Looney Ricks Kiss Architects, Inc. v. State Farm Fire & Casualty Co.
677 F.3d 250
5th Cir.2012Background
- LRK sued Bryan defendants for copyright infringement; insurers Lafayette and State Farm sought declarations on coverage/defense duties.
- 1996 Agreement provided LRK as author of architectural documents and restricted use without written agreement/compensation.
- LRK held a copyright on Island Park Apartments; Cypress Lake developments allegedly infringed LRK's work.
- Lafayette insured Cypress Lake (2000–2001) with personal and advertising injury coverage; State Farm insured Cypress Lakes (2002–2005) with similar coverage.
- Policies included breach-of-contract exclusions; district court held no coverage but insurers owed defense; LRK appealed and insurers cross-appealed.
- Court must decide whether exclusions preclude coverage and whether insurers owe defense, under Louisiana law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do breach-of-contract exclusions preclude coverage for copyright infringement? | LRK argues but-for tort would occur absent breach; exclusion should not apply. | Insurers contend breach-language excludes coverage for contract-based disputes. | But-for test applies; exclusions do not preclude coverage. |
| Is LRK's copyright claim within advertising-injury coverage? | LRK's claim fits copyright-infringement advertising injury. | Insurers argue exclusions apply to advertising injury. | Covered under advertising-injury provisions; not excluded. |
| Are the insurers obligated to defend the Bryan defendants in the LRK suit? | If covered, insurer must defend entire action. | If no coverage, no defense duty. | Duty to defend exists; affirmed. |
Key Cases Cited
- In re St. Louis Encephalitis Outbreak, 939 So.2d 563 (La.App.4th Cir. 2006) (breach-of-contract exclusion not applicable where tort arises from non-contract duties)
- Everett v. Philibert, 13 So.3d 616 (La.App.1st Cir. 2009) (tort claims must arise from duties other than contract to avoid exclusion)
- Michelet v. Scheuring Sec. Servs. Inc., 680 So.2d 140 (La.App.4th Cir. 1996) (ambiguous provisions construed against insurer)
- La. Ins. Guar. Ass'n v. Interstate Fire & Cas. Co., 630 So.2d 759 (La. 1994) (insurers may limit liability; policy terms control)
- Dubin v. Dubin, 641 So.2d 1036 (La.App.2d Cir. 1994) (same acts may support tort and contract; exclusions apply when separate duties exist)
- Callas Enters., Inc. v. Travelers Indem. Co., 193 F.3d 952 (8th Cir. 1999) (incidental relationship approach discussed in breach-of-contract exclusions)
- Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453 (5th Cir. 2003) (incidental relationship approach; under Louisiana law context noted)