Court: Louisiana Court of Appeal; February 12, 2008; Louisiana; State Appellate Court
In the case of Cheryl Moore, Kim Wattingney, and Henry Martin v. Kenilworth/Kailas Properties and Colony Insurance Company, the Louisiana Court of Appeal affirmed the district court's denial of a motion for summary judgment filed by third party defendant Dr. Dion L. Armstrong and his insurer, St. Paul Fire and Marine Insurance Company. The underlying issue involves a claim for contractual indemnity initiated by Kailas Management and Colony Insurance against Dr. Armstrong related to an incident on June 3, 1998, when plaintiffs, who were guests at the Armstrong Family Clinic, were injured due to a ceiling collapse.
The clinic, located at 6560 Morrison Ave., was leased by Kailas to Dr. Armstrong under a lease agreement that included an indemnification clause. This clause required Dr. Armstrong to indemnify Kailas for claims arising from bodily injury, except those resulting from Kailas's sole negligence. The lease also mandated that Dr. Armstrong notify Kailas of any necessary repairs, particularly concerning the air conditioning system, which Kailas was responsible for repairing unless the need arose from tenant-related issues.
Following the accident, Kailas and Colony filed a third-party demand for indemnification against Dr. Armstrong in October 2000. Dr. Armstrong subsequently sought summary judgment in November 2001, arguing that there was no evidence implicating him or his actions in the accident, asserting that he had appropriately reported the air conditioning leak and taken precautions for the safety of his patients. The court ultimately upheld the denial of his summary judgment motion.
Dr. Armstrong's motion for summary judgment was granted by the district court, leading to his dismissal from a trial that took place from September 9-17, 2002. During this trial, the jury found the principal plaintiffs in favor, allocating 90% of the fault to Kailas and 10% to Dr. Armstrong, resulting in a judgment on October 10, 2002. On October 23, 2002, the appellate court reversed the summary judgment, stating that the fault allocation was a factual issue. Following this, Kailas and Colony filed a motion for summary judgment on October 29, 2002, claiming indemnity from Dr. Armstrong based on the jury's verdict. Dr. Armstrong opposed this motion, which was denied by the district court on March 3, 2003. Subsequent writ applications by Kailas and Colony were denied by both the appellate court and the Supreme Court.
While pursuing indemnification, Kailas and Colony also appealed the trial judgment. The appellate court affirmed the fault allocation, noting Dr. Armstrong's potential to make repairs himself. Following a settlement with the plaintiffs, Kailas and Colony paid 90% of the judgment. On June 4, 2005, Dr. Armstrong and St. Paul filed a motion for summary judgment arguing against indemnification obligations based on prior court rulings. In response, Kailas and Colony submitted a second motion for summary judgment claiming entitlement to indemnity under the lease agreement. After delays due to Hurricane Katrina, a hearing occurred on March 10, 2006. The district court ruled on April 11, 2006, in favor of Dr. Armstrong and St. Paul, but did not clarify the status of their summary judgment motion. A follow-up hearing was set for September 29, 2006, for clarification.
The district court indicated its intention to grant Dr. Armstrong's and St. Paul's motion for summary judgment, ultimately issuing a formal judgment on October 9, 2006, which confirmed this decision. Following this, Kailas and Colony appealed, arguing that the district court erred by denying their motion for summary judgment. They contended that the lease agreement required Dr. Armstrong and St. Paul to indemnify them for claims arising from injuries allegedly caused by Dr. Armstrong's negligence. Kailas and Colony asserted that the contract's plain language supports their claim for indemnification, as the relevant provisions were triggered by the plaintiffs' injuries. They cited a jury's determination of combined negligence between Kailas and Dr. Armstrong, arguing that this finding established the conditions for indemnity. They emphasized that public policy generally disallows indemnification for sole negligence, but since both parties were found negligent, Dr. Armstrong and St. Paul are obligated to indemnify them for claims not resulting solely from Kailas's actions. Thus, Kailas and Colony argued that the district court improperly denied their motion for summary judgment, asserting that the existence of the indemnity obligation was undisputed based on the jury's findings.
Dr. Armstrong and St. Paul contend that they owe no indemnification due to Dr. Armstrong's qualified liability at trial and the applicability of the law of the case doctrine, which the Court affirms. A review of prior opinions establishes that the Court will not revisit its own rulings in the same case unless there is palpable error or manifest injustice. The Court previously reversed a summary judgment favoring Dr. Armstrong and St. Paul, determining that the allocation of fault was a factual question. The jury's apportionment of fault among Dr. Armstrong, St. Paul, Kailas, and Colony was upheld by the Court.
Kailas and Colony argue that the jury's allocation of fault should trigger a contractual indemnity obligation, focusing on the enforceability of the indemnity provision based on the combined negligence of Kailas and Dr. Armstrong. Under Louisiana law, indemnity agreements require strict interpretation, and a contract cannot indemnify a party against its own negligence unless explicitly stated. The Court finds that the indemnity provision does not unequivocally require Kailas and Colony to be indemnified for their own negligent acts. Concluding that affirming such indemnification would contradict the law of the case and undermine the jury's fault allocation, the Court confirms that Dr. Armstrong and St. Paul are liable only for the 10% of fault assigned to them. Ultimately, the Court supports the district court's decision to grant summary judgment in favor of Dr. Armstrong and St. Paul regarding the unenforceability of the indemnity provision.
The district court's judgment granting summary judgment in favor of Dr. Dion L. Armstrong, operating as Armstrong Family Clinic, and St. Paul Fire and Marine Insurance Company is affirmed. Judge Cannizzaro concurs with the majority's result but provides separate reasoning. The majority's decision relies on the law of the case doctrine, asserting that the jury's apportionment of fault, attributing ten percent (10%) to Dr. Armstrong, should not be reconsidered. However, the majority finds the indemnity clause of the lease ambiguous and unenforceable regarding Kailas Management's negligence, leading to the affirmation of summary judgment.
Judge Cannizzaro, while agreeing that the appellees cannot be held liable for any damages, argues from a different perspective. He emphasizes that the appellees were not involved in the September 2002 trial where the fault was apportioned, thus lacking the opportunity to defend against negligence claims. This absence constitutes a due process violation, which undermines the application of the law of the case doctrine in this instance. He notes that the doctrine is inapplicable when prior rulings contain palpable errors or result in manifest injustice. Ultimately, it is confirmed that Kailas and Colony have fulfilled their ninety percent (90%) fault responsibilities regarding the plaintiffs.
