Westchester Surplus Lines Insurance v. Pacorini Metals, USA, L.L.C.

131 So. 3d 445, 13 La.App. 5 Cir. 288, 2013 WL 6713974, 2013 La. App. LEXIS 2781
CourtLouisiana Court of Appeal
DecidedDecember 19, 2013
DocketNo. 13-CA-288
StatusPublished
Cited by2 cases

This text of 131 So. 3d 445 (Westchester Surplus Lines Insurance v. Pacorini Metals, USA, L.L.C.) 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
Westchester Surplus Lines Insurance v. Pacorini Metals, USA, L.L.C., 131 So. 3d 445, 13 La.App. 5 Cir. 288, 2013 WL 6713974, 2013 La. App. LEXIS 2781 (La. Ct. App. 2013).

Opinion

SUSAN M. CHEHARDY, Chief Judge.

[2The plaintiff appeals a judgment that granted the defendant’s exceptions of no right of action and no cause of action. We reverse and remand.

STATEMENT OF THE CASE

In July 2011, Westchester Surplus Lines Insurance Company (“Westchester”) filed suit against Pacorini Metals, USA, L.L.C. (“Pacorini”), for damage to a warehouse owned and managed by Westchester’s insureds, Edwards Avenue Partners (“EAP”) and Transportation Consultants, Inc. (“TCI”). Westchester alleged that Pacorini damaged the property through intentional fault or gross negligence and that Westchester, after having paid TCI and EAP for their damages, was conventionally subrogated to the insureds’ rights against Pacorini. The petition alleged as follows:

TCI is a trucking and warehousing business in Jefferson Parish. EAP is a company formed to be a holding entity for a warehouse located at 1000 Edwards Avenue, Harahan, Louisiana. EAP leases portions of the warehouse to TCI, in which TCI’s offices are located, and TCI manages the warehouse from those offices.

On January 29, 2010, EAP entered into a Net Commercial Lease Agreement with Pacorini for 111,033 square feet of space at the Edwards Avenue warehouse. |sPacorini intended to use the space to store bulk aluminum. Among the provisions in the lease was a section titled “Floor Load Limit” that required Pacorini to limit its storage of bulk aluminum to 1,250 pounds per square foot of building area. That provision stated further that “in the event the slab subsides solely as a result of LESSEE’S exceeding the Established Floor Load Limit, LESSOR may require that LESSEE, at LESSEE’S expense, make necessary repairs to the building slab.”

On July 24, 2010, a below-ground sprinkler system in the portion of the warehouse leased to Pacorini broke as a result of overloading of the floor and foundation by Pacorini -with its aluminum ingots and bars. The petition alleged that Pacorini had placed a load on the floor that exceeded 2,475 pounds per square foot.

At all times pertinent, Westchester had in effect an insurance policy issued to TCI, under which EAP was an additional loss payee as owner of the warehouse. West-chester paid to or on behalf of TCI and EAP $1,852,209.80, representing the cost of repairing the damage to the warehouse caused by the overloading of the floor by Pacorini.

Westchester asserted that under the terms of the insurance contract between it and TCI, and the principles of conventional subrogation, Westchester is entitled to recover from Pacorini all sums it paid to or on behalf of TCI and EAP.

The petition asserted claims against Pa-corini for breach of lease, and for gross negligence and intentional fault. West-chester subsequently filed a supplemental and amending petition that added a cause of action for legal subrogation.

Pacorini answered Westchester’s suit and filed a third-party demand against TCI, seeking to have TCI and EAP hold harmless, defend, and indemnify Pacorini against Westchester’s claims. Pacorini also sought rescission of the lease and 14refund of all lease payments, alleging that the warehouse was not suitable for the storage of bulk metals with a maximum [448]*448floor load of 1,250 pounds per square foot, as promised in the lease.

Pacorini filed combined exceptions of no right of action and no cause of action to Westchester’s petition. Pacorini asserted that Westchester “has no right or cause of action” to pursue a breach of contract and gross negligence claim as subrogee of TCI and EAP because the lease contained a waiver of subrogation clause, “and West-chester specifically authorized and approved the waiver of subrogation clause in the insurance policy under which it claims subrogation rights in this case.” Pacorini asserted that in the waiver of subrogation clause, both parties agreed to waive liability to each other for losses arising from damage to the leased premises, and they agreed that their insurance carriers would not be entitled to subrogation under any circumstances against any party to the lease.

That clause states:

22. WAIVER OF SUBROGATION: Neither the LESSOR nor the LESSEE shall be liable to the other for the loss arising out of the damage to or destruction of the Leased Premises, or the building or improvements of which the Leased Premises are a part thereof, when such loss is caused by any of the perils which are or could be included within or are insured against by a standard form of fire insurance with extended coverage, including sprinkler leakage insurance, if any. All such claims for any and all such loss, however caused, hereby are waived. Said absence of liability shall exist whether or not the damage or destruction is caused by the negligence of either LESSOR or LESSEE or by any of their respective agents, servants or employees. It is the intention and agreement of the LESSOR and the LESSEE that the rentals reserved by this Lease have been fixed in contemplation that each party shall fully provide his own insurance protection at his own expense and that each party shall look to his respective insurance carriers for reimbursement of any such loss, and further, that the insurance carriers shall not be entitled to subrogation under any [ ¡¡circumstances against any party to this Lease. Neither the LESSOR nor the LESSEE shall have any interest or claim in the other’s insurance policy of policies, or the proceeds thereof, unless specifically covered therein as a joint assured. [Emphasis added.]

In support of its argument that West-chester has no cause of action or right of action, Pacorini relies on Lifecare Hospitals of New Orleans, L.L.C. v. Lifemark Hospitals of Louisiana, Inc., 07-914 (La.App. 5 Cir. 4/15/08), 984 So.2d 894. In Lifecare Hospitals, this Court dismissed on summary judgment an intervention by a tenant’s property insurer who claimed subrogation rights. The dismissal was based on a lease between the insured tenant and the landlord that contained a waiver of subrogation clause.

In this ease, after a hearing, the trial court took the matter under advisement and later rendered judgment in favor of Pacorini, granting both exceptions. The court did not issue reasons for the judgment. During the hearing, however, the judge mentioned the Lifecare Hospitals case.

ARGUMENTS AND ANALYSIS

No Cause of Action

On appeal, Westchester argues, “The waiver of subrogation is nothing more than [449]*449an affirmative defense to Westchester’s claim, and the mere existence of an affirmative defense has no bearing on the question of whether the petition states a cause of action. The district court’s decision to sustain Pacorini’s exception of no cause of action must therefore be reversed.”

The function of the exception of no cause of action is to question whether the law extends a remedy to anyone under the factual allegations of the petition. Louisiana Paddlewheels v. Louisiana Riverboat Gaming Comm’n, 94-2015, p. 5 n. 3 (La.11/30/94), 646 So.2d 885, 888 n. 3. The exception of no cause of action tests the legal sufficiency of the petition by determining whether the law affords a remedy on the facts alleged in the pleading. Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So.2d 1234, 1235 (La.1993).

“No evidence may be introduced at any time to support or controvert the objection that the petition fails to state a cause of action.” La. C.C.P. art. 931.

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131 So. 3d 445, 13 La.App. 5 Cir. 288, 2013 WL 6713974, 2013 La. App. LEXIS 2781, Counsel Stack Legal Research, https://law.counselstack.com/opinion/westchester-surplus-lines-insurance-v-pacorini-metals-usa-llc-lactapp-2013.