Background
Elizabeth Molbert hired Kenko Bulkhead & Marine SVCS, LLC to construct a 130-foot wooden bulkhead for $32,500 to protect her Calcasieu River home from erosion. Completed in June 2016, the bulkhead failed during a May 2017 flood. Because Kenko had tied it to a house piling, the failure also shifted Molbert’s home. Liberty Mutual paid her $165,000 under a flood policy. Molbert subsequently paid $167,058.59 for an engineered steel replacement bulkhead and $266,372.75 to repair her home.
Molbert sued Kenko, its commercial general liability insurer Travelers Property Casualty Company of America, and Kenko members Kenneth Cooley and Glenn Beier. A jury found Kenko, Cooley, and Beier collectively 75% at fault and Molbert 25% at fault. It awarded $266,372.75 for the home, $167,058.59 for “shoreline/bulkhead,” $2,500 for loss of enjoyment of life, and $7,500 for mental anguish. After the comparative-fault reduction, the award totaled $332,573.50. Post-trial rulings dismissed Cooley and Beier personally and held that Travelers’ policy did not cover mental anguish, while otherwise leaving the judgment substantially intact. Travelers, Kenko, and Molbert appealed.
The Court’s Holding
Reviewing policy interpretation de novo, the court held that Travelers’ breach-of-contract exclusion was unambiguous but inapplicable because Kenko’s lack of required contractor licensing made the construction contract absolutely null. It nevertheless held that the work-product exclusion barred coverage for repairing or replacing the bulkhead itself. The products-completed operations hazard provision did not create an ambiguity: it covered resulting damage to other property, namely Molbert’s house, after completion of the work. Based on Molbert’s testimony, the court determined that the entire $167,058.59 shoreline/bulkhead award represented bulkhead repair and replacement, not shoreline restoration, so no remand was needed to separate those components.
The court also rejected Travelers’ fraud-based coverage arguments. Molbert’s allegation that the defendants falsely assured her they were licensed did not plead fraud with the required particularity, including specific intent and an effect on contractual consent; Travelers also had not pleaded fraud as an affirmative defense. The directed verdict keeping fraud from the jury therefore stood, and the expected-or-intended-injury exclusion did not apply on that theory.
The court upheld the general damages instructions and the jury’s restoration-cost award for the house. It found no reversible error in omitting Kenko’s requested property-valuation charge and no prejudice because parish codes and FEMA requirements necessitated the repairs. It also rejected Kenko’s subrogation argument: Liberty Mutual’s partial subrogation did not eliminate Molbert’s right of action or require a $165,000 reduction, although the policy obligated her to reimburse Liberty Mutual from her recovery. The exclusion of evidence concerning later hurricane insurance claims was not an abuse of discretion.
Reviewing the directed-verdict issues de novo, the court preserved mental-anguish damages based on Molbert’s experience witnessing the failure and the ensuing financial and personal disruption. It reversed the loss-of-enjoyment award because the record identified no formerly enjoyed activities she could no longer perform, and the court found no authority supporting that award without physical injury. Applying manifest-error review to comparative fault, it eliminated Molbert’s 25% allocation, concluding that the evidence established defective design and construction and that removing the temporary stabilization beam was Kenko’s responsibility, not that of a lay homeowner.
The court increased mental anguish from $7,500 to $15,000 as the highest reasonable award, but affirmed the dismissal of Cooley and Beier individually. Under the Ogea factors, their poor workmanship furthered Kenko’s obligations and occurred within their member capacities. Their unlicensed work satisfied the criminal-conduct factor, but that factor alone did not establish personal liability under La.R.S. 12:1320(D).
Key Takeaways
- The decree restores the full $266,372.75 home award and $167,058.59 bulkhead award without Molbert’s 25% fault reduction, increases mental anguish to $15,000, and eliminates loss-of-enjoyment damages.
- Travelers’ policy excludes the bulkhead’s repair or replacement but covers the resulting post-completion damage to the house; the decree does not disturb the trial court’s exclusion of mental-anguish coverage.
- Cooley and Beier remain dismissed personally despite the licensing and permit violations.
- Travelers and Kenko bear 100% of trial court costs, expert witness fees, and transcript-copy costs, and share appellate costs equally.
Why It Matters
The decision distinguishes defective-work exclusions from coverage for consequential damage to other property and demonstrates that an unambiguous exclusion may still be factually inapplicable. It also illustrates the different appellate standards governing policy interpretation, directed verdicts, factual findings, general damages, and evidentiary rulings.
For construction litigation, the opinion underscores that restoration reasonably required by current codes and flood regulations may be recoverable for a personal residence. It likewise confirms that LLC members’ licensing violations do not automatically overcome limited liability when the underlying claim remains poor workmanship performed within the company’s contractual undertaking.