Niemann v. Crosby Dev. Co.

• Decision Date: 03 May 2012
• Docket Number: No. 2011 CA 1337.,2011 CA 1337.
• Citation: 92 So.3d 1039
• Parties: Jason NIEMANN husband of/and Renee Niemann v. CROSBY DEVELOPMENT COMPANY, L.L.C.; Lakeside Village Development, L.L.C.; John Doe Supplier; ABC Insurance Company; 123 Insurance Company; XYZ Insurance Company.
• Court: Court of Appeal of Louisiana — District of US

92 So.3d 1039

Jason NIEMANN husband of/and Renee Niemann

v.CROSBY DEVELOPMENT COMPANY, L.L.C.; Lakeside Village Development, L.L.C.; John Doe Supplier; ABC Insurance Company; 123 Insurance Company; XYZ Insurance Company.

No. 2011 CA 1337.

Court of Appeal of Louisiana, First Circuit.

May 3, 2012.

Hugh P. Lambert, Cayce C. Peterson, Gregory P. DiLeo, Jennifer B. Eagan, Julie M. Jochum, Allan Kanner, Cynthia St. Amant, Melissa M. Fuselier, New Orleans, LA, for Plaintiffs–Appellants, Jason Niemann and Renee Niemann.

George B. Hall, Jr., Katie B. Whitman, New Orleans, LA, for Defendant–Appellee, American Empire Surplus Lines Ins. Co.

George P. Hebbler, Jr., Kelly F. Walsh, Metairie, LA, for Defendant–Appellee, Catlin Specialty Insurance Company.

Sidney W. Degan, III, Foster P. Nash, III, Stephanie L. Cheralla, New Orleans, LA, for Defendants–Appellees, Crosby Development Co., L.L.C. and Lakeside Village Development, L.L.C.

Keely Y. Scott, Catherine S. St. Pierre, Leigh Groves, Baton Rouge, LA for Defendant–Appellee, Calmar Construction Co., Inc.

Before CARTER, C.J., PARRO, and HIGGINBOTHAM, JJ.

HIGGINBOTHAM, J.

[1 Cir. 3]The plaintiff homeowners appeal a summary judgment dismissing their claims against a subcontractor's commercial general liability insurer for property damage alleged to have resulted from defective Chinese-manufactured drywall that the subcontractor installed in their home before they purchased it. For the following reasons, we vacate the judgment, sustain the peremptory exception of no right of action noticed by this court on our own motion, and remand for further proceedings consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

In February 2006, Crosby Development Company, L.L.C. (Crosby) designed and began construction of a house located at 201 Rue Esplanade in Lakeside Village Subdivision in Mandeville, Louisiana. On April 26, 2006, a subcontractor, Calmar Construction Company, L.L.C. (Calmar), installed Chinese-manufactured drywall (Chinese drywall) in the house. On November 1, 2007, the plaintiffs, Jason and Renee Niemann (the Niemanns), purchased the home from the subdivision developer, Lakeside Village Development, L.L.C. (Lakeside).

Approximately two-and-a-half years after they purchased the home, the Niemanns instituted this action on May 24, 2010. They sought damages due to alleged breach of warranties and negligence regarding the installation of defective Chinese drywall in their home.¹ The Niemanns sued Crosby, Calmar, and Lakeside, as well as each defendant's commercial general liability (CGL) insurer. The Niemanns alleged that their house had redhibitory defects as a result of the installation of the defective Chinese drywall. They also alleged that the builder, developer, and subcontractor all knew or should have known of the defects, but [1 Cir. 4]failed to disclose them to the Niemanns.² The Niemanns claimed they were not aware that their new home contained defective Chinese drywall at the time of the sale, and had they known, they would not have made the purchase. They also claimed that the Chinese drywall caused them damages, economic loss, and rendered their home defective, unfit, and useless for its intended purpose.

From July 16, 2004, through July 16, 2007, Calmar was continuously insured by defendant, American Empire Surplus Lines Insurance Company (American Empire), through three consecutive CGL policies of excess liability insurance that were issued and renewed annually. American Empire filed a motion for summary judgment in response to the Niemanns' lawsuit, maintaining that the last CGL policy issued by American Empire to Calmar expired before the Niemanns purchased the house and before the Niemanns became aware of the defective Chinese drywall that had been installed in the house. Accordingly, because the Niemanns' property damage did not manifest itself during any of the relevant CGL policy periods, American Empire asserted that insurance coverage for Calmar's alleged liability was never triggered, and therefore, it did not provide coverage for the Niemanns' claims against Calmar. The trial court agreed with American Empire's assertion that coverage was never triggered, and after a hearing on January 26, 2011, the trial court granted summary judgment in favor of American Empire. A judgment dismissing, with prejudice, the Niemanns' claims against American Empire was signed on February 8, 2011. The Niemanns appealed.

On appeal, the Niemanns maintain that the trial court incorrectly applied the manifestation trigger theory to this third-party insurance claim for construction [1 Cir. 5]defects.³ They also argue that American Empire's CGL policy contains ambiguous provisions that should be construed against American Empire. Alternatively, the Niemanns contend that the trial court erred in dismissing their claims before adequate discovery was conducted. However, for the following reasons, we do not reach the merits of any of the Niemanns' arguments regarding the trial court's grant of summary judgment in favor of American Empire. Instead, we sustain the peremptory exception of no right of action noticed by this court on our own motion. ⁴

RECENT JURISPRUDENCE

In a recent decision, Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., 2010–2267 (La.10/25/11), 79 So.3d 246, the Louisiana Supreme Court held that a subsequent purchaser of land, which had allegedly been contaminated with radioactive material more than two decades prior to the sale, had no right of action against a third party for non-apparent property damages inflicted on the property before the sale, in the absence of an assignment of or subrogation to that right.⁵ In Eagle Pipe, the supreme court specifically noted that the various theories of [1 Cir. 6]insurance contract interpretation regarding coverage triggers were not applicable to the right of action analysis, and our focus should be premised on the basic understanding that damage to property in Louisiana is considered as damage to the owner's rights in the property. See Eagle Pipe, 79 So.3d at 277–78 n. 75. Thus, the supreme court articulated an issue in Eagle Pipe that is pertinent to this appeal: whether a subsequent purchaser of property has the right to bring suit against a third party and seek damages for injury to its property that was inflicted before the purchaser became owner of the property.

Because the objection of no right of action was not raised by the parties to this appeal and that issue had the potential of mooting our consideration of third-party insurance coverage in this case, this court issued an interim order, while the appeal was pending, requesting that the parties file supplemental briefs in light of Eagle Pipe. We asked the parties to specifically address whether the Niemanns, as subsequent purchasers, have a right of action against the third-party subcontractor, Calmar, and Calmar's CGL insurer, American Empire, for non-apparent damages that were inflicted on the property prior to the purchase of their home. The parties timely filed supplemental briefs as ordered. Additionally, the Niemanns filed an unopposed motion to supplement the record on appeal with documents, including the act of sale between the Niemanns and the previous owner, Lakeside. The Niemanns contend that the documents were produced by Lakeside in response to the Niemanns' discovery requests for production. The Niemanns insist that the documents contain evidence of the Niemanns' subrogation to the right of action for damages against a third party. The Niemanns' motion to supplement was referred to the merits of this appeal.

MOTION TO SUPPLEMENT APPELLATE RECORD

At the outset, we note that the Niemanns, as appellants, are charged with the responsibility of completeness of the record for appellate review, and the [1 Cir. 7]inadequacy of the record is imputable to them. See Luper v. Wal–Mart Stores, 2002–0806 (La.App. 1st Cir.3/28/03), 844 So.2d 329, 333 n. 3. When the Niemanns appealed the trial court's grant of summary judgment in favor of American Empire, they designated the portions of the record that they considered necessary for their appeal, in accordance with La. C.C.P. art. 2128. As an appellate court, we have no jurisdiction to review evidence that is not in the record on appeal, and we cannot receive new evidence. City of Hammond v. Parish of Tangipahoa, 2007–0574 (La.App. 1st Cir.3/26/08), 985 So.2d 171, 176;Pinegar v. Harris, 2006–2489 (La.App. 1st Cir.5/4/07), 961 So.2d 1246, 1249. An appellate court must render any judgment which is just, legal, and proper upon the record on appeal.La. C.C.P. art. 2164. The record on appeal is that which is sent by the trial court to the appellate court and includes the pleadings, court minutes, transcripts, jury instructions (if applicable), judgments, and other rulings, unless otherwise designated. SeeLa. C.C.P. art. 2127 and 2128; Official Revision Comment (d) for La. C.C.P. art. 2127; Tranum v. Hebert, 581 So.2d 1023, 1026 (La.App. 1st Cir.), writ denied,584 So.2d 1169 (La.1991).

We further note that appellate briefs are not part of the record, and an appellate court has no authority to consider on appeal facts referred to in argument of counsel, in such briefs, or in exhibits containing matters that are not in the pleadings or evidence, and as such, are outside the record. Tranum, 581 So.2d at 1026–27;Franklin v. City of Baton Rouge, 525 So.2d 674, 675 (La.App. 1st Cir.1988). Notably, the documents on which the Niemanns rely in their motion to supplement were allegedly filed as discovery responses but never actually filed in the trial court record or admitted into evidence at the hearing on American Empire's motion for summary judgment. Discovery responses are not evidence. See Realty Mart, Inc. v. Louisiana Bd. of Tax Appeals, 336 So.2d 52, 54 (La.App. 1st Cir.1976). “Evidence” is testimony and matter that has actually been [1 Cir. 8]presented at trial. Id. Therefore, facts obtained through...