MOTOROLA, INC. v. ASSOCIATED INDEMNITY CORPORATION, Continental Casualty Company, National Surety Company, Transportation Insurance Company, Zurich American Insurance Company, Harbor Insurance Company, Hartford Accidental & Indemnity Co., Illinois National Insurance Company, National Union Fire Insurance Company, and St. Paul Surplus Lines Insurance Company.
No. 2002 CA 0716.
Court of Appeal of Louisiana, First Circuit.
June 25, 2004.
Rehearing Denied August 18, 2004.
878 So.2d 824 (2004)
Before: CARTER, C.J., KUHN, DOWNING, GAIDRY, and McDONALD, JJ.
David P. Salley, New Orleans, Philip R. King, Chicago, IL, Counsel for Defendant/Appellee Zurich American Insurance Co.
Robert A. Vosbein, William J. Kelly, III, New Orleans, Counsel for Defendant/Appellee Continental Casualty Company.
Michael Durand, Lafayette, Counsel for Defendants/Appellees Associated Indemnity Corporation and National Surety Corporation.
Edward A. Rodrigue, Jr., New Orleans, Counsel for Defendant/Appellee St. Paul Surplus Lines Insurance Company.
Eavelyn T. Brooks, New Orleans, Counsel for Defendants/Appellees National Union Fire Insurance Company of Pittsburgh, Pennsylvania and Illinois National Insurance Company.
GAIDRY, J.
This is an appeal of a summary judgment rendered in a declaratory judgment action, relating to the issues of an insurance company‘s coverage and duty to defend its insured in various class action lawsuits. The trial court denied the motion for summary judgment of the plaintiff-appellant, Motorola, Inc. (Motorola), but granted the motion for summary judgment of the defendant-appellee, Zurich American Insurance Company (Zurich). Motorola appeals the summary judgment dismissing its claims against Zurich. We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Motorola is a manufacturer of cellular wireless handheld telephones (“cell phones“). It was named as defendant in a number of class action lawsuits (the “Class Actions“) seeking recovery of sums of money allegedly owed by Motorola and other cell phone manufacturers to alleviate customers’ allegedly harmful exposure to radio frequency radiation. The Class Actions include Naquin v. Nokia Mobile Phones, Inc. (originally filed in Civil District Court for the Parish of Orleans, State of Louisiana); Pinney v. Nokia, Inc. (originally filed in the Circuit Court for Baltimore City, State of Maryland); Farina v. Nokia, Inc. (originally filed in the Court of Common Pleas for Philadelphia County, State of Pennsylvania); Gillian v. Nokia, Inc. (originally filed in the Supreme Court of the State of New York, Bronx County); and Gimpelson v. Nokia, Inc. (originally filed in the Superior Court for Fulton County, State of Georgia). All of the Class Actions were removed to federal court and joined as one multi-district action in the United States District Court for the District of Maryland. On March 5, 2003, the Class Actions were dismissed on the grounds that federal law preempted the causes of action asserted. In re Wireless Telephone Radio Frequency Emissions Products Liability Litigation (RFE Litigation), 248 F.Supp.2d 452 (D.Md.2003). As of this writing, that judgment is on appeal to the United States Court of Appeals for the Fourth Circuit under docket number 03-1433. Despite the different forums in which the Class Actions were instituted and variations in phraseology of their allegations, they are all based upon a common conceptual framework, and share many allegations
In addition to the economic restitution for headsets, the Naquin plaintiffs originally claimed “an amount sufficient to pay for the cоsts of all medical monitoring to protect against and/or monitor for potential development of diseases or illness,” attorney‘s fees, and legal interest. In their first supplemental and amended complaint, the Naquin plaintiffs amended their causes of action to exclude the claims for medical monitoring expenses and other “claims for any individualized physical injury.”
Motorola filed this action for declaratory judgment and breach of contract against Zurich and nine other primary and excess liability insurers, seeking a determination that their policies provide coverage for the claims in the Class Actions, that they have the duty to defend Motorola for those claims, and that they are liable for damages to Motorola for their failure to defend it in the Class Actions.2 Zurich issued two comprehensive general liability (CGL) policies to Motorola, in effect successively from July 1, 1985, to July 1, 1987. In addition to denying liability in its answer, Zurich asserted a reconventional demand for declaratory judgment “that it has no obligation to either defend and/or [sic] indemnify Motorola.”
The trial court granted summary judgment in favor of Zurich, and denied Motorola‘s motion on the same issues. The summary judgment dismissed Zurich as a party defendant in this declaratory judgment action.3 From that judgment, Motorola appeals.
STANDARD OF REVIEW
Appellate courts review summary judgments de novo under the same criteria that govern the trial court‘s consideration of whether summary judgment is appropriate. Savana v. Certain Interested Underwriters at Lloyd‘s London, 01-2450, p. 3 (La.App. 1st Cir.7/2/02), 825 So.2d 1242, 1243.
The summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of every action and is favored in our law.
The initial burden is on the party moving for summary judgment to show that no genuine issue of material fact exists. If the moving party points out that there is an absence of factual support for one or more elements essential to the adverse
Interpretation of аn insurance contract is usually a legal question which can be properly resolved in the framework of a motion for summary judgment. Madden v. Bourgeois, 95-2354, p. 3 (La.App. 1st Cir.6/28/96), 676 So.2d 790, 792. However, summary judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence supporting the motion, under which coverage could be afforded. Gaylord Chemical Corporation v. ProPump, Inc., 98-2367, pp. 3-4 (La.App. 1st Cir.2/18/00), 753 So.2d 349, 352.
PRINCIPLES OF INSURANCE POLICY INTERPRETATION
An insurance policy is a contract between the parties, and should be construed employing the general rules of interpretation of contracts. Blackburn v. National Union Fire Insurance Company of Pittsburgh, 00-2668, pp. 5-6 (La.4/3/01), 784 So.2d 637, 641. Words in an insurance policy must therefоre be given their generally prevailing meaning, unless they have acquired a technical meaning, in which case the technical meaning applies.
An insurance policy should not be interpreted in an unreasonable or strained manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion. Magnon v. Collins, 98-2822, p. 7 (La.7/7/99), 739 So.2d 191, 196. Likewise, a court should not strain to find ambiguity in a policy where none exists. Gaylord Chemical Corporation, 98-2367 at p. 4, 753 So.2d at 352. These principles of interpretation are generally accepted and followed in all jurisdictions of this country.
ANALYSIS
The only issue properly before us is whether the trial court was correct in concluding that their pending claims cannot, as a matter of law, be covered as claims for “damages because of bodily injury.” That is, if the class action plaintiffs have potentially valid causes of action against Motorola, do such causes of action seek relief for “damages because of bodily injury,” triggering Zurich‘s duty to defend and indemnify Motorola? In order to resolve this issue, it is necessary to define the phrase “damages because of bodily injury” as used in the poliсy at
“Damages Because of Bodily Injury”
The precise issues confronting us were previously considered by the U.S. Court of Appeals for the Fourth Circuit in Northern Insurance Company of New York v. Baltimore Business Communications, Inc., 68 Fed.Appx. 414, 2003 WL 21404703 (4th Cir.2003) (unpublished opinion). There, the court was presented with a summary judgment rendered in a declaratory judgment action instituted by an insurer of a defendant in the Pinney action, one of the Class Actions. The insurer sought judgment declaring it had no duty to defend or indemnify the insured on the grounds that the Pinney action was not one seeking “damages because of bodily injury” and that one or more of four “business risk” exclusions were applicable under the plaintiffs’ allegations. The appellate court disagreed with the district court‘s conclusion that the complaint‘s allegations did not seek such dаmages and therefore did not fall within the policy coverage. The appellate court noted that under Maryland law, “bodily injuries include those that occur at the minute, cellular level,” and by alleging that they suffered harm from radiation, the plaintiffs alleged a “bodily injury.” Id. at 419. The court interpreted the allegations as “seeking unspecified compensatory damages flowing from their bodily injuries, i.e., harm suffered from radiation,” and that the defendant could therefore be “potentially liable ... for any and all compensatory damages recoverable.” Id. at 420. Finally, while acknowledging that the plaintiffs did not seek “traditional compensation,” the court concluded that the issue of the insurer‘s duty to defend must be resolved in favor of the insured. Id. at 422.
The court‘s decision in Northern Insurance is not binding upоn us, however. For that reason, as well as the different parties involved and the necessity to resolve the issues as to the other Class Actions, we undertake our own independent analysis of these issues.
The class action plaintiffs’ allegations asserting the factual basis of the defendants’ liability clearly sound in tort.5 The policies at issue provide coverage for tort liability. Regardless of whether tort liability is based upon the venerable theory of “proximate cause” or the “duty-risk” analysis, a common, indispensable element
It has been observed that “Louisiana is generous in its conception of damage, the slightest being sufficient to support an action.” 12 William E. Crawford, Louisiana Civil Law Treatise: Tort Law § 3.4 (2000). Damages recoverable may include “future damages not yet suffered but feared and impending” and “fear of future harm.” Id. at § 3.6.
The terms “damages” and “bodily injury” are not defined in Zurich‘s policy.7 “Damage[s]” is generally defined as meaning “compensation in money imposed by law for loss or injury.” Merriam-Webster‘s Collegiate Dictionary 291 (10th ed.1993). To the extent that the Class Actions seek to compel Motorola to supply headsets to the class action claimants, they seemingly do not assert claims for “damages” under the foregoing definition. However, to the extent that they seek the “costs of headsets” (Farina and Gillian complaints), “amounts necessary to purchase” headsets (Gillian, Gimpelson and Pinney complaints), “reimbursement” of the costs of headsets already purchased by customers (Gillian, Gimpelson, Naquin, and Pinney complaints), and a “reduction in price sufficient to obtain a headset” (Naquin complaint), the Class Actions clearly seek monetary compensation, albeit of a limited nature. Does such relief constitute “damages,” and if so, does it constitute “damages because of bodily injury?”
Comparing the allegations of the Naquin plаintiffs’ complaint with the foregoing general definitions, it is obvious that those allegations set forth claims predicated upon ongoing, repetitive injurious exposure to allegedly harmful conditions generated by Motorola‘s products already in use, as well as future injurious exposure from its products later sold. Zurich claims that the recovery sought by the class action plaintiffs is therefore purely preventative in nature, and not based upon “bodily injury” which has already occurred. Its argument is seemingly supported by the fact that the class of claimants for which certification is sought has been defined to include future purchasers of cell phones without headsets, as opposed to only past purchasers of cell phones and cell phone headsets.
We first examine the issue within the framework of our state‘s law. The broad ambit of damages recoverable under
The supreme court in Wainwright overruled the appellаte court and reinstated the jury‘s verdict, holding that the jury did not abuse its discretion in failing to award
Since [the pharmacy] admitted its liability for the overdose, the jury would have been justified in awarding the [plaintiffs] medical expenses incurred in insuring that [the minor] had suffered no adverse effects from the medication. (Our emphasis).
Id., 00-0492 at pp. 10-11, 774 So.2d at 77. The ultimate result was that although there was no manifest injury proven, some “damages” for determining no injury existed were still recoverable under our law.
The following language from Justice Lemmon‘s additional assigned reasons in Wainwright is especially pertinent here:
When a tortfeasor causes an occurrence which subjects the tort victim to the reasonable possibility of serious injury, the tortfeasor is liable for the reasonable expenses incurred by the tort victim in consulting appropriate medical personnel and in insuring that the adverse effects of the occurrence will be prevented or minimized. This liability for medical consultation or treatment ensues from the tort even if the tort victim is fortunate enough that serious injury does not actually result. (Our emphasis; footnotes omitted.)
Wainwright v. Fontenot, 00-0492 at p. 1, 774 So.2d at 78 (Lemmon, J., subscribing opinion). The class action plaintiffs’ present claims, even if reduced to recovery of appropriate headsets or their cost, still seem to fit squarely within the framework of the principle articulatеd above.9
The liberal interpretation of the term “bodily injury” for purposes of insurance coverage in Louisiana is further illustrated by those cases which have held that “mental anguish” and “mental injury” may constitute “bodily injury” within the meaning of a liability insurance policy. See Crabtree v. State Farm Insurance Co., 93-0509 (La.2/28/94), 632 So.2d 736, 743-45; Ledbetter v. Concord General Corp., 95-0809, p. 5 (La.1/6/96), 665 So.2d 1166, 1169.
In Bourgeois v. A.P. Green Industries, Inc., 97-3188 (La.7/8/98), 716 So.2d 355 (Bourgeois I), our supreme court was called upon to determine whether asymptomatic members of a class of workers exposed to asbestos, seeking the costs of periodic medical monitoring, stated a cause of action for “damages” under
By Acts 1999, No. 989, the legislature sought to overrule Bourgeois I by amending
The original elements of the Naquin plaintiffs’ claims were clearly consistent with similar claims for damages for medical monitoring necessitated by exposure to toxic or harmful agents. Regardless of whether the element of medical monitoring damages has been eliminated from consideration in the Naquin case, the remaining claims, like those in Bourgeois I, are still predicated upon the existence of a legally protected interest in avoiding physical injury. To that extent, the remaining claims are clearly analogous to claims for medical monitoring, which were recognized as delictual claims under
We are aware of the supreme court‘s holdings in Austin v. Abney Mills, Inc., 01-1598 (La.9/4/02), 824 So.2d 1137, and Bonnette v. Conoco, Inc., 01-2767 (La.1/28/03), 837 So.2d 1219, relating to the analogous issue of damages for long-latency or insidious disease following exposure to asbestos.10 Regardless of the potential effect of those holdings upon the merits of the Naquin plaintiffs’ claims, we emphasize that we are not confronted with the sufficiency of the plaintiffs’ allegations in meeting the criteria of those cases nor with the merits of the Class Actions. We need only determine the narrower issue of whether there exists any reasonable interpretation of the policy, given the plaintiffs’ allegations and the undisputed material facts, under which coverage could be afforded.
The artful crafting of the class action plaintiffs’ pleadings, presumably motivated to aid in maintaining class action status, has not served to substantially alter the factual allegations upon which the limited relief sought is based. The form of the relief sought in the Class Actions does not change its essential character or purpose, which is that of “damages” in tort or products liability. Although the relief purportedly sought consists of tangible accessories to property of the class action plaintiffs, or the accessories’ monetary value, the class action plaintiffs plainly seek such relief “because of bodily injury.” In that regard, we note that our Civil Code provides that obligations may be extinguished by a “giving in payment,” traditionally called a dation en paiement, whereby an obligor gives a thing to an obligee, who accepts it in full or partial payment of a debt.
At common law, declaratory judgment, specific performance, and injunctive relief are traditionally considered equitable remedies. The Missouri Supreme Court was faced with a similar coverage issue for its determination in Farmland Industries, Inc. v. Republic Insurance Company, 941 S.W.2d 505 (Mo.3/25/97). There, affiliated companies brought a declaratory judgment action against various insurers who issued them CGL and excess liability policies. They sought a determination that the insurers were obligated to defend and indemnify them for environmental response costs relating to investigation and remediation required by the Environmental Protection Agency under the Comprehensive Environmental Response Compensation Liability Act of 1980 (CERCLA),
The “Business Risk” Exclusions
Zurich further contends that Exclusions (m), (n), and (o) of its policy apply to remove the class action plaintiffs’ claims from the ambit of its policy coverage.12
The Insurer‘s Duty to Defend
A liability insurer‘s duty to defend and the scope of its coverage are separate and distinct issues. Dennis v. Finish Line, Inc., 93-0638 (La.App. 1st Cir.3/11/94), 636 So.2d 944, 946, writ denied, 94-1652 (La.10/7/94), 644 So.2d 636. It is likewise well-recognized that the obligation of a liability insurer to defend suits against its insured is generally broader than its obligation to provide coverage for damages claims. Steptore v. Masco Construction Company, Inc., 93-2064, p. 8 (La.8/18/94), 643 So.2d 1213, 1218. Thus, even if a plaintiff‘s claim against an insured probably lacks merit, the insurer must defend its insured, if the claim conceivably falls within its coverage. The language of Zurich‘s policy accords with this general rule, as Zurich expressly assumes the “duty to defend any suit against the insured seeking damages on account of bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent.”
The issue of whether a liability insurer has the duty to defend a civil action against its insured is determined by application of the “eight-corners rule,” under which an insurer must look to the “four corners” of the plaintiff‘s petition and the “four corners” of its policy to determine whether it owes that duty. Vaughn v. Franklin, 00-0291, p. 5 (La.App. 1st Cir.3/28/01), 785 So.2d 79, 84, writ denied, 01-1551 (La.10/5/01), 798 So.2d 969. Under this analysis, the factual allegations of the plaintiff‘s petition must be liberally interpreted to determine whether they set forth grounds which raise even the possibility of liability under the policy. Id. In other words, the test is not whether the allegations unambiguously assert coverage, but rather whether they do not unambiguously exclude coverage. Vaughn, 00-0291 at p. 6, 785 So.2d at 84. Similarly, evеn though a plaintiff‘s petition may allege numerous claims for which coverage is excluded under an insurer‘s policy, a duty to defend may nonetheless exist if there is at least a single allegation in the petition under which coverage is not unambiguously excluded. Employees Insurance Representatives, Inc. v. Employers Reinsurance Corporation, 94-0676, p. 3 (La.App. 1st Cir. 3/3/95), 653 So.2d 27, 29, writ denied, 95-1334 (La.9/1/95), 658 So.2d 1268.
The instant case presents an even stronger case than Thomas for the determination that the insurer owes its insured a duty of defense. Cоntrary to Zurich‘s contentions, the limited relief sought by plaintiffs is not solely determinative of the scope of either Zurich‘s coverage or its duty to defend. Given the expansive nature of insurers’ duty to defend, the only reasonable conclusion is that the Class Actions present claims for “damages on account of such bodily injury,” and that Zurich owes Motorola the obligation of defending it in the Class Actions. We conclude, as did the court in Northern Insurance, that “[w]hile [plaintiffs‘] claims may lack merit, we are unable to state with certainty that they do not seek `damages because of bodily injury.‘” Northern Insurance, 68 Fed.Appx. at 421-22. Accordingly, the judgment of the trial court on the issue of Zurich‘s duty to defend Motorola must also be reversed.
CONCLUSION
The state of the law nationwide as to the validity and parameters of insidious injury and diseаse claims such as those asserted in the Class Actions is in flux. We cannot say, as a matter of law, that the relief sought by the class action plaintiffs falls outside the broad scope of “damages because of bodily injury.” Thus, we conclude that Zurich‘s policy imposes the duty to defend Motorola under the factual allegations of the Class Actions. The resolution of the issue of Zurich‘s duty to indemnify Motorola will necessarily depend on the disposition of the merits of the Class Actions.
DECREE
The judgment of the trial court is reversed, and the case is remanded to the trial court. All costs of this appeal are assessed against the defendant-appellee, Zurich American Insurance Company.
REVERSED AND REMANDED.
KUHN, J., concurs with reasons.
McDONALD, J., dissents.
DOWNING, J., dissents and assigns reasons.
MOTOROLA, INC. v. ASSOCIATED INDEMNITY CORPORATION, et al.
No. 2002 CA 0716.
Court of Appeal of Louisiana, First Circuit.
June 25, 2004.
I disagree with the majority‘s conclusion that the articulation of reasons for designation of a partial judgment (or partial summary judgment) as final for purposes of an immediate appeal by the trial court is not a jurisdictional defect. I also disagree with the majority‘s conclusion that the partial summary judgments in favor of insurers Associated Indemnity Company and Hartford Insurance Company, which dismissed the claims of Motorola, Inc. against those insurers under
MOTOROLA, INC. v. ASSOCIATED INDEMNITY CORPORATION, et al.
No. 2002 CA 0716.
Court of Appeal of Louisiana, First Circuit.
June 25, 2004.
DOWNING, J., dissents and assigns reasons.
If a man purchases a Coke with a deceased cockroach therein, drinks it and becomes ill, then his injury would be covered under a bodily injury policy. However, if he does not drink the Coke then his claim is оnly for the replacement cost of the Coke and recovery is excluded. This would be a business risk because of a defective product not a “bodily injury” claim, even though there was potential for bodily injury, and recovery would be excluded under the bodily injury policy.
Similarly, you can‘t sue Ford in tort for a Pinto gas tank alleging you could be killed if it blows up. That is a product claim, not causing bodily injury, for the gas tank and not covered under this type of policy.
Never have I seen pleadings so intentionally and meticulously crafted to not claim damages because of bodily injury than the pleadings of the class action plaintiffs.
The result of this case will be that a person who has not yet suffered symptoms of carpal tunnel syndrome, but who may have microsсopic cellular injury and desires to have a pad for the keyboard, may sue in tort for the cost of the pad. The insurer will now have to defend every redhibition claim where a creative lawyer can allege some potential but asymptomatic injury.
Interpreting these policies in this strained and liberal manner will convert every redhibition claim where there is potential for future bodily injury into a covered claim. That is not the purpose of this type of insurance and this opinion will cause havoc in the insurance industry.
I would affirm the trial court that there is no coverage and no duty to defend.
Notes
This policy does not apply: ...
(m) to loss of use of tangible property which has not been physically injured or destroyed resulting from
(1) a delay in or lack of performance by or on behalf of the named insured of any contract or agreement, or
(2) the failure of the named insured‘s products or work performed by or on behalf of the named insured to meet the level of performance, quality, fitness or durability warranted or represented by the named insured ...
Exclusion (n), a typical CGL “damage to products” еxclusion, Id. at § 198, provides that the policy does not apply “to property damage to the named insured‘s products arising out of such products or any part of such products.”
Exclusion (o) is a typical CGL “work performed” exclusion, Id., and excludes coverage “to property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith.” Both Exclusion (n) and Exclusion (o) are also referred to collectively as “work product” exclusions. Id.