Succession of Fannaly v. Lafayette Ins. Co.
| Decision Date | 15 January 2002 |
| Docket Number | No. 2001-C-1144, No. 2001-C-1355, No. 2001-C-1360., No. 2001-C-1343 |
| Citation | 805 So.2d 1134 |
| Parties | SUCCESSION OF Virginia FANNALY, Mark Ainsworth, and Brett Ainsworth v. LAFAYETTE INSURANCE COMPANY, Doyle Brown, and All-state Insurance Company. |
| Court | Louisiana Supreme Court |
Ronald S. Macaluso, Macaluso & Jordan, Hammond, Counsel for Applicant in No. 2001-C-1144.
Terry A. Bell, Metairie, Robert C. Funderburk, Jr., Funderburk & Andrews, Baton Rouge, Carey J. Guglielmo, Baton Rouge, Gregory A. Dupuy, Metairie, Gordon J. McKernan, Joseph J. McKernan, Baton Rouge, Fred R. DeFrancesch, La Place, John H. Smith, Baton Rouge, Counsel for Respondent in No. 2001-C-1144.
Robert C. Funderburk, Jr., Funderburk & Andrews, Baton Rouge, Counsel for Applicant in No. 2001-C-1343.
Terry A. Bell, Metairie, Ronald S. Macaluso, Macaluso & Jordan, Hammond; Carey J. Guglielmo, Baton Rouge, Gregory A. Dupuy, Metairie, Gordon J. McKernan, Joseph J. McKernan, Baton Rouge, Fred R. DeFrancesch, La Place, John H. Smith, Baton Rouge, Counsel for Respondent in No. 2001-C-1343. Gordon J. McKernan, Joseph J. McKernan, John H. Smith, Baton Rouge, Counsel for Applicant in No. 2001-C-1355.
Robert C. Funderburk, Jr., Funderburk & Andrews, Baton Rouge; Terry A. Bell, Metairie, Ronald S. Macaluso, Macaluso & Jordan, Hammond; Carey J. Guglielmo, Baton Rouge, Gregory A. Dupuy, Metairie, Fred R. DeFrancesch, La Place, Counsel for Respondent in No. 2001-C-1355.
Terry A. Bell, Metairie, Counsel for Applicant in No. 2001-C-1360.
Gordon J. McKernan, Joseph J. McKernan, John H. Smith, Robert C. Funderburk, Jr., Funderburk & Andrews, Baton Rouge; Ronald S. Macaluso, Macaluso & Jordan, Hammond; Carey J. Guglielmo, Baton Rouge, Gregory A. Dupuy, Metairie, Fred R. DeFrancesch, La Place, Counsel for Respondent in No. 2001-C-1360.
These consolidated writs concern insurance coverage for alleged damages sustained in an automobile accident. The issue is whether a special purpose insurance policy issued by Lafayette Insurance Company (Lafayette) to Pat Tucker d/b/a Century 21 Pat Tucker Realty (Tucker) provided liability coverage for one of Tucker's real estate sales agents, Doyle Brown, and uninsured/underinsured motorists (UM) coverage for passengers in the Brown automobile, who also were real estate sales agents for Tucker. Finding the Lafayette policy neither provided liability coverage for Mr. Brown nor UM coverage for the passengers in the Brown automobile, we affirm.
On July 23, 1996, while traveling along Louisiana Highway 40 in Tangipahoa Parish, a 1994 Lincoln owned and operated by Mr. Brown was struck by a 1994 Ford truck with trailer owned and operated by Louis Genovese, Jr. Passengers in the Brown automobile included Virginia Fannaly, Ruby Thibodeaux, and Mary Mosley. Both Ms. Fannaly and Ms. Thibodeaux died shortly after the collision; Ms. Mosley was injured as a result of the collision.
Mr. Brown and his three passengers were real estate sales agents for Tucker with independent contractor agreements. On the morning of the accident, the four attended a sales meeting at Tucker's office and then toured homes for sale. They were en route to a house listed by another broker when the accident happened. Apparently, the accident occurred when Mr. Brown attempted to make a left turn into a private driveway.
Following the accident, plaintiffs, Succession of Virginia Fannaly, Mark Ainsworth, and Brett Ainsworth, filed this suit for declaratory judgment, naming as defendants Lafayette, Mr. Brown, and Allstate Insurance Company (Allstate).2 Plaintiffs sought a determination of whether the Lafayette policy issued to Tucker provided liability coverage for Mr. Brown and UM coverage for the passengers in the Brown automobile. Subsequently, Judy Beard and W.J. Holland, heirs of decedent Ms. Thibodeaux, intervened.
The district court found the Lafayette policy was ambiguous and, therefore, held the policy provided liability coverage for Mr. Brown and UM coverage for the passengers in the Brown automobile.3 Lafayette appealed the judgment to the First Circuit; none of the other parties appealed or answered the appeal. In an unpublished opinion, a split, five-judge panel of the First Circuit reversed in part and held that the Lafayette policy neither provided liability coverage for Mr. Brown nor UM coverage for the passengers in the Brown automobile.4 We granted writs to further consider the correctness vel non of the court of appeal's holding.5
The single issue before this court is whether the Lafayette policy provided liability coverage for Mr. Brown and UM coverage for the passengers in the Brown automobile.6 Before addressing this issue, we note the well-established, general rules of contract interpretation.
An insurance policy is an aleatory, nominate contract subject to the general rules of contract interpretation as set forth in our civil code. See LSA-C.C. arts.1912, 1914-15. The extent of coverage under an insurance contract is dependent on the common intent of the insured and insurer. See Ledbetter v. Concord General Corp., 95-0809 (La.01/06/96), 665 So.2d 1166, 1169
. Thus, when interpreting an insurance contract, courts must attempt to discern the common intent of the insured and insurer. See LSA-C.C. art. 2045.
In ascertaining the common intent of the insured and insurer, courts begin their analysis with a review of the words in the insurance contract. Words in an insurance contract must be ascribed their generally prevailing meaning, unless the words have acquired a technical meaning, in which case the words must be ascribed their technical meaning. See LSA-C.C. art.2047. Moreover, an insurance contract is construed as a whole and each provision in the contract must be interpreted in light of the other provisions. One provision of the contract should not be construed separately at the expense of disregarding other provisions. See LSA-C.C. art.2050; Peterson v. Schimek, 98-1712 (La.03/02/99), 729 So.2d 1024, 1029.
When the words of an insurance contract are clear and explicit and lead to no absurd consequences, courts must enforce the contract as written. See LSA-C.C. art.2046. Courts lack authority to alter the terms of an insurance contract under the guise of contractual interpretation when the contract's provisions are couched in unambiguous terms. See Louisiana Ins. Guar. Ass'n v. Interstate Fire & Cas. Co., 93-0911 (La.01/14/94), 630 So.2d 759, 764
. Indeed, the rules of contractual interpretation "do not authorize a perversion of the words or the exercise of inventive powers to create an ambiguity where none exists." See Peterson, 729 So.2d at 1029.
However, if an ambiguity remains after applying the general rules of contractual interpretation to an insurance contract, the ambiguous contractual provision is construed against the insurer who furnished the contract's text and in favor of the insured. See LSA-C.C. art.2056. With these general rules of contract interpretation in mind, we now turn to review the Lafayette policy at issue.
The Lafayette policy, entitled "Premises Commercial Uni-Saver Policy," is a special purpose policy issued to Pat Tucker d/b/a Century 21 Pat Tucker Realty. It provides limited automobile liability coverage for hired autos and non-owned autos by an endorsement entitled "Louisiana Hired Auto and Non-Owned Auto Liability." Plaintiffs and intervenors urge that liability coverage is provided under the "Non-Owned Auto Liability" provision of the endorsement.
Section B of the endorsement extends non-owned auto liability coverage "to `bodily injury' or `property damage' arising out of the use of a `non-owned auto' by any person other than [Tucker] in the course of [Tucker's] business." For purposes of non-owned auto liability coverage, Section D of the endorsement provides:
Section F of the endorsement defines "non-owned auto" as follows:
3. "Non-owned auto" means any "auto" [Tucker does] not own, lease, hire, rent or borrow which is used in connection with [Tucker's] business. This includes "autos" owned by [Tucker's] "employees",... partners or ... "executive officers",... but only while used in [Tucker's] business....
Plaintiffs and intervenors claim the Lafayette policy "is confusingly ambiguous and is reasonably interpreted in multiple ways." Specifically, they argue the policy is confusing and ambiguous because Section B of the endorsement provided liability coverage for bodily injury arising out of the use of a non-owned auto by any person, other than Tucker, in furtherance of Tucker's business, but the succeeding sections of the endorsement take away coverage. Plaintiffs and intervenors state: "Section D conflicts with Section B because Section B covers any person using a `non-owned auto' in the policyholder's business and then Section D takes that coverage away." We disagree with plaintiffs and intervenors, and find that the Lafayette policy is clear and unambiguous. Plaintiffs and intervenors focus merely on the insuring agreement, which broadly provides non-owned auto liability coverage for "`bodily injury' or `property damage' arising out of the use of a `non-owned auto' by any person other than [Tucker] in the course of [Tucker's] business." However, such a narrow focus is improper. In keeping with the well-established jurisprudence recited above, an insurance policy is construed as a whole and each provision in the policy must be interpreted in light of the other...
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