Edwards v. Brambles Equipment Services, Inc. , 75 F. App'x 929 ( 2003 )

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opinion should not be published and is not precedent except under the limited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
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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
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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
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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
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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
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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
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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
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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"
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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.
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