Ella Hawkins v. Andrew John Redmon

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-215

ELLA HAWKINS, ET AL.

VERSUS

ANDREW JOHN REDMON, ET AL.

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APPEAL FROM THE
TWELFTH JUDICIAL DISTRICT COURT
PARISH OF AVOYELLES, NO. 2007-0841-B
HONORABLE WILLIAM J. BENNETT, PRESIDING
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SYLVIA R. COOKS
JUDGE

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Court composed of Sylvia R. Cooks, Oswald A. Decuir, and J. David Painter, Judges.

AFFIRMED.

Jerold Edward Knoll
Triston K. Knoll
P.O. Box 426
233 South Main Street
Marksville, LA 71351-0426
(318) 253-6200
COUNSEL FOR PLAINTIFFS/APPELLEES:
Ella Hawkins, et al.

Keith M. Borne
200 West Congress Street
P.O. Box 4305
Lafayette, LA 70502-4305
(337) 232-1604
COUNSEL FOR DEFENDANT-APPELLANT:
Safeway Insurance Company of Louisiana

COOKS, Judge.

On July 17, 2003, Ella Hawkins, individually and on behalf of her minor

children, filed a Petition for Damages alleging on January 13, 2007, an automobile

accident was caused by the fault of defendant, Andrew John Redmon, who was

operating a 1996 Ford Ranger owned by his father, Mervin Redmon. The petition

alleged the Redmon vehicle was insured by Safeway Insurance Company of

Louisiana and that Ella Hawkins had a policy of insurance through National

Automotive Insurance Company. Eventually all claims brought by plaintiffs against

National Automotive were resolved.

In response to the petition, Safeway generally denied all of the allegations

contained therein and specifically contended the policy at issue did not provide

coverage to Andrew John Redmon pursuant to a named driver exclusion made a part

of the policy. In response, plaintiffs filed a Petition for Declaratory Judgment

requesting the trial court declare that the Safeway policy issued to Mervin Redmon

did in fact provide coverage to plaintiffs. Safeway requested that the trial court

declare Andrew John Redmon was excluded from the policy as a covered driver.

The matter was scheduled for a hearing on August 1, 2008. The only issue

presented to the trial court was the coverage issue pertaining to Andrew John

Redmon. The trial court set forth the following undisputed facts:

1. A policy was issued to Mervin Redmon through the Cottonport
Insurance Agency with effective dates of January 11, 2007
through July 11, 2007 covering a 1995 Chevrolet S-10 and a 1996
Ford Ranger. This policy resulted from an application dated
January 11, 2006 signed by Sandra Redmon, wife of Mervin
Redmon.

2. An exclusion of named drivers was signed January 11, 2006 by
Sandra Redmon wherein Sandra Redmon excluded Andrew
Redmon, DOB: 6-02-87, as an excluded driver in the policy

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issued to Mervin Redmon by Safeway Insurance Company of
Louisiana. A request for change in policy was made January 9,
2007 signed by Sandra Redmon, however, the Court cannot
ascertain what specific change was requested.

3. The subject accident occurred January 13, 2007.

4. On March 9, 2007 Sandra Redmon executed a document
requesting that Andrew John Redmon be added as a driver on the
subject policy.

5. Sandra Redmon had the verbal authority of her husband to visit
the Cottonport Insurance Agency on January 11, 2006 and
purchase insurance coverage on the vehicles listed on the policy.

6. Mervin Redmon and Sandra Redmon did not have any discussion
concerning the exclusion of Andrew John Redmon under the
policy at the time of application of the policy, that being January
11, 2006.

7. Mervin Redmon testified that Sandra Redmon did not have his
authority to exclude Andrew John Redmon from coverage under
the policy.

The trial court concluded the named driver endorsement exclusion was invalid

because it was signed by Sandra Redmon rather than Mervin Redmon, who was listed

as the applicant on the policy at issue. Further, the trial court found Mervin Redmon

testified he did not give Sandra authority to exclude Andrew and “was unaware that

his son was not a covered driver.” Thus, the trial court held Andrew was a covered

driver under the Safeway policy.

Safeway filed this appeal contending the trial court erred in concluding the

policy afforded coverage in this case. For the following reasons, we affirm.

ANALYSIS

An insurance policy is an agreement between parties and should be interpreted

using ordinary contract principles. Smith v. Matthews, 611 So.2d 1377 (La.1993).

Insurance companies have the right to limit coverage in any manner they desire,

provided the limitations do not conflict with statutory provisions or public policy.

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Reynolds v. Select Properties, Ltd., 93-1480 (La. 04/11/94), 634 So.2d 1180. The

insurer, however, has the burden of proving that a loss comes within a policy

exclusion. Fields v. American Cent. Ins. Co., 40,738 (La.App. 2 Cir. 03/08/06), 923

So.2d 967.

On the date the policy at issue was delivered and on the date of the accident,

La.R.S. 32:900(L) provided:

Notwithstanding the provisions of Paragraph (B)(2) of this
Section, an insurer and an insured may by written agreement exclude
from coverage the named insured and the spouse of the named insured.
The insurer and an insured may also exclude from coverage any other
named person who is a resident of the same household as the named
insured at the time that the written agreement is entered into, and the
exclusion shall be effective, regardless of whether the excluded person
continues to remain a resident of the same household subsequent to the
execution of the written agreement. It shall not be necessary for the
person being excluded from coverage to execute or be a party to the
written agreement. For the purposes of this Subsection, the term “named
insured” means the applicant for the policy of insurance issued by the
insurer.

Essentially, La.R.S. 32:900(L) provides the authority for the automobile insurer

and the insured to contract to exclude a resident of the insured’s household from

coverage under the policy. The purpose is to give the insured the option of paying

a reduced premium in exchange for insurance that affords no coverage while a vehicle

is being operated by the excluded driver. Bryant v. United Servs. Auto. Ass’n,

03-3491 (La. 09/09/04), 881 So.2d 1214. Of significance to this case, the statute

specifically provides “the term ‘named insured’ means the applicant for the policy of

insurance issued by the insurer.”

In reaching its decision, the trial court relied on this Court’s opinion in Oliver

v. Ste. Marie, 97-1469 (La.App. 3 Cir. 7/1/98), 715 So.2d 722, writ denied, 98-2077

(La. 11/13/98), 730 So.2d 936. In Oliver, Guy D. Ste. Marie, his wife, Sharyll, and

their automobile insurer were sued for damages arising out of an automobile accident

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involving their minor daughter, Renee. The Ste. Maries’ insurer, Illinois National,

denied coverage because the policy contained a “Named Driver Exclusion

Agreement,” which excluded the minor, Renee, from coverage. That form was signed

by Sharyll Ste. Marie, although Guy Ste. Marie was the listed applicant on the policy.

The Ste. Maries filed a cross-claim against Illinois National demanding it provide

liability coverage according to the terms of the policy. The trial court found Renee

was entirely at fault in causing the accident and held that the policy exclusion

required a signature by the named insured, Guy Ste. Marie. Consequently, the court

found the exclusion invalid because Sharyll Ste. Marie signed her husband’s name

to the exclusion agreement without having authority to do so. Illinois National

appealed.

This Court held the trial court was correct in finding the exclusion agreement

could only be entered into by the named insured, Guy Ste. Marie. Because Sharyll

Ste. Marie did not have authority to sign on behalf of Guy Ste. Marie, the exclusion

was invalid, and Renee was a covered driver under the terms of the policy. In

affirming the trial court’s holding that only a named insured on a policy of

automobile liability insurance could exclude members of a household from coverage,

we cited with approval the following language from Safeway v. Johnson, 28,150, p.

2 (La.App. 2 Cir. 1/24/96), 666 So.2d 1300, 1301:

Requiring the written consent of each insured, as defined by the policy,
would necessitate the signatures of at least every household member,
even those not yet licensed to drive. Neither would the result be any
more tenable if the statute were construed to allow any of these insureds
to accomplish such a limitation. Even so, the named insured, who acts
on behalf of all other insureds in procuring an insurance policy, should
certainly be (and is) allowed to exercise this statutory option. We further
conclude that the legislature, contemplating a rational construction of
the statute, intended for the named insured alone to have the right and
responsibility of excluding members of his household from coverage.

(Emphasis in original).

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The Oliver court also found no merit in the argument that Sharyll Ste. Marie had her

husband’s apparent or actual authority to sign his name. It concluded there was no

specific authority from Guy Ste. Marie to his wife granting her the power to act.

The trial court specifically noted in the present case it was clear from the

testimony of Mervin Redmon that he did not give his wife authority to exclude

Andrew from coverage. There was no Power of Attorney nor agency agreement

giving her authority to act on his behalf. Considering this, and the clear definition in

La.R.S. 32:900(L) that a “named insured” is the applicant for the policy, we cannot

say the trial court erred in finding the “Named Driver Exclusion Agreement,” which

excluded Andrew from coverage was invalid.

Safeway attempts to rely on the definition of “named insured” as listed in its

policy, which defines it as the “individual named in the declarations and also includes

his spouse, while living with him.” Clearly, this provision is in conflict with the

definition of “named insured” set forth in La.R.S. 32:900(L), which limits “named

insured” solely to the applicant of the policy, which in the present case was Mervin

Redmon. The law is clear that insurers cannot contractually limit their liability by

including provisions which are in conflict with the law or public policy. Ducote v.

Koch Pipeline Co., L.P., 98-942 (La. 01/20/99), 730 So.2d 432; Smith v. Zale Indem.

Co., 538 So.2d 1142 (La.App. 5 Cir.), writ denied, 541 So.2d 876 (La. 1989).

Therefore, the trial court did not err in finding coverage existed in this case.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. All costs

of this appeal are assessed against appellant, Safeway Insurance Company of

Louisiana .

AFFIRMED.

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