Cooper v. Huddy

• Decision Date: 16 May 1991
• Docket Number: No. 90,90
• Citation: 581 So.2d 723
• Parties: Cecile B. COOPER, et al. v. Richard C. HUDDY, et al. CA 0273. 581 So.2d 723
• Court: Court of Appeal of Louisiana — District of US

Page 723

581 So.2d 723

Cecile B. COOPER, et al. v. Richard C. HUDDY, et al.

No. 90 CA 0273.

581 So.2d 723

Court of Appeal of Louisiana First Circuit.

May 16, 1991.

Writ Denied Sept. 20, 1991.

Ron S. Maclauso, Hammond, for plaintiff-appellant Cecile B. Cooper.

Thomas Hogan, Hammond, for plaintiffs-appellants Myra Patsy Cooper, Clarence Ray Cooper, Jeffery Wade Cooper.

Jesse Wimberly, Mandeville, for Melba Cooper Penn, Jeremy Cooper and Miranda Cooper, plaintiffs-appellants.

Michael Mentz, Metairie, Charles A. Schutte, Jr., Baton Rouge, for defendant-appellant La. Ins. Guar. Assoc.

Before EDWARDS, WATKINS and LeBLANC, JJ.

WATKINS, Judge.

This suit presents two clearly defined issues concerning the liability of the Louisiana Insurance Guaranty Association (LIGA) for claim(s) made against an insolvent insurer for the death of Clarence C. Cooper. The issues in dispute are:

1. Whether the wrongful death claims of the plaintiffs constituted one claim or five separate claims under the Insurance Guaranty Association Law, LSA-R.S. 22:1375-22:1394.

2. Whether the amount received by the plaintiffs from another insurance guaranty association should be credited toward the total amount of the judgment in the Louisiana court or toward LIGA's statutory limits.

FACTS

Clarence Cooper was involved in a fatal automobile accident on August 20, 1985, in Tangipahoa Parish, Louisiana, when his pickup truck struck the side of an International tractor trailer owned by S-N-W Enterprises and operated by Richard Huddy in the course and scope of his employment with S-N-W. The facts and circumstances surrounding the accident are not in dispute.

On January 15, 1986, Cecile B. Cooper, surviving spouse of Clarence Cooper, individually and as administratrix of the Succession of Clarence Ray Cooper; and Myra Patsy Farris Cooper (wife from a previous marriage), individually and as legal and natural tutrix of her minor children, Clarence Ray Cooper, Jr. ¹ and Jeffery Wade Cooper, filed a wrongful death suit, number 77,711, against Richard C. Huddy, and S-N-W Enterprises. ² The plaintiffs later amended their suit adding as additional defendants Champion Insurance Company (Champion), ³ Clarence Cooper's automobile liability insurer; and the Integrity Insurance Company (Integrity), the insurer of S-N-W and Richard Huddy. ⁴

Subsequently Melba Penn, (also a wife from a previous marriage), as the natural tutrix of her minor children, Jeremy Cooper and Miranda Cooper, filed a wrongful death suit, number 81,328, against S-N-W Enterprises, Richard C. Huddy, Integrity and Champion in the Eastern District of the United States Federal Court.

On March 24, 1987, Integrity was placed in liquidation, triggering potential liability for several state insurance guaranty associations for any "covered claims" arising under the policy of insurance issued by Integrity. Accordingly, the plaintiffs in both suits amended their petitions, naming the Pennsylvania Insurance Guaranty Association (PIGA), ⁵ the New Jersey Insurance Guaranty Association, ⁶ and the Louisiana Insurance Guaranty Association ⁷ as additional defendants. The two suits were subsequently consolidated for trial.

On October 28, 1987, plaintiffs in suit number 77,711 filed a Motion for Declaratory Judgment and/or Summary Judgment, seeking a determination of the maximum liability of PIGA and LIGA. LIGA also filed a Motion for Summary Judgment seeking to have the suit dismissed. Although the trial court rendered judgment in favor of the plaintiffs on their motion, this court took supervisory writs and vacated the summary judgment and further denied LIGA's writ pertaining to the denial of its motion for summary judgment. ⁸

On the eve of trial, the plaintiffs in both consolidated suits reached a settlement with PIGA for the statutory maximum of $299,900.00, ⁹ plus legal interest in the amount of $14,995.00, and court costs in the amount of $1,576.11. The plaintiffs agreed to release S-N-W Enterprises, Richard C. Huddy and PIGA from any further liability for damages as a result of the death of Clarence Ray Cooper, reserving their rights against LIGA. The New Jersey Guaranty Association was voluntarily dismissed from the consolidated suits.

The matter proceeded to trial with the jury finding Richard Huddy sixty-seven percent at fault and Clarence Cooper thirty-three percent at fault. The jury awarded damages to the plaintiffs totalling $1,094,053.85. On motion for JNOV, the trial court increased the award to Cecile B. Cooper for funeral expenses of $9,563.56. Therefore, the total award of all the plaintiffs amounted to $1,103,617.41, from which thirty-three percent ($364,193.75) for the negligence attributable to Clarence Cooper was deducted, leaving a net total award of $739,423.57. LIGA was ordered to pay $149,900.00 proportionately among the plaintiffs in accordance with the jury verdict. The court further ordered LIGA to pay legal interest from the date of judicial demand until paid and all costs of the proceedings. The plaintiffs and LIGA appealed. We reverse.

The plaintiffs argue that the trial court erred in limiting LIGA's liability for all the plaintiffs' claims to $149,900.00. The plaintiffs allege that there are three separate plaintiffs bringing five separate and distinct causes of action for damages, and that each cause of action constitutes a separate claim as defined in the LIGA statute.

At the time that Integrity was declared insolvent, LSA-R.S. 22:1382(1)(a) and (b) and LSA-R.S. 22:1379(3) provided:

LSA-R.S. 22:1382

(1) The association shall:

(a) Be obligated to the extent of the covered claims existing prior to the determination of the insurer's insolvency, ... but such obligation shall include only that amount of each covered claim, ... which is in excess of one hundred dollars and is less than one hundred fifty thousand dollars,.... In no event shall the association be obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises. ¹⁰

(b) Be deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent.

LSA-R.S. 22:1379 Definitions

. . . . .

(3) "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; ....

The Integrity insurance policy covering S-N-W Enterprises was a combined single limit policy for $750,000.00. The policy does not define "claim"; however, it does provide that Integrity "will pay all sums the insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto." The policy defines bodily injury as "bodily injury, sickness or disease including death resulting from any of these."

The Integrity policy also provides that "[r]egardless of the number of covered autos, insureds, claims made or vehicles involved in the accident, the most we will pay for all damages resulting from any one accident is the LIABILITY INSURANCE limit [$750,000.00] shown in the declarations."

It is clear that each plaintiff has a personal cause of action for the damages suffered as a result of Clarence Cooper's death. Former LSA-C.C. art. 2315. ¹¹ The question is whether these separate causes of action constitute one or five "covered claims" under the Act.

The Act defines covered claim as an unpaid claim arising out of and within the coverage and not in excess of the applicable limits of an insurance policy. The Integrity policy is a combined single limit policy of $750,000.00, with no separate limits for per person injuries. ¹² It is clear that within the terms and limits of the Integrity policy each of the plaintiffs' claims is a "covered claim". Consequently, each claim is a covered claim under the Act and is entitled to the per claim limits of $149,900.00, up to the maximum liability under the Integrity policy of $750,000.00. ¹³

The second issue is whether LIGA is entitled to offset amounts the plaintiffs received from PIGA against its statutory maximum or against the total judgment rendered by the lower court. Because we have concluded that each claimant is entitled to the per claim limits of $149,900.00, the issue of credit affects only Cecile Cooper whose award was the only one which exceeded LIGA's statutory maximum. The damages of the remaining plaintiffs are less than the statutory maximum of $149,900.00 each; therefore, LIGA's obligation is the same whether the credit for the PIGA recovery is offset against the total recovery or against LIGA's statutory obligation. (See Footnote 15 infra.)

LSA-R.S. 22:1386 provides:

(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.

(2) Any person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, he shall seek recovery first from the association of the location of the property, and if it is a workmen's compensation claim, he shall seek recovery first from the association of the...