Preview:

JOHN JOHNSON, ET AL.                                                                  *                    NO. 2006-CA-1223
VERSUS                                                                                *                    COURT OF APPEAL
ORLEANS PARISH SCHOOL                                                                 *                    FOURTH CIRCUIT
BOARD, ET AL.
*                                                                                     STATE OF LOUISIANA
*
*
*
CANNIZZARO, J., DISSENTS IN PART WITH REASONS
I respectfully dissent from the majority opinion insofar as it upholds the trial
court’s finding that the “Personal Injury Liability” (“PIL”) provisions of the
defendant-insurers’ policies provide coverage for the plaintiffs’ loss of property
values and emotional distress claims.
As set forth in her reasons for judgment, the trial court found as a matter of
fact and law that the defendant, the Housing Authority of New Orleans (“HANO”),
was negligent in directing the construction of Press Park on the Agriculture Street
Landfill (“ASL”) site, and HANO’s negligence was the cause of the plaintiffs’
injuries.  The court held that as a result of HANO’s negligence, the plaintiffs
suffered compensable damages in the form of loss of property value and
extraordinary mental and emotional distress.  Correspondingly, the court also
concluded that because the plaintiffs’ damages arose from the “‘interference with
[their] reasonable and comfortable use and enjoyment of their property,’ i.e. an
invasion of their right to private occupancy,” their claims were covered under the
PIL provisions in the defendant-insurers’ policies.  The court also found that
HANO, as the owner and operator of Press Park, was strictly liable to the Press
Park tenants and residents pursuant to La. C.C. art. 2317.
Between 1971 and 1993, the year the plaintiffs filed their lawsuit, the
defendant, HANO, was insured intermittently by the following four named
1




defendant-insurers:  Louisiana Insurance Guaranty Association (“LIGA”) as
successor in interest to Southern American Insurance Company; U.S. Fire
Insurance Company of America (“U.S. Fire”); National Union Fire Insurance
Company of Pittsburgh, PA (“National Union”), and Republican Insurance
Company (“Republic”).  In addition to the “Comprehensive General Liability
Insurance” (“CGL”) portion of each of the insurers’ policies, which provides
“Coverage A- Bodily Injury” and “Coverage B - Property Damage,” the policies
contain separate and distinct PIL insurance for what is termed under the policy
“Coverage P - Personal Injury.”  This PIL coverage, which is set forth under a
separate heading in each of the policies, is an additional aspect of coverage, for
claims not covered under the CGL policies. 1  In relevant part, the PIL policies
issued by the defendant-insurers provided the following:
I. - Coverage P - PERSONAL INJURY LIABILTY
The company will pay on behalf of the insured all sums which the
insured  [HANO] shall become legally obligated to pay as damages
because of injury (herein called ‘personal injury’) sustained by any
person or organization and arising out of one or more of the following
offenses committed in the conduct of the named insured’s business:
Group  A  -  false  arrest,  detention  or  imprisonment,  or  malicious
prosecution:
Group B - the publication or utterance of a libel or slander or of other
defamatory or disparaging material, or a publication or utterance in
violation of an individual’s right to privacy; . . .;
1 As discussed infra, the issue of whether the plaintiffs’ claims are covered by the PIL portion, as opposed to the
bodily injury or property damage portions of the defendant-insurers’ policies, is a matter of first impression in this
state.  In a case similar to the one at hand, County of Columbia v. Continental Insurance Company, 189 A.D. 2d 391,
595 N.Y. 2d 988 (N.Y. App. Div. 3rd 1993), the court explained succinctly the distinction between general liability
insurance and PIL insurance.  At issue in that case was whether a landowner’s claim for environmental damage to
his real property constituted a “wrongful entry or eviction or other invasion of the right of private occupancy” so as
to come within the PIL coverage of the defendants’ policies.  Explaining the difference between general liability
coverage and personal injury coverage, the court stated:
Unlike a general insurance policy, where coverage is stated in very
broad terms and subject to clearly defined exceptions (as is the case in
the  bodily  injury  and  property  damage  coverage  of  defendants’
policies), the personal injury coverage is “buil[t] from the ground up
[and] affords coverage only for defined risks. As such, coverage is
limited to “claims ... actually arising out of the enumerated ... torts.”
189 A.D. 2d at 395, 595 N.Y. 2d at 991 (N.Y. App. Div. 3rd 1993) (citations omitted).
2




Group C - wrongful entry or eviction, or other invasion of the right of
private occupancy;
if such offense is committed during the policy period . . .2
It is under this foregoing section (Group C) of the respective policies that the
plaintiffs sought coverage for their alleged injuries.
After considering the defendant-insurers’ insurance polices in full, I believe
the trial court erred, as a matter of law, in construing HANO’s interference with
the plaintiffs’ reasonable and comfortable use and enjoyment of their property as
an “invasion of the right of private occupancy” as contemplated by the PIL portion
of the policies.
It is well-settled that an insurance policy is a contract between the parties
and should be construed by using the general rules of interpretation of contract set
forth in the Louisiana Civil Code.   Sims v. Mulhearn Funeral Home, Inc., 07-0054,
p. 7 (La. 5/22/07), 956 So. 2d 583, 589.  According to those rules, the
responsibility of the judiciary in interpreting insurance contracts is to determine the
parties’ common intent.  Id.;    See La. C.C. art. 2045.  In ascertaining the common
intent, words and phrases in an insurance policy are to be construed using their
plain, ordinary and generally prevailing meaning, unless the words have acquired a
technical meaning, in which case, the words must be ascribed their technical
meaning.  See La. C.C. art. 2047;  Sims, 07-0054, p. 8, 956 So. 2d at 589.
An insurance contract is to be construed as a whole and each provision in the
contract must be interpreted in light of the other provisions.  One provision of the
contract should not be construed separately at the expense of disregarding other
provisions.  See La. C.C. art. 2050; Sims, 07-0054, p. 8, 956 So. 2d at 589.  Neither
should an insurance policy be interpreted in an unreasonable or strained manner so
2 The policies issued by LIGA, U.S. Fire, and National Union contain nearly identical language.  The PIL coverage
section of Republic’s policy , although differently worded, is substantively identical to the PIL coverage sections of
the other defendant- insurers’ policies.
3




as to enlarge or to restrict its provisions beyond what is reasonably contemplated
by its terms or so as to achieve an absurd conclusion.   Id.
When the words of an insurance contract are clear and explicit and lead to
no absurd consequences, no further interpretation may be made in search of the
parties’ intent and courts must enforce the contract as written.   See La. C.C.art.
2046;  Sims, 07-0054, p. 8, 956 So. 2d at 589.   “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.” Sims, 07-0054, pp. 8-
9, 956 So. 2d at 589.  The rules of contractual interpretation do not authorize a
perversion of the words or the exercise of inventive powers to create an ambiguity
where none exists or the making a new contract when the terms express with
sufficient clarity the parties’ intent.   Id. at p. 9, 956 So. 2d at 589.
If after applying the general rules of contractual interpretation to an
insurance contract, an ambiguity remains, the ambiguous contractual provision is
generally construed against the insurer and in favor of coverage.  See La. C.C. art.
2056;  Sims, 07-0054, p. 9, 956 So. 2d at 590.  Under this rule of strict
construction, equivocal provisions seeking to narrow an insurer’s obligation are
strictly construed against the insurer.   Id.  This strict construction principle applies,
however, only if the ambiguous policy provision is susceptible to two or more
reasonable interpretations; for the rule of strict construction to apply, the insurance
policy must be not only susceptible to two or more interpretations, but each of the
alternative interpretations must be reasonable.   Id.    The determination of whether a
contract is clear or unambiguous is a question of law.   Id.
Under the defendant-insurers’ policies, coverage for PIL is limited to a
specifically-enumerated list of torts or “offenses” that fall within that coverage
provision.  PIL coverage also requires that the enumerated offense be “committed”
4




(a term that connotes an intentional, deliberate or willful act) in the conduct of
HANO’s business.
Louisiana law defines “intent” to mean “‘that the defendant either desired to
bring about the physical results of his act or believed they were substantially
certain to follow from what he did.’”   Cole v. State Department of Safety and
Corrections, 01-2123, p. 7 (La. 9/4/02), 825 So. 2d 1134, 1140 (quoting Bazley v.
Tortorich, 397 So. 2d 475 (La. 1981.)  Each enumerated offense in Coverage P is
an intentional tort under Louisiana law.  See W. McKenzie and H. Alston Johnson,
III, 15 Louisiana Civil Law Treatise: Insurance Law & Practice §§ 12.3, 12.9
(false imprisonment), § 12.17 (malicious prosecution); Fitzgerald v. Tucker, 98-
2313, p. 10 (La. 6/29/99), 737 So. 2d 706, 715 (defamation); Ledbetter v. Concord
Gen. Corp., 564 So. 2d 732, 737 (La. App. 2d Cir. 1990) (“wrongful entry”
occurred when a hotel guest broke into another guest’s room); Regency Motors of
Metairie, L.L.C. v. Hibernia-Rosenthal Ins. Agency, Inc., 03-1312 (La. App. 5 Cir.
2/23/04), 868 So. 2d 905, writ denied, 04-0753 (La. 5/7/04), 872 So. 2d 1087
(eviction requires actual impingement on the occupant’s possessory rights);
Holmes, Appleman on Insurance Law & Practice (2nd Ed.) § 131.2[D] (“Personal
injury liability coverage obligates the insurer to indemnify for liability incurred for
certain intentional acts by the insured.”).
It follows then that “other invasion of the right of private occupancy” also
requires an active, knowing, and intentional act.  This conclusion is further
bolstered by the plain, ordinary and generally prevailing meaning of the term
“invasion” as an actual entry.
In this case, the plaintiffs never alleged nor introduced any evidence at trial
that HANO committed an intentional tort, evicted the plaintiffs from their homes
or property, denied the plaintiffs access to their homes or property; committed a
5




wrongful entry into their homes or onto their property, or otherwise wrongfully
occupied or interfered with their possessory rights or interests in their property.  In
other words, the plaintiffs failed to demonstrate that HANO committed any of the
enumerated offenses listed in the PIL provisions of its policies.  Moreover, as
indicated in her reasons for judgment, the trial judge found HANO liable based on
negligence and strict liability pursuant to La. C.C. art. 2317, but at no time did she
find HANO’s conduct was intentional.
Although never deeming the language “other invasion of the right of private
occupancy” ambiguous, and never identifying any alternate reasonable
interpretation of that phrase, and despite never finding any intentional conduct on
the part of HANO, the trial court concluded the plaintiffs’ claims fall within the
definition of “personal injury” under the PIL provision of the policies given
“Louisiana’s rules of policy interpretation that favor coverage. . .”    However, as
discussed above, the rule of strict construction against the insurer and in favor of
the insured applies only if an ambiguity exists and the ambiguity has two or more
reasonable interpretations.    In my opinion, not only is there no ambiguity in the
contractual provision at issue herein, there are no reasonable alternative
interpretations of “other invasion of the right of private occupancy.”
Group C offenses for purposes of PIL coverage are “wrongful entry or
eviction,” as well as “other invasion of the right of private occupancy.”  Under
Louisiana’s rules for interpretation of contracts, the latter cannot be construed
without reference to the former.  Further, applying the doctrine of ejusdem
generis3, the term “other invasion of right of private occupancy” draws its meaning
3
Black’s Law Dictionary 556 (8th ed. 2004) defines ejusdem generis as:
A canon of construction that when a general word or phrase follows a
list of specifics, the general word or phrase will be interpreted to
include only items of the same type as those listed.  For example, in the
phrase horses, cattle, sheep, pigs, goats, or any other farm animal, the
general language or any other farm animal- despite its seeming breadth
would probably be held to include only four-legged, hoofed mammals
typically found on farms, and thus would exclude chickens.
6




from and is to be construed analogously with the term “wrongful entry or
eviction,” which clearly requires interference with a possessory interest.
In Regency Motors of Metairie, L.L.C., supra, 03-1312, p. 1, 868 So. 2d at
905, the court construed the meaning of “eviction” in a personal injury coverage
provision.  The court cited Black’s Law Dictionary’s definition of “eviction” as
“‘[t]he act or process of legally dispossessing a person of land or rental property’”
and “actual eviction” as a “‘physical expulsion of a person from land or rental
property.’”  Id. at p. 6, 868 So. 2d 909.  The court also stated that “‘wrongful’” is
“‘characterized by unfairness or injustice ...contrary to law; unlawful.’”   Id.
Affirming a summary judgment in favor of the insurer, the court held the insurer
did not breach the duty to defend or indemnify the insured under the PIL coverage
because “[t]here was no actual impingement on any possessory rights [the
plaintifffs] may have had.”  Id. at 7, 868 So. 2d 909.  And in Ledbetter v. Concord
Gen. Corp., supra, 564 So. 2d 732, the court found coverage was provided under
the PIL provision of  a policy to an innkeeper who had a duty to maintain a secure
premises and to protect against “wrongful entry” arising from a guest breaking into
another guest’s locked room.
Further, in Louisiana, the term “occupancy” is synonymous with the state of
being inhabited (i.e., physical possession of property), and a “right of occupancy”
is consistently construed as a right associated with the act of inhabiting (i.e.,
physically possessing) a premises.4  Also, coverage for “other invasion of the right
4See, e.g., Richard v. Broussard, 495 So. 2d 1291, 1293 (La. 1986) (where lessor enforces lease by obtaining a
money judgment against lessee, the lease remains in effect and lessee retains the right of occupancy); Lichtentag v.
Bowens, 237 So. 2d 377 (La. 1970) (“in eviction proceedings demanding the right of possession or occupancy of
real property, the value of the right of occupancy and not the value of the property determines a court’s
jurisdiction”); Leblanc v. Romero, 00-1233 (La. App. 3 Cir. 2/28/01), 783 So. 2d 419 (“occupancy” of property
means to reside thereon, and thus contractual right of reversion should vendee cease to “ permanently occupy”
property was triggered when vendee moved off the property; La. C.C. art. 3412 (occupancy includes the “taking of
possession of a corporeal movable”); La. C.C. art. 3418 (“one who has taken possession of an abandoned thing with
the intent to own it acquires ownership by occupancy”); La. C.C.P. art. 4702 (requiring written notice when owner
of immovable property wishes to evict the “occupant” therefrom, after the purpose of the occupancy has ceased”);
La. C.C.P. art. 4704 (“‘Occupant’” includes ... any person occupying immovable property by permission or
accommodation of the owner, former owner, or another occupant....”); La. C.C.P. art. 4731 (where lessee or
occupant has lost his right of occupancy for any reason, the lessor or owner “may cause the lessee or occupant ... to
show cause why he should not be ordered to deliver possession of the premises to the lessor or owner”).
7




of private occupancy” is limited to rights associated with inhabiting the premises,
as opposed to using the premises.   Appleman at § 131.2[D].
Applying the traditional principles of contract interpretation to the PIL
policy provisions of the defendant-insurers’ policies, the language “other invasion
of the right of private occupancy” is unambiguous and needs no further
interpretation.  The trial court’s conclusion that an “interference with the plaintiffs’
reasonable and comfortable use and enjoyment of their property” constituted an
“invasion of their right to private occupancy” as contemplated under the PIL
provision of the policies is clearly wrong, as a matter of law.
Acknowledging the lack of Louisiana jurisprudence on the issue at hand, the
majority, on page 22 of its opinion, states that “[c]ourts in jurisdictions with rules
of construction similar to Louisiana’s have determined that interference with a
right of occupancy constitutes ‘personal injury’ as opposed to ‘bodily injury’
which usually means a physical injury or illness, under the same policy language
contained in the ‘personal injury’ coverage portion of the policies in question in
this case.”  I submit that such a statement is circular reasoning, as the issue is not
whether an invasion of the “right of (private) occupancy” constitutes an offense
under the PIL portion of the policy (clearly it does) but whether an interference
with a possessory interest is required in order to constitute the offense of an “other
invasion of the right of private occupancy.”  I believe it is.
I further note that in support of its conclusion that the PIL provisions of the
defendant-insurers’ policies provide coverage for the plaintiffs’ damages, the
majority relies on two cases from other jurisdictions, namely, Miller Mutual Ins.
Ass’n of Illinois v. Graham Oil Co., 668 N.E. 2d 223 (Ill. 2d Dist. 1996) and Titan
Holdings Syndicate, Inc. v. City of Keene, 898 F. 2d 265 (1st Cir. 1990).  I believe
those cases are distinguishable from the case at hand because they dealt with an
8




insurer’s duty to defend, which is broader than an insurer’s duty to indemnify, and
because the issue was before the court on a summary judgment or judgment on the
pleadings.
In summary, the plaintiffs here stipulated that they sustained no physical
bodily injuries or property damages as a result of HANO’s actions, and they
offered no evidence at trial that HANO committed any of the enumerated offenses
in Group C of the PIL provision of the policies.  Thus, in the absence of any
finding by the trial court that HANO intentionally interfered with the plaintiffs’
possessory interests or invaded their rights of private occupancy in their properties,
I believe that the plaintiffs’ claims for damages for the diminution of their property
values and emotional distress are not covered by the PIL provisions of the
defendant-insurers’ policies.
9

Download 200993.pdf

Louisiana Law