Court Opinion

ID: 32655
Source: CourtListenerOpinion
Date Created: 2010-04-25 18:56:07+00
Date Added: 2024-06-11T16:49:37.018521
License: Public Domain

United States Court of Appeals
                                                                   Fifth Circuit
                                                                F I L E D
                                                              September 16, 2003
                    UNITED STATES COURT OF APPEALS
                         For the Fifth Circuit              Charles R. Fulbruge III
                                                                    Clerk

                             No. 02-31034

                        EDDIE C EDWARDS; ET AL

                                            Plaintiffs,

             BRAMBLES EQUIPMENT SERVICES, INC; ET AL

                                            Defendants,

                  BRAMBLES EQUIPMENT SERVICES, INC.,

                         Defendant-Third Party Plaintiff-Appellant,

                                VERSUS

                       TRAVELERS INDEMNITY CO.,

                                  Third Party Defendant-Appellee.

          Appeal from the United States District Court

              For the Eastern District of Louisiana

                               01-CV-892

Before EMILIO M. GARZA and DENNIS, Circuit Judges, and VANCE,*

District Judge.

____________________
     *
      District Judge of the Eastern District of Louisiana, sitting
by designation.
PER CURIAM.**

     In this insurance coverage dispute, an equipment rental

company, Brambles Equipment Services, Inc., sued its customer's

comprehensive general liability carrier, Travelers Indemnity

Company.   Brambles sought to require Travelers to defend and

indemnify it against the personal injury claims of its customer's

employee under the "additional insured" endorsement of the

customer's comprehensive general liability policy.            The district

court granted Travelers' motion for summary judgment, and

Brambles now appeals the decision.         For the following reasons, we

AFFIRM.

I.   FACTS AND PROCEEDINGS

     On December 14, 2000, Laiche & Company rented a man lift

from Brambles.     The rental agreement between Laiche and Brambles

required Laiche to indemnify and defend Brambles:

     [Laiche] hereby indemnifies, defends, and holds
     [Brambles] . . . harmless from all liability
     whatsoever, and shall pay all damages, losses,
     liabilities, and expenses (including attorney's fees
     and other defense costs and expenses) for any injury or
     damage [sic] operation or condition of the Equipment.
     [Laiche] shall so indemnify from and hold [Brambles]
     harmless even though the injury or damage is caused by
     or arising out of the machinery or the design,
     condition, transportation, repair, maintenance, or use
     of the Equipment whether or not any service of defect
     is caused in whole or part by the company, or neglect
     or failure of [Brambles] to warn or give instructions
____________________
      **
         Pursuant to 5th Cir. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Cir. R. 47.5.4.
     about the design, condition, repair, or maintenance of

                                      2
     the Equipment or its suitability for the job for which
     it was rented or improper or inadequate instructions or
     warnings about the operation, use, condition, or
     suitability of the Equipment.

Laiche further agreed "to protect [Brambles] with comprehensive

general liability insurance covering all losses and damages."

     Laiche maintained a comprehensive general liability policy

underwritten by Travelers.   The Blanket Additional Insured

endorsement provided that the Policy covered

     any person or organization you are required by written
     contract to include as an insured, but only with
     respect to liability arising out of "your work". This
     coverage does not include liability arising out of the
     independent acts or omissions of such person or
     organization. The written contract must be executed
     prior to the occurrence of any loss.

     Laiche's employee Eddie Edwards used the man lift for a

paint job the day Laiche rented the equipment.   While Edwards was

using the man lift, it began to roll and then overturned,

injuring Edwards.   Laiche paid Edwards benefits pursuant to the

Louisiana Workers' Compensation Act.   Edwards and his wife filed

suit against Brambles, seeking damages for injuries caused by

Brambles' negligence.   The Edwards' allegations of negligence

included, among others, failure to discover the dangerous

condition of the man lift, failure to warn users of its defective

nature, and failure to maintain the man lift properly.

     Brambles filed a third-party complaint against Travelers,

seeking a defense against the Edwards' claims and indemnity under

the rental agreement.   Travelers successfully moved to bifurcate

                                 3
the third-party action from the underlying lawsuit.    Thereafter,

the parties settled the tort action, and following briefing and

argument, the district court decided the third-party action on

cross-motions for summary judgment.    The district court rendered

summary judgment for Travelers and dismissed Brambles' claims

with prejudice.    Brambles now appeals.

II.   DISCUSSION

      A.   Standard of Review

      We review the district court's ruling on a motion for

summary judgment de novo, applying the same legal standard as the

district court.    See Wyatt v. Hunt Plywood Co., 297 F.3d 405, 408

(5th Cir.2002).    An interpretation of an insurance policy

provision is likewise an issue of law reviewed de novo. See

Performance Autoplex II Ltd. v. Mid-Continent Cas. Co., 322 F.3d

847, 853 (5th Cir. 2003).    Summary judgment should be granted

only when there is "no genuine issue as to any material fact[.]"

FED. R. CIV. P. 56(c); see also Wyatt, 297 F.3d at 408-09.     In

determining whether there is a dispute as to any material fact,

we consider all of the evidence in the record, but we do not make

credibility determinations or weigh the evidence.     See Reeves v.

Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

Instead, we "draw all reasonable inferences in favor of the

nonmoving party[.]"    Id.; see also Wyatt, 297 F.3d at 409.    If we

determine, after giving credence to the facts as presented by the

                                  4
nonmoving party, that "the moving party is entitled to a judgment

as a matter of law," we affirm the grant of summary judgment.

Fed. R. Civ. P. 56(c).   "[S]ummary judgment is appropriate if the

nonmovant fails to establish facts supporting an essential

element of his prima facie claim."    GeoSouthern Energy Corp. v.

Chesapeake Operating Inc., 274 F.3d 1017, 1020 (5th Cir. 2001).

      B.   Applicable Louisiana Contract Law

      Because this is a diversity case, we apply the substantive

law of Louisiana to the issue of coverage.     See Erie R. Co. v.

Tompkins, 304 U.S. 64 (1938).    Under Louisiana law, courts

interpret insurance policies using ordinary contract principles.

See Smith v. Matthews, 611 So. 2d 1377, 1379 (La. 1993).       Under

Louisiana law, "the burden in an action on an insurance contract

is on plaintiff to establish every fact in issue which is

essential to his cause of action or right of recovery, including

existence of policy sued on, its terms and provisions, and that

his claim is within its coverage."    B.T.U. Insulators, Inc. v.

Maryland Casualty Co., 175 So.2d 899, 902 (La. App. 2d Cir. 1965)

(citing Boyd v. White, 123 So.2d 835, 839-40 (La. App. 2d Cir.

1960)); see also Vallery v. All Am. Life Ins. Co., 429 SO.2d 513,

515 (La. App. 3d Cir. 1983).    If the policy language is

unambiguous, the policy must be enforced as written.     Id.    Any

ambiguous provision, however, is construed in favor of coverage.

Id.   Exclusionary clauses are construed strictly against the

                                  5
insurer.   See Garcia v. St Bernard Parish Sch. Bd., 576 So. 2d

975, 976 (La. 1991).   If an exclusionary clause is susceptible to

two or more reasonable interpretations, we must adopt the

interpretation favoring coverage.    Id.

     C.    Analysis

     The additional insured endorsement extends coverage to "any

person or organization you are required by written contract to

include as an insured."   The rental agreement required Laiche "to

protect [Brambles] with comprehensive general liability insurance

covering all losses and damages."    The district court concluded

that, as a result of this requirement, Brambles was an additional

insured under the endorsement.   Travelers contends that Brambles

is not an additional insured under the endorsement because the

rental agreement did not require Laiche to include Brambles

specifically as an additional insured, but merely obligated

Laiche to protect Brambles by carrying insurance to fulfill its

contractual obligation to indemnify Brambles.

     We hold that the language of the rental agreement is

sufficient to make Brambles an additional insured under the

endorsement.   The rental agreement required Laiche "to protect"

Brambles with comprehensive general liability insurance.    The

ordinary, common sense meaning of "to protect with comprehensive

general liability insurance" is "to cover" with insurance.    A

requirement that one party protect another party with insurance

                                 6
means that the party must secure insurance for the second party.

See Woods v. Dravo Basic Materials Co., Inc., 887 F.2d 618, 622

(5th Cir.1989); Adams v. Falcon Equip. Corp., 717 So.2d 282, 287

(La. App. 2 Cir. 1998).   Such an obligation places Brambles

squarely under the endorsement as a person Laiche was required by

contract to include as an "insured."   Travelers' suggestion that

the language in the rental agreement was insufficiently precise

to trigger additional insured status elevates form over

substance.

     Under the endorsement, any person or organization that

Laiche is required by written contract to include as an insured

is considered an "insured" under the Policy, "but only with

respect to liability arising out of 'your work.'"   "Your work" is

defined in the Policy as "[w]ork or operations performed by

[Laiche] or on [Laiche's] behalf; and [m]aterials, parts, or

equipment furnished in connection with such work or operations."

The endorsement specifically excludes coverage for liability

arising out of such party's "independent acts or omissions."

     Travelers argues that this exclusion precludes Brambles from

recovering under the endorsement because Brambles is seeking

coverage for liability stemming from its own independent

negligence.   The Edwards' complaint in the underlying tort action

against Brambles alleges negligence based only on the independent

acts and omissions of Brambles.   The clear language of the

                                  7
exclusion in the endorsement unambiguously excludes coverage of

Brambles for liability arising out of these acts and omissions.

As a result, Travelers is entitled to summary judgment with

respect to Brambles' claims under the Policy.

     Brambles argues that the district court's interpretation of

the endorsement renders it ambiguous.       The district court

construed the "other insured" provision as applying only in

instances in which the other insured is vicariously liable.

Louisiana's comparative fault law recognizes vicarious liability

only in the limited context of certain relationships, such as an

employer-employee relationship.       See LA. CIV. CODE arts. 2320,

2323, 2324.   Brambles contends that because there was no such

relationship between it and Laiche, the "independent acts or

omissions" exclusion literally negates all of its coverage as an

additional insured.   Brambles asserts that the endorsement is

ambiguous because it establishes coverage for Brambles as an

additional insured under the policy, but then the exclusion

negates that coverage, and "[c]overage cannot be provided by the

right hand and then excluded by the left hand."       Seals v. Morris,

423 So. 2d 652, 656 (La. App. 1st Cir. 1982); see also Credeur v.

Luke, 368 So.2d 1030, 1031 (La. 1979); and McGuire v. Smith, 370

So.2d 895, 897-98 (La. App. 1st Cir. 1979).

     To begin with, the cases Brambles cites are distinguishable

from this case.   In each of those cases, the insurance policy

                                  8
itself was ambiguous, expressly declaring coverage in one

provision and declaring effectually in another provision that

there was no coverage.    See Seals, 423 So. 2d at 656; Credeur,

368 So.2d at 1032; McGuire, 370 So.2d at 898.       In this case, on

the other hand, Brambles' alleged ambiguity arises only because

Louisiana law applies in this case to the interpretation of the

endorsement.    The alleged ambiguity does not stem from the

language of the policy itself.    Brambles also contends that the

ambiguity exists with respect to any additional insured under the

policy because it provides coverage only for liability that can

never arise under Louisiana law.       Brambles' argument fails to

consider, however, that an additional insured may be subject to

tort liability that does not arise under Louisiana law.

     Brambles further argues that the Court should interpret the

endorsement as if Brambles were the only additional insured under

the policy.    As the district court noted, however:

     To interpret the endorsement only with respect to the
     relationship between Brambles and Laiche would be to
     interpret the endorsement contrary to the intent of the
     parties and the clear language of the contract.

Brambles' reliance on Section IV, Paragraph 7 of the policy

entitled "Separation of Insureds" is misplaced.       Brambles argues

that the provision unequivocally establishes that the policy must

be read and construed as if Brambles were the only insured

contemplated.    The Separation of Insureds provision establishes,

however, that the insurance applies as if each "Named Insured"

                                   9
were the only Named Insured.   The Common Policy Declarations

identify Laiche as the Named Insured under the policy.     The

policy clearly distinguishes between the "Named Insured"

identified in the policy declarations, i.e., Laiche, and the

"insureds" covered under the policy, which include, for example,

Laiche's employees and additional insureds as described in the

endorsement.   Brambles is not a Named Insured under the policy,

and thus the Separation of Insureds provision does not apply to

it.

III. CONCLUSION

      Because we conclude that the exclusion in the endorsement

excludes coverage to Brambles in this case, we AFFIRM the

district court's grant of Travelers' motion for summary judgment.

                                10