Jonathon Guillory v. Progressive Security Ins. Co.

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

CA 09-1056 consolidated with CA 09-1508

JONATHON GUILLORY

VERSUS

PROGRESSIVE SECURITY INS. CO., ET AL.

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APPEAL FROM THE FOURTEENTH JUDICIAL DISTRICT COURT PARISH OF CALCASIEU, NO. 2006-1743 HONORABLE WILFORD D. CARTER, DISTRICT JUDGE

JOHN D. SAUNDERS JUDGE

Court composed of John D. Saunders, Marc T. Amy, and Elizabeth A. Pickett, Judges.

REVERSED AND REMANDED.

Joseph Richard Pousson Jr. Plauche', Smith & Nieset P. O. Box 1705 Lake Charles, LA 70602 (337) 436-0522 Counsel for Defendant Appellee: Progressive Security Ins. Co.

Kelly Elizabeth Heinen Attorney at Law 200 W. Congress, Ste 650 Lafayette, LA 70501 (337) 235-5656 Counsel for Intervenor Appellee: New Hampshire Ins. Co. Cox Communications, Lafayette Matthew Charles Nodier Walsh & Bailey P.O. Box 3157 Baton Rouge, LA 70821 (225) 383-8649 Counsel for Defendant Appellant: American Home Assurance Co.

Richard Elliott Wilson Cox, Cox & Filo 723 Broad Street Lake Charles, LA 70601 (337) 436-6611 Counsel for Plaintiff Appellee: Jonathon Guillory

Claude P. Devall Newman, Hoffoss & Devall 1830 Hodges St. Lake Charles, LA 70601 (337) 439-5788 Counsel for Plaintiff Appellee: Jonathon Guillory

Brendan P. Doherty Gieger, Laborde & Laperouse 701 Poydras, Suite 4800 New Orleans, LA 70139-4800 (504) 561-0400 Counsel for Defendant Appellant: American Home Assurance Co. SAUNDERS, Judge.

Herein, we address whether the trial court was correct in granting summary

judgment in favor of the Appellee on the issue of whether uninsured motorist

coverage was validly rejected by the insured. For the following reasons, we find that

there exists a genuine issue of material fact and that the matter is not appropriate for

summary judgment.

FACTS AND PROCEDURAL HISTORY:

This appeal arises out of a Motion for Summary Judgment granted by the 14th

Judicial District Court in favor of the Appellee, Jonathon Guillory, and against the

Appellant, American Home Assurance Company (AHAC). The decision addressed

whether the Appellee was owed uninsured motorist coverage through its employer,

Cox Communications (Cox), and found that coverage was owed based on the

invalidity of a UM rejection form.

The Appellee was seriously injured in an automobile accident in November of

2005, when he was rear ended by another vehicle driven by Yvette Clark. Clark’s

underlying insurance limits are only $10,000.00–insufficient to cover the substantial

medical bills associated with Appellee’s injuries. Thus, the question becomes

whether the Appellee was entitled to UM coverage through Cox’s policy.

AHAC issued an automobile liability insurance policy to Cox with a term of

January 1, 2005, to January 1, 2006. The accident occurred during the effective date

of this policy. The original policy issued by AHAC to Cox was signed in December

of 2002, and covered a term of January 1, 2003, through January 1, 2004. This policy

was renewed in 2004 and 2005 with no changes made to the policy limits. UM

rejection forms were signed by Cox for both the 2003 policy and the 2005 policy. No

policy number was listed on the 2005 form. The Appellant asserts that if UM coverage was not validly rejected by a Cox

representative in January of 2005, the rejection form completed in December of 2002

serves as a valid rejection of UM coverage on the 2005 policy. Appellee argues that

both forms are invalid.

Both Appellant and Appellee filed motions for summary judgment. The trial

court granted the Appellee’s motion. The trial court found that the Appellant was

unable to prove that a valid UM rejection form existed at the time of the signing of

the form by the Appellee. The Appellant subsequently filed a motion for new trial so

that the trial court could reconsider the Appellee’s motion for summary judgment.

The trial court denied the motion for new trial and again entered a judgment in favor

of the Appellee. The Appellant now appeals the summary judgment in favor of the

Appellee and requests a summary judgment in its own favor.

APPELLANT’S ASSIGNMENT OF ERROR:

The trial court erred in granting summary judgment in favor of the Appellee in

light of the fact that Cox knowingly, voluntarily, correctly, and completely rejected

UM coverage, and summary judgment should be rendered in favor of the Appellant,

dismissing Appellee’s claim with prejudice.

LAW AND DISCUSSION ON THE MERITS:

Standard of Review

Appellate courts review summary judgments de novo under the same criteria

that govern the trial court’s consideration of whether summary judgment is

appropriate. Schroeder v. Bd. of Supervisors of La. State Univ., 591 So.2d 342

(La.1991). A motion for summary judgment shall be granted “if the pleadings,

depositions, answers to interrogatories, and admissions on file, together with

-2- affidavits, if any, show that there is no genuine issue of material fact, and that the

mover is entitled to judgment as a matter of law.” La.Code Civ.P. art. 966.

Discussion

Appellant argues that Appellee validly rejected UM coverage for its 2005-2006

policy term. UM rejection forms were signed by Appellee for both the 2003-2004

and the 2005-2006 terms of the policy. The trial court found, and we agree, that the

UM rejection form signed in 2005 was invalid in that it did not list a policy number.

Both parties have centered their arguments on the validity of the form signed in

December of 2002. This discussion will address the propriety of applying the 2003

rejection form to the 2005-2006 policy and whether the form was validly completed.

“Under Louisiana law, [UM] coverage is provided for by statute and embodies

a strong public policy.” A.I.U. Ins. Co. v. Roberts, 404 So.2d 948, 949 (La.1981).

“[T]he requirement of UM coverage is an implied amendment to any automobile

liability policy... as UM coverage will be read into the policy unless validly rejected.”

Duncan v. U.S.A.A. Ins. Co., 06-363 p. 4 (La. 11/29/06), 950 So.2d 544, 547.

Louisiana Revised Statutes 22:1295(1)(a)(ii) sets out the requirements for

effectuating a valid rejection of such coverage:

Such rejection, selection of lower limits, or selection of economic- only coverage shall be made only on a form prescribed by the commissioner of insurance. The prescribed form shall be provided by the insurer and signed by the named insured or his legal representative. The form signed by the named insured or his legal representative which initially rejects such coverage, selects lower limits, or selects economic- only coverage shall be conclusively presumed to become a part of the policy or contract when issued and delivered, irrespective of whether physically attached thereto. A properly completed and signed form creates a rebuttable presumption that the insured knowingly rejected coverage, selected a lower limit, or selected economic-only coverage. The form signed by the insured or his legal representative which initially rejects coverage, selects lower limits, or selects economic-only coverage shall remain valid for the life of the policy and shall not require the

-3- completion of a new selection form when a renewal, reinstatement, substitute, or amended policy is issued to the same named insured by the same insurer or any of its affiliates. An insured may change the original uninsured motorist selection or rejection on a policy at any time during the life of the policy by submitting a new uninsured motorist selection form to the insurer on the form prescribed by the commissioner of insurance. Any changes to an existing policy, regardless of whether these changes create new coverage, except changes in the limits of liability, do not create a new policy and do not require the completion of new uninsured motorist selection forms. For the purpose of this Section, a new policy shall mean an original contract of insurance which an insured enters into through the completion of an application on the form required by the insurer.

The Supreme Court of Louisiana in Duncan took the requirements a step

further in stating that the insurance commissioner’s form requires six tasks, which are

pertinent in rejecting UM coverage. Duncan, 950 So.2d 544.

Essentially, the prescribed form involves six tasks: (1) initialing the selection or rejection of coverage chosen; (2) if limits lower than the policy limits are chosen (available in options 2 and 4), then filling in the amount of coverage selected for each person and each accident; (3) printing the name of the named insured or legal representative; (4) signing the name of the named insured or legal representative; (5) filling in the policy number; and (6) filling in the date.

Id. at 551 (emphasis added).

In the current matter, there is little question that the insured, i.e. the Appellee,

by way of its employer, intended to reject UM coverage. However, Louisiana law has

been clear on the subject that the intent of the parties to reject UM coverage is

secondary to a strict adherence to the regulations set out by the legislature and by the

supreme court in Duncan. “The expression of a desire not to have UM coverage,

however clear, does not necessarily constitute a valid rejection if the expression of

rejection does not meet the formal requirements of law.” Cohn v. State Farm Mut.

Auto. Ins. Co., 03-2820, p. 4 (La.App. 1 Cir. 02/11/05), 895 So.2d 600, 602, writ

denied, 05-1000 (La. 6/17/05), 904 So.2d 705.

-4- With that in mind, we must look deeper and determine whether the 2003

rejection form is applicable to the current policy and whether it was in compliance

with the formal requirements of law.

On the first issue, a simple reading of Rashall v. Pennington, 08-0001 (La.App

3 Cir. 4/30/08), 982 So.2d 301, writ denied, 08-1543 (La. 10/10/08), 993 So.2d 1286,

and La.R.S. 22:1295(1)(a)(ii) tells us that a validly completed UM rejection form

remains effective for the life of the policy and that no new form need be completed

unless a new policy is formed.

The form signed by the insured or his legal representative which initially rejects coverage, selects lower limits, or selects economic-only coverage shall remain valid for the life of the policy and shall not require the completion of a new selection form when a renewal, reinstatement, substitute, or amended policy is issued to the same named insured by the same insurer or any of its affiliates.

Id.

The statute goes on to explain what constitutes a new policy such that a newly

completed and signed UM rejection form would be necessary:

Any changes to an existing policy, regardless of whether these changes create new coverage, except changes in the limits of liability, do not create a new policy and do not require the completion of new uninsured motorist selection forms. For the purpose of this Section, a new policy shall mean an original contract of insurance which an insured enters into through the completion of an application on the form required by the insurer.

In Rashall, an automobile accident occurred on January 28, 2005. The policy

in effect on the date of the accident was a renewal policy covering the term of

December 31, 2004, through December 31, 2005. When the policy had been

renewed, a newly created UM rejection form was executed. However, the insured’s

representative failed to date the form. The insured then attempted to make a claim on

-5- the policy arguing that his invalid rejection of UM coverage on the renewal policy

effectively revoked a prior valid rejection. This court rejected that argument and held

that the prior effected valid rejection form continued rejection of UM coverage

through the renewal policy absent an affirmative act by the insured to create a new

policy or to select UM coverage on the form prescribed by the commissioner of

insurance.

In the current matter, the parties and record are clear that no changes were

made to limits of liability under the policy. Accordingly, no new policy was created

between the Appellant and the Appellee between the signing of the 2003 form and the

start of the 2005-2006 policy term. For that reason, this court finds that it is clear that

the 2003 form, if validly completed and signed, would be applicable to the policy in

place at the time of the accident at issue and would continue the waiver of UM

coverage.

Our attention now turns to the validity of the 2003 UM rejection form. We

note that in making its decision to grant summary judgment, the trial court addressed,

in part, the fact that the 2003 form did not display the name of the insurer. On that

point, the trial court relied on this court’s decision in the case of Gingles v. Dardenne,

08-448 (La.App. 3 Cir. 11/26/08), 998 So.2d 795, writ granted, judgment reversed

by, 08-2995 (La. 3/13/09), 4 So.3d 799. In Gingles, we found that a UM rejection

form that did not contain the name of the insurer was an invalid waiver of UM

coverage. That ruling was subsequently reversed by the supreme court. Gingles v.

Dardenne, 08-2995 (La. 3/13/09), 4 So.3d 799. Therefore, we will not address the

absence of the insurer’s name on the form in this discussion.

As has been stated above, our legislature and our supreme court in Duncan

-6- have laid out the formal requirements which must be satisfied in order to validly

reject or waive UM coverage. Among them is the requirement that the UM rejection

form must display the insurance policy number.

It is the contention of the Appellee that the policy number was not present on

the 2003 UM rejection form at the time that it was signed by the insured’s agent,

Shelia Clinton, on December 31, 2002.

The Appellant denies that the policy number was not there. Furthermore, it

asserts that even if the policy number was absent, it would only have been missing

because the policy number wasn’t yet available. The supreme court, in Carter v. State

Farm Mutual Automobile Insurance Co., 07-1294 (La. 10/5/07), 964 So.2d 375,

noted that the Commissioner of Insurance’s regulations allow for the omission of a

policy number on a UM waiver form if that policy number does not exist at the time

the form is completed. Linda Smith, an account executive for A.J. Gallagher (an

insurance brokerage firm), who has handled the Cox account on behalf of the

Appellant for the last fifteen years, stated in her deposition that the policy number for

a UM rejection form signed on December 31 would have been available at the time

of signing.

On this appeal from a grant of summary judgment, both parties are arguing, and

the case turns upon, whether the policy number existed at the time the UM rejection

form was signed by Shelia Clinton. As it stands, the record is devoid of information

that would permit this court to make little more than an educated guess as to the

policy number’s existence. For that reason, we find that there is clearly a genuine

issue of material fact present in this matter.

At the time of the trial court’s ruling, summary judgment was a proper vehicle

-7- in that this court’s Gingles decision still stood. However, it seems that the change in

the law has taken this case out of the realm of summary judgment. Accordingly, we

reverse and remand the trial court’s ruling granting summary judgment in favor of the

Appellee. Moreover, we reject the Appellant’s request that summary judgment be

granted in its favor.

CONCLUSION:

For the foregoing reasons, we find that a genuine issue of material fact exists

in the matter before us. Accordingly, we reverse and remand the trial court’s grant

of summary judgment in favor of the Appellee, and we reject the Appellant’s request

for summary judgment in its favor. Costs of this appeal are assessed equally to the

Appellant and Appellee.

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