Chevalier v. Reliance Ins. Co. of Illinois

• Decision Date: 30 January 1992
• Docket Number: No. 91-4184,91-4184
• Citation: 953 F.2d 877
• Parties: Ralph E. CHEVALIER, Plaintiff-Appellant, Cross-Appellee, v. RELIANCE INSURANCE COMPANY OF ILLINOIS, Defendant-Appellee, Cross-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 877

953 F.2d 877

Ralph E. CHEVALIER, Plaintiff-Appellant, Cross-Appellee, v. RELIANCE INSURANCE COMPANY OF ILLINOIS, Defendant-Appellee,

Cross-Appellant.

No. 91-4184.

United States Court of Appeals, Fifth Circuit.

Jan. 30, 1992.

Rehearing Denied Feb. 27, 1992.

Robert G. Nida, Gold, Weems, Bruser, Sues & Rundell, Alexandria, La., for plaintiff-appellant-cross-appellee.

Katherine M. Loos, Jeansonne & Briney, Lafayette, La., for defendant-appellee-cross-appellant.

Appeals From the United States District Court for the Western District of Louisiana.

Before HIGGINBOTHAM and BARKSDALE, Circuit Judges, McBRYDE, ^* District Judge.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

In this diversity case Ralph Chevalier urges that a jury's award of damages for personal injury was inadequate and was reduced by improper credits of sums paid by insurers. Finally, Chevalier contends that the district court erred in not awarding attorneys' and expert witness fees under Louisiana law. Reliance Insurance of Illinois cross-appeals arguing that Reliance's policy did not insure Chevalier.

We find no merit in any of these contentions and affirm.

I.

Chevalier was injured while hauling material as a contract driver for L.H. Bossier, Inc. His dump truck overturned in an accident with a car driven by Jerry D. Walters. Chevalier sued Reliance Insurance Co., Bossier's insurer.

Reliance moved for summary judgment, denying that its policy provided uninsured motorists coverage or liability insurance to Chevalier. Chevalier moved for partial summary judgment, asserting that it did. The court agreed with Chevalier.

After a three-day trial, the jury returned a special verdict finding that Walters' negligent driving was the sole cause of the accident. The jury awarded Chevalier $10,000 for his past pain and suffering and $26,000 for past wage loss. With Chevalier's stipulated medical expenses of $49,373.54, his total recovery was $85,373.54. The judgment credited Reliance $49,373.54 for the medical expenses and $26,000 for compensation benefits it had paid. Finally, Reliance received a credit for $6,658.76 paid to Chevalier by Walters' liability carrier, Southern Security, bringing Chevalier's net recovery down to $3,349.24. The district court denied Chevalier's motion for a new trial on damages.

At trial, Reliance presented evidence that Chevalier had earlier injured his shoulder, and at most, the accident exacerbated his old injury. Hospital records of Chevalier's visit eleven days before the accident record an injury to his shoulder a year earlier. Eighteen days after the accident, Paul Davis, M.D. examined Chevalier's shoulder. Dr. Davis diagnosed an inflamed rotator cuff, probably pre-existing and exacerbated by the accident. Shoulder x-rays a month after the accident indicated that the disorder was chronic before the accident.

Reliance also presented expert and fact testimony that Chevalier's back injury was unrelated to his accident. Chevalier did not complain about back pain until he saw a chiropractor on June 9, 1986, more than five months after the accident. Dr. McDaniels, Reliance's expert, testified that a disc injury would have been painful immediately.

Glenn Hebert, a vocational specialist, and Dan Cliffe, a C.P.A., testified that injuries suffered by Chevalier did not significantly reduce his earning capacity.

II.

Chevalier raises seven points of error on appeal. Two of these points quarrel with the amount awarded for past and future damages: he asserts that the jury erred in awarding a "take nothing" verdict for future lost wages and future pain and suffering and awarded too little for past pain and suffering and past lost wages.

Chevalier contends in his remaining five points that the district court erred (i) in not awarding him penalties and attorneys' fees under La.R.S. 22:658; (ii) in allowing Reliance to claim sums paid to Chevalier for workers' compensation without intervening and (iii) in not apportioning Chevalier's attorneys' fees under Moody v. Arabie, 498 So.2d 1081 (La.1986); (iv) in allowing Reliance to reduce its damages by amounts paid by Walters' carrier; and (v) in not awarding expert witness fees. ¹

We need not decide whether the policy by its terms extended uninsured motorists coverage to Chevalier. We find that because the policy gave liability coverage to Chevalier, and Bossier did not explicitly waive in writing all uninsured motorists coverage, under La.R.S. 22:1406(D)(1)(a), Chevalier was covered by uninsured motorists insurance, regardless of policy terms. Under La.R.S. 22:1406(D)(1)(a), a person with liability coverage is covered by uninsured motorists insurance to the same extent, absent written waiver by the named insured. ²

Part IV(D) of the policy contains the following list of liability insured:

D. WHO IS INSURED.

1. You are an insured for any covered auto.

2. Anyone else is an insured while using with your permission a covered auto you own, hire or borrow ...

Chevalier contends that he is insured against liability under the policy because Bossier, his employer, "borrowed" his truck when Chevalier was hauling under contract. Reliance contends that Bossier "borrowed" Chevalier's truck only if Bossier physically controlled it. We agree with Chevalier that Bossier "borrowed" his truck within the meaning of Part IV(D)(2) and that Chevalier is therefore covered by uninsured motorists insurance under La.R.S. 22:1406(D)(1)(a).

Schroeder v. Bd. of Supervisors of Louisiana University, 577 So.2d 1074 (La.App. 1 Cir.1991), construed an identical clause: Part IV(D)(2) of the policy provided that "[a]nyone else is an insured while using with your permission a covered auto you own, hire, or borrow." A student who was injured while driving his father's car to get ice for a school function contended that LSU had "borrowed" his father's car. The Schroeder court agreed. It held that a vehicle is "borrowed" within the meaning of Part IV(D)(2) "when it is being used in furtherance of the borrower's interests and the borrower purposefully derives a benefit from the use of the vehicle." Schroeder, 577 So.2d at 1082.

We believe that the Schroeder court's analysis captures Louisiana law. It is supported by the use of the term "borrow" in other parts of the contract. The term "borrowed" appears in an exception to coverage contained in Part IV(D)(2)(a) of the policy, which excludes from liability coverage:

a. The owner of a covered auto you hire or borrow from one of your employees or a member of his or her household.

The implication is that the named insured can "borrow" a car used by an owner-employee rather than by the named insured. This is because there is no need to be exempted from coverage unless one is "using ... a covered auto" in the first place. Therefore, "a borrowing can occur whenever the named insured properly gains the use of a third party's ... vehicle for its purposes, no matter who has dominion or control of the car." Schroeder, 577 So.2d at 1081.

Reliance relies on Sturgeon v. Strachan Shipping Company, 731 F.2d 255 (5th Cir.) (en banc), cert. denied, 469 U.S. 883, 105 S.Ct. 251, 83 L.Ed.2d 188 (1984), for the proposition that a borrower must physically control the borrowed vehicle. Sturgeon interpreted a trucking company's insurance policy provision excluding unloaders and loaders from liability coverage unless they were "borrowers" of the truck. The Sturgeon court relied on a Texas decision, Liberty Mutual Ins. Co. v. American Employers Ins. Co., 556 S.W.2d 242 (Tex.1977), to hold that the unloaders of a truck were not "borrowers" of the truck unless they took actual possession of the truck that they were loading or unloading.

The definition of "borrowers" adopted by the Sturgeon court was based on the peculiar history, purpose, and context of standard loading/unloading exclusions. Reliance offers no reason specific to the particular clauses here to give a similar narrow construction to the term "borrow," a term appearing in a different part of a standard insurance policy. As we have noted, the context of Part IV(D)(2) indicates that "borrow" should be given a broader reading. We are persuaded that under Louisiana law Chevalier's truck was borrowed by Bossier giving Chevalier liability coverage.

Reliance finally contends that Chevalier is an "employee" of Bossier and within Part IV(D)(2)(a) which excludes from coverage "[t]he owner of a covered auto [the named insured] ... borrow[s] from one of [its] employees...." Reliance's own motion for summary judgment describes Chevalier as "an independent trucker" who hauls for companies like Bossier "on a contract basis." It is possible to read the term "employee" to cover Chevalier's relationship with Bossier, but not with confidence. It is not apparent that the term "employee" was intended to apply to independent contractors like Chevalier. We think that Louisiana law would invoke the principle that ambiguous terms in an insurance policy are to be construed against the insurer and in favor of the party claiming coverage. La.Civ.Code art. 2049; Credeur v. Luke, 368 So.2d 1030 (La.1979); Subro Audit, Inc. v. McCardell, 538 So.2d 320, 322 (La.App. 3 Cir.1989); Schroeder, 577 So.2d at 1080. ³

Chevalier contends that the district court abused its discretion in not awarding a new trial on the issue of damages. Chevalier argues that the jury's failure to award damages for future economic loss or pain and suffering and the jury's award of $36,000.00 for past lost wages and past pain and suffering were against the great weight of the evidence.

We will reverse the district court's denial of a new trial only if it abused its discretion. Menard v. Penrod Drilling Co., 538 F.2d 1084, 1088 (5th Cir.1976). In gauging the range of discretion, we in turn consider "that a jury has great discretion in determining and awarding damages in an action for personal injuries." Book v. Nordrill, Inc., 826 F.2d 1457 (5th Cir.1987). That the record...