Aisole v. Dean

574 So. 2d 1248, 1991 WL 9776
CourtSupreme Court of Louisiana
DecidedJanuary 28, 1991
Docket90-C-1057
StatusPublished
Cited by91 cases

This text of 574 So. 2d 1248 (Aisole v. Dean) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aisole v. Dean, 574 So. 2d 1248, 1991 WL 9776 (La. 1991).

Opinion

574 So.2d 1248 (1991)

Alanie AISOLE, et al.
v.
Alice DEAN, et al.

No. 90-C-1057.

Supreme Court of Louisiana.

January 28, 1991.

*1249 Lolis Edward Elie and John L. Dorsey, New Orleans, for Alanie Aisole, Wife of/and Terry L. Aisole plaintiffs-applicants.

Ellen Widen Kessler, Lowe, Stein, Hoffman & Allweiss, New Orleans, for Alice M. Dean, Douglas Dean, Elevating Boats Inc., and Lynn Oaks School Inc. defendants-respondents.

COLE, Justice.

In this case we are called upon to decide whether a self-insured lessor of a motor vehicle is liable for damages resulting from the negligent operation of the motor vehicle by an employee of the lessee.

I. Procedural History

The plaintiffs, Alanie Aisole and Terry Aisole, sued to recover damages for injuries sustained by Mrs. Aisole resulting from a vehicular collision between the car she was driving and a school bus. The plaintiffs named as defendants: Alice M. Dean, the driver of the school bus; Douglas Dean, Mrs. Dean's husband; Lynn Oaks School Inc. (hereinafter LOS), Mrs. Dean's employer and the lessee of the school bus; and Elevating Boats, Inc. (hereinafter EBI), the owner and lessor of *1250 the school bus. After suit was filed, Insurance Company of North America intervened seeking recovery of medical payments and worker's compensation benefits paid to or on behalf of the plaintiff.

The trial court found Alice Dean totally at fault and entered judgment in favor of the plaintiffs and intervenor against Alice Dean, Douglas Dean and LOS. The trial court dismissed the suit against EBI based on its conclusion that EBI, as a self-insurer, was not responsible for the actions of a person using the vehicle with express or implied consent.[1] The court of appeal affirmed the trial court's dismissal of EBI; however, it reversed the trial court's award for future wage loss and/or loss of earning capacity based on the lack of evidence that Mrs. Aisole suffered from a permanent disability. 560 So.2d 647.

We granted writs to review the lower courts' decisions.

II. Factual Background

The record indicates LOS, a non-profit organization with very few assets,[2] was conceived of and developed by Lynn Dean, the President of EBI. Sometime prior to the incorporation of LOS in August of 1980, EBI purchased several school buses which it listed on its application for self-insurance filed with the Department of Motor Vehicles. In accordance with La.R.S. 32:1042(B)(1), the state of Louisiana issued a certificate of self-insurance to EBI.

On March 25, 1984, EBI and LOS entered into an agreement pursuant to which EBI agreed to "furnish" seven school buses to the school. The agreement between the parties provided for various other long term performance obligations as well. For example, EBI agreed to lease certain land and buildings to LOS and to construct a gymnasium and swimming pool to be used by LOS. In return, LOS agreed to use the leased grounds, facilities and equipment as an educational institution, and to pay a monthly lease payment in the amount of $13,329.37 throughout the term of the ten year lease. After the rental agreement was signed by the parties, EBI continued to list the school buses it "furnished" to LOS on its annual self-insurance application and a copy of the certificate of self-insurance issued to EBI was maintained and displayed on each school bus.

III. Elevating Boat's Liability

The Louisiana Motor Vehicle Safety Responsibility Law (hereinafter LMVSRL) provides a mandatory, comprehensive scheme for the protection of the public from damage caused by motor vehicles. Specifically, La.R.S. 32:861 provides as follows:

A. (1) Every self-propelled motor vehicle registered in this state ... shall be covered by an automobile liability policy with liability limits as defined by R.S. 32:900(B)(2), or a binder for same, or by a motor vehicle liability bond as defined by Subsection B hereof, or by a certificate of the state treasurer stating that cash or securities have been deposited with said treasurer as provided by Subsection C hereof, or by a certificate of self insurance as provided by R.S. 32:1042.
(2) It shall be the duty of the registered owner of a motor vehicle to maintain the security hereinabove required. Failure to maintain said security shall subject the registered owner to the sanctions hereinafter provided in Sections 863, 864, and 865 of this Part.

As the registered owner of the school bus involved in the accident, EBI satisfied the above statutory requirements by applying for and obtaining a certificate of self-insurance pursuant to La.R.S. 32:1042.

Having concluded that EBI satisfied the requirements of the LMVSRL by listing the school buses on its annual application for self-insurance, we must determine whether EBI, as the self-insured lessor of the school buses, is required to provide omnibus coverage. The overall design of *1251 the LMVSRL carefully distinguishes self-insurers from those who post security or hold policies of insurance. Unlike La.R.S. 32:900(B)(2), 32:861(B) and 32:861(C), which specifically require policy holders and those who post security as proof of financial responsibility to provide omnibus coverage,[3] we find no provision in La.R.S. 32:1042 which requires a self-insurer to provide permissive user coverage. The failure of the legislature to prescribe omnibus liability for self-insurers manifests the legislative intent for self-insurers to be treated differently. Accordingly, we hold those who choose to satisfy La.R.S. 32:861 by obtaining a self-insurance certificate do not have to provide omnibus coverage.

Although we agree with EBI that self-insurers are not statutorily required to provide omnibus coverage, we feel the peculiar factual circumstances surrounding the instant case justify a finding of liability on other grounds. While the negligence of a lessee cannot normally be imputed to the lessor,[4] we believe liability rests upon the lessor in the instant case based upon the relationship and conduct of the parties to the lease agreement.

The evidence in the record establishes that EBI and LOS have close ties of kinship. The idea to create LOS was originally envisioned by Lynn Dean, the President of EBI. Lynn Dean and several members of his family presently serve, or have previously served, on the Board of Directors of LOS. In its brief submitted to this court, EBI admits that it has a "philanthropic concern" for LOS. In summary, EBI's relationship with LOS could easily be characterized as paternalistic in nature. It is, therefore, not unreasonable to conclude that EBI intended to facilitate LOS' operation of the school buses by insuring the school buses as part of the agreement between the parties, thereby allowing LOS to escape the financial burden associated with costly insurance premiums.

Furthermore, the course of conduct between the parties lends support to our conclusion that the parties intended for EBI to be financially responsible for any damages caused by the negligent operation of the school buses by LOS. The record reveals that EBI continuously provided LOS with a copy of its certificate of self-insurance which LOS maintained and displayed on the buses. LOS purchased no insurance of its own. When Mrs. Dean was asked by the officer at the scene of the accident if she carried insurance, she replied that the school bus was self-insured.

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Cite This Page — Counsel Stack

Bluebook (online)
574 So. 2d 1248, 1991 WL 9776, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aisole-v-dean-la-1991.