Sims v. Mulhearn Funeral Home, Inc.

• Citation: 956 So.2d 583
• Decision Date: 22 May 2007
• Docket Number: No. 2007-CA-0054.,2007-CA-0054.
• Parties: Helen C. SIMS v. MULHEARN FUNERAL HOME, INC. and Mulhearn Protective Insurance Company.
• Court: Supreme Court of Louisiana

956 So.2d 583

Helen C. SIMS v. MULHEARN FUNERAL HOME, INC. and Mulhearn Protective Insurance Company.

No. 2007-CA-0054.

Supreme Court of Louisiana.

May 22, 2007.

Breithaupt, Dunn, Dubos, Shafto & Wolleson, Walter C. Dunn, Jr., Gaudry, Ranson, Higgins & Gremillion, Daniel Aubry Ranson, Gretna, Charles C. Doti, Jr., Attorney General, David A. Young, Assistant Attorney General, for Appellant.

Diliberto & Kirin, Robert John Diliberto, New Orleans, Linda Suzanna Harang, Jefferson, Charles Shelby Norris, Jr, for Appellee.

James Houston Morgan, III, Baton Rouge, for Louisiana Insurers' Conference (LIC), Amicus Curiae.

Van Robinson Mayhall, III, Van Robinson Mayhall, Jr., Baton Rouge, and Michael Paul Fruge, for Louisiana Life and Health Insurance Guaranty Assn. (LLHIGA), Amicus Curiae.

Robert Thomas Myers, Metairie, for Louisiana Funeral Directors Association, Amicus Curiae.

Susie Morgan and Robert Reid Wood, Jr., for Kilpatrick Life Insurance Company, Amicus Curiae.

Crawford Allen Rose, III, for AARP, Amicus Curiae.

WEIMER, Justice.

This case is on direct appeal from a judgment declaring 2004 La. Acts No. 689, codified as LSA-R.S. 22:253(A), unconstitutional. We pretermit consideration of the constitutional issue because our review of the pleadings and evidence convinces us that consideration of the effect of Acts 2004, No. 689 is not necessary to decide this case, which can be resolved on the clear and unambiguous language of the insurance policies at issue. Further, upon conducting a de novo review of the pleadings and evidence, and finding no genuine issue of material fact and that the defendants are entitled to judgment as a matter of law, we reverse the judgment of the district court and grant summary judgment in favor of defendants.

FACTS AND PROCEDURAL HISTORY

During his lifetime, Claude Sims purchased two industrial life insurance policies¹ from Mulhearn Protective Insurance Company, both of which name his wife, Helen C. Sims, as beneficiary. The first policy was issued on January 24, 1958. This policy has a face amount of $500.00. It requires the payment of monthly premiums in the amount of $1.38 for twenty years, which Mr. Sims paid in full. The second policy was issued on September 1 1963. This policy also has a face amount of $500.00. It requires the payment of monthly premiums in the amount of $2.60 until Mr. Sims' death. As with the first policy, the premiums on this policy were paid in full. Both policies provide that upon the death of the insured, funeral benefits in the face amount of the policies will be furnished, which shall include the following: casket and outside case, burial garments if requested, preparation of body, funeral coach, arrangement and transportation of flowers, conducting of funeral, furnishing information to newspapers, cemetery equipment, chairs, use of funeral home, acknowledgment cards, candelabra and "Prie Dieu"² when desired.

Mr. Sims died on May 7, 2003. Shortly thereafter, his widow, Helen Sims, went to the funeral home operated by Mulhearn Funeral Home, Inc., the "Official Funeral Director" designated in the policies, to make arrangements for her late husband's funeral. Mrs. Sims presented the insurance policies to Mulhearn's funeral director, who explained that the combined maximum benefits available under the two policies was $1,000.00, which could be given to her as a credit toward the total cost of the funeral. Mrs. Sims expressed dissatisfaction with this explanation, being of the opinion that the policies provided for a full funeral service at no additional cost to the beneficiary. Nevertheless, she contracted with the funeral home to provide funeral services at a total cost of $5,998.39, reduced by the $1,000.00 in benefits paid by the insurance company.

On August 22, 2003, Mrs. Sims filed the instant lawsuit against Mulhearn Funeral Home, Inc. and Mulhearn Protective Insurance Company (hereinafter collectively referred to as "Mulhearn") seeking damages for breach of contract, breach of fiduciary duty, negligent misrepresentation, and negligent infliction of emotional and mental distress. The petition requests certification as a class action, filed on behalf of Mrs. Sims and all other persons or entities who are beneficiaries and/or heirs of deceased insureds who purchased insurance polices from Mulhearn providing that certain funeral benefits would be furnished by Mulhearn upon the death of the insured.

The Mulhearn defendants answered the petition, generally denying liability and asserting several affirmative defenses. The plaintiff, in turn, filed a motion for class certification. While this motion was pending, the Mulhearn defendants filed a motion for summary judgment seeking dismissal of plaintiff's claims on two grounds. First, the defendants argued that the policies issued to Mr. Sims plainly state that the benefits to be provided are subject to the $500.00 face amounts of insurance coverage shown in the policy schedules, and that, according to the clear and unambiguous language of the insurance contracts, defendants complied with their obligations under the policies by issuing plaintiff a credit of $1,000.00 toward the cost of the funeral. As support for this argument, and as an additional ground for relief, defendants cited to the provisions of LSA-R.S. 22:253(A), as amended by 2004 La. Acts No. 689. This statute provides:

A. (1) Every funeral policy shall state the dollar value of the funeral to be furnished and shall specify therein those benefits which shall constitute the funeral to be furnished. If upon the death of the insured, the dollar value of the funeral to be furnished, as stated in the policy or policies, is less than the retail price of the funeral benefits specified in the policy or policies, the beneficiary shall be entitled to a cash payment which shall be equal to one hundred percent of the face amount of the policy or policies.

(2) It is the intent of the legislature that under no circumstances shall an insurer be required to provide services or reimburse to a beneficiary at amounts greater than the stated dollar amount of the policy.

(3) The provisions of this Subsection are interpretive of Part VII of Chapter 1 of the Louisiana Insurance Code and are intended to explain the original intent.

(4) The provisions of this Subsection shall be applicable to all claims existing or actions pending on July 6, 2004 and all claims arising or actions filed on or after July 6, 2004. The provisions of this Paragraph shall not be construed to effect any claim arising from or involving any misrepresentation as to the terms and conditions of the policy by an insurer or its agent to the insured.

Defendants argued that both on the basis of the plain language of the insurance contracts and on the law as evidenced in the newly enacted statute, LSA-R.S. 22:253(A), they were entitled to summary judgment, dismissing plaintiff's claims.

Plaintiff responded to defendants' motion for summary judgment by filing a "Motion to Declare Louisiana Act 689 of 2004 Unconstitutional," asserting that the retroactive application of Act 689 to class action plaintiffs' claims contravenes the plaintiffs' due process guarantees by divesting them of their vested property rights in causes of action that accrued prior to the effective date of the Act.

On February 10, 2006, the district court conducted a hearing on defendants' motion for summary judgment, plaintiff's motion to declare Act 689 of 2004 unconstitutional and plaintiff's motion for class certification. Following that hearing, the court denied Mulhearn's motion for summary judgment for two reasons: 1) the motion was based primarily on Act 689, which the court expressly declared unconstitutional; and 2) disputed issues of material fact precluded summary judgment as a matter of law. On the issue of the constitutionality of Act 689 of 2004, the court ruled that retroactive application would divest plaintiff of vested contractual rights as beneficiary under her late husband's insurance policies, in violation of the due process and contract clauses of the United States and Louisiana constitutions. In examining the constitutional issue, the court found that the history of the amendments to LSA-R.S. 22:253(A) does not support the legislature's declaration that Act 689 is interpretive and, therefore, subject to retroactive application, and that the statute does not serve a public purpose such as would justify alteration of contractual expectations. Finally, the district court found that all of the requirements for class certification had been satisfied and granted plaintiff's motion seeking class certification. A judgment memorializing the court's rulings was signed on June 27, 2006. The judgment was certified as final pursuant to the provisions of LSA-C.C.P. art. 1915(B)(1).

The Mulhearn defendants suspensively appealed the district court judgment to this court, which has jurisdiction over the appeal pursuant to Article V, § 5(D)(1) of the Louisiana Constitution.³ By virtue of La. Const. art. V, § 5(F), that jurisdiction extends not only to the constitutional issue but to all issues ruled on by the district court.⁴ Cat's Meow, Inc. v. City of New Orleans Through Department of Finance, 98-0601, p. 16 (La.10/20/98), 720 So.2d 1186, 1198; Church Point Wholesale Beverage Co., Inc. v. Tarver, 614 So.2d 697, 700-701 (La.1993).

LAW AND ANALYSIS

Constitutional Issue

As a preliminary matter, we note the pleading which prompted plaintiff's challenge to the constitutionality of Act 689 was defendants' motion for summary judgment. A review of that motion and the arguments presented therein reveals the primary argument advanced by the defendants in support of their motion for summary judgment was one of contractual interpretation. The defendants argued that this case can be resolved within the four corners of the insurance contracts, and the language of the policies issued to Mr. Sims is clear and...