Roger Clark v. Danny Clark and Great Lakes Reinsurance (Uk), Plc

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

10-1281 consolidated with CW 10-918

ROGER CLARK

VERSUS

DANNY CLARK AND GREAT LAKES REINSURANCE (UK), PLC

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APPEAL FROM THE
TWELFTH JUDICIAL DISTRICT COURT
PARISH OF AVOYELLES, NO. 2009-3958
HONORABLE MARK A. JEANSONNE, DISTRICT JUDGE

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MARC T. AMY
JUDGE

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Court composed of Marc T. Amy, Shannon J. Gremillion, and Phyllis M. Keaty,
Judges.

REVERSED IN PART; MOTION FOR NEW TRIAL GRANTED AND
MADE PEREMPTORY; DEFAULT JUDGMENT REVERSED AND
VACATED IN PART; REMANDED.

James A. Rowell
Travis L. Bourgeois
Degan, Blanchard & Nash
400 Poydras Street, Suite 2600
New Orleans, LA 70130
(504) 529-3333
COUNSEL FOR DEFENDANT/APPELLANT:
Great Lakes Reinsurance (UK), PLC

Joseph H. Jolissaint
201 Napoleon Street
Baton Rouge, LA 70802
(225) 757-5600
COUNSEL FOR PLAINTIFF/APPELLEE:
Roger Clark

AMY, Judge.

The plaintiff brought suit against his son and his son’s alleged homeowner’s

insurer for injuries sustained in a fall at the son’s home. The trial court confirmed a

default judgment against both defendants. The insurer sought a new trial asserting

that it had not been served with the original suit. The trial court denied the motion.

The insurer appeals. For the following reasons, we reverse the denial of the motion

for new trial and enter judgment granting the motion for new trial. We further reverse

and vacate the default judgment in part and remand.

Factual and Procedural Background

Roger Clark filed this matter in August 2009 alleging that he sustained physical

injuries while assisting his son, Danny Clark (Danny) in unloading a generator from

the back of a pickup truck while at Danny’s home. The petition alleges that the

injuries occurred while the plaintiff “was moving the generator along a ramp out of

the back of a pickup truck on a ramp, . . . [Danny] turned his wheelchair around

coming in contact with the ramp.” The petition further provides that when the

wheelchair “came in contact with the ramp it knocked the ramp out from under the

plaintiff causing him and the generator to fall to the ground.” The plaintiff asserted

that he sustained serious shoulder injuries requiring ongoing treatment. The plaintiff

named Danny and his purported homeowner’s insurer, “Great Lakes Reinsurance

Company” (Great Lakes) as defendants.

However, the defendants did not answer the petition, resulting in a preliminary

default being entered in January 2010. With regard to the insurer, the motion for

preliminary default asserted that “the defendant, Great Lakes Reinsurance Company,

was served with the Petition for Damages through the Secretary of State on August

31, 2009.” The citation with service information for the insurer was attached to the

motion.1

Following a February 5, 2010 hearing, at which the plaintiff presented

evidence, the trial court confirmed the preliminary default and rendered judgment “in

favor of the plaintiff and against the defendants[.]”2 It awarded the plaintiff

$225,000.00 in general damages and $16,995.00 in special damages. The trial court

signed the judgment on February 8, 2010. The Notice of Signing of Judgment

indicates that “on the 8th day of Feb 2010, a Judgment was signed in the case and a

certified copy mailed to all counsel of record and unrepresented parties on the 8th day

of Feb 2010.”

Thereafter, on May 26, 2010, Great Lakes, appearing as Great Lakes

Reinsurance (UK) PLC, filed a motion for new trial. It asserted that a new trial was

appropriate since, it alleged, it did not receive notice of the suit until Danny’s

insurance agent forwarded a copy of the default judgment and notice of signing of

judgment. Thus, it argued that it had no opportunity to defend itself. Furthermore,

it contended that the damages awarded exceeded the limits of the policy issued to

Danny. Great Lakes also filed an answer at that time, acknowledging that it is a

foreign corporation which may be served through the Louisiana Secretary of State.

It conceded that it issued a policy to Danny, but alleged that its policy limits were

1
The Notice of Service provides, in part, as follows:

Date of Service: TUESDAY, AUGUST 25, 2009
Personal/Domiciliary: PERSONAL ON GREAT LAKES REINSURANCE
COMPANY THROUGH THE SECRETARY OF
STATE’S OFFICE

The record also contains a Certificate of Deputy Clerk of Court certifying that service was made on
“Great Lakes Reinsurance Company” through the “Secretary of State” on August 25, 2009.”
2
The judgment does not enter judgment against the defendants by name.

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insufficient to satisfy the damages awarded in the default judgment. Great Lakes

advanced other defenses as well, pointing to a policy exclusion and notice provisions

that it alleged could preclude coverage. It also urged claims of prescription and

comparative fault.

Following a hearing, the trial court denied the motion for new trial “on the

merits.” Thereafter, Great Lakes sought and obtained a suspensive appeal from the

February 8, 2010 default judgment and the July 13, 2010 judgment denying its motion

for new trial.3 Great Lakes questions the correctness of each judgment in its brief to

this court.4

Discussion

Default Judgment

Great Lakes contends, in part, that the default judgment must be vacated and

set aside, chiefly because it “was never legally served with citation of the instant

lawsuit.” We address this issue in consideration of the denial of the motion for new

trial. However, Great Lakes further questions the sufficiency of the plaintiff’s

evidence presented in support of the default judgment.

Louisiana Code of Civil Procedure Article 1701(A) provides that “[i]f a

defendant in the principal or incidental demand fails to answer within the time

prescribed by law, judgment by default may be entered against him.” This judgment

“may be obtained by oral motion in open court or by written motion mailed by the

3
Great Lakes also filed an application for supervisory writs seeking review of these
judgments. These matters were consolidated for review. For disposition of the companion writ
application, see Roger Clark v. Danny Clark and Great Lakes Reinsurance Company, 10-918
(La.App. 3 Cir. _/_/11), __ So.3d __.
4
These dates make it appear that the motion for new trial was untimely. It would seemingly
follow that this appeal would be untimely as well. However, as explained below, the date of service
of the judgment on Great Lakes is unclear in the record. We consider both the motion for new trial
and the resulting appeal as timely.

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court, either of which shall be entered in the minutes of the court, but the judgment

shall consist merely of an entry in the minutes.” Id. Thereafter, and in pertinent part,

the default judgment may be confirmed as follows:

A. A judgment of default must be confirmed by proof of the
demand sufficient to establish a prima facie case. If no answer is filed
timely, this confirmation may be made after two days, exclusive of
holidays, from the entry of the judgment of default. . . .

B. (1) When a demand is based upon a conventional
obligation, affidavits and exhibits annexed thereto which contain facts
sufficient to establish a prima facie case shall be admissible, self-
authenticating, and sufficient proof of such demand. The court may,
under the circumstances of the case, require additional evidence in the
form of oral testimony before entering judgment.

(2) When a demand is based upon a delictual obligation, the
testimony of the plaintiff with corroborating evidence, which may be by
affidavits and exhibits annexed thereto which contain facts sufficient to
establish a prima facie case, shall be admissible, self-authenticating, and
sufficient proof of such demand. The court may, under the
circumstances of the case, require additional evidence in the form of oral
testimony before entering judgment.

....

D. When the demand is based upon a claim for a personal
injury, a sworn narrative report of the treating physician or dentist may
be offered in lieu of his testimony.

La.Code Civ.P. art. 1702. Insofar as Article 1702 requires that a default judgment be

confirmed through the introduction of proof of the demand, it is similar to a trial. See

Arias v. Stolthaven New Orleans, L.L.C., 08-1111 (La. 5/5/09), 9 So.3d 815. On

appeal, review of a default judgment “is restricted to determining the sufficiency of

the evidence offered in support of the judgment.” Id. at 818. This determination is

subject to the manifest error standard of review. Id.

The default judgment awarded general damages in the amount of $225,000.00

and special damages totaling $16,995.00 collectively against “the defendants.”

4

However, the plaintiff’s evidence entered in support of the default judgment conflicts

with the judgment insofar as Great Lakes’ liability is concerned. With regard to

insurance coverage, the plaintiff submitted only a declaration page from the policy

at issue and an attached policy coverage disclosure summary. The declaration page

evidences a limit of liability in the amount of $100,000.00 for personal liability and

medical payments in the amount of $500.00 per person and $25,000.00 per person.

This document, alone, was insufficient to impose liability against the insurer.

In Arias, 9 So.3d 815, the supreme court addressed a default judgment entered

against a liability insurer. It referenced several portions of La.R.S. 22:1269, which

provides for an insured’s right of direct action against a liability insurer. It noted that

the statute affords such a right to sue “within the terms and limits of the policy.” Id.

at 823, quoting La.R.S. 22:1269. Accordingly, the supreme court concluded that,

even in a case in which the insurer has answered the petition and denied liability, “the

terms and conditions of the insurance policy are part of the principal basis for the

claims and critical to establishing a prima facie case of the insurer’s liability[.]” Id.

In Arias, a plaintiff’s memorandum of insurance and accompanying correspondence

were found to insufficiently disclose the terms and conditions of the policy so as to

constitute a prima facie case of coverage and liability of the insurer in the absence of

the policy itself. Id.

While the plaintiff did not submit the Great Lakes insurance policy in support

of the default judgment, he contends that the judgment was supported by evidence

other than the actual policy and cites Succession of Rock v. Allstate Life Ins. Co., 340

So.2d 1325 (La.1976) for that proposition. Indeed, the supreme court, in Succession

of Rock, upheld the default judgment before it even though the actual insurance policy

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was not submitted. However, and as specifically explained in Arias, 9 So.3d at 824,

the exception carved out by the Succession of Rock is applicable in “those limited

instances where the admission of all essential contract provisions upon which a suit

is based has been requested of the opposing party and, upon that party’s failure to

answer, they have been deemed admitted.”

The exception enunciated in Succession of Rock, 340 So.2d 1325, is not

applicable in this case. The plaintiff in that case was able to rely on unanswered

requests for admissions as proof of the essential elements of the claim at issue. Id.

However, the record in this case is slim, containing no requests for admissions that

could be construed as admitting coverage in this case. We find no merit in the

plaintiff’s contention that Great Lakes’ answer and Great Lakes’ submission of the

insurance policy at issue should be construed as satisfying the plaintiff’s evidentiary

burden of proving coverage within the terms and conditions of the policy at issue.

Instead, these items were not filed into the record until Great Lakes filed its motion

for new trial. Certainly, the trial court could not have relied on these at the time the

default judgment was entered. The plaintiff cannot, after default judgment was

entered, rely on those documents.

Additionally, the plaintiff’s own evidence weighed against the default

judgment insofar as it was entered against Great Lakes. As stated above, the

declaration page revealed limits less than the amount of the judgment. Further, a

three-page “Homeowners Insurance Policy Coverage Disclosure Summary” included

in the exhibit specifically states that the insured must refer to the “insurance policy

for complete policy terms and provisions[.]” Although the document lists flood and

mold as “limitations or exclusions under this policy[,]” it further directs as follows:

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“For all other limitations or exclusions refer to your policy for complete details on

terms and provisions.” Thus, the insurance policy was necessary in order for the

plaintiff to satisfy its evidentiary burden for a finding of liability against Great Lakes

as he was required to prove the terms and limits of the Great Lakes policy.

For this reason, we find that the trial court was manifestly erroneous in entering

judgment against the insurer.5 We find that this error further warranted the granting

of Great Lakes’ motion for new trial, as discussed below.

New Trial

Great Lakes’ sought a new trial under both La.Code Civ.P. arts. 1972 and 1973.

Article 1972 provides peremptory grounds for a new trial, instructing the trial court

that: “A new trial shall be granted, upon contradictory motion of any party . . .

[w]hen the verdict or judgment appears clearly contrary to the law and the evidence.”

Further, Article 1973 provides the discretionary grounds for the granting of a new

trial and states that “[a] new trial may be granted in any case if there is good ground

therefor, except as otherwise provided by law.”

As explained above, the judgment appears clearly contrary to the law and

evidence insofar as it cast Great Lakes in judgment absent the relevant policy and did

so in an amount exceeding the only evidence of the policy limits. Thus, the trial court

erred in failing to grant a new trial pursuant to La.Code Civ.P. art. 1972.

Additionally, and with regard to Article 1973, the lack of clarity in the citation

and service of the pertinent documents to Great Lakes warranted a new trial. The

record indicates that service of the petition was made on “Great Lakes Reinsurance

5
The other defendant cast in judgment, Danny Clark, did not appeal the default judgment
entered against him. We do not consider the correctness of the trial court’s entry of the default
judgment against him. The disposition of this matter does not disturb that portion of the default
judgment insofar as it relates to him.

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Company” through the Secretary of State. The insurer is listed as such in the

plaintiff’s petition even though the declarations page submitted by the plaintiff into

evidence clearly bears the name: “Great Lakes Reinsurance (UK) PLC.” Great Lakes

appeared under this latter name at the time it filed its answer and its motion for new

trial.

Also, in support of its motion for new trial, Great Lakes submitted the affidavit

of the Deputy Manager of its claims agent who stated that, although procedures were

in place which resulted in lawsuits being served on the insurer being forwarded to

him for action, he “never received service of citation or the petition in this lawsuit.”

Instead, he explained that he “was not aware of this lawsuit’s existence until 30 April,

2010, when [he] received a copy of the petition that had been faxed to Great Lakes

Reinsurance by Danny Clark’s insurance agent.” He explained that, immediately

thereafter, he contacted “U.S. legal counsel and forwarded the petition to them.”

This problem is compounded as the record fails to establish that the default

judgment was ever appropriately served on Great Lakes. This issue also becomes

relevant when considering the timeliness of the motion for new trial and, in turn, the

timeliness of this appeal. Louisiana Code of Civil Procedure Article 1974 provides

that the seven-day “delay for applying for a new trial commences to run on the day

after the clerk has mailed, or the sheriff has served, the notice of judgment as required

by Article 1913.” According to Article 1913(B), when the original citation and

service of the action is through the Secretary of State, as was presumptively

effectuated in this case, notice of the signing of the default judgment shall be made

“by service on the secretary of state.” Yet, the record does not indicated that this

service was made. While the notice of signing the default judgment indicates that a

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certified copy of the judgment was “mailed to all counsel of record and unrepresented

parties[,]” it bears only one listing under the “copies sent” portion of the notice:

“Joseph Jolissaint.” The record indicates that Mr. Jolissaint represented the plaintiff

in the court below, as he does before this court. There is no further indication that

service of the judgment was made on Great Lakes through the Secretary of State.

The plaintiff contended in his opposition to the motion for new trial that the

motion was untimely because “Notice of the signing of the Judgment was provided

to the defendant by Certified Letter to Great Lakes Reinsurance Company through the

Secretary of State which was signed for on April 22, 2010 by Tara Pascal with the

Secretary of State’s office.” In this regard, the plaintiff attached a April 21, 2010

cover letter from plaintiff’s counsel to Great Lakes purportedly forwarding the default

judgment. The certified mail receipt indicates that it was signed by “Tara Pascale.”

However, other than the plaintiff’s assertion in its opposition, the record contains no

evidence linking this service to the Secretary of State’s office. Further, this letter,

purportedly served on Great Lakes, is dated well over two months after the signing

of the default judgment.

In addition to the ill-defined service and citation demonstrated in the record,

Great Lakes alerted the trial court through its motion for new trial and its answer that

the judgment arguably exceeded the policy limits and that it would urge coverage and

comparative liability issues in a new trial. When considered collectively, these

factors indicate that the trial court abused its discretion in denying the motion for new

trial pursuant to La.Code Civ.P. art. 1973.

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For these reasons, we reverse the denial of the motion for new trial and grant

the motion. Further, we reverse and vacate the default judgment in part insofar as it

cast judgment against Great Lakes. We remand for a new trial against Great Lakes.

DECREE

For the foregoing reasons, the judgment denying the motion for new trial of the

appellant, Great Lakes Reinsurance (UK) PLC, dated July 13, 2010 is reversed and

judgment granting that party’s motion for new trial is entered.

The default judgment, dated February 8, 2010, is reversed and vacated to the

extent that it entered judgment against the appellant. The remainder of the default

judgment, insofar as it relates to the remaining defendant, Danny Clark, is left

undisturbed.

This matter is remanded for a limited new trial on the issue of the liability of

Great Lakes Reinsurance (UK) PLC under the judgment and the extent thereof. All

costs of this proceeding are assessed against the plaintiff, Roger Clark.

REVERSED IN PART; MOTION FOR NEW TRIAL GRANTED AND MADE
PEREMPTORY; DEFAULT JUDGMENT REVERSED AND VACATED IN
PART; REMANDED.

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