Daxtreme, Inc. v. Lafayette City-Parish Consol. Gov't

332 So.3d 1257

DAXTREME, INC. and T Con M, LLC

v.LAFAYETTE CITY-PARISH CONSOLIDATED GOVERNMENT, et al.

21-418

Court of Appeal of Louisiana, Third Circuit.

December 15, 2021

Kay A. Theunissen, MAHTOOK & LAFLEUR, 600 Jefferson Street, Suite 1000, Lafayette, Louisiana 70501, (337) 266-2189, COUNSEL FOR DEFENDANT/APPELLANT: Lafayette Consolidated Government

G. Benjamin Ward, Lawrence G. Pugh, III, PUGH ACCARDO, 1100 Poydras Street, Suite 3300, New Orleans, Louisiana 70163, (504) 799-4725, COUNSEL FOR DEFENDANT/APPELLANT: Lafayette Consolidated Government

Seth A. Schmeeckle, Heather N. Sharp, LUGENBUHL, WHEATON, PECK, RANKIN & HUBBARD, 9311 Bluebonnet Boulevard, Suite A, Baton Rouge, Louisiana 70810, (504) 568-1990, COUNSEL FOR THIRD-PARTY DEFENDANT/APPELLEE: Hartford Accident and Indemnity Company

John P. Barron, Donovan J. O'Pry, II, O'PRY LAW FIRM, 2014 West Pinhook Road, Suite 507, Lafayette, Louisiana 70508, (337) 415-0007, COUNSEL FOR PLAINTIFFS/APPELLEES: Daxtreme, Inc. and T Con M, LLC

P. Andrew Rabalais, Jr., PERRET DOISE, LLC, 1301 Camelia Boulevard, Suite 400, Lafayette, Louisiana 70508, (337) 593-4900, COUNSEL FOR PLAINTIFFS/APPELLEES: Daxtreme, Inc. and T Con M, LLC

Brent J. Carbo, MUSGAVE, MCLACHLAN & PENN, LLC, 1515 Poydras Street, Suite 2380, New Orleans, Louisiana 70112, (504) 799-4300, COUNSEL FOR DEFENDANT/APPELLEE: Certain Underwriters at Lloyd's, London Who Subscribed to Policy Number CLICCF 15472

Court composed of Elizabeth A. Pickett, Jonathan W. Perry, and Sharon Darville Wilson, Judges.

WILSON, Judge.

Defendant, Lafayette Consolidated Government (LCG) appeals the trial court's grant of the motion for summary judgment filed by Third-Party Defendant, Hartford Accident and Indemnity Company (Hartford). The judgment dismissed all of LCG's claims, including its claims for pre-judgment defense costs, against Hartford, finding that they were perempted pursuant to La.R.S. 9:2772. For the reasons that follow, we affirm the trial court's ruling.

I.ISSUES

In this case, we must decide whether La.R.S. 9:2772 applies to insurers with respect to a claim for additional insured status and whether a final judgment should have been rendered dismissing all of LCG's claims against Hartford as perempted.

II.FACTS AND PROCEDURAL HISTORY

The Downtown Development Authority of the City of Lafayette started a project known as the Lafayette Centre Core Area Streetscape Improvements Project (the Project). As part of the Project, the Lafayette Centre Development District and the Downtown Development Authority of the City of Lafayette, entered into an agreement for professional services with Sasaki Associates, Inc. (Sasaki), a landscape architect firm, on October 13, 1989. On August 21, 1991, LCG's predecessor in interest, the City of Lafayette, entered into an agreement for professional services (the Agreement) with Sasaki to fix the scope and limits of the Project. The August 21, 1991 agreement provided that "the City of Lafayette, its officials and employees shall be named as additional insureds in the commercial general liability policy" obtained by Sasaki in connection with the Project. The Agreement provided that the insurance requirement would continue for the life of Agreement, but the Agreement itself did not include a term.

On June 9, 1997, a Notice of Acceptance of Public Contract as Substantially Complete (the Notice) was signed by the president of Lafayette City-Parish Consolidated Government and filed with the Clerk of Court in Lafayette Parish. The Notice indicated that effective May 21, 1997, the Project was substantially complete.

As part of the Project, cypress trees were planted along Jefferson Street in Lafayette. Plaintiffs, T. Con M, LLC and Daxtreme, Inc.,¹ are the owner and lessee, respectively, of the building located at 324 Jefferson Street, which houses City Bar World Famous Saloon. On January 4, 2018, Plaintiffs filed suit against LCG and Certain Underwriters at Lloyd's, London Who Subscribed to Policy Number CLICCF 15472. The petition alleged that as the cypress trees grew, their roots grew underneath and through the foundation of Plaintiffs’ building. Plaintiffs further alleged that the roots caused damage to the building, requiring the removal of the foundation and the rebuilding of the structure, and destroyed the value of the business they operated there.

Based on the Agreement, LCG tendered its defense to Sasaki. On December 16, 2019, LCG filed a third-party demand against Hartford, alleging that LCG was an additional insured on the commercial general liability policy issued by Hartford to Sasaki. The policy issued by Hartford bears policy number 08UUNAX4732 and has an effective period from January 1, 2017, through January 1, 2018. Hartford issued a supplemental coverage letter on September 23, 2020, in which Hartford agreed to defend LCG under a reservation of rights. Sasaki was not named as a third-party defendant.

On October 7, 2020, Hartford filed a motion for summary judgment alleging that "any obligation arising under the 1991 Agreement for Professional Services was perempted five years from the date of acceptance of the Project, including Sasaki's alleged obligation to name LCG as an additional insured on its liability policy" pursuant to La.R.S. 9:2772. LCG opposed Hartford's motion for summary judgment, arguing that La.R.S. 9:2772 does not apply to insurers and/or additional insured claims.

Following a hearing, the trial court took the matter under advisement. On April 6, 2021, the trial court signed a judgment granting Hartford's motion for summary judgment. Because the April 6, 2021 judgment lacked decretal language, Hartford filed a motion to amend the judgment and/or a motion for new trial. On April 21, 2021, the trial court signed an amended judgment, which granted Hartford's motion for summary judgment and dismissed all claims asserted by LCG against Hartford in LCG's third-party demand. This appeal followed.

III.STANDARD OF REVIEW

"Although typically asserted through the procedural vehicle of the peremptory exception, the defense of prescription may also be raised by motion for summary judgment." Hogg v. Chevron USA, Inc. , 09-2632, 09-2635, p. 6 (La. 7/6/10), 45 So.3d 991, 997 (footnote omitted). When "peremption is raised through a motion for summary judgment, the appellate court conducts a de novo review using the same criteria used by the district court in determining whether summary judgment is appropriate." Lagneaux v. Galloway Jefcoat, LLP , 19-871, p. 3 (La.App. 3 Cir. 6/3/20), 298 So.3d 281, 284–85. "A reviewing court thus asks the same questions as does the trial court in determining whether summary judgment is appropriate: whether there is any genuine issue of material fact, and whether the mover is entitled to judgment as a matter of law." Robinson v. Heard , 01-1697, pp. 3-4 (La. 2/26/02), 809 So.2d 943, 945.

IV. LAW AND DISCUSSION

"Peremption is a period of time fixed by law for the existence of a right. Unless timely exercised, the right is extinguished upon the expiration of the peremptive period." La.Civ.Code art. 3458. Peremption is not subject to renunciation, interruption, or suspension. La.Civ.Code art. 3461.

The relevant portions of La.R.S. 9:2772 (emphasis added) read:

A. Except as otherwise provided in this Subsection, no action, whether ex contractu, ex delicto, or otherwise, including but not limited to an action for failure to warn, to recover on a contract, or to recover damages, or otherwise arising out of an engagement of planning, construction, design, or building immovable or movable property which may include, without limitation, consultation, planning, designs, drawings, specification, investigation, evaluation, measuring, or administration related to any building, construction, demolition, or work, shall be brought against any person performing or furnishing land surveying services, as such term is defined in R.S. 37:682, including but not limited to those services preparatory to construction, or against any person performing or furnishing the design, planning, supervision, inspection, or observation of construction or the construction of immovables, or improvement to immovable property, including but not limited to a residential building contractor as defined in R.S. 37:2150.1 :

(1)(a) More than five years after the date of registry in the mortgage office of acceptance of the work by owner.

(b) If no such acceptance is recorded within six months from the date the owner has occupied or taken possession of the improvement, in whole or in part, more than five years after the improvement has been thus occupied by the owner.

....

C. If such an injury to the property or to the person or if such a wrongful death occurs during the fifth year after the date set forth in Subsection A, an action to recover the damages thereby suffered may be brought within one year after the date of the injury, but in no event more than six years after the date set forth in Subsection A, even if the wrongful death results thereafter.

The crux of LCG's argument is that "[p]eremptive statutes are strictly construed against peremption and in favor of the claim. Of the possible constructions, the one that maintains enforcement of the claim or action, rather than the one that bars enforcement should be adopted." Rando v. Anco Insulations, Inc. , 08-1163, p. 21 (La. 5/22/09), 16 So.3d 1065, 1083. LCG argues that La.R.S. 9:2772 does not mention either insurers or claims regarding additional insureds and, therefore, applies only to persons performing professional services, such as Sasaki.

LCG cites Sibley v. Blue Cross Blue Shield of La. , 13-924, 13-925 (La.App. 1 Cir. 3/20/14), 142 So.3d 1022, for the proposition that under the principles of strict construction, a peremptive statute is not applicable to an insurer if the statute does not include them in its definitions. Sibley obtained a Blue Cross health insurance policy through an agency, but her policy was cancelled because she failed...