Walker v. State Farm Mut. Auto. Ins.
| Decision Date | 25 June 2003 |
| Docket Number | No. 37,063-CA.,37,063-CA. |
| Court | Court of Appeal of Louisiana — District of US |
| Parties | William Dale WALKER, et al., Plaintiffs-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE, et al., Defendants-Appellees. |
Sockrider, Bolin, Anglin, Batte & Bowers, by James E. Bolin, Jr., Shreveport, for Appellants Meredith Walker, Price and Brooke Katherine Walker.
Rountree, Cox, Guin & Achee by Roland J. Achee and Gordon Rountree, New Orleans, for Appellants William Dale Walker as Provisional Tutor of the Minors, Carmen Elizabeth Walker and Slade Etheredge Walker.
Corkern & Crews by Ronald E. Corkern, Jr., Guglielmo Marks Schutte, et al. by Henry Gerard Terhoeve, Counsel for Appellee State Farm Fire and Casualty.
Before GASKINS, CARAWAY and DREW, JJ.
The plaintiffs, Meredith Ashley Walker and Brooke Katherine Walker, and William Dale Walker as provisional tutor for the minor plaintiffs, Carmen Elizabeth Walker and Slade Etheredge Walker, appeal a judgment by the trial court finding that the household exclusion in an umbrella insurance policy, purchased by the decedent, precluded recovery by the decedent's two adult children and two minor children for damages resulting from the death of their father in an automobile accident. For the following reasons, we affirm in part and reverse in part the trial court ruling and remand for further proceedings.
The facts of this case were set forth in an earlier appeal of other issues in this matter. In Walker v. State Farm Mutual Automobile Insurance Company, 33,781 (La.App.2d Cir.8/25/00), 765 So.2d 1224, this court stated:
In the prior appeal, this court upheld the trial court decision granting an exception of no right of action as to the wrongful death and survival action of the minor children against their mother, as well as Slade's claims for his personal injuries. We found that the parent-child immunity statute of La. R.S. 9:571 applied to bar those claims. Also, the trial court granted an exception of no cause of action, dismissing the minor children's wrongful death and survival claims for their sister, Nina. That ruling was not appealed.
On March 21, 2001, a partial dismissal was entered by Meredith and Brooke, the adult children, dismissing State Farm Mutual Automobile Insurance Company (State Farm Automobile), but reserving their claims against Susan and State Farm Fire and Casualty Company (State Farm Fire).
On March 23, 2001, William Dale Walker, as provisional tutor for Carmen and Slade, released State Farm Automobile from all claims for the injuries and death of Frank.
On July 3, 2001, through his provisional tutor, Slade dismissed Susan Walker, State Farm Automobile and State Farm Fire regarding his personal injuries. He reserved his right to proceed against State Farm Fire on his claim for the wrongful death of his father. On October 19, 2001, a stipulation was entered that the accident was caused solely by Susan Walker and that the only claims before the court are the survival and wrongful death actions by the four children of the deceased. The document provided that there were two liability policies in effect. First, there was a policy by State Farm Automobile covering the Chevrolet van involved in the accident. The policy limits of $100,000 per person were paid and Susan Walker and State Farm Automobile were released. Rights were reserved against State Farm Fire, issuer of the second policy, a personal liability umbrella policy (PLUP), with a policy limit of $1,000,000. The PLUP is the subject of the present dispute. The parties stipulated that the value of the claim of the children of the deceased is $1,000,000 if the court finds that coverage exists under the umbrella policy.
On March 11, 2002, a supplemental stipulation was entered specifying that the value of the claims by or on behalf of the decedent's children is $1,000,000, if all four are allowed to recover. If only the adult children, Meredith and Brooke, are allowed recovery, they should receive $150,000 each, with no credit for the amount previously paid by State Farm Automobile.
A hearing was held on February 19, 2002, to determine whether there was coverage under the umbrella policy issued by State Farm Fire. Further argument was held on May 17, 2002, at the trial court's request. Judgment was entered by the trial court on September 21, 2002, in favor of State Farm Fire and against William Dale Walker, on behalf of Carmen and Slade, and against Meredith and Brooke Walker.
In reasons for judgment, the trial court noted that the PLUP issued by State Farm Fire contained the following exclusion and definitions:
We will not provide insurance:
. . . .
The court found that the household exclusion in the PLUP applied to preclude recovery by the decedent's four surviving children. The trial court rejected the argument that the household exclusion in the PLUP was against public policy. The court noted that the Louisiana legislature recently found that such exclusions were against public policy in primary automobile insurance policy coverage. La. R.S. 22:622.2 was enacted to prohibit such exclusions. The trial court found that there is no mandatory requirement to maintain additional automobile liability insurance under an excess or umbrella policy and therefore, there are no public policy considerations with regard to the maintenance of such a policy. Parties are free to contract to accept or reject a family exclusion. The court reasoned that the PLUP is not mandatory and is aimed at affording protection from seizure by non-family members of the assets of the insured. Accordingly, the trial court held that the household exclusion in the PLUP did not violate public policy.
Based upon this reasoning, the court found that the minor children who were members of the decedent-insured's household are not entitled to recover under the PLUP due to the household exclusion.
As to the insured's adult children that were not residing in his household, the court stated that their cause of action for the wrongful death of their father is barred because he would not be entitled to recover under the PLUP. Because the PLUP did not provide coverage for claims arising out of injury, including death, to the named insured, the court concluded that the exclusion is applicable to the adult children.
Both the minors and the adult plaintiffs appealed the trial court judgment.
An insurance policy is a contract between the parties and should be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil Code. The judicial responsibility in interpreting insurance contracts is to determine the parties' common intent. The parties' intent as reflected by the words of the policy determines the extent of coverage. Such intent is to be determined in accordance with the general, ordinary, plain and popular meaning of the words used in the policy, unless the words have acquired a technical meaning. Louisiana Insurance Guaranty Association v. Interstate Fire and Casualty Company, 93-0911 (La.1/14/94), 630 So.2d 759.
An insurance policy should not be interpreted in an unreasonable manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion. Absent a conflict with statutory provisions or public policy, insurers, like other individuals, are entitled to limit their liability and to impose and enforce reasonable conditions upon the policy obligations they contractually assume. Louisiana Insurance Guaranty Association v. Interstate Fire and Casualty Company, supra.
96-1402 (La.9/20/96), 679 So.2d 433.
The clear wording of the PLUP excludes the minors' right to recover unless the exclusion is written out due to public policy considerations. The minors first argue that the trial court erred in finding that public policy considerations of the Direct Action Statute, set forth in La. R.S. 22:655(D), do not apply to this case.1 They contend that the trial court erred in finding that the purpose of the PLUP was to protect the assets of the insured from seizure by non-family members, and therefore the household exclusion was not against public policy.
The minors...
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