Gen. Accident Ins. Co. of Am. v. Aggreko, LLC

Decision Date17 December 2012
Docket NumberCivil Action No. 11-cv-1682
PartiesGeneral Accident Insurance Co. of America v. Aggreko, LLC
CourtU.S. District Court — Western District of Louisiana

Judge Tucker L. Melançon

Magistrate Judge C. Michael Hill


Before the Court is plaintiff General Accident Insurance Company of America's (General Accident) Motion for Summary Judgment, R. 20, its Memorandum in Support, R. 20-2, defendant Aggreko, LLC's (Aggreko) Memorandum in Opposition, R. 25, and General Accident's Reply Memorandum in Support, R. 33. Also before the Court is Aggreko's Motion for Partial Summary Judgment, R. 21,1 its Memorandum in Support, R. 21-3, General Accident's Response, R. 24, and Aggreko's Reply Memorandum in Support, R. 35.

For the reasons that follow, the Court will deny General Accident's Motion for Summary Judgment, R. 20, and will grant in part and deny in part Aggreko's Motion for Partial Summary Judgment, R. 21. Due to the parties' failure to adequately address all claims in their motions and supporting and opposition memoranda filed in connection therewith, the Court must defer issuing a final Judgment until the parties have been given the opportunity to file supplemental briefs in accordance with the Order that will issue herein. Under Fifth Circuit precedent and Federal Rule of Civil Procedure 56(f), a court may not grant summary judgment sua sponte on a ground not raised by the parties, see Wernecke v. Garcia, 452 F. App'x 479, 482 (5th Cir. 2011), which theCourt would otherwise be inclined to do, without giving notice to the parties in order for them to brief the issue.


There is no dispute between the parties as to the material facts. On March 17, 2000, General Accident issued a commercial general liability policy to Aggreko (Policy No. 0009918-14) ("Policy") covering the period from October 1, 1999 to October 1, 2000. R. 20-4, p. 1. Under the Policy, General Accident agreed to pay damages on Aggreko's behalf in "excess of any deductible amounts." R. 20-4, p. 39. The deductible amount set by an endorsement to the Policy was $41,250.00 per occurrence. R. 20-4, p. 39. The Policy stated in pertinent part that General Accident "may pay any part or all of the deductible amount to effect settlement of any claim or 'suit'" on behalf of its insured, Aggreko. R. 20-4, p. 40. "[U]pon notification of the action taken," the Policy stated that Aggreko would "promptly reimburse [General Accident] for such part of the deductible amount as has been paid by [General Accident]" to effect such a settlement of a claim or suit. R. 20-4, p. 40.

General Accident made fifteen separate payments to third parties settling property damage and personal injury claims against Aggreko that arose during the Policy's coverage period. Lynne Young Aff., R. 20-3. The first of these payments was made on July 20, 2000, and the final payment was made on January 17, 2002. R. 20-3; see R. 21-3. Each payment was subject to the Policy's deductible reimbursement provision. R. 20-4, p. 40. On December 15, 2010, Lynne Young, financial manager at OneBeacon Insurance, the successor entity to General Accident, sent a one-page letter to Aggreko, notifying Aggreko that it owed General Accident the sum of $117,181.00, representing the total of the deductible amounts paid by General Accident tothird parties on behalf of Aggreko. R. 20-6.2

The parties stipulated that the December 15, 2010 letter from Young was the first notice Aggreko received of payments made under the Policy, the amounts of the settlements, and the deductibles owed that form the basis of this litigation. R. 16. Aggreko failed to reimburse General Accident after receipt of the December 15 letter, and General Accident filed its complaint on September 19, 2011 alleging liability for breach of contract and unjust enrichment under Louisiana law. R. 1.3 In their June 15, 2012 Rule 26(f) Report, the parties stipulated that the total payment made by General Accident on behalf of Aggreko under the Policy was $159,131.87, rather than the $117,181.00 as stated in Young's letter. R. 16. Aggreko subsequently conceded in its September 17, 2012 Motion for Partial Summary Judgment that three claims settled under the Policy, representing $84,640.38 of the amount stipulated to in the Rule 26(f) Report as having been paid by General Accident, fell within ten years of General Accident's filing this suit. R. 21-3, p. 2.4


A motion for summary judgment shall be granted if the pleadings, depositions, and affidavits show that there is no genuine issue as to any material fact and that the moving party isentitled to judgment as a matter of law. Fed. R. Civ. P. 56; Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir. 1994) (en banc). Initially, the party moving for summary judgment must demonstrate the absence of any genuine issues of material fact. When a party seeking summary judgment bears the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if such evidence were uncontroverted at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). As to issues which the non-moving party has the burden of proof at trial, the moving party may satisfy this burden by demonstrating the absence of evidence supporting the non-moving party's claim. Id. If the moving party fails to carry this burden, his motion must be denied. If he succeeds, however, the burden shifts to the non-moving party to show that there is a genuine issue for trial.5 Id. at 322-23. Once the burden shifts to the respondent, he must direct the attention of the court to evidence in the record and set forth specific facts sufficient to establish that there is a genuine issue of material fact requiring a trial. Celotex Corp., 477 U.S. at 324; Fed. R. Civ. P. 56(e). There must be sufficient evidence favoring the non-moving party to support a verdict for that party. Anderson, 477 U.S. at 249; Wood v. Houston Belt & Terminal Ry., 958 F.2d 95, 97 (5th Cir. 1992). There is no genuine issue of material fact if, viewing the evidence in the light most favorable to the non-moving party, no reasonable trier of fact could find for the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

If no issue of fact is presented and if the mover is entitled to judgment as a matter of law,the court is required to render the judgment prayed for. Fed. R. Civ. P. 56(c); Celotex Corp., 477 U.S. at 322. Before it can find that there are no genuine issues of material fact, however, the court must be satisfied that no reasonable trier of fact could have found for the non-moving party. Id.

A. General Accident's Breach of Contract Claims

To decide the motions before the Court, two issues related to General Accident's breach of contract claims must be resolved, the first being whether General Accident's breach of contract claims for reimbursement for deductibles paid on behalf of Aggreko under the Policy are barred by Louisiana's prescription statute, Article 3499. General Accident contends that its December 15, 2010 letter, notifying Aggreko of the reimbursement amounts owed pursuant to the Policy, marked the beginning of the prescriptive period. R. 20-2, p. 5. Therefore, General Accident argues, it filed its Complaint well within the prescriptive period. R. 20-2, p. 5. Aggreko, on the other hand, asserts that the prescriptive period for each payment that General Accident made on its behalf commences on the date of payment, and as all but three of the deductible payments were made more than ten years prior to the filing of this litigation,Louisiana's prescriptive statute bars General Accident's recovery for all but those three payments that total $84,640.38. R. 21-3, p. 2.

The second issue related to General Accident's breach of contract claims is whether Louisiana law bars those claims because General Accident waited an unreasonable amount of time before making demand on Aggreko to reimburse it under the Policy. Aggreko asserts that General Accident "should not be allowed an indefinite amount of time in which to bring its reimbursement claims." R. 21-3, p. 6. Relying on Louisiana Civil Code Article 1773, Aggreko contends that General Accident's "notice of demand for reimbursement was not brought within a reasonable time period" as required by Louisiana law. R. 25, p. 7. General Accident asserts that there is no "rule of law that would cut off these private parties' right to bargain for a flexible reimbursement deadline in this case." R. 24, p. 4-5. General Accident further contends that to impose such a deadline for demand would "essentially rewrite" the contractual language the parties had agreed on. R. 24, p. 4-5.

1. Louisiana's Prescriptive Period for Breach of Contract Claims

Under Louisiana law, a contract "is an agreement by two or more parties whereby obligations are created, modified, or extinguished." La. Civ. Code Ann. art. 1906. An insurance policy is a specific type of contract "between the insured and the insurer and has the effect of law between the parties." Fleniken v. Entergy Corp., 99-3023, 99-3024, p. 6 (La. App. 1 Cir. 2/16/01); 790 So. 2d 64, 68, writs denied, 01-1269 (La. 6/15/01); 793 So. 2d 1250, and 01-1295 (La. 6/15/01); 793 So. 2d 1252. As a contract, an insurance policy "should be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil Code." Cadwallader v. Allstate Ins. Co., 02-1637, p. 3 (La. 6/27/03); 848 So. 2d 577, 580. In general,the "[i]nterpretation of a contract is the determination of the common intent of the parties." La. Civ. Code Ann. art. 2045. Whether the language used in the contract "is clear or ambiguous is a question of law." Cadwallader, 02-1637 at 4, 848 So. 2d at 580.

In interpreting the contract, the words of the contract "are to be construed using their plain, ordinary and generally prevailing meaning,...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT