96 1018 La.App. 1 Cir. 3/27/97, Highlands Underwriters Ins. Co. v. Foley

• Decision Date: 27 March 1997
• Citation: 691 So.2d 1336
• Parties: 96 1018 La.App. 1 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 1336

691 So.2d 1336

96 1018 La.App. 1 Cir. 3/27/97

HIGHLANDS UNDERWRITERS INSURANCE COMPANY v. Willard J. FOLEY, III, et al.

No. 96 CA 1018.

Court of Appeal of Louisiana, First Circuit.

March 27, 1997.

Ronald L. Monroe, New Orleans, for Plaintiff/Appellant Highlands Underwriters Insurance Company.

Timothy J. Barbier, Napoleonville, for Defendant/Appellee Willard J. Foley, III.

Before CARTER, LeBLANC and PARRO, JJ.

[96 1018 La.App. 1 Cir. 2] CARTER, Judge.

This is an appeal from a trial court judgment in a suit for insurance premiums.

BACKGROUND

Prior to September 7, 1979, a sole proprietor was not included and could not be included under his workers' compensation insurance policy. However, the workers' compensation law was amended, and a sole proprietor could elect to be covered under the policy. ¹

When the law changed, Simmons & Savoie Insurance Agency, Inc. (Simmons & Savoie) prepared a letter to each of its workers' compensation insureds, notifying them of the change in the law. The letter stated that all new and renewal policies would automatically include the sole proprietor and that an additional premium would be added at the end of the policy period. The additional premium would be calculated, using a flat rate not exceeding $15,600.00, which would be added to the premium basis of the payroll of the sole proprietor. If, however, the sole proprietor elected to be excluded from coverage, the sole proprietor was required to sign an exclusion endorsement, which was enclosed with the letter, and to return the endorsement to Simmons & Savoie.

Beginning sometime before 1979, Willard J. Foley, III (Foley), acting in his capacity as sole proprietor of Willard J. Foley, III Farms, obtained workers' compensation insurance annually through Simmons & Savoie. Each application for insurance was sent to Southeastern Council on Compensation Insurance (Southeastern), which would assign an insurance company to provide the requested coverage for Foley.

On or about December 5, 1989, Foley applied, through Simmons & Savoie, for workers' compensation coverage. The application was signed by Foley. The [96 1018 La.App. 1 Cir. 3] application, under Section IV, question number 4, states "[i]f sole proprietorship, to be exempt?" The box next to the word "No" contained an "x." Southeastern received the application and assigned Highlands Underwriters Insurance Company (Highlands) to provide the requested coverage for Foley.

Pursuant to the assignment, Highlands issued to Foley a policy of workers' compensation and employers' liability insurance for the policy period December 6, 1989, through December 6, 1990. At the end of the policy period, Highlands sent Foley a voluntary audit report, which Foley completed with payroll information and returned. Thereafter, Foley received from Highlands an invoice for additional premiums in the amount of $793.00. Foley paid Highlands the additional premiums.

FACTS

Thereafter, Highlands renewed Foley's workers' compensation policy on an annual basis. For the policy period December 6, 1990, through December 6, 1991, policy number WC 205457 was issued to Foley, and, for the policy period December 6, 1991, through December 6, 1992, policy number WC 215907 was issued. Foley did not sign an exclusion endorsement for either policy to indicate that, as a sole proprietor, he, personally, wished to be exempt from workers' compensation coverage. After these policy periods, Highlands performed a final, physical audit and determined that Foley owed additional premiums, totaling $3,328.00, on the two renewal policies. On September 20, 1994, Highlands filed an action against Foley for payment of the additional premiums.

On November 15, 1995, trial on the merits was held. On January 22, 1996, the court rendered judgment in favor of Foley, finding that he did not owe Highlands the additional premiums. In its reasons for judgment, the trial court indicated that the policies were not expressive of the intent of the parties because Foley did not receive any notification of the proposed modification in coverage for the future renewals and was not notified of the automatic inclusion of the flat rate premium basis of $15,600.00 to each year's reported payroll. Thus, the court found that the ambiguity of the policy [96 1018 La.App. 1 Cir. 4] and application must be construed against Highlands. Highlands appealed, assigning the following specifications of error:

1. The trial court erred in excluding the testimony of plaintiff's witness and denied plaintiff due process of law.

2. The trial court erred in not finding that the defendant was bound by the acts and omissions of his agent.

3. The trial court erred in finding that plaintiff failed to carry its burden of proof by a preponderance of the evidence.

EXCLUSION OF TESTIMONY

Highlands contends that the trial court abused its discretion in disallowing the testimony of Don Savoie, Foley's insurance agent.

The record reveals that a pre-trial conference was held on August 14, 1995, at which time the court set a trial date for October 11, 1995, and ordered that any new parties be added and all discovery be completed by September 15, 1995. Pre-trial memoranda, listing all witnesses, were filed by Highlands and Foley by September 15, 1995, as ordered. The trial date was thereafter continued until November 15, 1995. On November 10, 1995, by facsimile transmission, Highlands sent the court and Foley's attorney a supplemental pre-trial memorandum, adding Don Savoie as a witness. Thereafter, Foley filed a motion to strike Savoie from the witness list because his name was added without leave of court and without proper, timely notification. Foley also filed a motion in limine, requesting that Savoie's testimony and any exhibits related thereto be excluded. At trial, the court refused to allow Savoie to testify for the following reasons:

The Court is however going to deny and will not allow Mr. Don Savoy (sic) to testify in this matter. He was added as a witness by fax on November 10th. This matter has been set for trial for quite a long period of time. In fact, it's been set since August. The Court feels that Mr. Monroe had more than ample time to add him. To add him on November 10th is only doing, and the only manner to do so would be to surprise or catch off guard the defense counsel in this matter. The Court is firmly against any sandbagging or any trial by ambush. If The (sic) Court would allow Mr. Savoy (sic) to testify, this would amount to a trial by ambush in allowing the plaintiffs at the last minute five days before the matter was to be tried allowing them to add a witness and to testify that has not been previously disclosed to the defendant, and The (sic) Court will not allow him to testify.

[96 1018 La.App. 1 Cir. 5] The jurisprudence provides that an orderly disposition of each case (and of the entire docket) and the avoidance of surprise are inherent in the theory of pre-trial procedure and are sufficient reasons for allowing the trial judge to require adherence to the pre-trial order in the conduct of an action. Futrell v. Scott Truck and Tractor Company of Louisiana, Inc., 629 So.2d 449, 453 (La.App. 3rd Cir.1993), writ denied, 94-0327 (La. 3/25/94); 635 So.2d 232; Bourg Dry Dock & Service Co., Inc. v. Lombas Industries, Inc., 393 So.2d 203, 204 (La.App. 1st Cir.1980). The pre-trial order controls the subsequent course of action, but it can be modified at trial to prevent substantial injustice. LSA-C.C.P. art. 1551. Although the trial court is vested with much discretion to amend its pre-trial order, this discretion must be exercised to prevent substantial injustice to the parties who have relied on the pre-trial rulings and structured the preparation and presentation of their cases accordingly. Stockstill v. C.F. Industries, Inc., 94-2072, p. 7 (La.App. 1st Cir. 12/15/95); 665 So.2d 802, 810, writ denied, 96-0149 (La. 3/15/96); 669 So.2d 428; Bordelon v. Drake, 578 So.2d 1174, 1178-79 (La.App. 5th Cir.1991) . Only upon a showing of an abuse of that discretion should the appellate court intervene. Regional Transit Authority v. Lemoine, 93-1896, 93-1897 p. 8 (La.App. 4th Cir. 11/16/95); 664 So.2d 1303, 1307, writ denied, 96-0412 (La. 3/29/96); 670 So.2d 1234; Pino v. Gauthier, 633 So.2d 638, 648 (La.App. 1st Cir.1993), writs denied, 94-0243, 94-0260 (La. 3/18/94); 634 So.2d 858, 859.

After reviewing the record in this matter, we find that Highlands had ample time to list its witnesses in accordance with the court's pre-trial order. Therefore, under the circumstances presented in this case, we find no abuse of discretion in the trial court's refusal to allow Highlands to add a witness five days before trial. ²

ADDITIONAL INSURANCE PREMIUMS

Highlands contends that the trial court erred in finding that it failed to prove that, under the terms of the insurance policy, Foley owed the additional premiums.

[96 1018 La.App. 1 Cir. 6] An insurance policy is a contract between the insured and the insurer and has the effect of law between the parties. Ledbetter v. Concord General Corp., 95-0809, p. 3 (La.1/6/96); 665 So.2d 1166, 1169, amended, 95-0809 (La.4/18/96); 671 So.2d 915; Dunn v. Potomac Insurance Company of Illinois, 94-2202, p. 5 (La.App. 1st Cir. 6/23/95); 657 So.2d 660, 663. Judicial responsibility in interpreting contracts is to determine the common intent of the parties. Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Company, 93-0911, p. 5 (La. 1/14/94); 630 So.2d 759, 763.

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 plain, ordinary, and popular sense of the language used in the policy, unless the words have acquired a technical meaning. LSA-C.C. art.2047; Ledbetter v. Concord General Corp., 665 So.2d at 1169. Each provision in a contract must be interpreted in light of the other provisions so that...