Hayes v. De Barton

• Decision Date: 15 February 2017
• Docket Number: CA 16–541
• Citation: 211 So.3d 1275
• Parties: Lonny HAYES v. Viviana Trevino DE BARTON, et al.
• Court: Court of Appeal of Louisiana — District of US

211 So.3d 1275

Lonny HAYES

v.Viviana Trevino DE BARTON, et al.

CA 16–541

Court of Appeal of Louisiana, Third Circuit.

February 15, 2017

Randall E. Hart, Aaron Broussard, Steven Broussard, Broussard & Hart, LLC, 1301 Common Street, Lake Charles, LA 70601, (337) 439–2450, COUNSEL FOR PLAINTIFFS/APPELLEES: Lonny Hayes Melissa Hayes

John J. Erny, III, Casler, Bordelon & Lawler, 2450 Severn Avenue, Suite 420, Metairie, LA 70001 (504) 832–3010 COUNSEL FOR DEFENDANT/APPELLEE: Progressive Insurance Company

L. Lane Roy, Elizabeth C. Austin, Brown Sims, P.C., 600 Jefferson Street, Suite 800, Lafayette, LA 70501, (337) 424–1240, COUNSEL FOR DEFENDANT/APPELLANT: Penn Millers Insurance Company

Court composed of Marc T. Amy, Elizabeth A. Pickett, David E. Chatelain,^* Shannon J. Gremillion, and John E. Connery, Judges.

PICKETT, Judge.

Insurer appeals the trial court's grant of summary judgment in favor of the plaintiff, declaring that the uninsured/underinsured motorist (UM) coverage waivers that its insured executed were invalid; therefore, its commercial auto policy included UM coverage for the plaintiffs' damages. For the following reasons, we reverse that judgment.

FACTS

On June 21, 2013, Lonny Hayes was injured in the course and scope of his employment with O'Neal's Feeder Supply, Inc. when Diana Gonzales failed to obey a traffic sign, and her vehicle collided with the vehicle Mr. Hayes was driving. Ms. Gonzales and the passengers in her vehicle were killed in the collision, and Mr. Hayes suffered severe injuries. When the accident occurred, Mr. Hayes was driving a vehicle owned by O'Neal's and insured by a Louisiana commercial automobile policy of insurance issued by Penn Millers Insurance Company.

Mr. Hayes and his wife sued Ms. Gonzales and her insurer, State Farm Automobile Insurance Company; his own insurer, Progressive Security Insurance Company; and Penn Millers. The plaintiffs asserted that State Farm's insurance policy did not provide adequate coverage for their claims and that Progressive's and Penn Millers' insurance policies provided UM coverage for their claims. Penn Millers denied the plaintiffs' claims, asserting that O'Neal's had waived UM coverage for the commercial auto policy it issued in favor of O'Neal's that was in effect on June 21, 2013.

The plaintiffs filed a motion for partial summary judgment on the issue of whether Penn Millers' commercial auto insurance policy provided UM coverage for the plaintiffs' claims. Thereafter, Progressive filed a motion for partial summary judgment in which it adopted the plaintiffs' motion for partial summary judgment. After a hearing held on January 21, 2016, the trial court granted summary judgment in favor of the plaintiffs, finding no valid rejection or waiver of UM coverage existed for O'Neal's commercial auto policy; therefore, the policy provided UM coverage to O'Neal's Feeder Supply, Inc. on June 21, 2013. The judgment was designated a final judgment as provided in La.Code Civ. P. art. 1915(B)(1). Penn Millers appealed the judgment.

ASSIGNMENTS OF ERROR

Penn Millers assigns two errors with the trial court's grant of summary judgment in favor of the plaintiffs:

1. The district court erred in finding the UM waiver validly executed in 2007 did not effectively waive coverage on June 21, 2013, the date of [the plaintiff's] accident.

2. The district court erred in finding the UM waiver validly executed in 2011 did not effectively waiver coverage on June 21, 2013, the date of [the plaintiff's] accident.

DISCUSSION

An appeals court reviews summary judgments de novo, using the same criteria as the trial court. Gray v. Am. Nat'l Prop. & Cas. Co. , 07–1670 (La. 2/26/08), 977 So.2d 839. In order to prevail on a motion for summary judgment, the moving party must show that "there is no genuine issue of material fact and that he is entitled to judgment as a matter of law." La.Code Civ.P. art. 966(A)(3).

Generally, interpretation of an insurance contract concerns a legal question that can be resolved in the framework of a motion for summary judgment. Cutsinger v. Redfern , 08–2607 (La. 5/22/09), 12 So.3d 945. Insurance policies are interpreted according to the general rules of contract interpretation, and liability insurance policies are interpreted to provide coverage not deny coverage. Supreme Servs. & Specialty Co., Inc. v. Sonny Greer, Inc. , 06–1827 (La. 5/22/07), 958 So.2d 634.

Louisiana law provides that "[n]o automobile liability insurance" policy shall be issued in the state unless it provides UM coverage for persons injured in accidents involving "owners and operators of uninsured or underinsured motor vehicles." La.R.S. 22:1295(1)(a)(i). This law embodies a strong public policy to allow innocent automobile accident victims to fully recover their damages. Cutsinger , 12 So.3d 945. "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." Duncan v. USAA Ins. Co. , 06–363, p. 4 (La. 11/29/06), 950 So.2d 544, 547.

The law further provides, however, that a named insured can reject UM coverage or select UM coverage with lower limits. Subsection 1295(1)(a)(ii) sets forth what is required for an insured to waive UM coverage:

Such rejection, selection of lower limits, or selection of economic-only coverage shall be made only on a form prescribed by the commissioner of insurance. The prescribed form shall be provided by the insurer and signed by the named insured or his legal representative.... The form signed by the insured or his legal representative which initially rejects coverage, selects lower limits, or selects economic-only coverage shall remain valid for the life of the policy and shall not require the completion of a new selection form when a renewal, reinstatement, substitute, or amended policy is issued to the same named insured by the same insurer or any of its affiliates.... Any changes to an existing policy, regardless of whether these changes create new coverage, except changes in the limits of liability, do not create a new policy and do not require the completion of new uninsured motorist selection forms. For the purpose of this Section, a new policy shall mean an original contract of insurance which an insured enters into through the completion of an application on the form required by the insurer.

Statutory exceptions to UM coverage must be strictly interpreted, and the insurer must prove that any named insured of the policy properly executed a written waiver rejecting UM coverage equal to bodily injury coverage, selected lower limits, or selected economic-only coverage. Duncan , 950 So.2d 544 ; La.R.S. 22:1295(1)(a)(ii). The supreme court in Duncan identified six tasks which must be performed to complete the UM waiver form prescribed by the commissioner of insurance in order to reject UM coverage:

(1) initialing the selection or rejection of coverage chosen; (2) if limits lower than the policy limits are chosen (available in options 2 and 4), then filling in the amount of coverage selected for each person and each accident; (3) printing the name of the named insured or legal representative; (4) signing the name of the named insured or legal representative; (5) filling in the policy number; and (6) filling in the date.

Duncan , 950 So.2d at 551. Failure to comply with one of these six tasks results in an invalid rejection of UM coverage. Duncan , 950 So.2d 544. Importantly, "[t]he insurer cannot rely on the insured's intent to waive UM coverage to cure a defect in the form of the waiver." Id. at 553.

Did the June 5, 2007 UM waiver effectively waive UM coverage June 21, 2013?

In their motion, the plaintiffs argue O'Neal's did not waive UM coverage for the June 21, 2013 accident. Penn Millers contends, however, that O'Neal's executed a valid UM waiver on June 5, 2007, which remained effective as of the date of the accident.

The plaintiffs first assert that the 2007 UM waiver is not valid because it does not contain a policy number. In Carter v. State Farm Mut. Auto. Ins Co. , 07–1294 (La. 10/5/07), 964 So.2d 375, the supreme court held that the UM waiver at issue was valid although it did not include the policy number because the commissioner's regulations in effect at that time provided the failure to include a policy number on a UM waiver for a new policy does not render the waiver invalid if the policy number was not available when the waiver was executed. See also Commissioner of Insurance LIRC Bulletin 98–03.

Penn Millers introduced the affidavit of the insurance producer who worked with O'Neal's on its commercial auto policy in which the producer attests that the policy number for that policy was not available when O'Neal's representative executed the application and UM waiver form for that policy. Accordingly, O'Neal's June 5, 2007 UM waiver was not invalid because the policy number was not included on the waiver form.

In their second argument, the plaintiffs argue that O'Neal's submitted a new application for coverage each year; therefore, a new policy was issued each year which required the completion of a new UM waiver each year. In support of this argument, they point out that in 2007 and 2008, O'Neal completed commercial auto forms identifying it as "Applicant," and that O'Neal's representatives' signatures on those forms are identified as "Applicant's Signature." Additionally, the plaintiffs reference the fact that while O'Neal's 2011 commercial auto form identified it as the "Named Insured" in the information portion of the form, its signature line was identified as "Applicant's Signature."

The plaintiffs support their position with the UM statute's definition of a new policy: "an original contract of insurance which an insured enters into through the completion of an application on the form required by the insurer." La.R.S. 22:1295(1)(a)(ii). This argument does not consider that the renewal of a...