Frank Tuson v. Merlyn Rodgers

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

15-66

FRANK TUSON, ET AL.

VERSUS

MERLYN RODGERS, ET AL.

**********

APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, NO. 12-C-1808-D
HONORABLE MILDRED E. METHVIN, JUDGE PRO TEMPORE

**********

ELIZABETH A. PICKETT
JUDGE

**********

Court composed of John D. Saunders, Elizabeth A. Pickett, and Phyllis M. Keaty,
Judges.

REVERSED AND REMANDED.

Daniel G. Brenner
R. Preston Mansour, Jr.
Bolen, Parker, Brenner, Lee &
Engelsman LTD.
P. O. Box 11590
Alexandria, LA 71315-1590
(318) 445-8236
COUNSEL FOR DEFENDANT-APPELLEE:
National General Assurance Company

V. Ed McGuire, III
Plauché, Smith & Nieset
P. O. Drawer 1705
Lake Charles, LA 70602-1705
(337) 436-0522
COUNSEL FOR DEFENDANT-APPELLEE:
Progressive Security Insurance Company

Donovan J. O'Pry, II
Jeansonne & Remondet
P. O. Box 91530
Lafayette, LA 70509
(337) 237-4370
COUNSEL FOR PLAINTIFFS-APPELLANTS:
Frank Tuson
Willard Tolliver
Lorenzo Ransaw

Charles Brandt
Kyle Sherman
Kenneth M. Habetz, Jr.
Brandt & Sherman, LLP
111 Mercury Street
Lafayette, LA 70503
(337) 237-7171
COUNSEL FOR PLAINTIFFS-APPELLANTS:
Keisha Harris
Aleta Hayden

2

PICKETT, Judge.

Five plaintiffs in this suit for damages resulting from an automobile accident

appeal the trial court‟s grant of summary judgment in favor of an insurer and its

denial of their cross motions for summary judgment. The trial court held that one

defendant‟s selection of uninsured motorist (UM) coverage in an amount lower

than its liability coverage was made properly and limited the UM coverage

available to $100,000 for all claims arising from the accident. We reverse and

remand.

FACTS

This suit arises out of an automobile accident that occurred on October 12,

2011, in Opelousas, Louisiana. The accident occurred when a vehicle operated by

Merlyn Rodgers rear-ended a vehicle operated by Crystal Bell and occupied by

Frank Tuson, Willard Tolliver, Lorenzo Ransaw, Aleta Hayden, and Keisha Harris.

Allstate Insurance Company (Allstate) insured the vehicle operated by Rodgers,

which was owned by Shirley Kennerson. Progressive Security Insurance Company

(Progressive) insured the vehicle operated by Bell, which was owned by Compass

Behavioral Center of Crowley, LLC (Compass).

On April 12, 2012, Tuson, Tolliver, and Ransaw filed a Petition for

Damages against Rodgers and Allstate. These plaintiffs then filed a First

Supplemental and Amending Petition for Damages on April 18, 2013, alleging

entitlement to UM coverage and naming Progressive as a defendant in its capacity

as the UM insurer of the vehicle that Bell was driving when the accident occurred.

Hayden and Harris filed a Petition for Intervention in the above action, naming

Rodgers and Allstate as defendants. Thereafter, they filed a First Supplemental

and Amending Petition for Intervention, alleging they were entitled to UM

coverage and naming Progressive as a defendant in its capacity as the UM insurer

of the Compass vehicle. Lastly, Bell filed a Petition for Intervention then a First

Supplemental and Amending Petition for Intervention, naming Rodgers, Allstate,

and Progressive as defendants.

Compass purchased a combined single limit (CSL) automobile insurance

policy from Progressive which provided liability coverage in the amount of

$1 million. On November 28, 2007, Compass representative, Mark Cullen,

executed an Uninsured/Underinsured Motorist Bodily Injury (UMBI) Coverage

Form issued by the commissioner of insurance in compliance with La.R.S. 22:680.

Mr. Cullen testified in his deposition that he did not recall executing the form but

identified the initials and signature on the form as being his.

The second of five options provided on the form was selected by the

placement of Mr. Cullen‟s initials in the line provided on the form. The option

reads:

I select UMBI Coverage which will compensate me for my economic
and non-economic losses with limits lower than my Bodily Injury
Liability Coverage limits:

$ each person $ each accident

The term “$100,000” was inserted in the blank preceding “each person.”

Additionally, the phrase “each person” was struck out, and “CSL” was handwritten

over the word “person.”

Progressive filed a motion for summary judgment, asserting that Compass‟s

UMBI Coverage Form selected UMBI coverage in the amount of $100,000

“combined single limits” and that it was entitled to judgment holding that the

policy it issued to Compass provided $100,000 of CSL UMBI coverage. The

plaintiffs filed cross motions for summary judgment, arguing Compass‟s UMBI

2

Coverage Form was invalid; therefore, Progressive‟s policy provided $1 million in

CSL coverage. In the alternative, the plaintiffs argued the Progressive policy

provided $100,000 per person in combined single limit coverage.

On September 29, 2014, the trial court heard the motions for summary

judgment and granted summary judgment in favor of Progressive and denied the

plaintiffs‟ cross motions for summary judgment. The trial court concluded that

Progressive‟s policy provided $100,000 in CSL UMBI coverage. The plaintiffs1

appealed.

ISSUES FOR REVIEW

The plaintiffs assign error with the trial court‟s grant of Progressive‟s motion

for summary judgment and denial of their cross motions for summary judgment.

Their assignments of error present the following issues for our review.

1. If the mandatory form prescribed by the Louisiana
commissioner of insurance for the rejection or selection of
UMBI coverage in an amount lower than a policy‟s liability
coverage does not provide a selection for CSL coverage, is an
insured‟s handwritten modification to the form indicating the
insured‟s intent to select UMBI coverage in an amount lower
than the policy‟s liability coverage valid?

2. If the selection is valid, does the insurance policy provide
coverage in the amount of the lower limit per person or per
accident?

DISCUSSION

On appeal, summary judgments are reviewed de novo, using the same

criteria the trial court considered when determining whether to grant summary

judgment as requested. Gray v. Am. Nat’l Prop. & Cas. Co., 07-1670

(La. 2/26/08), 977 So.2d 839. Cross motions for summary judgment were filed in

1
Before paying court costs, Ms. Bell dismissed her appeal.

3

this matter. Accordingly, we must “determine whether either party has established

there are no genuine issues of material fact and it is entitled to judgment as a

matter of law.” Duncan v. U.S.A.A. Ins. Co., 06-363, p. 4 (La. 11/29/06), 950

So.2d 544, 547.

The movant has the initial burden of proof to show that no genuine issue of

material fact exists. La.Code Civ.P. art. 966(C)(2). “[I]f the movant will not bear

the burden of proof at trial,” he need not “negate all essential elements of the

adverse party‟s claim.” Id. He must show, however, that “there is an absence of

factual support for one or more elements essential to the adverse party‟s claim.”

Id. If the movant meets this initial burden of proof, the burden shifts to the adverse

party “to produce factual support sufficient to establish that he will be able to

satisfy his evidentiary burden at trial.” Id.

“Interpretation of an insurance policy ordinarily involves a legal question

that can be properly resolved by a motion for summary judgment.” Cutsinger v.

Redfern, 08-2607, p. 4 (La. 5/22/09), 12 So.3d 945, 949 (citing Bonin v. Westport

Ins. Corp., 05-886, p. 4 (La. 5/17/06), 930 So.2d 906, 910).

Louisiana Revised Statutes 22:1295(1)(a)(i) provides that no policy of

automobile liability insurance “shall be delivered or issued for delivery in this

state” without UMBI coverage in an amount “not less than the limits of bodily

injury liability provided by the policy.” This mandate can be modified, and UM

coverage “is not applicable when any insured named in the policy either rejects

coverage, selects lower limits, or selects economic-only coverage, in the manner

provided in Item (1)(a)(ii) of this Section.” Id. Item (1)(a)(ii) of La.R.S. 22:1295

requires that the “rejection, selection of lower limits, or selection of economic-only

coverage shall be made only on a form prescribed by the commissioner of

4

insurance” and that “[a] properly completed and signed form creates a rebuttable

presumption that the insured knowingly rejected [UMBI] coverage, selected a

lower limit, or selected economic-only coverage.”

In Duncan, 950 So.2d at 547 (quoting Roger v. Estate of Moulton, 513 So.2d

1126, 1130 (La.1987)), the supreme court observed that strong public policy is

embodied in the UMBI coverage statute and that the statute is to be liberally

construed, which “requires the statutory exceptions to coverage be interpreted

strictly.” For these reasons, “the insurer bears the burden of proving any insured

named in the policy rejected in writing the coverage equal to bodily injury

coverage or selected lower limits.” Id. (quoting Tugwell v. State Farm Ins. Co.,

609 So.2d 195, 197 (La.1992)). Thereafter, the supreme court identified six tasks

which must be performed to complete the UMBI Coverage Form prescribed by the

commissioner of insurance in order to reject UMBI coverage:

[T]he prescribed form involves six tasks: (1) initialing the selection
or rejection of coverage chosen; (2) if limits lower than the policy
limits are chosen (available in options 2 and 4), then filling in the
amount of coverage selected for each person and each accident; (3)
printing the name of the named insured or legal representative; (4)
signing the name of the named insured or legal representative; (5)
filling in the policy number; and (6) filling in the date.

Duncan, 950 So.2d at 551. Failure to comply with one of these six tasks results in

an invalid rejection of UMBI coverage. Id. Importantly, “[t]he insurer cannot rely

on the insured‟s intent to waive [UMBI] coverage to cure a defect in the form of

the waiver.” Id. at 553.

Before addressing the parties‟ arguments, we note that as a general rule,

“automobile insurance policies are written with „split‟ limits of liability” coverage.

Watts v. Aetna Cas. & Sur. Co., 574 So.2d 364, 370 (La.App. 1 Cir.), writ denied,

568 So.2d 1089 (La.1990) (citing W. McKenzie and H. Johnson, 15 Louisiana

5

Civil Law Treatise: Insurance Law and Practice, Section 232, p. 434

(West.1986)). Under a split limit policy, “the insurer‟s obligation for bodily injury

is limited to a specific amount per person with a maximum amount per accident or

occurrence, together with a separate limit for property damage liability coverage.”

Id. Automobile policies, like Compass‟s, are written differently, however, “with a

„single‟ (or combined) limit per accident or occurrence for liability and property

damage coverage.” Id.

The Declarations Page of the policy Progressive issued to Compass outlined

coverage for Bodily Injury and Property Damage Liability as $1 million CSL. The

policy sets forth Progressive‟s Limit of Liability for Combined Bodily Injury and

Property Damage Limits, stating in pertinent part:

[We] will pay no more than the Limit of Liability shown for this
coverage on the Declarations Page, subject to the following:

....

2. Combined Bodily Injury and Property Damage Limits

Subject to the terms of Section 1 above, if your Declarations
Page indicates that combined bodily injury and property
damage limits apply for “each accident” or “combined single
limit” applies, the most we will pay for the aggregate of all
damages and covered pollution cost or expense combined,
resulting from any one accident, is the combined liability
insurance limit shown on the Declarations Page.

Progressive argues that Mr. Cullen completed the six tasks required by

Duncan when he completed the UMBI Coverage Form; therefore, its policy only

provides $100,000 in UMBI coverage for the accident. The plaintiffs argue the

waiver is invalid and that the only evidence Progressive can use to prove a valid

rejection of UM coverage is contained within the four corners of the UMBI

Coverage Form executed by Mr. Cullen. The plaintiffs urge that Progressive has

6

failed to show a valid selection of lower limits was effected because: (1) the form

was altered when the phrase “each person” was stricken and “CSL” was inserted

above those terms; (2) “CSL” is not defined on the UMBI Coverage Form; and (3)

the blank preceding “each accident” was left blank. The UMBI Coverage Form

prohibits alteration of the form. It states: “This form may not be altered or

modified.”

Progressive relies on Wart v. Progressive Security Insurance Co., 43,954

(La.App. 2 Cir. 4/8/09), 7 So.3d 865, writ denied, 09-1058 (La. 9/4/09), 17 So.3d

963, to support its motion for summary judgment. In Wart, as here, the UM

rejection at issue pertained to a CSL policy. The insured‟s representative in Wart

selected the same option on the UMBI Coverage Form that Mr. Cullen selected;

however, he wrote in $30,000 before “each person.” No other changes were made

to the form.

The trial court concluded in Wart, as the plaintiffs argue here, that the form

did not comply with the requirements of Duncan, 950 So.2d 544, and Gray, 977

So.2d 839, because it was not filled out as required by the commissioner of

insurance‟s directives. The second circuit disagreed with the trial court,

explaining:

At the time the Peterson policy was purchased, the State of
Louisiana allowed policyholders to choose whether to carry uninsured
coverage with lower limits than basic liability coverage limits in the
policy. The decision to choose lower UM coverage than the policy
limits had to be clear and unambiguous. If a purported election for the
lesser coverage is unclear, then the full policy limits would apply to
UM situations.

The problem is that the state had in effect a usable UM
coverage form for split-limit policies, but not for single-limit policies,
such as Peterson‟s Travelers policy at issue here. Accordingly, at the
time the representative of Peterson set out to address the issue of UM
coverage, there existed no form that fit hand in glove with a single-

7

limit policy. Thus the insured and the agent sought to make an
election of lower UM limits on a form that was not designed for a
single-limit policy. Travelers should not have to suffer for the state‟s
failure to supply adequate and appropriate UM coverage forms.

Peterson‟s decision to elect lower limits of UM protection per
person could not be more clear and unambiguous. Peterson‟s
representative clearly opted for a UM limitation of $30,000 per
person. As no aggregate UM limitation was inserted onto the form,
Travelers‟ aggregate exposure could have been up to $1 million per
accident.

We quite understand the quandary of the trial court in
examining this issue. The language in Duncan, supra, requires
demanding and precise observance of form and procedure.
Notwithstanding Wart‟s inventive alternative theories as to other
possible interpretations of this UM selection, we decline to elevate
form over the triad of substance, common sense, and logic. The UM
election of lower limits by Peterson was clear and unambiguous.
When the UM election was made, Peterson bought and Travelers sold
UM coverage of $30,000 per person, but with $1 million UM
coverage per accident. In our view, that is the logical way to interpret
the form before this court. We suggest that insurers and policy
holders in Louisiana should be assisted by the Insurance
Commissioner in supplying UM election forms for both single-limit
and split-limit policies.

Wart, 7 So.3d at 869-70 (footnotes omitted).

Contrary to Wart, Mr. Cullen did not simply fill in a blank indicating the

selection of lower UMBI limits. Instead, the UMBI Coverage Form was altered

when “per person” was struck and “CSL” was inserted above “person.” Moreover,

Mr. Cullen did not initial the alteration of the form to verify that he made the

alteration. Most importantly, however, there was no need for the form to be

modified because pursuant to the terms of Progressive‟s policy, the policy‟s CSL

coverage was “per accident” not “per person.” Therefore, Mr. Cullen needed only

to insert $100,000 in the blank before “each accident” to make a valid selection of

lower UMBI coverage per accident in the amount of $100,000.

8

For these reasons, we find that Compass‟s completion of the UMBI

Coverage Form was invalid. Accordingly, we reverse the judgment of the trial

court granting summary judgment in favor of Progressive and denying the

plaintiffs‟ cross motions for summary judgment. Summary judgment is hereby

granted in favor of the plaintiffs.

DISPOSITION

The judgment of the trial court granting summary judgment in favor of

Progressive Security Insurance Company and denying summary judgment in favor

of the plaintiffs is reversed. Judgment is granted in favor of the plaintiffs, holding:

(1) Compass‟s selection of UMBI coverage in the amount of $100,000 per accident

was invalid and (2) Progressive‟s policy of insurance issued to Compass provides

UMBI coverage in the amount of $1 million per accident. The matter is remanded

for further proceedings consistent with this opinion. All costs of this appeal are

assessed to Progressive Security Insurance Company.

REVERSED AND REMANDED.

9