Opinion
2021 CA 1546
06-03-2022
Kenneth BERTHELOT v. Russell INDOVINA and Progressive Security Insurance Company
Richard P. Voorhies, III, James F. Flinn, William A. Barousse, New Orleans, Louisiana, Counsel for Plaintiff/Appellee, Kenneth Berthelot Frederick C. Fondren, Houma, Louisiana, Counsel for Defendants/Appellants, Pro-Mag Inspections, L.L.C. and Houston Specialty Insurance Company Charles V. Giordano, Michael E. Escudier, Dianna Duffy Willem, Metairie, Louisiana, Counsel for Defendant/Appellant, Pro-Mag Inspections, L.L.C. Brant J. Cacamo, Sidney J. Angelle, New Orleans, Louisiana, Counsel for Intervenor/Appellant, Crum & Forster Specialty Insurance Company
Richard P. Voorhies, III, James F. Flinn, William A. Barousse, New Orleans, Louisiana, Counsel for Plaintiff/Appellee, Kenneth Berthelot
Frederick C. Fondren, Houma, Louisiana, Counsel for Defendants/Appellants, Pro-Mag Inspections, L.L.C. and Houston Specialty Insurance Company
Charles V. Giordano, Michael E. Escudier, Dianna Duffy Willem, Metairie, Louisiana, Counsel for Defendant/Appellant, Pro-Mag Inspections, L.L.C.
Brant J. Cacamo, Sidney J. Angelle, New Orleans, Louisiana, Counsel for Intervenor/Appellant, Crum & Forster Specialty Insurance Company
BEFORE: McDONALD, LANIER, AND WOLFE, JJ.
LANIER, J.
On appeal, defendants seek review of the district court's grant of plaintiff's motion for summary judgment. For the reasons that follow, we affirm in part, reverse in part, and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
This case arises out of a motor vehicle accident that occurred on April 14, 2014. Plaintiff, Kenneth Berthelot, originally filed suit in April 2015, alleging he was hit from the rear by a vehicle driven by defendant, Russell Indovina. Mr. Berthelot named Mr. Indovina and his liability insurer, Progressive Security Insurance Company ("Progressive"), as defendants. On November 5, 2015, Mr. Berthelot and Progressive agreed to a settlement for Progressive's policy limits of $100,000.00. Mr. Berthelot signed a Receipt, Release and Indemnity Agreement that provided, in part, as follows:
I do hereby release, acquit and forever discharge Progressive Security Insurance Company and Russell Indovina only in his personal capacity and in his capacity as insured of Progressive Security Insurance Company reserving all Kenneth Berthelot's rights to proceed against Russell Indovina in his capacity as insured under any other insurance policy or in his capacity as employee or agent of any person or entity as well as reserving all rights to proceed against all other parties named and unnamed. Plaintiff further releases, acquits and forever discharge's [sic] Progressive Security Insurance Company's insureds, insurers, indemnitors, successors, heirs, executors and administrators of and from any and all actions, causes of action, claims, demands, damages, costs, loss of services, expenses and compensation, on account of, or in any way growing out of, any and all known and unknown personal injuries or property damage resulting or to result from an incident that occurred on or about April 14, 2014, in the Parish of Terrebonne, State of Louisiana.
....
The above and foregoing payment is also made in full settlement and compromise of all claims asserted by the undersigned against Progressive Security Insurance Company and Russell Indovina only in his personal capacity and in his capacity as insured of Progressive Security Insurance Company in Docket No. 174356 of the 32nd Judicial District Court for the Parish of Terrebonne, State of Louisiana, entitled, "Kenneth Berthelot v. Russell Indovina and Progressive Security Insurance Company." Plaintiff reserves all rights to proceed against Russell Indovina in his capacity as insured under any other insurance policy or in his capacity as employee or agent of any person or entity as well as reserving all rights to proceed against all other parties named and unnamed. (Emphasis added.)
In addition, the parties filed a Partial Motion and Order to Dismiss, With Prejudice and Reservation of Rights, which provided:
NOW INTO COURT, by and through undersigned counsel, comes plaintiff, Kenneth Berthelot, only and upon suggesting to this Court that he has reached a settlement with defendants, Progressive Security Insurance Company and Russell Indovina, only, in his personal capacity and in his capacity as insured of Progressive Security Insurance Company, reserving all rights to proceed against all other parties named and unnamed ....
The December 2, 2015 Order signed by the court provided:
IT IS HEREBY ORDERED that Progressive Security Insurance Company and Russell Indovina, only, in his personal capacity and in his capacity as insured of Progressive Security Insurance Company are hereby dismissed in full and with prejudice reserving all Kenneth Berthelot's rights to proceed against Russell Indovina in his capacity as insured under any other insurance policy or in his capacity as employee or agent of any person or entity as well as reserving all rights to proceed against all other parties named and unnamed .... (Emphasis added.)
Thereafter, Mr. Berthelot filed a motion for leave to file a first supplemental and amending petition in which he noted that it was not until after taking Mr. Indovina's deposition that he learned that Mr. Indovina was "acting within the course and scope of his employment with Pro-Mag Inspections, L.L.C. ["Pro-Mag"] when the collision occurred." Mr. Berthelot was granted leave to file his proposed supplemental and amending petition, naming Pro-Mag as an additional defendant. Mr. Berthelot alleged that Pro-Mag was vicariously and solidarity liable for the actions and omissions of its employee, Mr. Indovina. In subsequent supplemental and amending petitions, Mr. Berthelot added Houston Specialty Insurance Company ("Houston Specialty") as Pro-Mag insurer and noted that Pro-Mag had a "second and/or umbrella policy of liability insurance" in effect on the date of the accident issued by Crum & Forster Specialty Insurance Company ("Crum & Forster"). Crum & Forster filed a petition for intervention to protect its interests as the excess insurer of Pro-Mag.
Thereafter, Crum & Forster, in its capacity as excess insurer of Pro-Mag, filed a motion for summary judgment seeking dismissal of Pro-Mag. Crum & Forster argued that as an omnibus insured of Progressive, Pro-Mag was released pursuant to the November 5, 2015 release entered into by Mr. Berthelot. In opposition thereto, Mr. Berthelot filed a cross motion for summary judgment arguing that he only intended to release Mr. Indovina and Progressive and that he specifically reserved his rights to sue Mr. Indovina's employer.
Pro-Mag previously filed a motion for summary judgment, raising this same issue, that was denied by the district court. Pro-Mag's application for supervisory review to both this court and the Louisiana Supreme Court were denied. See Berthelot v. Indovina, 2018 CC 1082 (La. 8/31/18), 250 So.3d 891 (unpublished writ action); Berthelot v. Indovina, 2018 CW 0176 (La. App. 1 Cir. 5/30/18), 2018 WL 2458850 (unpublished writ action).
Both motions proceeded to hearing before the district court on May 27, 2021. Over objection of counsel, the court allowed the submission of extrinsic evidence, noting its pertinence to the matter. After considering argument of counsel and the evidence submitted by the parties, the court denied Crum & Forster's motion for summary judgment, granted Mr. Berthelot's motion for summary judgment against Crum & Forster, Pro-Mag, and Houston Specialty, and found that Pro-Mag was not released as a Progressive insured by the November 5, 2015 release.
A dispute arose between the parties as to the scope of the court's judgment and whether the judgment was a final judgment for purposes of an appeal. Crum & Forster subsequently filed a Motion to Certify Judgment as Final Under Article 1915, which proceeded to hearing on July 29, 2021. The court found that the determination of "whether Pro-Mag is released as an insured by the November 2015 release is a threshold issue that will streamline or otherwise provide for judicial economy to the balance of the litigation, specifically, the merits of plaintiff's claims." Thereafter, on August 18, 2021, the court signed judgments granting Mr. Berthelot's motion for summary judgment, denying Crum & Forster's motion for summary judgment, and granting the motion to certify the judgment as final.
This appeal by Crum & Forster, Pro-Mag, and Houston Specialty (collectively "defendants") followed, wherein the following specifications of error are assigned for our review:
1. The trial court erred by allowing plaintiff to introduce parol evidence in support of his motion in an attempt to change plaintiff's "intent" with respect
to the clear and plain language of the release to avoid from releasing Pro-Mag from this litigation.
2. The trial court erred by granting plaintiffs Cross Motion for Summary Judgment and denying defendants' Motion for Summary Judgment despite the clear and explicit terms of the November 5, 2015 Receipt and Release which states that Plaintiff "releases ... Progressive['s] insureds ... from any and all actions, causes of action, claims, demands, ... in any way growing out of, any and all known and unknown personal injuries or property damage resulting or to result from an incident that occurred on or about April 14, 2014, in the Parish of Terrebonne, State of Louisiana. "[ ]
The denial of a motion for summary judgment is an interlocutory judgment and is appealable only when expressly provided by law. However, where there are cross-motions for summary judgment raising the same issues, this court will review the denial of a summary judgment in addressing the appeal of the granting of the cross-motion for summary judgment. Harris v. Imperial Fire and Casualty Insurance Company, 2020-1323 (La. App. 1 Cir. 7/21/21), 328 So.3d 1208, 1214 n.3, writ denied, 2021-01282 (La. 11/17/21), 327 So.3d 994.
APPLICABLE LAW
Summary Judgment
After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. Code Civ. P. art. 966(A)(3). In reviewing a trial court's ruling on a motion for summary judgment, appellate courts review evidence de novo using the same criteria that govern the trial court's determination of whether summary judgment is appropriate. Georgia-Pacific Consumer Operations, LLC v. City of Baton Rouge, 2017-1553 (La. App. 1 Cir. 7/18/18), 255 So.3d 16, 22, writ denied, 2018-1397 (La. 12/3/18), 257 So.3d 194.
The Code of Civil Procedure places the initial burden of proof on the party filing the motion for summary judgment. See La. Code Civ. P. art. 966(D)(1). If the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover need only point out to the court, through its supporting documents, the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. La. Code Civ. P. art. 966(D)(1). Once the motion for summary judgment has been properly supported by the moving party, i.e., the mover has established the material facts through its supporting documents and the mover has made a prima facie showing that the motion should be granted, the burden then shifts to the non-moving party to produce factual support, through the use of supporting documents in opposition to the motion, of the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. Code Civ. P. art. 966(D)(1). See also La. Code Civ. P. art. 966, Comments—2015, Comment (j). If the non-moving party fails to produce sufficient factual support in its opposition that proves the existence of a genuine issue of material fact, Article 966(D)(1) mandates the granting of the motion for summary judgment. See Babin v. Winn-Dixie Louisiana, Inc., 2000-0078 (La. 6/30/00), 764 So.2d 37, 40 (per curiam); Jenkins v. Hernandez, 2019-0874 (La. App. 1 Cir. 6/3/20), 305 So.3d 365, 371, writ denied, 2020-00835 (La. 10/20/20), 303 So.3d 315.
Summary judgment is seldom appropriate for determinations based on subjective facts of intent, motive, malice, good faith, or knowledge. Jones v. Estate of Santiago, 2003-1424 (La. 4/14/04), 870 So.2d 1002, 1006 ; Acadian Properties Northshore, L.L.C. v. Fitzmorris, 2019-1549 (La. App. 1 Cir. 11/12/20), 316 So.3d 45, 52. These subjective facts call for credibility evaluations and the weighing of testimony. Furthermore, the circumstantial evidence usually necessary for proof of motive or intent requires the trier-of-fact to choose from competing inferences, a task not appropriate for a summary judgment ruling. Louisiana AG Credit, PCA v. Livestock Producers, Inc., 42,072 (La. App. 2 Cir. 4/4/07), 954 So.2d 883, 891, writ denied, 2007-1146 (La. 9/14/07), 963 So.2d 1001. "[E]ven though granting a summary judgment based on an intent issue may be rare, it can be done when there is no issue of material fact concerning the pertinent intent." Carter v. BRMAP, 591 So.2d 1184, 1189 (La. App. 1 Cir. 1991).
In ruling on a motion for summary judgment, the trial court's role is not to evaluate the weight of the evidence or to determine the truth of the matter, but instead to determine whether there is a genuine issue of triable fact. Janney v. Pearce, 2009-2103 (La. App. 1 Cir. 5/7/10), 40 So.3d 285, 289, writ denied, 2010-1356 (La. 9/24/10), 45 So.3d 1078. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. Georgia-Pacific Consumer Operations, LLC, 255 So.3d at 22.
Compromise
A compromise instrument is the law between the parties and must be interpreted according to the parties' intent. It follows that the compromise instrument is governed by the same general rules of construction applicable to contracts. Trahan v. Coca Cola Bottling Co. United, Inc., 2004-0100 (La. 3/2/05), 894 So.2d 1096, 1106-1107 ; Ortego v. State, Dept. of Transp. and Development, 96-1322 (La. 2/25/97), 689 So.2d 1358, 1363. Therefore, when the words are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent. La. Civ. Code art. 2046. Further, a compromise extends only to those matters the parties intended to settle, and the scope of the transaction cannot be extended by implication. La. Civ. Code art. 3076 ; Trahan, 894 So.2d at 1107 ; Ortego, 689 So.2d at 1363 ; Brown v. Drillers, Inc., 93-1019 (La. 1/14/94), 630 So.2d 741, 748. Courts apply this rule of construction in light of the general principle that the instrument must be considered as a whole and in light of attending events and circumstances. Trahan, 894 So.2d at 1107 ; Ortego, 689 So.2d at 1363 ; Brown, 630 So.2d at 748.
The meaning and intent of the parties to a compromise is ordinarily determined from the four corners of the instrument, and extrinsic evidence is inadmissible to explain or to contradict the terms of the instrument. Trahan, 894 So.2d at 1107 ; Ortego, 689 So.2d at 1363. However, when the parties to a compromise dispute its scope, they are permitted to raise factual issues regarding whether the unequivocal language of the instrument was intended to be truly unequivocal. Brown, 630 So.2d at 749. Thus, a general release will not necessarily bar recovery for those aspects of a claim not intended by the parties to be covered by the release. Id. However, absent some substantiating evidence of mistaken intent, no reason exists to look beyond the four corners of the instrument to ascertain the parties' intent. Trahan, 894 So.2d at 1107 ; Brown, 630 So.2d at 749.
Utilizing a case-by-case, factual analysis, Louisiana courts have limited the rule's application to cases in which substantiating evidence is presented establishing either (1) that the releasor was mistaken as to what he or she was signing, even though fraud was not present; or (2) that the releasor did not fully understand the nature of the rights being released or that the releasor did not intend to release certain aspects of his or her claim. Brown, 630 So.2d at 749.
DISCUSSION
As previously noted, this matter was before the district court on cross motions for summary judgment. In its motion for summary judgment, Crum & Forster noted that Mr. Berthelot's allegations against Pro-Mag required a finding that Indovina was an employee of Pro-Mag and in the course and scope of his employment at the time of the accident in question. Thus, Crum & Forster maintained that assuming Mr. Berthelot could prove Pro-Mag was vicariously liable for Mr. Indovina's actions, Pro-Mag was an omnibus insured under the Progressive policy and was released by the November 5, 2015 release. Mr. Berthelot argued in his cross motion for summary judgment that he only intended to release Mr. Indovina and Progressive and that he specifically reserved his right to sue Mr. Indovina's employer, Pro-Mag.
The question of whether Mr. Indovina was acting within the course and scope of his employment with Pro-Mag at the time of the accident, thus bringing Pro-Mag within the definition of an insured under the Progressive policy, is not before us at this time. We note that another panel of this court previously considered this issue after the district court granted summary judgment in favor of Mr. Berthelot, finding that Mr. Indovina was acting in the course and scope of his employment with Pro-Mag at the time of the accident. On appeal, this court reversed, finding that summary judgment was inappropriate because genuine issues of material fact remained as to whether Mr. Indovina was in the course and scope of his employment at the time of the accident. Berthelot v. Indovina, 2021-0517 (La. App. 1 Cir. 12/22/21), 340 So.3d 119, 125.
In support of his argument that Pro-Mag was an insured of Progressive, counsel for Crum & Forster offered as evidence a copy of Progressive's policy, in which Mr. Indovina was the named insured. The policy further defines "Insured person" as "Any person or organization with respect only to vicarious liability for the acts or omissions of' a named insured. Over the objection of Mr. Berthelot's counsel, the district court allowed the introduction of the policy into evidence.
In addition to other evidence submitted, counsel for Mr. Berthelot offered several documents that he argued clearly evidenced Mr. Berthelot's intent to reserve his rights to pursue a claim against Pro-Mag. In an email between Progressive Claims Specialist, Michelle McReynolds, and Mr. Berthelot's counsel dated September 11, 2015, it is confirmed that in exchange for the policy limits of $100,000.00, Mr. Indovina would be released from any personal exposure and that a Gasquet release be executed reserving Mr. Berthelot's "rights against any applicable insurance with the employer or other coverage." Although Crum & Forster's counsel objected to the introduction of this document, the district court overruled the objection and allowed the evidence into the record.
Gasquet v. Commercial Union Ins. Co., 391 So.2d 466, 472 (La. App. 4 Cir. 1980), writs denied, 396 So.2d 921, 922 (La. 1981).
In a letter dated September 14, 2015, from Progressive's counsel to Mr. Berthelot's counsel, the following statement was included, "The $100,000.00 payment will be made on behalf of [Mr.] Indovina and Progressive .... In exchange for same, we will expect your client to execute a Receipt and Release and for you to execute a Dismissal of all claims against [Mr.] Indovina and Progressive ... reserving rights against his employer." Again, this document was allowed into evidence over the objection of Crum & Forster's counsel.
Moreover, Mr. Berthelot attested in an affidavit that when he signed the November 5, 2015 release, he did not know that Pro-Mag was Mr. Indovina's employer or that Mr. Indovina was acting in the course and scope of his employment with Pro-Mag when the April 14, 2014 accident occurred. He testified that he never intended to release Pro-Mag, Houston Specialty, or any excess and/or umbrella insurance companies providing coverage to Mr. Indovina and/or Pro-Mag relative to the accident in question. Mr. Berthelot also stated that he never intended to defend, indemnify, or hold harmless Pro-Mag with regard to the pending litigation or the accident in question. Mr. Berthelot added that the only parties who participated in the negotiation and execution of the November 5, 2015 release were him, Mr. Indovina, and Progressive. Mr. Berthelot further noted that prior to executing the release, he had no knowledge of the existence of Pro-Mag or Houston Specialty and that he received no compensation and/or benefits from either in exchange for executing the November 5, 2015 release.
On appeal, defendants argue that the district court erred in allowing Mr. Berthelot to introduce parol evidence to resolve the dispute as to the scope of the November 5, 2015 release. Defendants assert that Mr. Berthelot's submission of the parol evidence was an attempt to improperly change the terms of the release rather than to determine exactly what differences the parties intended to settle. Nonetheless, as previously noted, defendants rely on extrinsic evidence, the Progressive policy, in support of its position that Pro-Mag is an omnibus insured under the Progressive policy and thus released pursuant to the terms of the November 5, 2015 release.
Mr. Berthelot counters that the terms of the release are clear and, thus, parol evidence was not necessary to determine the parties' intent. Mr. Berthelot maintains that the language of the release specifically reserves his rights against Mr. Indovina in his capacity "as employee or agent of any person or entity as well as reserving all rights to proceed against all other parties named or unnamed." Mr. Berthelot further argues that the only logical reading of the provision releasing "Progressive insureds" and the broad reservation of rights is that he intended to release "Progressive insureds" only in their capacity as Progressive insureds, thereby allowing him to "maintain claims against any party 'named or unnamed' (even if that party is also a Progressive insured) to the extent that party is liable in any other capacity." Nonetheless, citing Brown, 630 So.2d at 749, and Roccaforte v. Wing Zone, Inc., 2007-2451 (La. App. 1 Cir. 8/21/08), 994 So.2d 126, 129, writ denied, (La. 11/21/08), 996 So.2d 1112, Mr. Berthelot posits that because a dispute arose as to the scope of the release, Louisiana law permits the introduction of extrinsic evidence in this case, which supports his position that he never intended to release Pro-Mag.
The record in the instant case clearly establishes "substantiating evidence" of mistaken intent, or, at the very least, sufficiently posits facts that raise a genuine issue regarding Mr. Berthelot's intent. Thus, based on the unique facts and circumstances of this case, we find no error by the district court in considering the extrinsic evidence offered by both parties. See Brown, 630 So.2d at 749. However, although we express no opinion as to whether this evidence establishes mistaken intent outside of the summary judgment context, we find that the evidence raises a genuine issue of material fact such that summary judgment in favor of Mr. Berthelot was not appropriate. For the same reasons, we find that Crum & Forster's summary judgment was appropriately denied by the district court.
DECREE
For the above and foregoing reasons, we affirm that portion of the district court's August 18, 2021 judgment that denied Crum & Forster Specialty Insurance Company's motion for summary judgment, we reverse that portion of the judgment that granted Kenneth Berthelot's motion for summary judgment, and we remand for further proceedings consistent with this opinion. We assess all costs associated with this appeal equally against all parties, Kenneth Berthelot, Pro-Mag Inspections, L.L.C., Houston Specialty Insurance Company, and Crum & Forster Specialty Insurance Company.