STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
05-580
AMANDA DOMINGUE, ET AL.
VERSUS
LEGION INDEMNITY CO., ET AL.
************
APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2000-2449-E HONORABLE HERMAN C. CLAUSE, DISTRICT JUDGE
JAMES T. GENOVESE JUDGE
Court composed of Sylvia R. Cooks, Michael G. Sullivan, and James T. Genovese, Judges.
Cooks, J., concurs and assigns reasons.
AFFIRMED.
David O. Walker Post Office Box 1190 Alexandria, Louisiana 71309 COUNSEL FOR PLAINTIFF/APPELLANT: Amanda Domingue
Michael W. Adley Post Office Drawer 51769 Lafayette, Louisiana 70505-1769 COUNSEL FOR DEFENDANT/APPELLEE: Federal Insurance Co.
Larry Lane Roy Frederick Douglas Gatz, Jr. George Edward Williams, Jr. Dawn L. Morris Post Office Drawer 94-C Lafayette, Louisiana 70509 COUNSEL FOR DEFENDANTS: John Ard Allstate Indemnity Company Mark E. Stipe Post Office Box 52169 Lafayette, Louisiana 70505 COUNSEL FOR DEFENDANT: Louisiana Motors, Inc. GENOVESE, Judge.
Plaintiff appeals the judgment of the trial court denying her motion for
summary judgment and granting summary judgment in favor of Defendant insurer
relative to the issue of liability insurance coverage. For the following reasons, we
affirm.
RELEVANT FACTS AND PROCEDURAL HISTORY
On May 21, 1999, Ronald Domingue was killed while riding his bicycle when
struck by an automobile being operated by Defendant, John Ard (“Ard”). Ard was
operating a vehicle owned by Defendant, Louisiana Motors, Inc. (“Louisiana
Motors”), with permission. Ard, an independent contractor, was hired by Louisiana
Motors to clean and detail the vehicle at his shop and return the vehicle to Louisiana
Motors.
On May 3, 2000, the mother of Ronald Domingue, Amanda Domingue
(“Domingue”), filed the instant wrongful death/survival action claims against Ard and
his personal auto liability insurer, Allstate Indemnity Company (“Allstate”),
Louisiana Motors and its auto liability insurer, Legion Indemnity Company
(“Legion”), and Federal Insurance Company (“Federal”), who provided a commercial
umbrella liability insurance policy to Louisiana Motors.
Louisiana Motors filed a motion for summary judgment seeking to dismiss the
claims asserted against it on the basis that it was not the employer of Ard at the time
of the accident and that there was no evidence to support a negligent entrustment
claim. The trial court granted summary judgment in favor of Louisiana Motors and
dismissed Domingue’s claims, with prejudice, by judgment signed on August 20,
2001.
Domingue asserted that Ard qualified as an omnibus insured under the Legion
insurance policy issued to Louisiana Motors providing $1,000,000.00 in commercial
1 auto liability coverage. Legion filed a motion for partial summary judgment seeking
to reduce its coverage limits to $10,000.00. The trial court denied Legion’s motion
for partial summary judgment and ruled that the Legion policy provided
$1,000,000.00 in liability insurance coverage to Lafayette Motors which covered Ard
as an omnibus insured for the claims asserted against him.
In early 2002, Domingue purportedly settled all claims against Ard with Legion
at mediation; however, before the settlement proceeds were paid and formal
settlement documents were effectuated, Legion became insolvent and was liquidated
by court order dated April 9, 2003. Because Legion is a surplus line insurance carrier
not authorized to transact insurance business in the State of Louisiana, the claims
against Legion are not covered claims under the Louisiana Insurance Guaranty Law,
as set forth in La.R.S. 22:1379, et seq.
On March 29, 2004, Domingue filed a motion for summary judgment claiming
that the commercial umbrella liability insurance policy issued to Louisiana Motors
by Federal “dropped down” to provide primary liability insurance coverage to Ard.
Federal filed a cross-motion for summary judgment on May 14, 2004, asserting that
it was entitled to a judgment declaring that its insurance policy did not “drop down”
to provide primary liability insurance coverage to Ard.
The trial court granted summary judgment in favor of Federal and dismissed
Domingue’s claims against Federal, with prejudice, by judgment signed on October
25, 2004. Domingue appeals.
LAW AND DISCUSSION
Standard of Review
Since the trial court decided the issue of insurance coverage by summary
judgment, this court’s standard of review is de novo and is governed by the same
criteria that governed the trial court’s determination of whether summary judgment
2 is appropriate. Sinegal v. Kennedy, 04-299 (La.App. 3 Cir. 9/29/04), 883 So.2d 1079;
La.Code Civ.P. art. 966.
Insurance Coverage
The sole issue on appeal is whether the Federal commercial umbrella liability
insurance policy issued to Lafayette Motors drops down to provide coverage due to
the insolvency of the primary insurer, Legion. The trial judge concluded that
Federal’s policy did not “drop down.” We agree.
Federal issued a commercial umbrella policy to Louisiana Motors bearing
policy number 7975-52-67 KCO. The liability insurance policy features two insuring
agreements.
The first insuring agreement, Coverage A, provides excess follow form liability
coverage. Coverage A provides, in pertinent part (emphasis in original):
Under Coverage A, we will pay on behalf of the insured, that part of loss covered by this insurance in excess of the total applicable limits of underlying insurance, provided the injury or offense takes place during the Policy Period of this policy.
The policy defines “underlying insurance” as “the policy or policies of insurance
listed in the Schedule of Underlying Insurance forming a part of this policy.” The
“Schedule of Underlying Insurance” lists a garage keepers legal liability insurance
issued by Legion in the amount of $500,000.00 per location, and a garage liability
insurance issued by Landmark Insurance Company in the amount of $1,000,000.00
per occurrence.
The policy imposes the condition upon the insured that “while this policy is in
effect you agree to maintain underlying insurance in full force” (emphasis in
original). The policy’s terms and conditions further provide, in pertinent part, that
“collectibility of underlying insurance limits as listed in the Schedule of Underlying
Insurance, or replacements thereof, must be available regardless of the bankruptcy or
insolvency of the underlying insurer” (emphasis in original). There is clearly no
3 “drop down” under this policy provision since the collectibility of the underlying
insurance issued by Legion was not available due to Legion’s insolvency. Federal’s
policy does specifically provide, in respect to Coverage A, that there are situations
in which the policy will “drop down.” Those situations are only “if the limits of
underlying insurance have been reduced by payment of loss” or “if the limits of
underlying insurance have been exhausted by payment of loss” (emphasis in
original). Thus, we agree that Coverage A of Federal’s policy does not “drop down”
to provide coverage due to the insolvency of the primary insurer, Legion.
The second insuring agreement, Coverage B, provides umbrella liability
coverage. Coverage B provides, in pertinent part (emphasis in original):
Free access — add to your briefcase to read the full text and ask questions with AI
STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
05-580
AMANDA DOMINGUE, ET AL.
VERSUS
LEGION INDEMNITY CO., ET AL.
************
APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. 2000-2449-E HONORABLE HERMAN C. CLAUSE, DISTRICT JUDGE
JAMES T. GENOVESE JUDGE
Court composed of Sylvia R. Cooks, Michael G. Sullivan, and James T. Genovese, Judges.
Cooks, J., concurs and assigns reasons.
AFFIRMED.
David O. Walker Post Office Box 1190 Alexandria, Louisiana 71309 COUNSEL FOR PLAINTIFF/APPELLANT: Amanda Domingue
Michael W. Adley Post Office Drawer 51769 Lafayette, Louisiana 70505-1769 COUNSEL FOR DEFENDANT/APPELLEE: Federal Insurance Co.
Larry Lane Roy Frederick Douglas Gatz, Jr. George Edward Williams, Jr. Dawn L. Morris Post Office Drawer 94-C Lafayette, Louisiana 70509 COUNSEL FOR DEFENDANTS: John Ard Allstate Indemnity Company Mark E. Stipe Post Office Box 52169 Lafayette, Louisiana 70505 COUNSEL FOR DEFENDANT: Louisiana Motors, Inc. GENOVESE, Judge.
Plaintiff appeals the judgment of the trial court denying her motion for
summary judgment and granting summary judgment in favor of Defendant insurer
relative to the issue of liability insurance coverage. For the following reasons, we
affirm.
RELEVANT FACTS AND PROCEDURAL HISTORY
On May 21, 1999, Ronald Domingue was killed while riding his bicycle when
struck by an automobile being operated by Defendant, John Ard (“Ard”). Ard was
operating a vehicle owned by Defendant, Louisiana Motors, Inc. (“Louisiana
Motors”), with permission. Ard, an independent contractor, was hired by Louisiana
Motors to clean and detail the vehicle at his shop and return the vehicle to Louisiana
Motors.
On May 3, 2000, the mother of Ronald Domingue, Amanda Domingue
(“Domingue”), filed the instant wrongful death/survival action claims against Ard and
his personal auto liability insurer, Allstate Indemnity Company (“Allstate”),
Louisiana Motors and its auto liability insurer, Legion Indemnity Company
(“Legion”), and Federal Insurance Company (“Federal”), who provided a commercial
umbrella liability insurance policy to Louisiana Motors.
Louisiana Motors filed a motion for summary judgment seeking to dismiss the
claims asserted against it on the basis that it was not the employer of Ard at the time
of the accident and that there was no evidence to support a negligent entrustment
claim. The trial court granted summary judgment in favor of Louisiana Motors and
dismissed Domingue’s claims, with prejudice, by judgment signed on August 20,
2001.
Domingue asserted that Ard qualified as an omnibus insured under the Legion
insurance policy issued to Louisiana Motors providing $1,000,000.00 in commercial
1 auto liability coverage. Legion filed a motion for partial summary judgment seeking
to reduce its coverage limits to $10,000.00. The trial court denied Legion’s motion
for partial summary judgment and ruled that the Legion policy provided
$1,000,000.00 in liability insurance coverage to Lafayette Motors which covered Ard
as an omnibus insured for the claims asserted against him.
In early 2002, Domingue purportedly settled all claims against Ard with Legion
at mediation; however, before the settlement proceeds were paid and formal
settlement documents were effectuated, Legion became insolvent and was liquidated
by court order dated April 9, 2003. Because Legion is a surplus line insurance carrier
not authorized to transact insurance business in the State of Louisiana, the claims
against Legion are not covered claims under the Louisiana Insurance Guaranty Law,
as set forth in La.R.S. 22:1379, et seq.
On March 29, 2004, Domingue filed a motion for summary judgment claiming
that the commercial umbrella liability insurance policy issued to Louisiana Motors
by Federal “dropped down” to provide primary liability insurance coverage to Ard.
Federal filed a cross-motion for summary judgment on May 14, 2004, asserting that
it was entitled to a judgment declaring that its insurance policy did not “drop down”
to provide primary liability insurance coverage to Ard.
The trial court granted summary judgment in favor of Federal and dismissed
Domingue’s claims against Federal, with prejudice, by judgment signed on October
25, 2004. Domingue appeals.
LAW AND DISCUSSION
Standard of Review
Since the trial court decided the issue of insurance coverage by summary
judgment, this court’s standard of review is de novo and is governed by the same
criteria that governed the trial court’s determination of whether summary judgment
2 is appropriate. Sinegal v. Kennedy, 04-299 (La.App. 3 Cir. 9/29/04), 883 So.2d 1079;
La.Code Civ.P. art. 966.
Insurance Coverage
The sole issue on appeal is whether the Federal commercial umbrella liability
insurance policy issued to Lafayette Motors drops down to provide coverage due to
the insolvency of the primary insurer, Legion. The trial judge concluded that
Federal’s policy did not “drop down.” We agree.
Federal issued a commercial umbrella policy to Louisiana Motors bearing
policy number 7975-52-67 KCO. The liability insurance policy features two insuring
agreements.
The first insuring agreement, Coverage A, provides excess follow form liability
coverage. Coverage A provides, in pertinent part (emphasis in original):
Under Coverage A, we will pay on behalf of the insured, that part of loss covered by this insurance in excess of the total applicable limits of underlying insurance, provided the injury or offense takes place during the Policy Period of this policy.
The policy defines “underlying insurance” as “the policy or policies of insurance
listed in the Schedule of Underlying Insurance forming a part of this policy.” The
“Schedule of Underlying Insurance” lists a garage keepers legal liability insurance
issued by Legion in the amount of $500,000.00 per location, and a garage liability
insurance issued by Landmark Insurance Company in the amount of $1,000,000.00
per occurrence.
The policy imposes the condition upon the insured that “while this policy is in
effect you agree to maintain underlying insurance in full force” (emphasis in
original). The policy’s terms and conditions further provide, in pertinent part, that
“collectibility of underlying insurance limits as listed in the Schedule of Underlying
Insurance, or replacements thereof, must be available regardless of the bankruptcy or
insolvency of the underlying insurer” (emphasis in original). There is clearly no
3 “drop down” under this policy provision since the collectibility of the underlying
insurance issued by Legion was not available due to Legion’s insolvency. Federal’s
policy does specifically provide, in respect to Coverage A, that there are situations
in which the policy will “drop down.” Those situations are only “if the limits of
underlying insurance have been reduced by payment of loss” or “if the limits of
underlying insurance have been exhausted by payment of loss” (emphasis in
original). Thus, we agree that Coverage A of Federal’s policy does not “drop down”
to provide coverage due to the insolvency of the primary insurer, Legion.
The second insuring agreement, Coverage B, provides umbrella liability
coverage. Coverage B provides, in pertinent part (emphasis in original):
Under Coverage B, we will pay on behalf of the insured damages the insured becomes legally obligated to pay by reason of liability imposed by law or assumed under an insured contract because of bodily injury, property damage, personal injury, or advertising injury covered by this insurance which takes place during the Policy Period of this policy and is caused by an occurrence. We will pay such damages in excess of the Retained Limit Aggregate, specified in Item 4d, of the Declarations or the amount payable by other insurance, whichever is greater.
The exclusions applicable to Coverage B specifically provide that this insurance does
not apply to “any liability arising out of the ownership, maintenance, use, loading or
unloading or entrustment to others of autos within the United States of America,
including its possessions and territories, Puerto Rico, Canada or while autos are
being transported between these places” (emphasis in original).
The accident which forms the basis of this suit occurred when Louisiana
Motors entrusted Ard with a vehicle for the purpose of detailing said vehicle. The
cited exclusion applies to negate coverage under Federal’s policy. Therefore, we
agree that Coverage B of Federal’s policy does not “drop down” to provide coverage
either.
Damages for Frivolous Appeal
4 Finally, Federal asserts in its response brief to Domingue’s appeal that it is
entitled to damages for “frivolous” appeal. We note that the record does not reflect
that Federal ever filed an answer to this appeal. An appellee shall answer an appeal
when he desires to have the judgment modified, revised, or reversed in part, or when
he demands damages against the appellant. La.Code Civ.P. art. 2133. This request
for damages for frivolous appeal by Federal in its response brief to Domingue’s
appeal does not satisfy the requirements of Article 2133 as it is neither an answer nor
an appeal. Roberts v. Robicheaux, 04-1405 (La.App. 3 Cir. 3/2/05), 896 So.2d 1232,
writ denied, 05-792 (La. 5/13/05), 902 So.2d 1021, citing Gibbs v. Gibbs, 33,169
(La.App. 2 Cir. 6/21/00), 764 So.2d 261; Gay v. Gay, 31,974 (La.App. 2 Cir.
6/16/99), 741 So.2d 149. Therefore, the issue of Federal’s request for damages for
frivolous appeal is not before this court and is thereby denied.
DECREE
For the foregoing reasons, the judgment of the trial court granting Federal’s
motion for summary judgment and denying Domingue’s motion for summary
judgment is affirmed. Costs of this appeal are assessed against Appellant.
5 STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
COOKS, J., concurring:
I concur in the result. I agree with the conclusion that the Federal policy does
not provide coverage as a result of Exclusion C, which provides:
C. Under Coverage B, this insurance does not apply to:
* * *
any liability arising out of the ownership, maintenance, use loading or unloading or entrustment to others of autos within the United States of America, including its possessions and territories, Puerto Rico, Canada or while autos are being transported between these places.