Opinion
CIVIL ACTION NO. 3:18-cv-01091-JWD-RLB
2020-03-12
Marnita SHEPERD v. Sanders E. WILLIS, Jr., Government Employees Insurance Company, Avis Budget Car Rental, L.L.C. and James River Insurance Company
Christopher T. Cascio, Dudley DeBosier Injury Lawyers, Baton Rouge, LA, for Marnita Sheperd. Stephen Dale Cronin, Schutte, Terhoeve, Richardson, Eversberg, Cronin, Judice &, Baton Rouge, LA, Floyd A. Buras, III, Law Office of Floyd Buras, LLC, Metairie, LA, for Sanders E. Willis, Jr., Government Employees Insurance Company. Lyon H. Garrison, Ebony Shadae Morris, Kevin Truxillo, Garrison, Yount, Forte & Mulcahy, LLC, New Orleans, LA, for James River Insurance Company.
Christopher T. Cascio, Dudley DeBosier Injury Lawyers, Baton Rouge, LA, for Marnita Sheperd.
Stephen Dale Cronin, Schutte, Terhoeve, Richardson, Eversberg, Cronin, Judice &, Baton Rouge, LA, Floyd A. Buras, III, Law Office of Floyd Buras, LLC, Metairie, LA, for Sanders E. Willis, Jr., Government Employees Insurance Company.
Lyon H. Garrison, Ebony Shadae Morris, Kevin Truxillo, Garrison, Yount, Forte & Mulcahy, LLC, New Orleans, LA, for James River Insurance Company.
RULING AND ORDER
JOHN W. deGRAVELLES, JUDGE
This matter comes before the Court on a Motion for Summary Judgment filed by Defendant, Avis Budget Rental, L.L.C. ("Budget"). (Doc. 13.) Defendants Government Employees Insurance Company ("GEICO") and Sanders E. Willis Jr. ("Mr. Willis") oppose this motion (Doc. 15), and Defendant James River Insurance ("JRI") (Doc. 16) along with Plaintiff Marnita Sheperd ("Sheperd") (Doc. 17) have joined GEICO in opposition to this motion (collectively, the "opposition" or "GEICO"). Avis has filed a reply brief in support of this motion. (Doc. 18.) Oral argument is not necessary. After careful consideration of the parties' arguments, the facts alleged, and the applicable law, and for the following reasons, the Motion to Dismiss (Doc. 13) is granted. FACTS
On November 23, 2017 an auto collision occurred between a 2017 Chevrolet Impala owned by Budget and driven by Mr. Willis and a 2015 Chevrolet Sonic driven by Sheperd. (Doc. 1-1 at ¶ 2-4; Doc. 9, ¶ 2-3.) The collision occurred on Starling Lane near where it intersects with High Point Road in Baton Rouge, Louisiana. (Doc. 1-1 at ¶ 3-4; Doc. 9, ¶ 3.) On November 16, 2017, Mr. Willis rented a 2017 Chevrolet Impala bearing license plate number FL GVYX27, from Budget pursuant to Budget Rental Agreement number 785052236 ("Agreement"). (Doc. 13-2 at 1; Doc. 15-1 at 1.) Mr. Willis electronically signed the Agreement and acknowledged the terms of the Agreement under the language "I have reviewed & agreed to all notices & terms here and in the rental jacket." (Doc. 13-6 at 1.)
Paragraph 21 of the Agreement shows 2017 Chevrolet Impala with license plate FL GVYX27 was insured by Budget. Paragraph 21 states:
Liability Protection. Anyone driving the car who is permitted to drive it by this agreement will be protected against liability for causing bodily injury or death to others or damaging the property of someone other than the authorized driver and/or the renter up to the minimum financial responsibility limits required by the law of the jurisdiction in which the accident occurs.
(Doc. 13-7 at 1.) Paragraph 21 goes on to condition the minimum financial security provided by Budget; stating, "[e]xcept where required by law to be primary or excess, any protection provided by us shall be secondary to, and not in excess of, any applicable insurance available to you, or any other driver, from any other source, whether primary, excess, secondary or contingent in any way. " (Id. (emphasis in original).) Paragraph 22 of the Agreement defines SLI coverage:
SLI provides protection for third party automobile claims for the difference between the minimum financial responsibility limits provided under paragraph 21 ... and a maximum combined single limit of liability of $1,000,000 or $2,000,000 .... This coverage is provided under a policy of excess liability insurance ... and is subject to all of the conditions and limitations described in paragraph 21[.]
(Doc. 13-7 at 1.) Mr. Willis declined to purchase optional supplemental liability insurance ("SLI") when he rented the car. (Doc. 13-2 at 2; Doc. 13-6 at 1; Doc. 15-1 at 2.)
Mr. Willis was covered by GEICO, which issued policy number 0510-93-36-09, which was in force and effect during the relevant period. (Doc. 13-2 at 2; Doc. 15-1 at 2.)
APPLICABLE STANDARD
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). If the mover bears his burden of showing that there is no genuine issue of fact, "its opponent must do more than simply show that there is some metaphysical doubt as to the material facts .... [T]he nonmoving party must come forward with ‘specific facts showing that there is a genuine issue for trial.’ " See Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586–87, 106 S. Ct. 1348, 89 L.Ed.2d 538 (1986) (internal citations omitted). The non-mover's burden is not satisfied by "conclusory allegations, by unsubstantiated assertions, or by only a ‘scintilla’ of evidence." Little v. Liquid Air Corp. , 37 F.3d 1069, 1075 (5th Cir. 1994) (citations and internal quotations omitted). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’ " Matsushita Elec. Indus. Co. , 475 U.S. at 587, 106 S.Ct. 1348. Further:
In resolving the motion, the court may not undertake to evaluate the credibility of the witnesses, weigh the evidence, or resolve factual disputes; so long as the evidence in the record is such that a reasonable jury drawing all inferences in favor of the nonmoving party could arrive at a verdict in that party's favor, the court must deny the motion.
International Shortstop, Inc. v. Rally's, Inc. , 939 F.2d 1257, 1263 (5th Cir. 1991).
DISCUSSION
a. Parties' arguments
1. Budget's arguments
Budget argues that the Court should apply Louisiana law in this diversity case. (Doc. 13-1 at 3.) Budget maintains that under Louisiana law, a rental car company is required to maintain financial security on all rental vehicles that meets the requirements of the Louisiana Motor Vehicle Safety Responsibility Law. (Doc. 13-1 at 3 (citing La. R.S. 22:1296(B) ).) Budget maintains that Louisiana Revised Statute 22:1296(B) contains specific statutory exceptions wherein the rental company's obligation to provide financial security does not apply; specifically, that a rental company is "relieved of any security obligation under [Louisiana Law] when the renter or driver has valid and collectible insurance ..." (Doc. 13-1 at 3-4 (quoting La. R.S. 22:1296(B) ).)
Budget asserts that Paragraph 21 of the Agreement sets forth the minimum financial security in accordance with Louisiana law that Budget provides for renters who: (1) did not purchase the optional SLI coverage; and (2) are not covered by other liability insurance. (Doc. 13-1 at 4.) Budget points out that because Mr. Willis did not purchase the optional SLI coverage and was covered by GEICO's valid and collectible insurance, under the terms of the rental agreement it is not obligated to provide liability coverage to Mr. Willis. (Doc. 13-1 at 5.)
2. GEICO's response
GEICO responds that Paragraph 21 of the Agreement is ambiguous because it does not clearly condition the minimum financial security coverage on the purchase of the optional SLI coverage. (Doc. 15 at 3.) GEICO states that Paragraph 21 does not mention the optional SLI coverage or in any way condition the applicably of the minimum financial security on the purchase of the optional SLI coverage. (Doc. 15 at 3-4.) GEICO further maintains that Paragraph 22 details that SLI is an optional coverage that supplements the coverage provided under Paragraph 21. (Doc. 15 at 4.) Therefore, GEICO reasons that the only way to read Paragraph 21 and 22 in harmony is that the Agreement provides "minimum limits of liability coverage to the renter, regardless of the purchase (or lack thereof) of supplemental liability insurance under Paragraph 22." (Doc. 15 at 5.) Therefore, GEICO maintains that Mr. Willis should be afforded the minimum financial security under Paragraph 21, even though he did not purchase the optional SLI coverage. (Doc. 15 at 5.)
GEICO also objects to affiant Vincent J. Moffa's conclusions as inadmissible affidavit testimony because they are legal conclusions, not facts to be considered by the Court. The Court does not rely on Mr. Moffa's legal conclusions in ruling on the Motion.
3. Budget's reply
In reply, Budget states that GEICO's argument that misinterprets its argument. (Doc. 18 at 1.) Budget sets out that:
There are only two ways that Avis Budget provides liability protection to a renter, and they are independent of each other. One way Avis Budget provides liability protection is if the renter purchases SLI. The other way Avis Budget provides liability protection is if the renter does not purchase SLI and has no applicable insurance, Avis Budget provides liability protection up to the state minimum limits as stated in Paragraph 21 of the Rental Agreement Terms and Conditions.
( Id. ) Because Mr. Willis did not purchase the optional SLI coverage and has applicable insurance, Budget argues the Agreement does not provide liability protection to Mr. Willis. (Doc. 18 at 1-2.)
b. Analysis
1. Louisiana law mandates minimum financial security for rental cars with certain statutory exceptions.
Louisiana Revised Statute 22:1296(B) requires that rental companies maintain minimum financial security on all vehicles in their inventory and sets out statutory exceptions for when a rental company is relieved of its obligation to provide the minimum financial security. Louisiana Revised Statute 22:1296(B) states:
A rental company ... shall maintain security on all rental vehicles meeting the requirements of the Motor Vehicle Safety Responsibility Law, R.S. 32:851 et seq., as follows:
(1) Such security maintained by the rental company shall apply only when there is no other valid or collectible insurance or other form of security meeting the minimum financial responsibility requirements under the Motor Vehicle Safety Responsibility Law.
(2) Notwithstanding a rental company's obligation to provide minimum financial responsibility pursuant to the Motor Vehicle Safety Responsibility Law ... a rental company shall be relieved of any security obligation under the Motor Vehicle Safety Responsibility Law when the renter or driver has valid and collectible insurance ... when the claimant maintains uninsured or underinsured motorist coverage for bodily injury or property damage claims, or when the renter violates the terms or conditions of the rental agreement.
(3) Nothing in this Section shall be construed:
(a) To limit or restrict a rental company from providing by contract that the renter or driver shall assume responsibility for satisfying any and all duties and obligations for claims under the Motor Vehicle Safety Responsibility Law provided that the renter or driver has valid and collectible insurance, ... which financial responsibility protection provided to the renter or driver shall be primary.
Budget argues that under this statutory scheme, Budget must provide minimum financial security "only when there is no other valid or collectible insurance or other form of security meeting the minimum financial responsibility requirements under the Motor Vehicle Safety Responsibility Law." La. R.S. 22:1296(B)(1). The Court agrees that Louisiana law does not require rental companies to provide minimum financial security if the renter or driver has valid and collectible insurance. See Vickers v. PV Holding Corp. , 394 F. Supp. 3d 648, 652 (W.D. La. 2019) (" LSA-R.S. 22:1296 governs the specific obligations of a rental car company under the broader, omnibus coverage requirements of the Louisiana Motor Vehicle Safety Responsibility Law, LSA-R.S. 22:1296 (B) provides that a rental car company ‘shall maintain security on all rental vehicles meeting the requirements of the Motor Vehicle Safety Responsibility Law....’ This obligation, however, is extinguished if ‘the renter or driver has valid and collectible insurance,’ or if ‘the renter violates the terms and conditions of the rental agreement.’ LSA-R.S. 22:1296 (B)(2).") Further, the Court notes that Louisiana Revised Statute 22:1296(B)(3) allows rental companies to
provid[e] by contract that the renter or driver shall assume responsibility for satisfying any and all duties and obligations for claims under the Motor Vehicle Safety Responsibility Law provided that the renter or driver has valid and collectible insurance, ... which financial responsibility protection provided to the renter or driver shall be primary.
La. R.S. 22:1296(B)(3). The Court therefore turns to the Agreement and whether there is any ambiguity in the Agreement regarding the minimum financial security coverage.
2. The Agreement is not ambiguous
GEICO argues that Paragraph 21 of the Agreement is ambiguous because it does not clearly condition the minimum financial security coverage on the purchase of the optional SLI coverage. (Doc. 15 at 3.) Budget replies that GEICO's argument misconstrues its position that minimum financial security is only provided if the renter did not purchase the optional SLI coverage and does not have other valid and applicable insurance. (Doc. 18 at 1-2.) The Court agrees with Budget.
As set forth by the Fifth Circuit, "[t]he interpretation of a contract ... is a question of law[.]" McLane Foodservice, Inc. v. Table Rock Rest., L.L.C. , 736 F.3d 375, 377 (5th Cir. 2013) ; see also EOG Res., Inc. v. Chesapeake Energy Corp. , 605 F.3d 260, 264 (5th Cir. 2010) ("The interpretation of a contract is a matter of law...."); Huggs, Inc. v. LPC Energy, Inc. , 889 F.2d 649, 651 (5th Cir. 1989.) Further, the Fifth Circuit has also concluded "[t]he ambiguity of a contract is a legal question." Dore Energy Corp. v. Prospective Inv. & Trading Co. , 570 F.3d 219, 225 (5th Cir. 2009) (citing Sims v. Mulhearn Funeral Home, Inc. , 956 So.2d 583, 590 (La. 2007).) Therefore, "[i]f the answer to the legal question of ambiguity is in the negative, then interpreting that unambiguous contract is also a legal issue for the court." Id. (citing Tex. E. Transmission Corp. v. Amerada Hess Corp. , 145 F.3d 737, 741 (5th Cir. 1998).)
Under Louisiana law, "[c]ontracts have the effect of law for the parties[.]" La. Civ. Code art. 1983. "Interpretation of a contract is the determination of the common intent of the parties." La. Civ. Code art. 2045. "When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties' intent." La. Civ. Code art. 2046. "Under this Article, when a clause in a contract is clear and unambiguous, the letter of that clause should not be disregarded under pretext of pursuing its spirit." Id. , cmt. (b) (citing Maloney v. Oak Builders, Inc. , 256 La. 85, 235 So. 2d 386 (1970) ). "The words of a contract must be given their generally prevailing meaning." La. Civ. Code art. 2047. "Words of art and technical terms must be given their technical meaning when the contract involves a technical matter." Id. "Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole." La. Civ. Code art. 2050.
Turning to the Agreement, Paragraph 21 sets out in relevant part:
Liability Protection. Anyone driving the car who is permitted to drive it by this agreement will be protected against liability for causing bodily injury or death to others or damaging the property of someone other than the authorized driver and/or the renter up to the minimum financial responsibility limits required by the law of the jurisdiction in which the accident occurs. The limit for bodily injury sustained by any one person includes any claim for loss of that person's consortium or services. Where the law extends this protection to a non-permitted driver, the same limits will apply. Except where required by law to be primary or excess, any protection provided by us shall be secondary to, and not in excess of, any applicable insurance available to you, or any other driver, from any other source, whether primary, excess, secondary or contingent in any way.
(Doc. 13-7 at 1 (emphasis in original).) The plain language of Paragraph 21 sets out that Budget will provide minimum financial security coverage as required by Louisiana law, only if the driver does not have other valid and applicable insurance. As discussed above, Louisiana law permits rental companies to contractually limit the minimum financial security coverage when a driver has other valid and applicable insurance. Jones ex rel. Jones v. Canal Ins. Co. , No. 06-2166, 2008 WL 2466215, at *4 (W.D. La. June 18, 2008) (explaining that La R.S. 22:1296, "automatically exclud[es] rental vehicle insurance coverage where the renter or driver has other insurance coverage.").
The clause in Paragraph 21 that states "Except where required by law to be primary or excess, any protection provided by us shall be secondary to, and not in excess of, any applicable insurance available to you ... whether primary, excess, secondary or contingent in any way" does not create an ambiguity in the Agreement under Louisiana law. The plain language of this clause states that when required by law to be primary, Budget agrees to be responsible for the minimum financial security. Budget Rent A Car Sys., Inc. v. Shea , No. 617CV993ORL41GJK, 2018 WL 6266522, at *5 (M.D. Fla. Nov. 6, 2018) ("That paragraph goes on to explain that ‘[e]xcept where required by law to be primary, any protection provided by [Budget] shall be secondary to, and not in excess of, any applicable insurance available to you, or any other driver, from any other source, whether primary, excess, secondary or contingent in any way.’ In other words, Budget is agreeing in this paragraph to be liable up to the minimum financial responsibility limits with the caveat that such coverage is only primary where required by law.") (internal citations omitted). As previously explained, Louisiana law does not require rental companies' minimum financial security to be primary and La. R.S. 22:1296(B) declares that the minimum financial security will only apply if there is no other applicable insurance.
GEICO's argument that Paragraph 22 creates an ambiguity in the Agreement is likewise not persuasive. Paragraph 22 states in relevant part,
If you elect to purchase SLI, coverage will be provided to you and any authorized driver under an excess automobile policy issued to Budget. SLI provides protection for third party automobile claims for the difference between the minimum financial responsibility limits provided under paragraph 21 above and a maximum combined single limit of liability of $1,000,000 or $2,000,000 depending on the jurisdiction of rental for bodily injury, death or property damage for each accident. This coverage is provided under a policy of excess liability insurance more fully described in the available
brochure and is subject to all of the conditions and limitations described in paragraph 21 above, except that notwithstanding anything contained in this agreement, the terms of the policy will at all times control.
(Doc. 13-7 at 1.) The plain language of Paragraph 22 begins "[i]f you elect to purchase SLI," which shows that Paragraph 22 applies only when SLI is purchased. Further, the phrase "[all coverage] is subject to all of the conditions and limitations described in [P]aragraph 21 above," demonstrates Budget's intent for Paragraph 21 to act as the independent operative provision to set out Budget's minimum financial responsibility coverage. Therefore, the Court finds that nothing in Paragraph 22 creates an ambiguity as to the extent and exceptions for Budget's responsibility for minimum financial security and regardless of the contractual provisions of Paragraph 22, it does not apply in this case, as Mr. Willis did not purchase the optional SLI coverage.
Therefore, the Agreement unambiguously sets out that Budget is not responsible for providing minimum financial security when a driver has other valid and applicable insurance. (Doc. 13-7.) Louisiana Revised Statute 22:1296(B) allows a rental company to escape liability through contract and further provides that as a matter of law the "[minimum financial] security maintained by the rental company shall apply only when there is no other valid or collectible insurance." Mr. Willis was driving the car at the time of the collision and he had valid and applicable insurance coverage through GEICO. (Doc. 1-1, ¶ 3; Doc. 9, ¶ 3.) The Court will therefore grant the Motion because Budget did not provide liability protection to Mr. Willis in connection with this accident.
CONCLUSION
Accordingly,
IT IS ORDERED that Avis Budget Car Rental, LLC's Motion for Summary Judgment (Doc. 13) is GRANTED ;
IT IS FURTHER ORDERED that all claims against Avis Budget are DISMISSED WITH PREJUDICE.