93 1402 La.App. 1 Cir. 12/7/94, Jarreau v. Hirschey

• Decision Date: 07 December 1994
• Citation: 650 So.2d 1189
• Parties: 93 1402 La.App. 1 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 1189

650 So.2d 1189

93 1402 La.App. 1 Cir. 12/7/94

Howard JARREAU, Jr., v. Erica HIRSCHEY, et al.

No. 93 CA 1402.

Court of Appeal of Louisiana,First Circuit.

Dec. 7, 1994.

Rehearing Denied Feb. 23, 1995.

Writ Denied May 12, 1995.

James R. Coxe, Jr., Baton Rouge, for appellant, Howard Jarreau, Jr.

W. Scott Maxwell, Baton Rouge, for appellees, Fidelity Fire & Cas. Ins. and LIGA.

Before LOTTINGER, C.J., and CARTER, GONZALES, WHIPPLE and PARRO, JJ.

[93 1402 La.App. 1 Cir. 2] GONZALES, Judge.

This is an appeal from a trial court judgment in an action for damages arising out of two automobile accidents.

FACTS

On July 23, 1990, Howard Jarreau, Jr. was involved in an automobile accident when a vehicle being driven by Erica Hirschey failed to yield the right of way when leaving a private parking lot and struck the right side of Jarreau's vehicle. As a result of the accident, Jarreau's vehicle was totalled, and Jarreau allegedly sustained serious, permanent injuries. Shortly thereafter, on August 14, 1990, Jarreau was involved in a second automobile accident when the vehicle he was driving was struck from the rear by a vehicle being driven by Donnie R. McPipe. As a result of this accident, Jarreau allegedly sustained serious injuries.

On June 17, 1991, Jarreau filed the instant suit for damages. Named as defendants in the action were: Erica Hirschey, the tortfeasor in the first accident; Continental Casualty Insurance Company (Continental), Hirschey's liability insurer; Donnie McPipe, the tortfeasor in the second accident; Fidelity Fire Insurance Company (Fidelity), McPipe's liability insurer; and Colonial Insurance Company of California (Colonial), Jarreau's uninsured/underinsured motorist (UM) insurer. In his petition, Jarreau alleged that the defendants were jointly and solidarily liable for the injuries he suffered in each of the two accidents, which combined to cause his cervical and lumbar injuries.

By partial judgment of dismissal dated August 1, 1991, Jarreau dismissed Hirschey, Continental, and Colonial. ¹ In the judgment of dismissal, Jarreau reserved his rights to proceed against McPipe and Fidelity. Fidelity was placed in liquidation on September 4, 1991. Thereafter, on December 4, 1991, Jarreau filed a motion to substitute the Louisiana Insurance Guaranty Association (LIGA) as a defendant for [93 1402 La.App. 1 Cir. 3] Fidelity. Subsequently, on April 15, 1992, Jarreau filed a supplemental and amending petition, adding LIGA as a defendant.

On August 12, 1992, Jarreau filed a motion for partial summary judgment on the issue of liability as to McPipe and LIGA. In his motion, Jarreau contended that, because he had settled with his uninsured motorist insurer prior to Fidelity's insolvency, LIGA was liable for the first $10,000.00 of liability to Jarreau. Jarreau reasoned that, on the date of Fidelity's insolvency, there was no other coverage available to Jarreau. ²

On October 30, 1992, Jarreau filed a motion for preliminary default against LIGA for its failure to answer the first supplemental and amending petition. On November 5, 1992, the trial judge ordered that a preliminary default be entered against LIGA. ³

On March 19, 1993, Jarreau, McPipe, and LIGA entered into a joint stipulation. In the stipulation, the parties stipulated to the following: (1) that all of Jarreau's medical expenses had been paid by other insurers; (2) that Hirschey and Continental paid Jarreau $9,500.00 to settle their responsibility in the first accident; (3) that Colonial paid Jarreau $7,500.00 to satisfy its responsibility as UM carrier in both accidents; ⁴ (4) that Jarreau's medical records could be received and entered into evidence without any further foundation; and (5) that Jarreau's insurance policy and settlement documents with Colonial could be received into evidence without further foundation.

On March 30, 1993, the matter went to trial. After hearing all of the testimony and receiving all of the evidence, the trial court took the matter under advisement. On May 6, 1993, the trial court rendered judgment in favor of LIGA, Fidelity, and McPipe, [93 1402 La.App. 1 Cir. 4] dismissing Jarreau's claims against them, with prejudice, and ordering that Jarreau pay all costs. The court noted that Jarreau had failed to prove loss of earnings and his inability to work. Moreover, the trial court indicated the following:

Considering the relatively minor injuries sustained by plaintiff herein as established of record, the Court feels that the prior recovery of $17,000.00 amply compensates for all damages sustained as a result of said injuries as well as any special damages to which plaintiff may have been entitled.

From this adverse judgment, Jarreau appealed, assigning the following specifications of error:

1. The trial court erred in failing to apportion fault between the successive tortfeasors whose combined fault caused plaintiff's injuries and with regard to the effect given Jarreau's settlement with Hirschey and Continental as to the first accident.

2. The trial court erred in awarding insufficient damages.

3. The trial court erred with regard to the effect given Jarreau's settlement with his UM carrier prior to Fidelity Fire and Casualty Insurance Company's liquidation.

4. The trial court erred with regard to the effect of McPipe's liability for his deductible of $100.00, costs, and interest which are not "covered claims" as to LIGA. ⁵

NONDUPLICATION OF RECOVERY PROVISION

At the times of the accidents involved herein (July 23, 1990 and August 14, 1990), La.R.S. 22:1386, provided, in pertinent part, as follows:

(1) Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his right under such policy. Any amount payable on a covered claim under this Part shall be reduced by the amount of any recovery under such insurance policy.

A. The 1990 Amendment

Shortly after the accidents at issue, the legislature passed Acts 1990, No. 130, effective September 7, 1990, amending La.R.S. 22:1386 to read as follows:

[93 1402 La.App. 1 Cir. 5] (1) Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required first to exhaust his rights under such policy. Such other policies of insurance shall include but shall not be limited to liability coverage, uninsured or underinsured motorist liability coverage, or both, hospitalization, and other medical expense coverage. Any amounts payable by such other insurance shall act as a dollar-for-dollar credit against any liability of the association under this Part. (Emphasis added).

The amendment clearly required an injured claimant to first exhaust his claim against his UM insurer prior to pursuing his claim against LIGA and that any amounts payable by a policy of insurance would be treated as a dollar-for-dollar credit against LIGA's liability.

In the instant case, Jarreau contends that the 1990 amendment is inapplicable because both accidents occurred prior to the amendment's effective date. We agree.

Recently, in Segura v. Frank, 93-1271 c/w 93-1401, (La. 1/14/94); 630 So.2d 714, 725, cert. denied sub nom, 511 U.S. 1142, 114 S.Ct. 2165, 128 L.Ed.2d 887 (1994), the Louisiana Supreme Court determined that the 1990 amendment to La.R.S. 22:1386 is neither procedural nor interpretive in nature, but substantive. The court further determined that, because the legislature expressed no intent in Act 130 of 1990 to apply the amendment retroactively, under La.C.C. art. 6, the amendment could have prospective application only. ⁶

Accordingly, because the Louisiana Supreme Court has already determined that the 1990 amendment to La.R.S. 22:1386 has prospective application only, the 1990 amendment does not apply to Jarreau's claims, which arose prior to the effective date of the legislation.

B. The 1992 Amendment

By Acts 1992, No. 237, the legislature again amended and reenacted La.R.S. 22:1386. Section A of La.R.S. 22:1386 was amended to read as follows:

[93 1402 La.App. 1 Cir. 6] A. Any person having a claim against an insurer under any provision in an insurance policy, other than a policy of an insolvent insurer which is also a covered claim, shall be required first to exhaust his rights under such policy. Such other policies of insurance shall include but shall not be limited to liability coverage, uninsured or underinsured motorist liability coverage, or both, hospitalization, and other medical expense coverage. As to the association, any amount payable by such other insurance shall act as a credit against the damages of the claimant, and the association shall not be liable for such portion of the damages of the claimant. (Emphasis added).

Section 3 of the Act provided that the Act would apply to "all covered claims, as defined in R.S. 22:1379, pending on or arising on or after the effective date of this Act." The effective date of the 1992 amendment was June 10, 1992.

The retroactivity of the 1992 amendment was also decided in Segura v. Frank. In Segura v. Frank, the Louisiana Supreme Court held that the 1992 amendment to La.R.S. 22:1386 would apply retroactively if two requisites were met. First, the claim had to be "pending" on June 10, 1992, the effective date of Act 237 of 1992. The court determined that a claim is "pending" as long as it is subject to judicial scrutiny. The court expressly noted that "[e]ven though a lower court has adjudicated a claim and rendered judgment, the claim continues to be pending until appeal of that judgment has been exhausted." Segura v. Frank, 630 So.2d at 727. Second, retroactive application of the amendment did not violate the federal and state constitutional prohibitions against impairment of contractual obligations or disturbance of vested rights. Segura v. Frank, 630 So.2d at...