Safeway Ins., Co. of Louisiana v. Government Employees Ins., Co.

Judgment rendered August 11, 2021.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 54,087-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

SAFEWAY INSURANCE Appellant
COMPANY OF LOUISIANA

versus

GOVERNMENT EMPLOYEES Appellee
INSURANCE COMPANY

*****

Appealed from the
Second Judicial District Court for the
Parish of Bienville, Louisiana
Trial Court No. 45-160

Honorable William R. “Rick” Warren, Judge

*****

TRACY L. OAKLEY Counsel for Appellant
MICHAEL W. LANDRY

LAW OFFICE OF J. BRAD SMITHERMAN Counsel for Appellee
By: J. Brad Smitherman

*****

Before PITMAN, COX, and HUNTER, JJ.

COX, J.

This case arises from the Second Judicial Court of Bienville Parish.

The plaintiff, Safeway Insurance Company of Louisiana (“Safeway”), appeals

a motion for summary judgment granted in favor of defendants, Government

Employees Insurance Company (“GEICO”), finding that Safeway’s policy

provided primary coverage. For the following reasons, we reverse the trial

court’s judgment and remand for further proceedings.

FACTS

The facts of this case are undisputed. On May 13, 2018, at

approximately 3:24 p.m., a two-vehicle accident occurred on LA Highway 14

in Bienville Parish. While Shawn Alford (“Alford”) was driving Alexis

Bradley’s (“Bradley”) 2006 Nissan Titan, the rear driver-side tire and rim

detached from the vehicle and rolled into oncoming traffic, injuring a third-

party driver, Johnell Gray (“Gray”). Alford was using Bradley’s vehicle with

her permission. At the time of the accident, Bradley’s vehicle was insured by

Safeway, which provided $15,000 in bodily injury coverage. Alford,

however, was a named insured under GEICO’s automobile policy, which

provided a $30,000 bodily injury policy limit.

Safeway settled Gray’s claim for damages out of court for the sum of

$8,303. Safeway then filed suit against GEICO for subrogation for the total

settlement amount paid, asserting that GEICO, as the insurer for the driver,

had primary liability for the coverage of the accident. Alternatively, Safeway

asserted that because both policies contained “other insurance” clauses, both

Safeway and GEICO were co-primary insurers, each proportionately

responsible for their share of the settlement amount. GEICO filed a motion

for summary judgment, arguing that it was not liable to Safeway for the

settlement. GEICO asserted that the “other insurance” clauses contained

within each policy were easily reconciled.

Specifically, GEICO argued that under Safeway’s “other insurance”

clause, Safeway’s coverage is considered excess to any other insurance which

would also cover the insured’s liability for the damages. However, GEICO

noted that in contrast, its own “other insurance” clause specified that when the

vehicle in question is considered a non-owned vehicle under the insured’s

policy, its liability for any damages sustained is considered excess coverage.

Therefore, GEICO argued that Safeway had the primary policy on the owned

vehicle and its policy provided only excess coverage such that no contribution

was owed.

On December 1, 2020, Judge Teat granted GEICO’s motion. The

written judgment was submitted and signed on February 8, 2021, by Judge

Rick Warren dismissing all claims and demands against GEICO with

prejudice and certifying the judgment as final for purposes of immediate

appeal.

DISCUSSION

When reviewing summary judgments on appeal, an appellate court

reviews a trial court’s granting of summary judgment de novo under the same

criteria that govern the trial court’s consideration of whether summary

judgment is appropriate, i.e., whether there is any genuine issue of material

fact and whether the movant is entitled to judgment as a matter of law.

Samaha v. Rau, 07-1726 (La. 2/26/08), 977 So. 2d 880. Generally, with

respect to coverage for temporary substitute vehicles, courts enforce the

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provisions of La. R.S. 22:1296 and find the insurer for driver of the vehicle

liable, See, Litton v. White, 49,958 (La. App. 2 Cir. 7/1/15), 169 So. 3d 819;

cites Safeway Ins. Co. of La. v. State Farm Mut. Auto. Ins. Co., 36,853 (La.

App. 2 Cir. 3/5/2003), 839 So. 2d 1022; with respect to non-owned classified

cars, the specific provisions of the insurance policy apply. See Shelter Mut.

Ins. Co. v. State Farm Mut. Auto. Ins. Co., 07-0163 (La. App. 1 Cir. 7/18/08),

993 So. 2d 236.

On appeal, Safeway argues that the trial court erred in granting

GEICO’s motion for summary judgment because GEICO, as the insurer for

Alford, maintained primary liability for the damages sustained and is

therefore liable in full to Safeway for the settlement amount paid.

Alternatively, Safeway argues that each insurer should be considered a co-

primary insurer for the accident and each insurance company bears

proportionate liability1 for the sum paid, predicated on their respective

coverages because the “other insurance” clauses contained within the two

policies are mutually repugnant.

In support, Safeway first cites Safeway v. State Farm, supra, in which

this court found that State Farm, the insurer of the driver who operated a

borrowed vehicle while their covered vehicle was under repair, rather than

Safeway, the insurer of the borrowed vehicle, provided primary liability

coverage for the damages sustained in the pedestrian accident. Safeway

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From the total amount of coverage provided between the two insurance
companies, Safeway argues that as a co-primary insurer, its proportionate share would be
1/3 and GEICO’s would be 2/3 of the $8,303. Therefore, GEICO’s liability to Safeway
would total $5,535.33.

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likewise contends that GEICO, because of its status as the driver’s insurer, is

primarily liable for the damages sustained in the present case.

We note that the decision rendered in Safeway v. State Farm, supra,

was based, in part, upon the vehicle’s classification as a temporary substitute

vehicle. Under La. R.S. 22:1406(F), now designated as La. R.S. 22:1296,2

which governs the use of temporary substitute vehicles, this court determined

that the driver’s insurer was primarily liable. However, in the present case,

there are not enough facts in the record to determine whether the 2006 Nissan

Titan is considered a temporary substitute vehicle, whereby the provisions of

La. R.S. 22:1296 would apply, or simply a non-owned vehicle, in which the

interpretation of the two “other insurance” clauses within each policy would

govern.

Although GEICO argues that the vehicle is a non-owned automobile

because it is not listed or insured under Alford’s policy,3 we nevertheless find

that there is insufficient information to determine if the vehicle would be

classified a temporary substitute vehicle. Because of the limited facts of this

contained in this record, we are unable to determine which application of the

law would apply. Moreover, after our reading and review of the two

insurance policies, we conclude that the policies create a genuine issue of

2
La. R.S. 22:1296, in pertinent part, provides: [e]very approved insurance
company, reciprocal or exchange, writing automobile liability. . . shall extend to temporary
substitute motor vehicles as defined in the applicable insurance policy. . .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. . .
(Emphasis added).
3
In brief, GEICO provided that it was uncontested that the 2006 Nissan Titan was
non-owned under its policy; however, there is no stipulation between the parties that the
vehicle is simply non-owned and not a temporary substitute vehicle.

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material fact as to the classification of the vehicle because under La. R.S.

22:1296, a temporary substitute vehicle is defined in accordance with the

insurer’s policy. Litton, supra; State Farm Auto. Mut. Ins. Co., v. Safeway

Ins. Co. of Louisiana, 16-357 (La. App. 3 Cir. 11/2/16), 205 So. 3d 981.

Safeway’s policy defines a temporary substitute automobile as

follows:

[A]ny private passenger, utility or farm automobile, not owned
by the named insurer or any resident of the same household,
while temporarily used as a substitute for the owned automobile
when the owned automobile is being serviced or repaired by a
person engaged in the business of selling, repairing, or servicing
motor vehicles.

It further defines a non-owned automobile as:

[A] private passenger or utility automobile not owned by or
furnished for the regular use of either the named insured or any
relative other than a temporary substitute automobile.

In contrast, GEICO’s policy provides that a temporary substitute automobile

is:

[A]n auto or trailer, not owned by you, temporarily used with the
permission of the owner. This vehicle must be used as a
substitute for your covered auto or trailer when withdrawn from
normal use because of its breakdown, repair, servicing, loss, or
destruction.

It further provides that a non-owed vehicle is:

[A] private passenger auto or trailer not owned by or furnished
for regular use of either you or a family member, other than a
temporary substitute auto. An auto rented or leased for more
than 30 days will be considered as furnished for your regular use.

Based upon our de novo review of the record before us, we find that

there are simply not enough facts before the court to permit the disposition of

this case by summary judgment. Neither party, in brief or oral argument,

attests to whether the 2006 Nissan Titan is a temporary substitute vehicle, nor

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are there any further details in the record which indicate the reason for which

Alford borrowed Bradley’s vehicle. Therefore, we find that the classification

of the vehicle is pertinent in first determining whether the provisions of La.

R.S. 22:1296 are applicable, or whether an interpretation of the insurers’

respective policies with regard to the “other insurance” clauses should be

conducted instead.

CONCLUSION

For the foregoing reasons, the trial court’s judgment is reversed and

this case is remanded for further proceedings. Costs associated with this

appeal are assigned to Safeway.

REVERSED and REMANDED.

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