Albert John Abshire v. Clinton P. Desmoreaux

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-626

ALBERT JOHN ABSHIRE, ET AL.

VERSUS

CLINTON P. DESMOREAUX, ET AL.

**********

APPEAL FROM THE
ALEXANDRIA CITY COURT
PARISH OF RAPIDES, NO. 101,340
HONORABLE RICHARD ERIC STARLING, JR., CITY COURT JUDGE

**********

ULYSSES GENE THIBODEAUX
CHIEF JUDGE

**********

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and
Billy Howard Ezell, Judges.

AFFIRMED IN PART; REVERSED
IN PART, AND RENDERED.

Robert Lawrence Beck, Jr.
Rivers, Beck, Dalrymple & Ledet
P. O. Drawer 12850
Alexandria, LA 71315-2850
Telephone: (318) 445-6581
COUNSEL FOR:
Plaintiffs/Appellees - Albert John Abshire and Holly G. Struble

Keith Michael Borne
Borne, Wilkes, L.L.P.
P. O. Box 4305
Lafayette, LA 70502-4305
Telephone: (337) 232-1604
COUNSEL FOR:
Defendant/Appellant - Safeway Insurance Company of Louisiana

Bonita K. Preuett-Armour
Armour Law Firm, L.L.C.
P. O. Box 710
Alexandria, LA 71309
Telephone: (318) 442-6611
COUNSEL FOR:
Secondary Defendant/Appellant - State Farm Mutual Automobile
Insurance Co.

THIBODEAUX, Chief Judge.

Defendant-appellant, Safeway Insurance Company (Safeway), appeals

the judgment ordering it to pay compensatory and exemplary damages arising out of

a car accident caused by its insured’s permissive driver, Clinton Desormeaux (Mr.

Desormeaux). Safeway contends that its liability coverage does not apply because

its policy with the named insured, Frances Blood Desormeaux (Ms. Blood),1 is void

ab initio due to material misrepresentations she made on her application for

automobile insurance. Alternatively, Safeway argues that because exemplary

damages are expressly excluded from coverage by its policy, the trial court erred in

holding it liable for the payment of exemplary damages.

The uninsured/underinsured motorist (UM) carrier, State Farm Mutual

Automobile Insurance Company (State Farm), has answered the appeal, alleging that

the trial court’s judgment should be reversed because the allocation of damages

erroneously resulted in it being held liable for the payment of damages that should

have been paid by the primary liability insurer, Safeway. State Farm also contends

that the trial court’s assessment to it of the payment of exemplary damages was

improper because such damages are expressly excluded from UM coverage by the

terms of its policy.

For the following reasons, the judgment of the trial court is affirmed in

part, reversed in part, and rendered.

I.

ISSUES

1. Can the material misrepresentation defense be raised
by an insurer to achieve the rescission of an

1
Ms. Blood later married Mr. Desormeaux; however, they were not married at the time of the
accident or at the time she procured insurance for the truck involved in the accident. For the sake
of clarity, we will refer to her as Ms. Blood throughout this opinion.

insurance contract after an accident triggering the
coverage has occurred?

2. Did Safeway satisfy its burden of establishing that
its insured made material misrepresentations on her
application of automobile insurance?

3. Did the trial court erroneously assess exemplary
damages to the primary liability and UM insurance
carriers?

4. Did the trial court misallocate damages, resulting in
a forced exhaustion of the limits of the primary
liability insurance carrier’s policy and a premature
allocation of damages to the UM carrier?

II.

FACTUAL BACKGROUND

On the night of September 17, 2004, Mr. Desormeaux struck the rear of

a pickup truck occupied by Holly Struble (Ms. Struble), the truck’s owner, and her

friend, Albert Abshire (Mr. Abshire). Mr. Desormeaux was also driving a pickup

truck. The truck was titled to his girlfriend, Ms. Blood, and insured in her name only.

Mr. Desormeaux fled the scene because he had been drinking; however, he was

followed by the couple and apprehended by the Alexandria City Police a short time

later. Mr. Desormeaux did not have a driver’s license at the time of the accident as

a result of a prior traffic offense and license suspension. He was arrested and

ultimately pled guilty to multiple charges, including Driving While Intoxicated

(DWI).

Mr. Abshire and Ms. Struble subsequently filed a suit for damages

against Mr. Desormeaux and Safeway, the liability insurer of the vehicle that he was

driving at the time of the accident. The plaintiffs also sued State Farm, the UM

carrier for Ms. Struble’s truck. In response to the lawsuit, Safeway alleged that its

policy was void ab initio and did not provide liability coverage for the accident

2

because of material misrepresentations made by Ms. Blood when she applied for

coverage for the truck in January of 2004. Safeway alleged that in response to

questions posed on its application for automobile insurance, Ms. Blood intentionally

failed to disclose that Mr. Desormeaux, who she had been cohabitating with for six

years at that time, was a resident of her household and that he would be an operator

of the pickup truck. Safeway asserted that Ms. Blood intentionally omitted this

information because she knew that his past driving offenses and lack of a driver’s

license would negatively affect the ability to get coverage for the vehicle. Safeway

argued that if Ms. Blood had disclosed that Mr. Desormeaux was a member of her

household and that he would be an operator of the truck that she sought to have

insured, it would not have issued the automobile policy. Therefore, Safeway sought

to have the policy declared void ab initio pursuant to La.R.S. 22:619.2

2
§ 619. Warranties and misrepresentations in negotiation; applications

A. Except as provided in Subsection B of this Section and R.S. 22:692, and R.S. 22:692.1,
no oral or written misrepresentation or warranty made in the negotiation of an insurance contract,
by the insured or in his behalf, shall be deemed material or defeat or void the contract or prevent it
attaching, unless the misrepresentation or warranty is made with the intent to deceive.

B. In any application for life or health and accident insurance made in writing by the insured,
all statements therein made by the insured shall, in the absence of fraud, be deemed representations
and not warranties. The falsity of any such statement shall not bar the right to recovery under the
contract unless such false statement was made with actual intent to deceive or unless it materially
affected either the acceptance of the risk or the hazard assumed by the insurer.

3

The plaintiffs, in turn, argued that La.R.S. 22:655(D)3 and La.R.S.

32:900(F)(1)4 prevented Safeway from asserting the misrepresentation defense after

the accident’s occurrence. They argued that allowing an insurer to seek the rescission

of a policy using this defense after a loss has occurred results in the evisceration of

Louisiana’s compulsory liability insurance laws, leaving injured third parties

vulnerable.

The trial court found that Mr. Desormeaux was solely at fault for the

accident based upon evidence introduced at trial that he was driving while intoxicated

when he struck the plaintiffs’ vehicle. This finding is not challenged on appeal. The

trial court also rejected Safeway’s material misrepresentation defense as a basis for

rescinding the policy. The court agreed with the plaintiffs’ arguments and held that

although misrepresentations may have been made by Ms. Blood, any efforts to void

the policy were only available to Safeway prior to the accident. The trial court stated

3
§655. Liability policy; insolvency or bankruptcy of insured and inability to effect
service of citation or other process; direct action against insurer

....

D. It is also the intent of this Section that all liability policies within their terms and limits
are executed for the benefit of all injured persons and their survivors or heirs to whom the insured
is liable; and, that it is the purpose of all liability policies to give protection and coverage to all
insureds, whether they are named insured or additional insureds under the omnibus clause, for any
legal liability said insured may have as or for a tort-feasor within the terms and limits of said policy.

4
§ 900. “Motor Vehicle Liability Policy” defined

....

F. Every motor vehicle liability policy shall be subject to the following provisions which
need not be contained therein:

(1) The liability of the insurance carrier with respect to the insurance required by this Chapter
shall become absolute whenever injury or damage covered by said motor vehicle liability policy
occurs; said policy may not be cancelled or annulled as to such liability by an agreement between
the insurance carrier and the insured after the occurrence of the injury or damage; no statement made
by the insured or on his behalf and no violation of said policy shall defeat or void said policy; . . .

4

that this conclusion was “consistent with the public policy of [La.R.S.] 32:900 and

[La.R.S.] 22:655.”

The trial court awarded the following compensatory damages for the

injuries alleged to have been suffered by the plaintiffs as a result of the accident:

general damages to Mr. Abshire—$1,500; general damages to Ms. Struble—$14,000;

and medical expenses to Mrs. Struble—$1,176.50. The trial court also awarded

exemplary damages, pursuant to La.Civ.Code art. 2315.4,5 in the amounts of $1,500

to Mr. Abshire and $5,000 to Ms. Struble. In summary, Mr. Abshire was awarded

damages totaling, $3,000.00, and Ms. Struble was awarded damages, totaling

$20,176.50.

The trial court recognized that Safeway’s and State Farm’s coverages

each had payment limits of $10,000 per person and $20,000 per accident and that

State Farm had already tendered a $2,000 payment to Ms. Struble prior to trial. The

trial court, consequently, rendered a judgment stating that Safeway and Mr.

Desormeaux were jointly and solidarily liable for the payment of the $3,000.00 award

to Mr. Abshire. The trial court then held Safeway and Mr. Desormeaux jointly and

solidarily liable to Ms. Struble for $10,000.00, as this was the maximum amount of

coverage available to Ms. Struble under Safeway’s policy. State Farm was held

jointly and solidarily liable with Mr. Desormeaux for the payment of $8,000.00 to

Ms. Struble, which absorbed the remaining coverage available to her under the UM

policy. The court then held Mr. Desormeaux solely liable for the payment of the

remaining $2,176.50 of Ms. Struble’s damages. The court did not distinguish

5
Art. 2315.4. Additional damages; intoxicated defendant

In addition to general and special damages, exemplary damages may be awarded upon proof
that the injuries on which the action is based were caused by a wanton or reckless disregard for the
rights and safety of others by a defendant whose intoxication while operating a motor vehicle was
a cause in fact of the resulting injuries.

5

between compensatory and exemplary damages when apportioning liability for the

payment of the damages awarded.

Safeway has appealed and now asserts that the trial court erred in ruling

that the defense of material misrepresentation cannot be asserted after a loss has

occurred. Safeway also contends that it carried its burden of proof and established

that Ms. Blood intentionally made misrepresentations that were material to its

decision to grant coverage. Alternatively, Safeway argues that the trial court erred

in holding it jointly and solidarily liable with Mr. Desormeaux for the payment of any

exemplary damages because its policy expressly excludes exemplary damages from

coverage.

State Farm has answered the appeal. It also challenges the trial court’s

allocation of damages. Specifically, State Farm contends that the trial court failed to

exhaust the limits of Safeway’s liability policy prior to assessing damages to it. It

asserts that the trial court should have exhausted Safeway’s policy limits that were

available to each plaintiff for the payment of compensatory damages and, then, should

have ordered payment of any remaining compensatory damages by State Farm. State

Farm, contends that the trial court’s failure to do this resulted in it—the UM

carrier—being ordered to pay compensatory damages that the primary liability policy

was able to cover. State Farm also seeks to have the assessment of exemplary

damages to it reversed, arguing that exemplary damages are expressly excluded by

its policy.

6

III.

LAW AND DISCUSSION

Material Misrepresentations

1. Can the material misrepresentation defense of La.R.S. 22:619 be asserted
to rescind an automobile liability policy after a loss has occurred?

The question of whether the trial court properly ruled that the material

misrepresentation defense could not be raised after the occurrence of the car accident

giving rise to the loss occurred is a legal question, requiring a de novo review by this

court to determine whether the trial court’s conclusion was legally correct or

incorrect. Foster v. ConAgra Poultry Co., 95-793 (La.App. 3 Cir. 2/14/96), 670

So.2d 471, writ denied, 96-0645 (La. 4/26/96), 672 So.2d 674. We find that the trial

court did commit legal error in ruling that the material misrepresentation defense

cannot be asserted after an accident has occurred. Louisiana jurisprudence contains

many examples in which the material misrepresentation defense has been raised as

a defense to a liability claim after an accident has occurred. See Tabchouri v.

Progressive Ins. Co., 00-134 (La.App. 3 Cir. 12/6/00), 775 So.2d 1127; Pryor v. State

Farm Mut Auto. Ins. Co., 663 So.2d 112 (La.App. 3 Cir. 8/30/95); Jamshidi v. Shelter

Mut. Ins. Co., 471 So.2d 1141 (La.App. 3 Cir. 1985). In fact, this state’s supreme

court and virtually all of this state’s circuits have customarily reviewed cases in which

the application of the material misrepresentation defense set forth in La.R.S. 22:619

was raised by an insurer after the date of loss, and in many instances, the courts have

affirmed or found that the facts justified the rescission of the purported coverage

because of misrepresentations that were made at the time the insurance was procured.

See Coleman v. Occidental Life Ins. Co. of N. America., 418 So.2d 645 (La.1982);

Cousin v. Page, 372 So.2d 1231 (La.1979); Gulf Wide Towing, Inc. v. Associated Ins.

Managers, Inc., 563 So.2d 432 (La.App. 1 Cir. 1990), writ denied, 567 So.2d 107

7

(La.1990); Benton v. Shelter Mut. Ins. Co., 550 So.2d 832 (La.App. 2 Cir. 1989);

Bieser v. American Deposit Ins. Co., 95-555 (La.App. 5 Cir. 12/13/95), 666 So.2d

1158.

In addition, we recognize that the particular question of whether this

defense is barred after an accident has occurred has been addressed by the appellate

courts before and agree that La.R.S. 32:900(F)(1) does not bar the assertion of this

defense after a potentially covered loss has occurred. See Kennedy v. Audubon Ins.

Co., 82 So.2d 91 (La.App. 1 Cir. 1955); Grain Dealers Mut. Ins. Co. v. Miller, 142

So.2d 458 (La.App. 3 Cir. 1962). The Kennedy and Grain cases held that La.R.S.

32:900(F)(1) does not prevent the rescission of an automobile liability policy which

has not been certified as a “Motor Vehicle Liability Policy,”6 for the purpose of

serving as proof of financial responsibility under the Motor Vehicle Safety

Responsibility Law (La.R.S. 32:851, et seq.). This court has previously recognized

this distinction and has also held that La.R.S. 32:900 does not necessarily apply to all

automobile liability insurance policies. See Breaux v. Claudel, 93-1580 (La.App. 3

Cir. 6/1/94), 640 So.2d 744. This distinction was explained further in Hearty v.

Harris, 574 So.2d 1234, 1239 (La.1991):

A. Applicability of La.R.S. 32:900

....

The plaintiffs fail to discern the distinction between
a ‘motor vehicle liability policy’ and an ‘automobile
liability policy.’ The term “motor vehicle liability policy”

6
§ 900. “Motor Vehicle Liability Policy” defined

A. A “Motor Vehicle Liability Policy” as said term is used in this Chapter, shall mean an
owner’s or an operator’s policy of liability insurance, certified as provided in R.S. 32:898 or 32:899
as proof of financial responsibility, and issued except as otherwise provided in R.S. 32:899, by an
insurance carrier duly authorized to transact business in this state, to or for the benefit of the person
named therein as insured.

8

is defined by La.R.S. 32:900(A) as ‘an owner’s or an
operator’s policy of liability insurance, certified as
provided in R.S. 32:898 or 32:899 as proof of financial
responsibility, and issued . . . by an insurance carrier duly
authorized to transact business in this state. . . .’ By
purchasing a ‘motor vehicle liability policy’ an owner or
operator satisfies the requirements of the LMVSRL. In
contrast, an ‘automobile liability policy’ is a voluntary
policy which has not been certified as proof of a motorist’s
financial responsibility and does not therefore satisfy the
requirements of the LMVSRL.

There is no proof in the record that Safeway’s policy was certified as a “Motor

Vehicle Liability Policy” for purposes of La.R.S. 32:856, et seq.

Additionally, we interpret La.R.S. 32:900 as that which intends to

prevent collusion between an insurer and insured. It is not intended, in every

instance, to limit the assertion of the misrepresentation defense to the time period

prior to an accident’s occurrence. Insurers must rely on the representations and

warranties provided to them by insureds and typically do not become aware of prior

misrepresentations until after a loss has occurred and a claim is pending; therefore,

the application of La.R.S. 32:900(F)(1) as urged by the plaintiffs would severely

restrict an insurer’s ability to protect itself from such unsavory practices. We do not

believe this was the legislature’s intent.

Accordingly, we find that the trial court legally erred in ruling that

Safeway was precluded from raising the material misrepresentation defense set forth

in La.R.S. 22:619, simply because a potentially covered loss had occurred. Because

we owe no deference to any subsequent factual findings made by the trial court

because of this error, we must undertake a de novo review of the record as to whether

Safeway carried its burden of proof on the issue of whether Ms. Blood made material

misrepresentations sufficient to rescind the automobile policy. Roberts v. Hartford

9

Fire Ins. Co., 05-1178 (La.App. 3 Cir. 4/5/06), 926 So.2d 121, writ denied, 06-1056

(La. 6/23/06), 930 So.2d 984.

2. Did Safeway prove that material misrepresentations, justifying rescission
of the policy, were made when the insurance was procured?

As stated by the supreme court in Coleman, 418 So.2d 645 (citations

omitted), “[t]he statute [La.R.S. 22:619] requires that a false statement bars recovery

only if it is made with the intent to deceive or it materially affects the risk. Louisiana

jurisprudence requires both factors.” The insurer raising this defense bears the

burden of proof. Id. (citing Cousin, 372 So.2d 1231).

The intent to deceive component is “determined from the surrounding

circumstances, indicating the insured’s knowledge of the falsity of the representations

made in the application and his recognition of the materiality of his

misrepresentations, or from circumstances which create a reasonable assumption that

the insured recognized the materiality.” Tabchouri, 775 So.2d at 1129 (citing Cousin,

372 So.2d 1231). A misstatement is “material” pursuant to La.R.S. 22:619, if the

truth would have resulted in the insurer not issuing the policy of insurance or issuing

the policy at a higher rate. Pryor, 663 So.2d 112; Irving v. U.S. Fidelity & Guar. Co.,

606 So.2d 1365 (La.App. 2 Cir. 1992). We do not find that Safeway carried its

burden of proving that the misrepresentations were material or that Ms. Blood

intended to deceive the insurance company in order to gain coverage for the vehicle.

Safeway submitted the affidavit of its litigation supervisor, Lisa Guidry,

in efforts to establish the materiality of the misrepresentations made by Ms.

Blood—that no other person of licensed age lived at her residence and that there were

no other operators of the truck that she was seeking to insure. However, Ms.

Guidry’s affidavit stated that “if Safeway Insurance Company of Louisiana had been

10

aware that Clinton P. Desormeaux (an unlicensed driver at the time of the application

for insurance due to a license suspension) was the actual owner of the 1992 Chevrolet

1500 pickup truck, and was the principal operator of this vehicle, Safeway would not

have written the policy.” We find that Ms. Guidry’s attestations do not address the

materiality of the actual misrepresentations at issue, and that she has based her

attestations on facts that were not established at the trial of this matter.

Specifically, the record establishes that on January 30, 2004, the then

twenty-three year old Ms. Blood met with an insurance agent alone to procure

automobile insurance for the 1992 Chevrolet pickup truck that was later involved in

the September 17, 2004, accident at issue. Ms. Blood has an eighth grade education.

The vehicle was titled in her name; however, she and Clinton had shared a household

for approximately six years and had purchased multiple vehicles together that were

used by them jointly. The pickup truck at issue in this case was no different. Ms.

Blood and Mr. Desormeaux both testified at trial that the truck at issue was titled in

her name only. No contradictory evidence was produced to negate this assertion. In

addition, they testified that they both drove the pickup truck, equally sharing its use.

No evidence is in the record to contradict this.

Moreover, Ms. Blood testified as to her perception that she was not

being deceitful with the insurance company because she was seeking to insure the

vehicle only in her name:

Q. Now you testified earlier that because Clinton didn’t
have a driver’s license that you knew he couldn’t get
insurance, right?

A. Yes m’am.

Q. But did you still think that because you had a
driver’s license that you could get insurance for
him?

11

A. Yes m’am.

Q. So you didn’t think there was a problem with you
going in to [sic] the agency and as long as you paid
money that because you had this license that you
could get insurance that covered you and him?

A. Yes m’am.

Q. You didn’t see anything wrong with that did you?

A. No m’am.

Q. Did you think that you were in any way deceiving or
being deceitful with an insurance company?

A. No m’am.

...

Q. Cause you, did you think that because you were
paying seven hundred and twenty two dollars for
two vehicles to this agency that you and anybody
who operated your vehicle that you gave permission
to was gonna have coverage.

A. Yes m’am.

The supreme court in Cousin, 372 So.2d 1231, explained that intent to

deceive is determined from the circumstances surrounding not only the insured’s

knowledge of the falsity of his or her representations, but is also determined from the

insured’s recognition of the materiality of those representations. We do not find that

Safeway carried its burden of proving that Ms. Blood truly recognized the purported

materiality of her misrepresentations. Therefore, we find that Safeway did not carry

its burden of establishing material misrepresentations that would support the

rescission of its automobile policy pursuant to La.R.S. 22:619.

Allocation of Damages

The issue of whether Mr. Desormeaux was covered by the policy, absent

any challenges to the validity of the policy, was not raised at trial or on appeal.

12

Consequently, we need not address that issue, and move directly to consideration of

the court’s allocation of damages among the defendants.

Mr. Abshire suffered soreness and stiffness in the neck and upper back

for approximately two weeks after the accident. A few days after the accident

occurred, Ms. Struble, who was riding on the passenger side of the truck, sought

medical treatment for pain and stiffness in her right arm that arose after she hit it on

the armrest of the vehicle’s door during the accident. At the time of trial

approximately two years later, Ms. Struble testified that she still suffered from

recurrent pain and stiffness in her right arm. The quantum of the awards to the

plaintiffs has not been challenged on appeal.

However, Safeway, alternatively, and State Farm, in its answer to

Safeway’s appeal, both seek review of the trial court’s allocation of damages.

Safeway contends that its policy expressly excludes exemplary damages and,

therefore, argues that it should not have been held jointly and solidarily liable with

Mr. Desormeaux for the payment of the exemplary award of $1,500.00 to Mr.

Abshire. State Farm, who asserts that its policy also expressly excludes exemplary

damages, argues that the trial court’s allocation was improper because it resulted in

State Farm, as the UM carrier, being charged with satisfying the payment of

compensatory damages that were compensable under Safeway’s policy. In other

words, State Farm argues that the trial court’s allocation did not properly allow for

the primary policy’s limits to be exhausted before applying UM coverage.

Specifically, State Farm asserts that the trial court should have applied

the limits of Safeway’s $10,000 per person/$20,000 per accident liability coverage

to pay the total of Mr. Abshire’s general damages, totaling $1,500.00. Next, it

suggests that the trial court should have ordered Safeway to tender its policy limit of

13

$10,000.00 to Ms. Struble as compensation towards her $14,000.00 general damage

award. State Farm asserts that its UM coverage should have then been responsible

for covering the remaining $4,000.00 of Ms. Struble’s compensatory damages and her

medical expenses of $1,176.50. Considering its credit for the pretrial payment of

$2,000.00 to Ms. Struble, State Farm contends that the judgment against it should

have totaled only $3,176.50 rather than $8,000.00. Both State Farm and Safeway

argue that Mr. Desormeaux should have been held solely liable for the payment of all

of the exemplary damages awarded.

We agree with these arguments. The trial court abused its discretion in

the allocation of damages between the parties. In this case, the trial court’s allocation

erroneously overlooked the express rejections of the payment of exemplary damages

in both policies7. Moreover, the trial court’s allocation of damages has yielded a

7
The Safeway policy’s exemplary damages exclusion states:

PART 1 — LIABILITY

A–Bodily Injury Liability; B–Property Damage Liability.

....

Exclusions. This policy does not apply under Part 1:

....

(o) regardless of any other provision of this policy, this
policy does not provide for the payment of punitive or
exemplary damages.

The State Farm policy excludes exemplary damages as follows:

SECTION III — UNINSURED MOTOR VEHICLE — COVERAGE U,
“ECONOMIC-ONLY” UNINSURED MOTOR VEHICLE — COVERAGE UEO
AND UNINSURED MOTOR VEHICLE PROPERTY DAMAGES — COVERAGE U1

UNINSURED MOTOR VEHICLE – COVERAGE U

....

We will pay nonpunitive damages for bodily injury an insured is
legally entitled to collect from the owner or driver of an uninsured
motor vehicle.

14

result that is contrary to the intent of UM coverage in this State because it did not

fully exhaust the limits of the primary carrier before accessing the UM carrier’s

limits. See La.R.S. 22:680(1)(a)(i).8 In a similar factual scenario, the first circuit

addressed this issue and explained:

The legislative aim of the uninsured motorist statute
is to promote full recovery for damages suffered by
innocent automobile accident victims by making uninsured
motorist coverage available for their benefit as primary
protection when the tortfeasor is without insurance and as
additional or excess coverage when he is inadequately
insured. Hoefly v. Government Employees Ins. Co., 418
So.2d 575, 578 (La.1982). Punitive damages do not
provide compensation for bodily injury; rather,

....

When Coverages U and UEO Do Not Apply

THERE IS NO COVERAGE:

....

3. FOR PUNITIVE OR EXEMPLARY DAMAGES.

8
§ 680. Uninsured motorist coverage

(1)(a)(i) No automobile liability insurance covering liability arising out of the ownership,
maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with
respect to any motor vehicle designed for use on public highways and required to be registered in
this state or as provided in this Section unless coverage is provided therein or supplemental thereto,
in not less than the limits of bodily injury liability provided by the policy, under provisions filed with
and approved by the commissioner of insurance, for the protection of persons insured thereunder
who are legally entitled to recover nonpunitive damages from owners or operators of uninsured or
underinsured motor vehicles because of bodily injury, sickness, or disease, including death resulting
therefrom; however, the coverage required under this Section is not applicable when any insured
named in the policy either rejects coverage, selects lower limits, or selects economic-only coverage,
in the manner provided in Item (1)(a)(ii) of this Section. In no event shall the policy limits of an
uninsured motorist policy be less than the minimum liability limits required under R.S. 32:900,
unless economic-only coverage is selected as authorized herein. Such coverage need not be provided
in or supplemental to a renewal, reinstatement, or substitute policy when the named insured has
rejected the coverage or selected lower limits in connection with a policy previously issued to him
by the same insurer or any of its affiliates. The coverage provided under this Section may exclude
coverage for punitive or exemplary damages by the terms of the policy or contract. Insurers may
also make available, at a reduced premium, the coverage provided under this Section with an
exclusion for all noneconomic loss. This coverage shall be known as “economic-only” uninsured
motorist coverage. Noneconomic loss means any loss other than economic loss and includes but is
not limited to pain, suffering, inconvenience, mental anguish, and other noneconomic damages
otherwise recoverable under the laws of this state.

(Emphasis added).

15

compensatory damages compensate an injured party for the
injury sustained by replacing the loss caused by the injury.
Exemplary or punitive damages are awarded to the plaintiff
over and above compensatory damages and are intended to
punish the defendant or make an example of him in order
to deter any such future conduct. See BLACK’S LAW
DICTIONARY 352 (5TH ed.1979).

We believe it is contrary to the intent of the law to
ignore the express exclusion for punitive damages in the
State Farm policy and allow plaintiff to recover under that
policy due to a forced exhaustion of the underlying limits
by the punitive damage award. We feel that a
compensatory damage award should be satisfied first, by
exhausting the primary policy. Then punitive damages,
which are awarded over and above compensatory damages,
would be satisfied under the excess UM policy. In this
case, that excess policy expressly excludes punitive
damages. We do not believe that the purpose and intent of
the UM statute is served by specifically allocating damages
so as to achieve the exhaustion of the underlying policy
limits by a punitive damage award. Moreover, requiring
payment under a UM policy under this factual scenario
neither punishes nor deters the tortfeasor and, thus, does
not serve the purpose behind an award of punitive
damages.

Malbreaugh v. CNA Reinsurance Co., 2003-2088, p. 4 ( La.App. 1 Cir. 9/17/04), 887

So.2d 496-97. (Footnote omitted).

We agree with this reasoning and apply it to the facts of this case. We,

too, find that the trial court abused its discretion in allowing recovery of

compensatory damages from the UM carrier State Farm, prior to exhausting

Safeway’s policy limits for the payment of these damages. Moreover, we find that

the polices of both Safeway and State Farm excluded exemplary damages.

Accordingly, we reverse the trial court’s allocation of damages and re-allocate

damages as follows:

Safeway and Mr. Desormeaux are jointly and in solido liable for

$1,500.00 in general damages to Mr. Abshire;

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Mr. Desormeaux is solely liable for $1,500.00 in exemplary damages to

Mr. Abshire;

Safeway and Mr. Desormeaux are jointly and in solido liable for

$10,000.00 in general damages to Ms. Struble;

State Farm and Mr. Desormeaux are jointly and in solido liable for

$1,176.50 in medical expenses and $2,000.00 in general damages to Ms. Struble

(recognizing the $2,000.00 credit to State Farm for its pretrial payment of that amount

to Ms. Struble); and

Mr. Desormeaux is solely liable for $5,000.00 in exemplary damages to

Ms. Struble.

IV.

CONCLUSION

For the foregoing reasons, the judgment of the trial court is affirmed in

part, reversed in part, and rendered. Defendants-appellants, Safeway Insurance

Company of Louisiana and Clinton P. Desormeaux are liable, jointly and in solido,

for general damages to plaintiff-appellee, Albert John Abshire, in the amount of

$1,500.00, and $10,000.00 in general damages to plaintiff-appellee, Holly G. Struble.

Defendant-Appellant-Appellee, State Farm Mutual Automobile Insurance Company

and Clinton P. Desormeaux are liable, jointly and in solido, for the payment of

general damages in the amount of $2,000.00 to Holly G. Struble and $1,176.50 in

medical expenses to Holly G. Struble. Clinton P. Desormeaux is solely liable for the

payment of exemplary damages in the amount of $1,500.00 to Albert John Abshire

and $5,000.00 to Holly G. Struble.

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Costs of this appeal are assessed one-half each to defendants-appellants,

Safeway Insurance Company of Louisiana and Clinton P. Desormeaux, and secondary

defendant-appellant, State Farm Mutual Automobile Insurance Company.

AFFIRMED IN PART, REVERSED IN PART, AND RENDERED.

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