STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
08-650
ANNA LEVY AND NORMAN TRAHAN
VERSUS
ENTERPRISE LEASING COMPANY OF NEW ORLEANS
********** APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. C-2007-0954 HONORABLE PATRICK MICHOT, PRESIDING **********
SYLVIA R. COOKS JUDGE
**********
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and Oswald A. Decuir, Judges.
REVERSED AND REMANDED.
L. Clayton Burgess, A.P.L.C. 605 West Congress Street P.O. Drawer 5250 Lafayette, LA 70502-5250 (337) 234-7573 COUNSEL FOR PLAINTIFFS/APPELLANTS: Anna Levy and Norman Trahan
Katherine M. Loos Briney & Foret P.O. Drawer 51367 Lafayette, LA 70505-1367 (337) 237-4070 COUNSEL FOR DEFENDANT-APPELLEE: Enterprise Leasing Company of New Orleans COOKS, Judge.
On February 25, 2006, Norman Trahan was driving a 2000 Lincoln in which
Anna Levy was riding as a guest passenger. Leon Boutte was driving a 2006
Chevrolet Malibu he rented from Enterprise Leasing Company of New Orleans at its
Lafayette, Louisiana location. Boutte pulled his vehicle out in front of Trahan’s
vehicle, causing Trahan to swerve and hit a pole. Both Trahan and Levy suffered
injuries as a result of the collision. At the time of the accident, Boutte did not have
automobile insurance. Boutte also did not purchase supplemental liability protection
from Enterprise when he rented the vehicle at issue.
Suit was filed by Trahan and Levy against Boutte and Enterprise for the
injuries sustained in the accident. Enterprise filed a Motion for Summary Judgment
seeking to dismiss it from the case arguing that Boutte did not buy rental insurance
for the vehicle he leased from Enterprise and that, pursuant to Louisiana law at that
time, Enterprise’s own insurance carrier is not liable for any judgment rendered
against any person it leased a vehicle to, even if that person did not have any
insurance when it rented the vehicle. Enterprise cited Paragraph 7 of the Rental
Agreement, which stated as follows:
7. Responsibility to Third Parties. Owner complies with applicable motor vehicle financial responsibility laws as a state certified self-insurer, bondholder, or cash depositor. Except to the extent required by the motor vehicle financial responsibility laws of the applicable state or otherwise by law, Owner does not extend any of its motor vehicle financial responsibility or provide insurance coverage to Renter, Additional Authorized Driver(s), passengers or third parties through this Agreement. If valid automobile liability insurance or self insurance is available on any basis to Renter, Additional Authorized Driver(s) laws or any other driver and such insurance or self insurance satisfies the applicable state motor vehicle financial responsibility law, then Owner extends none of its motor vehicle financial responsibility. However, if Renter and Additional Authorized Driver(s) are in compliance with the terms and conditions of this Agreement and if Owner is obligated to extend its motor vehicle financial
-1- responsibility to Renter, Additional Authorized Driver(s) or third parties, then Owner’s obligation is limited to the applicable state minimum financial responsibility amounts. Unless required by law, Owner’s financial shall not extend to any claim made by a passenger while riding in or on or getting in or out of Vehicle. Owner’s financial responsibility shall not extend to liability imposed or assumed by anyone under any worker’s compensation act, plan, or contract.
Enterprise argues its policy did not extend its financial responsibility to cover the acts
of renters as set forth in the terms and conditions of the Rental Agreement. Enterprise
argues Louisiana’s financial responsibility law as a self-insurer. According to its
standard rental agreement, Enterprise did not provide supplemental liability
protection unless a renter elected such protection by initialing the block requesting
same and paid for that service. Mr. Boutte did not initial the block requesting
supplemental liability protection nor did he pay for such services.
In opposition to this argument, Plaintiffs noted the newly amended La.R.S.
22:681, which now mandates that all rented vehicles be covered by some form of
insurance, is interpretive and should be applied retroactively. Enterprise countered
that the amendment made a substantive change in the law and thus could only be
applied prospectively. The trial court agreed with Enterprise and granted its Motion
for Summary Judgment dismissing it from the plaintiffs’ suit. This appeal followed.
ANALYSIS
Resolution of the issues raised in this matter requires an interpretation of
La.R.S. 22:681. An interpretation of a statute is a question of law that may be
decided by a motion for summary judgment. State Farm Mutual Automobile
Insurance Company v. U.S. Agencies, L.L.C., 05-0728 (La.App. 1 Cir. 3/24/06), 934
So.2d 745, writ denied, 06-933 (La. 6/16/06), 929 So.2d 1288.
Appellate courts review summary judgments de novo under the same criteria
that govern the district court’s consideration of whether summary judgment is
-2- appropriate. Schroeder v. Board of Supervisors of Louisiana State University, 591
So.2d 342 (La.1991); Costello v. Hardy, 03-1146 (La. 1/21/04), 864 So.2d 129. A
court must grant a motion for summary judgment “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to material fact, and that mover is entitled to
judgment as a matter of law.” La.Code Civ.P. art. 966(B). Summary judgment
procedure is favored and is designed to secure the just, speedy and inexpensive
determination of actions. La.Code Civ.P. art. 966(A)(2).
The trial court granted Enterprise’s motion for summary judgment on the
grounds that La.R.S. 22:681, prior to the 2007 amendment, did not require rental
companies to provide insurance coverage for the leased vehicle. The trial court
determined that it was the duty of the lessee to provide insurance coverage for the
leased vehicle. Plaintiffs counter this argument by asserting the amendment to R.S.
22:861 was interpretive and should be applied retroactively.
Prior to amendment La.R.S. 22:681, which became effective on August 15,
2007, read in entirety as follows:
Every approved insurance company, reciprocal or exchange, writing automobile liability, physical damage, or collision insurance, shall extend to temporary substitute motor vehicles as defined in the applicable insurance policy and rental private passenger automobiles any and all such insurance coverage in effect in the original policy or policies. Where an insured has coverage on multiple vehicles, at least one of which has comprehensive and collision insurance coverage, that comprehensive and collision substitute coverage shall apply to the temporary substitute motor vehicle or rental motor vehicle. Such insurance shall be primary. However, if other automobile insurance coverage is purchased by the insured for the temporary substitute or rental motor vehicle, that coverage shall become primary. The coverage purchased by the insured shall not be considered a collateral source.
We note initially the statute does not speak to vehicle owners, but rather references
insurance companies. Every insurance company writing a policy covering the
-3- liability of an owner also was required to extend such coverage to temporary
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
08-650
ANNA LEVY AND NORMAN TRAHAN
VERSUS
ENTERPRISE LEASING COMPANY OF NEW ORLEANS
********** APPEAL FROM THE FIFTEENTH JUDICIAL DISTRICT COURT PARISH OF LAFAYETTE, NO. C-2007-0954 HONORABLE PATRICK MICHOT, PRESIDING **********
SYLVIA R. COOKS JUDGE
**********
Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and Oswald A. Decuir, Judges.
REVERSED AND REMANDED.
L. Clayton Burgess, A.P.L.C. 605 West Congress Street P.O. Drawer 5250 Lafayette, LA 70502-5250 (337) 234-7573 COUNSEL FOR PLAINTIFFS/APPELLANTS: Anna Levy and Norman Trahan
Katherine M. Loos Briney & Foret P.O. Drawer 51367 Lafayette, LA 70505-1367 (337) 237-4070 COUNSEL FOR DEFENDANT-APPELLEE: Enterprise Leasing Company of New Orleans COOKS, Judge.
On February 25, 2006, Norman Trahan was driving a 2000 Lincoln in which
Anna Levy was riding as a guest passenger. Leon Boutte was driving a 2006
Chevrolet Malibu he rented from Enterprise Leasing Company of New Orleans at its
Lafayette, Louisiana location. Boutte pulled his vehicle out in front of Trahan’s
vehicle, causing Trahan to swerve and hit a pole. Both Trahan and Levy suffered
injuries as a result of the collision. At the time of the accident, Boutte did not have
automobile insurance. Boutte also did not purchase supplemental liability protection
from Enterprise when he rented the vehicle at issue.
Suit was filed by Trahan and Levy against Boutte and Enterprise for the
injuries sustained in the accident. Enterprise filed a Motion for Summary Judgment
seeking to dismiss it from the case arguing that Boutte did not buy rental insurance
for the vehicle he leased from Enterprise and that, pursuant to Louisiana law at that
time, Enterprise’s own insurance carrier is not liable for any judgment rendered
against any person it leased a vehicle to, even if that person did not have any
insurance when it rented the vehicle. Enterprise cited Paragraph 7 of the Rental
Agreement, which stated as follows:
7. Responsibility to Third Parties. Owner complies with applicable motor vehicle financial responsibility laws as a state certified self-insurer, bondholder, or cash depositor. Except to the extent required by the motor vehicle financial responsibility laws of the applicable state or otherwise by law, Owner does not extend any of its motor vehicle financial responsibility or provide insurance coverage to Renter, Additional Authorized Driver(s), passengers or third parties through this Agreement. If valid automobile liability insurance or self insurance is available on any basis to Renter, Additional Authorized Driver(s) laws or any other driver and such insurance or self insurance satisfies the applicable state motor vehicle financial responsibility law, then Owner extends none of its motor vehicle financial responsibility. However, if Renter and Additional Authorized Driver(s) are in compliance with the terms and conditions of this Agreement and if Owner is obligated to extend its motor vehicle financial
-1- responsibility to Renter, Additional Authorized Driver(s) or third parties, then Owner’s obligation is limited to the applicable state minimum financial responsibility amounts. Unless required by law, Owner’s financial shall not extend to any claim made by a passenger while riding in or on or getting in or out of Vehicle. Owner’s financial responsibility shall not extend to liability imposed or assumed by anyone under any worker’s compensation act, plan, or contract.
Enterprise argues its policy did not extend its financial responsibility to cover the acts
of renters as set forth in the terms and conditions of the Rental Agreement. Enterprise
argues Louisiana’s financial responsibility law as a self-insurer. According to its
standard rental agreement, Enterprise did not provide supplemental liability
protection unless a renter elected such protection by initialing the block requesting
same and paid for that service. Mr. Boutte did not initial the block requesting
supplemental liability protection nor did he pay for such services.
In opposition to this argument, Plaintiffs noted the newly amended La.R.S.
22:681, which now mandates that all rented vehicles be covered by some form of
insurance, is interpretive and should be applied retroactively. Enterprise countered
that the amendment made a substantive change in the law and thus could only be
applied prospectively. The trial court agreed with Enterprise and granted its Motion
for Summary Judgment dismissing it from the plaintiffs’ suit. This appeal followed.
ANALYSIS
Resolution of the issues raised in this matter requires an interpretation of
La.R.S. 22:681. An interpretation of a statute is a question of law that may be
decided by a motion for summary judgment. State Farm Mutual Automobile
Insurance Company v. U.S. Agencies, L.L.C., 05-0728 (La.App. 1 Cir. 3/24/06), 934
So.2d 745, writ denied, 06-933 (La. 6/16/06), 929 So.2d 1288.
Appellate courts review summary judgments de novo under the same criteria
that govern the district court’s consideration of whether summary judgment is
-2- appropriate. Schroeder v. Board of Supervisors of Louisiana State University, 591
So.2d 342 (La.1991); Costello v. Hardy, 03-1146 (La. 1/21/04), 864 So.2d 129. A
court must grant a motion for summary judgment “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to material fact, and that mover is entitled to
judgment as a matter of law.” La.Code Civ.P. art. 966(B). Summary judgment
procedure is favored and is designed to secure the just, speedy and inexpensive
determination of actions. La.Code Civ.P. art. 966(A)(2).
The trial court granted Enterprise’s motion for summary judgment on the
grounds that La.R.S. 22:681, prior to the 2007 amendment, did not require rental
companies to provide insurance coverage for the leased vehicle. The trial court
determined that it was the duty of the lessee to provide insurance coverage for the
leased vehicle. Plaintiffs counter this argument by asserting the amendment to R.S.
22:861 was interpretive and should be applied retroactively.
Prior to amendment La.R.S. 22:681, which became effective on August 15,
2007, read in entirety as follows:
Every approved insurance company, reciprocal or exchange, writing automobile liability, physical damage, or collision insurance, shall extend to temporary substitute motor vehicles as defined in the applicable insurance policy and rental private passenger automobiles any and all such insurance coverage in effect in the original policy or policies. Where an insured has coverage on multiple vehicles, at least one of which has comprehensive and collision insurance coverage, that comprehensive and collision substitute coverage shall apply to the temporary substitute motor vehicle or rental motor vehicle. Such insurance shall be primary. However, if other automobile insurance coverage is purchased by the insured for the temporary substitute or rental motor vehicle, that coverage shall become primary. The coverage purchased by the insured shall not be considered a collateral source.
We note initially the statute does not speak to vehicle owners, but rather references
insurance companies. Every insurance company writing a policy covering the
-3- liability of an owner also was required to extend such coverage to temporary
substitute motor vehicles and rental private passenger automobiles. However, if
other automobile insurance coverage was purchased by the insured for the temporary
substitute motor vehicle or rental private passenger automobile, that coverage became
primary and the other became secondary. La.R.S. 22:681 did not exclude, or for that
matter, even mention the obligation of rental companies to maintain “compulsory
insurance.” There appears to be no serious dispute between the parties that Section
A of the amended statute simply recites the former statute without making any
material changes. The amendment, however, added Section B.1
1 The statute now provides, in pertinent part, as follows (changes to Section A are italicized):
A. Every approved insurance company, reciprocal or exchange, writing automobile liability, physical damage, or collision insurance, shall extend to temporary substitute motor vehicles as defined in the applicable insurance policy and rental motor vehicles any and all such insurance coverage in effect in the original policy or policies. Where an insured has coverage on a single or multiple vehicles, at least one of which has comprehensive and collision or liability insurance coverage, those coverages shall apply to the temporary substitute motor vehicle, as defined in the applicable insurance policy, or rental motor vehicle. Such insurance shall be primary. However, if other automobile insurance coverage or financial responsibility protection is purchased by the insured for the temporary substitute or rental motor vehicle, that coverage shall become primary. The coverage purchased by the insured shall not be considered a collateral source.
B. A rental company, as defined in R.S. 22:2102(5), shall maintain security on all rental vehicles meeting the requirements of the Motor Vehicle Safety Responsibility Law, R.S. 32:851 et seq., as follows:
(1) Such security maintained by the rental company shall apply only when there is no other valid or collectible insurance or other form of security meeting the minimum financial responsibility requirements under the Motor Vehicle Safety Responsibility Law.
(2) Notwithstanding a rental company's obligation to provide minimum financial responsibility pursuant to the Motor Vehicle Safety Responsibility Law as the owner of the vehicle for the privilege of registering and titling such vehicle, a rental company shall be relieved of any security obligation under the Motor Vehicle Safety Responsibility Law when the renter or driver has valid and collectible insurance, self-insurance, bond, deposit, or other form of security in an amount sufficient to satisfy the minimum financial responsibility requirements of the Motor -4- The added Section B recites that rental companies are required to maintain
security on all rental vehicles meeting the requirements of the Motor Vehicle Safety
Responsibility Law. The remainder of the section then sets forth essentially a
ranking order as to which coverage is primary or secondary between the rental car
owner’s insurer and the insurer providing collectible coverage to the driver or renter.
It is the language referring to the rental car owner’s obligation to maintain security
on all rental vehicle which defendant now insists “substantively changed the law” and
is not enforceable retroactively in this case.
The legislature did not express its intent concerning the retroactive or
prospective application of the amendment to La.R.S. 22:681. Therefore, we must
determine whether the amendment was substantive, procedural or interpretive.
Sudwischer v. Estate of Hoffpauir, 97-785 (La.12/12/97), 705 So.2d 724.
Substantive laws are laws that impose new duties, obligations or responsibilities upon parties, or laws that establish new rules, rights and duties or change existing ones. Interpretative laws are those which clarify the meaning of a statute and are deemed to relate back to the time that the law was originally enacted. Procedural laws prescribe a method for enforcing a substantive right and relate to the form of the proceeding or the operation of the laws.
Sudwischer, 97-785, p. 9, 705 So.2d at 728 (internal citations omitted) (internal
quotations omitted).
Procedural and interpretive laws apply both prospectively and retroactively,
unless there is legislative expression to the contrary. La.Civ.Code art. 6. The
supreme court in St. Paul Fire & Marine Ins. Co. v. Smith, 609 So.2d 809 (La.1992),
elaborated on the distinction: substantive laws create and/or change rights, duties and
Vehicle Safety Responsibility Law, when the claimant maintains uninsured or underinsured motorist coverage for bodily injury or property damage claims, or when the renter violates the terms or conditions of the rental agreement.
-5- rules, while procedural laws provide the avenue by which those rights, duties, and
rules are enforced. Id.
The legislature has historically required that the owner of every motor vehicle,
before it is allowed to be registered for use on the highways, give security for any
possible injuries to persons or property caused by the faulty operation of a motor
vehicle by taking out a policy of motor vehicle liability insurance, or by depositing
cash, bond or other securities, or by becoming certified as a self-insurer. This
requirement is found in the Compulsory Motor Vehicle Liability Security Law,
La.R.S. 32:861, which existed prior to the amendment of La.R.S. 22:681. It provides
in pertinent part as follows:
A. (1) Every self-propelled motor vehicle registered in this state [with the exception of certain classifications of vehicles] . . . shall be covered by an automobile liability policy with liability limits as defined by La.R.S. 32:900(B)(2) or 900(M), or a binder for same, or by a motor vehicle liability bond as defined by Subsection B of this Section, or by a certificate of the state treasurer stating that cash or securities have been deposited or securitized with said treasurer as provided by Subsection C of this Section, or by a certificate of self-insurance as provided by R.S. 32:1042.
“At the heart of this statutory scheme is the decision to attach the financial
protection to the vehicle rather than to the operator.” Hearty v. Harris, 574 So.2d
1234, 1237 (La. 1991). Thus, the owner of the vehicle, who is at all times required
to maintain “an automobile liability policy” on any vehicle registered in this state
cannot absolve itself of this duty simply by renting the vehicle to a third party. There
was no exclusion for leased vehicles set forth in La.R.S. 32:861. Had the legislature
intended to exclude rental cars from the Compulsory Insurance Law, it could have
expressly provided so when it enacted La.R.S. 32:861. The excepted vehicle
classifications were “those motor vehicles used as agricultural or forest vehicles
during seasons when they are not used on the highways, those used primarily for
-6- exhibit or kept primarily for use in parades, exhibits or shows, and lease-bound
mobile rig haulers. . .” Pertinent to this case, commercial vehicles were not excluded
from the Compulsory Motor Vehicle Liability Security Law.
It is well settled in our jurisprudence that in determining the applicability of
laws, the more specific governs over the more general. In the Interest of A.C.,
93-1125 (La.1/27/94), 643 So.2d 719, 730, cert. denied, 515 U.S. 1128, 115 S.Ct.
2291 (1995). In short, the added language found in section B reciting that the rental
company shall maintain security as required by La.R.S. 32:861 et seq., did nothing
more than reference their then existing obligation to do so under the specific
Compulsory Insurance Law. The remaining language in section B was procedural in
nature and did not materially impose on rental car insurers a greater obligation than
they had prior to the amendment.
The amendment to this section did not create or change any vested rights of the
respective parties. The owner, here the rental company, had an obligation under the
Compulsory Insurance Law to maintain insurance on the vehicle up to the statutory
minimum, and the driver, as the tortfeasor, had a legal obligation to pay for the harm
he caused.
Section B (1) also provides that “security maintained by the rental company
shall apply only when there is no other valid or collectible insurance.” Section B (2)
further specifies the rental company’s security is primed by a renter or driver’s “valid
and collectible insurance, self-insurance, bond, deposit, or other form of security in
an amount sufficient to satisfy the minimum financial responsibility requirements of
the Motor Vehicle Safety Responsibility Law, [a] claimant[’s] . . . uninsured or
underinsured motorist coverage for bodily injury or property damage claims, or when
the renter violates the terms or conditions of the rental agreement.”
-7- These provisos seek to rank the order in which the responsible insurers must
pay. La.R.S. 22:681 prior to the amendment provided “if other automobile insurance
coverage is purchased by the insured for the temporary, substitute, or rental motor
vehicle, that coverage shall become primary.” The present amended language found
in Section B does the same thing. It too is interpretive.
None of the language changes or additions to La.R.S. 22:681 increases or
burdens the rental car companies prior obligation to maintain security.
DECREE
For the above reasons, we hereby reverse the trial court’s judgment granting
of Enterprise’s motion for summary judgment and dismissing with prejudice all
claims of Plaintiffs. We remand the case for a full trial on the merits as to the
liability for the alleged negligent acts of Leon Boutte. Costs of this appeal are
assessed to appellee, Enterprise Leasing Company of New Orleans.
-8-