Roy v. U.S.A.A. Cas. Ins. Co.

• Decision Date: 25 June 1984
• Docket Number: No. 84-C-0076,84-C-0076
• Citation: 453 So.2d 564
• Parties: Albert L. ROY, Jr. v. U.S.A.A. CASUALTY INSURANCE COMPANY.
• Court: Louisiana Supreme Court

Page 564

453 So.2d 564

Albert L. ROY, Jr. v. U.S.A.A. CASUALTY INSURANCE COMPANY.

No. 84-C-0076.

Supreme Court of Louisiana.

June 25, 1984.

James L. Babin, Lake Charles, for applicant.

Thomas W. Sanders, Sanders & Foreman, Lake Charles, for respondent.

CALOGERO, Justice.

In this case, we examine the language contained in a settlement and release executed by an automobile accident/tort victim in order to determine whether the release expressly reserved his right to sue other parties (potentially liable co-debtors, who, for purposes of our consideration are solidary obligors) for his damages which are in excess of the recovered limits of the tortfeasor's liability insurer's policy. Both lower courts ruled in favor of the ostensibly released co-debtor (a UMI carrier), and dismissed the plaintiff's suit on a motion for summary judgment, reasoning that the release of one co-debtor in solido released all co-debtors in solido. Upon review and for the following reasons, we reverse, finding an express reservation in the release executed by plaintiff.

Our only concern in this case is whether or not La.C.C. art. 2203 and its requirement of an express reservation can be used by this uninsured/underinsured motorist carrier as a defense against this insured's claim. To the extent that the UMI carrier is a solidary obligor along with the tortfeasor (if that is indeed the case, and we presuppose for sake of argument in this case that it is so), we do not here find that the UMI carrier was released by the document executed by the victim in favor of the tortfeasor and her insurer, because we find an express reservation therein.

We are not oblivious to the myriad problems attending the legal and contractual relationship of victim, tortfeasor and uninsured/underinsured motorist insurance carrier. We do not, as a consequence, purport to resolve all questions which might emanate therefrom. For instance, we do not in this opinion decide whether or under what circumstances the UMI carrier might somehow be barred from collecting whatever it has to pay, against the uninsured/underinsured motorist. See Pace v. Cage, 419 So.2d 443 (La.1982) which held that an uninsured motorist carrier cannot recover from a tortfeasor when the insured had completely discharged the tortfeasor before the uninsured motorist carrier made any payment to the insured, because the insured had no rights against his former debtor to subrogate to the insurer. See also Bond v. Commercial Union Assurance Co., 407 So.2d 401, 402 (La.1981) (On Rehearing) wherein all claims were litigated and no releases granted, and we found that the defendant/third party/plaintiff/UMI carrier was entitled to judgment against the tortfeasor because of a conventional subrogation in its policy. Nor do we worry here about whether the victim who releases the tortfeasor and then tries to recover against the UMI carrier is deprived of doing so (aside from any principles of solidary obligation) simply because by releasing the tortfeasor he interfered with any contractual or statutory rights of the UMI carrier to recover monies paid under his policy. La.R.S. 22:1406(D)(4). Finally we do not answer here the question on which we granted writs in five other cases recently, (see note 1 infra ) about whether a victim who has released the tortfeasor without any reservation against other parties is then precluded from suing his UMI carrier because of principles of solidary obligation, and particularly La.C.C. art. 2203.

As earlier indicated, all we are going to address in this opinion is whether there is, in the release before us, language which expressly reserves to relator the right to seek further compensation for damages from other parties. With that qualification, we examine the facts and very narrow issue presented in the case before us now.

On January 8, 1981, Mr. Albert L. Roy, Jr. was involved in an automobile accident caused solely by the negligence of Dora G. Melancon. On April 10, 1981, Roy settled his claim with, and granted a release to, Dora Melancon and her insurer Hartford Accident and Indemnity Company, in exchange for ten thousand dollars ($10,000), the maximum limits of her liability insurance policy. Thereafter Roy filed suit against United Services Automobile Association-Casualty Insurance Company (hereinafter USAA-CIC), his uninsured and underinsured motorist insurer, claiming that the amount recovered from Melancon and Hartford as a result of the accident was not adequate compensation for his personal injuries. Pursuant to a Motion for Summary Judgment, USAA-CIC pleaded in a second supplemental and amended answer the prior release and settlement as a bar to relator's lawsuit on the theory that the release of a solidary obligor (Dora Melancon and Hartford Accident and Indemnity Company), without an express reservation of rights, resulted in the release of USAA-CIC.

USAA-CIC's Motion for Summary Judgment was granted and Roy's suit was dismissed with prejudice. In his reasons, the trial judge found that USAA-CIC was a solidary obligor with Dora Melancon and her insurer and, because Roy did not reserve his rights against USAA-CIC in his settlement and release of Melancon and Hartford, he was barred from any recovery from USAA-CIC.

Plaintiff appealed the dismissal, contending that the release signed by him was restrictive and did not release other solidary obligors. The Third Circuit Court of Appeal affirmed the lower court's decision. 442 So.2d 1303 (La.App. 3 Cir.1983). Following that affirmance, we granted writs. 445 So.2d 430 (La.1984).

Both lower courts found this case controlled by Hoefly v. Government Employees Insurance Company, 418 So.2d 575 (La.1982) wherein we found the tortfeasor and UMI carrier were liable in solido, at least for the purpose of allowing an interruption of prescription. ¹ In this application, relator does not protest that there is no solidary obligation between the tortfeasor and the UMI carrier. The relator argues instead that the lower courts erred in concluding that the release of the solidary obligor did not contain a reservation of rights against USAA-CIC.

The release and settlement agreement executed by Roy, Melancon and Hartford Accident and Indemnity Company reads in pertinent part as follows:

For the sole consideration of $10,000.00, I/We Mr. Albert L. Roy, Jr., residing at 1721 N. Jake Street, Lake Charles, Louisiana, do hereby release, acquit and forever discharge Dora Melancon and Hartford Accident and Indemnity Company from any and all actions, causes of action, claims and demands, damages, costs, loss of services, expenses and compensation on account of or in any way growing out of any and all known and unknown personal injuries and property damage resulting or to result from an accident which occurred on or about January 8, 1981 and do hereby agree to indemnify and save harmless the said Dora Melancon and Hartford Accident and Indemnity Company from all further claims or demands, costs or expenses arising out of the injuries or damages sustained by me/us. It is further agreed that in the event other parties are responsible to me/us for damages as a result of this accident, the execution of this agreement shall operate as a satisfaction of my/our claim against such other parties to the extent of the pro-rata share of the parties herein. (emphasis provided)

It is the italicized portion of the release, above, that relator suggests expressly reserves his right to proceed against another co-debtor in solido (USAA-CIC here) for his damages in excess of the $10,000 settlement. We determine that the italicized portion has the effect of an express reservation against other co-debtors in solido under La.C.C. art. 2203 and the jurisprudence. USAA-CIC was not thereby released. Suit against USAA-CIC will therefore be allowed.

La.C.C. art. 2203 provides:

The remission or conventional discharge in favor of one of the codebtors in solido, discharges all the others, unless the creditor has expressly reserved his right against the latter.

In the latter case, he can not claim the debt without making a deduction of the part of him to whom he has made the remission. (emphasis provided)

Concerning what constitutes an express reservation of rights contained in a release under La.C.C. art. 2203, we said in Cusimano v. Ferrara, 170 La. 1044, 129 So. 630 at 632 (1930):

There is nothing sacramental about the form in which the reservation shall be made, and, since no one is presumed to renounce a right unless it clearly appears that he intended to do so, it follows that it suffices that the intention to reserve the right against codebtors may be inferred from any expression in the release of one codebtor which negatives the intent to release the other codebtors. (emphasis provided)

In Cusimano, there were involved seven indorsers on a note and two separate releases of two co-debtors. One release of one of the co-debtors (Paolo Nicolosi) was made "with full and complete reservation of all my rights against all of the judgment debtors in said suit." In the other release of one Vincenzo Nicolosi, plaintiff authorized as well the cancellation of a mortgage as to certain property of one V.S. Dantoni, but "in all other respects the said judgment is to remain in full force and effect." This Court concluded that these releases did not have the effect of releasing Dantoni, stating at 129 So. 630:

We consider all these expressions sufficient to express clearly an intention on the part of plaintiff not to abandon any rights which he had against the several codebtors; and a clearly expressed intention not to abandon a right is a clearly expressed intention to reserve it. (emphasis provided)

See also Honeycutt v. Town of Boyce, 341 So.2d 327 (La.1977) and the cases cited therein. 341 So.2d at 331.

Although this Court has not recently had to decide what manner of expression fits...