Sher v. Lafayette Ins. Co.
| Decision Date | 08 April 2008 |
| Docket Number | No. 2007-C-2443.,No. 2007-C-2441.,2007-C-2441.,2007-C-2443. |
| Citation | 988 So.2d 186 |
| Parties | Joseph SHER v. LAFAYETTE INSURANCE COMPANY; United Fire & Casualty Company; The United Fire Group; Robert Jones; Wes Swank; Fred Vanderbrook; and Property Loss Consulting, Inc. |
| Court | Louisiana Supreme Court |
Dunbar, The Dudenhefer Law Firm, Frank C. Dudenhefer, Jr., New Orleans, for Respondent (2007-C-2441) and Applicant (2007-C-2443).
Edward Dirk Wegmann, New Orleans, Robert H. Shulman, Washington, DC, Harry Simms Hardin, III, Madeleine Fischer, Joseph J. Lowenthal, Jr., New Orleans, for Tulane Educational Fund Administrators, Amicus Curiae.
Wystan M. Ackerman, Hartford, CT, Kevin Eugene Thomas Cunningham, Baton Rouge, Stephen E. Goldman, Hartford, CT, for American Insurance Association, Amicus Curiae.
Stephen G. Bullock, Mary L. Dumestre, Andrea Leigh Fannin, Wayne Joseph Lee, Charles Louis Chassaignac, IV, New Orleans, William Ryan Acomb, for National Association of Mutual Insurance Company, Amicus Curiae.
Kevin Michael McGlone, James Michael Garner, Timothy Benedict Francis, Darnell Bludworth, New Orleans, for Xavier University of Louisiana, Amicus Curiae.
James D. Caldwell, Tallulah, for State of Louisiana, Amicus Curiae.
Richard J. Doren, Los Angeles, CA, Robert Irwin Siegel, New Orleans, James C. Ho, Dallas, TX, Daniel W. Nelson, for Lexington Insurance Company, Amicus Curiae.
Francis X. Neuner, Jr., Lafayette, for Property Casualty Insurers Association of America and Louisiana Association of Business and Industry, Amicus Curiae.
John W. Waters, Jr., Gregory John McDonald, New Orleans, Amy Bach, Mill Valley, CA, for Louisiana Citizens Property Insurance Company, Amicus Curiae.
Sean Patrick Mount, Daniel Michael Redmann, Dominic J. Ovella, Metairie, for Fidelity and Deposit Company of Maryland, Empire Fire and Marine Insurance Company, Empire Indemnity Insurance Company and Centre Insurance Company, Amicus Curiae.
Amy Bach, Mill Valley, CA, William F. Merlin, Jr., Deborah R. Totter, Mary Kestenbaum, Tampa, FL, for United Policyholders, Amicus Curiae.
Adrianne L. Baumgartner, Covington, for National Association of Mutual Insurance Companies, Amicus Curiae.
James McClendon Williams, John William Houghtaling, III, Metairie, for Gauthier Houghtaling & Williams LLP, Amicus Curiae.
Kevin Michael McGlone, Darnell Bludworth, James Michael Garner, New Orleans, for Imperial Trading Co., Inc., Amicus Curiae.
Larry Dewayne Dyess, for Glen Philips and Deborah Philips, Amicus Curiae.
Larry Dewayne Dyess, Darin McMullen, Philadelphia, PA, J.J. McKernan, Drew Averill Rainer, James Parkerson Roy, Lafayette, Norval Francis Elliot, III, Calvin Clifford Fayard, Jr., Denham Springs, John N. Ellison, Matthew D. Schultz, for Chehardy Representative Policyholders, Amicus Curiae.
Joseph Edward Cain, New Orleans, Michael Ryan Casey, Bruce Campbell Dean, Metairie, Soren Erik Gisleson, Russ Michel Herman, Stephen Jay Herman, Cynthia Green St. Amant, Allan Kanner, New Orleans, for Louisiana Association for Justice, Amicus Curiae.
We granted these consolidated writ applications in order to determine whether the courts below erred. For the reasons which follow, we affirm in part, reverse in part, and render judgment.
On August 29, 2005, Hurricane Katrina struck New Orleans and the surrounding area with devastating results. As a result of the storm, extremely high water attacked the levee system protecting the city, causing some of the levees to fail and inundating the majority of the city with water.
Joseph Sher, the plaintiff, owned and lived in a five-unit apartment building in New Orleans at 1410 Broadway Street. Mr. Sher did not evacuate prior to the storm and was subsequently trapped by the flood waters, which reached a level of four feet in the lower level of the building. After his evacuation, plaintiff traveled to Baton Rouge and resided with one of his children.
Plaintiff had obtained a commercial all-risk insurance policy covering the building from Lafayette Insurance Company in 1989, which coverage was in effect throughout the time period in question. After the hurricane, plaintiff inspected his property and informed Lafayette of his claim. Lafayette assigned the claim to Property Loss Consulting, Inc. (PLC), on October 5, 2005, and Robert Jones conducted an inspection of the building on November 1, 2005. Following the inspection, Lafayette determined that most of the building's damage was due to poor maintenance, disrepair, and flooding, and estimated plaintiff's damages as $3,307.09. After subtracting a hurricane deductible of $1,000 and a premium charge of $2,037, Lafayette issued plaintiff a check in the amount of $270.09.
After a second inspection of the premises by Fred Vanderbrook, a consulting engineer hired by Lafayette, Lafayette issued plaintiff another check in the amount of $2,484.99. Plaintiff did not negotiate either check.
After continuously disputing Lafayette's damage estimate and sending Lafayette additional estimates and repair invoices, plaintiff filed suit on August 28, 2006 against Lafayette, United Fire and Casualty Company (UFCC), United Fire Group (UFG), Robert Jones, Wes Swank, Fred Vanderbrook, and PLC in Civil District Court in Orleans Parish. Plaintiff's petition included claims for insurance coverage, bad faith penalties, attorney's fees and costs, and bad faith breach of insurance contract. Lafayette answered asserting the declinatory exception of lis pendens, which exception was dismissed. UFCC and UFG filed motions for summary judgment, asserting that they were not liable to plaintiff. Plaintiff dismissed UFCC and UFG without prejudice. Vanderbrook filed an exception of vagueness and/or ambiguity, after which plaintiff dismissed him without prejudice.
Lafayette filed a motion for leave to file third party demands against the Federal Emergency Management Agency and the National Flood Insurance Program, which the trial court denied due to time constraints.
Plaintiff filed a motion for partial summary judgment, asking that the flood exclusion in Lafayette's policy be declared ambiguous. The trial court granted the motion for partial summary judgment, ruling that the flood exclusion was ambiguous, and that the policy covered man-made events.
Lafayette filed a motion in limine to exclude new theories of recovery not disclosed prior to trial, which the trial court granted. Plaintiff filed a motion in limine to exclude limitations or exclusions not specifically pled in Lafayette's answer as affirmative defenses, which the trial court granted. Lafayette then filed a motion in limine to exclude prejudicial statements, including a statement that plaintiff was a Holocaust survivor. The trial court denied the motion as to mention of the Holocaust on a limited basis.
The trial was conducted in two phases over five days, the first phase concerning liability and damages, and the second concerning only Lafayette's alleged arbitrary and capricious behavior. The jury returned a verdict against Lafayette and awarded the following damages:
Building Damage Above the Basement $175,850.00
Building Damage In the Basement 144,300.00
Lost Rents 17,350.00
Business Personal Property 31,577.00
Penalties Pursuant to R.S. 22:658 184,538.50
___________
TOTAL $553,615.50
Following the trial, plaintiff dismissed his claims, with a reservation of rights, against Robert Jones, Wes Swank, and PLC. The trial court assessed attorney's fees and costs as follows:
Costs Pursuant to C.C.P. art. 1920 $ 16,288.60
Costs Pursuant to C.C.P. art. 970 42,020.24
Attorney's Fees Pursuant to C.C. art. 1997
and/or R.S. 22:658 258,728.00
___________
TOTAL $317,036.84
The total judgment against Lafayette, including attorney's fees and costs assessed by the trial judge, totaled $870,652.34.
Lafayette filed a suspensive appeal asserting several claims of error, which plaintiff answered, asserting his own claims of error. The court of appeal amended in part, affirmed and rendered as amended. The awards as amended by the court of appeal are as follows:
Building Damage Above the Basement $175,850.00
Building Damage In the Basement 144,300.00
Lost Rents 17,350.00
Business Personal Property 31,577.00
Penalties Pursuant to R.S. 22:658 92,269.25
___________
TOTAL $461,346.25
Costs Pursuant to C.C.P. art. 1920 $ 16,288.60
Costs Pursuant to C.C.P. art. 970 42,020.24
Attorney's Fees Pursuant to C.C. art. 1997
and/or R.S. 22:658 0.00
___________
TOTAL $ 53,308.84
The total award as amended and rendered by the court of appeal is $514,655.09.
Lafayette argues that the court of appeal erred in affirming the trial court's granting of plaintiff's partial motion for summary judgment by determining that the meaning of the word "flood," as used in the policy, was ambiguous. We agree.
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