97 So. 3d 1167
La. Ct. App.2012Background
- GSM and Harnek Chahal challenge a summary judgment ruling that Royal had no duty to defend GSM or Chahal in the Ferraras’ sexual harassment suit.
- Royal denied coverage and defense under its CGL policy, citing an Employment-Related Practices Exclusion (ERPE).
- The underlying Ferraras’ suit alleged harassment, battery, and defamation by Chahal during a GSM employment-related interview process; damages were sought.
- The trial court granted Royal’s summary judgment, holding the ERPE unambiguously excluded coverage.
- GSM and Chahal argued the ERPE did not unambiguously preclude coverage; the court analyzed policy language and eight-corners rule to determine defense duty.
- Louisiana appellate review is de novo on summary judgment, with the insurer bearing burden to show exclusions apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ERPE unambiguously excludes coverage | GSM argues ERPE does not apply to non-employee victims. | Royal argues ERPE applies to employment-related acts directed at a person, including Ferrara. | ERPE unambiguously excludes coverage for employment-related acts. |
| Whether insurer owed a duty to defend under eight-corners rule | If petition could plead coverage, insurer must defend. | If ERPE excludes coverage, no duty to defend. | No duty to defend because ERPE excludes the claimed conduct. |
| Scope of ERPE applicability to non-employee victims | ERPE should not apply to non-employees like Ferrara. | ERPE applies to a person regardless of employment status. | ERPE applies to a person regardless of whether the injured party is an employee. |
Key Cases Cited
- Henly v. Phillips Abita Lumber Co., 971 So.2d 1104 (La. App. 1st Cir. 2007) (duty to defend evaluated under eight-corners rule)
- Yount v. Maisano, 627 So.2d 148 (La. 1993) (insurer must defend if potential coverage exists)
- Doiron v. Louisiana Farm Bureau Mut. Ins. Co., 753 So.2d 357 (La. App. 1st Cir. 2000) (summary judgment on coverage issues permissible)
- Jones v. Estate of Santiago, 870 So.2d 1002 (La. 2004) (burden on insured to show policy coverage; insurer to show exclusions)
- Ledbetter v. Concord Gen. Corp., 665 So.2d 1166 (La. 1996) (clear policy language enforced; avoid absurd results)
- Cadwallader v. Allstate Ins. Co., 848 So.2d 577 (La. 2003) (construction of insurance contracts; burden allocation)