Opinion
CIVIL ACTION 00-1209, SECTION "T"(3)
March 31, 2004
Before the Court is a Motion for Summary Judgment filed by defendant in intervention, Scottsdale Insurance Company. The Court took this matter under submission. The Court, having considered the arguments of counsel, the evidence submitted, the record, the law and applicable jurisprudence, is fully advised in the premises and ready to rule.
ORDER AND REASONS
I. BACKGROUND:
This suit arises out of damages allegedly sustained by James and Jocel Ravannack in conjunction with the construction of their residence at 5432 Janice Avenue, Kenner, Louisiana, 70065. The Ravannack's filed suit in the 24th Judicial District Court for the Parish of Jefferson, State of Louisiana on April 4, 2000, against several defendants, including Quigley Homes, Inc. ("Quigley Homes") and Quigley Home Builders, Inc. ("Quigley Home Builders"). The Ravannacks assert that their residence, built in 1992, was defective. It is alleged that in 1999, they discovered that water had intruded into their home, saturating various areas of their carpeting. After hiring an expert to inspect the home in May 1999, it was learned that moisture had intruded through the exterior insulation and finish system ("EIFS") installed on the outside of the home and caused extensive structural damage and wood decay. The Ravannacks contend that Quigley Homes and Quigley Home Builders, as the alleged builders of the home, and Matherne Plastering, Inc. ("Matherne"), the subcontractor who installed the EIFS, are responsible for these damages. These companies' insurers were likewise named defendants in the litigation. Additionally, the Ravannacks sued their own homeowners' insurer, Liberty Mutual Insurance Company ("Liberty Mutual"), alleging that the policy of insurance issued to the Ravannacks insured them against the damages claimed.
On July 5, 2000, an Amended and Supplemental Petition was filed whereby additional insurers of Matherne, including Scottsdale Insurance Company ("Scottsdale"), were named as defendants. Scottsdale filed an Answer in the state court proceedings, denying liability in the premises.
Two weeks after the state court proceeding was filed by the Ravannacks, on April 19, 2000, Liberty Mutual filed a "Complaint for Declaratory Relief and to Interpret and Enforce Terms of Contract" with this Court. Liberty Mutual prayed for judgment declaring that (1) the Ravannacks comply with their duties enunciated in the policy of insurance issued by Liberty Mutual, (2) that certain exclusions enunciated under that policy be enforced, and (3) that to the extent Liberty Mutual nukes payment to the Ravannacks under the subject homeowners policy, Liberty Mutual be granted a subrogation right of recovery against third parties and their insurers' who may be liable for the damages claimed by the Ravannacks with respect to the defects, if any, in the construction of the home. The Ravannacks filed a counterclaim asserting the same allegations as set forth in the state court action, but did not seek relief from Matherne or Scottsdale.
On August 10, 2000, Liberty Mutual filed a Complaint of Intervention naming Matherne and others as defendants and asserting that the Ravannacks suffered damage to their home as a result of a defective product and improper installation. As a result, Liberty Mutual has "paid and will pay for certain damages that were allegedly caused by the defective produce (sic), improper installation and result in (sic) damage." Complaint of Intervention, paragraph 2. On August 11, 2000, Liberty Mutual filed an identical Petition for Intervention in the state court proceedings. On November 6, 2000, Liberty Mutual filed a Supplemental and Amending Petition for Intervention in the state court proceedings, naming as defendants-in-intervention additional insurers of Matherne, including Scottsdale. On December 11, 2000, Liberty Mutual filed an identical Supplemental and Amending Complaint of Intervention in these federal court proceedings. Scottsdale filed answers to the interventions of Liberty Mutual in both the federal court and state court proceedings, denying liability in the premises.
II. LAW AND ANALYSIS:
A. The Law on Summary Judgment
The Federal Rules of Civil Procedure provide that a court should grant a motion for summary judgment only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Stults v. Conoco, Inc., 76 F.3d 651, 655-56 (5th Cir. 1996) (citing Skotak v. Tenneco. Resins, Inc., 953 F.2d 909, 912-13 (5th Cir.) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)), cert. denied, 506 U.S. 832 (1992)). When the moving party has earned its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. The nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis supplied); Tubacex. Inc. v. M/V RISAN. 45 F.3d 951, 954 (5th Cir. 1995).
Thus, when the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no "genuine issue for trial." Matsushita Elec. Indus. Co., 475 U.S. at 588. Finally, the Court notes that substantive law determines the materiality of facts, and only "facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
B. A Genuine Issue of Material Fact Exists.
In its Motion for Summary Judgment, Scottsdale states that its Commercial Liability Policy ("CGL") between it and Matherne was in effect from December 16, 1995 to December 16, 1996. issued its first and only policy of insurance to Matherne on December 16, 1995. The CGL policy states:
this insurance applies to "bodily injury" and "property damage" only if: 1) the bodily injury or property damage is caused by an occurrence that takes place in the coverage territory, and 2) the bodily injury or property damage occurs during the policy period.
Scottsdale argues that the Ravannacks have presented no evidence of exposure to mold during the Scottsdale policy term. Further, Scottsdale argues that no physician has been listed that will testify that any exposure to mold within the policy period was more likely than not. Scottsdale concludes that since the Ravannacks have failed to offer evidence proving that they experienced property damage and personal injury during the policy period, Summary Judgment should be granted.
The Ravannacks have included a claim that the allegedly faulty construction of their home, including the work done by Scottsdale's insured Matherne, has caused bodily injury to the Ravannack children which continues to adversely affect the children. The Ravannacks have alleged that the children were continuously exposed to mold during the period while they lived in the house, which includes the period that the Scottsdale policy was in effect. The Ravannacks allege that this exposure to mold has caused bodily injury. The Ravannacks further allege that the mold is a result of the faulty construction of their home.
In Korossy v. Sunrise Homes. Inc., 653 So.2d 1215 (La.App. 5th Cir. 1995); writ denied 660 So.2d 878 (La. 9/29/95), the Louisiana Fifth Circuit Court of Appeals discussed the two distinct "trigger dates" adopted by Louisiana Courts to determine the date from which coverage is calculated under a standard occurrence CGL policy. The court noted that the Louisiana Supreme Court Has utilized both the "exposure theory" and the "manifestation theory" to determine coverage under a CGL policy requiring that the damage occurs in the policy period. Id. at 1225. The court set forth the "exposure theory" which holds that "the damage would be considered to have occurred when the act which resulted in damage took place, not when the damage was discovered." Id. at 1225-1226. The court also presented the "manifestation theory," which provides that "property damage would be considered to have occurred when it became manifest, regardless of when the act from which it resulted occurred." Id. at 1226. Although a court may apply the manifestation theory when property damage is at issue as the court did in Korossy, when a victim allegedly suffers bodily injuries during multiple policy years, the exposure theory is to be applied.
In The Society of Roman Catholic Church of the Diocese of Lafayette and Lake Charles, Inc. v. Interstate Fire Casualty Company, et al., 26 F.3d 1359 (5th Cir. 1994), the United States Court of Appeals for the Fifth Circuit noted that the most applicable line of Louisiana cases dealing with multiple injuries during successive years are the asbestosis cases, such as Cole v. Celotex Corp., 599 So.2d 1058 (La. 1993). In Cole, the Louisiana Supreme Court answered the question of how to determine the number of occurrences when the victim is repeatedly injured during multiple policy years. Adopting the exposure theory, the court concluded that the inhalation of asbestos fibers during a policy year causes bodily injury as defined in the `occurrence' policies. The court held that an employee suffered bodily injury from an occurrence when the employee inhaled asbestos fibers during a policy year and all subsequent inhalation during that year arose out of the same occurrence. When the employee inhaled asbestos during the next policy year, again, the employee suffered bodily injury from an occurrence. Thus, each employee suffered injury from an occurrence during each year in which he inhaled asbestos. Society of Roman Catholic Church. 26 F.3d at 1365; Cole, 599 So.2d at 1075-8.
In Footnote 7, the Fifth Circuit noted that asbestos cases provide significant direction regarding the number of occurrences when a victim suffers repeated injuries during multiple policy years. Society of Roman Catholic Church, 26 F.3d at 1365. The Fifth Circuit believed that the Louisiana Supreme Court would apply the same analysis to the stipulated facts of that case and held that when a priest molested a child during a policy year, there was both bodily injury and an occurrence, triggering policy coverage. All further molestations of that child during the policy period arose out of the same occurrence. When the priest molested the same child during the succeeding policy year, again there was both bodily injury and an occurrence. Thus, each child suffered an `occurrence' in each policy period in which he was molested. Id.
Using the guidelines established by the Fifth Circuit in Society of Roman Catholic Church. this Court determines that there is possible coverage under the Scottsdale policy. The alleged bodily injury to the Ravannacks may have occurred during the Scottsdale policy year and there may be both bodily injury and an occurrence which would trigger policy coverage. This leads the Court to conclude that there does exist issues of material fact in dispute, specifically, whether the Ravannacks were exposed to conditions that caused bodily injury during the Scottsdale policy period.
Accordingly,
IT IS ORDERED that the Motion for Summary Judgment filed on behalf of the defendant in intervention, Scottsdale Insurance Company, be and the same is hereby DENIED.