Amanda Rae Douga v. Progressive Casualty Insurance Co.

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

16-543

AMANDA RAE DOUGA

VERSUS

PROGRESSIVE CASUALTY
INSURANCE COMPANY, ET AL

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, NO. 2014-3241
HONORABLE DAVID A. RITCHIE, DISTRICT JUDGE

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JAMES T. GENOVESE
JUDGE

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Court composed of Marc T. Amy, Elizabeth A. Pickett, and James T. Genovese,
Judges.

AFFIRMED.

Norman J. Thigpen
Law Office of Norman J. Thigpen
2380 Lake Street
Lake Charles, Louisiana 70601
(337) 497-0123
COUNSEL FOR PLAINTIFF/APPELLANT:
Amanda Rae Douga

Michael H. Schwartzberg
Vamvoras, Schwartzberg & Associates, LLC
1111 Ryan Street
Lake Charles, Louisiana 70601
(337) 433-1621
COUNSEL FOR PLAINTIFF/APPELLANT:
Amanda Rae Douga

Leah M. Penny
Casler, Bordelon & Lawler
11550 Newcastle Avenue, Suite 200
Baton Rouge, Louisiana 70806
(504) 434-3109
COUNSEL FOR DEFENDANTS/APPELLANTS:
Progressive Security Insurance Company
and Teneeshia M. Powell

James Ryan III
Craig R. Webb
James Ryan III & Associates, LLC
201 St. Charles Avenue, Suite 2420
New Orleans, Louisiana 70170
(504) 599-5990
COUNSEL FOR DEFENDANTS/APPELLEES:
All Star Buick GMC Truck, Inc. and
Tower National Insurance Company

GENOVESE, Judge.

Plaintiff, Amanda Rae Douga, and Defendants, Teneeshia Powell and

Progressive Security Insurance Company (Progressive),1 appeal the trial court’s

grant of summary judgment relative to garage operations liability insurance

coverage in favor of All Star Buick GMC Truck, Inc. (All Star) and Tower

National Insurance Company (Tower), and its denial of their cross motion for

summary judgment.2 For the following reasons, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

On September 7, 2013, Ms. Douga was driving her vehicle in Sulphur,

Louisiana, when she was rear-ended by a vehicle being driven by Ms. Powell.

Ms. Douga sustained bodily injuries from this collision. Ms. Powell was driving

a vehicle owned by All Star, a car dealership in Sulphur. All Star had loaned the

vehicle to Ms. Powell while it was repairing her vehicle.

At the time of the automobile accident, All Star had been issued a garage

operations liability insurance policy by Tower. Ms. Douga filed suit on August

15, 2014, naming Ms. Powell, All Star, Tower, Progressive, and State Farm

Mutual Automobile Insurance Company (State Farm),3 as defendants.

Progressive answered, admitting that it provided Ms. Powell with

automobile liability insurance coverage in the statutory minimum amount of
1
Progressive was erroneously identified in Ms. Douga’s petition as Progressive
Casualty Insurance Company.
2
The denial of a motion for summary judgment is an interlocutory judgment from
which, ordinarily, an appeal may not be taken. La.Code Civ.P. art. 968. However, when there
is also an appeal from a final judgment, i.e., a trial court’s grant of summary judgment, an
interlocutory ruling may also be reviewed by the appellate court. See Mackmer v. Estate of
Angelle, 14-655 (La.App. 3 Cir. 12/10/14), 155 So.3d 125, writ denied, 15-69 (La. 4/2/15), 176
So.3d 1031.
3
State Farm provided Ms. Douga with uninsured/underinsured motorist (UM)
insurance. State Farm has abstained from all proceedings relating to the parties’ cross-motions
for summary judgment.

$15,000.00.4 All Star and Tower answered, denying liability and denying

coverage under the terms of Tower’s garage operations liability insurance policy.

All Star and Tower filed a motion for summary judgment. They asserted

that Ms. Powell was not an insured under Tower’s policy based on the following

provisions:

SECTION II – LIABILTIY COVERAGE

A. Coverage

....

2. “Garage Operations” – Covered “Autos”

We will pay all sums an “insured” legally must pay as
damages because of “bodily injury” or “property damage”
to which this insurance applies, caused by an “accident”
and resulting from “garage operations” involving the
ownership, maintenance or use of covered “autos”.

....

3. Who Is An Insured

a. The following are “insureds” for covered “autos”:

(1) You for any covered “auto”.

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

....

(d) Your customers. However, if a customer
of yours:

(i) Has no other available insurance
(whether primary, excess or
contingent), they are an “insured”
but only up to the compulsory or
financial responsibility law limits
4
Louisiana Revised Statutes 32:900(B)(2) compels all motor vehicles registered in
Louisiana to have liability coverage in the amount of $15,000.00 per person with a limit of
$30,000.00 per accident, and property damage coverage in the amount of $25,000.00.

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where the covered “auto” is
principally garaged.

(ii) Has other available insurance
(whether primary, excess or
contingent) less than the compulsory
or financial responsibility law limits
where the covered “auto” is
principally garaged, they are an
“insured” only for the amount by
which the compulsory or financial
responsibility law limits exceed the
limit of their other insurance.

All Star and Tower argue that Section II, Subsection A.3.a.(2)(d) of the policy

applies, that it bars coverage to Ms. Powell for her negligence in causing the

accident, and that coverage to a customer of All Star is only provided when the

customer either lacks automobile insurance or has less than the minimum amount

required by law. All Star and Tower sought judgment as a matter of law that

Tower’s garage operations liability insurance policy did not provide liability

coverage to Ms. Powell.

Ms. Douga filed a cross motion for summary judgment, which Ms. Powell

and Progressive adopted and reiterated. Ms. Douga asserted that Tower’s policy

provides one million dollars in liability coverage for customers who drive All

Star loaner vehicles when their own autos are being serviced by All Star’s repair

shop. She alleged that Ms. Powell was an insured based upon ambiguities in both

the aforementioned provision and the following exclusion:

B. Exclusions

This insurance does not apply to any of the following:

....

7. Leased Autos

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Any covered “auto” while leased or rented to others. But
this exclusion does not apply to a covered “auto” you rent
to one of your customers while their “auto” is left with you
for service or repair.

Ms. Douga sought judgment as a matter of law that ambiguities in Tower’s policy

must be construed in favor of affording coverage to Ms. Powell for her

negligence in causing the accident.

After a March 15, 2016 hearing, the trial court granted Tower’s motion,

ruling that Tower’s garage operations liability insurance policy did not provide

liability coverage to Ms. Powell. Judgment was signed March 29, 2016, granting

the motion for summary judgment filed by All Star and Tower, denying the cross

motion for summary judgment filed by Ms. Douga, and dismissing with prejudice

Ms. Douga’s claims against All Star and Tower. Ms. Douga, joined by

Progressive and Ms. Powell, have appealed.

ASSIGNMENTS OF ERROR

On appeal, two errors were assigned for our consideration: (1) the trial

court “erred in granting the Motion for Summary Judgment filed by [All Star

and] Tower[;]” and (2) the trial court “erred in denying the Cross Motion for

Summary Judgment filed by [Ms. Douga].”

STANDARD OF REVIEW

Summary judgments are reviewed de novo using the same criteria that

govern the trial court’s consideration of whether summary judgment is

appropriate, i.e., whether there is a genuine issue of material fact and whether the

mover is entitled to judgment as a matter of law. Beslin v. Anadarko Petro.

Corp., 15-291 (La.App. 3 Cir. 10/7/15), 175 So.3d 1134. “Interpretation of an

insurance policy ordinarily involves a legal question that can be properly

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resolved by a motion for summary judgment.” Bernard v. Ellis, 11-2377, p. 9

(La. 7/2/12), 111 So.3d 995, 1002 (citing Cutsinger v. Redfern, 08-2607 (La.

5/22/09), 12 So.3d 945).

DISCUSSION

Ms. Douga argues the trial court erred in finding that Tower’s policy does

not provide coverage for the accident which is the subject of this lawsuit,

contending that Ms. Powell is an insured due to ambiguities within Tower’s

policy. According to Ms. Douga, “[t]he policy language at issue in the instant

appeal has been the subject of debate before this Honorable Court in the past,

wherein coverage was ultimately afforded.” Ms. Douga refers this court to the

decisions in Stanfield v. Hartford Accident & Indemnity Co., 581 So.2d 340

(La.App. 3 Cir. 5/22/91) and Hargrove v. Missouri Pacific Railroad Company,

00-228 (La.App. 3 Cir. 1/10/01), 780 So.2d 454, writ granted, 01-1228 (La.

6/29/01), 794 So.2d 804.

At the time of the accident sued upon in Stanfield, Donald Stanfield was

operating a loaner bus supplied to his employer, Tri-State Charters, Inc. (Tri-

State), by Wayne Bus and Equipment Sales, Inc. (Wayne), the franchise bus

dealer with a sales and service facility where Tri-State’s bus was being repaired.

Mr. Stanfield was driving the loaner bus in the course and scope of his

employment with Tri-State when the bus was involved in a one-vehicle accident.

Student passengers who were on the bus filed personal injury lawsuits against

Mr. Stanfield; Tri-State; its commercial liability insurer, National Fire and

Marine Insurance Company (National); Wayne; and, its garage liability insurer,

Hartford Accident and Indemnity Company (Hartford). The trial court issued a

declaratory judgment declaring that the coverage provided by Hartford was

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primary and the coverage provided by National was excess. Hartford appealed,

arguing that Mr. Stanfield and Tri-State were not insureds under the terms of its

policy. Hartford’s policy provided:

D. WHO IS AN INSURED.

1. For Covered Autos.

a. You are an insured for any covered auto.

b. Anyone else is an insured while using with
your permission a covered auto except:

....

3. Your customers, if your business is shown in
ITEM ONE of the declarations as an auto
dealership.

Stanfield, 581 So.2d at 341 (emphasis added). In affirming the trial court, the

majority concluded that the auto dealership customer exclusion applied only to

customers of the automobile dealership side of Wayne’s business, but did not

apply to customers of the garage side of Wayne’s business.

Hargrove involved an automobile/train collision wherein plaintiffs were

passengers in the automobile being driven by Ricky Haley. Martin Automotive

Group (Martin), an automobile dealership where Mr. Haley had taken his vehicle

for repair, had a verbal agreement with Enterprise Rent A Car for customers

receiving automotive repair. In affirming the trial court, the majority followed

the reasoning in Stanfield to find that Mr. Haley and Martin were co-renters,

making Mr. Haley an uninsured motorist under Martin’s insurance policies.

Tower avers that the trial court correctly concluded Ms. Powell was not

insured under its policy. According to Tower, its policy is “different than, and

much broader than, the language of the Stanfield policy.” Tower refers this court

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to the opinions of other circuits in the cases of Savana v. Certain Interested

Underwriters at Lloyd’s London, 01-2450 (La.App. 1 Cir. 7/2/02), 825 So.2d

1242; Baker v. Kenney, 99-2950 (La.App. 4 Cir. 5/3/00), 767 So.2d 711, writ

denied, 00-2153 (La. 10/13/00), 771 So.2d 650; and, Gambino v. Lamulle,

97-2798 (La.App. 4 Cir. 6/10/98), 715 So.2d 574. Tower argues “[t]hese

cases . . . demonstrate that the courts of this state have routinely upheld the

provisions of garage operations policies that exclude coverage for customers of

dealerships[] when the customer is uninsured or underinsured.”

The facts in Savana, Baker, and Gambino are analogous to the facts herein

in that the vehicles at issue were loaned to the party involved in the accident to

replace a vehicle that was being repaired. Savana, Baker, and Gambino conflict

with this circuit’s decisions in both Stanfield and Hargrove. Whereas this court

drew a distinction between the dealership side of the business and the garage side

of the business in Stanfield, the courts in Savana, Baker, and Gambino did not.

Our colleagues on the first circuit in Savana examined this court’s

interpretation of similar policy language in Stanfield and expressed:

With all due respect to the majority in Stanfield v. Hartford
Acc. and Indem. Co., 89-1249 (La.App. 3 Cir. 5/22/91), 581 So.2d
340, this Court finds the distinction made between the auto dealership
customers and the garage customers to be an artificial one, and we
agree with Judge Guidry’s dissent, which found no ambiguity or
conflict in the provisions of the policy. . . .

. . . [W]e prefer to follow the opinions of the Fourth Circuit in the
cases of Gambino v. Lamulle, 97-2798 (La.App. 4 Cir. 6/10/98), 715
So.2d 574, and Baker v. [Kenney], 99-2950 (La.App. 4 Cir. 5/3/00),
767 So.2d 711, writ denied, 2000-2153 (La.10/13/00), 771 So.2d 650,
which interpreted substantially the same policy language as the policy
in the case at bar. We note that under La. R.S. 22:671, the primary
liability coverage for a loaner vehicle is provided by the driver’s
policy, not the service dealer’s policy. Thus, Forrester’s policy which
met the requirements of La. R.S. 32:900 provided the plaintiff with
compensation contemplated by the Louisiana Motor Vehicle

7

Responsibility Law. Further, because the policy provided coverage in
the event the driver of the covered vehicle lacks the insurance
coverage required by La. R.S. 32:900, we find that the language of the
policy does not violate public policy and should be interpreted as
written.

Savana, 825 So.2d at 1244-45. We find that Stanfield and Hargrove are not

applicable to the matter before us. Instead, we find Savana, Baker, and Gambino

to be more instructive.

Ms. Douga also argues that the exclusionary language is ambiguous in that

it does not define “customer.” This court considered this argument in Falgout v.

Jester, 04-434 (La.App. 3 Cir. 9/29/04), 883 So.2d 515. At the time of the

accident sued upon in Falgout, Walter Jester, the negligent driver, was test-

driving a vehicle in contemplation of purchasing the vehicle from an automobile

dealership. Plaintiffs, seeking liability insurance coverage to Jester as an insured

or omnibus insured under the dealership’s general liability insurance policy,

argued that the exclusionary language was ambiguous, in part, because

“customer” was not defined. Relying upon La.Civ.Code art. 2047, this court

declared “[w]e do not find that the term ‘customer’ is a word of art or a technical

term. Therefore, it must be given its generally prevailing meaning.” Falgout,

883 So.2d at 520. This court found “that the generally prevailing meaning of the

word ‘customer’ would include a person such as Jester.” Id.

Considering the foregoing, we find no ambiguity in the policy and that the

trial court did not err in granting summary judgment in favor of All Star and

Tower. Tower’s insurance policy specifies that coverage to a customer of All

Star is provided only when the customer either lacks automobile insurance or has

insurance which fails to meet the minimum amount required by La.R.S.

32:900(B)(2). Because Ms. Powell was insured by Progressive in an amount

8

which satisfies the statutory minimum, we find that the exclusion in Tower’s

policy applies, and Ms. Powell is excluded from coverage under the policy.

DECREE

For the foregoing reasons, the trial court judgment of March 29, 2016,

which granted the motion for summary judgment of All Star and Tower, denied

the cross motion for summary judgment of Ms. Douga, and dismissed with

prejudice Ms. Douga’s claims against All Star and Tower is hereby affirmed. All

costs of this appeal are assessed equally to Plaintiff/Appellant, Amanda Rae

Douga, and Defendants/Appellants, Progressive Security Insurance Company and

Teneeshia Powell.

AFFIRMED.

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