement must be enforced as written. An insurance policy should not be interpreted in an unreasonable or strained manner so as to enlarge or restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion. The policy should be construed as a whole and one portion thereof should not be construed separately at the expense of disregarding another. If after applying the other general rules of construction an ambiguity remains, the ambiguous contractual provision is to be construed against the insurer who issued the policy and in favor of the insured.
Hebert v. Webre, 08-60, pp. 4-5 (La. 5/21/08), 982 So.2d 770, 773-74 (citations
omitted).
[I]n determining whether an insurance policy provides coverage, every provision of the policy must be read and interpreted, particularly the provisions relating to what is insured, usually contained in a section entitled “Insuring Agreement,” the provisions relating to who is insured, usually contained in a section entitled “Who Is An Insured,” and the provisions relating to what is excluded from coverage, usually contained in a section entitled “Exclusions.” Only then can a determination of coverage be made. See Magnon v. Collins, 98-2822 (La. 07/07/99), 739 So.2d 191. Succession of Fannaly v. Lafayette Ins. Co., 01-1355, p. 6 (La. 1/15/02), 805 So.2d
1134, 1139.
8 ATLANTIC’S POLICY
At the time of the accident, Spriggs LLC, d/b/a D/Von‟s Jetter Rooter
Service was the named insured on a CGL policy with Atlantic, No. L034002841.
The Atlantic policy provides in Section I – Coverage A – Bodily Injury and
Property Damage Liability, that Atlantic “will pay those sums that the insured
becomes legally obligated to pay as damages because of „bodily injury.‟” When
Eads named Atlantic as a defendant, Atlantic invoked Exclusion e of Combination
Endorsement AGL-055 (the endorsement) that is attached to Spriggs LLC‟s policy
to deny Eads coverage. Mr. Eads filed a cross-motion for summary judgment,
seeking a judgment recognizing him as an insured under Atlantic‟s policy. The
trial court granted Atlantic‟s motion for summary judgment and denied Eads‟s
cross-motion. Eads asserts error on the part of the trial court based upon ambiguity
that he contends is created by the endorsement.
When an endorsement is affixed to an insurance policy, the two must be read
together. If the endorsement conflicts with the policy in any respect, the
endorsement prevails. Zeitoun v. Orleans Parish Sch. Bd., 09-1130 (La.App. 4
Cir. 3/3/10), 33 So.3d 361, writ denied, 10-752 (La. 6/4/10), 38 So.3d 303.
Accordingly, if coverage is provided in the policy, but the endorsement excludes
coverage, there is no coverage. Id.
“Exclusionary provisions in insurance contracts are strictly construed against
the insurer, and any ambiguity is construed in favor of the insured. Garcia v. St.
Bernard Parish Sch. Bd., 576 So.2d 975, 976 (La.1991).” Ledbetter v. Concord
Gen. Corp., 95-809, p. 4 (La. 1/6/96), 665 So.2d 1166, 1169. “[A]n ambiguity
exists in an insurance policy when the pertinent provision can reasonably be
9 construed in two different ways.” McCarthy v. Berman, 95-1456, p. 8 (La.
2/28/96), 668 So.2d 721, 726.
Whether a policy endorsement creates an ambiguity must be considered as
follows:
[I]f the exclusion found in the endorsement provides a narrower scope of coverage than the provisions in other sections of this policy, such differences do not necessarily create ambiguity. The extent of coverage is determined by the parties‟ intent as reflected by the words of the policy; the intent is to be determined in accordance with the general, ordinary, plain and popular meaning of the policy‟s words, unless those words have acquired a technical meaning. Ledbetter v. Concord General Corporation, 95-0809 (La. 01/06/96), 665 So.2d 1166. The very purpose of exclusions added through endorsements is to change what otherwise would be the meaning of the terms in the policy or the scope of the coverage. The use of such endorsements allows the parties to adjust a policy without having to confect an entire new policy in place of a “standard” policy.
Sims v. Guerrero, 39,091, pp.4-5 (La.App. 2 Cir. 12/15/04), 889 So.2d 1184, 1186.
Atlantic‟s motion for summary judgment is based on Exclusion e contained
in the endorsement which states, in pertinent part:
EXCLUSION OF INJURY TO EMPLOYEES, CONTRACTORS AND EMPLOYEES OF CONTRACTORS
Exclusion e. Employer’s Liability of Coverage A. Bodily Injury and Property Damage Liability (Section I-Coverages) is replaced by the following:
This insurance does not apply to:
(i) “bodily injury” to any “employee” of any insured arising out of or in the course of:
(a) Employment by any insured; or (b) Performing duties related to the conduct of any insured‟s business” ....
With respect to this endorsement only, the definition of "Employee" in the DEFINITIONS (Section V) of CG0001 is replaced by the following:
10 “Employee” shall include, but is not limited to, any person or persons hired, loaned, leased, contracted, or volunteering for the purpose of providing services to or on behalf of any insured, whether or not paid for such services and whether or not an independent contractor.
This definition of “employee” replaces the definition of “employee” contained in
Section V of the policy “with respect to this endorsement only” while “[a]ll other
terms and conditions remain unchanged.”
Eads argues that Exclusion e of the endorsement creates an ambiguity
because he was a temporary worker of Spriggs LLC and Exclusion e of Atlantic‟s
policy provided coverage to temporary workers. Exclusion e of the policy
provides that the insurance does not apply to “bodily injury” to an “employee.”
Section V – DEFINITIONS of the policy defines “employee” as:
5. “Employee” includes a “leased worker.” “Employee” does not include a “temporary worker.”
Therefore, Mr. Eads is correct that Exclusion e of Atlantic‟s policy does not apply
to a temporary worker, such as himself, because the definition of “employee”
expressly removes him from the excluded group. He is not correct, however, that
the definitions in Exclusion e of the policy and Exclusion e of the endorsement
create an ambiguity.
Atlantic argues that because Mr. Eads was “hired” for the job in Sunset, the
endorsement‟s definition of “employee” unambiguously applies to him. It cites
Spell v. Mallett, Inc., 06-1477 (La.App. 3 Cir. 5/2/07), 957 So.2d 262, in support of
its position. In Spell, this court found that the same endorsement in another
Atlantic policy excluded coverage for the plaintiff who was injured while working
short-term for the insured.
Eads contends, however, that because Atlantic‟s policy definitions of
“temporary worker” and “leased worker” have been left untouched by the
11 endorsement, and the definition of “leased worker” still states: “Leased worker”
does not include a “temporary worker,” an ambiguity is created by the
endorsement‟s definition of “employee.”
Exclusion e of the endorsement replaces the Employer‟s Liability of
Coverage A. Bodily Injury and Property Damage Liability. Therefore, the policy‟s
definition of “employee” is specifically replaced by the endorsement‟s definition
of “employee,” and “any person . . . hired . . . for the purpose of providing services
to or on behalf of any insured” is an employee excluded from coverage. Though
the terms “leased worker” and “temporary worker” appear in the definition of
“employee” and are each defined by the policy, those terms have no impact on the
endorsement because they do not appear in the endorsement.
The fact that Atlantic‟s policy‟s definition of “employee” expressly excludes
“temporary worker” is of no importance because the endorsement‟s definition of
“employee” excludes “temporary worker.” Louisiana Civil Code Article 2050
provides that “[e]ach provision in a contract must be interpreted in light of the
other provisions so that each is given the meaning suggested by the contract as a
whole.” When the policy is read as a whole, i.e., the policy and the endorsement,
Exclusion e of the endorsement excludes coverage for Mr. Eads because he is “any
person . . . hired . . . for the purpose of providing services to or on behalf of any
insured” and he seeks recovery for “bodily injury.”
Barousse v. Western World Insurance Co., 07-1264 (La.App. 3 Cir. 3/5/08),
978 So.2d 1129, presented a similar situation. The plaintiff argued that the policy
was ambiguous because the application signed by the insured stated, “I agree to
promptly report all full and part time drivers,” but neither the application nor the
policy defined “promptly.” The endorsement at issue in Barousse provided:
12 To add a driver to the list of drivers, you must notify your agent or insurance producer in writing of the name, date of birth, date of hire and driver‟s license number of the additional driver before that driver operates a covered “auto.”
Id. at 1131. Relying on Article 2050, this court concluded:
Any ambiguity arguably created by the term „promptly‟ in the application is resolved when the policy is construed as a whole. The Listed Drivers Coverage endorsement clearly and unambiguously provides what „promptly‟ means and what [the insured] had to do to obtain $100,000 coverage for its drivers. Therefore, we need not determine whether the „promptly‟ is ambiguous.
Id.
As in Barousse, any ambiguity arguably created by the policy‟s definitions
of “employee,” “temporary worker,” and “leased worker” is resolved when
Atlantic‟s policy is construed as a whole. Accordingly, we affirm the grant of
summary judgment in favor of Atlantic and the denial of summary judgment in
favor of Mr. Eads on his cross-motion for summary judgment, finding no issue of
material fact regarding coverage for his injuries under the Atlantic policy.
MOTION FOR NEW TRIAL
Mr. Eads appeals the denial of the motion for new trial he filed regarding the
trial court‟s grant of summary judgment in favor of Atlantic. He argues that a
temporary worker, like himself, is not included in the employee exclusion of the
endorsement, “not because the endorsement says this, but because the original
definition of „employee‟ in the policy specifically excluded „temporary worker[]‟
and the amended definition just failed to include a temporary worker.”
Louisiana Code of Civil Procedure Article 1972 lists the peremptory
grounds for a motion for new trial, as relevant herein:
A new trial shall be granted, upon contradictory motion of any party, in the following cases:
13 (1) When the verdict or judgment appears clearly contrary to the law and the evidence.
(2) When the party has discovered, since the trial, evidence important to the cause, which he could not, with due diligence, have obtained before or during the trial.
Further, La.Code Civ.P. art. 1973 addresses the discretionary grounds for a
motion for new trial, stating that “[a] new trial may be granted in any case if there
is good ground therefor, except as otherwise provided by law.”
The grounds for new trial potentially applicable here are set forth in La.Code
Civ.P. art. 1972(1) and Article 1973. As explained above, Mr. Eads is excluded
from coverage under Atlantic‟s policy because he falls within the plain terms of the
endorsement‟s definition of “employee.” Accordingly, his motion for a new trial
was properly denied.
CONCLUSION
The grant of summary judgment in favor of Atlantic and the denial of
summary judgment in favor of Eads on general liability coverage are affirmed.
The denial of Eads‟s motion for new trial is also affirmed. Costs of this appeal are
assessed to Eads.
14 STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
SHANE EADS, ET AL.
CHARTIS SPECIALTY INS. CO., ET AL.
THIBODEAUX, Chief Judge, dissenting.
Exclusion “e” provides that the insurance does not apply to “bodily
injury” to an “employee.” Policy section V – DEFINITIONS defines “employee”
as:
5. “Employee” includes a “leased worker.” “Employee” does not include a “temporary worker.”
Hence, the original exclusion “e” does not apply to a temporary
worker such as Eads, as the definition of “employee” expressly removes him from
the excluded group. While definition 5 above still remains in the original policy,
along with the definitions of “temporary worker” and “leased worker,” exclusion
“e” was replaced via endorsement AGL-0551 which contains its own definition of
1 EXCLUSION OF INJURY TO EMPLOYEES, CONTRACTORS AND EMPLOYEES OF CONTRACTORS
Exclusion e. Employer’s Liability of Coverage A. Bodily Injury and Property Damage Liability (Section I-Coverages) is replaced by the following:
(i) “bodily injury” to any “employee” of any insured arising out of or in the course of:
(a) Employment by any insured; or (b) Performing duties related to the conduct of any insured’s business;
(ii) “bodily injury” to any “contractor” for which any insured may become liable in any capacity; or
(iii) “bodily injury” sustained by the spouse, child, parent, brother or sister of any “employee” of any insured, or of a “contractor,” as a consequence of any injury to any person as set forth in paragraphs (i) and (ii) of this endorsement. “employee” that addresses almost every possible kind of employee but does not
include, exclude, or address the “temporary” worker in any manner:
“Employee” shall include, but is not limited to, any person or persons hired, loaned, leased, contracted, or volunteering for the purpose of providing services to or on behalf of any insured, whether or not paid for such services and whether or not an independent contractor.
AGL-055 states that the new definition replaces the original “with
respect to this endorsement only” and that “[a]ll other terms and conditions remain
unchanged.” According to Atlantic, since Mr. Eads was “hired” for the job in
Sunset, the new expansive definition of “employee” unambiguously applies to him.
In support of its position, Atlantic cites and the majority relies upon Spell v.
Mallett, Inc., 06-1477 (La.App. 3 Cir. 5/2/07), 957 So.2d 262, which found that the
same endorsement in another Atlantic policy excluded coverage for the plaintiff
who was injured while working short-term for the insured. When considering the
policy as a whole, pursuant to Hebert v. Webre, 08-60 (La. 5/21/08), 982 So.2d
770, I find Spell distinguishable from the present case.
This exclusion applies to all claims and “suits” by any person or organization for damages because of “bodily injury” to which this exclusion applies including damages for care and loss of services.
This exclusion applies to any obligation of any insured to indemnify or contribute with another because of damages arising out of “bodily injury” to which this exclusion applies, including any obligation assumed by an insured under any contract.
With respect to this endorsement only, the definition of “Employee” in the DEFINITIONS (Section V) of CG0001 is replaced by the following: “Employee” shall include, but is not limited to, any person or persons hired, loaned, leased, contracted, or volunteering for the purpose of providing services to or on behalf of any insured, whether or not paid for such services and whether or not an independent contractor. As used in this endorsement, “contractor” shall include but is not limited to any independent contractor or subcontractor of any insured, any general contractor, any developer, any property owner, any independent contractor or subcontractor of any general contractor, any independent contractor or subcontractor of any developer, any independent contractor or subcontractor of any property owner, and any and all persons working for and or providing services and or materials of any kind for these persons or entities mentioned herein.
All other terms and conditions remain unchanged.
AGL-055 8/05
2 In Spell, the description of the insured’s business was carpentry and
the construction of residential property, which included the barn being constructed
at the time of injury. Mr. Spell was a carpenter engaged in his trade; he fell
squarely under the new definition of “employee;” and there was no issue of his
temporary status or the different treatment of “temporary” workers in the policy.
Here, the policy definitions of “temporary worker” and “leased worker” have been
left untouched by the endorsement, and the definition of “leased worker” still
states: “Leased worker” does not include a “temporary worker.” These issues
were not considered by the Spell court, and it is legally tenuous for the majority to
place any reliance on Spell.
Further, the record in Spell indicated that the insured, Mallett,
purchased Atlantic endorsements to cover the work of his contractors and their
employees, not to provide an additional avenue of recovery for employees already
covered by Mallet’s workers’ compensation policy. We do not have those facts in
this record. In fact, Spell was receiving workers’ compensation benefits under
Mallett’s other policy, and the workers’ compensation carrier intervened to recover
its payments from the Atlantic CGL policy.
While I acknowledge that endorsement exclusion “e” appears to be
identical in both cases, the issues were entirely different in Spell, and the
endorsement cannot be viewed in a vacuum. The endorsement clearly targets
“contractors,” more fully explained below. Before the endorsement in the present
case, Spriggs’s policy did not even contain a definition for “contractor.” Whether
that was true of the policy in Spell is unknown. The endorsement in Spell exists in
conjunction with another endorsement relating to contractors and in a policy issued
to a construction company that regularly hired building contractors. Spriggs’s
LLC was a one-man rotor-rooter operation. Spriggs testified that except for Eads,
he had only had two other helpers in his eight-year-old operation.
3 Here, the trial court admitted that there was doubt surrounding the
endorsement and that the policy writer could have removed this doubt by simply
including temporary workers in the new definition. Atlantic even acknowledged a
“lack of linguistic clarity” but distinguished it from “ambiguity.” The trial court
acknowledged that temporary worker was “still sitting out there” and that
interpreting the new exclusion was a “close call” and a “hard decision.” Doubts,
close calls, hard decisions, and lack of linguistic clarity all point to ambiguity that
should be interpreted against Atlantic, the insurer.
In this case, exclusion AGL-055 constitutes only one page in a ten-
page endorsement. In the world of insurance contracts, the policy must be
construed as a whole and one portion cannot be construed separately at the expense
of disregarding another. See Hebert v. Webre, 982 So.2d 770.
More specifically, Atlantic’s CGL form policy is a fourteen-page
document. Its schedule of endorsements lists thirteen additional documents that
are made part of the policy. Twelfth on the list is endorsement AGL-CO, which is
itself a ten-page “Combination Endorsement” entitled, “Exclusions/Limitations -
Combination Endorsement - Contractors.” On page four (4) of Combination
Endorsement AGL-CO is the single-page endorsement with the new exclusion “e”,
AGL-055, entitled, as discussed, “Exclusion of Injury to Employees, Contractors
and Employees of Contractors.” AGL-055 provides, as before, that the insurance
does not apply to “bodily injury” to an “employee,” but the new exclusion and the
new definition of “employee” expressly address contractors to such an extent that
it is clear that “contractors” are the target of the endorsement.
The original exclusion “e” did not mention contractors or any other
description of worker. In fact, it specifically stated that the exclusion did not apply
to liability assumed by the insured under an “insured contract.” The original
policy did not contain a definition for contractors in Section V – DEFINITIONS.
4 Exclusion “e” in AGL-055, on the other hand, adds three provisions addressing
contractors above the new definition of “employee,” which includes contractors.
Below the new definition, it devotes an entire paragraph to defining “contractor;”
and it expressly names general contractors, independent contractors,
subcontractors, including those who work for developers, property owners, or other
contractors. Including its use in the title, “contractor” is referenced approximately
eighteen times while “employee” appears only six times.
Accordingly, the endorsement is very comprehensive and all-
inclusive; it is clearly meant to bring contractors of all descriptions into the realm
of people whose bodily injuries are excluded from coverage. The extent of the
detail signals a complete turnaround in the policy’s treatment of contractors.
Likewise, the new definition of “employee” expressly includes leased, loaned,
hired, contracted, and volunteering persons in the realm of the newly-excluded.
Yet nowhere does the new exclusion mention “temporary” workers, and at its end
it states that “[a]ll other terms and conditions remain unchanged.” One is left to
ponder the rationale for this omission. It is quite possible that temporary people
were omitted from the endorsement because in some jurisdictions they are not
covered by workers’ compensation laws. Such a reason applies specifically to Mr.
Eads in this case. Given the all-inclusiveness and the extent of detail in the
endorsement, its omission of “temporary” workers is glaring. This is particularly
true when the unchanged provisions are examined.
The policy’s Section V contains twenty-two (22) definitions. In
addition to number 5, “employee,” it contains three other pertinent definitions,
numbers 10, 19, and 20. Considered together, they state:
5. “Employee” includes a “leased worker.” “Employee” does not include a “temporary worker.” ....
5 10. “Leased worker” means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. “Leased worker” does not include a “temporary worker.” .... 19. “Temporary worker” means a person who is furnished to you to substitute for a permanent “employee” on leave or to meet seasonal or short-term workload conditions. 20. “Volunteer worker” means a person who is not your “employee,” and who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary or other compensation by you or anyone else for their work performed for you.
While it is true that the old definition of “employee” expressly
excludes “temporary worker,” and the new definition of “employee” in AGL-055
does not, it is also true that AGL-055 does not include “temporary worker,” or
address the term in any way. In fact, the entire ten-page Combination
Endorsement AGL-CO, of which AGL-055 is a part, does not address “temporary
worker” on any of its ten pages. AGL-CO does, however, on page 10, address and
delete Definition 20, “Volunteer worker,” from Section V – DEFINITIONS. More
specifically, on page 10 of Combination Endorsement AGL-CO is exclusion CG
21 66A, entitled “Exclusion – Volunteer Workers.” Thus, of the four above
definitions in Section V of the original policy, one was replaced (No. 5.
“Employee”) and one was deleted (No. 20. “Volunteer worker”) in the
Combination Endorsement that is the subject of this litigation.
Original definitions 10 (“Leased worker”) and 19 (“Temporary
worker”) were left untouched by the endorsements. Endorsement AGL-055 did
not change the definition of “leased worker” but specifically included “leased”
persons in its new definition of “employee.” The unchanged definition of “leased
worker” still specifically excludes “temporary worker” the way the original
definition of “employee” did. Now that leased worker is an employee, for
6 purposes of AGL-055, and leased worker still excludes temporary worker, the
result is the same, and it could be seen as redundant for the new definition of
“employee” to also state that it excludes “temporary worker.” Temporary worker
has been excluded by the exclusion to coverage by reference, as it was never
intended to be included in the employee exclusion to coverage. If it had been,
AGL-055 would have expressly included it. This reasoning is consistent with the
fact that the new definition of the excluded “employee” includes every kind of
worker except a “temporary worker.” Again, endorsement AGL-055 indicates at
the bottom, that except for the changes expressed, all other terms and conditions
remain unchanged.
Moreover, exclusion/endorsement CG 21 66A also deletes “volunteer
workers” from Section II – Who Is An Insured, while leaving “employees” as
insureds, for their acts against others under limited circumstances. Because CG 21
66A is a separate endorsement from AGL-055, though both are part of
Combination Endorsement AGL-CO, the original definition of “employee” stands
as to CG 21 66A, since the new definition applies only to exclusion/endorsement
AGL-055. The new definition of “employees” could not apply to CG 21 66A
because the new definition includes “volunteering” persons, which would conflict
with CG 21 66A’s deletion of “volunteer workers” while it continued to maintain
“employees” as insureds. This is additional evidence that the endorsements are
consistent in including and excluding terminology and that AGL-055 would have
said “temporary worker” if it meant “temporary worker.”
Is it also reasonable to suggest that “temporary worker” was tacitly
implied in AGL-055’s reference to a “hired” person? After all, Mr. Eads was
“hired,” and he was “providing services to” the insured, D/Von’s Jetter Rooter
Service. I conclude that the pertinent provision can be reasonably construed in two
7 different ways, thereby rendering it ambiguous under McCarthy v. Berman, 95-
1456 (La. 2/28/96), 668 So.2d 721.
Accordingly, in considering the policy and the ten-page Combination
Endorsement as a whole, I find ambiguity in the coverage extended to “temporary
workers” such as Mr. Eads. Thus, I interpret the policy against the writer, Atlantic,
and I conclude that Mr. Eads is not excluded from general liability coverage under
the Atlantic policy. Accordingly, I would reverse the granting of summary
judgment in favor of Atlantic and render judgment in favor of Mr. Eads on his
cross-motion for summary judgment, finding no issue of material fact regarding
coverage for his injuries under the Atlantic policy.
For the foregoing reasons, I dissent.