Schroeder v. Board of Sup'rs of Louisiana State University

• Decision Date: 02 December 1991
• Docket Number: No. 91-C-0941,91-C-0941
• Citation: 591 So.2d 342
• Parties: Rolf R. SCHROEDER, et al. v. BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY, et al. 591 So.2d 342, 71 Ed. Law Rep. 1279
• Court: Louisiana Supreme Court

Page 342

591 So.2d 342

Rolf R. SCHROEDER, et al. v. BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY, et al.

No. 91-C-0941.

591 So.2d 342, 71 Ed. Law Rep. 1279

Supreme Court of Louisiana.

Dec. 2, 1991.

Rehearing Denied Feb. 6, 1992.

Dermot S. McGlinchey, Eve Barrie Masinter, James M. Garner, Monica A. Frois, McGlinchey, Stafford, Cellini and Lang, Counsel for applicants.

Frank A. Fertitta, Lane, Fertitta, Lane & Tullos, Carolyn Pratt Perry, Raymon G. Jones, Mary E. Mouton, Barbara L. Malik, Deutsch, Kerrigan & Stiles, Boris F. Navratil, Breazeale, Sachse & Wilson, for respondents.

DENNIS, Justice.

In this summary judgment review, the question is whether Louisiana State University, under the terms of its liability insurance policy, "borrowed" an automobile when a university laboratory school student used his father's car to give a ride to a fellow student who had volunteered to run a school related errand at the request of a teacher who had no knowledge of or control over his means of transportation. The trial court and court of appeal, 577 So.2d 1074, concluded that LSU had "borrowed" the vehicle owned by the driver's father and rendered summary judgment in favor of plaintiff that coverage was afforded under LSU's liability insurance policy for an auto accident in which the students were involved during the errand. We reverse. The words of the insurance policy are clear and explicit: "Anyone else is an insured while using with your permission a covered auto you own, hire or borrow...." Therefore, no further interpretation may be made in search of the parties' intent. Under its generally prevailing meaning, borrow connotes the acquisition of temporary possession, dominion or control of a thing, or the right to direct the use of a thing, not merely the receipt of some benefit from its use by another person. In the present case, under the evidence offered in support of the summary judgment, LSU did not possess, dominate, control or acquire the right to direct the use of the vehicle involved in the accident so as to make the vehicle a "borrowed" automobile under the policy.

FACTS

On Saturday, October 29, 1983, Andrew Eric Schroeder ("Eric") drove his father's car to University Laboratory School ("U. High") on the Louisiana State University campus in Baton Rouge, where he attended high school. On the way to school he picked up Bradley Aucoin, a classmate. Before arriving at school, Eric stopped and purchased a six pack of beer, which one or both of the boys consumed in the parking lot of U. High. The boys had arrived at school around 12:30 p.m. to participate in "Sadie Hawkins Day" events. These events were sponsored by the senior class of U. High with the help of U. High officials. The events were held on the school grounds of U. High and were chaperoned by faculty "sponsors."

Later that afternoon, sometime before 4:00 p.m., Ms. Ater, a faculty sponsor, asked Brad if he knew who was assigned to bring the ice for the sodas which were going to be served at the dance that night. Brad said that he didn't know but volunteered to go get it. Ms. Ater gave Brad money to purchase the ice and asked him to procure it. Ms. Ater did not know that Brad did not have a car. However, Ms. Ater was aware that some mode of transportation would likely be required to reach the place from which she had instructed Brad to obtain the ice. Without Ms. Ater's knowledge, Brad asked Eric to drive him to get the ice. On the way back, Eric and Brad stopped to buy more beer. After resuming the trip back to the school, Eric collided with another car causing severe injuries to the owner of the other car Jeanne Elise Lee. Lee, through her parents, sued Eric, Eric's father, Rolf Schroeder, his insurer, USAA Casualty Insurance Company of America, and her UM insurers, Continental Casualty Company ("CNA") and Safeco Insurance Company of America ("Safeco").

THE CASE BELOW

The present litigation arises from the same vehicular accident as a previous tort suit by Jeanne Elise Lee against Eric, his father Rolf R. Schroeder, their insurer USAA, and Lee's uninsured motorist carriers, CNA and Safeco. Judgment was rendered in favor of Lee in the amount of $1,626,600.00 against all named defendants. USAA, as liability carrier of Schroeder, paid its entire policy limits of $100,000. Lee's UM carriers, CNA and Safeco, paid the balance of the judgment. CNA and Safeco cross-claimed against Rolf R. Schroeder for amounts paid under their policies. These judgments were affirmed on appeal with minor reductions in quantum. Lee v. USAA Casualty Insurance Company of America, 540 So.2d 1083 (La.App. 1st Cir.), writ denied, 542 So.2d 514 (La.), reconsideration denied, 544 So.2d 384 (La.1989).

Schroeder then filed suit against LSU and its insurers on the basis that LSU was vicariously liable for the tortious conduct of Eric, and that Eric was an insured under LSU's automobile policy. CNA and Safeco intervened in the matter asserting that if LSU's policy afforded coverage then Lee was not uninsured or underinsured and LSU's insurers were liable to reimburse them for sums paid out under their policy. The trial court dismissed the claim of vicarious liability on an exception of no cause of action. That ruling is not before the court at this time. Schroeder and the intervenors jointly moved for summary judgment on the issue of whether Eric was an insured under LSU's liability insurance policy. LSU and its insurers made a cross-motion for summary judgment that Eric was not an insured. The trial court found that there was no genuine issue of material fact, with respect to either motion, that the joint movers were entitled to judgment as a matter of law, but that LSU was not. Therefore, the trial court granted plaintiff's and intervenors' joint motion and denied LSU's motion for summary judgment. The trial court found that the term borrow was ambiguous, and in construing the term against the insurance company, found that borrow embraced any use of any vehicle for the benefit of the named insured LSU. LSU and its insurers appealed. The Court of Appeal, First Circuit, affirmed. We granted LSU's application for certiorari to determine whether the words of the insurance contract were ambiguous and whether plaintiff and intervenors are entitled to judgment as a matter of law. LSU did not complain in this application of the denial of its cross-motion for summary judgment.

SUMMARY JUDGMENT

Appellate courts review summary judgments de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate. GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711, 714 (5th Cir.1985); McCrae v. Hankins, 720 F.2d 863, 865 (5th Cir.1983); Wright, Miller & Kane, Federal Practice and Procedure, Sec. 2716, at 125 (Supp.1991). A motion for summary judgment is properly granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact, and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966; Vermilion Corp. v. Vaughn, 397 So.2d 490, 493 (La.1981). Because the mover has the burden of establishing that no material factual issue exists, inferences to be drawn from the underlying facts contained in the materials before the court must be viewed in the light most favorable to the party opposing the motion. Vermilion Corp., supra; see also United States v. Diebold, 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Thornbrough v. Columbus and Greenville R. Co., 760 F.2d 633, 640 (5th Cir.1985). The party who defended against the motion for summary judgment must have his properly filed allegations taken as true and must receive the benefit of the doubt when his assertions conflict with those of the movant. Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976); Thornbrough, supra; Wright, Miller & Kane, supra.

CONSTRUCTION OF THE INSURANCE CONTRACT

It is well settled in our law that general rules of interpretation apply to insurance policies in the same way that they apply to other contracts. Massachusetts Mutual Life Ins. v. Nails, 549 So.2d 826 (La.1989); Savoie v. Fireman's Fund Insurance Co., 347 So.2d 188, 191 (La.1977). A conventional obligation, such as created by an ordinary contract or insurance policy, is a legal relationship whereby the obligor is bound to render a performance in favor of the obligee. La.C.C. art. 1756. In a conventional obligation, the nature of that relationship is governed by the agreement of the parties. Hence, the interpretation of a contract is the determination of the common intent of the parties. La.C.C. art. 2045; Hurst v. Ricard, 514 So.2d 14, 16 (La.1987). Under civilian methodology, the interpretation of a contract is similar to the interpretation of a statute, and vice versa. Id., at 17; Geny, Methode d'Interpretation et Sources en Droit Prive' Positif, No. 98, p. 182 (2d ed. La.St.L.Inst. trans. 1963); see also La.C.C. art. 2046, Comment (c). Civil Code article 2045 further provides that "[w]hen the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent." Also, in determining the meaning of the words of a contract, they are to be given their generally prevailing meaning. La.C.C. art. 2047; Savoie, supra, at 191; Taylor v. State Farm Mutual Auto Insurance Co., 248 La. 246, 178 So.2d 238, 241 (1965). When the meaning of the words are clear then the courts should look no further in determining the intent of the parties. La.C.C. art. 2046; Soverign Ins. Co. v. Texas Pipe Line Co., 488 So.2d 982, 985 (La.1986). Where the meaning of a contract is to be determined solely from the words upon its face, without the necessity of extrinsic evidence, the appellate courts are as competent to review the evidence as the trial court, and no special deference is...