Opinion ID: 4517629
Heading Depth: 2
Heading Rank: 1

Heading: Louisiana Contract Principles

Text: “An insurance policy is a contract between the parties and should be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil Code.” Cadwallader v. Allstate Ins. Co., 848 So. 2d 577, 580 (La. 2003). “The words of a contract must be given their generally prevailing meaning.” La. Civ. Code art. 2047 (2019). “When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent.” Id. art. 2046; see also Cadwallader, 848 So. 2d at 580 (“If the policy wording at issue is clear and unambiguously expresses the parties’ intent, the insurance contract must be enforced as written.”). “Words and phrases used in an insurance policy are to be construed using their plain, ordinary and generally prevailing meaning, unless the words have acquired a technical meaning.” Cadwallader, 848 So. 2d at 580. “Courts lack the authority to alter the terms of insurance contracts under the guise of contractual interpretation when the policy’s provisions are couched in unambiguous terms.” Id. Courts should not “create an ambiguity where none exists.” Id. However, “[a]mbiguous policy provisions are generally construed against the insurer and in favor of coverage.” Id.; see also La. Civ. Code art. 2056. This is known as Louisiana’s “rule of strict construction.” Cadwallader, 848 So. 2d at 580. The rule applies “only if the ambiguous policy provision is susceptible to two or more reasonable interpretations,” meaning that “each of the alternative interpretations must be reasonable.” Id. (citing Carrier v. Reliance Ins. Co., 759 So. 2d 37, 43–44 (La. 2000)). 8 Case: 19-30190 Document: 00515350430 Page: 9 Date Filed: 03/18/2020 No. 19-30190 The burden rests with the insured to prove that an insurance policy covers a particular claim. Jones v. Estate of Santiago, 870 So. 2d 1002, 1010 (La. 2004). Here, the dispute concerns the scope of the insuring clause, not the scope of any exclusion. Therefore, IberiaBank bears the burden of proving that the DOJ Settlement is covered by the Policies. In the context of this case, that means that IberiaBank must prove that the government is a “third party client” and that IberiaBank rendered “Professional Services” to the government in its role as a DE Lender.