Lloyd'S v. First Petroleum, Inc., CIVIL ACTION NO. 2:13-CV-2226

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Western District of Louisiana
Decision Date01 October 2014
Docket NumberCIVIL ACTION NO. 2:13-CV-2226




October 1, 2014




Before the court is a Motion for Summary Judgment [Doc. 18], filed by the plaintiff, Certain Underwriters at Lloyd's, London (plaintiff), to which First Petroleum, Incorporated (First Petroleum), has filed an Opposition [Doc. 20] and the plaintiff has filed a Reply [Doc. 25]. For the following reasons, the plaintiff's Motion [Doc. 18] is hereby GRANTED.


The plaintiff issued a commercial general liability policy (the policy) to Swati Enterprises, Incorporated, and Mohammad Swati for the policy period from May 4, 2011, to May 4, 2012.1 The policy lists those persons and entities insured under the policy, which includes Shujat Swati, who at the time of the accident herein was the president and sole shareholder of First Petroleum.2

First Petroleum was originally incorporated by Mohammad Swati for the purpose of operating CJ's Exxon, a convenience store that was the location of the alleged incident giving

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rise the underlying lawsuit which itself gave rise to this action.3 CJ's Exxon is also listed on the policy's "Schedule of Locations," though the policy does not list it as an insured entity.4

Roderick L. Davis alleges that he sustained severe injuries in a physical altercation with Harold "Trey" Hargrave at CJ's Exxon on or about December 1, 2011.5 Mr. Davis and his wife, Stephanie Davis, brought suit against Mr. Hargrave, and First Petroleum, for monetary damages (the underlying lawsuit).6 Mr. and Mrs. Davis allege that First Petroleum was negligent, and is strictly liable for Mr. Davis' injuries.7

The plaintiff filed suit seeking a declaratory judgment, claiming that First Petroleum is neither a "named insured," nor an "additional insured," and does not fit the criteria of "Who is an Insured," as set forth in the policy.8 The plaintiff's chief contention is that, although the underlying lawsuit identifies CJ's Exxon as the location of the accident, it neither names CJ's Exxon, nor any other insured person or entity, as party defendants.9 The plaintiff claims that the policy's terms only obligate the plaintiff to provide a defense to "the insured" for suits seeking damages for bodily injury.10 The plaintiff also states that, although Shujat Swati was reportedly the president and director of First Petroleum when the accident occurred, and Shujat Swati is listed as an insured party, that coverage is not imparted to First Petroleum under the terms of the policy.11

First Petroleum acknowledges that it is not listed as an insured party on the policy, but urges the court to draw legal significance from the fact that CJ's Exxon was listed on the policy

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as a location owned, rented, or occupied by the named insureds.12 First Petroleum claims that it was their intent in purchasing the policy to secure general liability coverage for First Petroleum as well as for the CJ's Exxon store.13 First Petroleum further asserts that their company's exclusion from the final policy was the fault of either its insurance agent or the insurer.14 In the affidavit of Mr. Shujat Swati, he claims that at all times pertinent hereto, CJ's Exxon was the only store operated by First Petroleum, and that First Petroleum frequently operated under the name "First Petroleum d/b/a CJ's Exxon."15

Apparently, Brian McGee, an employee of Swati Enterprises, Incorporated, was tasked with renewing Swati Enterprises, Incorporated's, policy of insurance with its local insurance agency, Brandon Rose Insurance Agency (the local agency).16 Mr. McGee provided the local agency with a spreadsheet containing the many store locations owned and operated by the Swati family that were in need of coverage.17 However, while the spreadsheet contained property descriptions, it evidently did not state which legal entities were in need of coverage.

First Petroleum claims that it does not know why it was not included in the policy, and that this alleged oversight had never been noticed prior to the commencement of the underlying lawsuit.18 It argues that, because discovery has not been conducted, testimony and evidence has not yet been discovered which may flush out facts that will determine why First Petroleum was not listed as an insured party on the policy.19 The Swatis sold all of their stock in First Petroleum to Mohammad Hossain and Farhana Saddiquee, on July 20, 2012.20

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A grant of summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). Summary judgment may be granted when "the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To survive a motion for summary judgment, "[t]he nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial."' Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted) (emphasis deleted). "A genuine issue of material fact exists if the record, taken as a whole, could lead a rational trier of fact to find for the non-moving party." Dreyer v. Yelverton, 291 Fed. App'x 571, 576 (5th Cir. 2008) (citing Tubos de Acero de Mexico, S.A. v. Am. Int'l Inv. Corp., 292 F.3d 471, 478 (5th Cir.2002)). The court must view "all facts and evidence in the light most favorable to the non-moving party when considering a motion for summary judgment." Weeks Marine, Inc. v. Standard Concrete Products, Inc., 737 F.3d 365, 368-69 (5th Cir. 2013) (citing Dameware Dev., L.L.C. v. Am. Gen. Life Ins. Co., 688 F.3d 203, 206-07 (5th Cir.2012)) (additional citations omitted).

Summary judgment may be granted before discovery takes place; if a party is unable to defend such a motion, a request for continuance for further discovery is his remedy. Washington v. Allstate Ins. Co., 901 F.2d 1281, 1285 (5th Cir. 1990) (citing New Am. Shipbuilders, Inc. v. United States, 871 F.2d 1077, 1081 (Fed. Cir. 1989)).

If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits or declarations or to take discovery; or (3) issue any other appropriate order.

FED. R. CIV. P. 56(d).

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The parties dispute the applicable state law which should govern this policy.21 When a federal court's subject matter jurisdiction is predicated upon diversity of citizenship, the choice of law rules of the forum state govern. Roberts v. Energy Dev. Corp., 104 F.3d 782, 786 (5th Cir. 1997) (citing Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487 (1941)). Article 3537 of the Louisiana Civil Code states that, in order to determine which applicable law governs, courts must establish which state's laws "would be most seriously impaired if its law were not applied to that issue." LA. CIV. CODE ANN. art. 3537.

That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties; (2) the nature, type, and purpose of the contract; and (3) the policies referred to in Article 3515, as well as the policies of facilitating the orderly planning of transactions, of promoting multistate commercial intercourse, and of protecting one party from undue imposition by the other.

LA. CIV. CODE ANN. art. 3537.

With regard to issues of insurance policy interpretation, "Louisiana courts generally choose the law of the state in which the insurance policy in question was issued to govern the interpretation of the terms of the policy." Woodfield v. Bowman, 193 F.3d 354, 360 (5th Cir. 1999) (citing Anderson v. Oliver, 705 So. 2d 301, 305-06 (La. Ct. App. 1998) (additional citations...

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