Holmes v. Reliance Ins. Co.
| Decision Date | 24 May 1978 |
| Docket Number | No. 6508,6508 |
| Citation | 359 So.2d 1102 |
| Parties | Frank D. HOLMES et al., Plaintiffs and Appellants-Appellees, v. RELIANCE INSURANCE COMPANY et al., Defendants and Appellants-Appellees. |
| Court | Court of Appeal of Louisiana — District of US |
Brittain & Williams by Jack O. Brittain, John G. Williams, Natchitoches, Gold, Little, Simon, Weems & Bruser, Edward E Rundell, Alexandria, for defendants and appellants-appellees.
Thomas & Dunahoe, G. F. Thomas, Jr., Natchitoches, for plaintiffs and appellants-appellees.
Before CULPEPPER, DOMENGEAUX and FORET, JJ.
This is a suit for damages resulting from a two vehicle collision which occurred July 8, 1975 on U.S. Highway 71 in Grant Parish. Plaintiffs are Kenneth Byoune, driver of one of the vehicles, and Frank D. Holmes individually and on behalf of his minor son, Dennis Wayne Holmes. Both Mr. Holmes and his minor son were passengers in the automobile driven by Byoune. Named as defendants are: (1) Titus A. Parker, driver of the other vehicle; (2) Parker's liability insurer, Dixie Auto Insurance Company; (3) Byoune's insurer, Kenilworth Insurance Company; and (4) Reliance Insurance Company, which issued a garage liability policy covering the vehicle driven by Byoune. Before trial, Frank and Dennis Holmes settled with Reliance for an undisclosed amount, but reserved their rights against the other defendants. The trial court found the negligence of Titus A. Parker to be the sole legal cause of the accident. Judgment was rendered in favor of Frank and Dennis Holmes against defendants Parker, Dixie and Kenilworth, and in favor of Kenneth Byoune against defendants Parker, Kenilworth and Reliance. Kenilworth and Reliance appealed. Dixie did not appeal, since it deposited in the registry of the court the sums for which it was cast. Also, defendant Parker did not appeal. All three plaintiffs appealed.
The substantial issues on appeal are: (1) Does the decision in Deane v. McGee, 261 La. 686, 260 So.2d 669 (La.1972) invalidate the primary and excess insurance provisions of the uninsured motorist coverages by Kenilworth and Reliance? (2) Should uninsured motorist coverages be "stacked" under Reliance Insurance Company's policy? (3) Should there be a pro rata distribution of funds available under the Dixie policy?
There is no question of defendant Parker's liability. He drove his 1974 Ford Pickup over the center line into the opposite lane of traffic colliding with the 1975 Chevrolet driven by Kenneth Byoune. Titus Parker's vehicle was insured by Dixie Auto Insurance Company under a policy which provided liability coverage of $5,000 for each person and $10,000 for each accident.
Kenneth Byoune was driving a car owned by Humphrey Chevrolet Company, Inc. of Evanston, Illinois, by whom he was employed as a salesman. The car was a "demonstrator", which Mr. Byoune was operating with the full knowledge and consent of the owner. Humphrey Chevrolet had in effect a garage liability policy issued by Reliance Insurance Company.
Answering an interrogatory propounded by the plaintiffs, Reliance stated that Humphrey Chevrolet of Evanston, Illinois, owned 160 vehicles which were covered by the policy. Reliance further stated that $3 per "dealer plate" is charged for uninsured motorist coverage. This account was audited on June 1, 1976. At that time, there were 177 dealer plates. Of the $58,362 charged the assured under the policy, $531 was for uninsured motorist protection.
In answer to interrogatories by Kenilworth Insurance Company, Reliance stated that it had an automobile liability policy in force and effect on July 8, 1975 which covered the vehicle driven by Mr. Byoune. This was not coverage under a fleet policy. The policy did provide for uninsured motorist coverage of $15,000 per person and $30,000 per accident. Again Reliance stated that this policy covered 160 vehicles.
Kenneth Byoune had been issued a "non-owned" vehicle policy by defendant Kenilworth, which covered him while he was operating any non-owned vehicle. This policy had uninsured motorist limits of $10,000 per person and $20,000 per accident.
The trial judge awarded Frank Holmes $48,000 plus $12,904 for medical expenses for a total of $60,904. This award was against Parker, Dixie, and Kenilworth, in solido, limiting Dixie's liability to $5,000 and Kenilworth's liability to $10,000, (their per person policy limits).
As administrator of the estate of Dennis Holmes, Frank Holmes was awarded $6,000. In addition, Frank Holmes was awarded $1,231 for medical expenses incurred by Dennis. This judgment was against Parker, Dixie and Kenilworth, in solido. Treating Kenilworth as an excess insurer, Dixie was held liable to the extent of $5,000 (its per person policy limits), and Kenilworth was held liable for the remaining $2,231.
The court awarded Kenneth Byoune $11,498.41 against Parker, Kenilworth and Reliance, in solido, with Kenilworth's liability being limited to its remaining coverage of $7,769.
Kenilworth Insurance Company contends that provisions in its policy make its uninsured motorist coverage only excess to the uninsured motorist coverage provided by Reliance. And furthermore, that there should be "stacking" of the uninsured motorist coverages on the 160 vehicles insured by the Reliance policy, to satisfy the awards to these plaintiffs.
Reliance contends that both the Reliance and Kenilworth policies should be on equal footings with regard to the issue of primary versus excess uninsured motorist coverage. This is the result reached by the trial court.
We address first the question of whether Deane v. McGee, 261 La. 686, 260 So.2d 669 (La.1972) stands for the proposition that all "excess" insurance clauses are repugnant to the Louisiana uninsured motorist statutes, LSA-R.S. 22:620, 22:1406, and, therefore, must be deemed invalid when written as part of uninsured motorist coverage. We have carefully studied Deane and cases following it, and we do not find such a broad interpretation of those cases warranted. In Deane, the plaintiff's damages totaled $22,902. Two primary insurers of the host vehicle each carried uninsured motorist coverage of $5,000 per person and $10,000 per accident. A third insurer's uninsured motorist coverage was excess only with limits of $10,000 per person. Each of the three policies involved contained a clause which made any "other insurance" primary and its coverage excess. Each policy also provided for proration in the event the total coverage exceeded the damages. The Court of Appeal held the two primary insurers could prorate, with each being liable for only $2,500 of its $5,000 coverage, but held the excess insurer liable for its full $10,000 coverage. Thus, the Court of Appeal awarded plaintiff a total of $15,000 against the three insurers. Our Supreme Court agreed the excess insurer was liable for its full $10,000 coverage but held each of the two primary insurers was also liable for its full $5,000 coverage, for a total award of $20,000 against the three insurers.
The rationale of the Supreme Court decision in Deane is that the Louisiana uninsured motorist statute, LSA-R.S. 22:1406, D, requires a minimum of $5,000 coverage, which cannot be reduced by proration clauses where the damages exceed the total coverages. However, the court did not hold that proration clauses are unenforceable where the total uninsured motorist coverages exceed the damages. Nor did the court hold that "excess insurance" clauses are unenforceable where the primary uninsured motorist coverage is sufficient to pay the entire damage.
We conclude that where the primary uninsured motorist coverage is sufficient to pay the entire damage, a clause in another policy providing that its coverage is excess only to the primary insurance is enforceable.
Counsel for Kenilworth contends its non-owned vehicle policy issued to Kenneth Byoune as named insured provides only "excess" uninsured motorist coverage, and that the Dixie and Reliance policies provide primary coverage. Reliance contends that the Kenilworth policy has no such "excess" insurance provisions as far as uninsured motorist coverage is concerned, but in the event the court finds such a provision does exist, that there is a similar provision in the Reliance policy and that they should both, therefore, be treated as unenforceable. We have carefully examined both policies and find there is a specific "excess" insurance provision under "Part IV Protection Against Uninsured Motorists" in the Kenilworth policy. We find no such provision in the Uninsured Motorist rider made part of the policy issued by Reliance. Therefore, we find the coverage by Reliance to be primary and the coverage by Kenilworth to be excess as to the uninsured motorist coverages. Of...
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