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Louisiana District Court Dismisses Insurer’s Third Party Complaint Arising From Faulty Hurricane Isaac Repairs

Blogs, Insurance Coverage

In a recent decision involving property damages allegedly sustained during Hurricane Isaac, the United States District Court for the Eastern District of Louisiana, granted summary judgment in favor of a third-party defendant roofing contractor. Specifically, the court found that the insurer’s third-party complaint failed as a matter of law because the insured’s complaint against its insurer did not assert any allegations arising from the roofing contractor’s defective emergency repairs which would render the contractor liable to the insurer. Cedar Ridge, LLC v. Landmark American Insurance Company, et al, C.A. No. 13-672, 2014 WL 295068 (Jan. 27, 2014).

On April 10, 2013, Cedar Ridge, LLC, (“Cedar Ridge”) filed a complaint against its insurer Landmark American Insurance Company (“Landmark”) for breach of contract with respect to roof damage allegedly sustained to its Riverlands Shopping Center (“Riverlands”) as a result of Hurricane Isaac. Following Hurricane Isaac, Roof Technologies, Inc. (“Roof Tech”) conducted emergency mitigation on the roof. Landmark denied coverage for Cedar Ridge’s insurance claim on the grounds that the work performed by Roof Tech caused additional damage to Riverlands which was precluded from coverage under the policy’s exclusions for “faulty, inadequate or defective . . . workmanship, repair, construction, renovation, remodeling, grading, [and] compaction,” and for “faulty, inadequate, or defective . . . materials used in a repair, construction, renovation, or remodeling.” 

Following the commencement of the suit against it by its insured, Landmark filed a third-party complaint against Roof Tech asserting that, in the event that Landmark was held liable for any of the claims asserted against it by Cedar Ridge, Roof Tech was liable to Landmark for the damage it caused to the property as a result of its defective workmanship. Roof Tech moved for summary judgment on the basis that it cannot be found liable to Landmark because Cedar Ridge’s complaint is premised solely on hurricane damage, and not on any allegation that Roof Tech performed faulty repairs relating to the hurricane damage.

In granting Roof Tech’s motion for summary judgment, the district court first affirmed the general principle that if a third-party complaint does not allege that the third-party plaintiff is liable for all or part of the principal demand, then the third-party complaint fails as a matter of law. In this case, the court found that the only admissible evidence supported Roof Tech’s position that Cedar Ridge’s complaint did not encompass the damages allegedly caused by Roof Tech. Thus, the court concluded that Landmark’s third-party complaint against Roof Tech was baseless. 

To read a copy of the court’s decision click here