Dalton D. Broussard, Et Ux. v. Progressive Security Ins. Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

11-1585

DALTON D. BROUSSARD, ET UX.

VERSUS

PROGRESSIVE SECURITY INSURANCE
COMPANY, ET AL.

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APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF ST. MARTIN, NO. 75734-E
HONORABLE KEITH R.J. COMEAUX, DISTRICT JUDGE

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MARC T. AMY
JUDGE

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Court composed of John D. Saunders, Marc T. Amy, and Billy Howard Ezell,
Judges.

REVERSED.

Richard J. Petre, Jr.
Onebane Law Firm
Post Office Box 3507
Lafayette, LA 70502-3507
(337) 237-2660
COUNSEL FOR DEFENDANTS/APPELLANTS:
Gateway Dirtworks, LLC
QBE Specialty Insurance Company

John J. Erny, III
Casler, Bordelon & McGinty
2450 Severn Avenue, Suite 200
Metairie, LA 70001
(504) 832-4839
COUNSEL FOR DEFENDANT/APPELLEE:
Progressive Paloverde Insurance Company

Gretchen Heider Mayard
Katherine P. Martin
Martin Mayard, LLC
Post Office Box 81338
Lafayette, LA 70598-1338
(337) 291-2440
COUNSEL FOR DEFENDANT/APPELLEE:
State Farm Mutual Auto Insurance Company

Scott A. Dartez
Perrin, Landry, deLaunay, Dartez & Ouellet
Post Office Box 53597
Lafayette, LA 70505
(337) 237-8500
COUNSEL FOR PLAINTIFFS/APPELLEES:
Dalton D. Broussard
Mary S. Broussard

AMY, Judge.

The plaintiffs pursued damages following an automobile accident in which

their vehicle was struck by a truck involved in transporting material for another dirt

works business. The plaintiffs sought damages from, among others, the hiring dirt

works business and its insurer. The trial court ultimately entered summary

judgment in favor of the plaintiffs, finding that the hiring business‟s insurance

policy provided coverage to the driver insofar as he was driving a hired and/or

nonowned automobile. The dirt works business and its insurer appeal. For the

following reasons, we reverse.

Factual and Procedural Background

This insurance coverage matter arose when the vehicle of Dalton Broussard

and Mary Broussard was involved in an intersectional collision with a dump truck

driven by Charles Belvin in Maurice, Louisiana. Deposition testimony indicated

that the truck was used for the business purposes of C.K. Paul Trucking, a business

venture of Mr. Belvin and his girlfriend, Yolanda Lumar. According to her

deposition testimony, Yolanda created C.K. Paul to haul materials such as dirt,

gravel, and asphalt. The dump truck was registered in the name of Latoya Lumar,

Yolanda‟s sister.

On the day of the accident, Mr. Belvin was engaged in transporting material

from Maurice to a construction area near Interstate 49 pursuant to an arrangement

between C.K. Paul and Gateway Dirtworks, LLC. Gateway owner Robert

Connolly explained that Gateway performed work for businesses who required

dump truck service for the delivery of sand, gravel and asphalt for road work or

construction. According to Mr. Connolly‟s deposition, Gateway owned three

dump trucks for its business purposes. He explained that C.K. Paul had contacted

Gateway‟s dispatcher, Barbara Ruiz, inquiring about work availability. He stated

that Ms. Ruiz handled the arrangements and that “[t]he arrangement with C.K. Paul

or any other truck” would be that the truck would get ninety percent of the rate

paid by the customer and Gateway would retain ten percent.

Following the accident, Mr. and Mrs. Broussard filed this suit seeking

general and special damages. They filed suit against C.K. Paul, Mr. Belvin, Latoya

Lumar and the subject truck‟s insurer Progressive Paloverde Insurance Company.

The suit also named Gateway and its insurer, QBE Specialty Insurance Company,

as defendants insofar as the plaintiffs asserted that Mr. Belvin was operating the

dump truck under the control and direction of Gateway at the time of the accident.

QBE filed an initial motion for summary judgment, asserting that its policy

issued to Gateway was inapplicable since Gateway was not Mr. Belvin‟s employer.

Gateway joined in QBE‟s memorandum in support of the motion for summary

judgment, asserting also that it was not Mr. Belvin‟s employer. The trial court

denied the motion at that time.

Thereafter, the plaintiffs sought summary judgment and asserted that there

was no genuine issue of material fact as to whether Mr. Belvin was an insured

under the QBE policy or to whether the truck operated by him was qualified as a

“nonowned auto” under that policy. Progressive and Mr. Belvin filed a similar

motion for summary judgment. Gateway also filed its own motion for summary

judgment, asserting that based on its evidence, including the affidavit of its

dispatcher, Barbara Ruiz, that it was not Mr. Belvin‟s employer.

Following a hearing, the trial court granted summary judgment in favor of

the plaintiffs and Progressive, determining that the QBE policy provided insurance

coverage for Mr. Belvin. The trial court denied the motion for summary judgment

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filed by Gateway and QBE. 1 It also denied Gateway‟s and QBE‟s motion for

reconsideration or, alternatively, a new trial. Ultimately, the matter was designated

as a final judgment for the purpose of an immediate appeal pursuant to La.Code

Civ.P. art. 1915.

Gateway and QBE appeal, assigning the following as error:

(1) The trial court erred in finding that a truck used by a
subcontractor in doing work for a general contractor becomes the
general contractor‟s “hired auto” under the general contractor‟s
automobile liability policy even though there was no lease agreement
for the vehicle; thus, the trial court erred in granting the summary
judgment motions on coverage filed by plaintiffs and Progressive.

(2) The trial court erred in granting summary judgment
despite several genuine issues of material fact including (a) the factual
issue of whether a vehicle driver was the general contractor‟s
employee or subcontractor, an issue that the trial court cited in
denying the general contractor‟s summary judgment motion that the
driver was not an employee, and (b) the factual issue of whether
driver Belvin was the owner of the truck that he was driving.

Discussion

Burden of Proof

A trial court must grant a motion for summary judgment “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).

While the burden of proof remains with the mover to demonstrate that genuine

issues of material fact do not exist, a moving party who will not bear the burden of

proof at trial is not required to negate all essential elements of the adverse party‟s

claim. La.Code Civ.P. art. 966(C)(2). Instead, the moving party must point out

that “there is an absence of factual support for one or more elements essential to

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Gateway and QBE do not question the denial of their motion in this appeal.

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the adverse party‟s claim, action, or defense.” Id. Once the moving party has met

this 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.

On review, an appellate court conducts 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.

QBE Insurance Policy

The QBE policy issued to Gateway provides that the following are insureds:

a. You for any covered “auto”.

b. Anyone else while using with your permission a covered “auto” you own,
hire or borrow except:

(1) The owner or anyone else from whom you hire or borrow a
covered “auto”. This exception does not apply if the covered
“auto” is a “trailer” connected to a covered “auto” you own.

(2) Your “employee” if the covered “auto” is owned by that
“employee” or a member of his or her household.

(3) Someone using a covered “auto” while he or she is working in a
business of selling, servicing, repairing, parking or storing “autos”
unless that business is yours.

(4) Anyone other than your “employees”, partners (if you are a
partnership), members (if you are a limited liability company), or a
lessee or borrower or any of their “employees”, while moving
property to or from a covered “auto”.

(5) A partner (if you are a partnership), or a member (if you are a
limited liability company) for a covered “auto” owned by him or
her or a member of his or her household.

c. Anyone liable for the conduct of an “insured” described above but only
to the extent of that liability.

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Further, in its “schedule of coverages and covered autos” section, the policy

includes, among the covered autos, “nonowned „autos‟ only.” The policy defines

“nonowned autos” as:

Only those “autos” you do not own, lease, hire, rent or borrow that are
used in connection with your business. This includes “autos” owned
by your “employees”, partners (if you are a partnership), members (if
you are a limited liability company), or members of their households
but only while used in your business or your personal affairs.

The trial court seemingly found coverage in light of several aspects of the

above policy language. In reasons for ruling, the trial court explained:

The owner of Gateway Dirt testified that Gateway hired Belvin
to help with hauling dirt. Gateway informed Belvin about the work to
be done, the pay he would receive and what needed to be done on
Gateway job sites. Further, the evidence is uncontroverted that the
truck driven by Belvin was not owned by Gateway but by his
girlfriend‟s sister Latoya Lumar. The Court finds that there is no
genuine issue of material fact that Belvin was hired by Gateway and
that the truck he was driving qualifies as a non-owned auto.

Further, the Court agrees with Broussard and Progressive that
Belvin is an insured under the policy. Section b of the policy provides
that “an insured is anyone using with your permission a covered auto
you own, hire, or borrow.” There is no genuine issue of material fact
that Belvin became an insured because he was on a mission for
Gateway and in furtherance of Gateway‟s business at the time of the
accident. Therefore, under the terms of the policy, Belvin was an
“insured‟ because he was driving a “covered auto” with the
permission of Gateway and which Gateway hired to do their dirt
hauling work.

Gateway and QBE question the trial court‟s determinations that the QBE

policy afforded Mr. Belvin coverage due to its finding that the dump truck

involved in the accident was a “hired” auto under the terms of the policy and,

furthermore, that it afforded Mr. Belvin coverage insofar as the truck qualified as a

“nonowned auto.”

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Hired Auto

Gateway and QBE first contest whether coverage was afforded by

Subsection 1.b; in other words, whether Mr. Belvin was insured as a permissive

user of an auto Gateway hired. The policy defines a “hired auto” as:

Only those “autos” you lease, hire, rent or borrow. This does not
include any “auto” you lease, hire, rent, or borrow from any of your
“employees”, partners (if you are a partnership), members (if you are
a limited liability company) or members of their households.

Although the trial court determined that Gateway had hired the subject truck,

review of the parties‟ submissions indicates that genuine issues of material fact

remain in this regard. We note that the trial court‟s ruling and the arguments in

support of the motion for summary judgment assert that Gateway hired Mr. Belvin

and that it hired the dump truck as well. However, the record lacks evidence

permitting this definitive and specific ruling.

Instead, the depositions of Mr. Belvin, Yolanda Lumar, along with the

affidavit of Barbara Ruiz, reference Gateway engaging C.K. Paul, generally, to

provide services to Gateway‟s projects. No evidence referenced solely the truck

being hired. Even the load tickets invoicing each load made by Mr. Belvin for

Gateway are entitled C.K. Paul, and include the details of the daily load. Only one

of those tickets indicates “Driver. Charles. Truck # ckp[sic] #1”. Otherwise, the

tickets reveal the date and the amount of the load. The accompanying checks from

Gateway, list “Yolanda Lumar” as the payee. Neither does the record contain a

contract referencing the hiring or leasing of this truck.

At a minimum, these facts constitute genuine issues of material fact as to

whether Gateway “hired” this particular dump truck. The facts could arguably be

construed so as indicate that Gateway and C.K. Paul entered into a straightforward

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subcontracting arrangement for the totality of C.K. Paul‟s services rather than a

particular contract to hire the subject truck.

The plaintiffs suggest that Taylor v. United States Fidelity & Guaranty

Insurance Co., 630 So.2d 237 (La.1993), is persuasive with regard to the “hired”

auto issue. In Taylor, the supreme court considered whether a plaintiff was injured

in an automobile accident which involved an owner-operated truck, pulling a

trailer owned by another individual. The trailer was loaded with lumber owned by

a lumber company. The supreme court remarked summarily that the owner-

operator of the truck at issue in that case was driving an auto “hired” by the lumber

company under the terms of the lumber company‟s policy.

Importantly, however, Taylor, 630 So.2d 237, did not focus on analysis of

the “hired” auto issue. Instead, the court included only a footnote indicating the

lumber company president testified that his company owned no trailers and it hired

tractors and trailers for transportation. Rather, the issue considered in Taylor

involved whether joint tortfeasors were entitled to a credit against a plaintiff‟s

damages for the amount received in a pre-trial compromise. Accordingly, we do

not consider Taylor as applicable here as it is not on point with the issue now

before this court.

We observe here too that with regard to the “hired” auto issue, Subparagraph

1.b(1) excludes from coverage “[t]he owner or anyone else from whom you hire or

borrow a covered „auto.‟” Certainly, the ownership of the truck is left unresolved

by the submissions. While evidence indicated that the truck was registered to

Yolanda‟s sister, other evidence placed the ownership of the truck into question.

Particularly, portions of the testimony of both Mr. Belvin and Yolanda support a

view that these two own the truck or that they own the truck along with Yolanda‟s

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sister. 2 This testimony raises the issue of whether Subparagraph 1.b(1) would

exclude coverage as a “hired” auto due to the issue of ownership.

Further, Subparagraph 1.b(2) excludes coverage for “[y]our „employee‟ if

the covered „auto‟ is owned by that „employee‟ or a member of his or her

household.” Recall that the trial court determined that Mr. Belvin was working as

2
Mr. Belvin testified as follows with regard to the ownership of the truck when C.K. Paul
was formed:

A Well, I started driving trucks for myself. I had got laid off from over there because
the work was kind of slow.
Q So you were laid off, and then you began driving a truck for yourself?
A Yes, sir.
Q Did you own your own truck?
A Well, we owned the truck. Yes, sir.
Q Who is “we”?
A Me and Yolanda Lumar. Or you can say Yolanda.
Q You all owned it together?
A Well, she owned the truck. I drove the truck.
Q What truck was that?
A A Mack truck. It was a 1989 Mack.

He later testified that:

A So we started a trucking business. The truck became – Like I said, we saw a truck.
And we decided to buy the truck. We went out and bought the truck. And then, we
went to do the paperwork on the truck. At that particular time, when we went [to] do
the paperwork on the truck, Yolanda‟s license at that particular time, it was – she had
a flag or something on her license. I‟m not exactly sure about that. So the sister was
with us. So we asked her if she could just go ahead and put the truck in her name
until we get the stuff straight.

....

Q Yolanda had a flag on her license?
A I think it was a flag or something on her license. Yes.
Q Right. And because she had a flag on her license, when you all went to purchase the
truck, Yolanda‟s sister, Latoya, volunteered to the truck in her name?
A Yes.
Q Am I understanding that correctly?
A Yes.
Q So tell me what happens. This agreement between Yolanda and Latoya, did this
happen when you all purchased the vehicle?
A Yes.

Yolanda‟s responses to questioning also touched on the ownership issue:

Q Your boyfriend, Mr. Charles Belvin, has testified earlier that you, Mr. Belvin, and
your sister - -
A Latoya.
Q -- Latoya, purchased a vehicle?
A Yes.

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an employee of Gateway. This determination, alone, in light of the question raised

regarding Mr. Belvin‟s and/or Yolanda‟s ownership of the truck 3 would have

precluded summary judgment finding coverage as a “hired” auto. However, much

like the ownership issue, the question of whether Mr. Belvin could be considered

an employee of Gateway is not resolved by the parties‟ evidence. Rather,

competing evidence reflected that no contract of employment was extended to Mr.

Belvin, he worked when a Gateway project was available for C.K. Paul, and C.K.

Paul paid Mr. Belvin after it was paid by Gateway. However, Gateway, through its

dispatcher, offered some type of guidance regarding Mr. Belvin‟s performance on

the job in that at least some type of directions were given regarding his route to the

job site and his time of arrival at the site.

In light of the existence of genuine issues of material fact, entry of summary

judgment finding that the QBE policy afforded Mr. Belvin coverage as a

permissive user of the truck, as a “hired” auto, was in error.

Nonowned Auto

Gateway and QBE also question the trial court‟s determination that the QBE

policy afforded Mr. Belvin coverage insofar as the truck was a “nonowned auto.”

While Gateway and QBE concede that the truck was a “nonowned auto” under the

terms of the policy, they argue that the policy affords coverage for “nonowned

autos” only to the named insured, Gateway, and not to Mr. Belvin.

Reference to the policy reflects merit in the appellants‟ position.

Specifically, the QBE policy lists three types of “covered autos”: “specifically

described „autos‟”; “hired „autos‟ only”; and “nonowned „autos‟ only”. Thereafter,

in describing who is an insured, the policy lists:

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Mr. Belvin explained that he and Yolanda lived at the same residence, thus raising the
question of whether the truck was owned by a member of his household in light of Subparagraph
1.b(2).
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a. You for any covered “auto”.

b. Anyone else while using with your permission a covered “auto”
you own, hire or borrow[.]

Thus, the policy insures the named insured, Gateway, for any covered auto,

including a “nonowned auto” and anyone else, including Mr. Belvin, only if he or

she is permissively using a covered auto which Gateway owns, hires, or borrows.

As explained above, genuine issues of material fact remain with regard to whether

Gateway hired the truck at issue.

The plaintiffs point to two cases addressing nonowned autos, Huddleston v.

Luther, 04-1420 (La.App. 3 Cir. 3/9/05), 897 So.2d 887, writ denied, 05-0895 (La.

6/17/05), 904 So.2d 703, and Perkins v. Guaranty National Insurance Co., 95-229

(La.App. 3 Cir. 11/2/95), 667 So.2d 559, writ denied, 96-0759 (La. 5/31/96), 673

So.2d 1033. Progressive cites the latter case as well. They contend that these

support the trial court‟s determination that Mr. Belvin was insured in light of the

“nonowned auto” status of the truck. However, neither Huddleston nor Perkins is

applicable in this situation.

Instead, Huddleston, 897 So.2d 887, generally addressed whether a vehicle

was a “nonowned auto” under the pertinent policy and not, particularly, whether

“anyone else,” such as Mr. Belvin, was insured as the operator of a “nonowned

auto.” Also, Perkins, 667 So.2d 559, addressed the question of whether an

employee, driving an admitted “nonowned auto,” was used in pursuit of the

insured‟s business affairs and whether UM coverage was therefore afforded to the

employee under that policy. Perkins did not involve a question of whether a

driver, who was not established to be an employee, was covered for the permissive

use of a “nonowned auto” as in the present case.

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We note, again, that Gateway and QBE concede that the truck was a

“nonowned auto.” They simply dispute whether Mr. Belvin is insured as an

operator of such a vehicle. Under the terms of the policy, we conclude that the

trial court inappropriately entered summary judgment, declaring Mr. Belvin to be

an insured under the QBE policy. Accordingly, we reverse that ruling below.

DECREE

For the foregoing reasons, the judgments entering summary judgment in

favor of the plaintiffs, Dalton D. Broussard and Mary D. Broussard, and the

defendant, Progressive Paloverde Insurance Company, are reversed. All costs of

this proceeding are assessed equally to the plaintiffs-appellees, Mr. Broussard and

Mrs. Broussard, and the defendant-appellee, Progressive.

REVERSED.

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