Boston Old Colony Ins. v. Tiner Associates Inc.
| Decision Date | 09 April 2002 |
| Docket Number | No. 01-30193.,01-30193. |
| Citation | 288 F.3d 222 |
| Parties | BOSTON OLD COLONY INSURANCE CO., Plaintiff-Counter Defendant-Appellee-Cross Appellant, State of Louisiana, through the Office of Risk Management, division of Administration, Office of the Governor; Louisiana Public Broadcasting, Intervenor Plaintiffs-Appellees, v. TINER ASSOCIATES INC., Etc.; et al., Defendants, HRC Armco Inc., Defendant-Intervenor Defendant-Cross Defendant-Appellee, and Stainless Inc., Defendant-Intervenor Defendant-Appellee, and Allied Resource Management of Florida Inc., Defendant-Intervenor Defendant-Cross Claimant-Cross Defendant-Appellee, v. General Star Indemnity Co., Defendant-Intervenor Defendant-Cross Defendant-Third Party Plaintiff-Counter Claimant-Appellant-Cross-Appellee, v. Marine Office of America Corporation; National Union Fire Ins. Co. of Pittsburgh, Pennsylvania, Third Party Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Andrew C. Wilson (argued), Jedd Spencer Malish, Burke & Mayer, New Orleans, LA, for Boston Old Colony Ins. Co. and Marine Office of America Corp.
Jerry W. Deason, Jr., Law Offices of Charles F. Wagner, Alexandria, LA, for State of Louisiana and Louisiana Public Broadcasting.
E. John Litchfield, Berrigan, Litchfield, Schonekas, Mann, Traina & Thompson, New Orleans, LA, for Stainless Inc.
David F. Bienvenu (argued), Shawn Louise Holahan, David D. Bravo, Hoffman, Siegel, Seydel, Bienvenu, Centola & Cordes, New Orleans, LA, for HRC Armco Inc., Allied Resource Management of Florida Inc. and National Union Fire Ins. Co. of Pittsburgh, PA.
Raymond Joseph Pajares (argued), Alfred Raymond Gould, Jr., Aubert & Pajares, Covington, LA, for General Star Indem. Co.
Appeals from the United States District Court for the Western District of Louisiana.
Before HIGGINBOTHAM, DeMOSS and BENAVIDES, Circuit Judges.
This case arises from the collapse of a television transmission tower owned by KNOE Television ("KNOE") in Riverton, Louisiana. Most of the claims resulting from the tower's collapse were resolved on summary judgment. A jury awarded over $4 million in damages to KNOE's first party insurer, Boston Old Colony ("BOC"), and against General Star Indemnity Co. ("General Star"), the excess liability insurer for Tower Network Services ("TNS"). General Star appeals from a number of summary judgment and evidentiary rulings of the district court. In turn, BOC cross-appeals on two issues relating to the district court's judgment on the jury verdict. After a review of the relevant facts, we address these issues in turn.
On March 20, 1997, a television transmission tower owned by KNOE collapsed and was completely destroyed. Before the collapse, KNOE had contracted with TNS for maintenance and repair work on the tower. At the time of the collapse, a repair crew was working on the tower, installing "diagonals," thin metal rods which prevent the tower from twisting. The post-accident investigation indicated that the sole cause of the incident was the failure on the part of the tower crew to use a temporary brace to support the tower during the removal of the diagonals, which resulted in the tower becoming unstable and collapsing.
TNS is a contractor specializing in the repair and maintenance of towers. Before the collapse, TNS had contracted with HRC Armco, Inc. ("Armco") for administrative employee services. In turn, this contract was assigned to Armco's sister corporation, Allied Resource Management of Florida ("Allied"). Thus, Allied actually paid the tower crew and performed a number of other administrative functions in relation to the workers.
Due to the destruction of KNOE's tower, a new tower was built. Before the collapse, KNOE was using the tower to broadcast its signal. Louisiana Public Broadcasting ("LPB") was also using the tower pursuant to a philanthropic donation of space on the tower by the owner of KNOE, which would expire in 2005. After the new tower was built, KNOE leased tower space to LPB for a period of 40 years, in exchange for a one-time payment of $1.1 million.
BOC, the first party insurer of KNOE, made payments to or on behalf of KNOE of approximately $5 million for the new tower and transmitter, business interruption losses and other expenses related to the loss. On May 22, 1997, BOC filed a Petition for Damages in Louisiana state court against TNS; TNS's primary liability insurer, Nautilus Ins. Co. ("Nautilus"); TNS's excess liability insurer, General Star; Armco; Allied; and the builder of the tower, Stainless, Inc. ("Stainless"). BOC alleged that the collapse was caused by the negligence of persons for whom TNS, Armco, or Allied were responsible; or by design defects for which Stainless was responsible. The case was removed to federal court on the basis of diversity jurisdiction in June 1997. KNOE intervened to recover damages and expenses not covered by the BOC policy. The State of Louisiana also intervened to assert a claim on behalf of LPB.
On July 19, 1999, Armco and Allied filed a cross-claim against TNS, Nautilus, and General Star, seeking indemnity and/or contribution. General Star filed a cross-claim against Armco and Allied for indemnity and/or contribution and filed a third-party complaint against their insurer, National Union Fire Ins. Co. ("National Union").
A number of motions for partial summary judgment and motions in limine were filed, and all claims except those by BOC against General Star were resolved or dismissed before trial. At trial, the jury rendered a verdict in favor of BOC and against General Star, and the court entered judgment in favor of BOC and against General Star in the amount of $4,432,624 plus pre- and post-judgment interest.
General Star appeals from several district court rulings on motions for partial summary judgment and motions in limine. BOC cross-appeals with respect to calculation of damages and interest.
In March, 2000, General Star moved for partial summary judgment in its favor on the grounds that the "care, custody, or control" exclusion in its policy excluded coverage for the damages sought by BOC. The district court denied General Star's motion and rendered summary judgment against General Star and in favor of BOC, Armco, TNS, KNOE, and the State of Louisiana on this issue.
We review the district court's summary judgment decision de novo, applying the same standard on appeal that is applied by the district court. See Pratt v. City of Houston, Texas, 247 F.3d 601, 605-606 (5th Cir.2001). Summary judgment may be granted if there is no genuine issue as to material fact and the moving party is entitled to a judgment as a matter of law. See Fed.R.Civ.P. 56(c). In determining whether summary judgment is appropriate, the courts should view the evidence introduced and all factual inferences from that evidence in the light most favorable to the party opposing the motion and all reasonable doubts about the facts should be resolved in favor of the nonmoving litigant. See Impossible Elec. Techniques, Inc. v. Wackenhut Protective Sys., Inc., 669 F.2d 1026, 1031 (5th Cir.1982).
The General Star insurance policy contains a "care, custody or control exclusion," which provides:
"This policy does not apply to property damage:
...
(c) ... property in the care, custody, or control of the Insured or property over which the Insured for any purpose is exercising physical control."
The parties agree that Louisiana law applies to the interpretation of the exclusion. We apply Louisiana state law as interpreted by the Louisiana Supreme Court; if that court has not definitively ruled on a particular issue, we must predict how it would decide the issue. Harken Exploration Co. v. Sphere Drake Ins. PLC, 261 F.3d 466, 471 n. 3 (5th Cir.2001).
We find that the "care, custody, or control" exclusion does not apply in this case. Under Louisiana law, insurance policies are contracts, and the parties' intent as reflected by the language of the policy determines the extent of coverage. Reynolds v. Select Props., Ltd., 634 So.2d 1180, 1183 (La.1994). Under General Star's interpretation of the exclusion, TNS would lose virtually all liability insurance coverage. TNS is in the sole business of inspecting, maintaining, and repairing towers. So to interpret the exclusion as applying whenever TNS works on a tower "would be an anomalous result." Aladdin Oil Co. v. Rayburn Well Svc., Inc., 202 So.2d 477, 490 (La.App. 4th Cir.1967). "If this was intended, the insurer should have indicated more specifically its intent[.]" Id. ().
In any case, TNS did not exercise "care, custody, or control" over the tower because the tower was only incidental to the specific sections on which repairs were made. "[D]amaged property or premises merely incidental or adjacent to the contracted object upon which work is being performed by the insured is not within the `care, custody or control' of the insured for purposes of the exclusion clause in question, even though he might be permitted access thereto during the performance of the contract." See Thomas W. Hooley & Sons v. Zurich General Acc. & Liability Ins. Co., 235 La. 289, 103 So.2d 449, 450-51 (1958).1
Because TNS did not have care, custody or control of the tower within the meaning of the exclusion in General Star's policy, we affirm the district court's grant of summary judgment on this issue.
On cross-motions for summary judgment filed by TNS, Nautilus, and General Star on one hand, and Armco, Allied and National Union on the other, the district court granted summary judgment for the latter...
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