text:
    James CHAPMAN v. Dorothy M. SETTLES
    NO. 2018-CA-0841
    Court of Appeal of Louisiana, Fourth Circuit.
    FEBRUARY 20, 2019
    Deidre Katrina Peterson, THE PETERSON LAW FIRM, LLC, 102 Brunswick Court, New Orleans, LA 70131, COUNSEL FOR PLAINTIFF/APPELLANT
    Eric Oliver Person, 1539 Jackson Avenue, Suite 100, New Orleans, LA 70130, COUNSEL FOR DEFENDANT/APPELLEE
    (Court composed of Judge Rosemary Ledet, Judge Sandra Cabrina Jenkins, Judge Dale N. Atkins )
   Judge Dale N. Atkins

Plaintiff/appellant, James Chapman, seeks to appeal the trial court's denial of his motion for summary judgment in which he sought a judgment of possession based on ten-year acquisitive prescription. This Court does not have appellate jurisdiction over a denial of summary judgment. For the reasons that follow, we convert the appeal to an application for supervisory writ, grant the writ, but deny the relief requested by Mr. Chapman.

BACKGROUND

James Chapman purchased the property at 308-310 Cherokee Street from the City of New Orleans on June 14, 2005, for $ 15,000.00. The City previously obtained ownership of the same property via tax sale in August 1988 after Ms. Dorothy Settles failed to pay her property taxes.

The City of New Orleans held the property for approximately 17 years before Mr. Chapman purchased the property at a Sheriff's auction in 2005 pursuant to former La. R.S. 33:4720.11 (repealed in 2008). The Act of Sale between the City of New Orleans and Mr. Chapman provides: "pursuant to La. R.S. 33:4720.11, et seq., Seller does hereby grant, bargain, sell, convey, assign, transfer, set over and deliver, without warranty of title, but with full substitution and subrogation in and to any and all actions of warranty which it has or may have against any and all preceding owners or vendors, unto Purchaser, the [property]."

In 2016, having held the property for more than ten years, Mr. Chapman filed a Petition for Declaratory Judgment by Adverse Possession, which named the prior owner, Ms. Dorothy M. Settles, as the defendant. Mr. Chapman's petition alleges that he has been in possession of the property as owner since the Act of Sale, June 14, 2005; he has openly possessed and maintained the property as his own, without interruption; and he has continued to pay taxes on the property.

Ms. Settles filed an Answer and Reconventional Demand, denying that Mr. Chapman could own the property because, Ms. Settles claims, she did not receive actual notice of the tax sale in accordance with her due process rights. The reconventional demand states that Ms. Settles acquired the property through a Judgment of Possession issued in succession proceedings in 1983. Ms. Settles' reconventional demand further acknowledges that Mr. Chapman purchased a claim over the subject property.

Mr. Chapman filed a motion for summary judgment seeking a judgment of possession based on ten-year acquisitive prescription. In opposition to the motion for summary judgment, Ms. Settles and her son submitted affidavits indicating that P.O. Box 764 was never a proper address for Ms. Settles. She argued that Mr. Chapman is not entitled to ten-year acquisitive prescription because he does not hold just title.

At the summary judgment hearing, the court found that the tax collector was required to send to each taxpayer by certified mail, return receipt requested, notice of the delinquency and the sale, pursuant to former La. R.S. 47:2180, which was in effect at the time of the sale. The district court denied the motion for summary judgment, stating that "it is unclear whether Ms. Settles received proper notice of the sale," and asked counsel for Ms. Settles to prepare a written judgment.

Mr. Chapman timely appealed the district court's ruling.

JURISDICTION

This Court may not determine the merits of an appeal unless its jurisdiction is properly invoked by a final judgment. Tomlinson v. Landmark American Ins. Co. , 2015-0276, p. 1 (La. App. 4 Cir. 3/23/16), 192 So.3d 153, 156. The trial court signed the Judgment denying Chapman's motion for summary judgment on July 11, 2018. The denial of a motion for summary judgment is not a final appealable judgment. La. C.C.P. art. 968 ; Clark v. Legion Ins. Co. , 2002-2487, p. 6 (La. App. 4 Cir. 7/23/03), 853 So.2d 684, 687. However, this Court in its discretion may convert an appeal to a supervisory writ application when certain criteria are met, as expressed in Mandina, Inc. v. O'Brien :

In certain circumstances, this court has exercised its discretion to convert an appeal of an interlocutory judgment that is not immediately appealable into a supervisory writ application ... when the following two circumstances both are present: (i) the motion for appeal has been filed within the thirty-day time period allowed for the filing of an application for supervisory writs under Rule 4-3 of the Uniform Rules, Courts of Appeal. (ii) When the circumstances indicate that an immediate decision of the issue sought to be appealed is necessary to ensure the fundamental fairness and judicial efficiency, such as where reversal of the trial court's decision would terminate the litigation.

2013-0085, pp. 8-9 (La. App. 4 Cir. 7/31/13), 156 So.3d 99, 104. See also Forstall v. City of New Orleans , 2017-0414, pp. 5-6 (La. App. 4 Cir. 1/17/18), 238 So.3d 465, 469 ;

Herlitz Constr. Co., Inc. v. Hotel Inv'rs of New Iberia, Inc. , 396 So.2d 878 (La. 1981).

Here, Mr. Chapman filed a "Notice of Appeal" on August 6, 2018, and an Order granting the appeal was signed on August 7, 2018. Mr. Chapman demonstrated his intent to seek review within 30 days of the district court's July 11, 2018 Judgment, thereby satisfying the first prong of the Mandina test. In addition, we find the second prong of the Mandina test is met, because a reversal of the trial court's ruling would effectively terminate the litigation. Finding the Mandina test satisfied, we exercise our discretion to convert Mr. Chapman's appeal to a supervisory writ application, and grant a writ to address the parties' arguments.

STANDARD OF REVIEW

This Court has stated the standard of review on summary judgment as follows:

Appellate courts review the grant or denial of a motion for summary judgment de novo, using the same criteria applied by trial courts to determine whether summary judgment is appropriate. This standard of review requires the appellate court to look at the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, to determine if they show that no genuine issue as to a material fact exists, and that the mover is entitled to judgment as a matter of law. A fact is material when its existence or nonexistence may be essential to the plaintiff[']s cause of action under the applicable theory of recovery; a fact is material if it potentially insures or precludes recovery, affects a litigant's ultimate success, or determines the outcome of the legal dispute. A genuine issue is one as to which reasonable persons could disagree; if reasonable persons could reach only one conclusion, no need for trial on that issue exists and summary judgment is appropriate. To affirm a summary judgment, we must find reasonable minds would inevitably conclude that the mover is entitled to judgment as a matter of the applicable law on the facts before the court.
The summary judgment procedure is designed to secure the just, speedy and inexpensive determination of actions. Summary judgments are favored, and the summary judgment procedure shall be construed to accomplish these ends.

Chatelain v. Fluor Daniel Const. Co. , 2014-1312, p. 3 (La. App. 4 Cir. 11/10/15), 179 So.3d 791, 793 (citing Mandina , 13-0085 at 9, 156 So.3d at 104-05 ).

With these precepts in mind, we review the parties' arguments.

ANALYSIS

Mr. Chapman asserts that he is entitled to acquisitive prescription of ten years under La. C.C. art. 3475 et seq. because the property is susceptible to acquisitive prescription; he has been in open possession of the property since the sale in 2005; at the time of the sale, he was in good faith; and the Act of Sale from the City constitutes "just title." In addition, Mr. Chapman claims that he has continued to maintain the property and pay taxes on it. He claims there has been no interruption of his possession since 2005 and points out that Ms. Settles does not dispute this contention. Mr. Chapman further states that Ms. Settles was properly notified of the tax sale but admits in his pleadings that there is no proof of service by certified mail. Nevertheless, Mr. Chapman argues that due to his peaceful possession for more than ten years, he is entitled to the benefit of ten-year acquisitive prescription based on his good-faith ownership.

A possessor is in good faith when he reasonably believes that he is the owner of the thing he possesses. La. C.C. art. 3480 ; La. C.C. art. 3481. "It is sufficient that possession has commenced in good faith; subsequent bad faith does not prevent the accrual of prescription of ten years." La. C.C. art. 3482.

In opposition, Ms. Settles argues that Mr. Chapman is not entitled to a judgment of possession through ten-year acquisitive prescription because he did not obtain title from a titled owner. Ms. Settles argues that the 2005 Act of Sale from the City is a non-warranty deed, "without warranty of title," equivalent to a quitclaim deed, which is insufficient to begin the running of ten-year good-faith acquisitive prescription. She argues that Mr. Chapman cannot acquire the property through acquisitive prescription until he has had uninterrupted possession for 30 years.

Ms. Settles also alleges that the deed or title that the City passed to Mr. Chapman is an absolute nullity because she did not receive proper notice of the sale. Affidavits submitted by Ms. Settles and her son state that the "P.O. Box 764" address in Washington DC was never a valid address for Ms. Settles. Additionally, Ms. Settles argues that advertisements prior to the sale were not sufficient to prove notice to the owner to satisfy due process protections under the Fourteenth Amendment to the U.S. Constitution, citing Lewis v. Succession of Johnson , 05-1192, p. 12 (La. 4/4/06), 925 So.2d 1172, 1179. Ms. Settles evidently does not dispute that the tax sale was advertised; rather, she claims that such advertisements were insufficient to protect her due process rights under the Fourteenth Amendment and Article VII, § 25 of the Louisiana Constitution. However, it is not clear from the record whether Ms. Settles could have been "identified or easily discovered," thereby necessitating that she receive written notice under Lewis , supra.

Moreover, the 2005 Act of Sale was confected pursuant to La. R.S. 33:4720.11 et seq. (now repealed), but the parties have not addressed whether the modified notice provisions found in La. R.S. 33:4720.12 (2)(b) (now repealed), if adhered to, might have constituted sufficient notice of the 2005 sale. See , e.g. , Laney v. City of New Orleans ex Rel. Dept. of Finance, 2005-0521, p. 7 (La. App. 4 Cir. 10/27/06), 945 So.2d 79, 83 ("The notice required herein shall be sufficient, and it shall not be necessary to determine whether notice of the tax sale was given."). Again, the evidence in the record does not establish whether Ms. Settles was "absent or unable to be served in accordance with Subparagraph (2)(a)" of La. R.S. 33:4720.12.

In light of the material issues of fact that have not been resolved, we decline to determine whether, if a tax sale is adjudged an absolute nullity for lack of sufficient notice, the tax sale purchaser's presumed good faith (pursuant to La. C.C. art. 3482 ) at the time of the transfer and his "just title" (pursuant to Clifton v. Liner , 552 So.2d 407, 414 (La. App. 1 Cir. 1989), and Callahan v. Authement , 99 So.2d 531, 539 (La. 1957) ) should prevail over the original property owner's right not to be deprived of property without due process of law.

In short, because genuine issues of both fact and law remain, we find that the matter is not ripe for summary judgment.

CONCLUSION

For the reasons stated above, we convert the appeal to a supervisory writ, grant the writ, and deny relief.

APPEAL CONVERTED TO WRIT; WRIT GRANTED; RELIEF DENIED

JENKINS, J., CONCURS IN THE RESULT

      The method for taking an appeal involves three procedural elements: (1) a motion or petition for appeal, (2) an order of appeal, and (3) a notice of appeal. Ratcliff v. Boydell , 566 So.2d 197, 199 (La. App. 4 Cir. 1990) ; see also Belser v. St. Paul Fire & Marine Ins. Co. , 542 So.2d 163 (La. App. 1 Cir. 1989). Although Mr. Chapman filed a "Notice of Appeal" rather than a Motion or Petition for Appeal, the trial court signed the necessary Order granting the appeal in a timely manner.

      La. C.C. art. 3481 provides: "Good faith is presumed. Neither error of fact nor error of law defeats this presumption. This presumption is rebutted on proof that the possessor knows, or should know, that he is not owner of the thing he possesses."

      In Lewis , the Supreme Court stated: "the notice of the tax delinquency by publication of an advertisement for an upcoming tax sale, alone, does not pass constitutional muster if the owners of the property can be identified or are easily discovered. A taxpayer, therefore, must also have the opportunity to receive written notice, as a minimum requirement, to ensure protection of the owner's property rights under the Fourteenth Amendment." 05-1192 at 12, 925 So. 2d at 1179. We note that the holdings of the Lewis case were superseded by the Louisiana Legislature's changes made to the scheme for acquiring land through tax sales in 2008. However, the transfers at issue in this case occurred before 2008.

      The lack of notice of a tax sale can result in the tax sale being adjudged an absolute nullity in certain circumstances. See , e.g. , Engine 22, LLC v. Land & Structure, LLC , 2016-0664, 2016-0665, p. 4 (La. App. 4 Cir. 4/5/17), 220 So.3d 1, 4.

      La. R.S. 33:4720.12(2) (now repealed) provided guidelines for notice requirements in accordance with adjudicating abandoned property:
      (a) "Notice" as applied in this Chapter, is the sending of written communication to interested parties:
      (i) By means of registered or certified mail, return receipt requested.
      (ii) In the same manner as service of citation or other process, whether made by sheriff, deputy sheriff, or constable.
      (iii) By a duly authorized building inspector or other representative of the political subdivision, as provided by ordinance.
      (b) In the event that the interested parties are absent or unable to be served in accordance with Subparagraph (2)(a) of this Section, notice may be made by publication once a week for two consecutive weeks in the official journal of the political subdivision.


source: Caselaw Access Project

author: Judge Roland L. Belsome

license: Public Domain

text:
    Regina Bourdais VOLPE v. Salvador VOLPE, Jr.
    NO. 2018-CA-0809
    Court of Appeal of Louisiana, Fourth Circuit.
    FEBRUARY 20, 2019
    Janet M. Ahern, JANET M. AHERN, PLC, 141 Robert E. Lee Blvd., Suite 261, New Orleans, LA 70124, COUNSEL FOR PLAINTIFF/APPELLANT
    Cynthia A. De Luca, Rebecca A. Gilson, CYNTHIA A. DE LUCA, APLC, 7037 Canal Boulevard, Suite 204, New Orleans, LA 70124, COUNSEL FOR DEFENDANT/APPELLEE
    (Court composed of Judge Roland L. Belsome, Judge Joy Cossich Lobrano, Judge Tiffany G. Chase )
   Judge Roland L. Belsome

This appeal is taken from the community property partition judgment rendered on May 30, 2018.

On appeal, Ms. Bourdais' challenges to the trial court's judgment are grouped into three categories: 1) reimbursements related to the marital domicile; 2) reimbursements on student loans; and 3) reimbursements for taxes. For the reasons that follow we reverse in part, amend in part, and affirm in part.

Standard of Review

"[A] trial court has broad discretion in adjudicating issues raised by divorce and partition of the community. The trial judge is afforded a great deal of latitude in arriving at an equitable distribution of the assets between the spouses."

Marital Domicile

Ms. Bourdais maintains that the trial court erred in its award of reimbursements concerning the expenses and debt related to 2113 Valentine Court, New Orleans, Louisiana. That property was purchased by Ms. Bourdais on May 2, 2001. Shortly before their July 3, 2003 marriage, Ms. Bourdais refinanced the home. After their marriage, the property became the marital domicile until their divorce in 2013. On August 30, 2007, Ms. Bourdais donated one half of her interest in the property to Mr. Volpe. The mortgage on the property remained in Ms. Bourdais' name.

It is well settled that when partitioning community property, the trial court may divide particular assets or liabilities equally or unequally, taking into consideration the nature and source of the asset or liability, the economic condition of the spouses, and any other relevant circumstances. However, the trial court is mandated to divide the community assets and liabilities so that each spouse receives property of an equal net value.

The first reimbursements challenged by Ms. Bourdais are for half of the community funds used, prior to the August 30, 2007 donation, to pay for the flood insurance, homeowner's insurance, and taxes on the property. Generally, when the community has benefited from the use of a home as a marital residence, as is the case here, expenses such as insurance and taxes are not considered reimbursable expenses. For that reason, we find the trial court abused its discretion in awarding Mr. Volpe reimbursement for those expenses.

Additionally, the trial court awarded Mr. Volpe half of the community funds used towards the payment of the principal on the property, from the date of marriage to termination of the community, and also awarded him half of the community funds used to satisfy the mortgage on the property at the act of sale.

Here, one of the largest assets of the community was the equity in the Valentine Court property. The property was the matrimonial domicile for the entirety of the marriage. Prior to the donation, the property was Ms. Bourdais' separate property. At the time of the donation, Mr. Volpe was aware that the property had a mortgage attached to it and he acknowledged as much in the donation document. That mortgage remained in Ms. Bourdais' name. Even though, Mr. Volpe benefitted from the use of the property and shared in its equity, he also sought reimbursements for payments to the principle during the course of the marriage and half of the funds used to satisfy the mortgage at the act of sale.

Similarly, in Maxwell v. Maxwell , Mr. Maxwell owned immovable separate property at the time of his marriage to Mrs. Maxwell. During the course of the marriage, Mr. Maxwell donated fifty percent interest in the immovable property to Mrs. Maxwell. The donation document stated that "[t]he property donated herein shall be subject to any debt on any outstanding mortgages or liens." After their divorce, Mr. Maxwell argued that the mortgage, which remained in his name, was a community obligation. The court rejected the reclassification of the debt from separate to community. However, the court did find that Mrs. Maxwell, as donee, gained the property subject to the mortgage. Likewise, in this case, Mr. Volpe shares equally in the equity of the property subject to its mortgage.

After satisfying the outstanding debt on the property, Mr. Volpe and Ms. Bourdais shared equally in approximately $ 69,000.00 of equity that had accumulated from the ownership of the property. Reviewing the trial court's reimbursements pertaining to the property, in light of the principles of partitioning a community, it is unjust, inequitable and improper for Mr. Volpe to also be reimbursed for half of the payments to the principle on the mortgage during the marriage, and for one half of the funds used to settle the mortgage at the act of sale. Accordingly, we find the trial court abused its discretion in the award of those reimbursements.

Ms. Bourdais also seeks reimbursement for half of the mortgage payments made from May 1, 2013 until March 24, 2017. The community had terminated by May 2013, and during this time she had exclusive use and occupancy of the home. Former spouses continue to be co-owners of the former community property even after the termination of the community and until it has been finally partitioned. Although the statute for co-ownership allows for the reimbursement of "incurred necessary expenses, expenses for ordinary maintenance and repairs, or necessary management expenses paid to a third person," the jurisprudence has found that mortgage payments do not fall within those categories. For that reason, we do not find that the trial court abused its discretion in denying this reimbursement to Ms. Bourdais.

Lastly, both parties agree the trial court erred in its calculation for the rental reimbursement due Mr. Volpe. Accordingly, the judgment is amended to reflect that Mr. Volpe is awarded rental reimbursement in the amount of $ 12,350.00.

Student Loan Debt

Ms. Bourdais also contends that the trial court erred in the amount that was awarded her as reimbursement for Mr. Volpe's student loans, his separate debt. According to the testimony at trial, Mr. Volpe's student loans and interest paid off during the marriage totaled $ 20,800.99. Also established at trial was that Mr. Volpe used $ 8,512.00 of his separate funds to pay off part of the student loans. In the trial court's judgment, the amount of reimbursement awarded Ms. Bourdais was $ 4,844.00. Relying on the numbers established at trial we find that the proper reimbursement would be one half of $ 12,288.99 ($ 20,800.99-$ 8,512.00), or $ 6,144.50. The judgment is amended to reflect the increase in that reimbursement.

2012 Taxes

In this final assignment of error Ms. Bourdais argues that the trial court erroneously denied awarding her half of the liabilities associated with the 2012 taxes as ordered by the March 19, 2013 Consent Judgment. That judgment ordered Mr. Volpe and Ms. Bourdais to file their 2012 taxes jointly and share equally in all refund(s) and liabilities.

At trial Ms. Bourdais presented testimony and documentation that indicated she paid for the preparation of the 2012 taxes, the taxes owed to the federal government, and the late fee associated with those taxes. Fifty percent of those expenses, less the refund from the state taxes, totaled $ 1,465.21. The trial court erroneously failed to address the 2012 tax reimbursement in its judgment. Accordingly, the judgment is amended to reflect a tax reimbursement to Ms. Bourdais in the amount of $ 1,465.21.

Conclusion

The trial court's judgment is reversed as to Mr. Volpe's reimbursements for flood insurance ($ 124.50), homeowner's insurance ($ 1,668.12), and property taxes ($ 595.53). The reimbursements to Mr. Volpe for reduction to the principal balance of the first mortgage ($ 8,465.77) and for the funds used to satisfy the first mortgage ($ 34,824.83) are also reversed. Further, the judgment is amended to reflect that Mr. Volpe's rental reimbursement is $ 12,350.00, to increase Ms. Bourdais' reimbursement for Mr. Volpe's student loan debt to $ 6,144.50, and to include Ms. Bourdais' reimbursement for the 2012 taxes in the amount of $ 1,465.21. In all other respects the judgment is affirmed.

REVERSED IN PART; AMENDED IN PART; AND AFFIRMED IN PART

      Legaux-Barrow v.Barrow , 08-530, p. 5 (La.App. 5 Cir. 1/27/09), 8 So.3d 87, 90 (citing Kambur v. Kambur , 94-775 (La.App 5 Cir. 3/1/95), 652 So.2d 99 ).

      La.R.S. 9:2801(4)(c).

      La.R.S. 9:2801(4)(b).

      $ 124.50.

      $ 1,668.12.

      $ 595.53.

      Dillenkoffer v. Dillenkoffer , 492 So.2d 71, 75 (La.App. 5 Cir. 1986).

      $ 8,465.77.

      July 3, 2004 until October 11, 2012.

      $ 34,824.83.

      51,335, p.2 (La.App. 2 Cir. 4/5/17), 217 So.3d 1227, 1229.

      Id. at p. 3, 217 So.3d at 1230.

      Id. at p. 6, 217 So.3d at 1231.

      Id. at p. 7, 217 So.3d at 1232.

      Id.

      These reimbursements resulted in Mr. Volpe's net share of the community being $ 74,307.93, while Ms. Bourdais' net share of the community was $ 2,083.11.

      La. C.C. arts. 2369, 2369.1 ; Gill v. Gill , 39,406, p.5 (La. App. 2 Cir. 3/9/05), 895 So.2d 807, 812.

      La. C.C. art. 806.

      Cahill v. Kerins , 34,522, p. 8 (La.App. 2 Cir. 4/4/01), 784 So.2d 685, 691. (A mortgage payment is not an expense within the meaning of Article 806, but is a non-possessory right created over property to secure the performance of an obligation.); see also, Roque v. Tate, 631 So.2d 1385, 1386 (La.App. 5 Cir. 1994).

      Those funds were received by Mr. Volpe as a gift from his grandfather.

      Tax preparation $ 240.00, federal taxes $ 3,984.00, and late payment penalty $ 179.63.


author: JAMES F. MCKAY III, CHIEF JUDGE

text:
    STATE of Louisiana, THROUGH ORLEANS PARISH CRIMINAL DISTRICT COURT, Clerk of Court Arthur Morrell v. CITY OF NEW ORLEANS, THROUGH Its Mayor Mitchell J. LANDRIEU
    NO. 2018-CA-0775
    Court of Appeal of Louisiana, Fourth Circuit.
    FEBRUARY 20, 2019
    MARDO BANDARIES, MADRO BANDARIES, P.L.C., P.O. Box 56458 938, Lafayette Street, Suite 204, New Orleans, Louisiana 70113 -and- ARTHUR MORRELL, Clerk of Court, Criminal District Court, Parish of Orleans, 2700 Tulane Avenue, Room 114, New Orleans, Louisiana 70119, COUNSEL FOR PLAINTIFF/APPELLANT
    DANIEL T. SMITH, ASSISTANT CITY ATTORNEY, CORWIN ST. RAYMOND, DEPUTY CITY ATTORNEY, CHURITA A. HANSELL, CHIEF DEPUTY CITY ATTORNEY, CHERRELL S. TAPLIN SR., CHIEF CITY ATTORNEY, SUNNI J. LEBOUF, CITY ATTORNEY, 1300 Perdido Street, City Hall-Room 5E03, New Orleans, Louisiana 70112, COUNSEL FOR DEFENDANT/APPELLEE
    (Court composed of Chief Judge James F. McKay III, Judge Edwin A. Lombard, Judge Regina Bartholomew-Woods )
   JAMES F. MCKAY III, CHIEF JUDGE

The plaintiff, State of Louisiana, through Orleans Parish Criminal District Court, Clerk of Court, Arthur Morrell, appeals the trial court's July 10, 2018 judgment in favor of the defendant, the City of New Orleans, through its Mayor, Mitchell J. Landrieu, which denied plaintiff's petition for declaratory judgment. For the reasons that follow, we reverse the judgment of the trial court and grant the declaratory relief sought by the plaintiff.

FACTS AND PROCEDURAL HISTORY

By way of background, the City of New Orleans and the Clerk of Criminal District Court have been involved in a dispute over the proper funding of the Clerk's office since 2012. The dispute is contentious and the parties have been before this Court on several occasions.

After becoming aware that the invoice from his auditors in the amount of $ 40,000.00 had not been paid by the City, the Clerk sent a demand to the City requesting that it pay the billing, as had been done in the past. The request provided a March 26, 2018 reply date. The date passed with no reply. Thereafter, the Clerk filed the present lawsuit.

On April 6, 2018, the Clerk filed a petition for declaratory judgment, arguing that the City unlawfully refused to pay for the Clerk's annual audit for the 2016 fiscal year. The Clerk argued that the City's refusal caused the Clerk's auditor to delay conducting the Clerk's fiscal year 2017 audit, which is required by state law. The Clerk also argued that the City's refusal was unlawful because La. R.S. 13:1381.7 requires the City to pay the Clerk's expenses. Finally, the Clerk claimed that the City was responsible for the audit expense because the City had historically paid for it.

On April 18, 2018, the City moved to transfer the matter to the same division that had heard the previous litigation regarding the Clerk's budget, while the Clerk opposed such transfer. The district court heard the motion to transfer on June 14, 2018, and granted it on June 25, 2018. At the Clerk's urging, the district court set an expedited hearing on the merits.

The matter came on for trial on June 27, 2018. Three witnesses were called to testify at trial, all by the Clerk. The witnesses were: Cary Grant, Assistant Chief Administrative Officer for the City of New Orleans; Alisha Brumfield, Judicial Administrator of Criminal District Court; and Arthur Morrell, Clerk of Criminal District Court. Following trial, a judgment was issued on July 10, 2018, "denying the Petition for Declaratory Judgment [of the Clerk] and dismissing these proceedings, with each party to bear its own costs." It is from this judgment that the Clerk appeals.

DISCUSSION

On appeal, the plaintiff raises the following assignments of error: 1) the trial court was manifestly in error in its July 10, 2018 judgment denying the Clerk's declaratory judgment based on its finding of fact in its "reasons" that "[t]here was no evidence presented that the City of New Orleans historically pays the expenses for the annual audit of the Clerk of Criminal District Court's office"; and 2) the trial court was manifestly in error in its July 10, 2018 judgment denying the Clerk's declaratory judgment in its findings of fact that "there is nothing in La. R.S. 13:1381.7, or any state law, that expressly requires the City to fund non-salary expenses, such as the annual audit of the Clerk of Criminal District Court."

In the instant case, "the scope of appellate review is confined to a determination of whether or not the trial court abused its discretion by granting or refusing to render a declaratory judgment. Hornot v. Cardenas, 06-1341, p. 11 (La.App. 4 Cir. 10/3/07), 968 So.2d 789, 797 (quoting In re Peter, 98-0701, pp.4-5 (La.App. 4 Cir. 12/23/98), 735 So.2d 665, 667. "[T]rial courts are vested with wide discretion in deciding whether to grant or refuse declaratory relief." Louisiana Supreme Court Comm. On Bar Admisions ex rel. Webb v. Roberts, 00-2517, p. 3 (La. 2/21/01), 779 So.2d 726, 728 (citing Liberto v. Rapides Parish Police Jury, 95-456 (La.App. 3 Cir. 11/2/95), 667 So.2d 552, 555.

Although the appellant lists two assignments of error, there is actually only one issue before this Court. That is, whether the trial court properly denied the appellant's petition for declaratory judgment as to whether the City was obligated to pay for the Clerk's annual audit required by law.

The Clerk argues that there is no dispute that his office must be audited on an annual basis as provided for in La. R.S. 24:513 and that the City, as found in La. R.S. 13:1381.7 is required to pay the expenses of the Clerk of Court. However, no matter what the Clerk presented in his annual budget request, the City only awarded roughly $ 3.7 million, an amount the City knew was not enough to fund the Clerk and was thus a reduction in funding each year. In fact, when Cary Grant, a 34 year City employee and Assistant Chief Administrative Officer (as to the budget) was asked about the Clerk's budget from 2012 to 2018 being stuck at $ 3.7 million, Mr. Grant admitted: "It's the amount because, as I stated in my deposition, due to legal issues, we've been instructed to remain at that amount for every year until those legal issues are resolved."

In pertinent part, La. R.S. 24:513(A)(3) provides:

The financial statements of the offices of the independently elected public local officials, including judges, sheriffs, clerks of court, assessors, and district attorneys, all parish governing authorities, all political subdivisions created by parish governing authorities or by law, and all districts, boards, and commissions created by parish governing authorities either independently or in conjunction with other units of government, school boards, district public defender offices, municipalities, all political subdivisions created by municipal governing authorities, and all boards and commissions created by municipalities, either independently or in conjunction with other units of government, city courts, quasi-public agencies, housing authorities, mortgage authorities, or other political subdivisions of the state not included within the state's Comprehensive Annual Financial Reports, hereinafter collectively referred to as "local auditee", shall be audited or reviewed by licensed certified public accountants subject to Paragraph (5) and (6) of this Subsection, but may be audited by the legislative auditor pursuant to Paragraph (4) of this Subsection.

La. R.S. 13:1381.7 states:

A. The legislature finds that adequate funding of the office of Clerk of the Criminal District Court for the parish of Orleans is necessary for the efficient performance of the powers and duties required of a judicial officer of the state. Pursuant to the exercise of the police power of the state, actions or obtaining adequate funding are necessary to promote judicial efficiency and to protect and promote the lives, morals, comfort, and general welfare of people as a whole. The amounts to be appropriated and paid by the city of New Orleans for expenses, including salaries and maintenance of constitutional officers, their deputies, subordinates, and employees shall not be reduced by the city of New Orleans without the consent of the legislature.
B. The legislature further finds that the state statutes mandating payment by the city of New Orleans to the state's employees and officers of the Clerk for the Criminal District Court for the parish of Orleans constitute a valid exercise of state's police power, and such statutes do not violate the provisions of the Louisiana Constitution of 1921 or the Louisiana Constitution of 1974.
C. Nothing contained in this Section shall be construed as giving to the city of New Orleans any rights, powers, authority, or jurisdiction over any constitutional officers, their deputies, employees, subordinates, or over any state or district officers, their deputies, subordinates, or employees.

Based on our reading of the statutes above, the Clerk is clearly required to have an audit and expenses are clearly noted as a compensable obligation of the City as to the Clerk. According to Louisiana Civil Code Article 11, "[t]he words of a law must be given their generally prevailing meaning." An audit would qualify as an expense. "When a statute is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature." La. C.C. art. 9. As such, the City is obligated to pay for the Clerk's audit and for the trial court to find otherwise was an abuse of discretion.

CONCLUSION

For the foregoing reasons, we reverse the judgment of the trial court and grant the plaintiff's petition for declaratory judgment, recognizing that the Clerk's annual audit is an expense as envisaged by La. R.S. 13:1381.7.

REVERSED AND REMANDED

      State ex rel. Orleans Parish Criminal Dist. Court v. City of New Orleans ex rel. Landrieu, 2012-1756 (La.App. 4 Cir. 10/23/13), 126 So.3d 762 ; State ex rel. Orleans Parish Criminal District Court v. City of New Orleans, ex rel. Landrieu, 2014-0421 (La.App. 4 Cir. 10/1/14), 151 So.3d 714 ; State ex rel. Orleans Parish Criminal Dist. Court v. City of New Orleans ex rel. Landrieu, 2015-1089 (La.App. 4 Cir. 3/16/16), 192 So.3d 127 ; State through Morrell v. City of New Orleans through Landrieu, 2017-0110 (La.App. 4 Cir. 12/21/17), 234 So.3d 1071, writ denied, 2018-0116 (La. 3/9/18), 237 So.3d 1192 ; and State through Orleans Parish Criminal Dist. Court v. City of New Orleans through City Council, 2017-1051 (La.App. 4 Cir. 10/3/18), --- So.3d ----, 2018 WL 4778845.


text:
    Dustin ROGERS and Lacey Rogers v. INTEGRATED EXPLORATION AND PRODUCTION, LLC
    NO. 2018-CA-0425
    Court of Appeal of Louisiana, Fourth Circuit.
    FEBRUARY 20, 2019
   Richard E. King, Jennifer L. Simmons, Scott R. Huete, MELCHIODE MARKS KING, LLC, 639 Loyola Avenue, Suite 2550, New Orleans, LA 70113, COUNSEL FOR THIRD PARTY DEFENDANTS/APPELLANTS

Hunt Downer, Mary W. Riviere, Joseph L. Waitz, Jr., David C. Pellegrin, Jr., Joseph L. Waitz, III, WAITZ & DOWNER, 423 Goode Street, Houma, LA 70360, COUNSEL FOR PLAINTIFFS/APPELLEES

Robert T. Myers, YOUNG, RICHAUD & MYERS, 3850 N. Causeway Blvd., Suite 1830, Metairie, LA 70002, John A. Scialdone, John S. Garner, SCIALDONE LAW FIRM, PLLC, 1319 24th Avenue, Gulfport, MS 39501, COUNSEL FOR DEFENDANTS/APPELLEES

Susan A. Daigle, J. Daniel Rayburn, Jr., DAIGLE RAYBURN, LLC, 303 W. Vermillion Street, Suite 210, P.O. Box 3667, Lafayette, LA 70502-3667, Kelley A. Sevin, Elton F. Duncan, III, DUNCAN & SEVIN, LLC, 400 Poydras Street, Suite 1200, New Orleans, LA 70130, COUNSEL FOR THIRD PARTY DEFENDANTS/APPELLEES

(Court composed of Judge Roland L. Belsome, Judge Joy Cossich Lobrano, Judge Regina Bartholomew-Woods )

Judge Joy Cossich Lobrano

In this insurance coverage dispute, appellants, Zurich American Insurance Company ("Zurich") and American Guarantee and Liability Insurance Company ("AGLIC"), seek review of three district court judgments dated December 7, 2016, June 16, 2017, and December 19, 2017. For the reasons that follow, we affirm all three judgments.

This litigation arises from a September 26, 2013 accident on an oilfield platform owned by Integrated Exploration & Production, L.L.C. ("Integrated") in Lake Borgne in St. Bernard Parish. Plaintiff, Dustin Rogers, was an employee of Valerus Compression Service, L.L.P. ("Valerus") at the time of his accident; and Coastal Marine Contractors, L.L.C. ("Coastal Marine") was Integrated's subcontractor at the time of the accident.

At the time of Rogers' accident, a Master Contract Service Agreement ("MCSA") and a Schedule B Services Contract, both between Valerus and Integrated, were in place, which governed the work performed by Valerus for Integrated on the platform. The MCSA contained a "knock for knock" reciprocal indemnification provision, which was triggered whenever the employee of one party sued the other party or a member of its subcontractor "Group" such that each party was responsible for the injuries of its own respective employees, regardless of fault.

The MCSA also required that Valerus and Integrated obtain commercial liability insurance and name each other as additional insureds. The MCSA did not require Valerus to name a subcontractor such as Coastal Marine as an additional insured. However, the MCSA required that a member of Integrated's "Group" (including its subcontractors, such as Coastal Marine) was entitled to defense and indemnification from Valerus for tort liability for injuries sustained by an employee of Valerus, such as Rogers.

Thus, several insurance policies are implicated in this matter. Valerus obtained a policy of primary insurance from Zurich, with policy limits of $ 1 million, and an excess policy from AGLIC, with limits of $ 25 million. Integrated obtained primary and excess policies from Gemini Insurance Company ("Gemini"), with policy limits of $ 1 million and $ 4 million, respectively. Coastal Marine obtained a policy of primary insurance from Atlantic Specialty Insurance Company ("Atlantic"), with policy limits of $ 1 million, and excess insurance from New York Marine and General Insurance Company ("New York Marine"), with limits of $ 10 million.

Following the accident, Dustin Rogers and Lacey Rogers (collectively "plaintiffs") brought claims against Integrated and Coastal Marine. Integrated subsequently filed a third party demand against Valerus and Zurich, seeking contractual defense and indemnification pursuant to the MCSA. Coastal Marine, likewise, brought a cross claim against Zurich (but not Valerus), seeking contractual defense and indemnification pursuant to the MCSA. In its cross claim, Coastal Marine alleged that it was Integrated's subcontractor and a member of the MCSA Customer "Group" entitled to defense and indemnification for tort liability for the injuries allegedly sustained by Rogers. Integrated, Coastal Marine, and their insurers thereafter brought third party demands, reconventional demands, and cross claims between them relative to the ensuing insurance coverage disputes.

On February 12, 2016, Valerus filed an exception of prematurity on the basis of an arbitration clause contained in the MCSA. On March 17, 2016, the district court granted the exception pursuant to a consent judgment, dismissing Valerus without prejudice. None of the other parties filed any pleadings in the district court seeking to invoke the arbitration cause; thus, this litigation was not stayed and proceeded in the district court in Valerus' absence.

Zurich and AGLIC have raised numerous coverage defenses in this litigation. In particular, they argue that the Louisiana Oilfield Anti-Indemnity Act ("LOAIA") renders the defense and indemnification provisions in the MCSA unenforceable. They also contend that a limitation of liability provision in the MCSA limits Integrated's recovery from Valerus, and thus its insurers, to the amount that Integrated paid Valerus in the six months before Rogers' accident, which was $ 0. They further argue that there is no coverage for Integrated's and Coastal Marine's negligence. They also contend that Coastal Marine's contractual claim against Zurich is barred by the Louisiana Direct Action Statute ("LDAS"), where Coastal Marine has not made a claim against Zurich's insured, Valerus.

The district court rendered the three following judgments, which are at issue in the instant appeal.

The first judgment, dated December 7, 2016, granted summary judgment in favor of Integrated and ordered Zurich to provide defense and indemnification to Integrated. In this judgment, the district court also denied Zurich's motions for summary judgment seeking dismissal of Integrated's and Coastal Marine's defense and indemnification claims.

Prior to trial on January 9, 2017, the parties reached a settlement agreement wherein plaintiffs would receive $ 5 million, plus judicial interest, with all other parties reserving all rights against each other, including their respective contractual defense and indemnification and insurance coverage claims.

The second judgment was rendered on June 16, 2017, which denied Zurich's peremptory exceptions of no cause of action and no right of action and granted Coastal Marine's motion for judgment on the pleadings, ordering Zurich to provide defense and indemnification to Coastal Marine.

In the third judgment, dated December 19, 2017, the district court granted summary judgment in favor of Integrated, Gemini, and New York Marine and ordered the following. Zurich and AGLIC were ordered to provide coverage to Valerus for defense and to indemnify Integrated and Coastal Marine for this litigation and the settlement with plaintiffs. In order to fund the settlement, Zurich was ordered to tender $ 1 million, plus accrued interest, to plaintiffs, and AGLIC was ordered to tender $ 4 million, plus accrued interest from the date of settlement January 9, 2017, to plaintiffs. Zurich and AGLIC were also ordered to pay Integrated's and Coastal Marine's attorney's fees, defense costs, and court costs. Zurich's motion for summary judgment to rank insurance policies and seeking contribution for funding the settlement was denied.

This appeal followed, in which Zurich and AGLIC raise six assignments of error:

1. Despite the dismissal of Valerus due to a binding arbitration clause, the Trial Court nevertheless rendered determinations as to the defense and indemnity obligations of Valerus and binding coverage for such determinations under the Zurich and AGLIC policies.
2. The Trial Court erred in denying Zurich's peremptory exceptions of no cause of action and no right of action and ruling that Coastal Marine could maintain a direct action against Zurich, a third-party insurer, despite not also asserting a claim against Zurich's insured, Valerus.
3. The Trial Court erred in ruling that the Limitation of Liability provision of the MCSA was inapplicable for purposes of determining the limitation of liability owed by Valerus to Integrated under the terms of the MCSA.
4. The Trial Court erred in ruling that the Zurich and AGLIC policy exclusions were inapplicable to the coverage claims asserted by Integrated and Coastal Marine.
5. The Trial Court erred in ruling that Integrated and Coastal Marine's own insurers did not provide coverage for the negligence of Integrated and Coastal Marine.
6. The Trial Court erred in ruling that LOAIA did not invalidate the defense and indemnification provisions contained in the MCSA in light of the fact that the MCSA explicitly incorporates the terms of LOAIA.

We first address Zurich's and AGLIC's argument that the district court erred in its findings as to their defense and indemnification and coverage obligations under the Zurich and AGLIC policies. We then address each of the assignments of error, as they apply to the three judgments on appeal.

With respect to the December 7, 2016 judgment, which forms the basis for Zurich's and AGLIC's third and sixth assignment of error, the district court ruled on motions for summary judgment. An appellate court's "review of a grant or denial of a motion for summary judgment is de novo ." Jones v. Estate of Santiago , 2003-1424, p. 5 (La. 4/14/04), 870 So.2d 1002, 1006. Summary judgment procedure is favored in Louisiana. La. C.C.P. art. 966(A)(2). "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. C.C.P. art. 966(A)(3).

Regarding the burden of proof on summary judgment, La. C.C.P. art. 966(D)(1) states:

The burden of proof rests with 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.

In its sixth assignment of error, Zurich and AGLIC argue that the district court erred by concluding that LOAIA did not apply to the MCSA and by finding the defense and indemnification provision in the MCSA enforceable. In its reasons for judgment, the district court articulated that the MCSA did not "pertain to a well," and as a result, LOAIA did not render the defense and indemnification provision void.

LOAIA is found in La. R.S. 9:2780 and provides, in pertinent part, that certain defense and indemnification agreements "pertaining to a well" are unenforceable:

B. Any provision contained in, collateral to, or affecting an agreement pertaining to a well for oil, gas, or water, or drilling for minerals which occur in a solid, liquid, gaseous, or other state, is void and unenforceable to the extent that it purports to or does provide for defense or indemnity, or either, to the indemnitee against loss or liability for damages arising out of or resulting from death or bodily injury to persons, which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee, or an agent, employee, or an independent contractor who is directly responsible to the indemnitee.

To determine whether LOAIA is applicable, "courts have engaged in a two-step test." Fontenot v. Chevron U.S.A. Inc. , 95-1425, p. 10 (La. 7/2/96), 676 So.2d 557, 564 (citing Transcontinental Gas v. Transportation Ins. Co. , 953 F.2d 985, 991 (5th Cir.1992) (" Transco ") ). "First, there must be an agreement that 'pertains to' an oil, gas or water well." Id. "Second, the agreement must be related to exploration, development, production, or transportation of oil, gas, or water." Id.

"If the contract does not pertain to a well, the inquiry ends." Transco , 953 F.2d at 991. "Only if we determine that the contract has the required nexus to a well may we proceed to the second step of the process, examination of the contract's involvement with 'operations related to the exploration, development, production, or transportation of oil, gas, or water.' " Id. "LOAIA is not applicable if the work required by the contract is performed on gas transmission equipment at 'a reasonably determinable point at which the gas can no longer be identified with a particular well, or is so fundamentally changed in processing, commingling, or preparing it for distribution to its ultimate end user, that the gas no longer 'pertains to a well.' " Lloyds of London v. Transcon. Gas Pipe Line Corp. , 38 F.3d 193, 196 (5th Cir. 1994) (" Lloyd's ")(citing Transco , 953 F.2d at 991 ). "The Transco court listed ten non-exclusive factors relevant to this determination." Id. (footnote in original).

In its December 7, 2016 reasons for judgment, the district court explained that no genuine issue of material fact existed as to the "identification of gas to any particular wells." The district court found that "three pipelines bring gas from three separate wells which upon entry on the platform are commingled for the scrubbing and compression process" and "that once upon the platform the gas is commingled and can no longer be identified with a particular well."

It was undisputed that there was no active well on the Integrated platform, and the platform was a scrubbing station. The purpose of the platform was to process commingled gas from wells in the field and redeliver the processed gas at an outlet point ready for sale. The nearest gas well was located within one and a half miles of the Integrated platform. The only pipelines that ran to the Integrated platform were owned by Integrated, and no other facility intersected between these wells and the Integrated platform. Integrated had the capability to monitor the flow from each of these wells and could cut the flow from each well, should it have been necessary. The gas from the three pipelines was immediately commingled upon reaching Integrated platform. J. Lee Harrell, who testified on behalf of Integrated, described this commingling as taking place in "a snap of a finger."

The district court adopted the reasoning of Hughes v. Pogo Producing Co. , No. 06-1894 (W.D. La. 3/11/09), 2009 WL 667186 as the basis for its finding that such commingling precludes the application of LOAIA. The Hughes platform was a commingling station where gas from three incoming pipelines was further commingled and pumped into one pipeline destined for a refinery. Id. at p. 6. This platform was not an active, producing well. Id. No well that eventually fed production through the platform was located closer than five miles from the platform, and the platform was "closely related to a pipeline," because its sole purpose was to further commingle product from incoming pipelines to larger outgoing pipelines. Id. Thus, the court concluded that the work performed under the contract "was to be performed on gas transmission equipment located 'at a reasonably determinable point at which the gas can no longer be identified with a particular well, or is so fundamentally changed in processing, commingling, or preparing it for distribution to its ultimate end user, that the gas no longer 'pertains to a well.' " Id. at p. 8 (quotation omitted).

Zurich and AGLIC attempt to distinguish this matter from Hughes in that, here, the platform and all three pipelines, from which gas was commingled, were owned by Integrated. They cite, however, to no case that has found a commingling platform such as this one "pertains to a well." As the U.S. Fifth Circuit explained in Lloyd's , LOAIA does not apply where work is performed at a "reasonably determinable point" at which the gas can no longer be identified with a particular well, or is so fundamentally changed in commingling or preparing it for distribution that the gas no longer pertains to a well. 38 F.3d at 196. We see no reason to reach a different result here merely because the commingled gas comes from pipelines all owned by Integrated. Accordingly, we find no error in the district court's conclusion that LOAIA does not apply to the facts of this case.

In their third assignment of error, Zurich and AGLIC argue that the district court erred by failing to apply the MCSA's limitation of liability provision. They contend that, under the MCSA, any liability owed by Valerus to Integrated could not exceed the total amount paid by Integrated to Valerus in the six months prior to the date on which such claim arose. According to Zurich's and AGLIC's argument, because Integrated paid nothing to Valerus in the six months before Rogers' accident, Integrated is not entitled to any indemnification. Zurich and AGLIC do not argue on appeal that the limitation of liability applies to Coastal Marine.

"Contracts have the force of law between the parties, and the courts are bound to interpret them according to the common intent of the parties." Cox Commc'ns v. Tommy Bowman Roofing, L.L.C. , 2004-1666, p. 3 (La. App. 4 Cir. 3/15/06), 929 So.2d 161, 164 (citing La. C.C. arts. 1983 and 2045). If the words of the contract are clear, unambiguous, and lead to no absurd consequences, the court need not look beyond the contract language to determine the true intent of the parties. La. C.C. art. 2046. Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole. La. C.C. art. 2050.

"When absurd results are possible from a reading of a contract, it is ambiguous, and the courts must construe the provision in a manner consistent with the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and other contracts of a like nature between the same parties." Vignette Publications, Inc. v. Harborview Enterprises, Inc. , 2000-1711, p. 10 (La. App. 4 Cir. 9/12/01), 799 So.2d 531, 537 (citing La. C.C. art. 2053 ; Doerr v. Mobil Oil Corp. , 2000-0947, p. 6 (La. 12/19/00), 774 So.2d 119, 124 ). "Words of art and technical terms must be given their technical meaning when the contract involves technical matter and words susceptible of different meanings are to be interpreted as having a meaning that best conforms to the object of the contract." Id. (citing La. C.C. arts. 2047 - 2048 ). Ambiguous clauses are construed against the drafter. Armstrong Airport Concessions v. K-Squared Rest., L.L.C. , 2015-0375, p. 18 (La. App. 4 Cir. 10/28/15), 178 So.3d 1094, 1106.

Here, Valerus drafted the MCSA. The limitation of liability provision, found in Section 12 of the MCSA, provides as follows:

12. Limitations of Liability.
(a) Notwithstanding anything contained herein, the aggregate liability of Valerus for Claims made by Customer in respect of loss or damage arising out of or in connection with the provision of the Services or any breach of Valerus' obligations under any Services Contract, whether arising for breach of contract, tort, negligence or otherwise, shall not exceed the total amount paid by Customer to Valerus under the applicable Services Contract in the previous six (6) months from the date on which such claim arose .

(Emphasis in original).

In the MCSA, "Customer" is defined as Integrated. "Claims" are defined as "any and all claims, damages, liabilities, losses, demands, liens, encumbrances, causes of action of any kind, costs and expenses (including reasonable attorneys' fees), judgments, interest, and awards, whether created by law, equity, contract, tort, or otherwise." "Services" are defined as "turnkey compression and other services that are detailed on such Services Contract." The Schedule B Services Contract further defines "Services" as "receive Customer's gas... at the inlet point, [ ] perform compression services and then [ ] redeliver the gas to Customer at the outlet point within the range of the designated discharge pressure..." "Party" or "Parties" are defined as Valerus and Integrated.

The insurance and indemnification provisions are found, respectively, in Sections 10 and 11, and provide, in pertinent part, as follows:

10. Insurance.
(a) Customer and Valerus shall each maintain in full force and effect during the term of this Agreement, at its sole cost and expense, the insurance described below;
(i) Commercial general liability, including bodily injury, property damage, independent contractor, products/completed operations, contractual and personal injury liability, with a combined single limit of $ 1,000,000, per occurrence.
* * *
(iv) Excess Liability Insurance over that required in Sections 10(a)(i) and (iii) above, which shall provide coverage at least as broad as the underlying policies, with minimum limits of U.S. $ 1,000,000, and specifically including contractual liability.
* * *
(b) Each Party, its affiliates, directors, officers, employees and agents shall be named as additional insureds on the policies required pursuant to Section 10(a) (the "Required Policies ") and provided a waiver of subrogation with respect to the Required Policies by the other Party or Parties, but only to the extent of the indemnity obligations expressly assumed by the insuring Party under this Agreement. The obligations of each Party, with respect to the maintenance of insurance under this Agreement, are separate and apart from each Party's respective indemnification obligations under this Agreement, and such indemnification obligations shall not be limited in amount or scope to coverages provided by the insurance required by this Section 10.
* * *
11. Indemnification.
* * *
(a) In General. Except as otherwise provided in this Agreement, EACH PARTY AGREES TO RELEASE, DEFEND, INDEMNIFY, AND HOLD HARMLESS THE OTHER PARTY AND ITS RESPECTIVE GROUP FROM AND AGAINST any and all claims, damages, liabilities, losses, demands, liens, encumbrances, causes of action of any kind, costs and expenses (including reasonable attorneys' fees), judgments, interest, and awards, whether created by law, equity, contract, tort, or otherwise (collectively, "Claims ") for (i) any personal injury to any of the indemnifying Party's employees or independent contractors and/or (ii) property loss or damage relating to the indemnifying Party's facilities and equipment. For purposes of the foregoing, a Party's "Group " means that Party and its contractors (except that Customer's Group excludes Valerus and its subcontractors), subcontractors, co-interest owners, joint venturers, co-lessees, and invitees, and their respective affiliates, shareholders, officers, directors, employees, agents, consultants, and servants.
* * *
(e) Scope of Indemnification. The obligations of each Party to indemnify the other Party under this Section 11 shall apply EVEN IF SUCH CLAIMS ARE CONTRIBUTED TO OR CAUSED BY THE SOLE, JOINT, COMPARATIVE, CONCURRENT, ACTIVE OR PASSIVE NEGLIGENCE OF THE INDEMNIFIED PARTY OR ANY MEMBER OF ITS GROUP, STRICT LIABILITY, THE UNSEAWORTHINESS OF ANY VESSEL OR VESSELS, IMPERFECTION OF MATERIAL, DEFECT OR FAILURE OF EQUIPMENT, BREACH OF REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED), ULTRA-HAZARDOUS ACTIVITY, TORT, BREACH OF CONTRACT, BREACH OF STATUTORY DUTY, BREACH OF ANY SAFETY REQUIREMENT OR REGULATION, OR OTHER FAULT OF THE INDEMNIFIED PARTY OR ANY MEMBER OF ITS GROUP . However such indemnification obligations shall not apply in the event of the gross negligence or willful misconduct of the indemnified Party.
* * *
(g) Indemnity Not Altered by Third Party Obligations. All indemnities in this Agreement shall apply even though an insurer or other person or entity is required to pay for any Claim or to make a contribution to such Claim. Even though insurance may be arranged or other persons or entities may have certain liabilities or obligations, each Party remains responsible for its indemnity and other obligations under this Agreement, even if such insurer or such other person or entity, for any reason, does not pay.

(Emphasis in original).

We find no merit in Zurich's and AGLIC's contention that Section 12 limits the amount of indemnification that Integrated can receive under Section 11 for damages sought by Valerus employees such as Dustin Rogers. The limitation of liability language is contained in the section of the MCSA dealing with performance of the contract, which is separate from the indemnification provision. Section 12 is silent as to indemnification and insurance. Indemnification and insurance obligations are set forth separately in Sections 10 and 11. Section 10 is also explicit that the obligations to maintain insurance are separate from the indemnification obligations in Section 11 "and such indemnity obligations shall not be limited in amount or scope to coverage provided by the insurance required..."

Moreover, the limitation of liability language pertains to "the provision of the Services." Indemnification is not included in the definition of "Services." Reviewing Section 12 in light of the other provisions, indemnification is too attenuated from the services provided under the MCSA. Rather, we find, as the district court did, that Section 12 contemplates damages resulting from performance of the contract between Valerus and Integrated. We find no error in the district court's conclusion that the limitation of liability provision does not limit Valerus' obligation to defend and indemnify Integrated for Dustin Rogers' claims. This assignment lacks merit. As such, we affirm the district court's judgment of December 7, 2016.

We now consider the district court's December 19, 2017 judgment, in which we review the fourth and fifth assignments of error.

In Zurich's and AGLIC's fourth assignment of error, they argue that their policies exclude coverage for Integrated's and Coastal Marine's indemnification claims, pursuant to (1) the broad form additional insured endorsement and (2) the Zurich policy limits.

We explained in King v. Old Republic Ins. Co. , 2016-0170, pp. 4-7 (La. App. 4 Cir. 9/7/16), 200 So.3d 989, 992-94 as follows:

"A dispute as to whether, as a matter of law, an insurance policy provides or precludes coverage to a party usually involves a legal question which can be resolved in the framework of a motion for summary judgment." Batiste v. City of New Orleans , 2011-1168, p. 3 (La. App. 4 Cir. 2/29/12), 85 So.3d 800, 802 (citing Dore v. Brignac , 2000-1719, p. 3 (La. App. 4 Cir. 6/20/01), 791 So.2d 736, 738.) "When determining whether or not a policy affords coverage for an incident, it is the burden of the insured to prove the incident falls within the policy's terms." Doerr v. Mobil Oil Corp. , 2000-0947, p. 5 (La. 12/19/00), 774 So.2d 119, 124, modified on other grounds on reh'g , 2000-0947 (La. 3/16/01), 782 So.2d 573. "Summary judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence supporting the motion, under which coverage could be afforded." Reynolds v. Select Properties, Ltd. , 93-1480 (La. 4/11/94), 634 So.2d 1180, 1183 (citing Westerfield v. LaFleur , 493 So.2d 600, 605 (La. 1986) )....
"An insurer, like other individuals, is entitled to limit its liability and to impose and enforce reasonable conditions upon the policy obligations it contractually assumes; it may change or amend the coverage provided by the policy by an endorsement attached to the policy as long as the provisions and/or endorsements do not conflict with statutory law or public policy." Zeitoun v. Orleans Par. Sch. Bd. , 2009-1130, p. 4 (La. App. 4 Cir. 3/3/10), 33 So.3d 361, 365 (citing Louisiana Ins. Guar. Ass'n [v. Interstate Fire & Casualty Co. ], 93-0911 [p. 5] at p. 6, [ (La. 1/14/94),] 630 So.2d [759] at 763 ). "If an endorsement is attached to the policy and the policy and endorsements are parts of the same contract, the endorsement becomes part of the contract, and the two must be construed together." Zeitoun, 2009-1130 at p. 4, So.3d at 365 (citing Mattingly v. Sportsline, Inc. , 98-230, p. 7 (La. App. 5 Cir. 10/28/98), 720 So.2d 1227, 1230 ). "If a conflict between the endorsement and the policy exists, the endorsement prevails." Zeitoun, 2009-1130 at p. 4, So.3d at 365 (citing Chicago Property Interests, L.L.C. v. Broussard , 2008-526, p. 10 (La. App. 5 Cir. 1/13/09), 8 So.3d 42, 49 ). "If coverage is provided in the policy, but then excluded in the endorsement to the policy, coverage will be excluded." Id.

In arguing that the broad form additional insured endorsement excludes coverage for Integrated and Coastal Marine, Zurich and AGLIC raise three arguments. First, they contend that coverage for Integrated's sole negligence is excluded under the endorsement. Second, they argue that the MCSA does not require Valerus to provide coverage to Integrated for Integrated's sole act or omission. Third, they argue that the endorsement does not apply to Coastal Marine because the MCSA does not require Coastal Marine to be an additional insured.

Dustin Rogers was an employee of Valerus at the time of his accident. Section 10(a) of the MCSA required Valerus and Integrated to name each other as additional insureds on each other's policies; thus, Integrated was required to be named as an additional insured on the Zurich and AGLIC policies. Zurich's broad form additional insured endorsement states:

A. Section II - Who Is An Insured is amended to include as an insured the persons or organizations shown in the Schedule of this endorsement. (BLANKET, AS REQUIRED BY WRITTEN CONTRACT)
B. The insurance provided to the additional insured shown in the Schedule of this endorsement applies only to "bodily injury" ... covered under Section I - Coverage A - Bodily Injury And Property Damage Liability and Section I - Coverage B - Personal And Advertising Injury Liability , but only with respect to liability for "bodily injury", "property damage" ... caused:
1. In whole or in part, by your acts or omissions or the acts of omissions of those acting on your behalf; or
2. Unless prohibited by law, solely by acts or omissions of such additional insured, if coverage for sole acts or omissions of the additional insured is required by written contract or written agreement, and resulting from:
a. Your ongoing operations; or
b. "Your work" completed as included in the "products-completed operations hazard", performed for the additional insured at the location designated and described in the Schedule of this endorsement.

(Emphasis in original).

We disagree with Zurich's and AGLIC's contention that the endorsement wholly precludes coverage for both Integrated and Coastal Marine. As to Integrated, Zurich and AGLIC have not shown, with undisputed facts, that Rogers' injuries were not caused by acts of those acting on Valerus' behalf, or that Rogers' injuries were caused by Integrated's sole negligence. Zurich and AGLIC are not entitled to summary judgment, as a matter of law, that the endorsement does not provide coverage to Integrated as an additional insured. Further, Valerus obligated itself in Section 11 of the MCSA to defend and indemnify Integrated for its own negligence, and Valerus procured policies issued by Zurich and AGLIC that provide contractual coverage over obligations assumed in "insured contracts" including the MCSA. The Zurich policy defines "insured contract" as:

That part of any other contract or agreement pertaining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liability of another party to pay for "bodily injury" or "property damage" to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

We, thus, reject the argument that the endorsement precludes coverage for Integrated.

As to Coastal Marine, it is undisputed that Coastal Marine is not an additional insured under the Zurich and AGLIC policies, and that the MCSA does not require that Coastal Marine be named an additional insured under the Zurich and AGLIC policies. Rather, the MCSA requires that Valerus defend and indemnify both Integrated and its "Group," which includes Coastal Marine as Integrated's subcontractor, even for its sole negligence. Accordingly, Valerus procured coverage for its obligations under the MCSA. The MCSA is an "insured contract" for which the Zurich and AGLIC policies provide contractual coverage.

With respect to policy limits, Zurich contends that it cannot be liable for more than its $ 1 million policy limits for Dustin Rogers' accident, which is a single occurrence. We find no evidence in the record that either the occurrence of a single accident or the amount of Zurich's policy limits is disputed. Zurich fails to explain and we fail to appreciate the impact of Zurich's argument on excess coverage owed by AGLIC. Moreover, the settlement herein is not a part of the record on appeal, such that we cannot extrapolate what other monies Zurich claims to owe under the settlement that are not reflected in this judgment. The district court ordered Zurich to pay $ 1 million to fund the settlement with plaintiffs. The district court ordered AGLIC to pay $ 4 million to fund the settlement with plaintiffs. There is no dispute in the record that plaintiffs settled their claims with Integrated and Coastal Marine for $ 5 million, with the insurance third party defendants reserving all rights against each other. There is nothing in the record that informs this Court that Zurich has been called upon to pay a judgment beyond its policy limits. This assignment lacks merit.

In their fifth assignment of error, Zurich and AGLIC argue that the district court erred by failing to apply the Louisiana jurisprudence concerning ranking insurance policies. According to their argument, Integrated and Coastal Marine are named insureds on policies providing coverage for their negligence, and the district court should look to the "other insurance" clauses contained in the respective Gemini, Atlantic, and New York Marine policies to apportion shares within policy limits and determine which policies provide excess coverage. We disagree.

As the district court acknowledged, the proper inquiry is which insurer provides coverage for the contractual obligations Valerus assumed in the MCSA. Under the particular facts of this case, the Gemini, Atlantic, and New York Marine policies do not provide coverage to Valerus, such that it is unnecessary to rank these policies. Dustin Rogers, a Valerus employee, filed suit against Integrated and Coastal Marine. Valerus obligated itself in the MCSA to defend and indemnify Integrated and Coastal Marine, regardless of fault, against claims by Valerus employees, including Dustin Rogers, and to secure insurance in the amounts required by the MCSA. Valerus then procured primary and excess insurance policies from Zurich and AGLIC, respectively, which named Integrated as an additional insured, and which covered contractual liability over written contracts, namely, "insured contracts" including the MCSA. We find no evidence in the record that any other insurance policy provides coverage for Valerus' contractual obligation to defend and indemnify Integrated and Coastal Marine. Accordingly, there is no need to rank insurance policies. This assignment, thus, lacks merit. As such, we find no error in the district court's December 19, 2017 judgment. Zurich and AGLIC are liable for coverage to Valerus for defense and to indemnify Integrated and Coastal Marine for this claim and the settlement with plaintiffs.

We next turn to Zurich's and AGLIC's first and second assignments of error which deal with the unusual procedural posture of the case.

In the district court's June 16, 2017 judgment, which implicates Zurich's and AGLIC's second assignment of error, the district court denied Zurich's peremptory exceptions of no cause of action and no right of action, rejecting Zurich's claim that Coastal Marine was not entitled to maintain a direct action against Zurich.

"Whether a plaintiff has a cause of action and whether a plaintiff has a right of action are questions of law." Hershberger v. LKM Chinese, L.L.C. , 2014-1079, p. 2 (La. App. 4 Cir. 5/20/15), 172 So.3d 140, 143. This Court must, therefore, conduct a de novo review in determining whether the district court's rulings on the exceptions of no cause of action and no right of action were legally correct or incorrect. Id.

As this Court has explained:

The exceptions of no cause of action and no right of action are both peremptory exceptions, the function of which is "to have the plaintiff's action declared legally nonexistent, or barred by effect of law, and hence this exception tends to dismiss or defeat the action." "[O]ne of the primary differences between the exceptions of no right of action and no cause of action lies in the fact that the focus in the exception of no right of action is on whether the particular plaintiff has a right to bring the suit, while the focus in an exception of no cause of action is on whether the law provides a remedy against the particular defendant."
The function of an exception of no right of action is to determine whether a plaintiff is included in the class of persons to whom the law has granted the cause of action that is asserted in the plaintiff's petition. An exception of no cause of action "questions whether the law extends a remedy against the defendant to anyone under the factual allegations of the petition."
In considering the merits of an exception of no cause of action, the trial court is required to decide whether to grant or deny the exception on the basis of the face of the petition. "Each well-founded fact in the petition must be accepted as true." In the case of an exception of no right of action, evidence is admissible at a hearing on the exception to either support or rebut the exception.
Whether a litigant has standing to assert a claim is tested via an exception of no right of action. The foundation of Louisiana's standing requirement is found in Louisiana Code of Civil Procedure Article 681, which provides that "[e]xcept as otherwise provided by law, an action can only be brought by a person having a real and actual interest in what he asserts."

Id. , 2014-1079, pp. 3-4, 172 So.3d at 143 (internal citations omitted). Where doubt exists regarding the appropriateness of an exception of no right of action, it is to be resolved in favor of denying the exception and finding a right of action. See Rebel Distributors Corp. v. LUBA Workers' Comp. , 2013-0749, p. 10 (La. 10/15/13), 144 So.3d 825, 833.

Coastal Marine filed a cross claim seeking defense and indemnification from Zurich pursuant to the MCSA. Coastal Marine alleges that it was Integrated's subcontractor and a member of the MCSA Customer "Group" entitled to defense and indemnification for tort liability for the injuries allegedly sustained by Rogers.

Zurich contends that Coastal Marine's claim against Zurich is barred by the LDAS, pursuant to La. R.S. 22:1269. Zurich argues that it is the insurer for a third party, Valerus; thus, according to Zurich, Coastal Marine cannot maintain a direct action in contract against Zurich, where Coastal Marine has not made a claim against Zurich's insured, Valerus. Thus, Zurich contends that Coastal Marine's claim is contractual.

In support of their arguments, Zurich and AGLIC rely on Tyler v. Walt , 184 La. 659, 167 So. 182 (1936) and Pennsylvania Fire Ins. Co. v. Underwriters at Lloyd's London , 140 So.2d 212 (La. App. 4th Cir. 1962), for the proposition that an unintended third party beneficiary to an insurance policy is not among the class of persons who may sue the insurer directly under the LDAS. Zurich and AGLIC also cite to N. Am. Specialty Ins. Co. v. Georgia Gulf Corp. , 99 F.Supp.2d 726 (M.D. La. 2000) to suggest that "the 'injured party' accorded a right of direct action is a "person injured as a result of tortious conduct and not one injured as a result of breach of contract." We find these cases distinguishable because Coastal Marine is not an unintended beneficiary of the Zurich policy.

Louisiana law permits a party to bring a claim under an insurance policy when he is a named insured, additional insured, or a third party beneficiary of the contract. Ledet v. FabianMartins Constr., L.L.C. , 2018-133, p. 9 (La. App. 5 Cir. 10/17/18), 258 So.3d 1058, 1066 (citing Haddad v. Elkhateeb , 2010-0214, 2010-0308 (La. App. 4 Cir. 8/11/10), 46 So.3d 244, 257 n. 11 ). If a party is neither a named insured nor an additional insured, he can nonetheless avail himself of the benefits of the policy if he can establish that he is a third party beneficiary. Ledet , 2018-133, p. 9, 258 So.3d at 1066 (citing Joseph v. Hospital Service District No. 2 of the Parish of St. Mary , 2005-2364, pp. 6-7 (La. 10/15/06), 939 So.2d 1206, 1211. Louisiana Civil Code article 1978 provides that a "contracting party may stipulate a benefit for a third person called a third party beneficiary." In Louisiana, such a contract for the benefit of a third party is commonly referred to as a stipulation pour autrui . Joseph , 2005-2364, p. 7, 939 So.2d at 1211. There are three criteria for determining whether contracting parties have provided a benefit for a third party: "(1) the stipulation for a third party is manifestly clear; (2) there is certainty as to the benefit provided the third party; and (3) the benefit is not a mere incident of the contract between the promisor and the promisee." Id. , pp. 8-9, 939 So.2d at 1212.

Coastal Marine alleges in its cross claim that it is a member of Integrated's subcontractor "Group," and that members of the "Group" are those "required by written contract" to be covered by the insurance policies provided for in the MCSA. Coastal Marine alleges that the MCSA obligation to defend and indemnify encompasses Integrated, as well as Coastal Marine. In opposition to these exceptions, Coastal Marine introduced the Zurich policy, which provides coverage for an "insured contract." Here, the insured contract is the MCSA, which sets forth Valerus' obligation to provide defense and indemnification to subcontractors of Integrated.

Considering the indemnification language in the MCSA, together with Zurich's coverage of insured contracts, the district court found, and we agree, that under Valerus' policy with Zurich, Coastal Marine is a third party beneficiary of the Zurich policy as Integrated's subcontractor. Coastal Marine is not an unintended beneficiary of the Zurich policy. Rather, the MCSA contemplates that Coastal Marine is intended to be covered for its defense and indemnification. Though Coastal Marine is not specifically named as an insured in the Zurich policy, it would be entitled to sue Zurich. See Mabile v. Dow Chem. Co. , 2016-0577, p. 7 (La. App. 1 Cir. 12/22/16), 2016 WL 7436587 (reversing grant of exception of no right of action and finding allegations in petition sufficiently pled third party beneficiary status relative to contract of insurance); see also Cashman Equip. Corp. v. Rozel Operating Co. , 854 F.Supp.2d 406, 414 (M.D. La. 2012) (denying motion to dismiss claims for defense and indemnity based on status as a contractual indemnitee, considering Louisiana and Texas law). We, thus, find no error in the district court's overruling of the exceptions of no cause of action and no right of action.

Lastly, we address Zurich's and AGLIC's argument that the district court erred in adjudicating the defense and indemnity obligations of Valerus and coverage obligations under the Zurich and AGLIC policies, in the face of a binding arbitration clause contained in the MCSA. Integrated, New York Marine, and Gemini each point out that Zurich and AGLIC never raised the arbitration issue in the district court, and therefore, it is waived. We agree. Without addressing whether Zurich and AGLIC were entitled to invoke arbitration or had a contractual right to arbitrate with the remaining parties, their arbitration arguments were clearly waived by their actions and inactions in this litigation.

Courts will find that arbitration has been waived "when the party seeking arbitration substantially invokes the judicial process to the detriment or prejudice of the other party." Lorusso v. Landrieu Enterprises, Inc. , 2002-2346, p. 6 (La. App. 4 Cir. 5/21/03), 848 So.2d 656, 659. "Seeking relief from the court before demanding arbitration is not determinative of whether the right to demand arbitration has been waived, but is only a factor to be considered." Id. (quotation omitted). Nevertheless, this Court has stated that "one who claims entitlement to arbitration cannot make a pro forma request for it, file a reconventional demand and then sit on his rights for six and a half years, participate in litigation and then after an adverse ruling cry '[ ] the judgment is invalid for want of arbitration.' That is the very antithesis of what arbitration is all about." Thomas v. Desire Cmty. Hous. Corp. , 98-2097, p. 7 (La. App. 4 Cir. 7/19/00), 773 So.2d 755, 759 (recognizing that "arbitration is a substitute for litigation and that its purpose is to settle disputes in a fast, inexpensive manner before a tribunal chosen by the parties" and finding that the right to arbitration was waived by failing to seek timely supervisory review of a judgment granting the exception of prematurity).

"The determination of whether or not a party has waived its contractual right to arbitrate by its participation in the judicial process or by failing to timely request arbitration while participating in the judicial process is an issue properly considered by the [district] court." Rathborne v. Rathborne , 2006-1518, p. 8 (La. App. 4 Cir. 12/3/08), 999 So.2d 816, 822.

Zurich and AGLIC, however, did not argue in the district court that they are entitled to arbitration or that the district court did not have authority to render determinations as to the defense and indemnification obligations of Valerus. Zurich and AGLIC bring their arbitration arguments for the first time on appeal. Having failed to invoke their arbitration argument prior to this appeal, these parties have consented to the procedural posture herein. Zurich and AGLIC have waived their right to arbitration and any argument relating to arbitration.

"Under Rule 1-3 of the Uniform Rules, Courts of Appeal, we cannot consider an argument not raised in the trial court 'unless the interest of justice clearly requires otherwise.' We find that the issue is not properly before this Court nor would the interests of justice be served by our consideration of this argument for the first time on appeal." KeyClick Outsourcing, Inc. v. Ochsner Health Plan, Inc. , 2011-0598, p. 6 (La. App. 4 Cir. 3/14/12), 89 So.3d 1207, 1211. We, thus, find this assignment without merit.

Accordingly, for the reasons ascribed above, we affirm the three judgments on appeal, dated December 7, 2016, June 16, 2017, and December 19, 2017.

AFFIRMED

      In a "knock for knock" indemnification agreement, "each party to the contract would indemnify the other for claims brought by its employees or the employees of subcontractors it hired." See, e.g., Weathersby v. Conoco Oil Co. , 752 F.2d 953, 957 (5th Cir. 1984) ; see also Darty v. Transocean Offshore U.S.A., Inc. , 2003-1669, p. 6 (La. App. 4 Cir. 5/12/04), 875 So.2d 106, 110 (quoting Cormier v. Rowan Drilling Co. , 549 F.2d 963, 969-70 (5th Cir. 1977) )(the "whole purpose behind these provisions is to make sure that the contractor ... and the company ... are each solely responsible for anything that happens to their own respective employees, regardless of fault").

      In addition, this judgment denied Coastal Marine's motion for summary judgment seeking a finding of freedom from fault.

      No written settlement agreement is contained in the record before us. The parties submit that the settlement was read into the record on January 9, 2017. That transcript is not a part of the record. Nevertheless, we find no reason to believe a genuine issue of material fact exists as to the terms of the settlement.

      Coastal Marine's motion for summary judgment seeking determination of actual defense costs and attorneys' fees, however, was denied as premature.

      The district court's findings concerning LOAIA are contained in its reasons for judgment dated December 7, 2016, and December 19, 2017, not in the judgments themselves. "[A]n appeal lies only from the judgment, not from the reasons." I.F. v. Administrators of Tulane Educ. Fund , 2013-0696, p. 6 (La. App. 4 Cir. 12/23/13), 131 So.3d 491, 496. We thus review this assignment to determine whether LOAIA renders the defense and indemnification provision and additional insured endorsements unenforceable and whether such a finding could mandate reversal of summary judgment against Zurich and AGLIC.

      While LOAIA is a Louisiana state statute, most of the jurisprudence analyzing whether a contract "pertains to a well" has come from the federal courts. As this Court explained in Rousse v. United Tugs, Inc. , 2017-0585, p. 6 (La. App. 4 Cir. 12/20/17), 234 So.3d 1179, 1184 :
      "Federal appellate court decisions are persuasive only." Shell Oil Co. v. Sec'y, Revenue & Taxation , 96-0929, p. 9, n. 11 (La. 11/25/96), 683 So.2d 1204, 1210 (citations omitted). "Federal appellate decisions will not be followed in the face of positive jurisprudence of the Supreme Court of Louisiana to the contrary." Id. , 96-0929 at p. 9, 683 So.2d at 1210. Nonetheless, as federal appellate decisions are persuasive authority, "we review those opinions carefully to see if they provide further guidance for our analysis." FIA Card Servs., N.A. v. Weaver , 2010-1372, p. 7 (La. 3/15/11), 62 So.3d 709, 714. Likewise, federal district court decisions are not binding on this Court, but we may find their "rationale persuasive and concur with [their] conclusions." Houston v. Avondale Shipyards, Inc. , 506 So.2d 149, 150 (La. App. 4th Cir. 1987).

      Those factors are:
      (1) whether the structures or facilities to which the contract applies or with which it is associated, e.g., production platforms, pipelines, junction platforms, etc., are part of an in-field gas gathering system;
      (2) what is the geographical location of the facility or system relative to the well or wells;
      (3) whether the structure in question is a pipeline or is closely involved with a pipeline;
      (4) if so, whether that line picks up gas from a single well or a single production platform or instead carries commingled gas originating from different wells or production facilities;
      (5) whether the pipeline is a main transmission or trunk line;
      (6) what is the location of the facility or structure relative to compressors, regulating stations, processing facilities or the like;
      (7) what is the purpose or function of the facility in question;
      (8) what if any facilities or processes intervene between the wellhead and the structure or facility in question, e.g., "heater treaters," compressor facilities, separators, gauging installations, treatment plants, etc.;
      (9) who owns and operates the facility or structure in question, and who owns and operates the well or wells that produce the gas in question;
      (10) and any number of other details affecting the functional and geographic nexus between "a well" and the structure or facility that is the object of the agreement under scrutiny.

      See, e.g., Penton v. Hotho, 601 So.2d 762, 766 (La. App. 1st Cir.1992) (citing Graves v. Traders & General Insurance Company , 252 La. 709, 214 So.2d 116, 118 (1968) ; Dean v. State Farm Mut. Auto Ins. Co. , 518 So.2d 1115, 1118 (La. App. 4th Cir. 1987) ).

      The parties do not dispute that the MCSA did not require Valerus to name Coastal Marine an additional insured under the Zurich and AGLIC policies. There is also no evidence of a contract between Coastal Marine and Valerus or between Coastal Marine and Zurich.

      The Louisiana Direct Action Statute, found in La. R.S. 22:1269, provides, in relevant part:
      B. (1) The injured person or his survivors or heirs mentioned in Subsection A of this Section, at their option, shall have a right of direct action against the insurer within the terms and limits of the policy; and, such action may be brought against the insurer alone, or against both the insured and insurer jointly and in solido, in the parish in which the accident or injury occurred or in the parish in which an action could be brought against either the insured or the insurer under the general rules of venue prescribed by Code of Civil Procedure Art. 42 only; however, such action may be brought against the insurer alone only when at least one of the following applies:
      (a) The insured has been adjudged bankrupt by a court of competent jurisdiction or when proceedings to adjudge an insured bankrupt have been commenced before a court of competent jurisdiction.
      (b) The insured is insolvent.
      (c) Service of citation or other process cannot be made on the insured.
      (d) When the cause of action is for damages as a result of an offense or quasi-offense between children and their parents or between married persons.
      (e) When the insurer is an uninsured motorist carrier.
      (f) The insured is deceased.
      (2) This right of direct action shall exist whether or not the policy of insurance sued upon was written or delivered in the state of Louisiana and whether or not such policy contains a provision forbidding such direct action, provided the accident or injury occurred within the state of Louisiana. Nothing contained in this Section shall be construed to affect the provisions of the policy or contract if such provisions are not in violation of the laws of this state.