Billie Jean Gilbert and Joseph Gilbert v. Marlow Reynoso

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

05-418

BILLIE JEAN GILBERT AND
JOSEPH GILBERT

VERSUS

MARLOW REYNOSO, ET AL.

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, NO. 02-4670-G
HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE

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J. DAVID PAINTER
JUDGE

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Court composed of Glenn B. Gremillion, J. David Painter, and James T. Genovese,
Judges.

AFFIRMED.

Ian A. MacDonald
P.O. Box 3408
Lafayette, LA 70502
Counsel for Defendant-Appellee:
Progressive County Mutual Insurance Company

P. Craig Morrow, Jr.
Patrick C. Morrow
P.O. Drawer 1787
Opelousas, LA 70571
Counsel for Plaintiffs-Appellants:
Billie Jean Gilbert and Joseph Gilbert

Marlow Reynoso, In Proper Person
10201 Harwin, No. 310
Houston, TX 77036
Defendant- Appellee:
Marlow Reynoso

PAINTER, Judge.

Plaintiffs, Billie Jean Gilbert and Joseph Gilbert, appeal the trial court’s judgment

granting a motion for summary judgment in favor of Defendant, Progressive County

Mutual Insurance Company. Finding that there is no genuine issue of material fact

with respect to the Progressive policy’s exclusion of Marlow S. Reynoso from

coverage, we affirm the ruling of the trial court.

FACTUAL AND PROCEDURAL BACKGROUND

On April 23, 2003, Gladys Hernandez (“Hernandez”), a Texas resident,

submitted an application for automobile insurance with Progressive County Mutual

Insurance Company (“Progressive”) with respect to a 1989 Honda Accord DX and

a 1995 Lincoln Towncar EX. Hernandez and her boyfriend/common law husband,

Marlow S. Reynoso (“Reynoso”) were listed as drivers on the policy. However, on

May 1, 2002, Hernandez, as the policy owner, deleted the Lincoln Towncar from the

policy and executed a form to exclude Reynoso as a driver under the policy. The

form executed by Hernandez was approved and authorized by the Texas Department

of Insurance and provided as follows:

515A. EXCLUSION OF NAMED DRIVER AND PARTIAL
REJECTION OF COVERAGES

This endorsement forms a part of Policy No. 38010526-0 issued to Gladys
V. Hernandez by the Oscars Ins. Agency (Name of Insurance Company) at
its Agency located (city and state) Houston Texas and is effective from 2:20
p.m. (12:01 A.M. Standard Time). (The information above is required only
when this endorsement is issued subsequent to preparation of the policy.)
This endorsement forms a part of the policy to which attached, effective from
its date of issue unless otherwise stated herein.

WARNING
READ THIS ENDORSEMENT CAREFULLY!

This acknowledgment and rejection is applicable to all renewals issued by us
or any affiliated insurer. However, we must provide a notice with each
renewal as follows: “This policy contains a named driver exclusion.”

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You agree that none of the insurance coverages afforded by this policy shall
apply while Marlon Reynoso (The Excluded Driver) is operating your
covered auto or any other motor vehicle. You further agree that this
endorsement will also serve as a rejection of Uninsured/Underinsured
Motorists Coverage and Personal Injury Protection Coverage while your
covered auto or any other motor vehicle is operated by the excluded driver.
Acknowledged by (s) Gladys Hernandez (Your signature). By (s)
Oscar A. Rivas (Duly Authorized Representative).

FORM 515A - EXCLUSION OF NAMED DRIVER AND PARTIAL
REJECTION OF COVERAGES Texas Standard Automobile Endorsement
Prescribed March 18, 1992.

Hernandez’s insurance agent communicated this information to Progressive on

May 1, 2002 and Progressive issued the changed policy reflecting the deletion of the

Lincoln Towncar and excluding Reynoso as a driver effective May 2, 2002. Attached

and made a part of that policy was Form 515A, as it appears above.

On July 4, 2002, Reynoso drove the Honda Accord to Calcasieu Parish,

Louisiana, and was involved in an automobile accident with Billie Jean Gilbert and

Joseph Gilbert (“the Gilberts”). Ms. Gilbert was driving and Mr. Gilbert was a

passenger. The Gilberts filed suit in the Fourteenth Judicial District Court for

personal injuries and property damages allegedly sustained in the accident. Reynoso

and Progressive were named as defendants. Progressive answered the suit and

asserted that it did not provide coverage for this accident based on the exclusion of

Reynoso as a driver executed by the policy owner, Hernandez. Progressive then

moved for summary judgment and said motion was granted by the trial court.

Plaintiffs lodged this appeal, asserting that the trial court erred in finding that

Reynoso was an excluded driver under the terms and conditions of the policy since

the exclusion form signed by Hernandez was not dated. Plaintiffs further contend that

Louisiana law rather than Texas law applies and that parole evidence cannot be used

to alter the written document. For the following reasons, we disagree with Plaintiffs

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and affirm the ruling of the trial court granting summary judgment in favor of

Progressive.

DISCUSSION

At the outset, we note that Appellate courts review summary judgments de novo,

under the same criteria which govern the district court’s consideration of the

appropriateness of summary judgment. Jones v. Estate of Santiago, 03-1424 (La.

04/14/04), 370 So.2d 1002; Glod v. Baker, 04-1483 (La.App. 3 Cir. 3/23/05), 899

So.2d 642. Thus, we must determine whether any genuine issues of material fact

exist and whether the movant is entitled to judgment as a matter of law. La.Code

Civ.P. art. 966(B) and (C). If the pleadings, depositions, answers to interrogatories,

admissions on file, and affidavits show a lack of factual support for an essential

element of the opposing party’s claim and the opposing party cannot produce any

evidence to suggest that it will be able to meet its evidentiary burden at trial,

judgment should be rendered in favor of movant. Palm v. Stewart, 03-594 (La.App.

3 Cir. 11/5/03), 858 So.2d 790.

In this case, the inquiry on de novo review involves four questions: (1) whether

Texas or Louisiana law governs; (2) whether the exclusion is valid; (3) whether the

exclusion applies to the facts of this case; and (4) whether there are any genuine

issues of material fact precluding summary judgment.

Turning first to the issue of whether Louisiana or Texas law applies, we note that

the critical first test is whether there is, in fact, a difference in the law of the two

jurisdictions and whether any such difference affects the outcome of the case. Palm,

858 So.2d 790. Plaintiffs contend, without citation to authority or giving any other

reason, that Louisiana law applies but further contend that even if Texas law applies,

it recognizes that parole evidence cannot be used and that its standards governing

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summary judgments are similar to those of Louisiana law. Defendants, on the other

hand, contend that Texas law applies because the insurance policy at issue was issued

and delivered to Hernandez, a Texas resident, for a vehicle registered and garaged in

Texas. See Beasley v. Butler, 499 So.2d 543 (La.App. 2 Cir. 1986) and Gates v.

Clairet, 945 F.2d 102 (5th Cir. 1991).

In both Louisiana and Texas, a named insured, such as Hernandez, is free to

exclude a specific driver by written agreement. La.R.S. 32:900(L); V.A.T.S. Ins.

Code, Art. 5.06. In Texas, that exclusion must be executed on a form approved by

the State Board of Insurance and made a part of the policy. V.A.T.S. Ins. Code, Art.

5.06, Safeway Managing Gen. Agency for State and County Mut. Fire Ins. Co. v.

Cooper, 952 S.W. 2d 861 (Tex.Civ.App. - Amarillo 1997). Neither state requires that

the form be dated and neither state requires that the excluded driver sign the

agreement. La.R.S. 32:900(L); V.A.T.S. Ins. Code, Art. 5.06. Plaintiffs also contend

that the exclusion is problematic in that Reynoso was the owner of the vehicle which

he was excluded from driving. We note that the named insured on the policy was

Hernandez and that the issuance of a non-owner policy is not violative of Louisiana

public policy or law. Biggs v. Prewitt, 95-315 (La.App. 1 Cir. 10/6/95), 669 So.2d

441, writ denied, 96-1035 (La. 5/31/96), 674 So.2d 264.. This court finds that there

are no significant differences in the laws of the two jurisdictions with respect to the

validity of the named driver exclusion at issue herein which would affect the outcome

of this case. We do recognize that Texas has a legitimate interest in regulating

insurance contracts delivered to and insuring activities of Texas residents, but find

that the application of Louisiana law in this instance will not abrogate the Texas

insurance contract issued in this case in any way.

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We next address the issue of the validity of the named driver exclusion at issue

in this case. In this respect, we first note that the interpretation of an insurance policy

is usually a legal question that can be properly resolved by a motion for summary

judgment. Miller v. Superior Shipyard and Fabrication, Inc., 01-2907 (La. App. 1

Cir. 08/20/03), 859 So.2d 159, writ denied, 03-2643 (La. 12/12/03), 860 So.2d 1159.

However, with respect to summary judgments relating to coverage issues, the

Louisiana Supreme Court has said that summary judgment may not be rendered

declaring lack of coverage 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. Westerfield v. LaFleur, 493 So.2d

600 (La.1986).

Plaintiffs assert that this exclusion is invalid because it is undated and because

it was not signed by Reynoso. Defendants contend that the form does not have to be

dated because it specifically states that “This endorsement forms a part of the policy

to which attached, effective from its date of issue unless otherwise stated herein.”

The undisputed material facts are that Hernandez specifically and knowingly

excluded Reynoso from coverage under the Progressive policy with herself as the

named insured by executing form 515A which was approved and authorized by the

Texas Department of Insurance and made a part of the policy issued to her.

Hernandez testified that she executed the exclusion in order to receive a reduction in

the premium, which she did, in fact, receive. Mr. Reynoso understood that he was

excluded from coverage. Thus, we agree with the trial court’s finding that there was

no misunderstanding as to what the intent was in the execution of this exclusion.

Again, we note that neither the law of Texas nor the law of Louisiana requires

that the named driver exclusion be dated. Louisiana law requires that a named driver

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exclusion must be in writing and signed by the named insured. Louisiana Revised

Statute 32:900(L) specifically states that “[i]t shall not be necessary for the person

being excluded from coverage to execute or be a party to the written agreement.” The

requirements of Louisiana law are met in this case and it is of no consequence that

Reynoso testified that he did not sign the exclusion and that he was not present when

Hernandez filled out the named driver exclusion. Texas law requires that the form

clearly show the intent of the named insured to exclude a specific driver from

coverage, that the form be approved and authorized by the Texas Department of

Insurance, and that the form, once executed, be made a part of the policy. All of

those requirements have been met in this case as well. We, therefore, conclude that

the named driver exclusion at issue herein is valid under both Louisiana and Texas

law.

Finding that the exclusion is valid, we must next determine whether it is

applicable to the facts of this case. Again, we agree with the trial court’s finding that

the document itself is the best evidence of its contents and that it shows that there was

a clear exclusion of Reynoso from coverage. Reynoso was driving a vehicle which

he knew that he was excluded from driving by the policy of insurance covering same.

There is no question that the exclusion was executed before the subject accident

occurred. Therefore, this exclusion is applicable to the facts of this case.

The final issue is whether there are any genuine issues of material fact precluding

summary judgment in favor of Progressive in this instance. We find that there are no

such issues. Plaintiffs contend that the parole evidence rule precludes the alteration

of a written document by the deposition testimony of Hernandez and Reynoso;

however, Plaintiffs go on to assert that Reynoso’s testimony that he was not present

when the exclusion was executed, that he did not think that Hernandez went to the

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agency to sign the document, and that he did not sign the exclusion creates a genuine

issue of material fact. Since Louisiana law does not require the excluded driver to be

a party to the named driver exclusion, we find that this testimony does not create an

issue of material fact. Hernandez clearly testified that she executed the exclusion and

identified her signature thereon. Therefore, Reynoso’s testimony that even though

he understood he was excluded from driving the vehicle, he knew nothing about the

circumstances under which Hernandez executed said exclusion does not create an

issue of material fact. Accordingly, we find summary judgment in favor of

Progressive to be appropriate.

DECREE

For all of the foregoing reasons, we find that the named driver exclusion executed

by the named insured, Gladys Hernandez, was valid under both Louisiana and Texas

laws. Accordingly, we affirm the trial court’s grant of summary judgment in favor

of Progressive County Mutual Insurance Company. Costs of this appeal are assessed

to Plaintiffs-Appellants, Billie Jean Gilbert and Joseph Gilbert.

AFFIRMED.

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