Roger v. Estate of Moulton
| Decision Date | 18 May 1987 |
| Docket Number | No. 86-C-2266,86-C-2266 |
| Citation | 513 So.2d 1126 |
| Parties | Donald ROGER v. The ESTATE OF Tad MOULTON, et al. |
| Court | Louisiana Supreme Court |
Mack Barham, Gail Nick, Barham & Churchill, Robert Keaty, Keaty & Keaty, for applicant.
Craig Marks, Jeansonne & Briney, Raymond Jackson, III, Allen, Gooch, Bourgeois, Gregory Moroux, Voorhies & Labb, for respondents.
The primary issue in this case is whether or not there was a valid rejection of uninsured motorist (UM) coverage. The Court of Appeal found there was a valid rejection. 1 We reverse.
The automobile liability policy was issued by Liberty Mutual Insurance Company (Liberty Mutual) to United Parcel Service (UPS). The appellate court found relevant a letter written in 1981 which the trial court had ruled was inadmissible. It also determined the letter constituted a valid rejection of UM coverage in Louisiana, when considered in pari materia with the policy and a previous 1974 letter which was statutorily ineffective as a rejection. Our threshhold concern is the sufficiency of the 1981 letter to effect a rejection of the UM coverage.
This case arises out of a vehicular collision which occurred along Highway 333 in Vermilion Parish during a rain storm. Liability is not now at issue and we recite only those facts necessary for an understanding of the procedural posture.
On the morning of July 3, 1981, plaintiff Donald Roger was traveling south on Louisiana Highway 333 in a truck owned by his employer, UPS. At this same time, Tad Moulton and three passengers were in an automobile proceeding north on Highway 333. The four were returning home after a two week tour of duty on an offshore oil rig. As these two vehicles entered a curve in the highway, Moulton swerved his vehicle across the double yellow line of the highway, striking the front left side of the UPS truck. Tad Moulton died at the scene from injuries sustained in the collision. Donald Roger was seriously injured.
A third vehicle, a pickup truck owned by Pierce Enterprises, Inc. (Pierce) and driven by its employee, Owen Schexnyder (Schexnyder), was also allegedly involved in the accident. Prior to the accident, Schexnyder, because of transmission failure, pulled onto the eastern shoulder of Highway 333 to attempt to effect repairs. Allegations were made that Moulton was forced to cross the highway's centerline by the position of the pickup truck on the shoulder.
Three separate law suits were filed as a result of this accident. Initially, Roger filed suit against the Estate of Tad Moulton; Frank R. Moulton, Jr., administrator; and Maryland Casualty Company (Maryland), insurer of the vehicle owned by Frank Moulton. Roger later added as defendants Global Marine, Inc. (Global), who was Tad Moulton's employer; Pierce, and its insurer, Maryland.
Liberty Mutual, in its capacity as workers' compensation carrier for UPS, filed a separate suit against the Estate of Tad Moulton, Frank R. Moulton, Jr., and Maryland as Moulton's insurer, seeking reimbursement for workers' compensation benefits and medical expenses paid to Roger. Added later to this suit as defendants were Pierce, its insurer Maryland, and Global.
These two actions were consolidated, with Liberty Mutual being designated by stipulation as intervenor in Roger's suit. Prior to trial, Roger settled his claims against the defendants named in his original suit and dismissed the suit with prejudice, reserving his right to proceed against Liberty Mutual as UM carrier for UPS.
Following this settlement, Roger filed a separate suit against Liberty Mutual in its capacity as UM carrier for UPS. He later added Liberty Mutual in this same capacity as a defendant in his original suit. His separate action against Liberty Mutual for UM benefits was also consolidated, and as consolidated, all three suits proceeded to trial.
After a four day trial of these consolidated suits, the trial court determined (1) the accident was caused solely by the negligence of Tad Moulton; (2) UPS had not rejected UM coverage in Louisiana, and therefore UM coverage was required to be provided in amounts equal to the liability limits of $200,000; (3) Roger had suffered $406,579.06 in damages; and, (4) Liberty Mutual was not entitled to recover from Maryland, Moulton's liability insurer, the workers' compensation benefits it paid to Roger.
The trial court allowed oral arguments on Liberty Mutual's motion for a new trial, but rejected Liberty Mutual's claim for reimbursement of Roger's compensation benefits out of his judgment against Liberty Mutual based upon the UM coverage. The trial court did, however, acknowledge Liberty Mutual's right as compensation carrier to sue itself.
Liberty Mutual both in its capacity as UM carrier and as workers' compensation carrier appealed. On original hearing the Court of Appeal affirmed in part and reversed in part. It affirmed the trial court's determination that the accident was solely the fault of Tad Moulton. It reversed the trial court's finding of UM coverage, holding UPS had validly rejected the coverage in Louisiana.
In reaching its conclusion, the Court of Appeal first concluded:
The Liberty [Mutual] policy, although issued and delivered outside the State of Louisiana, provides coverage for UPS trucks and other vehicles located in Louisiana.... Under these circumstances ... insofar as such policy applies to UPS motor vehicles registered and principally garaged in the State of Louisiana, such policy was "issued for delivery in this state" and therefore, the provisions of La.R.S. 22:1406 D(1)(a) apply.
In finding La.R.S. 22:1406(D)(1)(a) did mandate UM coverage, the Court of Appeal distinguished Snider v. Murray, 461 So.2d 1051 (La.1985). After concluding our law required UM coverage be provided, the Court of Appeal then determined UPS had validly rejected UM coverage in Louisiana based on a combined reading of the policy and the two letters.
The first letter dated January 2, 1974 was an express rejection of UM coverage in Louisiana. It is undisputed this letter was never physically attached to the original policy issued in 1974, or any subsequent renewals. Accordingly, it alone could not operate as a valid rejection of UM coverage under Stroud v. Liberty Mutual Insurance Co., 429 So.2d 492 (La.App. 3d Cir.1983), writ denied, 437 So.2d 1147 (La.1983).
The second letter dated March 2, 1981 had been excluded from evidence in the trial court on the grounds of relevancy. The letter was allowed to be offered as a proffer of proof. In choosing to consider the 1981 letter, the Court of Appeal found, "The trial court clearly erred in disallowing this evidence." This letter in its entirety states:
In accordance with our standard procedure and instructions to Liberty Mutual please reject the Uninsured Motorist coverage in the state of Pennsylvania, effective March 1, 1981.
Since this is our standard practice, regarding Uninsured Motorists coverage in the event any other state changes their law or regulations to allow rejection of this coverage, please do so immediately on the earliest possible effective date.
Taking both letters into account, the Court of Appeal concluded:
Were it not for the letter of March 2, 1981, Stroud, supra, would dictate the result reached by the trial court. However, when the contents of this letter are considered together with the body of the other evidence presented, it is crystal clear that UPS validly rejected UM coverage under the 1981 policy.... (Emphasis added.)
On rehearing, the Court of Appeal reinstated its earlier opinion holding the 1981 letter was admissible and that there was a valid rejection of UM coverage by UPS. In addition, the court rejected arguments by Roger that the 1981 letter, standing alone, must be sufficient to reject UM coverage. The court reasoned:
Even if, arguendo, one would assume that the 1981 letter standing alone was insufficient to reject UM coverage, when the policy (which shows no UM coverage in Louisiana) and the two letters (1974 and 1981 documents) are considered in pari materia, the only conclusion which can be reached is that UPS validly rejected UM coverage in this state.
Roger applied for writs of certiorari and review asking us to consider the finding of a valid rejection of UM coverage. We granted writs on December 12, 1986. 498 So.2d 1 (La.1986).
Roger asserts initially the March 2, 1981 letter does not meet the statutory requisites for a valid rejection of UM coverage in Louisiana. He argues the Court of Appeal determination that the 1981 letter indicated a desire on the part of UPS to reject UM coverage in every state where possible is not sufficient, as their reliance on "intent" and "desire" to find such a rejection avoids the purpose and public policy behind requiring UM protection. He also urges this finding undermines the formal requirements of R.S. 22:1406(D)(1)(a).
The Louisiana UM statute, contained in R.S. 22:1406(D)(1)(a), provides the following:
(1)(a) No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in not less than the limits of bodily injury liability provided by the policy, under provisions filed with and approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom; provided, however, that the coverage required under this Subsection shall not be applicable where any insured named in the policy shall reject in...
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