Orleans Parish School Board v. Lexington Insurance Co.
99 So. 3d 723
La. Ct. App.2012Background
- OPSB retained Aon Risk Services to procure property and other coverages for 2004-2005 and 2005-2006 policy periods; policies commenced May 1 each year.
- Katrina caused direct physical damage to OPSB properties in late August 2005; OPSB held multiple layers of insurance with Lexington primary, Clarendon/Essex first excess, Westchester second excess, RSUI upper excess, totaling $200 million per occurrence.
- OPSB filed a claim for business income and extra expense; insurers denied coverage for these elements.
- OPSB sued primary and excess insurers; Lexington was dismissed with prejudice after a compromise; OPSB obtained partial summary judgment against excess insurers on business income/extra expense at trial court.
- Excess insurers argued follow-form policies; the trial court granted OPSB summary judgment on coverage, but the appellate court reversed on issues related to whether the excess policies provide blanket coverage and whether the Statement of Values limits apply; remanded for further proceedings.
- There is a factual dispute whether the Statement of Values used to limit coverage was properly prepared for 2005-2006 policies, raising genuine issues of material fact.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether excess follow-form policies blanket cover business income and extra expense. | OPSB argues excess follow Lexington; no express exclusion of business income/extra expense. | Excess policies limit liability to items/values on the Statement of Values; documents indicate $5 million for extra expense and no business income. | Genuine issue of material fact; blanket coverage disputed. |
| Whether the Statement of Values properly limits excess coverage or if misdated/prepared values affect coverage. | OPSB contends Statement of Values is valid and supports blanket coverage. | Statement of Values may be from 2003-04 and not properly signed or updated for 2004-06; limits/exceptions apply. | Issue of material fact; not enough to grant/deny summary judgment. |
Key Cases Cited
- Fair Grounds Corp. v. Travelers Indem. Co. of Illinois, 742 So.2d 1069 (La.App. 5 Cir. 1999) (scheduled vs blanket policy; value-based limits on loss)
- Orleans Parish School Bd. v. Lexington Ins. Co., 95 So.3d 1205 (La.App. 4 Cir. 2012) (follow-form policies; exceptions to underlying policy terms)
- Robichaux v. Randolph, 563 So.2d 226 (La.1990) (follow-form policy interpretation guidance)
- Toston v. Nat’l Union Fire Ins. Co. of Louisiana, 942 So.2d 1204 (La.App. 2 Cir. 2006) (excess policy limits and statements of values)
- Rainbow USA, Inc. v. Crum & Forster Specialty Ins. Co., 711 F.Supp.2d 655 (E.D. La. 2010) (policy interpretation; scheduled vs blanket coverage)