Judith Langlinais Mistich v. Louisiana Farm Bureau Casualty Ins. Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 12-150 consolidated with CA 12-151

ELLIOT A. MISTICH, JR., ET AL.

VERSUS

DIEDRA R. WEEKS, ET AL.

consolidated with

JUDITH LANGLINAIS MISTICH, ET AL.

VERSUS

LOUISIANA FARM BUREAU CASUALTY INS. CO., ET AL.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 20052134 C/W 20052147
HONORABLE MARILYN CARR CASTLE, DISTRICT JUDGE

**********

JOHN D. SAUNDERS
JUDGE

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Court composed of John D. Saunders, Billy Howard Ezell, and Phyllis M. Keaty,
Judges.

REVERSED AND REMANDED.

Walter Kay Jamison, III
Frederick Douglas Gatz, Jr.
Bryan E. Lege
Kraft Gatz, L.L.C.
600 Jefferson Street, Ste 410
Lafayette, LA 70501
(337) 706-1818
COUNSEL FOR DEFENDANTS/APPELLEES:
U. S. Agencies Casualty Ins. Co.
Diedra R. Weeks

William E. Wright, Jr.
Beverly A. DeLaune
Ashley E. Gilbert
Deutsch, Kerrigan & Stiles
755 Magazine St.
New Orleans, LA 70130-3672
(504) 581-5141
COUNSEL FOR DEFENDANTS/APPELLEES:
Christine Laporte
Eric Robichaux
CAN Insurance Company

George Pivach II
Mark A. Pivach
Ellen Pivach Dunbar
Pivach, Pivach, Hufft
P. O. Box 7125
Belle Chasse, LA 70037
(504) 394-1870
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Elliot A. Mistich, Jr.
Jamie Mistich Bergeron

Charles R. Sonnier
P. O. Drawer 700
Abbeville, LA 70511-0700
(337) 893-5973
COUNSEL FOR APPELLANT:
Judith Langlinais Mistich

Edward O. Taulbee, IV
Max Michael Menard
Katherine P. Martin
Taulbee & Associates
P.O. Box 2038
Lafayette, LA 70502-2038
(337) 269-5005
COUNSEL FOR DEFENDANTS/APPELLEES:
Louisiana Farm Bureau Casualty Ins. Co.
Louisiana Farm Bureau Mutual Ins.Co.

Gretchen Heider Mayard
Martin Mayard, LLC
P. O. Box 81338
Lafayette, LA 70598-1338
(337) 291-2440
COUNSEL FOR DEFENDANT APPELLEE:
State Farm Mutual AutomobileIns. Co. (as insurer)

SAUNDERS, Judge.

This insurance coverage dispute arose from an accident wherein the driver of

a car owned by his wife’s corporation died as a result of a collision. An ambiguity

in a policy exclusion is at issue, and the trial court granted summary judgment

denying coverage. The Plaintiffs/Appellants appeal this judgment. Since the

ambiguity can be reasonably interpreted in favor of coverage, we reverse the

decision of the trial court and remand for proceedings consistent herewith.

FACTS AND PROCEDURAL HISTORY

Elliot Mistich, Sr. and his wife, Judy, purchased a “Comprehensive

Automobile Policy” from Louisiana Farm Bureau Casualty Insurance Co.

(hereinafter “Farm Bureau”) which provides protection against uninsured motorists

with limits of $300,000.00 per person and $500,000.00 per accident. The

“Comprehensive Automobile Policy” (hereinafter “comprehensive policy”) does

not list specific automobiles on the declarations page, nor does that page allot

space to do so. The declarations page specifically references “UM HIRED/NON-

OWNED,” indicating that the policy covers uninsured or underinsured motorists,

hired vehicles, and non-owned vehicles. Additionally, to ensure full coverage, the

Mistiches purchased a “Commercial Umbrella Policy” (hereinafter “umbrella

policy”) from Farm Bureau which provided supplementary coverage in the amount

of $1,000,000.00.

At the time the policies were issued, the Mistiches had possession of three

automobiles: a 2002 BMW 530 owned by Tobias, Incorporated (hereinafter

“Tobias, Inc.”), a company Judy owns and works for; a Ford 250 truck, owned by

Elliot’s employer, Jade Marine; and an antique 1963 Cadillac, owned by Elliot.

The BMW was insured by a policy issued by Gemini Insurance Company and

purchased by Tobias, Inc. That policy, however, excluded underinsured or

uninsured motorist coverage for the BMW.

The accident which gave rise to this matter occurred on May 2, 2004, when

Elliott was driving Judy’s BMW westbound on Louisiana Highway 92, with Judy,

two of their grandchildren, and Judy’s mother as passengers. Deidra Weeks,

Defendant, (hereinafter “Weeks”) was driving a 1999 Honda Accord eastbound

down the highway. Weeks’s car crossed the center line of the highway and

collided with the BMW driven by Elliot. Elliot was declared dead at the scene,

while Judy and the remaining passengers survived, with injuries.

Plaintiffs/Appellants are Elliott A. Mistich, Jr. and Jamie Mistich Bergeron

(hereinafter “Mistich”), the surviving children of Elliot Mistich, Sr. Mistich filed

suit against Weeks and Farm Bureau, seeking insurance coverage and damages

resulting from Weeks’s negligence. Weeks has Louisiana’s minimum allowed

automobile liability insurance coverage, $10,000.00.

Farm Bureau filed a Motion for Summary Judgment on January 18, 2007,

asserting that the policies at issue do not provide coverage for the claimed losses.

In that motion, Farm Bureau argues that the policies exclude coverage due to a

certain clause, referred to as “exclusion (b).” Exclusion (b) reads as follows:

“THIS POLICY DOES NOT APPLY: … (b) under any of the coverages for

automobiles owned or furnished for regular use of any member of the insureds [sic]

household, unless shown on the declaration…” (emphasis added). According to

Farm Bureau, the clause excludes coverage for the BMW driven by Elliot at the

time of the accident, because the BMW was not listed on the declaration page.

In opposition, Mistich argues, inter alia, that the language of exclusion (b) is

ambiguous, because it is unclear whether the phrase “unless shown on the

declaration” refers to “automobiles” or “members of the insureds [sic] household.”
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Mistich points out further that the declaration page in the policy lists no

automobiles nor does it allot spaces or lines for which to do so. In sum, Mistich

argued that exclusion (b) was not applicable, or at best ambiguous.

The trial court granted summary judgment in favor of Farm Bureau on

October 29, 2007, denying coverage based on exclusion (b) of the primary policy.

This court reversed and remanded on other grounds on Novermber 4, 2009, noting

that Mistich’s argument regarding exclusion (b)’s ambiguity was compelling. On

August 3, 2011, Farm Bureau re-asserted its previously filed Motion for Summary

Judgment. Thereafter, on August 31, 2011, Mistich filed a Motion for Partial

Summary Judgment as to the ambiguity of exclusion (b). Judy Mistich, Elliot

Mistich, Sr.’s surviving spouse, had filed a separate suit as a result of the accident.

She joined in this motion, and her case was consolidated with the suit brought by

Elliot Mistich, Jr. and Jamie Mistich Bergeron. We consolidate the Plaintiffs’

assignments of error in this opinion (hereinafter all Plaintiffs referred to as

“Mistich,” unless it is necessary to specifically mention one of them). The trial

court heard oral arguments on September 15, 2011. Ruling from the bench, the

trial court granted summary judgment in favor of Farm Bureau and denied

Mistich’s Motion for Partial Summary Judgment, thereby denying coverage. It is

from this judgment that Mistich appeals.

ASSIGNMENTS OF ERROR

1. The District Court erred in finding that “exclusion (b)” of the
general exclusions of the Louisiana Farm Bureau Casualty
Insurance Company Comprehensive Automobile Policy is
unambiguous, and[,] therefore, excludes coverage of
Plaintiffs[’]/Appellants’ claimed losses.

2. The District Court erred by granting Farm Bureau’s Motion for
Summary Judgment for Failure to Procure Claims.

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LAW AND ANALYSIS

Assignment of Error Number One

Mistich argues that the trial court erred in granting Farm Bureau’s Motion

for Summary Judgment, finding that exclusion (b) excluded coverage of the

claimed losses. Mistich maintains that there is an ambiguity in the exclusion

clause which should be resolved in favor of coverage. We find merit in this

contention.

The following principles govern the standard of review and burdens of proof

for a review of summary judgments:

Summary judgments are subject to a de novo review.
Thibodeaux v. Lafayette Gen. Surgical Hosp., 09-1523 (La.App. 3 Cir.
5/5/10), 38 So.3d 544. “The summary judgment procedure is
designed to secure the just, speedy, and inexpensive determination of
every action, except those disallowed by [La.Code Civ.P. art.] 969.
The procedure is favored and shall be construed to accomplish these
ends.” La.Code Civ.P. art. 966(A)(2). A motion for summary
judgment “shall be rendered forthwith 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).

It is also important to be aware of the movant’s and not-
movant’s burdens of proof. Though the burden of proof on a motion
for summary judgment remains on the movant, the movant’s burden
changes contingent upon whether he or she will bear the burden of
proof at trial on the matter that is the subject of the motion for
summary judgment. Johnson v. State Farm Ins., 08-1250 (La.App. 3
Cir. 4/1/09), 8 So.3d 808.

Davis v. Country Living Mobile Homes, Inc., 11-471, pp. 2-3 (La.App. 3 Cir.

10/19/11), 76 So.3d 1248, 1249-50.

Louisiana Code of Civil Procedure Article 966(C)(2) states in pertinent part:

The burden of proof remains with the movant. 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, the movant's
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burden on the motion does not require him to negate all essential
elements of the adverse party’s claim, action, or defense, but rather to
point out to the court that there is an absence of factual support for
one or more elements essential to the adverse party’s claim, action, or
defense. Thereafter, if the adverse party fails to produce factual
support sufficient to establish that he will be able to satisfy his
evidentiary burden of proof at trial, there is no genuine issue of
material fact.

In the insurance policy context, trial courts are limited in their granting of

summary judgments, and ambiguities should be interpreted in favor of the insured:

When words and phrases contained in an insurance contract are
ambiguous, they are to be construed reasonably in the sense that is
most favorable to the insured or the person claiming coverage. Smith
[v. Girley, 255 So.2d 748 (La.1971)]; Hendricks [v. American
Employers Ins. Co., 176 So.2d 827 (La.App. 2 Cir. 1965)]; Credeur v.
Luke, 368 So.2d 1030 (La.1979)[;] and Rodriguez v. Northwestern
National Ins. Co., 358 So.2d 1237 (La.1978). Because of this,
summary judgment may not be rendered declaring lack of
coverage unless there is no reasonable interpretation of the policy,
when applied to the undisputed material facts shown by the evidence
supporting the motion, under which coverage could be afforded.
La.C[ode Civ. P.] art. 966.

Westerfield v. LaFleur, 493 So.2d 600, 605 (La.1986) (emphasis added).

“The determination of whether a contract is clear or ambiguous is a question of

law.” Cadwallader v. Allstate Ins. Co., 02-1637, p. 4 (La. 6/27/03), 848 So.2d 577,

580.

The insurer has the burden to prove policy exclusions: “Policy ambiguities

are construed in favor of coverage. Policy exclusions must be clearly stated.

Any ambiguity in an insurance policy’s exclusions is construed to afford

coverage. The insurer has the burden of proving that a loss comes within a

policy exclusion.” La. Maint. Servs, Inc. v. Certain Underwriters at Lloyd’s of

London, 616 So.2d 1250, 1252 (La.1993) (citations omitted) (emphasis added).

Insurance policies are contracts of adhesion, and the insurer has the duty to

unequivocally specify exclusions to its obligations. Cooling v. U.S. Fid. & Guar.

Co., 269 So.2d 294 (La.App. 3 Cir. 1972), writ refused, 272 So.2d 373 (La.1973).
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“If the language of the exclusion is subject to two or more reasonable

interpretations, the interpretation which favors coverage must be applied.”

Holland v. Golden Rule Ins. Co., 96-264, pp. 4-5 (La.App. 3 Cir. 10/9/96), 688

So.2d 1186, 1189 (emphasis added) (citation omitted).

The nature of an insurance policy is as follows: “An insurance policy is a

conventional obligation that constitutes the law between the insured and insurer,

and the agreement governs the nature of their relationship. La.Civ.Code art.

1983.” Peterson v. Schimek, 98-1712, p. 4 (La. 3/2/99), 729 So.2d 1024, 1028.

“Words in an insurance contract are to be given their generally prevailing and

ordinary meaning, unless they have acquired a technical meaning. La.Civ.Code art.

2047; Schroeder v. Board of Supervisors of La. State Univ., 591 So.2d 342, 345

(La.1991).” Peterson, 729 So.2d at 1028-29. “An insurance contract is construed

as a whole and each provision in the policy must be interpreted in light of the other

provisions so that each is given meaning. One portion of the policy should not be

construed separately at the expense of disregarding other provisions. La.Civ.Code

art. 2050; Central La. Elec. Co. [v. Westinghouse Elec. Corp., 579 So.2d 981, 985

(La.1991)].” Peterson, 729 So.2d at 1029.

In the case sub judice, Mistich asserts that exclusion (b) can be reasonably

interpreted to mean either: that a specific member of the household must be listed

on the declaration page in order to qualify for coverage; or that automobiles owned

or furnished for regular use must be listed on the declaration page to qualify for

coverage. In support of this argument, Mistich points out that both Elliot and Judy

Mistich are listed on the declaration page, that no vehicles at all are listed on the

declaration page, and that there is no allotted space to list automobiles on the page.

On the other hand, Farm Bureau argues that the primary, comprehensive

policy was issued at a low premium to provide a “small sliver” of coverage that the
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Mistichs needed to procure the umbrella policy. Since the umbrella policy was

issued to Elliot and Judy Mistich, Farm Bureau argues, then coverage should not

extend to vehicles owned by the couple’s employers, Jade Marine and Tobias, Inc.,

respectively. Furthermore, Farm Bureau provides an explanation as to why no

vehicles are listed on the declaration page and why there is no space on which to so

do. In its brief, Farm Bureau states that the comprehensive policy was meant to

insure a small risk of non-owned and hired vehicles, which was not intended to

include Judy’s BMW, since it was insured by a separate insurance company. To

aid its argument, Farm Bureau cites to the testimonies of insurance agents who

spoke with Elliot and Judy during the negotiation of the policies, the testimony of

Judy, and to the price of the premium for the comprehensive policy. Essentially,

Farm Bureau argues that it was the intention of all parties involved to exclude UM

coverage for the BMW.

We agree with Mistich that there are two reasonable interpretations of

exclusion (b): that the policy does not apply to vehicles owned or furnished for

regular use, unless the specific member of the insured’s household is listed on the

declaration page; or that the policy does not apply to vehicles owned or furnished

for regular use, as to any member of the insured’s household, unless the specific

vehicle is listed on the declaration page. The ambiguity results from a misplaced

modifier phrase, “unless shown on the declaration,” which could reasonably be

there to modify either “automobiles” or “member.”

Farm Bureau urges extrinsic and parol evidence in support of its argument

against coverage. According to Farm Bureau, this evidence should be available to

ascertain the intent of the parties and to resolve the ambiguity before us.

Conversely, Mistich refers us to the principle that the drafter of an insurance policy

should not be permitted to vary the terms using extrinsic evidence, since coverage,
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especially exclusions, should be well-defined. See Cooling, 269 So.2d 294;

Holland, 688 So.2d 1186; La. Maint. Servs, Inc., 616 So.2d 1250; Peterson, 729

So.2d 1024. In addition, “if the language of the exclusion is subject to two or more

reasonable interpretations, the interpretation which favors coverage must be

applied.” Holland, 688 So.2d at 1189.

We conclude that extrinsic evidence should not be admissible to vary the

terms of the contract. We further conclude that exclusion (b) can be reasonably

interpreted to mean that members of the insured household would not benefit from

coverage unless they were listed on the declaration page. Elliot Mistich, Sr. was

listed on that page; therefore, the policy should be read to include coverage of the

underlying accident. Accordingly, we reverse the decision of the trial court

granting Farm Bureau summary judgment and rule in favor of coverage.

Under this assignment of error, Mistich also appeals the trial court’s denial

of their own Motion for Summary Judgment. Mistich sought partial summary

judgment on whether Farm Bureau’s policy, specifically, exclusion (b), is

ambiguous. In its motion, Mistich pointed out the exclusion’s clause “unless

shown on the declaration,” could reasonably refer to “member” or “automobiles.”

We agree with Mistich that exclusion (b) is ambiguous and that it should be

construed in favor of coverage. For the reasons discussed above, we reverse the

trial court’s denial of Mistich’s Partial Motion for Summary Judgment. We rule in

favor of Mistich, insofar as coverage is found in their favor. Accordingly, we

reverse the decision of the trial court and remand for proceedings consistent

herewith.

Assignment of Error Number Two

In the second assignment of error, Judy Mistich states that the trial court

erred by granting Farm Bureau’s Motion for Summary Judgment for Failure to
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Procure Claims. Judy contends that had she known at the time that Farm Bureau

would deny the very UM coverage that she sought, she would have sought UM

coverage elsewhere. We find this issue moot, however, due to our decision to

reverse the trial court’s summary judgments denying coverage. Therefore, this

issue is pretermitted.

CONCLUSION

We reverse the decision of the trial court to grant Farm Bureau, Inc.’s

Motion for Summary Judgment to deny coverage, because the policy exclusion’s

ambiguity can be reasonably interpreted in favor of Mistich, the insured. We also

reverse the decision of the trial court denying Mistich’s Motion for Partial

Summary Judgment and rule in favor of coverage. We remand for proceedings

consistent with this opinion. All costs are assessed to defendant Louisiana Farm

Bureau Casualty Insurance Co.

REVERSED AND REMANDED.

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