Motorola, Inc. v. Associated Indem. Corp.

867 So.2d 723

MOTOROLA, INC. v. ASSOCIATED INDEMNITY CORPORATION, Continental Casualty Company, National Surety Company, Transportation Insurance Company, and Zurich Insurance Company

No. .

Court of Appeal of Louisiana, First Circuit.

October 22, 2003.

S. Gene Fendler, Harold J. Flanagan, New Orleans, J.W. Montgomery, III, Pittsburgh, PA, Counsel for Plaintiff/Appellant Motorola, Inc.

Michael Durand, Lafayette, Counsel for Defendants/Appellees Associated Indemnity Corporation and National Surety Corporation.

Philip R. King, Chicago, IL, Counsel for Defendant/Appellee Zurich American Insurance Company.

David P. Salley, New Orleans, Counsel for Defendant/Appellee Continental Casualty Company.

William J. Mitchell, II, Baton Rouge, Counsel for Defendant/Appellee Hartford Insurance Company.

Robert A. Vosbein, William J. Kelly, III, New Orleans, Counsel for Defendants/Appellees Continental Casualty Company and Transportation Insurance Company.

Edward A. Rodrigue, Jr., New Orleans, Counsel for Defendant/Appellee St. Paul Surplus Lines Insurance Company.

Eavelyn T. Brooks, New Orleans, Counsel for Defendants/Appellees National Union Fire Insurance Company of Pittsburg, Pennsylvania and Illinois National Insurance Company.

Before: CARTER, C.J., FOIL, WHIPPLE, PARRO, FITZSIMMONS, KUHN, GUIDRY, PETTIGREW, DOWNING, GAIDRY, McDONALD, & McCLENDON, JJ.

CARTER, C.J.

Motorola, Inc., was originally sued in various class actions and in two individual lawsuits. Motorola filed this action for declaratory judgment and breach of contract on August 11, 2000, against ten of its primary and excess liability insurers, seeking a determination that their policies provide coverage for the claims in the underlying actions, that they have the duty to defend Motorola for those claims, and that they are liable for damages to Motorola for their failure to defend it in the underlying actions. In addition to denying liability in their answers, Associated Indemnity Company, Hartford Insurance Company, and other insurers asserted reconventional demands for declaratory judgments that they have no obligation to either defend or indemnify Motorola in the underlying class actions.

Cross motions for summary judgment were filed by Motorola and its alleged insurers regarding insurance coverage and the duty to defend Motorola in those suits. The trial court denied Motorola's motion, but granted the motions of Associated and Hartford, dismissing Motorola's claims against those insurers. The trial court also granted partial summary judgment in favor of Continental Casualty Company on certain issues, although it remains a defendant as to the unresolved issues. Motorola appeals.

Because of the importance of consistency in the application of Louisiana Code of Civil Procedure article 1915 in determining the appealability of partial judgments, and with the consent of the parties, we review this procedural issue en banc, as we did in a prior opinion in the connected appeal, Motorola, Inc. v. Associated Indem. Corp., 02-0716 (La.App. 1 Cir. 4/30/03), 867 So.2d 715 (Motorola I). Since we are addressing only the procedural issue involved herein, the original three-judge4 panel to which this appeal was assigned will decide the merits of the appeal, if it is maintained.

FACTUAL AND PROCEDURAL BACKGROUND

Motorola is a manufacturer of cellular wireless handheld telephones (cell phones). Class-action plaintiffs in a number of suits seek damages from Motorola and numerous other cell phone manufacturers and distributors to either prevent or alleviate customers' allegedly harmful exposure to radio frequency radiation.¹ Motorola is also a defendant in two individual lawsuits that seek damages for brain cancers allegedly caused by Motorola's products.²

In this declaratory judgment action by Motorola, on November 28, 2001, the trial court granted the motion for summary judgment of Zurich American Insurance Company, ruling that its policy did not afford coverage to Motorola for the claims asserted in the underlying class actions and that it owed no duty of defense. In the same judgment, the court denied Motorola's motion for summary judgment on the same issues.³ At a subsequent hearing on March 27, 2002, the trial court also granted summary judgment in favor of the other moving insurers and denied Motorola's motions on the same issues. The summary judgments dismissed Associated and Hartford as party defendants in this declaratory judgment action. As to Continental, the summary judgment granted it partial relief as to its duties for all of the underlying class actions, but not those relating to the underlying individual actions, as to which it did not seek such relief. Thus, as to Continental, the partial summary judgment did not grant complete relief as to all issues joined between it and Motorola.

DISCUSSION

Appellate courts have the duty to examine their subject matter jurisdiction sua sponte, even when the parties do not raise the issue. McGehee v. City/Parish of East Baton Rouge, 00-1058 (La.App. 1 Cir. 9/12/01), 809 So.2d 258, 260. A final judgment of the trial court can be appealed. LSA-C.C.P. art.2083. A judgment that determines the merits in whole or in part is a final judgment. LSA-C.C.P. art. 1841. Whether a partial judgment is appealable is determined by examining the requirements of Code of Civil Procedure article 1915. Once again, as in Motorola I, it is appropriate for us to examine the basis for our jurisdiction before addressing the merits of this appeal.

The judgments before us are summary judgments rendered in an action for declaratory judgment.⁴ Louisiana Code of Civil Procedure article 1915 authorizes the immediate appeal of partial final judgments, including partial summary judgments. It provides, in pertinent part:

A. A final judgment may be rendered and signed by the court, even though it may not grant the successful party or parties all of the relief prayed for, or may not adjudicate all of the issues in the case, when the court:

(1) Dismisses the suit as to less than all of the parties, defendants, third party plaintiffs, third party defendants, or intervenors.

....

(3) Grants a motion for summary judgment, as provided by Articles 966 through 969, but not including a summary judgment granted pursuant to Article 966(E).⁵

....

B. (1) When a court renders a partial judgment or partial summary judgment or sustains an exception in part, as to one or more but less than all of the claims, demands, issues, or theories, whether in an original demand, reconventional demand, cross-claim, third party claim, or intervention, the judgment shall not constitute a final judgment unless it is designated as a final judgment by the court after an express determination that there is no just reason for delay.

(2) In the absence of such a determination and designation, any order or decision which adjudicates fewer than all claims or the rights and liabilities of fewer than all the parties, shall not terminate the action as to any of the claims or parties and shall not constitute a final judgment for the purpose of an immediate appeal. Any such order or decision issued may be revised at any time prior to rendition of the judgment adjudicating all the claims and the rights and liabilities of all the parties. [Our emphasis; footnote added.]

In its judgment, the trial court designated⁶ the partial summary judgments in favor of the insurers as partial final judgments pursuant to article 1915B.

As between Motorola and the insurers, Associated and Hartford, the issue for determination is identical to that presented in Motorola I. No factors warrant a different resolution. We therefore conclude, for the same reasons set forth in Motorola I, that the judgments against those insurers are partial final judgments under both paragraphs A(1) and A(3) of article 1915, immediately appealable without need for the trial court's designation. Accordingly, we maintain those judgments for appeal.

What is more difficult, however, is the trial court's designation as final of the summary judgment in favor of Continental. That judgment clearly falls within the ambit of article 1915B, and despite the clear designation of the summary judgment as final and appealable by the trial court, the reasoning upon which it based that designation is unstated. We will therefore address what constitutes proper designation of a partial judgment for purposes of appeal under Louisiana law.

LEGAL BACKGROUND

The Initial Optimism

When the Louisiana Code of Civil Procedure was adopted in 1960,⁷ commentators expressed great hope that the new codal provisions on judgments would greatly reduce future procedural problems. The redactors had "not only borrowed thoroughly-tested rules from other jurisdictions, but they also employed unambiguous language and exhaustive comments to minimize any confusion relative to still unlitigated matters." Jack Brook, Symposium on Civil Procedure, Rendition of Judgements, 21 La.L.Rev. 168, 235 (1960). New article 1915 was hailed as one of the best examples of these new rules. No more would parties with easily proven claims be forced "to endure the hardship of awaiting final disposition of all claims." Id. at 232.

Unfortunately, the redactors' optimism was misplaced. The "thoroughly-tested rule" that they borrowed for article 1915 was Federal Rule of Civil Procedure 54(b). The Louisiana legislature did not adopt Rule 54(b) in its entirety, however, and over the years Louisiana's jurisprudential interpretation of article 1915 has diverged somewhat from the federal courts' interpretation of Rule 54(b). The legislature amended article 1915 in 1983, 1992, 1997, 1999, and 2001, and the result has been a procedural morass.

The issue before the en banc court today is the interpretation of article 1915B's language "an express determination that there is no just reason for delay." We must determine whether such express determination requires the trial court to give...