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MARY CLULEE, WIFE OF/AND NEAL CLULEE, HOMEPLACE BATTURE LEASING, INC., AND N/C MATERIALS, INC. VERSUS BAYOU FLEET, INC., ET AL

NO. 04-CA-106 C/W 04-CA-107 FIFTH CIRCUIT COURT OF APPEAL STATE OF LOUISIANA

MARY CLULEE, WIFE OF/AND NEAL CLULEE, ET AL
VERSUS ST. CHARLES PARISH, THROUGH ITS CHAIRMAN, TERRY AUTHEMENT, ET AL

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MAY 2 6 2004

ON APPEAL FROM THE TWENTY-NINTH JUDICIAL DISTRICT COURT PARISH OF ST. CHARLES, STATE OF LOUISIANA NO. 49,963 C/W 50,906, DIVISION "D" HONORABLE KIRK R. GRANIER, JUDGE PRESIDING MAY 26, 2004

WALTER J. ROTHSCHTI D
JUDGE
Panel composed of Judges James L. Cannella, Thomas F. Daley and Walter J. Rothschild

JOEL T. CHAISSON P. O. Box 819
Destrehan, Louisiana 70047 COUNSEL FOR PLAINTIFF/APPELLANT

CATHERINE LEARY P. O. Box 472 Westwego, Louisiana 70096 COUNSEL FOR PLAINTIFF/APPELLANT

GUSTAVE A. FRITCHIE III
400 Poydras Street Suite 2700 Texaco Center New Orleans, Louisiana 70130

COUNSEL FOR DEFENDANT/APPELLEE

AFFIRMED IN PART; REVERSED IN PART.

This is an appeal from a summary judgment rendered in favor of Coregis
Insurance Company ("Coregis") on the issue of insurance coverage. For the 'reasons stated herein, we affirm in part and reverse in part.

FACTS AND PROCEDURAL HISTORY
The plaintiffs, Mary and Neal Clulee, Homeplace Batture Leasing, Inc., and N/C Materials, Inc. (hereinafter referred to as "Clulee Plaintiffs") filed two lawsuits, which were later consolidated, against several defendants, including St. Charles Parish and certain parish officials in their official capacities ("Parish Defendants"). In the "first lawsuit," which was filed on July 1, 1998, the Clulee Plaintiffs
filed a Petition for Damages and a First Supplemental and Amended Petition

setting forth numerous claims against the Parish Defendants, including allegations that some of the Parish Defendants, including former Parish President Chris Tregre

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and former Parish Attorney Randy Lewis, conspired to aid Bayou Fleet in the operation of its sandpit by re-zoning the property in violation of the parish's zoning code. The Clulee Plaintiffs assert that, unlike Bayou Fleet, they had to spend significant funds on their facilities in order to re-zone their property and to satisfy the zoning requirements necessary to expand their operation. The Petition for Damages and Amended Petition set forth many other claims including, but not limited to, allegations of violations of the Louisiana Unfair Trade Practices Act and violations of the plaintiffs' rights to due process and equal protection under the Louisiana Constitution. The Clulee Plaintiffs contend that the actions of the Parish Defendants have caused them damages and led to litigation in federal court. In the "second lawsuit," which was filed on January 14, 1999, the Clulee
Plaintiffs originally sought a writ of mandamus to St. Charles Parish, its

Department of Planning and Zoning, and certain parish officials, ordering them to enforce the St. Charles Parish zoning laws. On August 27, 2001, a First Supplemental and Amended Petition was filed, in which the plaintiffs withdrew their request for mandamus and sought declaratory and injunctive relief, as well as damages caused by the alleged zoning violations. Coregis issued two separate insurance policies to the St. Charles Parish Council for the period of November 1, 1996 to November 1, 1997. One policy issued was a Commercial General Liability insurance policy,' and the other one was a Public Officials and Employees Liability insurance policy.2 On August 26,

2003, Coregis filed a Motion for Summary Judgment, arguing that it should be
dismissed from this litigation, because neither of the policies issued to St. Charles Parish provides coverage for the claims asserted by the plaintiffs. After a hearing on September 10, 2003, the trial court granted Coregis' Motion for Summary

* Policy No. 651-006406-8 2 Policy No. POD-000123-1

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Judgment, dismissing it from this litigation with prejudice. It is from this judgment

that the Clulee Plaintiffs appeal.3 LAW AND DISCUSSION Appellate courts review summary judgments de novo under the same criteria governing the trial court's consideration of whether a summary judgment is

appropriate. Prince v. K-Mart Corporation, et al., 01-1151 (La. App. 5 Cir.
3/26/02), 815 So. 2d 245, 248. Summaryjudgments are now favored in the law

and the rules should be liberally applied. Nutt v. City of Gretna, 00-1864, 00-1865

9 (La. App. 5 Cir. 5/16/01), 788 So. 2d 617, 619; Carr v. Wal-Mart Stores, Inc., 00-896 (La. App. 5 Cir. 10/31/00), 772 So. 2d 865, 866, writ denied, 00-3247 (La.
1/26/01), 782 So. 2d 636. It is well settled that a motion for summary judgment is properly granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits submitted, if any, show there is no genuine issue of material fact such that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966; Ekere v. Dupont Chemical Plant, 99-1027 (La.

App. 56 Cir. 2/16/00), 757 So.2d 33, 34, writ denied, 00-778 (La. 4/28/00), 760 So.
2d 1181. Summary judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence supporting the motion, under which coverage could be afforded. Reynolds v. Select Properties, Ltd., 93-1480 (La. 4/11/94), 634 So. 2d 1180, l183. An insurance policy is a contract between the parties and should be construed by using the general rules of contract interpretation set forth in the Louisiana Civil Code. Mayo v. State Farm Mutual Automobile Insurance

Company, 03-1801 (La. 2/25/04), 869 So. 2d 96. Words and phrases used in an
insurance policy are to be construed using their plain, ordinary, and generally
3 The insured, St. Charles Parish, has not joined in the appeal or filed any documents with this Court.

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prevailing meaning, unless the words have acquired a technical meaning. M. When the words of an insurance contract are clear and explicit and lead to no absurd consequences, courts must enforce the contract as written. Succession of

Fannaly v. Lafayette Insurance Co., 01-1355 (La. 1/15/02), 805 So. 2d 1134, 1137.
However, if the insurance policy is susceptible to two or more reasonable interpretations, then it is considered ambiguous and must be liberally interpreted in favor of coverage. Vintage Contracting, L.L.C. v. Dixie Building Material

Company, Inc., 03-422 (La. App. 5 Cir. 9/16/03), 858 So. 2d 22, 26; Newby v. Jefferson Parish School Board, 99-98 (La. App. 56 Cir. 6/1/99), 738 So.2d 93, 96.
The determination of whether a contract is clear or ambiguous is a question of law. Mayo, supra. Any ambiguity in insurance policy provisions should be narrowly construed to afford coverage. Gottsegen v. Hart Property Management,

g, 02-129 (La. App. 5 Cir. 5/29/02), 820 So. 2d 1138, 1141, writ denied, 021776 (La. 10/4/02), 826 So. 2d 1129; Peterson v. Schimek, 98-1712 (La. 3/2/99),
729 So. 2d 1024, 1029. Insurance policies should be interpreted to effect, not deny, coverage. Yount v. Maisano, 627 So.2d 148, 151 (La. 1993). An insurer seeking to avoid coverage through summary judgment must prove that some exclusion applies to preclude coverage. Smith v. Reliance Insurance Co. of Illinois, 01-888

(La. App. 5 Cir. 1/15/02), 807 So. 2d 1010, 1014.
With these principles of law in mind, we consider whether the trial court correctly found that neither of the insurance policies issued by Coregis to St. Charles Parish provides coverage as a matter of law for the damages asserted by the plaintiffs in these consolidated cases. As stated above, the two insurance policies issued to St. Charles Parish were a Commercial General Liability ("CGL") policy and a Public Officials and Employees Liability ("POD") policy. The CGL policy provides coverage within the policy period for "personal injury" and "property damages" caused by an
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"occurrence," which unexpectedly or unintentionally causes damage. Therefore, intentional acts are generally not covered. However, the CGL policy also contains a discrimination endorsement which states: Under Section II: Definitions, Personal Injury, is amended to include Discrimination or Violation of the Federal Civil Rights Act of 1871, or 42 U.S.C. 1983, and similar laws. (Emphasis added.) The POD policy specifically excludes coverage for claims arising from the intentional violation of a statute, ordinance, rule, or law. This policy does not
contain the discrimination endorsement that is in the CGL policy.

In Bayou Fleet v. Alexander, 97-2205 (E.D. La. 9/11/98), 1998 WL 623909,
which is the federal litigation primarily between these same parties, the federal district court for the Eastern District of Louisiana considered the same insurance policies at issue in the present case. In the federal litigation, the allegations were very similar to those asserted in this case, but the roles of the parties were reversed. In that case, Bayou Fleet was the plaintiff and it sued the Clulees, some of the Parish Defendants, and others, alleging that Alexander, who was a member of the St. Charles Parish Council, conspired with the Council and others to destroy Bayou Fleet's business, in violation of 42 U.S.C.

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