Charles v. Towing & Recovery Professionals of Louisiana, Inc.

156 So. 3d 84, 12 La.App. 3 Cir. 824, 2013 La. App. LEXIS 992, 2013 WL 2250988
CourtLouisiana Court of Appeal
DecidedApril 24, 2013
DocketNo. CA 12-824
StatusPublished
Cited by1 cases

This text of 156 So. 3d 84 (Charles v. Towing & Recovery Professionals of Louisiana, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Charles v. Towing & Recovery Professionals of Louisiana, Inc., 156 So. 3d 84, 12 La.App. 3 Cir. 824, 2013 La. App. LEXIS 992, 2013 WL 2250988 (La. Ct. App. 2013).

Opinions

EZELL, Judge.

^Towing and Recovery Professionals of Louisiana Trust appeals a judgment of the trial court finding that it was estopped from raising the defense of no right or no cause of action. It argues that it is a public liability trust and not an insurer, and therefore there is no right to bring a direct action against it under La.R.S. 22:1269. It also claims that the trial court erred in awarding Plaintiff interest from the date of judicial demand.

FACTS

Raymond Charles was severely injured when a tow truck owned by J.C.’s Wrecker Service, Inc. rear-ended his vehicle on September 14, 2006. Mr. Charles filed suit on September 7, 2007, against J.C.’s, the driver of the tow truck, and Towing and Recovery Professionals of Louisiana (TRPL) Trust incorrectly named as ‘Towing and Recovery Professionals of Louisiana, Inc.’. In the petition, Mr. Charles alleged that TRPL Trust was an insurer doing business in Louisiana and had in full force and effect a policy of general liability insurance insuring the tow truck.

TRPL Trust answered the appeal asserting that its correct name was Towing and Recovery Professionals of Louisiana Trust. However, it also admitted that it was an insurer and that it issued an insurance policy to J.C.’s.

On May 24, 2010, TRPL Trust filed a notice in the record that it had filed a petition for Chapter 11 bankruptcy in federal court on May 17. On November 15, 2010, TRPL Trust filed a notice of removal to federal court. In response, Mr. Charles filed a motion to remand, which was granted by the federal court on February 17, 2011. Mr. Charles then filed a motion for summary judgment on liability and insurance coverage on June 22, 2011. On June 29, 2011, TRPL Trust filed an | ^exception of no right or no cause of action alleging that it is not an insurance company and is not subject to the Louisiana Direct Action Statute.

A hearing was held on August 22, 2011. Mr. Charles’s motion for summary judgment on the issue of liability was granted but was denied as to insurance coverage.

A hearing was held on February 6, 2012, on TRPL Trust’s exception of no right or no cause of action. The trial court agreed that TRPL Trust was a trust and not an insurer. However, the trial court ruled that TRPL Trust was estopped from claiming an exemption from direct action and denied its peremptory exception of no right or no cause of action. Judgment denying the exception was signed on February 12, 2012.

At the same hearing, the court received evidence concerning Mr. Charles’s injuries. After considering the evidence presented by Mr. Charles, the trial court awarded him $400,000 plus costs and interest from the date of judicial demand until paid. Judgment against J.C.’s, the tow truck driver, and TRPL Trust was signed on March 8, 2012. TRPL Trust then filed the present appeal.

RIGHT TO BRING A DIRECT ACTION

TRPL Trust argues that the trial court erred in denying its exception of no right of action and rendering judgment directly against it. TRPL Trust asserts that it is a public liability trust, not a licensed insurer, and that the Louisiana Direct Action Statute is not applicable to Mr. Charles’s claims.

The Louisiana Direct Action Statute refers to a right of direct action, and a defendant challenging a plaintiffs right to proceed under the Louisiana Direct Action Statute should do so by means [87]*87of an exception of no right of action. Vincent v. Penrod Drilling Co., 372 So.2d 807 (La.App. 3 Cir.), writ denied, 375 So.2d 646 (La.1979); Diamond v. Progressive Sec. Ins. Co., 05-820 (La.App. 1 Cir. 3/24/06), 934 So.2d 739. “Without enabling legislation, the right to direct action does not exist.” Logan v. Hollier, 424 So.2d 1279, 1281 (La.App. 3 Cir.1982).

The supreme court explained the appellate review of a ruling on an exception of no right of action in Eagle Pipe & Supply, Inc. v. Amerada Hess Corp., 10-2267, 10-2272, 10-2275, 10-2279, 20-2289, pp. 6-7 (La.10/25/11), 79 So.3d 246, 255-56:

“The function of the exception of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the suit.” Hood v. Cotter, 2008-0215, p. 17 (La.12/2/08), 5 So.3d 819, 829. An appellate court reviewing a lower court’s ruling on an exception of no right of action should focus on whether the particular plaintiff has a right to bring the suit and is a member of the class of persons that has a legal interest in the subject matter of the litigation, assuming the petition states a valid cause of action for some person. Id.

Whether a person has a right to bring an action raises a question of law. Id. “A question of law requires a de novo review.” Id. at 256.

At the time of the accident in 2006, La.R.S. 22:46(9)(d)1 clearly provided that public liability trust funds established by professional associations are not insurance as follows:

The establishment and operation of one or more professional, trade, and occupational or public liability trust funds by professional associations in this state for the purpose of providing a means by which professional malpractice and public liability claims or judgments arising from such claims against members of the associations shall be paid or settled shall not be deemed to be insurance, and the trust shall not be deemed to be a licensed, admitted, or authorized insurer but shall be subject to Subpart E of Part III of Chapter 2, Part IV of Chapter 7, and Chapters 8 and 12 of this Title.

The Louisiana Direct Action Statute, La. R.S. 22:1269, is found in Part IV of Chapter 4, not one of the sections that a professional, trade and occupational, or public liability trust fund was subject to at the time of the accident.

|4TRPL Trust was established as a public liability trust on February 25, 2004. The agreement to act as a public liability trust was filed with the Commissioner of Insurance. As such, it was not subject to the Louisiana Direct Action Statute.

Recognizing that TRPL Trust is a public liability trust not subject to direct action, Mr. Charles argues that TRPL Trust is estopped from any argument that it is a public liability trust not subject to direct action because of its prior representations, judicial admissions, and litigation tactics. Specifically, Mr. Charles claims that TRPL Trust repeatedly admitted that it was an insurer. He also claims that it utilized its status as a direct action insurance company defendant to file a stay in the trial court due to bankruptcy proceedings and to remove the present action to federal court.

Equitable estoppel is a jurisprudential doctrine in which the voluntary [88]*88conduct of a party precludes him from asserting rights against another party who has justifiably relied on such conduct to change his position so that he will suffer injury if the first party is allowed to retract his conduct. MB Indus., LLC v. CNA Ins. Co., 11-303, 11-304 (La.10/25/11), 74 So.3d 1173. “Strictly speaking, equitable estoppel applies only where a party has made false or misleading representations of fact and the other party justifiably relied on the representation.” Id.

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156 So. 3d 84, 12 La.App. 3 Cir. 824, 2013 La. App. LEXIS 992, 2013 WL 2250988, Counsel Stack Legal Research, https://law.counselstack.com/opinion/charles-v-towing-recovery-professionals-of-louisiana-inc-lactapp-2013.