Opinion
NO. 2018 CA 0818
02-25-2019
TMI ENTERPRISE, L.L.C. v. KRAWDADDY'S DELI, LLC, PAUL ANTHONY MLADENKA, MICHAEL MLADENKA AND MARYLAND CASUALTY COMPANY
MICHAEL A. TRIAY MANDEVILLE, LA ATTORNEY FOR PLAINTIFF/APPELLANT TMI ENTERPRISE, L.L.C. RANDELL E. TREADAWAY JEFFREY E. MCDONALD COVINGTON, LA ATTORNEYS FOR DEFENDANT/APPELLEE ZURICH AMERICAN INSURANCE COMPANY, SUCCESSOR IN INTEREST TO MARYLAND CASUALTY COMPANY CLIFTON IVEY, JR. BATON ROUGE, LA ATTORNEY FOR DEFENDANTS KRAWDADDY'S DELI, LLC, PAUL MLADENKA, AND MICHAEL MLADENKA JACK E. TRUITT COVINGTON, LA ATTORNEY FOR DEFENDANT KRAWDADDY'S LA a/k/a KRAWDADDY'S INC.
NOT DESIGNATED FOR PUBLICATION Appealed from the 18nd Judicial District Court In and for the Parish of West Baton Rouge, State of Louisiana
Trial Court No. 1041680
Honorable Edward J. Gaidry, Judge Ad Hoc MICHAEL A. TRIAY
MANDEVILLE, LA ATTORNEY FOR
PLAINTIFF/APPELLANT
TMI ENTERPRISE, L.L.C. RANDELL E. TREADAWAY
JEFFREY E. MCDONALD
COVINGTON, LA ATTORNEYS FOR
DEFENDANT/APPELLEE
ZURICH AMERICAN INSURANCE
COMPANY, SUCCESSOR IN INTEREST TO
MARYLAND CASUALTY COMPANY CLIFTON IVEY, JR.
BATON ROUGE, LA ATTORNEY FOR
DEFENDANTS
KRAWDADDY'S DELI, LLC, PAUL
MLADENKA, AND MICHAEL MLADENKA JACK E. TRUITT
COVINGTON, LA ATTORNEY FOR
DEFENDANT
KRAWDADDY'S LA a/k/a KRAWDADDY'S
INC. BEFORE: WELCH, CHUTZ, AND LANIER, JJ. LANIER, J.
Plaintiff, TMI Enterprise, L.L.C. ("TMI"), appeals the trial court's September 7, 2017, judgment, which dismissed, with prejudice, its claims against defendant, Maryland Casualty Company ("MCC"). For the following reasons, we maintain the appeal and affirm as amended.
According to the record, Zurich American Insurance Company, as successor by merger with MCC, appeared on behalf of MCC in these proceedings. However, for clarity and consistency, we will refer to the insurer throughout this opinion as MCC.
FACTS
According to TMI's petition for damages, TMI was the owner and operator of various gaming devices located in the Krawdaddy's Truck Stop in Port Allen, Louisiana. On October 20, 2013, defendant, Krawdaddy's Deli, LLC, d/b/a Krawdaddy's Kitchen ("Krawdaddy's Deli"), was operating a restaurant in the truck stop. TMI alleged that defendants, Paul and Michael Mladenka, while in the course and scope of their employment with Krawdaddy's Deli, "ignited a gas burner under a large cast iron pot ... filled with cooking grease," which resulted in a "raging fire," burning the truck stop to the ground. TMI asserted it was unable to continue the operation of its gaming enterprise due to the total loss of its gaming equipment and the complete destruction of the truck stop. TMI named MCC in its capacity as the liability insurer of Krawdaddy's Deli and the Mladenkas (hereinafter sometimes collectively referred to as "Krawdaddy's Deli" for ease of reference). In a subsequent amended petition, TMI added, as an addition defendant, Krawdaddy's LA, L.L.C. a/k/a Krawdaddy's Inc. ("Krawdaddy's LA"), in its capacity as the owner of the immovable property on which the truck stop was located.
In response to TMI's claims, MCC filed a motion for summary judgment on April 28, 2017, seeking dismissal, with prejudice, of TMI's claims against it. MCC argued that there was no coverage under the MCC policy issued to Krawdaddy's Deli on the grounds that material misrepresentations made by Krawdaddy's Deli in its application for insurance voided the MCC policy ab initio. MCC further asserted that there was no coverage because the MCC policy was cancelled effective July 28, 2013, prior to the date of the fire, for nonpayment of the premium. In support of its motion, MCC submitted the following evidence: (1) a copy of the MCC policy number PPS 05424975, with a policy period of 11/28/2012 to 11/28/2013; (2) a copy of the electronic insurance application form; (3) a copy of a form entitled "Restaurant Supplemental Information" that was filled out by hand; (4) excerpts from the deposition of Paul Mladenka, given as the corporate representative of Krawdaddy's Deli; (5) excerpts from Michael Mladenka's deposition; (6) excerpts from Robert "Andy" Blumberg's deposition, the insurance agent who secured the MCC policy for Krawdaddy's Deli; (7) a copy of the notice of cancellation dated July 10, 2013, indicating a notice effective date of cancellation of the MCC policy of July 28, 2013, unless $371.04 was received by said date; (8) a copy of the certificate of mailing; (9) a copy of a $371.04 check dated August 8, 2013, from Krawdaddy's Deli made payable to MCC; and (10) Aiko Walson's affidavit, an Underwriting Manager with knowledge of the MCC policy in question. A hearing on said motion was originally scheduled for June 15, 2017, but was later continued to August 10, 2017.
The record reveals that MCC had filed at least two prior motions for summary judgment on the issue of the cancellation of the MCC policy due to nonpayment of premiums. However, according to the record before us, neither of the motions were ever adjudicated.
We note a clerical error in the trial court's September 7, 2017 judgment with regard to the MCC policy in question. The trial court references the policy as bearing Policy No. "PPS 0524975." However, from our review of the record, this is clearly a clerical error as the correct Policy No. is "PPS 05424975." The trial court could have corrected this error on its own initiative pursuant to La. Code Civ. P. art. 1951. Further, this court may correct clerical errors in the judgment of a trial court. Accordingly, we amend the judgment to reflect the correct policy number. See Live Oak Homes Corp. v. Carrier Sales & Distribution, LLC, 2013-516 (La. App. 5 Cir. 4/23/14), 140 So.3d 362, 367.
Generally, a party may not utilize unsworn and unverified documents as summary judgment evidence. Thomas v. Comfort Center of Monroe. LA. Inc., 2010-0494 (La. App. 1 Cir. 10/29/10), 48 So.3d 1228, 1237. Article 966(A)(4) states that "[t]he only documents that may be filed in support of or in opposition to the motion are pleadings, memoranda, affidavits, depositions, answers to interrogatories, certified medical records, written stipulations, and admissions." However, Article 966 further provides that the court "shall consider any documents to which no objection is made." La. Code Civ. P. art. 966(D)(2).
On July 31, 2017, Krawdaddy's Deli filed an answer, generally denying the claims of TMI, and further asserted a cross claim against MCC, requesting judgment in their favor finding that the MCC policy provided "full coverage for defense, full indemnity, and other coverages up to the limits of the policy(ies)."
MCC's motion for summary judgment proceeded to hearing on August 10, 2017, at which time all parties were present. Counsel for MCC argued that TMI's opposition to the motion for summary judgment was untimely. Citing La. Civ. Code art. 966(B)(2), MCC argued that TMI's opposition, and any documents attached thereto, should be stricken from the record for failure to comply with the article. After counsel for MCC completed argument on the summary judgment motion, the trial court rendered a decision from the bench, without allowing counsel for TMI argument on the motion. The trial court granted summary judgment in favor of MCC finding there was no genuine issue of fact that the MCC policy was cancelled effective July 28, 2013, for nonpayment of premium and that the MCC policy was not in effect on the date of the fire. The trial court signed a judgment on September 7, 2017, dismissing TMI's claims against MCC, with prejudice.
Article 966(B)(2) provides that "Any opposition to the motion and all documents in support of the opposition shall be filed and served in accordance with Article 1313 not less than fifteen days prior to the hearing on the motion."
We note from the record that MCC also filed a reply memorandum on the day of the hearing objecting to TMI's opposition and requesting that TMI's opposition and all evidence attached thereto be excluded as untimely pursuant to Article 966(B)(2).
While the judge did not specifically say TMI's opposition was excluded from consideration, it is clear from several of the judge's comments (e.g., "I still have to determine the validity of the motion for summary judgment with or without the opposition. Obviously it gives the mover the upper hand, so to speak, in the filing.") and the sequence of events at the hearing that the trial court did not consider the untimely opposition filed by TMI, or any of the exhibits attached thereto, in rendering its decision on MCC's motion for summary judgment.
TMI was served on September 19, 2017, with notice of the trial court's September 7, 2017 judgment. TMI subsequently fax-filed a motion for new trial on September 28, 2017, which was denied by the trial court on October 11, 2017. This December 11, 2017 appeal by TMI followed, wherein the following specifications of error were raised:
We note that there is an unsigned motion for appeal in the record that reflects a filing date of December 11, 2017. However, this same motion also bears what appears to be a date, time, and pagination stamp indicative of fax-filing of said motion on December 8, 2017. Using either date, TMI's appeal is timely.
1. The trial court erred in finding that the policy of insurance issued by MCC to [Krawdaddy's Deli] was cancelled by MCC on July 28, 2013 for nonpayment of premium.
2. The trial court erred in finding that the MCC policy was not in force or effect on October 20, 2013 when the fire occurred at the Krawdaddy's Truck Stop in Port Allen, Louisiana.
Rule to Show Cause
On June 22, 2018, this court, ex proprio motu, issued an order directing the parties to show cause as to why this appeal should not be dismissed because it appeared that the motion for devolutive appeal was filed untimely. The parties filed briefs, and the record was supplemented on July 9, 2018. The rule to show cause was subsequently referred to this panel for disposition. See TMI v. Krawdaddy's Deli, LLC, 2018-0818 (La. 1 Cir. 10/23/18) (unpublished action). Our review of the record, along with supplements thereto, reveals that the appeal was timely taken. Therefore, we maintain the appeal.
SUMMARY JUDGMENT
A motion for summary judgment is a procedural device used to avoid a full-scale trial when there is no genuine issue of material fact. All Crane Rental of Georgia, Inc. v. Vincent, 2010-0116 (La. App. 1 Cir. 9/10/10), 47 So.3d 1024, 1027, writ denied, 2010-2227 (La. 11/19/10), 49 So.3d 387. After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show there is no genuine issue as to material fact and that mover is entitled to judgment as a matter of law. La. Code Civ. P. art. 966(A)(3). The only documents that may be filed in support of or in opposition to the motion are pleadings, memoranda, affidavits, depositions, answers to interrogatories, certified medical records, written stipulations, and admissions. La. Code Civ. P. art. 966(A)(4).
The burden of proof rests on the mover. Nevertheless, 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's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish 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).
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. Guardia v. Lakeview Regional Medical Center, 2008-1369 (La. App. 1 Cir. 5/8/09), 13 So.3d 625, 628. A trial court cannot make credibility decisions on a motion for summary judgment. Monterrey Center, LLC v. Ed.ucation Partners, Inc., 2008-0734 (La. App. 1 Cir. 12/23/08), 5 So.3d 225, 232. In deciding a motion for summary judgment, the trial court must assume that all of the witnesses are credible. Independent Fire Ins. Co. v. Sunbeam Corp., 99-2181 (La. 2/29/00), 755 So.2d 226, 236.
Appellate courts review evidence de novo under the same criteria that govern the trial court's determination of whether summary judgment is appropriate. Bouquet v. Williams, 2016-0134 (La. App. 1 Cir. 10/28/16), 206 So.3d 232, 237, writs denied, 2016-2077, 2016-2082 (La. 1/9/17), 214 So.3d 870, 871. Thus, appellate courts ask the same questions that the trial court does 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. Smith v. Our Lady of the Lake Hosp., Inc., 93-2512 (La. 7/5/94), 639 So.2d 730, 750. 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. Succession of Hickman v. State Through Board of Supervisors of Louisiana State University Agricultural and Mechanical College, 2016-1069 (La. App. 1 Cir. 4/12/17), 217 So.3d 1240, 1244.
DISCUSSION
As previously noted, it is clear from the record that neither TMI's opposition nor any of the exhibits attached thereto were considered by the trial court at the hearing on MCC's motion for summary judgment. Article 966(B) mandates that an opposition to a motion for summary judgment, along with all documents in support of the opposition, must be filed no less than fifteen days prior to the hearing on the motion. The time limitations established by Article 966(B) for the filing and serving of evidence in opposition to a motion for summary judgment are mandatory; evidence not timely filed can be ruled inadmissible and properly excluded by the trial court. See Buggage v. Volks Constructors, 2006-0175 (La. 5/5/06), 928 So.2d 536 (per curiam).
The record indicates that TMI did not file its memorandum and attached opposition evidence until August 3, 2017, seven days prior to the hearing on the motion for summary judgment. The opposition evidence was not filed in accordance with the time limitations established by Article 966(B). MCC objected in a reply memorandum as noted in Footnote 6. Thus, we cannot say that the trial court erred in refusing to consider the memorandum and attached evidence offered by TMI in opposition to MCC's motion for summary judgment.
On appeal, TMI argues that there is a genuine issue of material fact as to whether, as in the past, the late premium payments made by Krawdaddy's Deli were accepted by MCC, resulting in the reinstatement of the MCC policy. TMI further contends that the Mladenkas never received the alleged refunds of any of these late premium payments issued to them by MCC. TMI asserts that equitable estoppel applies in this case such that Krawdaddy's Deli was led to believe that the MCC policy would remain in effect even though the premiums were not paid when due. Finally, TMI asserts that according to a notice of cancellation issued to the additional insured Krawdaddy's LA by MCC on September 16, 2013, Krawdaddy's LA's interest in the MCC policy did not cease until October 23, 2013, after the October 20, 2013 fire. Thus, TMI maintains, the MCC policy was in force and effect in favor of Krawdaddy's LA on the date of the fire.
To establish equitable estoppel, the following criteria apply: (1) there must be a habit or custom of accepting overdue premiums; and (2) the insured must reasonably believe that by reason of this custom the insurer will maintain the policy in effect without prompt payment of the premiums. Ledent v. Guar. Nat. Ins. Co., 31,346 (La. App. 2 Cir. 12/28/98), 723 So.2d 531, 536.
In response, MCC asserts the evidence is clear that the notice of cancellation was issued, the U.S. Postal Service received the notice of cancellation for transport and delivery on July 9, 2013, and delivery is presumed. MCC contends, therefore, that TMI will be unable to satisfy its evidentiary burden at trial with regard to non-delivery of the notice of cancellation. Moreover, concerning the alleged late premium payments made by Krawdaddy's Deli, MCC maintains that there was no habit of accepting late premiums beyond the noticed effective date of cancellation and that TMI has provided no evidence that Krawdaddy's Deli reasonably believed that MCC would maintain the policy. Rather, on prior occasions when Krawdaddy's Deli submitted payment of past due premiums, MCC notes it had always been before the date noticed for cancellation. MCC maintains further that it never retained any unearned premiums paid by Krawdaddy's Deli, but instead issued refund checks to Krawdaddy's Deli. Finally, noting that the MCC policy only required that the notice of cancellation be sent to the first named insured, MCC argues that any subsequent notice of cancellation sent to any additional insureds has no bearing on whether the MCC policy was effectively cancelled. Rather, MCC submits that it complied with the terms of the policy and the law in cancelling the MCC policy, and, therefore, there can be no coverage for the claims at issue. Based on our thorough de novo review of the record and relevant jurisprudence, we agree with MCC.
In a cancellation of insurance case, the burden of proof first rests upon the insurer to prove by prima facie evidence the mailing of notice to the insured. Where the insurer meets the burden of proof, a presumption of delivery is established, which then may be rebutted by the insured by proof of non-delivery. The insured has the burden of proof to establish the non-delivery. Williams v. Storms, 2001-2820 (La. App. 1 Cir. 11/8/02), 835 So.2d 755, 761.
MCC's policy contains the following with regard to cancellation and notice of cancellation:
BUSINESSOWNERS COMMON POLICY CONDITIONS (as modified by the
"Louisiana Changes" Endorsement)
All coverages of this policy are subject to the following conditions,
A. Cancellation
. . . .
2. Notice of Cancellation
. . . .
b. Cancellation of Renewal Policies And New Policies in Effect For 60 Days Or More
If this policy has been in effect for 60 days or more, or is a renewal of a policy we issued, we may cancel only for one or more of the following reasons:
(1) Nonpayment of premium;
. . . .
We will mail or deliver written notice of cancellation under Paragraph 2.b, to the first Named Insured at least:
(a) 10 days before the effective date of cancellation if we cancel for nonpayment of premium ....
3. We will mail or deliver our notice to the first Named Insured's last mailing address known to us.
4. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date.
. . . .
6. If notice is mailed, proof of mailing will be sufficient proof of notice.
Aiko Walson, an underwriting manager employed by Foremost Insurance Group ("Foremost"), attested in an affidavit that she had personal knowledge of the underwriting guidelines for the issuance of the property and general commercial liability policies under the MCC Precision Portfolio Restaurant Program, which included the MCC policy in question.
Ms. Walson testified as follows in her affidavit. Krawdaddy's Deli was to pay monthly premiums on the MCC policy through October 28, 2013. No regular monthly premium payments were received from Krawdaddy's Deli for the months of January and February 2013. MCC mailed a notice of cancellation to Krawdaddy's Deli, indicating the MCC policy would be cancelled effective March 30, 2013, unless $456.32 was paid by March 30, 2013. A payment of $456.32 was received from Krawdaddy's Deli on March 25, 2013, and the MCC policy was continued without interruption. Again, in March and April 2013, no regular monthly premiums were received. A notice of cancellation was mailed to Krawdaddy's Deli, indicating that the MCC policy would be cancelled effective May 28, 2013, unless $413.68 was paid by May 28, 2013. On May 19, 2013, Krawdaddy's Deli made a payment, and the MCC policy was continued without interruption.
Once again, no regular monthly premium payments were made by Krawdaddy's Deli in May and June 2013, prompting a notice of cancellation dated July 10, 2013. MCC advised Krawdaddy's Deli that the MCC policy would be cancelled effective July 28, 2013, unless $371.04 was paid by July 28, 2013. The $371.04 premium due on the MCC policy was not paid prior to July 28, 2013. A Certificate of Mailing from the U.S. Postmaster on July 9, 2013, indicated that the notice was mailed on July 9, 2013. The MCC policy was cancelled for nonpayment of premium effective 12:01 a.m. on July 28, 2013.
Thus, it is clear that there was no history, as alleged by TMI, of MCC accepting late payments beyond the noticed effective date of cancellation, resulting in the reinstatement of the MCC policy. Although Krawdaddy's Deli had previously been behind on its premium payments for the MCC policy, on both prior occasions, Krawdaddy's Deli submitted payment of the past due premiums before the date noticed for cancellation. Moreover, as attested to by Ms. Walson, MCC did not retain any unearned premiums. In fact, MCC issued two separate refund checks to Krawdaddy's Deli. The first was a check for $202.41, dated October 3, 2013, representing the balance remaining of a payment made by Krawdaddy's Deli on August 12, 2013, after MCC retained $168.63 from a $371.04 check for premiums earned prior to the July 28, 2013 cancellation date. Another check dated November 12, 2013, in the amount of $150.00, represented a return of the payment in the same amount made by Krawdaddy's Deli and received by MCC on October 28, 2013, eight days after the fire occurred.
A review of the notice of cancellation in the instant case reveals that the effective date of the MCC policy was November 28, 2012. The notice of cancellation, which was issued on July 10, 2013, was mailed to Krawdaddy's Deli at P.O. Box 995, Port Allen, LA 70767, notifying them that the MCC policy would be cancelled for nonpayment of premium effective July 28, 2013. The notice expressly stated:
YOUR POLICY(S) SHOWN ABOVE WILL BE CANCELLED AS OF THE EFFECTIVE DATE OF CANCELLATION SHOWN ABOVE, BECAUSE WE HAVE NOT RECEIVED YOUR PAYMENT. THE CANCELLATION WILL TAKE EFFECT AT 12:01 A.M. LOCAL TIME AT THE ADDRESS OF THE INSURED ON THE DATE OF CANCELLATION SHOWN ABOVE. IF WE RECEIVE YOUR PAYMENT BY THAT DATE AND TIME, YOUR INSURANCE COVERAGE WILL CONTINUE WITHOUT INTERRUPTION.Moreover, the Certificate of Mailing from the U.S. Postmaster indicates that the notice of cancellation was received by the U.S. Postal Service for transport and delivery on July 9, 2013.
According to the deposition testimony of Paul Mladenka, who testified in his capacity as the corporate representative of Krawdaddy's Deli, he knew that monthly premiums were due on the MCC policy. Both Paul and Michael Mladenka testified that they were aware that there were past due premiums at the time the MCC policy was cancelled on July 28, 2013. With regard to the July 10, 2013 notice of cancellation, Paul verified that the post office box to which the notice was mailed was the correct mailing address for Krawdaddy's Deli. Moreover, Paul acknowledged that he could not testify under oath that Krawdaddy's Deli did not receive the notice of cancellation.
Michael Mladenka testified that their cousin, Patrick Mladenka, acted as the general manager and was responsible for the administrative functions of the business, such as paying bills. However, when Patrick's tenure as the general manager ended in July 2013, Michael took over some of the day-to-day operations. When asked about the notice of cancellation, Michael indicated that he checked the post office box once a week and that the box was checked "maybe six times a month." Michael testified that while he never received or saw a notice of cancellation from MCC, there were other people who checked the post office box. Michael further acknowledged that Patrick was primarily checking the mailbox and that while Patrick never said anything about getting a notice of cancellation from MCC, he could not testify as to whether Patrick may or may not have known about the notice.
Having satisfied its evidentiary burden of proof on the mailing of the notice of cancellation to the insured, MCC is entitled to a presumption of delivery. See Williams, 835 So.2d at 761. Furthermore, as previously mentioned, pursuant to the terms of the MCC policy, if the notice was mailed, proof of mailing is sufficient proof of notice, and the effective date on the notice of cancellation serves as the date the policy period ends, i.e., July 28, 2013.
We note further that La. R.S. 22:1266(D) does not require that notice of cancellation for nonpayment of premiums be sent by certified mail. --------
In light of the evidence presented by MCC on its motion for summary judgment, we are satisfied that MCC met its burden of proving that there was an absence of support for one of the essential elements of TMI's claim, i.e., that MCC's policy was in effect on the date of the fire. Thus, the burden shifted to TMI to produce factual support sufficient to establish that it would be able to satisfy its evidentiary burden of proof at trial. "When a motion for summary judgment is made and supported ... an adverse party may not rest on the mere allegations ... of his pleading, but his response ... must set forth specific facts showing that there is a genuine issue for trial." La. Code Civ. P. art. 967(B).
As previously noted, TMI failed to comply with the dictates of Article 966(B) in filing its opposition memorandum and the exhibits attached thereto. Accordingly, there is no opposition evidence for this court to consider on MCC's motion for summary judgment. TMI has failed to come forward with any evidence to show that it would be able to carry its burden of proof at trial; therefore, there is no genuine issue of material fact and summary judgment was appropriate.
CONCLUSION
For the above and foregoing reasons, we amend the trial court's September 7, 2017 judgment to reflect the correct policy number, and affirm as amended. We assess all costs associated with this appeal against appellant, TMI Enterprise, L.L.C.