## Facts

- Donald Robert Rovira worked for LaGoDa, Inc., a heating and air-conditioning business, and suffered an on-the-job back injury.
- After returning to work, Rovira sued LaGoDa and its officers, alleging wrongful discharge: he claimed he was fired without just cause and/or in retaliation for filing a workers’ compensation claim.
- LaGoDa denied liability and asserted Rovira was terminated for legitimate business reasons.
- LaGoDa sought defense and indemnity from its workers’ compensation and employer’s liability insurer, National Fire Insurance Company of Hartford, under an endorsement addressing “wrongful discharge.”
- National Fire denied coverage and refused to defend LaGoDa in Rovira’s suit.
- LaGoDa settled Rovira’s claim for a small amount while continuing to deny wrongdoing, then pursued National Fire for reimbursement of defense costs (including attorney’s fees) and indemnification for the settlement payment.

## Issues

1. Whether, based on the allegations in Rovira’s petition and the policy language, National Fire owed LaGoDa a duty to defend the wrongful-discharge/retaliatory-discharge suit.
2. Whether National Fire owed indemnity for the amount LaGoDa paid in settlement.
3. Whether the attorney’s fee award for defense costs should be changed on appeal.

## Decision

- The court held National Fire owed LaGoDa a duty to defend because the petition’s allegations potentially fell within the wrongful-discharge endorsement.
- The court held National Fire did not owe indemnity for the settlement because LaGoDa did not prove the settlement represented covered damages under the policy.
- The court affirmed the award of attorney’s fees and defense costs due to the wrongful refusal to defend, with a slight amendment to the amount.
- The judgment was otherwise affirmed.

## Legal Principles

- An insurer’s duty to defend is determined by comparing the petition’s allegations with the policy terms; if the allegations potentially fall within coverage, the insurer must defend.
- Ambiguities in coverage grants or exclusions are construed against the insurer when determining the duty to defend.
- The duty to defend is broader than the duty to indemnify; a breach of the defense duty may require payment of reasonable defense costs and attorney’s fees.
- Indemnity for a settlement requires proof that the settlement amount was paid for a covered loss; a voluntary compromise, without a sufficient showing of covered liability, does not establish indemnity.

## Conclusion

The court required the insurer to reimburse LaGoDa’s reasonable defense expenses because the pleadings created potential coverage under the wrongful-discharge endorsement, but it refused to shift the settlement payment absent proof that the compromise represented covered damages, affirming the fee award as slightly modified.


Rovira v. LaGoDa, Inc., 551 So. 2d 790 (La. Ct. App. 5th Cir. 1989)