29,221 La.App. 2 Cir. 2/26/97, Hickey v. Centenary Oyster House

• Decision Date: 26 February 1997
• Parties: 29,221 La.App. 2 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 858

690 So.2d 858

29,221 La.App. 2 Cir. 2/26/97

Angela Armstrong HICKEY and Shawn Edward Hickey, Plaintiffs-Appellants, v. CENTENARY OYSTER HOUSE, et al., Defendant-Appellee.

No. 29221-CA.

Court of Appeal of Louisiana Second Circuit.

Feb. 26, 1997.

Rehearing Denied March 27, 1997.

W. Eugene Golden & Associates by Huey L. Golden, Shreveport, for Plaintiffs-Appellants.

Bodenheimer, Jones & Szwak by David A. Szwak, Shreveport, for Defendant-Appellee Colony Insurance Company.

Joe Clark, Sr., Metairie, for Defendant Melvin Ashley d/b/a Security Professionals.

Before MARVIN, C.J., and WILLIAMS and PEATROSS, JJ.

MARVIN, Chief Judge.

In this personal injury action, arising out of an attack on a customer by an armed robber in the parking lot of a Shreveport restaurant, Angela Armstrong Hickey appeals the trial court's grant of summary judgment in favor of Colony Insurance Company, the liability insurer for Melvin Ashley d/b/a Security Professionals of Shreveport, Inc., which provided security for the restaurant and its customers. The summary judgment dismissed plaintiff's claim against Colony based upon the "assault and battery" exclusion in the liability policy.

We discern that the public policy stated in the purpose of the Private Security Regulatory and Licensing Law and the requirement that private security agencies have liability insurance overrides the assault and battery exclusion. We reverse and remand for further proceedings. La.R.S. 37:3270 et seq.

FACTS

On October 1, 1994, Hickey and a group of friends were leaving the Centenary Oyster House ("Centenary") at or near closing time after an evening of drinking and socializing. Hickey agreed to drive some friends home in Greg Teal's car because Teal was intoxicated. Teal's car was parked near the building in Centenary's back parking lot. Shelly Veuleman and Dr. Margaret Olmedo accompanied Hickey and Teal through an alleyway to the parking lot.

As the group stood next to Teal's car and Hickey was about to unlock the driver's-side door, a robber wearing a ski mask and armed with a .45 caliber handgun approached the car from the passenger side. The armed robber ordered Veuleman and Olmedo, who were standing next to the passenger side of the car, to surrender their purses. As Veuleman gave over her purse, Olmedo, who had no purse, raised her hands and lay face down on the pavement.

While unlocking the door on the driver's side of the vehicle, with Teal beside her, Hickey did not immediately notice the robber. When Hickey opened the door the car's inside light automatically illuminated. The light apparently startled the robber, who aimed and fired the gun at Hickey about five times through the passenger side window. Two bullets struck Hickey in the upper torso. The robber then fled on foot and has not been apprehended. Our resolution of this appeal affects only the defendant liability insurer who insured the security agency that contracted to provide security for the restaurant and its patrons. We do not consider in this appeal the liability of the insured.

DISCUSSION

Louisiana law requires that each private security company carry at least $100,000 in general liability insurance, with the State of Louisiana named as an additional insured. La.R.S. 37:3276(E). Ashley secured liability insurance through James Nichols at Nichols Agency, Inc, Ashley's regular insurance agent. Nichols procured the insurance through McIntyre and Associates, Colony's managing general agent. According to Ashley, although he did not read the policy, he understood that Nichols gave him "the type of coverage needed for a security company."

After suing Centenary, Centenary's liability insurer, Reliance Insurance Company, Ashley and Colony, Hickey settled with Centenary and Reliance. The remaining defendants in this action are Ashley and Colony.

Colony relies on the "assault and battery" exclusion from coverage contained in its liability policy. After oral argument on the motion for summary judgment, the trial court deferred ruling until the supreme court rendered its opinion in Ledbetter v. Concord General Corp. Following the ruling in Ledbetter, 95-0809 (La. 1/6/96), 665 So.2d 1166, the trial court again heard argument on the motion and granted summary judgment.

Finding no genuine issue of material fact, the trial court ruled that Colony was not bound by any alleged representations of coverage to Ashley by Nichols because no agency relationship existed between Nichols and Colony. Although the court deemed it unnecessary to rule on the issue, the trial court specifically found the exclusion did not offend public policy, as argued by Hickey.

On appeal, Hickey urges this court to find an agency relationship between Nichols and Colony, such that Nichol's alleged representations of coverage to Ashley would bind Colony, and that the assault and battery exclusion in the Colony policy defeats the purpose of La.R.S. 37:3276(E) and is against statutorily declared public policy.

Standard of Review

Appellate courts review summary judgments de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate. Schroeder v. Board of Supervisors of Louisiana State University, 591 So.2d 342 (La.1991). Whether an insurance policy, as a matter of law, provides or precludes coverage is a dispute which can properly be resolved within the framework for a motion for summary judgment. La.C.C.P. art. 966; Nelson v. Ragan, 26,724 (La.App. 2d Cir. 4/5/95), 653 So.2d 185, writ denied.

La.C.C.P. art. 966 was amended in 1996, effective May 1, 1996, to provide that summary judgment procedure is now favored, "designed to secure the just, speedy, and inexpensive determination of every action, ... and shall be construed to accomplish these ends." The amendment is procedural in nature and, therefore, retroactive in application. La.C.C. art. 6; Collinsworth v. Foster, 28,671 (La.App. 2d Cir. 9/25/96), 680 So.2d 1275.

Art. 966 still specifies, however, that the burden of proof shall remain with the mover to show "that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law." Notwithstanding the amendment to Art. 966, if the mover fails to show that no genuine issues of material fact remain, summary judgment is not proper. Collinsworth v. Foster, supra. Is Colony bound by Nichols' representations of coverage?

We address whether Colony is bound by Nichols' alleged representations to Ashley concerning what insurance coverage was being provided to Ashley, and Ashley's resultant belief that he was covered by the liability policy for this incident. The issue is whether Nichols was an insurance agent of Colony, the insurer, soliciting risks and effecting insurance as a representative of Colony, or merely an insurance broker, soliciting insurance from various insurers as a representative of Ashley, the insured. See and compare Alexander v. Lee, 612 So.2d 1024 (La.App. 2d Cir.1993).

Hickey argues that Nichols acted as Colony's insurance agent and Colony is bound by Nichols' representations that Ashley was obtaining all the insurance coverage required by La.R.S. 37:3276. In support of her argument, Hickey emphasizes that Nichols advertised in the yellow pages that it was a "multi-line agency" with "immediate binding" available. Hickey also relies on Nichols' deposition testimony that his agency was a broker for some insurance companies, but an agent for others, and that an ordinary client could not tell whether Nichols was acting as an agent or broker.

Contending that a trial on the merits is needed to fully investigate the alleged principal/agent relationship between Nichols and Colony, Hickey argues that Nichols' representations to Ashley and Ashley's understanding of the terms of the policy that he was buying have not yet been fully explored because Ashley's deposition was interrupted and has not been completed.

Whether an insurance broker, in a particular transaction, acts as an agent of the insured or the insurer is a question of fact, dependent on the particular circumstances of the case. Tiner v. Aetna Life Insurance Company, 291 So.2d 774 (La.1974). The existence or non-existence of an agreement between an insurer and an intermediary is not necessarily dispositive of the issue. Britten v. Payne, 381 So.2d 855 (La.App. 1st Cir.1980), writ denied. A principal/agent relationship is never presumed. There must exist facts which give rise to the reasonable inference that an agency relationship has been entered into. Smason v. Celtic Life Ins. Co., 615 So.2d 1079 (La.App. 4th Cir.1993), writ denied. This record is devoid of any facts from which one could infer an agency relationship between Nichols and Colony.

This record clearly establishes that Nichols operated as an independent insurance agency, soliciting applicants for insurance from the general public to forward to different insurers or their general agents. Nichols had no written agency contract with Colony, had no authority to issue coverage on behalf of Colony, to make any alterations, changes or additions to any insurance policy issued by Colony, or to make any binding commitments on behalf of Colony.

There was no direct connection between Nichols and Colony, as indicated by the following exchanges from James Nichols' deposition testimony:

Q. Okay. And can you tell me about your relationship, if any, to Colony Insurance Company or the Waite Hill Insurance Group?

A. The only relationship I have with them is indirectly through McIntyre and Associates, the managing general agent. I don't have any direct contractual or any other relationship with Colony.

* * * * * *

Q. And in this case, it's been your testimony that you are not an agent of Colony Insurance Company, but you were brokering a policy through McIntyre and Associates?

A. That's correct.

This court has noted that the issue of whether a person is an agent or a broker depends mainly...