Billeaudeau v. Lemoine

• Decision Date: 12 November 1979
• Docket Number: No. 12688,12688
• Citation: 377 So.2d 1344
• Parties: Jennie S. BILLEAUDEAU et al. v. Robert LEMOINE et al.
• Court: Court of Appeal of Louisiana — District of US

Page 1344

377 So.2d 1344

Jennie S. BILLEAUDEAU et al. v. Robert LEMOINE et al.

No. 12688.

Court of Appeal of Louisiana, First Circuit.

Nov. 12, 1979.

Rehearing Denied Dec. 27, 1979.

Patricia R. Smith, Baker, for plaintiffs-appellees Jennie S. Billeaudeau and Otis J. Billeaudeau, Jr.

Joseph F. Keogh, Baton Rouge, for defendant-appellee Allstate Ins. Co.

James B. Thompson, III, Baton Rouge, for defendant-appellee Robert W. Lemoine.

Richard Creed, Jr., Baton Rouge, for defendant-appellant Louisiana Ins. Guaranty Assn.

Before ELLIS, CHIASSON and PONDER, JJ.

CHIASSON, Judge.

This is a tort action for injuries received in an automobile accident which occurred on July 12, 1975 between an automobile driven by Robert W. Lemoine and a pickup truck owned by Otis Billeaudeau, Sr. and being driven by Otis J. Billeaudeau, Jr. Jennie Simpson Billeaudeau was a passenger in the Billeaudeau truck and was injured as a result of the collision.

This suit was filed by Jennie Billeaudeau and Otis J. Billeaudeau, Jr. against:

(1) Lemoine and his liability insurer, Manchester Insurance and Indemnity Co., under a policy with limits of $10,000 per person;

(2) Allstate Insurance Co. as the liability insurer of Otis J. Billeaudeau, Sr., with a $5,000 limit for each person and $10,000 for each accident;

(3) Allstate Insurance Co. as the liability insurer of Otis J. Billeaudeau, Jr., with a $10,000 limit for each person and $10,000 for each accident;

(4) Allstate Insurance Co. as the liability insurer of Jennie Simpson Billeaudeau, by virtue of her being a named insured residing with her father, D. A. Simpson, with a $5,000 limit for each person.

In the alternative, Jennie S. Billeaudeau alleged that Billeaudeau, Jr. was either solely negligent or jointly negligent with Lemoine and therefore Allstate was liable for her injuries.

Lemoine's insurer was insolvent and the Louisiana Insurance Guaranty Association (LIGA) was added as the successor of the insolvent insurer pursuant to the statutory provisions of La.R.S. 22:1375, et seq.

Allstate answered the plaintiff's petition and alleged settlement and compromise of the claims asserted by Jennie Simpson Billeaudeau by virtue of an agreement she executed on June 30, 1976 with Allstate as the insurer of D. A. Simpson, Billeaudeau, Sr. and Billeaudeau, Jr. Allstate also asserted a third party demand against Lemoine and his insurer for $15,000 which Allstate paid in settlement to Jennie S. Billeaudeau under the uninsured/underinsured motorist coverage of the policies issued to Billeaudeau, Sr., Billeaudeau, Jr. and D. A. Simpson.

The trial court found that the accident was caused by the joint negligence of Billeaudeau, Jr. and Lemoine. Judgment was rendered dismissing Billeaudeau, Jr.'s lawsuit. Judgment was further rendered in favor of Jennie S. Billeaudeau and against Lemoine, Allstate and LIGA, in solido, for $30,000. LIGA's liability was limited to $10,000; Allstate's liability was subject to a credit of $15,000 previously paid on June 30, 1976; and Allstate's liability under its liability policy was limited to an additional $5,000 as per a written agreement. Allstate's third party demand for $15,000 against Lemoine was granted. No appeal was taken as to the findings of negligence and as to quantum.

The issues on appeal are whether LIGA and Lemoine are entitled to a credit for the amount recovered by Jennie Billeaudeau from Allstate, and whether Allstate is entitled to a judgment against Lemoine.

As to the first issue, Appellant LIGA argues that had the lower court properly interpreted La.R.S. 22:1386(1), LIGA would have been credited for amounts paid by Allstate.

The following statutory provisions are pertinent to the resolution of this issue:

La.R.S. 22:1396 provides:

"The purpose of this Part is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, and to provide an association to assess the cost of such protection among insurers."

La.R.S. 22:1378 provides:

"This Part shall be liberally construed to effect the purpose under section R.S. 22:1376, which shall constitute an aid and guide to interpretation."

La.R.S. 22:1386(1) provides:

"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."

La.R.S. 22:1379(3) provides:

" 'Covered claim' means an unpaid claim, including one for unearned premiums, which arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this Part applies issued by an insurer, if such insurer becomes an insolvent insurer after September 1, 1970 and (a) the claimant or insured is a resident of this state at the time of the insured event; or (b) the property from which the claim arises is permanently located in this state. 'Covered claim' shall not include any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise."

The trial court read these provisions to mean that plaintiff's claim against Allstate was in Excess of the available liability coverage under Lemoine's Manchester policy because plaintiff's claim against Allstate did not arise out of or within the coverage of the Manchester policy and therefore was not a "covered claim" under the LIGA statute. Since the LIGA provisions are to be construed liberally as provided in La.R.S. 22:1376 and because payment by Allstate was Not payment on a "covered claim", then under La.R.S. 22:1386(1) this payment could Not be used to reduce LIGA's liability.

The trial court found that La.R.S. 22:1386(1) was designed to prevent double recovery by the plaintiff and it was not intended to limit LIGA's liability.

We do not agree with the trial court's conclusion. It is well settled that in construing a statute the court's function is to discover and apply the intent of the legislative body. La.CC art. 18; Gautreau v. Board of Electrical Examiners, 167 So.2d 425 (La.App. 1st Cir. 1964).

We find that La.R.S. 22:1386(1) requires that a person who has a claim against a solvent insurer under any provision in an insurance policy must first...