30754 La.App. 2 Cir. 8/21/98, Adams v. Falcon Equipment Corp.

• Decision Date: 21 August 1998
• Citation: 717 So.2d 282
• Parties: Cir
• Court: Court of Appeal of Louisiana — District of US

Page 282

717 So.2d 282

30754 La.App. 2 Cir. 8/21/98

Guyon and Kathy ADAMS, Plaintiff-Appellee/Appellant, v. FALCON EQUIPMENT CORPORATION and Homestead Insurance Company, Defendant-Appellant/Appellee.

No. 30754-CA.

Court of Appeal of Louisiana Second Circuit.

Aug. 21, 1998.

G. Gregory Green, for Appellants Guyon and Kathy Adams.

J. Michael Rhymes, Monroe, for Appellant Falcon Equipment Corp.

Brian E. Crawford, Neal L. Johnson, Jr., Monroe, for Appellant Breck Construction, Inc.

Charles S. Smith, Karen L. Hayes, Monroe, for Appellee Homestead Insurance Co.

Charles W. Rea, Baton Rouge, for Intervenor Fidelity & Casualty Co. of New York.

Before STEWART, GASKINS and PEATROSS, JJ.

[30754 La.App. 2 Cir. 1] GASKINS, Judge.

The plaintiffs, Guyon and Kathy Adams, as well as the defendants, Falcon Equipment Corporation and Breck Construction Company with its insurer, Audubon Insurance Company, appeal from the trial court's disposition of several motions for summary judgment. For the following reasons, we reverse the summary judgment in favor of Falcon and its insurer, Homestead Insurance Company (Homestead), on the issue of indemnity and affirm the grant of summary judgment in favor of Homestead on the issue of insurance policy limits.

FACTS

This matter arises from an accident and injury sustained by the plaintiff, Guyon Adams, on August 2, 1993, while working for his employer, Breck Construction Company (Breck), at a job at the Ethyl Corporation plant near Magnolia, Arkansas. Breck was performing services at the plant which required the lease of several pieces of heavy equipment. Breck's vice president, Jim Murray, negotiated a lease with Falcon Equipment Corporation (Falcon) for a seventy-five ton crane and a cherry picker. Breck also needed a float and a fifth wheel truck. Breck claims these two items were loaned by Falcon to Breck, free of charge, because Breck made such a sizeable lease agreement with the company.

On the date of the accident, Eric Herndon, an employee of Breck, who was not authorized to operate the fifth wheel truck, decided that he would help out by starting the truck. There are allegations that he attempted to start the truck without engaging the clutch. There is also some indication that the truck was in reverse and not in neutral. There are further assertions that the truck was defective. As a result of Mr. Herndon's efforts, when he attempted to start the truck, it lurched backward approximately four feet. The plaintiff was standing behind the truck at [30754 La.App. 2 Cir. 2] the time. He was pinned between the bumper of the truck and a hook type hitch on a crane. The plaintiff suffered serious injuries as a result of the accident.

Mr. Adams filed suit against Falcon Equipment Corporation and its insurer, Homestead, alleging that the truck was defective in that its air brakes did not work, the air brakes did not have a reverse guard, the truck did not have flashing lights or an audible signal when the truck was backing up, and the truck was capable of being started while in gear. Kathy Adams also joined in the claim as a plaintiff, asserting a claim for loss of consortium due to her husband's injuries.

Falcon and Homestead filed a third party demand naming Breck Construction and Audubon Insurance Company (Audubon) as third party defendants, seeking indemnity against Breck. Falcon contended that the lease agreement concerning the truck included an indemnity clause whereby Breck would indemnify Falcon for any and all claims arising from the use of the truck involved in this accident. According to Falcon, the lease agreement also specified that Breck would obtain insurance on the leased equipment and would name Falcon as an additional insured.

On March 27, 1997, Breck and Audubon filed a motion for summary judgment, to dispose of Falcon and Homestead's third party claim for indemnity. Breck and Audubon argued that Falcon can only avail itself of the indemnity provision contained in the lease if the provision is unambiguous and expressed in unequivocal terms. Breck contended that in this case, the indemnity provision is ambiguous. Breck asserted that the truck was loaned to the company by Falcon and was not leased. Also, because a lease was not contemplated, Breck never obtained insurance on the truck as specified in the lease document. Breck further asserted that the deposition of Jim Murray, the Breck representative who [30754 La.App. 2 Cir. 3] negotiated the equipment agreement, shows that he was under the impression that the truck was loaned, not leased, because Breck did not pay rent for the truck. His understanding was that the loan of the truck was included because of the large amount of equipment actually leased by Breck. Mr. Murray also stated in his deposition that he did not read the indemnity or insurance clauses on the agreement and stated that in thirty-two years of negotiating equipment leases he had never read the terms and conditions on the leases. According to Breck, it was entitled to summary judgment on the indemnity issue because of the ambiguities in the indemnity clause.

On April 25, 1997, Falcon and Homestead Insurance Company filed a joint motion for summary judgment on the issue of Falcon's entitlement to indemnity from Breck for the claims raised in this case. Falcon and Homestead contended that Jim Murray, Breck's representative, signed a clear agreement to indemnify Falcon from any and all claims arising from the use of the truck involved in the accident and agreed to add Falcon as an additional insured on its insurance policy. Falcon asserted that the agreement was clear and unambiguous and is not affected by Breck's tort immunity.

On August 4, 1997, the trial court denied the motion for summary judgment filed on behalf of Breck and Audubon and granted the motion for summary judgment filed by Falcon and Homestead. The court rejected the argument that the indemnity clause is ambiguous and found the indemnity agreement to be valid and enforceable. The trial court ruled that Breck is liable to indemnify Falcon for any liability which might be placed on the corporation in connection with the claims brought by the plaintiffs in this matter. On August 6, 1997, the trial court certified this ruling as an appealable final judgment.

[30754 La.App. 2 Cir. 4] Homestead Insurance, Falcon's insurer, filed a motion for summary judgment asserting that its policy to Falcon limits coverage for non-specified operators of vehicles to the minimum statutory limits required by the state in which the accident occurred. Homestead argues that because Eric Herndon was not a specified operator of the vehicle, and since the Arkansas minimum limits are $25,000.00 per person or $50,000.00 per occurrence, the policy limit in this case, should Falcon be found liable, is $25,000.00.

On September 5, 1997, the trial court granted summary judgment on behalf of Homestead, finding that its liability is limited under the terms of the policy to $25,000.00, if Falcon is found to be liable. The judgment further specified that the court determined that there was no just reason for delay and the summary judgment was final for purposes of appeal.

On August 26, 1997, Breck and Audubon devolutively appealed from the summary judgment of August 4, 1997, finding that the indemnity agreement in the lease contract was valid and enforceable.

Falcon and the plaintiffs, Guyon and Kathy Adams, appealed from the September 5, 1997 grant of summary judgment in favor of Homestead, finding that its liability was limited to $25,000.000 under the terms of the policy.

SUMMARY JUDGMENT

The summary judgment procedure is designed to secure the just, speedy and inexpensive determination of every action allowed by law. Traweek v. Jackson, 30,248 (La.App. 2d Cir.2/25/98), 709 So.2d 867. Summary judgments are reviewed on appeal de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate. Schroeder v. Board of [30754 La.App. 2 Cir. 5] Supervisors of Louisiana State University, 591 So.2d 342 (La.1991); Traweek v. Jackson, supra.

In Louisiana, the law regarding summary judgment is set forth in La. C.C.P. art. 966. This article was amended by Acts 1996, 1 st Ex.Sess., No. 9 § 1 to legislatively overrule the jurisprudential presumption against summary judgment. The amendment "leveled the playing field" between the parties by allowing the supporting documents submitted by the two parties to be scrutinized equally and removing the overriding presumption in favor of trial on the merits. Hayes v. Autin, 96-287 (La.App. 3d Cir.12/26/96), 685 So.2d 691, writ denied, 97-0281 (La.3/14/97), 690 So.2d 41; Berzas v. OXY USA, Inc., 29,835 (La.App. 2d Cir.9/24/97), 699 So.2d 1149. A motion for summary judgment should be granted if the pleadings, depositions, answers to interrogatories, admissions on file and affidavits show that there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966; Mixon v. Progressive Specialty Co 29,698 (La.App. 2d Cir.6/18/97), 697 So.2d 662.

Amended again in 1997, La.C.C.P. art. 966 now states that if the moving party points out that there is an absence of factual support for one or more of the essential elements to the adverse party's claim, action, or defense, and the nonmoving party fails to produce factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact and summary judgment should be granted. Acts 1997, No. 483; Berzas v. OXY USA, Inc., supra. Further, La. C.C.P. art. 967 provides that when a motion for summary judgment is made and supported as provided above, an adverse party may not rest on his pleadings, but his responses, by affidavits or as otherwise provided above, must set forth specific facts showing that there is a [30754 La.App. 2 Cir. 6] genuine issue for...