Nicholas Williams v. Usagencies Casualty Ins. Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

14-185

NICHOLAS WILLIAMS, ET AL.

VERSUS

USAGENCIES CASUALTY INS. CO.

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APPEAL FROM THE
THIRTEENTH JUDICIAL DISTRICT COURT
PARISH OF EVANGELINE, NO. 73991-B
HONORABLE THOMAS F. FUSELIER, DISTRICT JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Billy Howard Ezell,
and Shannon J. Gremillion, Judges.

REVERSED; RENDERED; AND REMANDED.

William Howard Justice
5420 Corporate Blvd., Ste 103
Baton Rouge, LA 70808
(225) 926-1810
COUNSEL FOR DEFENDANT/APPELLANT:
USAgencies Casualty Ins. Co.

Timmy James Fontenot
P. O. Box 68
Mamou, LA 70554
(337) 468-4444
COUNSEL FOR PLAINTIFFS/APPELLEES:
Nicholas Williams
Bobby Giroir

EZELL, Judge.

USAgencies Casualty Insurance Company, Inc. appeals a trial court

judgment granting summary judgment in favor of Nicholas Williams and Bobby

Giroir. The plaintiffs instituted a class action lawsuit seeking damages and

penalties when USAgencies failed to pay for collision damages under its contract

of automobile insurance. USAgencies filed a motion for summary judgment

alleging that its policy excluded coverage for first-party property damage while

driving with a blood alcohol content above the legal limit. The plaintiffs filed a

motion for partial summary judgment claiming the exclusion was unenforceable.

The trial court denied USAgencies‟ motion for summary judgment and granted the

plaintiffs‟ motion for summary judgment, declaring that the subject policy

exclusion is void and unenforceable because it is against public policy.

FACTS

On August 26, 2012, Nicholas Williams was operating a 2005 Chevrolet

Avalanche when he was involved in a single-car collision and cited for driving

while intoxicated. The automobile was a total loss. Mr. Williams filed a claim for

damages to the truck under his own policy of insurance with USAgencies held by

Bobby Giroir and himself, as a permitted driver. USAgencies denied coverage due

to a policy exclusion for blood alcohol content above the legal limit. The plaintiffs

filed suit for damages to the truck and for emotional damages due to the financial

strain of paying a bank note for collateral that no longer exists.1

After answering and filing several exceptions, USAgencies filed a motion

for partial summary judgment seeking a determination by the trial court that the

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The plaintiffs also filed a motion for class certification, but that motion has not been set
for hearing by either party.

exclusion in its insurance policy is enforceable. The plaintiffs also moved for

partial summary judgment requesting a finding that the exclusion is unenforceable

as ambiguous, vague, and/or against public policy.

To oppose USAgencies‟ motion and support their motion, the plaintiffs

submitted several affidavits. One of the affidavits, from a finance manager of a

Lafayette car dealership, states that the majority of all automobiles sold at the

dealership are financed. There are affidavits from presidents and vice presidents of

three different banks, all attesting that as the loan officers for their respective

institutions, they would not finance any automobile with an exclusion as it is

written in USAgencies‟ policy. USAgencies filed a motion to strike these

affidavits.

After a hearing on the motions for summary judgment and the motion to

strike, the trial court denied USAgencies‟ motion to strike and for summary

judgment. The trial court granted the plaintiffs‟ motion for summary judgment

finding that the subject policy exclusion is void and unenforceable because it is

against public policy. USAgencies then filed the present appeal seeking reversal of

the trial court‟s denial of its partial motion for summary judgment and the granting

of the plaintiffs‟ motion for partial summary judgment. USAgencies also seeks

reversal of the trial court‟s denial of its motion to strike the four affidavits.

AFFIDAVITS

We must first address USAgencies‟ contention that the four affidavits are

inadmissible. USAgencies claims the affidavits are immaterial, irrelevant, and

speculative. The plaintiffs offered the affidavits in support of their argument that

the USAgencies policy exclusion is unenforceable claiming that it is against public

policy because it “stifles commerce.”

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Louisiana Code of Civil Procedure Article 967 permits the use of affidavits

for the purposes of supporting or opposing a motion for summary judgment if they

are made on personal knowledge, set forth facts that would be admissible in

evidence, and affirmatively show that the affiant is competent to testify to the

matters set forth in the affidavit. However, affidavits containing “„[m]ere

conclusory allegations, improbable inferences and unsupported speculation will not

support a finding of a genuine issue of material fact.‟” Richard v. Liberty Mut. Ins.

Co., 13-26, p. 6 (La.App. 3 Cir. 10/9/13), 123 So.3d 345, 348 (quoting Sears v.

Home Depot, USA, Inc., 06-201, p. 12 (La.App. 4 Cir. 10/18/06), 943 So.2d 1219,

1228, writ denied, 06-2747 (La. 1/26/07), 948 So.2d 168) (alteration in original).

The affidavit from the finance manager of a dealership states that 75% of the

automobiles at that dealership are financed. He also concludes that this number

could be as high as 90% on an industry-wide level. The other three affidavits are

from loan officers who state that they would not finance any automobile with an

exclusion as written in the USAgencies policy.

These conclusory statements are unsupported by sufficient admissible facts.

None of the affidavits indicate that financing has been denied based on the contents

of an insurance policy. Even in the present case, financing was provided when

such an exclusion was in the policy. In addition to this exclusion, there are other

exclusions in most policies under the comprehensive and collision sections, yet the

financing of vehicles has continued. Furthermore, the statements are speculative as

to what may occur in the future. We find these conclusory statements of these

affiants are no more than unsupported speculation that financing would not be

provided if this particular exclusion was included in automobile policy. Therefore,

these affidavits are not sufficient to support or oppose a motion for summary

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judgment, and the trial court erred in relying on them when ruling on the motion

for summary judgment.

SUMMARY JUDGMENT

“The issue of whether an insurance policy, as a matter of law, provides or

precludes coverage is a dispute that can be resolved properly within the framework

of a motion for summary judgment.” Collins v. Randall, 02-209, p. 3 (La.App. 1

Cir. 12/20/02), 836 So.2d 352, 354.

Louisiana Code of Civil Procedure Article 966, which governs summary

judgment proceedings, was significantly amended in both the 2012 and 2013

legislative sessions. These amendments affect the burden of proof elements of the

Article. At the time of this hearing, August 2, 2013, the 2013 version of Article

966 was in effect. After the amendment by 2013 La. Acts No. 391, § 1, Article

966(F)(1)(emphasis supplied) now provides that “A summary judgment may be

rendered or affirmed only as to those issues set forth in the motion under

consideration by the court at that time.” Furthermore, Article 966(B)(2) now

provides that evidence considered by the trial court must be “admitted for purposes

of the motion for summary judgment.” Article 966(F)(2) now provides that

“[e]vidence cited in and attached to the motion for summary judgment or

memorandum filed by an adverse party is deemed admitted for purposes of the

motion for summary judgment unless excluded in response to an objection.”

Furthermore, “[o]nly evidence admitted for purposes of the motion for summary

judgment may be considered by the court in its ruling on the motion.” La.Code

Civ.P. art. 966(F)(2).

The amendments did not change the burden of proof applicable to a motion

for summary judgment as set forth in Article 966(C)(2):

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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
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.

It is well-settled that “[a]ppellate review of the granting of a motion for

summary judgment is de novo using the identical criteria that govern the trial

court‟s consideration of whether summary judgment is appropriate.” Smitko v.

Gulf S. Shrimp, Inc., 11-2566, p. 7 (La. 7/2/12), 94 So.3d 750, 755 (citations

omitted). In this matter, the evidence relied on by the litigants was attached to

their motions for summary judgment or memorandum, so they complied with the

evidentiary changes in Article 966.

USAgencies seeks review of both the grant of summary judgment in favor

the plaintiffs and the denial of its own motion for summary judgment. Generally, a

trial court‟s denial of a motion for summary judgment is not appealable. La.Code

Civ.P. art. 967; Arceneaux v. Norman, 05-1536, 05-1537 (La.App. 3 Cir. 5/24/06),

931 So.2d 484, writ denied, 06-1629 (La. 10/6/06), 938 So.2d 76. However, the

denial of a motion for summary judgment may be reviewed in conjunction with

other appealable issues for the sake of judicial economy. Arceneaux, 931 So.2d

484. By challenging the denial of its motion in connection with an appeal of a

final judgment granting summary judgment in favor of the plaintiffs, USAgencies

has utilized the proper procedure to obtain review of the denial of its motion.

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VALIDITY OF EXCLUSION

The exclusion at issue applies to the policy provisions found in Parts D, E, F,

and G, which provide coverage for comprehensive loss, collision, towing and labor,

and rental reimbursement. The exclusion specifically provides, in pertinent part,

“There is no Coverage For Damage To Your Auto for: . . . 12. Loss occurring

while the operator of the auto insured under Parts D, E, F, and/or G has a blood

alcohol content above the legal limit for operation of a motor vehicle.”

As observed by USAgencies, an insurer can contract for anything that is not

prohibited by statute or against public policy. Marcus v. Hanover Ins. Co., Inc.,

98-2040 (La. 6/4/99), 740 So.2d 603. Furthermore, clear and unambiguous

provisions of an insurance policy that express the intent of the parties must be

enforced as written. Id. USAgencies argues that there is no statute that prohibits

the inclusion in an automobile policy of a first-party, property damage exclusion

for operating above the legal limit of intoxication. We agree. Therefore, the

question is whether it is against the public policy of Louisiana to exclude first-

party, property damage that occurs while an insured vehicle is being operated

above the legal limit of intoxication.

The plaintiffs argue that the exclusion is against public policy for four

reasons. They first argue that it is an illusory contract because upholding this

exclusion would allow USAgencies to exclude coverage for any and all violations

of state law, leading to the absurd consequence of excluding all liability coverage.

Secondly, the plaintiffs argue that the exclusion interferes with commerce, because

collision coverage was required as part of the financing agreement when Mr. Giroir

bought the vehicle. Thirdly, the plaintiffs claim that the act of driving while

intoxicated does not require that the driver “intentionally” drive drunk, so that it is

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not in the form of an intentional act that may be excluded from an insurance

contract. Lastly, the plaintiffs argue that the exclusion is ambiguous because it

does not define “legal limit.”

On the other hand, USAgencies claims that enforcement of the exclusion

promotes public policy, as it is against public policy and state law to drive a

vehicle in Louisiana with a blood alcohol content above the legal limit.

The legislature has enunciated that public policy concerning the purpose of

liability insurance in La.R.S. 22:1269(D) provides that all liability policies are

executed for the benefit of all injured persons and their survivors or heirs to whom

the insured is liable, giving protection and coverage to all insureds for any legal

liability the insured may have within the terms and limits of the policy. As noted

by the supreme court in Marcus, 740 So.2d at 606, “[t]he purpose of the

compulsory automobile liability insurance law is not to protect the owner against

liability, but to provide compensation for persons injured by the operation of

insured vehicles.” The omnibus coverage provision of La.R.S. 32:900 does not

come into play when the issue is whether there is collision coverage. Cormier v.

American Deposit Ins. Co., 95-865 (La.App. 3 Cir. 12/6/95), 664 So.2d 807. This

is because there is no requirement that collision coverage be purchased at all.

Obviously, public policy, as established by the compulsory automobile

liability insurance law, dictates that automobile insurance provide coverage for

injuries and damages suffered by third parties. When contracting for insurance for

damages suffered by the policy owner, public policy does not require an owner to

protect himself at all.

There is a strong public policy in Louisiana against driving while intoxicated.

Numerous laws have been enacted enforcing the importance of not driving while

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intoxicated. It is unlawful for an operator of a motor vehicle or a passenger in a

motor vehicle to possess an open alcohol beverage container or consume an

alcoholic beverage in a motor vehicle. La.R.S. 32:300. It is a crime to operate a

vehicle while intoxicated. La.R.S. 14:98; La.R.S. 14:98.1. In a civil case, punitive

damages are available when damages have been caused by an intoxicated driver

with a wanton or reckless disregard for the rights and safety of others.

La.Civ.Code art. 2315.4. Collision damage waiver forms issued by rental car

agencies can specifically exclude damages incurred while “[d]riving while

intoxicated or under the influence of any drug, or the combined influence of

alcohol and any drug.” La.R.S. 22:1525(B)(2)(b).

In Taylor v. Lumar, 612 So.2d 798 (La.App. 1 Cir. 1992), the first circuit

addressed the issue of an exclusion in an automobile insurance policy for punitive

damages against an intoxicated driver. The first circuit stated, “We are not

convinced that the compulsory liability insurance law mandates that drivers be

insured for wanton or reckless behavior brought about by voluntary intoxication.”

Id. at 800. The first circuit held that the exclusion of coverage for punitive

damages did not offend public policy.

In Collins, 836 So.2d 352, the first circuit had to determine whether an

exclusion for loss caused by a driver under the influence of alcohol in an excess

insurance policy on a rental vehicle was valid. The first circuit held that public

policy of Louisiana did not dictate that insurers provide excess coverage to

customers of self-insured rental car agencies for accidents related to alcohol

consumption.

Plaintiffs‟ argument that the exclusion is illusory, i.e. a contract in which the

promisor has not committed himself in any manner, because USAgencies will be

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able to exclude every violation of state law, is a stretch. Clearly, the parties can

contract for whatever terms they want as long it does not violate the law or is

against public policy. What a future contract may provide is not before us. We are

dealing with one exclusion in this case and whether that exclusion is against public

policy. The policy still provides coverage for damage to the insured‟s vehicle if

one of the exclusions does not apply.

Nor do we find that the language of the exclusion is ambiguous. The

exclusion clearly provides that the blood alcohol content must be above the legal

limit which is clearly defined by law. La.R.S. 14:98; La.R.S. 14:98.1.

We also find that public policy does not compel insurers to provide coverage

for damages to an insured‟s own vehicle caused by an intoxicated driver. Insureds

are not even required to purchase comprehensive or collision coverage on their

vehicle. The fact that a person who finances a car may have to find and pay extra

money for an insurance policy that does not exclude coverage for damages to the

vehicle if they are in an accident because they are driving while intoxicated is not

against public policy. Ownership of a vehicle is not a guaranteed right. Public

policy dictates that innocent third parties are protected from damages caused by

another person while driving, not that the owner is protected from his own

negligent acts.

CONCLUSION

We find that the first-party collision coverage exclusion for loss occurring to

an insured vehicle while the operator was driving with a blood alcohol content

above the legal limit is valid and enforceable. Therefore, the trial court erred in

granting the plaintiffs‟ motion for summary judgment. Accordingly, we reverse

the trial court‟s judgment in favor of the plaintiffs, grant the motion for summary

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judgment filed by USAgencies, and remand this case to the trial court for further

proceedings. Costs of this appeal are assessed to the plaintiffs, Nicholas Williams

and Bobby Giroir.

REVERSED; RENDERED; AND REMANDED.

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