Wade Phillips v. New Hampshire Ins. Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

08-632

WADE PHILLIPS, ET AL.

VERSUS

NEW HAMPSHIRE INSURANCE COMPANY, ET AL.

**********

APPEAL FROM THE
ALEXANDRIA CITY COURT
PARISH OF RAPIDES, NO. 105,872
HONORABLE RICHARD E. STARLING, JR., CITY COURT JUDGE

**********

MARC T. AMY
JUDGE

**********

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir and
Marc T. Amy, Judges.

REVERSED AND REMANDED.

Thomas O. Wells
Post Office Box 13438
Alexandria, LA 71315
(318) 445-4500
COUNSEL FOR DEFENDANTS/APPELLEES:
Jackie D. Hampton, Jr.
Cenla Courier Services, Inc.
Bobby Adrian Patrick

David L. Roberson, II
Bolen, Parker, Brenner,
Lee & Gremillion Ltd.
Post Office Box 11590
Alexandria, LA 71315-1590
(318) 445-8236
COUNSEL FOR DEFENDANTS/APPELLEES:
James Thomasee
Jim Thomasee Insurance Agency, Inc.

Russell L. Potter
Stafford, Stewart & Potter
Post Office Box 1711
Alexandria, LA 71309
(318) 487-4910
COUNSEL FOR DEFENDANTS/APPELLEES:
Metropolitan Inurance Group Property and Casualty Company
Metropolitan Group Property and Casualty Insurance Company

Philip G. Hunter
Hunter & Morton
Post Office Box 11710
Alexandria, LA 71315-1710
(318) 487-1997
COUNSEL FOR PLAINTIFFS/APPELLEES:
Mary Beth Phillips
Wade Phillips

Michael H. Rubin
Juston M. O'Brien
Jamie D. Seymour
McGlinchey Stafford, PLLC
One American Place, 14th Floor
Baton Rouge, LA 70825
(225) 383-9000
COUNSEL FOR DEFENDANT/APPELLANT:
New Hampshire Insurance Company

Marjorie B. Breaux
Daigle, Jamison and Rayburn, LLC
Post Office Box 3667
Lafayette, LA 70502
(337) 234-7000
COUNSEL FOR DEFENDANT/APPELLANT:
New Hampshire Insurance Company

AMY, Judge.

A car accident occurred on May 29, 2006. The plaintiffs, alleging that the

driver was in the course and scope of his employment, sued the driver’s alleged

employer and its insurer, among other defendants. The plaintiffs, the insurance agent,

and the alleged employer filed a joint motion for summary judgment, seeking a

judicial declaration that the insurer issued a policy affording coverage on the date of

the accident. The trial court granted the motion based on its finding that La.R.S.

45:173 and La.R.S. 45:174 make cancellation of a common carrier insurance policy

contingent on notification of the cancellation to the Louisiana Public Service

Commission (LPSC) and the insurer’s failure to provide such notice. The insurer

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

Factual and Procedural Background

On May 29, 2006, the plaintiffs’ son, Justin Phillips, was involved in an

automobile accident with Jackie Hampton. Hampton was allegedly operating the

1997 Mercury Grand Marquis in the course and scope of his employment with Cenla

Taxi and Courier Service, Inc. (Cenla Courier), a business insured by New Hampshire

Insurance Company (New Hampshire). Bobby Patrick is the sole owner of several

businesses, including Cenla Courier and Cenla Dispatch Company. Patrick’s other

businesses were insured by Progressive Insurance Company (Progressive). Cenla

Courier contracted with the military to provide transportation for military personnel.

This contract required insurance coverage of one million dollars; thus, Patrick

procured, via the Jim Thomasee Insurance Agency, higher insurance limits through

New Hampshire for Cenla Courier.

New Hampshire issued a policy to Cenla Courier (originally under the name

of Crew Livery Transport), bearing the effective dates of October 12, 2005 to October

12, 2006. The record shows that the policy only listed a 1996 Ford van as a covered

vehicle. As evidenced in the record, the LPSC initially rejected Cenla Courier’s filing

request due to a lapse of coverage. According to a letter addressed to the insurance

agency, New Hampshire advised Cenla Courier and/or its producer, to address the

problem with the Louisiana Department of Motor Vehicles and resubmit its request

upon resolution of the problem. The record indicates that Cenla Courier later

requested that the Jim Thomasee Insurance Agency (not New Hampshire) file the

policy with the LPSC.

According to Patrick’s deposition, Cenla Courier ceased its business operations

prior to the May 26, 2006 accident. He stated that he made an oral request to the Jim

Thomasee Insurance Agency that his policy with New Hampshire be cancelled and

that Progressive provide insurance coverage for all of his company vehicles. Patrick

testified that he did not pay the February 2006 premium owed to New Hampshire.

In turn, the record indicates that New Hampshire mailed a notice of cancellation to

Cenla Courier to be effective March 8, 2006. Testimony reveals that there was a

discrepancy as to whether this notice was received. On the basis of this discrepancy,

New Hampshire’s motion for summary judgment regarding cancellation of the policy

was denied.

On November 27, 2007, the plaintiffs, James Thomasee, the Jim Thomasee

Insurance Agency, and Bobbie Patrick filed a joint motion for summary judgment on

the ground that “[New Hampshire] failed to cancel its policy that afforded coverage

on the date of the accident at issue.” The movers urged that the vehicle involved in

the accident was covered as a “temporary substitute auto” as per a provision in the

insurance policy. The trial court, relying on New Hampshire’s lack of notification to

2

the LPSC, granted summary judgment. New Hampshire appeals, asserting several

assignments of error:

1. The trial court erred as a matter of law when it granted summary
judgment because the insurance policy was never put into evidence and
the movers failed to carry their burden of proof to show that insurance
coverage existed.

2. The trial court erred as a matter of law in granting summary judgment
when it held that cancellation of a commercial carrier’s insurance was
ineffective solely because the Louisiana Public Service Commission
purportedly did not receive notice of cancellation.

3. The trial court erred as a matter of law when it granted summary
judgment despite unresolved issues of material fact regarding whether
New Hampshire’s insured was involved in the accident, whether the
vehicle involved qualified as a temporary substitute vehicle under the
policy, and whether the policy was cancelled for failure to pay
premiums.

Discussion

Burden of Proof

Appellate courts conduct a de novo review of motions for summary judgment,

making the same inquiries as the trial court in determining the appropriateness of

summary judgment. Champagne v. Ward, 03-3211 (La. 1/19/05), 893 So.2d 773. A

motion for summary judgment will be granted “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.” La.Code Civ.P. art. 966(B). “[F]acts are material if

they potentially insure or preclude recovery, affect a litigant’s ultimate success, or

determine the outcome of a legal dispute.” Smith v. Our Lady of the Lake Hosp., Inc.,

93-2512, p. 27 (La. 7/5/94), 639 So.2d 730, 751 (citation omitted). “If evidence

presented is subject to conflicting interpretations, summary judgment is not proper.”

3

Federated Rural Elec. Ins. Corp. v. Gulf S. Cable Inc., 02-0852, p. 4 (La.App. 3 Cir.

12/11/02), 833 So.2d 544, 546-547.

Initially, the burden of proof remains with the mover to show that genuine

issues of material fact do not exist. “However, if the movant will not bear the burden

of proof at trial on the matter that is before the court on the motion for summary

judgment,” he need not “negate all essential elements of the adverse party’s claim”

but he must point out that “there is an absence of factual support for one or more

elements essential to the adverse party’s claim, action or defense.” La.Code Civ.P.

art. 966(C)(2). Once the mover has met his initial burden of proof, the burden shifts

to the non-moving party to “produce factual support sufficient to establish that he will

be able to satisfy his evidentiary burden of proof at trial[.]” Id.

Evidence in the Record

New Hampshire argues that the insurance policy was never entered into the

record by the movers. As stated above, La.Code Civ.P. art. 966(B) describes what a

court may consider in its determination of a summary judgment motion, namely:

“pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits, if any[.]” Further, La.Code Civ.P. art. 967(A) explains the kinds

of documents that can be submitted by a party in support of or in opposition to a

motion for summary judgment:

Supporting and opposing affidavits shall be made on personal
knowledge, shall set forth such facts as would be admissible in
evidence, and shall show affirmatively that the affiant is competent to
testify to the matters stated therein . . .. Sworn or certified copies of all
papers or parts thereof referred to in an affidavit shall be attached
thereto or served therewith. The court may permit affidavits to be
supplemented or opposed by depositions, answers to interrogatories, or
by further affidavits.

4

The supreme court in Aydell v. Sterns, 98-3135, p. 1 (La. 2/26/99), 731 So.2d

189, 190 held that evidence presented as an attachment to the memorandum in

support of or in opposition to the motion for summary judgment is properly before

the court, reasoning that to hold otherwise “undermines the use of summary judgment

procedures to ‘secure the just, speedy, and inexpensive determination of every

action.’ La.C.C.P. art. 966(A)(2).” Furthermore, in Hutchinson v. Knights of

Columbus, Council No. 5747, 03-1533, p. 4 (La. 2/20/04), 866 So.2d 228, 232, the

supreme court stated that “[a]ffidavits in support of or in opposition to motions for

summary judgment must be filed into evidence at the hearing on the motion or filed

into the record in order for the affidavits to be part of the record on appeal.”

New Hampshire argues that Denoux v. Vessel Mgmt. Servs., Inc., 07-2143, p.

6 (La. 5/21/08), 983 So.2d 84, 88 mandates that “[e]vidence not properly and

officially offered and introduced cannot be considered, even if it is physically placed

in the record.” However, Denoux addressed a peremptory exception of prescription

governed by La.Code Civ.P. art. 9311, not a motion for summary judgment governed

by La.Code Civ.P. art. 966.

Insofar as New Hampshire contends that the policy under which coverage is

sought (policy number 416-28-390) is not contained in the record, we address this

omission below. However, insofar as the movers’ motion for summary judgment

1
Art. 931. Evidence on trial of peremptory exception

On the trial of the peremptory exception pleaded at or prior to the trial of the
case, evidence may be introduced to support or controvert any of the objections
pleaded, when the grounds thereof do not appear from the petition.

When the peremptory exception is pleaded in the trial court after the trial of
the case, but prior to a submission for a decision, the plaintiff may introduce evidence
in opposition thereto, but the defendant may introduce no evidence except to rebut
that offered by plaintiff.

No evidence may be introduced at any time to support or controvert the
objection that the petition fails to state a cause of action.

5

questions the effectiveness of cancellation, we note that the record contains the

affidavit of Milton West, the underwriting manager for New Hampshire, wherein Mr.

West attests to the existence of a policy, bearing the number 416-28-390 with

effective dates of October 12, 2005 to October 12, 2006. Further, the declarations

page for the relevant policy, which provides, at a minimum, the policy number, the

named insured, the policy limits, and the covered auto, was filed into the record as per

the attachment to the mover’s Memorandum in Support of Joint Motion for Summary

Judgment. The presence of the affidavit and the declarations page are sufficient for

a discussion of the parties’ arguments regarding cancellation insofar as they establish,

not coverage, but the existence of a policy.

Notice Requirement

In its second assignment of error, New Hampshire contends that the trial court

erred by holding that La.R.S. 45:173 and La.R.S. 45:174 require LPSC to receive

notice of the cancellation of a commercial carrier’s policy in order for said

cancellation to have effect.2 Louisiana Revised Statutes 45:173 and 45:174 provide:

2
The trial court’s reasons for judgment:

However, there is a legal issue that must be decided, even if Mr. Patrick
received notice of cancellation. Louisiana Revised Statutes 45:173 and 45:174
require that a policy of liability insurance issued to a common carrier shall provide
ten days notice of intention to cancel the policy which shall be given to the LPSC.
While the cases addressing this issue do not specifically state the purpose of these
statutes, it would seem clear that the LPSC must be notified of the cancellation of the
policy by the carrier to protect the public. It allows the LPSC to take corrective action
to make sure a common carrier is not operating vehicles on a public roadway without
insurance or a bond to cover damages to innocent third parties. Notification by the
insurance carrier to the LPSC to effectuate a valid cancellation is consistent with
holdings of the First and Second Circuit Louisiana Appellate Courts. Walcott v.
Trailways Lines, Inc. 774 So.2d 1054 (La.App.2d Cir. 2000); St. Paul Marine and
Insurance Company v. Roubion 252 So.2d 679 (La. App. 1st Cir. 1071). Accordingly,
the court holds that the moving parties Wade Phillips and Mary Beth Phillips,
individually, and on behalf of Justin Phillips and James Thomasee and the Jim
Thomasee Insurance Agency, Inc. and Bobby Adrian Patrick are entitled to Summary
Judgment against New Hampshire Insurance Company recognizing that New
Hampshire Insurance Company afforded liability insurance coverage for the accident
at issue.

6

§ 173. Contract carriers; liability policy or bond required

Every motor carrier, as defined in R.S. 45:162(10), not exempted
by R.S. 45:177, using the highways shall file with the Louisiana Public
Service Commission, a liability insurance policy or bond satisfactory to
the commission of a company authorized to do business in this state.
For contract carriers of passengers, other than a contract carrier by bus,
the policy or bond shall be not less than five thousand dollars for the
death or injury to any one person and thirty thousand dollars total
liability for any one accident, and for contract carriers of property the
policy or bond shall be not less than five thousand dollars for the death
or injury to any one person and ten thousand dollars total liability for
any one accident.

§ 174. Cancellation of bond or policy

The policy or bond provided in R.S. 45:173 shall provide that ten
days’ notice in writing shall be given to the commission of intention to
cancel the policy or bond. If the policy or bond is cancelled, or in the
event it should lapse for any reason, the contract carrier by motor
vehicle shall replace the policy or bond with another.

In review of the question posed by the motion for summary judgment, we are

mindful of the rules of statutory construction. Louisiana Revised Statutes 1:3

provides:

Words and phrases shall be read with their context and shall be
construed according to the common and approved usage of the language.
Technical words and phrases, and such others as may have acquired a
peculiar and appropriate meaning in the law, shall be construed and
understood according to such peculiar and appropriate meaning.

The word “shall” is mandatory and the word “may” is permissive.

Louisiana Revised Statutes 1:4 provides:

When the wording of a Section is clear and free of ambiguity, the
letter of it shall not be disregarded under the pretext of pursuing its
spirit.

Further, the supreme court has explained:

The fundamental question in all cases of statutory interpretation is
legislative intent. SWAT 24 Shreveport Bossier, Inc. v. Bond,
2000-1695, p. 11 (La. 6/29/01), 808 So.2d 294, 302; Succession of
Boyter, 99-0761, p. 9 (La. 1/7/00), 756 So.2d 1122, 1128. The rules of
statutory construction are designed to ascertain and enforce the intent of

7

the legislature. Id.; Stogner v. Stogner, 98-3044, p. 5 (La. 7/7/99), 739
So.2d 762, 766.

The meaning and intent of a law is determined by considering the
law in its entirety and all other laws on the same subject matter and by
placing a construction on the law that is consistent with the express
terms of the law and with the obvious intent of the legislature in
enacting the law. SWAT 24 Shreveport Bossier, 2000-1695 at p. 11, 808
So.2d at 302; Succession of Boyter, 99-0761 at p. 9, 756 So.2d at 1129.
A statute must be applied and interpreted in a manner that is logical and
consistent with the presumed purpose and intent of the legislature. Id.

Further, it is presumed that every word, sentence, or provision in
a law was intended to serve some useful purpose, that some effect is to
be given to each such provision, and that no unnecessary words or
provisions were employed. Sultana Corporation v. Jewelers Mutual
Insurance Company, 03-0360, p. 9 (La.12/3/03), 860 So.2d 1112, 1119.
As a result, courts are bound, if possible, to give effect to all parts of a
statute and to construe no sentence, clause or word as meaningless and
surplusage if a construction giving force to, and preserving, all words
can legitimately be found. St. Martin Parish Police Jury v. Iberville
Parish Police Jury, 212 La. 886, 33 So.2d 671, 676 (1947); State v.
Fontenot, 112 La. 628, 36 So. 630, 634 (1904). Finally, it is presumed
that the legislature acts with full knowledge of well-settled principles of
statutory construction. Sultana Corporation, 03-0360 at p. 9, 860 So.2d
at 1119.

Moss v. State, 05-1963, pp. 15-16 (La. 4/4/06), 925 So.2d 1185, 1196.

We review the mover’s argument in light of the above principles of statutory

interpretation. While La.R.S. 45:173 and La.R.S. 45:174 anticipate that an applicable

policy will require the notification of the LPSC upon cancellation, they do not

designate the party responsible for notification. Nor do the statutes contain a

provision that makes cancellation effective solely upon the receipt of said notice. We

do not impose this provision or read it into the law. See Perritt v. Dona, 02-2601 (La.

7/2/03), 849 So.2d 56. For this reason, the trial court erred in rendering summary

judgment on the basis that the cancellation was not effective due to a lack of notice.

We note that the movers and the trial court relied on Wolcott v. Trailways

Lines, Inc., 34,071 (La.App. 2 Cir. 12/06/00), 774 So.2d 1054 and St. Paul Fire

Marine & Ins. Co. v. Roubion, 252 So.2d 679 (La.App. 1Cir. 1971), to support the

8

assertion that the LPSC must receive notice before cancellation is effective.

However, in Wolcott, 774 So.2d 1054, a Form E3 was present and cancellation of the

policy was determined by the terms of the form. The court did not find that the

statutes, alone, dictated coverage or cancellation. Ultimately, the second circuit held

that replacement of one insurer with another constitutes termination of coverage by

the first insurer, without reaching the issue now before the court of whether

notification to the LPSC is a prerequisite to termination of coverage. Similarly, St.

Paul Marine and Insurance Company, 252 So.2d 679 is distinguishable from this

matter, as the issue of coverage in the former case was decided, again, upon the

language of the endorsement, not as a matter of statutory interpretation involving

La.R.S. 45:173 and La.R.S. 45:174 alone.

Genuine Issues of Material Fact

Notwithstanding the cancellation issue addressed above, New Hampshire also

points out that key facts regarding coverage are disputed. Significantly, the policy

under which the movers claim coverage, policy number 416-28-390, is not contained

in the record.4 Further, there is a dispute concerning whether Jackie Hampton, the

driver of the Mercury Marquis, was employed by Cenla Courier, New Hampshire’s

insured, at the time of the accident. Patrick, the owner of both Cenla Courier and

Cenla Dispatch, made conflicting statements in regard to which company employed

3
In Wolcott, 774 So.2d at 1060, the second circuit explained that: “Form E is a document
required to be filed, inter alia, with the Interstate Commerce Commission (“ICC”) and the LPSC.”
The second circuit set forth the contents of the Form E in that case, which provided:

This certificate and the endorsement described herein may not be canceled without
cancellation of the policy to which it is attached. Such cancellation may be effected
by the Company or the insured giving thirty (30) days notice in writing to the State
Commission, such thirty (30) days notice to commence to run from the date notice
is actually received in the office of the Commission.

Id.
4
Another policy, bearing the number 419-09-298, was filed into the record earlier in the
proceedings. We do not substitute the language of that policy for the policy at issue.

9

Hampton when the accident occurred. In his exception of no cause of action, Patrick

asserted that “he did not employ Jackie D. Hampton, Jr. at the time of the accident

and thus is not responsible for the alleged negligent action of Jackie D. Hampton Jr.”

However, he also stated in an affidavit that Jackie “at the time of that accident . . .

had started working under our fleet company then with the Cenla Dispatch

Company,” which was insured by Progressive, not New Hampshire. Additionally,

Patrick’s joint motion for summary judgment states that “Jackie D. Hampton, Jr. was

allegedly within his course and scope of employment by Cenla Taxi and Courier

Service, Inc.” Because New Hampshire’s involvement in the case as a potential

insurer necessarily depends on whether the driver was New Hampshire’s insured, a

genuine issue of material fact exists, precluding summary judgment.

Another issue regards whether the car involved in the accident was covered

under the policy. It is undisputed that the 1997 Mercury Grand Marquis was not

listed on the New Hampshire policy declaration sheet as a covered automobile. The

movers, though, argue coverage is afforded due to the policy provision that includes

“temporary substitute autos.5”

5
As noted, policy number 416-28-390 is not contained in the record. For discussion
purposes only, we note that as per a letter from York Claims Service, Inc., the authorized
representative of New Hampshire, wherein coverage for this accident was declined, the policy
provision reads in pertinent part:

C. CERTAIN TRAILERS, MOBILE EQUIPMENT AND TEMPORARY
SUBSTITUTE AUTOS

If Liability Coverage is provided by this Coverage Form, the following types
of vehicles are also covered “autos” for Liability Coverage:

....

3. Any “auto” you do not own while used with the permission of its
owner as a temporary substitute for a covered “auto” you own that is
out of service because of its:

a. Breakdown;
b. Repair:
c. Servicing;
d. “Loss”; or
e. Destruction.

10

While the policy was not filed into the record, it appears that coverage as

claimed by the movers will require proof that a “temporary substitute automobile,”

is one that “you do not own.” Although the movers contend that the “Mercury

Marquis . . . was a temporary replacement used by Cenla Taxi and Courier Service,

Inc. for a Ford Van previously damaged in another accident” and, thus, is covered as

a temporary substitute vehicle, competing evidence exists as to who is the owner of

the Mercury. Pointing to the affidavit of Bobby Patrick, the movers urge that the

Mercury qualified under the temporary substitute provision, while New Hampshire

contends that the insured, Cenla Taxi, owned the Mercury, and the provision

affording coverage is only triggered if the insured does not own the vehicle. The

absence of the policy from the record, as well as the disputed issue of coverage, create

genuine issues of material fact.

Consequently, we find that, in addition to the failure of the movers’ statutory

claim as to notice of cancellation, multiple, genuine issues of material fact exist and

preclude summary judgment. We reverse and remand for further proceedings.

DECREE

For the foregoing reasons, the summary judgment entered by the trial court is

reversed. This matter is remanded to the trial court for further proceedings. Costs of

this appeal are assessed to the appellees, Wade Phillips and Mary Beth Phillips,

individually and on behalf of Justin Phillips, James Thomasee, the Jim Thomasee

Insurance Agency, and Bobbie Adrian Patrick.

REVERSED AND REMANDED.

11