Lisa Johnson v. Ashley Citizen

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-1209

LISA JOHNSON, ET AL.

VERSUS

ASHLEY CITIZEN, ET AL.

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APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, NO. 05-C-0358-B
HONORABLE ELLIS J. DAIGLE, DISTRICT JUDGE

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MARC T. AMY
JUDGE

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Court composed of Oswald A. Decuir, Jimmie C. Peters, and Marc T. Amy, Judges.

REVERSED AND REMANDED.

Keith M. Borne
Borne & Wilkes, L.L.P.
Post Office Box 4305
Lafayette, LA 70502-4305
(337) 232-1604
COUNSEL FOR DEFENDANTS/APPELLANTS:
Safeway Insurance Company of Louisiana
Alex Savoy
Eugene Savoy

Dominic J. Ovella
Hailey, McNamara, Hall, Larmann & Papale, L.L.P.
Post Office Box 8288
Metairie, LA 70011-8288
(504) 836-6500
COUNSEL FOR DEFENDANT/APPELLEE:
Enterprise Leasing Company of New Orleans

Dawn L. Morris
Preis & Roy
Post Office Drawer 94-C
Lafayette, LA 70509
(337) 237-6062
COUNSEL FOR PLAINTIFF/APPELLEE:
Lisa Johnson

AMY, Judge.

The plaintiff filed suit against her uninsured motorist insurer, among others,

following an automobile accident. Both the plaintiff and the insurer filed motions for

summary judgment regarding the validity of a uninsured motorist coverage waiver.

The trial court granted summary judgment in favor of the plaintiff, finding the waiver

ineffective due to the form’s lack of a policy number. The insurer appeals. The

plaintiff answers the appeal, asserting that the trial court erred in denying her request

for penalties and attorney fees due to the insurer’s failure to tender its UM policy

limits. For the following reasons, we reverse and remand.

Factual and Procedural Background

The plaintiff, Lisa Johnson, alleges that her minor son was injured in an April

3, 2004 automobile accident. She filed the instant matter, naming Safeway Insurance

Company of Louisiana as a defendant in its capacity as her uninsured motorist

insurer. Safeway asserted that the plaintiff waived uninsured motorist coverage at the

time she completed the application for her policy, February 25, 2004.1

The plaintiff filed a motion for summary judgment seeking a determination that

the UM coverage waiver urged by Safeway was ineffective due to Duncan v. U.S.A.A.

Ins. Co., 06-363 (La. 11/29/06), 950 So.2d 544, wherein the Louisiana Supreme Court

determined that an insurer’s failure to include a policy number on the UM coverage

waiver form rendered the waiver invalid. The plaintiff also sought penalties and

attorney fees for Safeway’s refusal to tender the UM policy limits. Safeway filed a

counter motion for summary judgment, arguing that Duncan is inapplicable where the

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Although Safeway was also named as a defendant in its capacity as the insurer of the driver
of another vehicle involved in the accident, this latter capacity is not at issue in the matter now
before the court.

policy number had not been assigned at the time the UM coverage waiver form was

executed.

Following a hearing, the trial court granted the plaintiff’s motion for summary

judgment, finding the UM coverage waiver invalid pursuant to Duncan. The trial

court denied the request for penalties and attorney fees. The trial court also denied

Safeway’s motion for summary judgment.2 The trial court designated the judgment

granting the plaintiff’s motion for summary judgment as a final judgment and

expressly determined that there was no just reason for delay.

Safeway appeals, assigning the following as error:

The trial court erred in concluding that the rejection of uninsured
motorist coverage by Safeway Insurance Company of Louisiana’s
named insured was invalid due to the fact that there was not a policy
number placed on said form, as there was not a policy number available
to place on said form when it was executed by the named insured, since
it was executed at the same time that the application for said form was
completed, a point in time when a policy number had not yet been
assigned.

The plaintiff answered the appeal and again seeks penalties and attorney fees.

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The trial court explained at the hearing;

The Court will deny the Motion for Summary Judgment on behalf of Safeway
and grant the motion on behalf of the plaintiff. The Court finds that it must adhere
to the Duncan decision. As indicated by both counsel, the issue of whether or not the
policy number needs to be placed on the - - on the rejection form at the time of
execution by the insurer - - insured without there presently being a policy number
was not addressed in Duncan. However, this Court is without any information by
reading the Duncan decision as to whether or not there was, in fact, a policy number
at the time that the rejection form was signed. In that respect, this Court finds that
it must follow the Supreme Court case of Duncan.

As to the penalties and attorney’s fees, the Court will deny same in that the
Court feels that this was not arbitrary and capricious on behalf of Safeway . . . .

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Discussion

Summary Judgment

Louisiana Code of Civil Procedure Article 966(B) provides that a summary

judgment shall be entered “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.” A trial court’s determination as to a motion for summary judgment is

reviewed de novo on appeal. Supreme Services v. Sonny Greer, Inc., 06-1827 (La.

5/22/07), 958 So.2d 634.

Merits

In Duncan, 950 So.2d 544, the supreme court addressed whether the

Uninsured/Underinsured Motorist Bodily Insurance Coverage Form, designated for

selection of UM coverage by the Commission of Insurance, must contain the

insurance policy number in order for a waiver to be effective. The supreme court

ultimately found that the “failure to fill in the policy number on the form prescribed

by the commissioner of insurance invalidates the UM waiver, and consequently, the

UM coverage is equal to the liability limits of the policy.” Id. at 554.

The plaintiff in this case supported her motion for summary judgment with the

UM coverage waiver at issue. Dated February 25, 2004, the form contains the

inscription “TBD” in lieu of a policy number.

In its counter motion, Safeway asserted that Duncan was inapplicable as the

supreme court case contains no information regarding the availability of a policy

number at the time of the execution of the form under consideration. Safeway

submitted the affidavit of Cynthia Balthazar, an employee of the insurance agency

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that accepted the Safeway policy application, who explained that she assisted the

plaintiff and that:

[T]he only reason why a policy number was not placed on the
Uninsured/Underinsured Motorist Bodily Injury Coverage Form is that
there was not a policy number assigned by Safeway Insurance Company
of Louisiana at the time that the Uninsured/Underinsured Motorist
Bodily Injury Coverage was completed, as it was completed in
connection with the application for a policy with Safeway Insurance
Company of Louisiana and at that time no policy number had been
assigned. Accordingly, the initials “TBD” (to be determined) were
placed on said form for the policy number.

Paula Thibodeaux, an underwriting manager for Safeway, also explained by

affidavit that, at the time of the signing of the application and UM coverage form, the

policy number was unavailable and “was not assigned by Safeway Insurance

Company of Louisiana until receipt of the application for insurance[.]” Ms.

Thibodeaux stated that:

Safeway Insurance Company of Louisiana has, at all times, relied upon
the instructions provided by the office of the Louisiana Commissioner
of Insurance with regard to the proper execution of
Uninsured/Underinsured Motorist Bodily Injury Coverage Forms,
including Bulletin LIRC 98-03 which states, in pertinent part, “The
policy number should be shown at the lower right hand corner of the
UM Form. In the case where a policy number is not available, the space
for the policy number may be left blank or a binder number may be
inserted.” [ ]

A copy of Bulletin 98-03, referenced above, was included with the submission.

In opposition to Safeway’s motion, the plaintiff submitted her previously

cancelled Safeway policy and argued that “absent a policy number on a UM waiver,

no presumption of valid waiver can attach because it cannot be known to which

policy such a UM waiver refers.”

The trial court rejected Safeway’s arguments and relied on Duncan in granting

summary judgment in favor of the plaintiff. However, in the period of time between

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the order of appeal and this court’s briefing period, the supreme court granted a writ

application from a first circuit ruling, and stated:

Granted. The judgment of the trial court is reversed and Imperial’s
motion for summary judgment is granted for the reasons assigned by the
dissenting judge in the court of appeal. We also note this case is
factually distinguishable from Duncan v. USAA Ins. Co., 06-0363 (La.
11/29/06), 950 So.2d 544, because the Commissioner of Insurance’s
regulations specifically allow omission of the policy number if it does
not exist at the time [the] UM waiver form is completed.

Carter v. State Farm Mut. Auto. Ins. Co., 07-1294 (La. 10/5/07), 964 So.2d 375, 376.

In our review, we consider the parties’ submissions in light of both Duncan and

Carter. Although Carter was not available to the trial court, it now fully reveals that

the present matter is factually distinguishable from Duncan. It is unquestioned that

the UM coverage form lacked a policy number. However, as in Carter, Safeway’s

submission indicates that the policy number may not have existed at the time the UM

coverage form was completed. For these reasons, the granting of summary judgment

in favor of the plaintiff, and finding the waiver ineffective, was in error and must be

reversed. This determination renders moot the plaintiff’s answer to the appeal,

wherein she requests penalties and attorney fees for Safeway’s failure to tender the

UM policy limits pursuant to Duncan.

As only the granting of the summary judgment in favor of the plaintiff is before

this court on appeal, we do not consider whether summary judgment should have

been entered in favor of Safeway. Rather, we remand this matter for further

proceedings in light of Carter, 964 So.2d 375.

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DECREE

For the foregoing reasons, the summary judgment entered in favor of the

plaintiff, Lisa Johnson, is reversed. This matter is remanded for further proceedings.

All costs of this appeal are assessed to Ms. Johnson.

REVERSED AND REMANDED.

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