Bernard v. Ellis

• Decision Date: 02 July 2012
• Docket Number: NO. 2011-CC-2377,2011-CC-2377
• Parties: ANN BERNARD, ET AL. v. ANTOINETTE ELLIS, ET AL.
• Court: Louisiana Supreme Court

ANN BERNARD, ET AL.

v.ANTOINETTE ELLIS, ET AL.

NO. 2011-CC-2377

S UPREME COURT OF LOUISIANA

Dated: July 2, 2012

Supreme Court of Louisiana

FOR IMMEDIATE NEWS RELEASE

NEWS RELEASE #039

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 2nd day of July, 2012, are as follows:

BY JOHNSON, J.:

2011-CC-2377 ANN BERNARD, ET AL. v. ANTOINETTE ELLIS, ET AL. (Parish of Orleans)

For the above reasons, we find that Plaintiffs, as guest passengers, were using Ann Bernard's vehicle. Further, based on the facts of this case, we find that the accident arose out of the Plaintiffs' use of the vehicle. Thus, we hold that Plaintiffs are liability insureds under the Imperial policy, and therefore entitled to UM coverage under the policy. Imperial's motion for partial summary judgment was properly denied. AFFIRMED AND REMANDED TO THE TRIAL COURT FOR FURTHER PROCEEDINGS.

VICTORY, J., dissents for reasons assigned by Justice Guidry.

GUIDRY, J., dissents and assigns reasons.

CLARK, J., dissents for reasons by Justice Guidry.

ON SUPERVISORY WRITS TO THE FIRST CITY COURT

FOR THE CITY OF NEW ORLEANS

JOHNSON, Justice

In this writ application, we are asked to determine whether Norell and Andrea Bernard ("Plaintiffs"), who were guest passengers in a vehicle owned and operated by Ann Bernard and insured by Imperial Fire & Casualty Insurance Company ("Imperial"), are entitled to uninsured/underinsured motorist ("UM") coverage under the Imperial policy. For the reasons that follow, we hold that the Plaintiffs are liability insureds under the Imperial policy and therefore entitled to UM coverage. Thus, we affirm the rulings of the lower courts, denying Imperial's motion for partial summary judgment.

FACTS AND PROCEDURAL HISTORY

In February of 2009, a vehicle driven by Antoine Ellis disregarded a stop sign and struck a vehicle owned and operated by Ann Bernard. Norell Bernard and Andrea Bernard were guest passengers in Ann Bernard's vehicle at the time of the accident. Mr. Ellis was uninsured, and Ann, Norell and Andrea Bernard all filed suit against Imperial for UM coverage. While Imperial did not dispute its named insured, Ann Bernard, was entitled to UM coverage, it filed a Motion for Partial Summary Judgment as to Norell and Andrea Bernard's claims on the basis that the guestpassengers were not residents of Ann Bernard's household, and therefore did not meet the definition of "insured person" under the terms of the insurance policy for UM coverage.¹ In opposition, Plaintiffs argued that as permissive guest passengers, they were "using" the vehicle and therefore "insureds" under the terms of the liability section of the Imperial policy,² and thus statutorily entitled to UM coverage pursuantto La. R.S. 22:1295.³

After a hearing, the city court denied Imperial's motion for summary judgment.⁴ Imperial applied for supervisory writs from this ruling, but the court of appeal denied the writ, finding Plaintiffs were insureds under the liability section of the policy. The court observed that although the Imperial policy did not define the term "use," the jurisprudence routinely found that a passenger can be "using" the vehicle. The court concluded: "Liberally construing the policy, we find it provides coverage to the guest passengers who were occupying the insured vehicle with the driver's consent."⁵ Imperial subsequently filed a writ application in this Court. We granted the writ and remanded the case to the court of appeal for en banc consideration, instructing the court to reconcile its holding with its previous ruling in Knight v. Imperial Fire & Casualty.⁶

In Knight, guest passengers filed suit against Imperial seeking recovery of UM damages. Imperial moved for summary judgment, arguing guest passengers not residing in the driver's household were not liability insureds, and therefore notcovered under the UM provision. The city court denied Imperial's motion. The Fourth Circuit granted Imperial's writ, and granted Imperial's motion for summary judgment, stating:

Both the liability portion and the uninsured motorist portion of the Imperial Policy present two distinct definitions of "insured persons." In this case, plaintiffs' attempt to use the definition of "insured person" found in the liability portion of the policy is in error. Further, Imperial's provision limiting coverage to "insured persons" under the uninsured motorist section of its policy is only extended to those who reside in the same household and are blood related; the plaintiffs do not meet this criteria.

The district court erred in failing to grant Imperial's partial summary judgment. A clear reading of the policy in conjunction with the law reveals that no genuine issues of material fact remain.

Knight v. Imperial Fire & Casualty, 10-1474 (La. App. 4 Cir. 1/7/11) (unpub.).

On remand of this case, the Fourth Circuit, en banc, denied Imperial's writ in a split decision.⁷ The majority opinion provided, in pertinent part:

Imperial contends that even assuming the guest passengers were using the vehicle, as this court found in the Bernard case, the definition of an "insured person" at issue contains an additional requirement that the "accident arise out of that person's use." Imperial contends that it cannot be concluded that the accident arose out of the guest passengers' mere riding in the vehicle. In support of its position, Imperial cites the First Circuit's recent decision in Batiste.[⁸ ]

The Batiste case involved the same factual scenario and policy provisions at issue in the Bernard and Knight cases. In the Batiste case, the First Circuit, with one judge dissenting, affirmed a judgment granting Imperial's motion for summary judgment on the same coverage issue. The First Circuit reasoned that "[t]o find that plaintiffs were 'using' the vehicle simply because they were riding as guest passengers would require a strained interpretation inconsistent with the meaning of the word and beyond what could have been contemplated by the parties." The court further reasoned that even assuming the passengers were using the vehicle, the accident did not arise out of their use. The court still further reasoned that the "use" provision is "designed to limit coverage to liability resulting from conduct of the insured which constitutes botha use of the vehicle and a legal cause of the injury." Based on this reason, the court held that the guest passengers who were riding in the insured vehicle did not legally cause or contribute to the accident, did not fall within the definition of "insured persons" for purposes of liability coverage, and thus are not entitled to UM/UIM coverage.

We are not bound by and decline to follow the Batiste case. The omnibus provisions in the liability portion of Imperial's policy define an insured as "any person with respect to an accident arising out of that person's [permissive] use of a covered vehicle." As we stated in our prior writ disposition in the Bernard case, use includes riding as a passenger. But for the guest passengers' permissive use of the covered vehicle - riding in the insured's vehicle when the accident occurred - they would not have been injured. Liberally construing the policy language, we hold that the guest passengers fall within the definition of "insured persons" for purpose of liability coverage, and thus are entitled to UM/UIM coverage.

***

Discussing the policy considerations, we noted in a footnote in our prior writ disposition in the Bernard case that "a contrary holding would result in the anomaly of allowing the driver to recover, but the driver's two innocent guest passengers to have no recourse." We further noted that "[t]his anomalous result is inconsistent with the underlying purpose of mandatory uninsured motorist coverage." *** Based on the policy considerations, a liberal construction of Imperial's policy, and the jurisprudence, we again deny Imperial's writ application in the Bernard case and overrule en banc our contrary writ disposition in the Knight case. [footnotes and citations omitted]

Following the writ denial by the court of appeal, Imperial filed the instant writ application with this Court. Finding the court's decision created a split in the circuits, we granted the writ application.⁹

DISCUSSION

The issue we must decide is whether the Plaintiffs are insureds under the Imperial Policy, such that they are entitled to UM coverage. It is undisputed that Plaintiffs are not "insureds" under Part C of the Imperial policy providing for Uninsured/Underinsured Motorist Coverage. As defined by the policy, a UM "insured" is the named insured, or a relative of the insured who lives in the samehousehold as the named insured. The only named insured on the Imperial policy is Ann Bernard. While Plaintiffs are relatives of Ann Bernard, they are not residents of her household and thus do not qualify as UM insureds under the specific language of Part C of the policy.

Although Plaintiffs are not entitled to contractual UM coverage under Part C of the Imperial policy, this Court has previously held that if a plaintiff is insured under the auto liability coverage, he is entitled to UM coverage. See Filipski v. Imperial Fire & Casualty Ins. Co., 09-1013 (La. 12/1/09), 25 So. 3d 742, 745 (per curium); Magnon v. Collins, 98-2822 (La. 7/7/99), 739 So. 2d 191, 196. In Howell v. Balboa Ins. Co., this Court explained:

UM coverage attaches to the person of the insured, not the vehicle, and that provision of UM coverage purporting to limit insured status to instances involving a relationship to an insured vehicle contravenes LSA-R.S. 22:1406(D). In other words, any person who enjoys the status of the insured under a Louisiana motor vehicle liability policy which includes uninsured/underinsured motorist coverage enjoys coverage protection simply by reason of having sustained injuries by an uninsured/underinsured motorist.

564 So. 2d 298, 301-02 (La. 1990) (emphasis added). See also, La. R.S. 22:1295(1)(a)(I). Thus, Plaintiffs are entitled...