255 So. 3d 1223
La. Ct. App.2018Background
- RSUI issued claims-made-and-reported D&O policies to St. Bernard Parish Government (SBPG) covering Feb 2015–Feb 2016; suit arises from termination of an IT contract between SBPG and ParaTech.
- Plaintiffs (ParaTech and two individuals) sued SBPG, Council members, media, and named RSUI in a direct action; claims included breach of contract, torts (negligence, defamation), and a broad "catch-all" for other negligent/intentional acts.
- RSUI moved for summary judgment asserting several policy exclusions: breach-of-contract (contract-based liability), defamation, and mental anguish/emotional distress; RSUI also sought to quash a deposition and obtain a protective order.
- Trial court granted RSUI's motion for summary judgment and quashed the proposed deposition; the Parish appealed both the discovery ruling and the grant of summary judgment.
- The appellate court reviewed discovery rulings for abuse of discretion and reviewed the summary judgment de novo, applying the eight-corners rule for duty to defend and contract interpretation principles under Louisiana law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of motion to compel deposition of RSUI was erroneous | Parish: RSUI failed to provide substantive interrogatory responses; deposition under Art. 1442 needed to probe underwriting/drafting | RSUI: policy wording is clear; no further discovery necessary for legal coverage decision | Denial affirmed — trial court did not abuse discretion because policy language was clear and dispositive |
| Whether breach-of-contract exclusion bars coverage for plaintiffs' tort claims | Parish: the exclusion should be applied under a "but-for" test; some tort duties were independent of the contract (Borden) | RSUI: the alleged torts arise from the contract termination and are not separate and distinct from contractual duties | Exclusion applies — plaintiffs' torts arose from the operative act (contract termination); coverage excluded |
| Whether defamation and emotional distress claims are covered | Parish: RSUI failed to prove these claims are excluded | RSUI: policy expressly excludes libel/slander/defamation and mental anguish/emotional distress | Exclusion applies — those claims are expressly excluded by policy language |
| Whether the "catch-all" allegation defeats summary judgment | Parish: general allegation of other negligent/intentional acts (to be found in discovery) preserves coverage | RSUI: conclusory catch-all is insufficient under Louisiana fact-pleading to allege facts creating coverage | Held against Parish — conclusory "catch-all" insufficient to create a genuine issue of material fact |
Key Cases Cited
- Sporl v. Sporl, 788 So.2d 682 (La. App. 5 Cir. 2001) (interlocutory rulings reviewable on appeal from final judgment)
- Orleans Parish Sch. Bd. v. Lexington Ins. Co., 118 So.3d 1203 (La. App. 4 Cir. 2013) (no absolute right to delay summary judgment for discovery; clear policy language controls)
- Looney Ricks Kiss Architects, Inc. v. State Farm Fire & Cas. Co., 677 F.3d 250 (5th Cir. 2012) (discussing the "but-for" test for breach-of-contract exclusions under Louisiana-law Erie analysis)
- Borden, Inc. v. Howard Trucking Co., 454 So.2d 1081 (La. 1983) (same act can give rise to both tort and contract liability)
- In re St. Louis Encephalitis Outbreak in Ouachita Parish, 939 So.2d 563 (La. App. 2 Cir. 2006) (breach-of-contract exclusion did not bar tort claims where duty to plaintiffs was independent of contract)
- Everett v. Philibert, 13 So.3d 616 (La. App. 1 Cir. 2009) (breach-of-contract exclusion barred coverage where tort claims arose from duties created solely by the contract)
Disposition: Affirmed — summary judgment for RSUI and denial of Parish's discovery request were upheld.