146 So. 3d 210
La. Ct. App.2014Background
- Twin City issued a CGL policy to JL Steel, which contractually named KMTC-JV as an additional insured only for liability "caused by" JL Steel’s acts or omissions.
- A fatal construction accident occurred June 12, 2009; plaintiffs sued multiple parties (Maldonado matter), initially including JL Steel and KMTC-JV.
- JL Steel was dismissed with prejudice from the Maldonado suit on March 11, 2011; plaintiffs filed amended petitions thereafter that removed allegations of fault against JL Steel.
- Twin City filed a declaratory-judgment action seeking a ruling that its duty to defend KMTC-JV ended once JL Steel was no longer alleged to be at fault; the matters were consolidated.
- The trial court held Twin City owed KMTC-JV a defense “through the appeal process.” Twin City appealed; this court amended the judgment to limit Twin City’s duty to defend to the period ending March 11, 2011, and affirmed as amended.
Issues
| Issue | Plaintiff's Argument (Twin City) | Defendant's Argument (KMTC-JV/Zurich) | Held |
|---|---|---|---|
| Did Twin City’s duty to defend KMTC-JV terminate once amended pleadings and dismissal removed any allegation that JL Steel caused the injury, and if so, when? | Duty ended because the additional-insured endorsement only covers vicarious liability "caused by" JL Steel; duty terminated March 21, 2011 (or alternatively May 9, 2012 or May 30, 2012). | Duty continues because amended pleadings did not unambiguously exclude coverage; a jury could (or on appeal might) apportion fault to JL Steel, and insurer must defend until coverage is unambiguously precluded. | Duty to defend existed from the original petition through March 11, 2011 (the date JL Steel was dismissed with prejudice); it ended on that date. |
Key Cases Cited
- Mayo v. State Farm Mut. Auto. Ins. Co., 869 So.2d 96 (La. 2004) (insurance-policy interpretation follows contract rules; court determines common intent)
- Doerr v. Mobil Oil Corp., 774 So.2d 119 (La. 2000) (policy language controls; extrinsic evidence only if ambiguity)
- Brown v. Drillers, Inc., 630 So.2d 741 (La. 1994) (contract interpretation may be decided as a matter of law from the four corners)
- Henly v. Phillips Abita Lumber Co., 971 So.2d 1104 (La. App. 1st Cir. 2007) (duty-to-defend analysis uses the eight-corners rule and is broader than duty to indemnify)
- Allstate Ins. Co. v. Roy, 653 So.2d 1327 (La. App. 1st Cir. 1995) (duty to defend ceases when uncontroverted facts unambiguously preclude coverage)