Abramson v. Florida Gas Transmission Co.

• Decision Date: 30 November 1995
• Docket Number: Civ. A. No. 91-4255,93-2404.
• Citation: 908 F. Supp. 1389
• Parties: Aaron ABRAMSON, et al. v. FLORIDA GAS TRANSMISSION COMPANY, et al.
• Court: U.S. District Court — Eastern District of Louisiana

908 F. Supp. 1389

Aaron ABRAMSON, et al. v. FLORIDA GAS TRANSMISSION COMPANY, et al.

Civ. A. Nos. 91-4255, 93-2404.

United States District Court, E.D. Louisiana.

November 30, 1995.

Karen Delcambre McCarthy, Lanny R. Zatzkis, Yvette Anne D'Aunoy, Zatzkis & Associates, New Orleans, LA, Louis B. Merhige, Metairie, LA, for Aaron Abramson.

Louis B. Merhige, Metairie, LA, for Alfred Abramson, Joseph Abramson, Carol Abramson Schudmak, Eugenie Marrus Abramson, Steven M. Brainis, Joseph M. Brainis, David Brainis, Lucy Abramson Brainis, Debra Brainis Lester, Sara Brainis Rambin, and Ethel Abramson.

Michael Ray Mangham, Michael J. O'Shee, Mangham & Hardy, Lafayette, LA, Louis P. Soldano, Florida Gas Transmission Co., Houston, TX, for Florida Gas Transmission Co.

Bryan David Fisher, Hank Seldon Hannah, Hannah, Colvin & Pipes, Baton Rouge, LA, for Ralston & Associates, Inc.

Lawrence Emig Larmann, Dominic J. Ovella, W. Evan Plauché, Hailey, McNamara, et al., Metairie, LA, Russell Louis Sylvester, Brittain & Sylvester, Natchitoches, LA, for Liberty Mutual Insurance Group, defendant.

Eric Shuman, McGlinchey, Stafford, et al., New Orleans, LA, Richard W. Bryan, Douglas C. McAllister, Jackson & Campbell, Washington, DC, for National Union Fire Ins. Co. of Pittsburgh.

Stephen Louis Huber, Borrello, Huber & Dubuclet, Metairie, LA, Lawrence Emig Larmann, Dominic J. Ovella, W. Evan Plauché, Hailey, McNamara, et al., Metairie, LA, for Henkles & McCoy, Inc.

Russell Louis Sylvester, Brittain & Sylvester, Natchitoches, LA, for Liberty Mutual Insurance Company, third-party defendant.

ORDER AND REASONS

JONES, District Judge.

Pending before the Court is a "Cross-Motion of Defendant National Union Fire Insurance Company of Pittsburgh, Pa., for Summary Judgment."¹ The motion was taken under submission on a previous date without oral argument. Having reviewed the memoranda of the parties, the record and the applicable law, the Court DENIES the motion.

Background

Plaintiffs have asserted claims against defendants Florida Gas Transmission Company (hereinafter "Florida Gas") and Henkels & McCoy, Inc., for alleged damages to their property following a reconditioning project on a natural gas pipeline that traverses plaintiffs' property. Plaintiffs seek damages for various items, including but not limited to damages for material allegedly left on the property. Florida Gas owns the pipeline, and Henkels & McCoy was the reconditioning contractor.²

Defendant National Union Fire Insurance Company of Pittsburgh, Pa. (hereinafter "National Union"), issued two policies of insurance to Henkels & McCoy, with effective dates of October 1, 1989, to October 1, 1990, and October 1, 1990, to October 1, 1991 (hereinafter the "1989-90 policy" and "1990-91 policy").³ According to National Union, it assumes for purposes of the instant motion that coverage is sought under the 1989-90 policy, which is the policy in effect at the time of the pipeline reconditioning project.⁴ However, as noted by National Union, both policies contain the same exclusions at issue.⁵

National Union seeks summary judgment on three bases in an attempt to exclude coverage for the damages claimed by plaintiffs. First, National Union contends that under the 1989-90, coverage is excluded because the damages were "expected or intended from the standpoint of the insured," Henkels & McCoy. Second, National Union posits that the "Contractor's Endorsement" to its policy contains an applicable exclusion to policy coverage. Third, National Union asserts that the "Professional Liability Exclusion Endorsement" bars coverage in this matter.

In opposition, both Henkels & McCoy and Florida Gas argue that, under controlling Louisiana law, the intentional act exclusion is ambiguous and, hence, there are genuine issues of material fact that summary judgment. Further, both maintain that neither the Contractor's Endorsement nor the Professional Liability Exclusion Endorsement are applicable under the facts of this matter.

Law and Application

I. Standard of Review

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment is proper "if the pleadings, depositions, answer to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." (Emphasis added.) The mover first bears the burden of "coming forward with the absence of genuine issues of material fact...." Kinsey v. Farmland Industries, Inc., 39 F.3d 603, 606 (5th Cir.1994), citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986).

If the mover meets its burden, the nonmovant's burden of then showing a genuine issue of material fact "is not satisfied with `some metaphysical doubt as to the material facts,' by `conclusory allegations,' or by only a `scintilla' of evidence." Little v. Liquid Air Corporation, 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). Further, "factual controversies are resolved in favor of the nonmoving party, but only when there is an actual controversy, that is, when both parties have submitted evidence of contradictory facts." Id.

In other words, the inferences drawn from the underlying facts, however, must be viewed in a light most favorable to the nonmoving party. Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 588, 106 S.Ct. 1348, 1357, 89 L.Ed.2d 538 (1986). The substantive law determines materiality of facts, and only facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).

In essence, "the inquiry performed is the threshold inquiry of determining whether there is the need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Id. at 250, 106 S.Ct. at 2511.

II. Intentional Act Exclusion

The 1989-90 policy provides that National Union "will pay on behalf of the Insured that portion of the ultimate net loss in excess of the retained limit ... which the Insured will become legally obligated to pay as compensatory damages ... because of ... Property Damage Liability ... caused by an occurrence...."⁶ The policy defines "occurrence" in pertinent part as follows:

With respect to Personal Injury and Property Damage, the term occurrence means an event, including continuous or repeated exposure to conditions, which result sic in Personal Injury and Property Damage neither expected nor intended from the standpoint of the insured.⁷

National Union's contention as to this issue arises from Henkels & McCoy's motion for summary judgment against Florida Gas regarding indemnity, wherein Henkels & McCoy asserted that Florida Gas instructed Henkels & McCoy to deposit old polyethylene pipeline coating into the pipeline trench, that Henkels & McCoy did so, and that both Florida Gas and Henkels & McCoy knew that tar from the new pipeline coating would be deposited along the pipeline right-of-way.⁸ Hence, National Union argues that the intentional injury exclusion is applicable and that it owes no coverage under the policy.

The Louisiana Supreme Court recently summarized the law as to the intentional injury exclusion as at issue here as follows:⁹

Policies should be construed to effect, not deny, coverage. Any ambiguity in an exclusion should be narrowly construed in favor of coverage. The "expected or intended exclusion" has been held to be ambiguous. The insurer bears the burden of proving the applicability of the intentional injury exclusion. The purpose of the intentional injury exclusion is "... to prevent an insured from acting wrongfully with the security of knowing that his insurance company will `pay the piper' for the damages."

The exception, by its language, makes it clear that not all injuries resulting from an intentional act will be excluded, but only those injuries that were themselves intended. "The subjective intent of the insured, as well as his reasonable expectations as to the scope of his insurance coverage, will determine whether an act is intentional. An act is intended if the perpetrator desires the results of his action or he believes that the results are substantially certain to occur." As for the reasonable expectation of the insured regarding the scope of his coverage, this court has held:

... when minor bodily injury is intended, and such results, the injury is barred from coverage. When serious bodily injury is intended, and such results, the injury is also barred from coverage. When a severe injury of a given sort is intended and a severe injury of any sort occurs, coverage is also barred. But when minor injury is intended, and a substantially greater or more severe injury results, whether by chance, coincidence, accident, or whatever, coverage for the more severe injury is not barred.

"The insured's subjective intent or expectation must be determined not only from the insured's words before, at the time of, and after the pertinent conduct, but from all the facts and circumstances bearing on such intent or expectation." Such determinations of subjective intent are factual and much discretion will be given to the trier of fact.

Yount v. Maisano, 627 So.2d 148, 151-52 (La.1993) (citations omitted).

These principles are applicable as to property damage as well as personal injuries. See Great American Insurance Company v. Gaspard, 608 So.2d 981 (La.1992) (property damage sustained by owner and other tenants of shopping center when insured tenant intentionally set fire to his leased premises excluded from coverage under intentional injury exclusion identical to that at issue here).

National Union's argument, in essence, is that because Henkels & McCoy intentionally buried...