Opinion
NO. 2012 CA 0221
09-21-2012
WILBUR J. BABIN, JR., CHAPTER 7 TRUSTEE FOR THE BANKRUPTCY ESTATE OF CYNTHIA A. DICK AND CYNTHIA A. DICK v. GEICO CASUALTY COMPANY AND JOHN D. ADDITON
Christopher T. Lee Lafayette, LA Attorney for Plaintiffs-Appellants, Wilbur J. Babin, Jr., Chapter 7 Trustee for the Bankruptcy Estate of Cynthia A. Dick and Cynthia A. Dick John J. Erny, III Metairie, LA Attorney for Defendant-Appellee, Progressive Security Insurance Company
NOT DESIGNATED FOR PUBLICATION
On Appeal from the
17th Judicial District Court,
In and for the Parish of Lafourche,
State of Louisiana
Trial Court No. 114131
Honorable A. Bruce Simpson, Judge Presiding
Christopher T. Lee
Lafayette, LA
Attorney for Plaintiffs-Appellants,
Wilbur J. Babin, Jr., Chapter 7 Trustee for
the Bankruptcy Estate of Cynthia A. Dick
and Cynthia A. Dick
John J. Erny, III
Metairie, LA
Attorney for Defendant-Appellee,
Progressive Security Insurance Company
BEFORE: WHIPPLE, McCLENDON, AND HIGGINBOTHAM, JJ. HIGGINBOTHAM , J.
This appeal involves cross-motions for summary judgment on a question of law as to whether a commercial auto insurance policy provided uninsured motorist (UM) coverage for the named insured's employee, who was injured in an accident while driving her personal vehicle in the course of her employment. For the reasons that follow, we find that the policy does not provide UM coverage in this case, and we affirm the trial court's judgment.
FACTS AND PROCEDURAL HISTORY
On February 5, 2009, Cynthia A. Dick was involved in an automobile accident, when an alleged uninsured driver rear-ended her while she was driving her personal vehicle in the course of her employment with Hub Enterprises, Inc. (Hub). Progressive Security Insurance Company (Progressive) issued a commercial auto liability policy to Hub, supposedly with a rejection of UM coverage; however, the waiver of UM coverage form on behalf of Hub has never been produced. After an initial petition for damages was filed, Progressive was added as a defendant in an amended petition, alleging that Progressive provided UM coverage for the benefit of Ms. Dick.
Because Ms. Dick and her husband filed bankruptcy after the accident, the trustee for the bankruptcy court, William A. Babin, Jr., actually filed Ms. Dick's personal injury suit on behalf of Ms. Dick and her estate. Although the trustee is an additional party plaintiff along with Ms. Dick, throughout this opinion we simply refer to the plaintiff as Ms. Dick. Further, Ms. Dick initially named her UM carrier, Government Employees Insurance Company (GE1CO), as a defendant, but GEICO was later dismissed after a settlement.
Progressive answered and filed a motion for summary judgment on the grounds that even though Progressive could not locate Hub's UM waiver form, the policy did not afford UM coverage for Ms. Dick because her personal vehicle was not an "insured auto" as defined by the policy. The trial court denied the motion, and as a result, Ms. Dick then moved for summary judgment, seeking to confirm that Progressive's policy issued to Hub provided UM coverage in her favor. Ms. Dick relied on the UM coverage endorsement and an employers' non-ownership liability endorsement that modified the definition of "insured auto" in the policy, purportedly to include a non-owned auto used by an employee in Hub's business.
In response, Progressive filed a cross-motion for summary judgment on the UM coverage issue, again urging that Ms. Dick was not afforded UM coverage under the policy because her personal vehicle was not considered an "insured auto" since it was not specifically described on the declarations page of the policy issued to Hub. Thus, Progressive argued that Ms. Dick was not an insured as defined by the policy. Progressive also maintained that Ms. Dick was relying on a non-ownership endorsement in the policy that was limited to the liability section of the policy. Progressive further relied on Halphen v. Borja, 2006-1465 (La. App. 1st Cir. 5/4/07), 961 So.2d 1201, 1212, writ denied, 2007-1198 (La. 9/21/07), 964 So.2d 338, where this court found that a similarly-situated plaintiff in his personal vehicle was not entitled to UM coverage under his employer's policy, because he was not driving a vehicle that was specifically listed in the policy.
On December 5, 2011, the trial court rendered and signed a judgment granting Progressive's motion and denying Ms. Dick's motion, thereby dismissing Progressive from the lawsuit with prejudice. Ms. Dick appealed, arguing in one assignment of error that the trial court erred when it failed to find that Progressive provided UM coverage for the benefit of Ms. Dick while she was driving her personal vehicle.
STANDARD OF REVIEW
The law applicable to review a grant or denial of a motion for summary judgment, and to the proper interpretation of an insurance policy, was reiterated by the Supreme Court in Huggins v. Gerry Lane Enterprises, Inc., 2006-2816 (La. 5/22/07), 957 So.2d 127, 128-129, quoting Bonin v. Westport Ins. Corp., 2005-886 (La. 5/1/06), 930 So.2d 906, 910-911, as follows:
A motion for summary judgment will be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact and that mover is entitled to judgment as a matter of law." La. C.C.P. art. 966(B). This court reviews a grant or denial of a motion for summary judgment de novo[.] Thus, this court asks the same questions as does the trial court in determining whether summary judgment is appropriate: whether there is any genuine issue of material fact, and whether the mover is entitled to judgment as a matter of law.Huggins, 957 So.2d at 128-129 (quoting Bonin, 930 So.2d at 910-911).
Interpretation of an insurance policy usually involves a legal question which can be resolved properly in the framework of a motion for summary judgment. An insurance policy is a contract between the parties and should be construed using the general rules of interpretation of contracts set forth in the Civil Code. The judicial responsibility in interpreting insurance contracts is to determine the parties' common intent. La. C.C. art. 2045[.] Words and phrases used in an insurance policy are to be construed using their plain, ordinary and generally prevailing meaning, unless the words have acquired a technical meaning. La. C.C. art. 2047.
An insurance policy should not be interpreted in an unreasonable or a strained manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion. Unless a policy conflicts with statutory provisions or public policy, it may limit an insurer's liability and impose and enforce reasonable conditions upon the policy obligations the insurer contractually assumes.
If after applying the other general rules of construction an ambiguity remains, the ambiguous contractual provision is to be construed against the insurer and in favor of coverage. Under this rule of strict construction, equivocal provisions seeking to narrow an insurer's obligation are strictly construed against the insurer. That strict construction principle, however, is subject to exceptions. One of these exceptions is that the strict construction rule applies only if the ambiguous policy provision is susceptible to two or more reasonable interpretations. For the rule of strict construction to apply, the insurance policy must be not only susceptible to two or more interpretations, but each of the alternative interpretations must be reasonable. [Case citations omitted.]
DISCUSSION
Although Louisiana's public policy strongly favors UM coverage and a liberal construction of the UM statute, it is well-settled that a person who does not qualify as an "insured" for liability coverage under a policy of insurance is not entitled to UM coverage under the policy. Halphen, 961 So.2d at 1205-1206. Furthermore, limitations on UM coverage are valid where they are authorized by statute. Halphen, 961 So.2d at 1206. For instance, even if a person is an "insured" for liability coverage, if the policy under which the insured claims UM coverage describes specific motor vehicles, the UM coverage does not apply to bodily injury of such an insured while occupying a motor vehicle owned by that particular insured unless that motor vehicle is described in the policy under which the claim is made. See La. R.S. 22:1295(l)(e); Halphen, 961 So.2d at 1206.
The starting point for interpreting an insurance policy is an examination of the relevant policy provisions. Halphen, 961 So.2d at 1206. The declaration page of the policy at issue lists the named insured as Hub and includes a list of "rated drivers." Ms. Dick is not listed. The declaration page also contains a schedule of covered autos that does not include Ms. Dick's personal vehicle. The policy defines "insured" for liability purposes to mean "[y]ou [referring to the named insured, Hub] with respect to an insured auto." The policy provisions, with respect to UM coverage, provide as follows:
The general definitions section of Progressive's policy states that, "[y]ou", "your", and "yours" refer to "the named insured shown on the Declarations Page."
UNINSURED/UNDERINSURED
MOTORIST COVERAGE ENDORSEMENT
Except as specifically modified in this endorsement, all provisions of the Commercial Auto Policy apply.
We agree with you that the insurance provided under your Commercial Auto Policy is modified as follows:
INSURING AGREEMENT — UNINSURED/UNDERINSURED MOTORIST BODILY INJURY COVERAGE
Subject to the Limits of Liability, if you pay the premium for Uninsured/Underinsured Motorist Bodily Injury Coverage, we will pay for damages which an insured is legally entitled to recover from the owner or operator of an uninsured auto because of bodily injury:
1. sustained by an insured;
2. caused by an accident; and
3. arising out of the ownership, maintenance, or use of an uninsured auto.
* * *
ADDITIONAL DEFINITIONS
When used in this endorsement, whether in the singular, plural, or possessive:
1. "Insured" means:
* * *
b. if the named insured shown on the Declarations Page is a corporation, partnership, organization or any other entity that is not a natural person:
(i) any person occupying your insured auto or temporary substitute auto; and
(ii) any person who is entitled to recover damages covered by this endorsement because of bodily injury sustained by a person described in (i) above.
* * *
Since the named insured (Hub) is a corporation, the UM endorsement clearly indicates that in order for "any person" to be an insured, they must be occupying "your insured auto" or a "temporary substitute auto." It is undisputed that Ms. Dick's personal vehicle was not a temporary substitute auto for Hub. Furthermore, the general definition section of Progressive's policy provides that "your insured auto" means "[a]ny auto specifically described on the Declarations Page, unless you have asked us to delete that auto from the policy." The record reflects that Ms. Dick's personal vehicle was not listed or specifically described on the declarations page of the policy. Thus, Ms. Dick was not occupying an insured auto at the time of the accident and she is not considered an insured under the policy for UM purposes. The Progressive policy unambiguously limits UM coverage to those persons occupying vehicles specifically listed on the policy's declarations page.
Ms. Dick contends, however, that Progressive's policy provides UM coverage due to another endorsement that modifies and expands the general definition of "insured auto" in a section titled "EMPLOYERS' NON- OWNERSHIP LIABILITY ENDORSEMENT." We disagree with Ms. Dick's interpretation of that particular endorsement. The referenced endorsement specifically provides:
The declarations page of Progressive's policy provided that the policy in effect at the time of Ms. Dick's accident was modified by Form 1890 (06/04), known as the Employers' Non-Ownership Liability Endorsement.
EMPLOYERS' NON-OWNERSHIP LIABILITY
ENDORSEMENT
Except as specifically modified in this Endorsement, all provisions of the Commercial Auto Policy apply.
We agree with you that the insurance provided under your Commercial Auto Policy is modified as follows:
ADDITIONAL DEFINITION USED IN THIS ENDORSEMENT
When used in this Endorsement, non-owned auto means an auto that you do not own, lease, hire, rent, or borrow, and that is used in connection with your business. This includes autos owned by your employees, partners (if you are a partnership), members (if you are a limited liability company), or members of their households but only while used in your business.
CHANGES TO PART I — LIABILITY TO OTHERS
The definition of insured auto is modified to include a non-owned auto when you or any of your employees use the non-owned auto in your business.
EXCLUSIONS
The insurance provided by this Endorsement does not apply to bodily injury or property damage arising out of the ownership, maintenance or use of any non-owned auto in the conduct of any partnership or joint venture of which you are a partner or member and which is not shown as the named insured on the Declarations Page.
* * *
ALL OTHER TERMS, LIMITS AND PROVISIONS OF THE POLICY REMAIN UNCHANGED.
The employer's non-ownership liability endorsement modifying the definition of an "insured auto" is expressly and unambiguously limited to Part 1 of the policy, which is the "LIABILITY TO OTHERS" section. This endorsement does not apply to the UM endorsement provisions in Progressive's policy. Accordingly, the UM endorsement section of Progressive's policy is not expanded beyond the general definition of "insured auto," which requires that the vehicle be specifically described on the declarations page of the policy. We reiterate, that Ms. Dick's personal vehicle is not described on the declarations page; therefore, UM coverage is not applicable in this case. Insurers have the right to limit coverage in any manner desired, so long as the limitations are clearly and unambiguously set forth in the contract and are not in conflict with statutory provisions or public policy. Anderson v. State Farm Fire & Cas. Ins. Co., 2010-0036 (La. App. 1st Cir. 7/16/10), 42 So.3d 1140, 1144.
Ms. Dick further submits that UM coverage is statutorily mandated since there is no evidence of Hub's waiver of UM coverage. Ms. Dick relies on La. R.S. 22.T295(l)(a)(i), providing in pertinent part: "No automobile liability insurance covering liability ... shall be delivered ... unless [UM] coverage is provided therein ... for the protection of persons insured thereunder." The requirement that there be UM coverage is an implied amendment of any automobile liability policy, as UM coverage will be read into the policy unless validly rejected. Roger v. Estate of Moulton, 513 So.2d 1126, 1130 (La. 1987). The record contains no evidence of a valid UM waiver form. Progressive acknowledges that while Ms. Dick is covered for liability purposes pursuant to the above-referenced employers' non-ownership liability endorsement, she is not covered for UM purposes notwithstanding the absence of a UM waiver, because her personal vehicle was not specifically listed on the declarations page of her employers' policy. Additionally, Progressive argues that there are exceptions to the general rule that if someone is covered for liability purposes they must be covered for UM. UM coverage is ultimately determined not only by contractual provisions, but also by applicable statutes. Roger, 513 So.2d at 1130.
All liability insurance policies issued in Louisiana are required to offer UM coverage in an amount equal to liability coverage absent an express waiver or reduction in UM coverage. Anderson, 42 So.3d at 1144.
Progressive relies on a statutory exception found in the statute governing UM coverage in Louisiana. La. R.S. 22:1295. Louisiana Revised Statutes 22:1295(1)(e), provides in pertinent part:
The uninsured motorist coverage does not apply to bodily injury, sickness, or disease, including the resulting death of an insured, while occupying a motor vehicle owned by the insured if such motor vehicle is not described in the policy under which a claim is made, or is not a newly acquired or replacement motor vehicle covered under the terms of the policy. This provision shall not apply to uninsured motorist coverage provided in a policy that does not describe specific motor vehicles. (Emphasis added.)
As Progressive correctly points out, this court has previously interpreted this statutory exception in a factually similar case, where after a thorough review of the relevant jurisprudence, we determined that UM coverage was clearly precluded for an employee occupying his own vehicle when that personal vehicle was not specifically listed/described in the employer's policy. See Halphen, 961 So.2d at 1211-1212. In Halphen, as in the case sub judice, the injured plaintiff claimed UM coverage under a policy covering vehicles owned by an employer, not the plaintiff, and for which the plaintiff did not pay premiums for liability or UM coverage. See Halphen, 961 So.2d at 1209. We conclude that the reasoning and holding of Halphen applies to this case and, along with the clear statutory exception found in La. R.S. 22:1295(l)(e), supports the trial court's ruling that Ms. Dick is not covered while driving her personal vehicle under the UM portion of Progressive's policy. Thus, even assuming that Ms. Dick would be considered an insured under the employers' non-ownership liability endorsement in Progressive's
The relevant provision in the UM statute at the time that Halphen was decided was La. R.S. 22:680(l)(e). This provision was reenacted and redesignated as La. R.S. 22:1295(l)(e) by Acts 2008, No. 415, § 1, effective January 1, 2009, in a new format and number scheme without changing the substance of the provisions. Acts 2010, No. 703, § 1, effective January 1, 2011, amended and reenacted La. R.S. 22:1295(l)(e). The minor changes in the amended language do not affect our interpretation or analysis of the statutory exception.
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policy, the statutory exception specifically excludes the mandatory UM coverage for bodily injury of an insured while occupying a personal vehicle owned by the insured, but not particularly described in the insurance policy. Ms. Dick's assignment of error is without merit.
CONCLUSION
For the stated reasons, the trial court judgment denying Ms. Dick's motion for summary judgment, granting Progressive's cross-motion for summary judgment and dismissing Progressive from the suit is affirmed. All costs of this appeal are assessed to plaintiffs/appellants, Wilbur J. Babin, Jr., Chapter 7 Trustee for the Bankruptcy Estate of Cynthia A. Dick and Cynthia A. Dick.
AFFIRMED.