Case Law Watch

Richard v. Century Sur. Co.
(W.D. La. June 25, 2005)
Question of fact regarding reinstatement of CGL policy: This concerns property damage incurred during Hurricane Lillie on Oct. 3, 2002. The insured made a claim under her commercial general liability policy for reimbursement for the damage, even though her policy had been cancelled several days before for failure to make premium payments. The court denied the insurer summary judgment as to the insured’s challenge of the insurer’s denial. It concluded the insured raised issues as to whether the policy was reinstated by proffering evidence of two premium payments after the policy was cancelled, which were accepted by the insurer’s agents. The payments were not returned to her nor was she ever notified that her effort to reinstate the coverage had been rejected. The court noted that Louisiana prohibits an insurer from refusing coverage while simultaneously accepting payment for such coverage.

Hardy v. Ducote
(W.D. La. July 21, 2005)
Issue of fact on duty to defend exposure to hazardous material: This matter involves the claims of a contractor’s employees for exposure to hazardous materials battery recycling plant. The owner of the plant and the contract/employer entered into a contract in which the contractor agreed to hold the owner harmless for any liability that arose from the contractor’s work at the plant and to insure the owner concerning exposure and handling of hazardous materials. The owner’s subrogee commenced a direct action against the owner’s insurer concerning the employee’s claims. Although the court observed that the lead exclusion might prohibit coverage under each of the theories of liability asserted against the insurer, the employees’ allegations included injuries that were not excluded under the policy. As such, the court held there were issues of fact concerning the insurer’s duty to defend.

Fontenot v. One Beacon Am. Ins. Co.
(W.D. La. July 27, 2005)
No coverage under work product exclusion; bodily injury occurred outside policy period: The court held the insurer had no duty to defend the insureds under the applicable policy because the underlying complaint stated claims that either fell totally within the policy’s work product exclusion orthe date of the bodily injury fell outside the policy period for which the general liability provision affords coverage. The insureds were two contractors who built a house for the plaintiff in the underlying action. The underlying plaintiff alleged the redhibitory defect of the insureds building a house on a foundation laid over an old defective water line. The underlying plaintiff also claimed to sustain emotional damages based on the contractors’ work. Although the court rejected the insurer’s argument concerning whether the actual damage manifested, the court enforced the “work product exclusion.” In addressing the emotional distress allegations, the court observed that it could pinpoint when the bodily injury occurred, unlike the property damages, and that injury occurred outside of the policy period.

Case Law Watch is edited by Kevin T. Merriman of the law firm of Goldberg Segalla (www.goldbergsegalla.com). Kevin T.Merriman can be reached at kmerriman@goldbergsegalla.com.