STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
04-1420
MARGARET HUDDLESTON ET AL.
VERSUS
VANCE LUTHER ET AL.
************
APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT PARISH OF RAPIDES, NO. 197, 231 HONORABLE HARRY RANDOW PRESIDING, DISTRICT JUDGE
JAMES T. GENOVESE JUDGE
Court composed of John D. Saunders, Oswald A. Decuir, and James T. Genovese, Judges.
AFFIRMED.
Robert L. Beck, Jr. Rivers, Beck, Dalrymple and Ledet P.O. Drawer 12850 Alexandria, LA 71315-2850 COUNSEL FOR PLAINTIFFS/APPELLEES: Margaret Huddleston, William C. Huddleston, and Alison Huddleston Winn Albin A. Provosty John D. Ryland Provosty, Sadler, deLaunay, Fiorenza & Sobel Post Office Drawer 1791 Alexandria, LA 71309-1791 COUNSEL FOR DEFENDANT/APPELLANT: Clarendon National Insurance Company
Edward E. Rundell Gold, Weems, Bruser, Sues & Rundell P.O. Box 6118 Alexandria, LA 71301-6118 COUNSEL FOR DEFENDANTS/APPELLEES: Vance D. Luther and Reliance Insurance Company
Stacy C. Auzenne Keiser & Auzenne, L.L.C. P.O. Box 12358 Alexandria, LA 71315-2358 COUNSEL FOR DEFENDANT/APPELLANT: Durand Logging, Inc.
John Albert Ellis Louisiana Department of Justice, AAG P.O. Box 1710 Alexandria, LA 71309 COUNSEL FOR DEFENDANT/APPELLEE: State of Louisiana
William Shutte, Jr. Jones, Walker, Waechter, Poitevent, Carrere & Denegre 8555 United Plaza Blvd., 5th Floor Baton Rouge, La. 70809 COUNSEL FOR DEFENDANT/APPELLEE: International Paper Company GENOVESE, JUDGE.
This appeal arises from the trial court’s granting of a motion for partial
summary judgment on the issue of insurance coverage. The trial court found the
vehicle involved in the subject accident was a “nonowned auto” under the policy
issued by Clarendon National Insurance Company to Durand Logging, Inc., and thus
a “covered auto” under the policy. Clarendon appeals. We affirm.
FACTS
On July 23, 1999, Plaintiff, Allison Huddelston Winn, was driving east on
Louisiana Highway 3128 in Rapides Parish with her mother, Margaret Huddleston,
riding as a guest passenger, when they were involved in an accident with a tractor-
trailer owned and operated by Defendant, Vance Luther (“Luther”). At the time of
the accident, Luther was hauling timber for Defendant, Durand Logging, Inc.
(“Durand Logging”). Allison Huddleston Winn, Margaret Huddleston and William
C. Huddleston filed suit against Luther, his automobile liability insurer, Reliance
Insurance Company (“Reliance”), Durand Logging Inc. and its insurer, Clarendon
National Insurance Company (“Clarendon”), alleging that Luther and Durand
Logging were insured under the Clarendon policy.
Plaintiffs filed a motion for partial summary judgment seeking a legal
determination that the Clarendon automobile liability insurance policy issued to
Durand Logging provided coverage for Plaintiffs’ injuries. The trial court ruled in
favor of coverage and Clarendon appealed.
ISSUES
The issue on appeal is whether the trial court erred in finding that the vehicle
driven by Luther was a “covered auto” under the Clarendon policy.
1 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 governed by the same criteria
that governed the trial court’s determination of whether summary judgment 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 commercial auto policy, business auto coverage form, issued by Clarendon
provides liability coverage under Section II - Liability Coverage. This portion of the
policy provides in pertinent part as follows:
A. COVERAGE
We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto”.
Therefore, in order for there to be coverage under the Clarendon policy, the
vehicle driven by Luther must be a “covered auto.” In addition to those vehicles
listed on the declarations page, the policy, at Section I - Covered Autos, sets forth
additional categories of automobiles which are also included as “covered autos”
under the policy. For our purposes, the limited inquiry is whether the Luther vehicle
meets the definition of a “hired auto” or a “nonowned auto” under Section I (A) of
the policy. The Clarendon policy defines these terms and provides coverage under
the following terms and conditions of the policy:
HIRED “AUTOS” ONLY. Only those “autos” you lease, hire, rent, or borrow. This does not include any “auto” you lease, hire, rent, or borrow from any of your employees or partners or members of their households.
2 NONOWNED “AUTOS” ONLY. Only those “autos” you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes “autos” owned by your employees or partners or members of their households but only while used in your business or your personal affairs.
(Emphasis added).
If the Luther vehicle meets the policy definition of a “hired auto,” it is not a
“covered auto” under the Clarendon policy due to the employee exclusion.1 If the
vehicle is a “nonowned auto,” it is a “covered auto” as long as it was being used in
Durand’s business, which is not disputed.
In order to classify the Luther vehicle as either a “hired auto” or a “nonowned
auto,” this court must first determine if the vehicle was being leased, hired, rented or
borrowed by Durand Logging. The trial court found that it was not. We agree.
Luther and Durand had an arrangement whereby Luther would haul wood for
Durand using Luther’s own truck and trailer. Luther was paid by the load for the
wood he hauled and delivered. The evidence is clear that Durand exercised no
control over the truck itself. No one at Durand Logging ever operated or maintained
the Luther vehicle. All maintenance, repair and fueling expenses incurred were
Luther’s responsibility. Clearly, Durand Logging had no rights of possession,
dominion, or control over the truck. See Green v. Bobby A. Freeman Estate, 99-1262
(La.App. 3 Cir. 4/5/00), 759 So.2d 201and Gore v. State Farm Mut. Ins. Co., 26,417,
(La.App. 2 Cir. 1/25/95), 649 So.2d 162, writ denied, 95-481 (La. 4/21/95), 653
So.2d 555 cited therein.
The court does note that there was testimony from Luther and Mickie Durand,
the owner of Durand Logging, that the tractor-trailer owned by Luther was being
1 The trial court, at the hearing on the motion for partial summary judgment, also determined that Luther was an employee of Durand Logging. The judgment on that issue was not appealed.
3 leased to Durand when this accident occurred. However, the lay opinion of these
individuals is not determinative on the legal requirements for a contract of lease.
The Louisiana Civil Code articles on lease were revised by 2004 La. Acts No.
821 effective January 1, 2005. However, this accident occurred in 1999 and the
following articles are pertinent to this 1999 accident.
A contract of lease or hire was defined in La.Civ. Code art. 2669 as follows:
Art. 2669.
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
04-1420
MARGARET HUDDLESTON ET AL.
VERSUS
VANCE LUTHER ET AL.
************
APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT PARISH OF RAPIDES, NO. 197, 231 HONORABLE HARRY RANDOW PRESIDING, DISTRICT JUDGE
JAMES T. GENOVESE JUDGE
Court composed of John D. Saunders, Oswald A. Decuir, and James T. Genovese, Judges.
AFFIRMED.
Robert L. Beck, Jr. Rivers, Beck, Dalrymple and Ledet P.O. Drawer 12850 Alexandria, LA 71315-2850 COUNSEL FOR PLAINTIFFS/APPELLEES: Margaret Huddleston, William C. Huddleston, and Alison Huddleston Winn Albin A. Provosty John D. Ryland Provosty, Sadler, deLaunay, Fiorenza & Sobel Post Office Drawer 1791 Alexandria, LA 71309-1791 COUNSEL FOR DEFENDANT/APPELLANT: Clarendon National Insurance Company
Edward E. Rundell Gold, Weems, Bruser, Sues & Rundell P.O. Box 6118 Alexandria, LA 71301-6118 COUNSEL FOR DEFENDANTS/APPELLEES: Vance D. Luther and Reliance Insurance Company
Stacy C. Auzenne Keiser & Auzenne, L.L.C. P.O. Box 12358 Alexandria, LA 71315-2358 COUNSEL FOR DEFENDANT/APPELLANT: Durand Logging, Inc.
John Albert Ellis Louisiana Department of Justice, AAG P.O. Box 1710 Alexandria, LA 71309 COUNSEL FOR DEFENDANT/APPELLEE: State of Louisiana
William Shutte, Jr. Jones, Walker, Waechter, Poitevent, Carrere & Denegre 8555 United Plaza Blvd., 5th Floor Baton Rouge, La. 70809 COUNSEL FOR DEFENDANT/APPELLEE: International Paper Company GENOVESE, JUDGE.
This appeal arises from the trial court’s granting of a motion for partial
summary judgment on the issue of insurance coverage. The trial court found the
vehicle involved in the subject accident was a “nonowned auto” under the policy
issued by Clarendon National Insurance Company to Durand Logging, Inc., and thus
a “covered auto” under the policy. Clarendon appeals. We affirm.
FACTS
On July 23, 1999, Plaintiff, Allison Huddelston Winn, was driving east on
Louisiana Highway 3128 in Rapides Parish with her mother, Margaret Huddleston,
riding as a guest passenger, when they were involved in an accident with a tractor-
trailer owned and operated by Defendant, Vance Luther (“Luther”). At the time of
the accident, Luther was hauling timber for Defendant, Durand Logging, Inc.
(“Durand Logging”). Allison Huddleston Winn, Margaret Huddleston and William
C. Huddleston filed suit against Luther, his automobile liability insurer, Reliance
Insurance Company (“Reliance”), Durand Logging Inc. and its insurer, Clarendon
National Insurance Company (“Clarendon”), alleging that Luther and Durand
Logging were insured under the Clarendon policy.
Plaintiffs filed a motion for partial summary judgment seeking a legal
determination that the Clarendon automobile liability insurance policy issued to
Durand Logging provided coverage for Plaintiffs’ injuries. The trial court ruled in
favor of coverage and Clarendon appealed.
ISSUES
The issue on appeal is whether the trial court erred in finding that the vehicle
driven by Luther was a “covered auto” under the Clarendon policy.
1 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 governed by the same criteria
that governed the trial court’s determination of whether summary judgment 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 commercial auto policy, business auto coverage form, issued by Clarendon
provides liability coverage under Section II - Liability Coverage. This portion of the
policy provides in pertinent part as follows:
A. COVERAGE
We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto”.
Therefore, in order for there to be coverage under the Clarendon policy, the
vehicle driven by Luther must be a “covered auto.” In addition to those vehicles
listed on the declarations page, the policy, at Section I - Covered Autos, sets forth
additional categories of automobiles which are also included as “covered autos”
under the policy. For our purposes, the limited inquiry is whether the Luther vehicle
meets the definition of a “hired auto” or a “nonowned auto” under Section I (A) of
the policy. The Clarendon policy defines these terms and provides coverage under
the following terms and conditions of the policy:
HIRED “AUTOS” ONLY. Only those “autos” you lease, hire, rent, or borrow. This does not include any “auto” you lease, hire, rent, or borrow from any of your employees or partners or members of their households.
2 NONOWNED “AUTOS” ONLY. Only those “autos” you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes “autos” owned by your employees or partners or members of their households but only while used in your business or your personal affairs.
(Emphasis added).
If the Luther vehicle meets the policy definition of a “hired auto,” it is not a
“covered auto” under the Clarendon policy due to the employee exclusion.1 If the
vehicle is a “nonowned auto,” it is a “covered auto” as long as it was being used in
Durand’s business, which is not disputed.
In order to classify the Luther vehicle as either a “hired auto” or a “nonowned
auto,” this court must first determine if the vehicle was being leased, hired, rented or
borrowed by Durand Logging. The trial court found that it was not. We agree.
Luther and Durand had an arrangement whereby Luther would haul wood for
Durand using Luther’s own truck and trailer. Luther was paid by the load for the
wood he hauled and delivered. The evidence is clear that Durand exercised no
control over the truck itself. No one at Durand Logging ever operated or maintained
the Luther vehicle. All maintenance, repair and fueling expenses incurred were
Luther’s responsibility. Clearly, Durand Logging had no rights of possession,
dominion, or control over the truck. See Green v. Bobby A. Freeman Estate, 99-1262
(La.App. 3 Cir. 4/5/00), 759 So.2d 201and Gore v. State Farm Mut. Ins. Co., 26,417,
(La.App. 2 Cir. 1/25/95), 649 So.2d 162, writ denied, 95-481 (La. 4/21/95), 653
So.2d 555 cited therein.
The court does note that there was testimony from Luther and Mickie Durand,
the owner of Durand Logging, that the tractor-trailer owned by Luther was being
1 The trial court, at the hearing on the motion for partial summary judgment, also determined that Luther was an employee of Durand Logging. The judgment on that issue was not appealed.
3 leased to Durand when this accident occurred. However, the lay opinion of these
individuals is not determinative on the legal requirements for a contract of lease.
The Louisiana Civil Code articles on lease were revised by 2004 La. Acts No.
821 effective January 1, 2005. However, this accident occurred in 1999 and the
following articles are pertinent to this 1999 accident.
A contract of lease or hire was defined in La.Civ. Code art. 2669 as follows:
Art. 2669. Lease or hire, definition Lease or hire is a synallagmatic contract, to which consent alone is sufficient, and by which one party gives to the other the enjoyment of a thing, or his labor, at a fixed price.
The essential elements of lease were defined in La.Civ. Code art. 2670 as follows:
Art. 2670. Essential elements of lease To the contract of lease, as to that of sale, three things are absolutely necessary, to wit: the thing, the price, and the consent.
Two kinds of leases were contemplated by La.Civ. Code art. 2673:
Art. 2673. Kinds of lease There are two species of contracts of lease, to wit: 1. The letting out of things. 2. The letting out of labor or industry.
Louisiana Civil Code article 2674 defined lease of things as follows:
Art. 2674. Lease of things To let out a thing is a contract by which one of the parties binds himself to grant to the other the enjoyment of a thing during a certain time, for a certain stipulated price which the other binds himself to pay him.
The agreement between Luther and Durand did not involve the lease of a specific
thing, i.e. the vehicle. The parties did not agree that Durand was to have enjoyment
of the truck for a “certain time” nor was there a “certain stipulated price” for the use
of the truck. Luther was to use his own vehicle to accomplish the task of hauling
wood. If considered to be a contract of lease, the agreement between Luther and
Durand Logging was more akin to the lease of Luther’s labor. See La.Civ. Code art.
4 2675. The record establishes that Luther was compensated based on the amount of
wood he hauled with the truck. He was not paid a specified fixed amount for the use
of the truck. Durand Logging hired Luther to perform the work, which is to be
distinguished from a lease of the truck by Durand who had no rights to the truck itself
as a result of the arrangement between the parties. We, like the trial court, therefore
conclude that the vehicle being operated by Luther was not a vehicle leased by
Durand Logging.
Since the Luther vehicle was not a vehicle leased to Durand, the proper
classification under the Clarendon policy is that of a “nonowned auto”, i.e. an
automobile that Durand Logging did not own, lease, hire, rent or borrow that is used
in connection with its business. This would include an auto owned by Luther,
Durand’s employee, while used in Durand’s business affairs. Liability coverage is
therefore provided under the policy issued by Clarendon to Durand Logging since the
present accident results “from the ownership, maintenance, or use of a covered auto.”
For the foregoing reasons, the judgment of the trial court is affirmed. All costs
of this appeal are assessed to Defendant/Appellant, Clarendon National Insurance
Company.