Agenda - Planning Commission - 09/02/2004

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Pa,oe 6 -- August 10, 2004 Insurance -- Company claims policy does not cover violations of state constitutional rights Argues only federal claims protected Citation: CIulee ,/. Bctyou Fleet inc., Cot,trr of Appeal of Louisiana, 5ch Cir., ~Vo. 04-CA-J06 C/W 04-G-k-J07 ('2004) LOUISIANA (05/26/04) ~ Clulee sued St. Charles' Parish for conspLring to aid a business rival in the' operation of its sandpit by rezoning property in violation of ~he parish code. Clulee's al'legations included violations of his state constitutional rights as well as his federal ones. The parish had an insurance policy protecting it from liability for certain legaI claims. Although intentional acts were excluded under the insurance policy, there was an exception for violations of the United States Civil Rights Act of 18'71 and "similar laws." The Civil Rights Act allowed an individual to sue government officials who deprived a person of rights under the U.S. Constitution. The insurance company claimed Clulee was not suing for acts covered by ~he parish's policy because the exception only covered federal claims. Thus, it asked the court to find it had no responsibility to provide coverage for the parish in this case. The court ruled in the company's favor. Clu!ee appealed, arguing the insurance company was also a party to the lawsuit and was ultimately monetarily responsible. DECISION: Reversed. The insurance policy provided coverage for the alleged state constitutional law violations. The language in the policy did not specify whether "similar laws" were limited under the policy to federal laws or whether sinzilar state constitutional laws were covered. The state constitutional protections claimed by Clulee were similar to the federal laws granting those same rights, and the "similar laws" language in the discrimination endorsement could reasonably be interpreled to include cover- age for state constitutional law violations. If an insurance policy was susceptible to two or more interpretations, ti~en it was ambiguous and had to be liberally interpreted in favor of coverage. It was evident ~he language in ~he discrimination endorsement was unclear and ambiguous as to what violations were covered under the policy. There- fore, it had to be construed in favor of coverage. see ~lxo: Succe.~'si~)n of'F,m~nalv v. Lafayette Insurance Co., 805 So.2d 1134 t 2002 ). z'~'e (~h;o: Oorrs'e.ve~,~ v. ~'~'arr Proper? Man~gemenr b~.c., 820 $o.2d I13,5/20021, 84 2004 '~umlan ?ubiismn9 (-~fOLIO. ~f~y :eoroducuon ~s oroi~lbJ~e~. For more information please ,:att t6i7) 542-0048.