Dickey Porter and Doris Porter v. Joshua Robert McGuffee Service First, Inc. and Travelers Property and Casualty

Judgment rendered August 28, 2024.
Application for rehearing may be filed
within the delay allowed by Art. 2166,
La. C.C.P.

No. 55,845-CA

COURT OF APPEAL
SECOND CIRCUIT
STATE OF LOUISIANA

*****

DICKEY PORTER AND DORIS Plaintiffs
PORTER

versus

JOSHUA ROBERT MCGUFFEE Defendants
SERVICE FIRST, INC. AND
TRAVELERS PROPERTY AND
CASUALTY

*****

Appealed from the
Fourth Judicial District Court for the
Parish of Ouachita, Louisiana
Trial Court No. 2020-1891

Honorable Jefferson Bryan Joyce, Judge

*****

LUGENBUHL, WHEATON, PECK, Counsel for Appellant,
RANKIN & HUBBARD Travelers Property Casualty
By: Celeste D. Elliott Company of America
Seth A. Schmeeckle
Tina L. Kappen

STEWART LAW GROUP, LLC Counsel for Plaintiffs,
By: Arthur L. Stewart Dickey Porter and Doris
Porter
J. MICHAEL RHYMES

ROUNTREE LAW OFFICES Counsel for Appellees,
By: James A. Rountree Service First, Inc., and
Joshua McGuffee
CASTEN & PEARCE, APLC
By: Marshall R. Pearce

HAMMONDS, SILLS, Counsel for Appellee,
ADKINS & GUICE State Farm Mutual
By: Neal L. Johnson, Jr. Automobile Ins., Co.

*****

Before STONE, COX, and ROBINSON, JJ.

COX, J.

This appeal arises out of the Fourth Judicial District Court, Ouachita

Parish, Louisiana. Dickey Porter and Doris Porter filed a personal injury

suit against Joshua McGuffee, Service First, Inc. (“Service First”), and

Travelers Property and Casualty Company (“Travelers”). Travelers filed a

motion for summary judgment arguing it did not provide coverage for the

accident. The trial court granted the motion for summary judgment. Mr.

McGuffee and Service First now appeal. For the following reasons, we

reverse.

FACTS

Mr. McGuffee is an employee of Service First and drove a vehicle

owned by Service First as part of his job. Travelers provided automobile

insurance to Service First’s fleet of vehicles.

On July 17, 2020, Dickey Porter and Doris Porter filed a petition for

damages against Mr. McGuffee, Service First, and Travelers and alleged the

following facts and damages:

On August 15, 2019, Mr. Porter was driving his 2006 Harley

Davidson motorcycle on I-20. Mr. Porter turned on his right turn signal and

began slowing down to exit the interstate when he was rear-ended by Mr.

McGuffee, who was driving a 2011 Chevrolet Silverado (“2011 Chevy”)

owned by Service First. Mr. Porter fell off his motorcycle and rolled into

the middle of I-20. Mr. Porter was able to get up and move out of traffic.

Mr. Porter alleged that his whole body was injured, specifically his

shoulders, hips, and dominant right hand. He stated he has had two

surgeries on his right hand, but he has effectively lost all use of the hand.

Mr. Porter claimed to continually suffer from pain throughout his body and

stated he is still required to take medication as a result of his injuries.

Mrs. Porter claimed she suffered great emotional distress and the loss

of services and society of her husband including the loss of his services in

helping maintain the marital domicile (which includes five acres of land).

The Porters requested the following relief: medical expenses, loss of services

and society, mental and emotional distress, all costs of these proceedings,

and legal interest from the date of judicial demand.

Service First filed an answer, in which it requested a jury trial, denied

the allegations, and asserted comparative fault. Travelers filed its answer

and denied the allegations. Travelers asserted several defenses in its answer,

including that Mr. McGuffee was not driving a covered auto and the

plaintiffs’ claims are barred due to a “Change Endorsement” effective

January 18, 2019. Service First and Mr. McGuffee filed an answer and

cross/third-party claim, denied the allegations, and stated that if the truck

was not insured, it was due to a clerical error and Travelers still has a duty to

defend. Service First and McGuffee requested that the plaintiffs’ demands

be denied at their costs and Travelers be required to defend or pay defense

costs and indemnify Service First.

Travelers filed an answer and asserted defenses to Service First’s and

Mr. McGuffee’s crossclaim, denied the allegations, and stated that there was

no insurance coverage on the truck and Mr. McGuffee was not an “insured”

because he was not driving a covered vehicle.

On February 4, 2021, the Porters filed their first motion to amend their

petition. They agreed that the truck should still be covered by Travelers’

insurance policy, but if not, Service First’s commercial general liability
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(“CGL”) insurance policy should cover the negligent action of removing the

insurance coverage of the truck. The Porters added as a defendant The

Travelers Indemnity Company of America (“Travelers Indemnity”), Service

First’s GCL insurer.

Travelers filed an answer to the amended petition, reasserted that the

truck was not a covered auto, and denied liability coverage. Travelers

Indemnity filed an answer and stated that the CGL insurance policy itself is

the best evidence of its contents. Travelers Indemnity denied any liability to

the plaintiffs and stated the claims fall outside the scope of coverage of the

CGL policy due to the automobile exclusion.

On April 28, 2022, the Porters amended their petition to include State

Farm Mutual Automobile Insurance Company (“State Farm”), Mr.

McGuffee’s personal auto liability insurer. Travelers and Travelers

Indemnity filed separate answers, denying liability. State Farm answered

and stated that it did not issue coverage to Mr. McGuffee for the operation or

use of the 2011 Chevy owned by Service First.

Service First and Mr. McGuffee filed an answer and alleged that Mr.

Porter’s “erratic” attempt to turn caused the accident. They stated that in the

list of covered vehicles, the 2011 Chevy was listed directly below an unused

2011 Chevrolet truck, and the 2011 Chevy was inadvertently marked out

instead of the unused 2011 truck. They stated they were not given notice

that the truck insurance was canceled. They again requested that Travelers

provide their defense in the suit.

On October 10, 2022, State Farm filed a motion for summary

judgment, asserting that the auto accident was not covered under Mr.

McGuffee’s insurance. On November 11, 2022, Travelers Indemnity filed a
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motion for judgment, asserting their auto exclusion precludes coverage of

the accident. These motions for summary judgment are not contested on

appeal.

On November 15, 2022, Travelers filed its motion for summary

judgment, asserting that it should be dismissed because there was no

coverage of the 2011 Chevy under the auto policy. Travelers included the

affidavit of David Stewart, who stated he is a managing director of the

Travelers group of insurers. Mr. Stewart provided a copy of the auto policy,

effective September 18, 2018 through September 18, 2019, a copy of the

policy change request submitted by or on behalf of Service First, and a copy

of the insurance cards. Stewart stated the requested changes were effective

January 18, 2019, and Travelers returned $2,477 in premiums to Service

First for removing the vehicle from coverage.

Travelers also attached the deposition of Jeff Alford, CEO of Service

First. He stated that either he or another employee of Service First requested

to have “Vehicle 8” removed from service. He stated the removal was an

accident because the truck listed below “Vehicle 8” was supposed to be

removed due to it no longer being in use. He stated that his insurance agent

was the first to notice that the truck was not covered by insurance after the

accident, but he was uncertain how Travelers would handle the claim. Mr.

Alford stated that his agent thought the truck that was removed from

insurance was the truck that was no longer in service.

Service First opposed Travelers’ motion for summary judgment.

Service First attached a list of disputed facts and the affidavit of Mr. Alford.

Mr. Alford stated that at the beginning of 2019, four trucks were covered by

insurance but not in use for various reasons, one of those was a 2011 Chevy
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Silverado with the VIN number ending in 3740. However, Travelers uses a

different numbering system than Service First. For instance, the 2011 Chevy

was listed as vehicle 26 on Service First’s records and vehicle 8 on

Travelers’ list. Mr. Alford stated that he confirmed with Service First’s

insurance representative, Rhonda Crooks, that they were both attempting to

remove the truck with the VIN number ending in 3740 when they removed

the 2011 Chevy “by mutual error.”

Mr. Alford stated that when Service First canceled liability insurance

on vehicles in the past, he routinely received a notice from the State of

Louisiana to provide proof of insurance or surrender the license plate. He

stated that he received no notice of the cancelation of the 2011 Chevy from

the State of Louisiana. He stated that if Travelers had correctly notified the

State, the error would have been corrected immediately. The affidavit of

Margarette Danna, an officer and shareholder of Service First, was also

attached, in which she reiterated the statements by Mr. Alford.

Service First also attached a notice of cancelation of liability

insurance from the Louisiana Department of Public Safety and Corrections

that it received after cancelation of another vehicle’s insurance.

The Porters also opposed Travelers’ motion for summary judgment.

The matter was argued on January 18, 2023. On February 2, 2023, the trial

court put its ruling and reasons for ruling on the record. Regarding

Travelers’ motion, the district court stated:

It is clear the subject truck was removed from the policy prior
to the accident. The Court is convinced that removal was in
error. However, to reform the policy and provide coverage the
mistake must be mutual by both parties… Neither plaintiff nor
Service First can point to any evidence that Travelers
committed error in the removal of the truck from its list of
insured vehicles… There is no evidence of mistake by
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Travelers… There’s no evidence of any fraud… They argue, if
the Travelers -- if Travelers had complied with its duty to notify
the State Service First would have received a notice, corrected
the policy mistake immediately after receiving notice, thus,
Travelers contributed to the mistake. That argument is that the
failure to report was a mistake creating a mutual error. The
statute does seem to mandate an insurance company shall notify
the State when a vehicle is no longer insured… Much of this
argument is speculation. It assumes the State would have sent
out a notice. There’s no real evidence that Service First relied
on this procedure to cure any error. The Court is of the opinion
that Travelers did have a duty to notify the State, however,
whether or not that would have resulted in Service First taking
some remedial action is speculative. There is no significant
evidence that Service First relied on this mistake. The Court is
of the opinion that there is no showing that such an error by
Travelers was enough to create a mutual error or mistake… the
Court finds that if there is no coverage, there is no duty to
defend. The Court accepts Service First statement that there
was no intention to operate this truck without insurance. The
evidence supports that position, however, neither Service First
nor the plaintiff can support its argument that there was mutual
fault, thus reforming the policy. It does not appear to be a
genuine issue of material fact. It may not be equitable, but it
appears to be legally correct. Travelers’ motion for summary
judgment is granted.

On March 8, 2023, the district court signed its judgment regarding all

three motions for summary judgment. The district court granted the three

motions for summary judgment and dismissed the Porters’ claims against the

three insurance companies with prejudice. The district court also dismissed

the crossclaims of Service First against Travelers with prejudice.

Service First filed a motion for new trial, which was denied. Service

First now appeals the granting of Travelers’ motion for summary judgment.

The motions for summary judgment in favor of Travelers Indemnity and

State Farm have not been appealed.

DISCUSSION

Service First argues that the trial court erred in granting Travelers’

motion for summary judgment. It asserts that the trial court incorrectly

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concluded that Travelers’ insurance policy did not provide coverage for the

accident and Travelers did not have a duty to defend.

A de novo standard of review is required when an appellate court

considers rulings on motions for summary judgment, and the appellate court

uses the same criteria that governed the district court’s determination of

whether summary judgment was appropriate. Sepulvado v. Travelers Ins. -

Charter Oak Fire Ins. Co., 52,415 (La. App. 2 Cir. 11/8/18), 261 So.3d 980.

A court must grant a motion for summary judgment if the motion,

memorandum, and supporting documents show that there is no genuine issue

as to a material fact and that the mover is entitled to judgment as a matter of

law. La. C.C.P. art. 966.

A fact is material if it potentially ensures or precludes recovery,

affects a litigant’s ultimate success, or determines the outcome of the legal

dispute. A genuine issue of material fact is one as to which reasonable

persons could disagree; if reasonable persons could reach only one

conclusion, there is no need for trial on that issue and summary judgment is

appropriate. Jackson v. City of New Orleans, 12-2742 (La. 1/28/14), 144

So.3d 876, cert. denied, 574 U.S. 869, 135 S. Ct. 197, 190 L. Ed. 2d 130

(2014); Green v. Brookshire Grocery Co., 53,066 (La. App. 2 Cir. 9/25/19),

280 So.3d 1256. In determining whether an issue is genuine, a court should

not consider the merits, make credibility determinations, evaluate testimony,

or weigh evidence. Green v. Brookshire Grocery Co., supra.

The interpretation of an insurance policy ordinarily involves a legal

question that can be properly resolved on motion for summary judgment.

Jumper v. State Farm Mut. Auto. Ins. Co., 54,184 (La. App. 2 Cir. 3/9/22),

335 So.3d 1001. The starting point in analyzing insurance policies is the
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principle that the policy is a contract between the parties and should be

construed using the general rules of interpretation of contracts set forth in

the Louisiana Civil Code. Id. Summary judgment declaring a lack of

coverage under an insurance policy may not be rendered unless there is no

reasonable interpretation of the policy, when applied to the undisputed

material facts shown by the evidence supporting the motion, under which

coverage could be afforded. Id.

“As other written agreements, insurance policies may be reformed if,

through mutual error or fraud, the policy as issued does not express the

agreement of the parties.” Samuels v. State Farm Mut. Auto. Ins. Co., 06-

0034 (La. 10/17/06), 939 So.2d 1235, citing William Shelby McKenzie and

H. Alston Johnson, III, Louisiana Civil Law Treatise: Insurance Law and

Practice, Vol. 15, § 5, p. 14 (2nd Ed. 1996). In the absence of fraud, the

party seeking reformation has the burden of proving a mutual error in the

written policy. Id. Parole evidence is admissible to show mutual error even

though the express terms of the policy are not ambiguous. Id.

Service First alleged a mutual mistake in the removal of the 2011

Chevy that Mr. McGuffee was driving. Service First has never denied that

its representative drew a line through the 2011 Chevy, but it argues that it

was a clerical mistake because there were two 2011 Chevy trucks and only

one was in operation. Service First stated that it continued to pay insurance

premiums on the number of trucks operating in its fleet. Service First also

argued that if Travelers had sent the insurance cancelation to the Louisiana

Office of Motor Vehicles, Service First would have been aware of the

mistake when the Office of Motor Vehicles requested the license plate of the

2011 Chevy.
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Travelers’ position is that there is no coverage because the truck was

removed from the policy by Service First. Travelers argued that Service

First could not prove any mistake on their part for the mistake to be mutual.

The trial court agreed with Travelers that the vehicle was removed, therefore

there is no coverage.

This case is presented to us at the summary judgment phase.

Therefore, we have conducted a de novo review and find that material facts

prevent the granting of Travelers’ motion for summary judgment.

Each allegation of a clerical error or mutual mistake must be analyzed

on the facts of each case. Here, Service First communicated with its

insurance agent the need to remove inoperable vehicles from their insurance

policy. Service First’s list of vehicles was organized in a different manner

than Traveler’s list of the same vehicles. Service First thought the correct

vehicles were marked out but inadvertently crossed out the incorrect 2011

Chevrolet truck. Service First communicated with their agent, gave the

agent the list, and the agent submitted the list to Travelers. Travelers argued

that it had no way of knowing the incorrect truck was removed. This creates

a genuine issue of material fact. An agent sold Service First the Travelers’

policy and was involved in the removal of the inoperable vehicles.

Therefore, there is a question of that agent’s knowledge and whether it is

imputed to Travelers.

In addition to whether the agent’s knowledge was imputed to

Travelers, we have an issue of whether Service First relied on the Office of

Motor Vehicles’ request for license plates after insurance was canceled. The

trial court stated that it did not find that Service First relied on the license

plate request. Through affidavits from Mr. Alford and Ms. Danna, Service
9

First showed that it has received license plate requests in the past after

canceling insurance on a vehicle. Service First stated that if it received the

request from the Office of Motor Vehicles, it would have been on notice to

correct the mistake. Service First stated it would have caught the error when

attempting to return the requested license plate. This shows that the license

plate request was confirmation of the proper vehicles being insured. We

find this fact sufficient to show a genuine issue of material fact regarding

whether the vehicle should be covered under the fleet.

This is not a case where an insured has not paid the applicable

premium after accidentally removing a vehicle. Service First has continued

to pay its insurance premiums on its fleet of vehicles and received insurance

cards that stated the “fleet” was insured. Individual cards with the make,

model, and VIN numbers of the vehicles were not issued for each vehicle in

the covered fleet.

This is not a case of interpreting a policy provision without the need

to consider outside facts. This case presents a unique set of facts regarding

the error and the systems to catch or see the error after the fact. The

intention and credibility of the parties will be necessary in determining the

liability of Travelers. For these reasons, we find this matter is best resolved

at a trial on the merits, not on a motion for summary judgment.

CONCLUSION

For the reasons expressed above, we reverse the granting of Travelers

Property and Casualty Company’s motion for summary judgment and

remand to the trial court for further proceedings. Costs associated with this

appeal are cast on Travelers Property and Casualty Company.

REVERSED.
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