Duncan v. U.S.A.A. Ins. Co.

• Decision Date: 29 November 2006
• Docket Number: No. 2006-CC-363.,2006-CC-363.
• Parties: Tammy Kay DUNCAN v. U.S.A.A. INSURANCE COMPANY, James S. Cameron and Maloni R. Sartin-White, Western Heritage Insurance Company.
• Court: Louisiana Supreme Court

950 So.2d 544

Tammy Kay DUNCAN v. U.S.A.A. INSURANCE COMPANY, James S. Cameron and Maloni R. Sartin-White, Western Heritage Insurance Company.

No. 2006-CC-363.

Supreme Court of Louisiana.

November 29, 2006.

Rehearing Denied February 16, 2007.

Opinion Dissenting from Denial of Rehearing February 16, 2007.

Ungarino & Edkert, Matthew J. Ungarino, David I. Bordelon, Metairie, for Applicant.

Frischhertz & Associates, Lloyd N. Frischhertz, Jr., William J. Levenson, Marc L. Frischhertz, New Orleans, McCranie, Sistrunk, Anzelmo, Hardy, Maxwell & McDaniel, Michael R. Sistrunk, Metairie, for Respondent.

Stevan C. Dittman, New Orleans, Attorney for Louisiana Trail Lawyers Association Amicus Curiae.

KIMBALL, J.

The issue presented in this case is whether UM coverage was validly waived when the line for policy number was left blank on the form prescribed by the commissioner of insurance. For the reasons that follow, we find the UM statute requires that the blank for the policy number contained on the insurance commissioner's form be filled in to effectuate a valid waiver of UM coverage and, therefore, UM coverage was not effectively waived in this instance. Accordingly, we affirm the judgment of the court of appeal, granting plaintiff's motion for summary judgment and denying defendant's motion for summary judgment.

FACTS AND PROCEDURAL HISTORY

On May 16, 2003, Tammy Kay Duncan ("plaintiff") was a guest passenger in a vehicle operated by Shea Rembert that was rear-ended by a vehicle operated by defendant Maloni Sartin-White, who had herself been rear-ended by a vehicle operated by defendant James Cameron. Plaintiff filed an action in the Twenty-Fourth Judicial District Court against Maloni Sartin-White, who was uninsured, James Cameron, and James Cameron's insurer, U.S.A.A. Insurance Company. Plaintiff later supplemented her petition to add Western Heritage Insurance Company ("Western Heritage") as a defendant, alleging that Western Heritage was the uninsured/underinsured motorist ("UM") carrier for the vehicle operated by Shea Rembert.

Western Heritage thereafter filed a motion for summary judgment and prayed that it be dismissed from the action. Western Heritage asserted it did not provide UM coverage because the owner of the insured vehicle, Robert Rembert, had validly rejected UM coverage on August 16, 2002. In response, plaintiff filed a cross motion for summary judgment alleging the UM rejection was invalid and, therefore, Western Heritage's UM coverage should be equal to the $100,000 liability limits of the policy.

The district court granted plaintiff's cross motion for summary judgment and denied Western Heritage's motion for summary judgment. In its reasons for judgment, the district court explained the waiver of the UM coverage was ineffective because the form was not properly completed according to the 1997 amendment to La. R.S. 22:1406 (redesignated as La. R.S. 22:680 by 2003 La. Acts No. 456). Because the Western Heritage UM form failed to follow the appropriate language of the statute, the district court held there was UM coverage of $100,000 equal to the liability limits of the policy.

Western Heritage applied for supervisory writs, which the Court of Appeal, Fifth Circuit, granted, stating:

This court has previously held that the absence of a policy number on a UM rejection form does not invalidate the rejection, provided that the form complies in all other respects with La. R.S. 22:680. Knight v. Owens, 03-1064 (La. App. 5 Cir. 2/23/04), 869 So.2d 188.

After a review of the UM waiver at issue, we find that the waiver is valid and therefore the trial court should have granted relator's Motion for Summary Judgment.

Plaintiff then filed a writ of certiorari with this court, which was granted with an order remanding the matter to the court of appeal for briefing, argument and opinion. On remand, a different panel of the Fifth Circuit Court of Appeal, in a split decision, ruled in favor of plaintiff. The court reasoned that pursuant to the 1997 amendment, a rejection must now be made only on a form prescribed by the commissioner of insurance, and that the commissioner of insurance promulgated a UM form with a line for the policy number in the lower right-hand corner of the form. Spaces were provided for the policy number on the form in this case, but they were left blank. Citing Cohn v. State Farm Mut. Auto Ins. Co., 03-2820, p. 4 (La.App. 1 Cir. 2/11/05), 895 So.2d 600, 602, and Roger v. Estate of Moulton, 513 So.2d 1126, 1131 (La.1987), the court of appeal stated, "The expression of a desire not to have UM coverage, however clear, does not necessarily constitute a valid rejection if the expression does not meet the formal requirements of law." The court of appeal denied Western Heritage's writ, noting the incomplete form, the liberal construction given the UM statute and the strict construction accorded any statutory exceptions to coverage. The dissenting judge stated the form was properly completed as required by La. R.S. 22:680 even without the policy number. Western Heritage then applied for a writ of certiorari to this court, which was granted to address the issue of whether UM coverage was effectively waived when the insured left the line for policy number blank on the form prescribed by the commissioner of insurance.

DISCUSSION

A motion for summary judgment is a procedural device used when there is no genuine issue of material fact. The summary judgment procedure is favored and designed to secure the just, speedy, and inexpensive determination of every action and shall be construed to accomplish these ends. La. C.C.P. art. 966(A)(2). Appellate courts review summary judgments de novo under the same criteria that govern the district court's consideration of whether summary judgment is appropriate. Schroeder v. Board of Supervisors of Louisiana State Univ., 591 So.2d 342, 345 (La.1991). A motion for summary judgment is properly granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue of material fact, and the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966. In ruling on the present cross motions for summary judgment, we will determine whether either party has established there are no genuine issues of material fact and it is entitled to judgment as a matter of law.

In Louisiana, UM coverage is provided for by statute and embodies a strong public policy. Roger, 513 So.2d at 1130; A.I.U. Ins. Co. v. Roberts, 404 So.2d 948, 949 (La.1981). The object of UM insurance is to provide full recovery for automobile accident victims who suffer damages caused by a tortfeasor who is not covered by adequate liability insurance. Tugwell v. State Farm Ins. Co., 609 So.2d 195, 197 (La.1992); Henson v. Safeco Ins. Co., 585 So.2d 534, 537 (La.1991); Hoefly v. Government Employees Ins. Co., 418 So.2d 575, 578 (La.1982).

UM coverage is determined not only by contractual provisions, but also by applicable statutes. Roger, 513 So.2d at 1130. Thus, under the UM statute, the requirement of UM coverage is an implied amendment to any automobile liability policy, even when not expressly addressed, as UM coverage will be read into the policy unless validly rejected. Daigle v. Authement, 96-1662, p. 3 (La.4/8/97), 691 So.2d 1213, 1214; Henson, 585 So.2d at 537.

This court has held the statute is to be liberally construed. Daigle, 96-1662 at p. 3, 691 So.2d at 1214; Roger, 513 So.2d at 1130. The liberal construction given the UM statute requires the statutory exceptions to coverage be interpreted strictly. Roger, 513 So.2d at 1130. Any exclusion from coverage in an insurance policy must be clear and unmistakable. Daigle, 96-1662 at p. 3, 691 So.2d at 1214; Roger, 513 So.2d at 1130. In accordance with this strict construction requirement, the insurer bears the burden of proving any insured named in the policy rejected in writing the coverage equal to bodily injury coverage or selected lower limits. Tugwell, 609 So.2d at 197.

As stated by this court in Roger, 513 So.2d at 1130:

The law imposes UM coverage in this state notwithstanding the language of the policy, the intentions of the parties, or the presence or absence of a premium charge or payment. Accordingly, to effect a valid rejection of the UM coverage under La. R.S. 22:1406(D)(1)(a), the insured or his authorized representative must expressly set forth in a single document that UM coverage is rejected in the State of Louisiana as of a specific date in a particular policy issued or to be issued by the insurer. A writing, regardless of the intention of the insured, of a less precise nature is insufficient to effect a valid rejection. (Citations omitted.)

The right to reject UM coverage and the method of rejection have been addressed several times by the Louisiana Legislature. Henson, 585 So.2d at 537; See also Historical and Statutory Notes to La. R.S. 22:1406. The original UM statute, adopted by 1962 La. Acts No. 187, required UM coverage in every automobile liability insurance policy issued in Louisiana, in an amount not less than the limits mandated by law for bodily injury damages. Henson, 585 So.2d at 537. The initial statute also gave the named insured the right to reject UM coverage. Id.

Although early versions of the UM statute did not explicitly require a rejection in writing, the courts interpreted the statute, by looking to general insurance laws, as requiring a written rejection. Henson, 585 So.2d at 537; See A.I.U. Ins. Co., 404 So.2d at 949. Thereafter, 1977 La. Acts No. 438 specifically required that the rejection of UM coverage be in writing.

In 1987 La. Acts No. 436, La. R.S. 22:1406 was amended to require that any rejection or selection of lower limits shall be made only "on a form designed by each insurer." In Tugwell, 609 So.2d at 197, this court held that the form used by the insurance company must give...