Shantanya Thibeaux v. Goauto Insurance Company

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

18-333

SHANTANYA THIBEAUX

VERSUS

GOAUTO INSURANCE COMPANY

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 2017-2737
HONORABLE DAVID M. SMITH, DISTRICT JUDGE

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JOHN E. CONERY
JUDGE
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Court composed of Sylvia R. Cooks, Elizabeth A. Pickett, John E. Conery, D. Kent
Savoie, and Candyce G. Perret, Judges.

Cooks, J., dissents and assigns reasons.

REVERSED AND REMANDED.

Jason W. Burge
Fishman Haygood LLP
201 St. Charles Avenue, 46th Floor
New Orleans, Louisiana 70170-4600
(504) 586-5252
Attorney for Appellant/Defendant
GoAuto Insurance Company

W. Alan Lilley
Goforth & Lilley, PLC
109 Stewart Street
Lafayette, Louisiana 70501
(337) 237-5777
Attorney for Appellee/Plaintiff
Shantanya Thibeaux

CONERY, Judge.

The defendant, GoAuto Insurance Company (GoAuto), appeals the trial

court’s partial summary judgment in favor of its insured, Shantanya Thibeaux (Mrs.

Thibeaux), in which the trial court found that GoAuto was liable under its policy’s

collision coverage for damages to Mrs. Thibeaux’s 2008 Ford Mustang (Mustang).

The vehicle at issue was involved in a one car accident while being driven by Jairi

Thibeaux, an excluded driver under the terms of policy number 88797-20 issued to

Mrs. Thibeaux by GoAuto. For the following reasons, we reverse the judgment of

the trial court and remand for further proceedings.

FACTS AND PROCEDURAL HISTORY

On May 11, 2016, while Ms. Thibeaux was not at home, Jairi Thibeaux, her

seventeen-year-old son, took her Mustang without permission and was in a single

vehicle collision a few hundred yards from their home causing extensive damage to

the vehicle. The accident did not involve third party fault. The GoAuto Policy

denied coverage for the accident based on the “Named Driver Exclusion

Endorsement” which specifically excluded Jairi as a driver of the Mustang under the

terms of the policy.

When GoAuto denied Mrs. Thibeaux’s claim for damages to the Mustang, she

filed suit and moved for partial summary judgment on the issue of collision

coverage. The deposition testimony of Mrs. Thibeaux and Jairi Thibeaux, as well

as Mrs. Thibeaux’s affidavit filed in support of the motion for partial summary

judgment, are clear that Jairi did not have permission to drive his mother’s Mustang

on the day of the accident or any other day.

The trial court, “after considering the law, memoranda and argument of

counsel and the insurance policy, affidavits and deposition testimony[,]” found as

follows in its December 29, 2017 judgment:

IT IS ORDERED, ADJUDGED AND DECREED that
Summary Judgment is granted in favor of Shantanya Thibeaux, the
Court finding that there is no genuine issue of material fact that Jairi
Thibeaux did not have permission to operate the 2008 Mustang owned
by Shantanya Thibeaux on the day of the collision, May 11, 2016, and
there is property damage collision coverage afforded to Shantanya
Thibeaux for the 2008 Mustang arising out of the collision of May 11,
2016[,] under the GoAuto Policy of Insurance policy no. 88797-20.

GoAuto now timely appeals the trial court’s December 29, 2017 judgment on

the basis that the insurance policy at issue excludes collision coverage when the

vehicle is being operated by Jairi Thibeaux, a named excluded driver.

ASSIGNMENT OF ERROR

GoAuto appeals the trial court’s ruling asserting one assignment of error as

follows: “The district court’s granting of summary judgment on coverage in favor

of Ms. Thibeaux was contrary to the terms of the Named Driver Exclusion

Endorsement, was contrary to Louisiana statutes providing that such exclusion is

enforceable, and was error.”

LAW AND DISCUSSION

Standard of Review

An appellate court reviews a trial court’s granting of a motion for summary

judgment de novo. Duncan v. U.S.A.A. Ins. Co., 06-363 (La. 11/29/06), 950 So.2d

544. This standard of review requires the appellate court to use the same criteria as

the trial court in determining if summary judgment is appropriate, which is whether

there is a genuine issue of material fact and whether the mover is entitled to judgment

as a matter of law. Id.

A de novo review simply asks whether the trial court was legally correct or

legally incorrect. Domingue v. Bodin, 08-62 (La.App. 3 Cir. 11/5/08), 996 So.2d

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654. “[T]he appellate court assigns no special weight to the trial court[.]” Id. at 657.

Instead, the appellate court reviews the record in its entirety and determines

“whether the trial court’s decision was legally correct in light of the evidence.” Id.

Assignment of Error One - Exclusion of Coverage And Statutory Construction

GoAuto argues that the trial court erred by not applying the terms of the

GoAuto policy issued to Mrs. Thibeaux, more particularly the “Named Driver

Exclusion Endorsement” “Policy Number: 88797-16, which states:

PLEASE READ THIS ENDORSEMENT CAREFULLY.
THIS ENDORSEMENT CHANGES THE TERMS OF YOUR
POLICY.

This endorsement is attached to and, forms a part of the policy to be
issued as of the date this endorsement is prepared. This endorsement
will apply to this policy and any amended, renewal, reinstatement or
substitute policy issued to the same Named Insured by the Company.
This endorsement supersedes and excludes from the policy any
contrary provision(s).

In consideration of the premium charged, the Named Insured agrees
that no coverage provided by the Company is afforded while any
vehicle listed on this policy is being used, driven, operated or
manipulated by, or under the care of :

Robyn Thibeaux, Jairi D. Thibeaux.

(Emphasis in original).

It is undisputed that Mrs. Thibeaux signed the Named Driver Exclusion

Endorsement on April 12, 2014, and the endorsement was in effect on May 11, 2016,

the date of the accident at issue.

Likewise, the “Named excluded operator” is also clearly and specifically

defined in the GoAuto policy as:

“Named excluded operator” means any person who by written
agreement, contained in the application or by endorsement to this
Policy, signed by any applicant for this Policy, or the applicant’s legal
representative, is listed as a person who shall be excluded from

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coverage under this Policy, whether or not that listed excluded person
is you, the named insured, the spouse of the named insured, a family
member of the named insured, or any other person who but for being
named as an excluded operator would have been a person insured under
the terms of this Policy or by operation of law.

(Emphasis in original).

Further, the portion of the policy entitled, “Exclusions for Parts D, E, F,

AND G[,]” the “named excluded operator” provision in Section 1 also provides:

There is no Coverage For Damage To Your Auto for:

1. Arising out of the operation or use of any auto insured under
Parts D, E,[Collision Coverage] F, and/or G by a named
excluded operator.

(Emphasis in original).

Louisiana Revised Statutes 32:900(L)(1) expressly permits named driver

exclusions and states in pertinent part:

Notwithstanding the provisions of Paragraph (B)(2) of this
Section, an insurer and an insured may by written agreement exclude
from coverage the named insured and the spouse of the named insured.
The insurer and an insured may also exclude from coverage any other
named person who is a resident of the same household as the named
insured at the time that the written agreement is entered into, and
the exclusion shall be effective, regardless of whether the excluded
person continues to remain a resident of the same household subsequent
to the execution of the written agreement. It shall not be necessary for
the person being excluded from coverage to execute or be a party to the
written agreement. For the purposes of this Subsection, the term
“named insured” means the applicant for the policy of insurance issued
by the insurer.
(Emphasis added).

The sole purpose for the exclusion in La. R.S. 32:900(L) is premium
reduction. Williams v. Watson, 01-0495, p.7 (La.10/16/01), 798 So.
2d 55, 59. As we recognized in Joseph v. Dickerson, 99-1046, p.9
(La.1/19/00), 754 So.2d 912, 917, the purpose of the exclusion “is to
allow the named insured the option of paying a reduced premium in
exchange for insurance that affords no coverage while a covered
vehicle is operated by the excluded driver.”

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Bryant v. United Servs. Auto. Ass’n, 03-3491, p. 8 (La. 9/9/04), 881 So.2d 1214,

1219 (emphasis added).

Jairi was excluded from collision coverage in exchange for a reduced policy

premium, all in accordance with the stated purpose of the statute. The collision at

issue did not involve any third parties and there is nothing in the policy language

that allows collision coverage in a single vehicle accident if the excluded driver is

operating the vehicle without permission.

Mrs. Thibeaux urges the application of Khaliq v. Progressive Security Ins.

Co., 06-1207 (La.App. 3 Cir. 2/7/07), 950 So.2d 933, writ denied, 07-471 (La.

4/27/07), 955 So.2d 688. In Khaliq, a panel of this court found that collision

coverage was available because no permission was given to the excluded driver to

operate the vehicle at issue. However, the panel in Khaliq was also guided by the

supreme court’s holding and rational in Bryant. See id.

However, Bryant, 881 So.2d 1214, did not involve a first party collision claim

by the policy holder against its insurer for collision coverage and therefore is

inapplicable to the instant case. Because Khaliq relied on Bryant, it is

distinguishable from this case. Bryant involved compulsory liability coverage under

La.R.S. 32:900(L), cited above. In Bryant, the plaintiff vehicle owner sought

coverage under the tortfeasor’s liability policy; however, the driver of the plaintiff’s

vehicle at the time of the accident was an excluded driver under the policy. As stated

by the court:

the narrow issue presented by these cases is whether the “no pay, no
play” law applies to bar a portion of a named insured’s recovery of her
own bodily injury and/or property damages when an excluded driver is
involved in an accident while driving the named insured’s vehicle. The
resolution of this issue requires a determination of the scope of La.R.S.
32:866 and a balancing of the competing policies underlying La.R.S.
32:866 and La.R.S. 32:900(L).

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Id. at 1220 (emphasis added).

Because the applicability of the “no pay, no play” statute depended upon

whether the plaintiff vehicle owner carried the requisite compulsory liability

coverage required by La.R.S. 32:900, the supreme court in Bryant first considered

whether the vehicle owner “owned or maintained” the requisite liability insurance.

It concluded that the Bryant policy did not provide the requisite liability coverage,

stating:

Had [the excluded driver] been at fault in causing the accident, [the
vehicle owner’s] insurance coverage would not have been available to
an injured third party. Likewise, any property damage claim that
[the vehicle owner] would have otherwise been able to make against
her own coverage would not have been available had [the excluded
driver] been at fault in causing an accident while driving her
vehicle. Because no insurance coverage was afforded by [the
vehicle owner’s] policy for any claim arising out of accidents that
occurred when [the excluded driver] was driving [the owner’s]
vehicle, we must conclude that she failed to maintain compulsory motor
vehicle liability security at the time of the accident at issue.

Id. at 1222 (emphasis added).

The supreme court specifically considered the issue of “permission” in

connection with La.R.S. 32:866, the “no pay, no play” statute, and La.R.S. 32:900,

which requires liability coverage but also allows a vehicle owner to exclude certain

individuals as insureds under the liability policy. Id. It found the two statutes were:

best reconciled by limiting the application of La. R.S. 32:866 [the “no
pay, no play” statute] to situations in which a named insured has given
permission to operate a covered vehicle to a driver validly excluded
pursuant to La.R.S. 32:90[0](L), and then seeks to recover his or her
own damages when the excluded driver is involved in an accident.

Id. at 1223 (emphasis added).

In Bryant, 881 So.2d 1214, the issue of permission did not affect the

determination of whether coverage was afforded under the vehicle owner’s own

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policy. In fact, the supreme court recognized that no liability or collision coverage

was available when an excluded driver drove the vehicle. Rather, the court

considered the issue of permission only in connection with determining whether the

“no play, no pay” statute barred the vehicle owner from recovering from the

tortfeasor’s liability insurer. Id.

In this case there is no third party fault at issue for the collision claim damage

to the Mustang, and the applicability of “no play, no pay” is not at issue in this case.

The language of the GoAuto policy clearly provides there is no insurance coverage

of any kind, which would include collision coverage, provided to a vehicle which is

being driven by a named excluded driver such as Jairi Thibeaux. Under the

provisions of La.R.S. 32:900(L), an individual and its insurer are free to contract for

no coverage for certain named excluded drivers in exchange for a reduced premium.

Williams, 798 So.2d 55.

We note that a panel of our sister circuit in Taylor v. Gramercy Ins. Co., 12-

795 (La.App. 1 Cir. 2/13/13) (unpublished opinion) reached the same result. In

Taylor, the owner of a 2006 Cadillac CTS (Cadillac), Cynthia Taylor, executed a

named driver exclusion endorsement with her insurer, Gramercy Insurance

Company (GIC), in which her daughter, Charrion Taylor, was named as an excluded

driver for the Cadillac. Charrion was driving the Cadillac in Ethel, Louisiana,

“when she lost control of the vehicle and hit a culvert.” Id. at p. 1. The Cadillac

was a total loss. Id.

Both parties filed motions for summary judgment and the trial court granted

the motion filed by GIC. The first circuit affirmed, distinguishing Bryant on the

basis that the supreme court had “specifically noted that had Ms. Bryant’s excluded

driver been at fault in causing the accident, any property damage claim that Ms.

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Bryant would have been otherwise able to make against her own coverage would not

have been available to her. Bryant, 881 So.2d at 1222.” Taylor, 12-795 at p. 6. The

panel also found that the Khaliq case was factually distinguishable from Taylor. See

id. The appellate court affirmed the trial court’s ruling granting summary judgment

in favor of GIC, and denying summary judgment in favor of the Taylors, finding

there was no coverage for the damages to the Cadillac under the GIC policy for the

named excluded driver, Charrion Taylor. See id.

We find that the named driver exclusion in this case is clear and unambiguous.

Accordingly, we reverse the partial summary judgment of the trial court in favor of

Shantanya Thibeaux and remand this matter for further proceedings.

CONCLUSION

Based on the foregoing, we reverse the trial court’s December 29, 2017 partial

summary judgment in favor Shantanya Thibeaux and remand this matter for further

proceedings. All costs of this proceeding are assessed to Shantanya Thibeaux.

REVERSED AND REMANDED.

8

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

18-333

SHANTANYA THIBEAUX

VERSUS

GOAUTO INSURANCE COMPANY

COOKS, J., dissents.

Shantanya Thibeaux (Mrs. Thibeaux) was the owner of a 2008 Ford Mustang.

On May 11, 2016, while Mrs. Thibeaux was at work, her young son, Jairi Thibeaux

(Jairi), took the car without permission and headed down the road to school. Mrs.

Thibeaux and Jairi testified Jairi knew he was forbidden to drive the car. Both

testified his mom did not know Jairi took the car without her permission on the

morning of the accident. Jairi testified the accident occurred when he was forced

onto the shoulder of the road by an oncoming vehicle veering into his lane of travel.

Despite this uncontradicted testimony the majority says this was a one-car accident

and concludes “there is no third-party fault at issue.” This is not supported by the

record.

Following the accident Mrs. Thibeaux filed a claim with GoAuto for payment

in accordance with the insurance policy’s provision covering damage or loss

resulting from a collision. GoAuto denied coverage and refused to pay any amount

to Mrs. Thibeaux for the loss of her vehicle because it construed the provision listing

Jairi as an excluded driver to be an all-inclusive proviso. Mrs. Thibeaux sued

GoAuto and moved for partial summary judgment on the issue of liability for the

loss of the vehicle. The trial court granted partial summary judgment in favor of

Mrs. Thibeaux.

Upon de novo review the majority finds GoAuto has no liability to Mrs.

Thibeaux for the loss of the Mustang because Jairi was an excluded driver at the time

of the accident. It finds the excluded driver provision in this insurance contract is

an all-inclusive provision which renders irrelevant any consideration of whether Jairi

had implied or express permission or was driving without permission at the time of

the accident. But the Louisiana Supreme Court in Bryant v. United Servs. Auto.

Ass’n., 03-3491 (La. 9/9/04), 881 So.2d 1214, consolidated with McCray v. Jenkins,

04-28, (La. 9/9/04), 881 So.2d 1214, and this court in Khaliq v. Progressive Security

Insurance Company, 06-1207 (La.App. 3 Cir. 2/7/07), 950 So.2d 933, writ

denied, 07-471 (La. 4/27/07), 955 So. 2d 688, rejected such an all-inclusive

argument finding there are instances, such as the tort of conversion or theft, which

are exceptions. Bryant and Khaliq are instructive and controlling, but the majority

ignores those decisions by “distinguishing” the holdings in Bryant and Khaliq from

the case before us. I believe the majority errs in ignoring the clear rationale of Bryant

and this court’s holding in Khaliq. This decision effectively overrules Khaliq

without expressly saying so.

In Bryant, the supreme court resolved conflicting circuit court decisions

regarding the applicability of Louisiana’s “no pay no play” auto insurance statute,

La. R.S. 32:866, which places limitations on recovery for personal injury and

property damage. In the McCray case the insured parent gave the excluded driver

permission to drive the family vehicle thus the court found the provisions of the

statute applicable. However, in the Bryant case the record on summary judgment

was “unclear [as to] whether Justin Bryant was operating Marolyn Bryant’s vehicle

with her permission.” Id. at 1222. Marolyn Bryant’s policy contained a designated

driver exclusion endorsement which stated:

“In consideration of the premium charged for the policy to which
this endorsement applies, it is hereby understood and agreed that any
insurance afforded by this policy shall not apply or accrue with respect

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to any claim arising from accidents which occur when any vehicle
described in the declarations of the policy or any other vehicle to which
the terms of the policy are extended is being used or operated, either
with or without permission, by the following excluded members of the
insured's household: Justin Bryant son.”

Bryant, 881 So. 2d at 1222.

The supreme court expressly stated that it therefore had to “determine whether

the granting of permission, or lack thereof, by a named insured to an excluded driver

to operate a covered vehicle makes a difference in the applicability of La.R.S. 32:

866 to a particular case.” Id. The high court found that it did make a difference

despite the all-inclusive language denying coverage for use by a named excluded

driver. In Khaliq we found the court’s reasoning in Bryant provided clear guidance

in determining the effect on coverage when an excluded driver operates the insured

auto without permission. The Bryant court reasoned as follows:

It would serve no valid purpose, however, to apply the provisions
of the “no pay, no play” law to a situation in which the excluded driver
operated the vehicle without the permission of the named insured. In
such a situation, the named insured has not thwarted the law by
receiving a reduced premium in exchange for excluding a driver and
then permitting that excluded driver to operate the vehicle in
contravention of the Motor Vehicle Safety Responsibility Law.
Additionally, it would be absurd to contend that a named insured
should not be allowed to recover a portion of his or her damages
pursuant to the provisions of La. R.S. 32:866 in a situation where the
vehicle was stolen and then involved in an accident, perhaps an
accident that was not caused by the fault of the thief. This view is
supported by the provisions of La. R.S. 32:865, which impose criminal
sanctions on an owner who allows the operation of a motor vehicle that
is not covered by proper security. The terms of the statute, however,
do not apply when the vehicle is operated without the permission of
the owner. Additionally, the legislative committee that considered the
enactment of the bill that eventually added La. R.S. 32:900(L)
specifically declined to amend La. R.S. 32:900(B)(2) to limit required
coverage to validly licensed drivers because it was concerned about the
situation in which a young child accidentally caused a vehicle to move
and cause damage. See Minutes of Meeting, House Insurance
Committee, May 13, 1992. In light of the policies served by La. R.S.
32:866, we find it would be absurd to apply the “no pay, no play” law
to partially reduce an owner’s recovery for damages arising out of the
operation of his or her vehicle by an excluded driver who is involved
in an accident when the owner did not give the excluded driver
permission to operate the vehicle.

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Bryant, 881 So. 2d at 1223–24 (emphasis added).

The supreme court’s decision in Bryant recognized the important public

policy provided in La.R.S. 32:861-66. Louisiana Revised Statute 32:865 provides

criminal penalties for failure to carry compulsory liability insurance required under

La.R.S. 32:861. Louisiana Revised Statute 32:866 places limitations on the amount

a person may recover for personal injury and/or property damages when they have

failed to comply with the compulsory liability insurance law. This statute did not

include any language regarding authorized versus unauthorized users, whereas,

La.R.S. 32:865(A)3(b) expressly provides that the statutory criminal penalties do not

apply: “To the owner of a motor vehicle if at the time of the accident the vehicle was

being operated without his permission, express or implied, or was parked by a person

who had been operating such motor vehicle without such permission.” It was

therefore necessary for the supreme court to decide the issue in Bryant regarding the

applicability of the “no pay, no play” civil penalties to an unauthorized user. The

reasoning in Bryant and Khaliq making the civil penalties provided in La.R.S.

32:866 inapplicable to unauthorized users, even where that user is a named

excluded driver, is consistent with the statutory scheme in La.R.S. 32:865 which

expressly does not hold an owner culpable under the criminal statute for failure to

carry compulsory liability insurance when the driver is an unauthorized user.

The import of the supreme court’s decision in Bryant was clear to this court

in Khaliq and I believe the majority errs in ignoring this court’s previous decision.

Mr. Khaliq’s son, like Jairi, was an excluded driver. Khaliq’s son, like Jairi, took

the vehicle without his parent’s permission or knowledge. This, we said, was “no

different from a thief taking and wrecking the vehicle.” Khaliq, 950 So.2d at 936.

We further noted “it has long been recognized that an insured may recover for

property damage under the collision coverage when the damage is sustained while

the insured vehicle is in the possession of an unauthorized person.” Id. at 936-37

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(citation omitted) (emphasis added). The majority finds that the decision in Bryant

is “distinguishable” and was limited to the “no pay, no play” situation. But a panel

of this court rejected that assertion in Khaliq and it should be rejected here. As this

court’s panel said in Khaliq, it is a “distinction[] without a difference.” Id. at 936.

The distinction here, without a real difference, is that the unauthorized person, Jairi,

was not a thief. He was engaged in the tort of conversion, and a loss occasioned by

conversion is covered under GoAuto’s policy except when the person is a permissive

user. The policy expressly excludes a permissive driver but does not include an

exception for a named excluded driver.

The insurance contract is the law between the parties. The majority

recognizes this, GoAuto asserts it is so, but, more importantly, La.R.S. 32:900(F)4

expressly provides: “The policy, the written application therefor, if any, and any

rider or endorsement which does not conflict with the provisions of the Chapter shall

constitute the entire contract between the parties” (emphasis added).

The insurance policy provides in pertinent part (emphasis in original and

added):

NAMED DRIVER EXCLUSION ENDORSEMENT

In consideration of the premium charged, the Named insured
agrees that no coverage provided by the Company is afforded while any
vehicle listed on this policy is being used, driven, operated or
manipulated by, or under the care of: Robyn Thibeaux or Jairi
Thibeaux.

POLICY

Words and phrases that appear in bold have special meaning:
refer to terms specifically defined in the DEFINITIONS sections of the
Policy…

“Your insured auto” means:

a. Any auto owned by you listed on the declaration page. . .

An “auto accident” is an unexpected and unintended event or
occurrence arising out of the ownership, maintenance, operation or use

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of your insured auto or a non-owned auto that causes bodily injury
or property damage.

“Loss” means direct, sudden and accidental loss of or damage to
your insured vehicle…

“Named excluded operator” means any person who by written
agreement, contained in the application or by endorsement to this
Policy, signed by any applicant for this Policy, or the applicant’s legal
representative, is listed as a person who shall be excluded from
coverage under this Policy, whether or not that listed excluded person
is you, the named insured, the spouse of the named insured, a family
member of the named insured, or any other person who but for being
named as an excluded operator would have been a person insured under
the terms of this Policy or by operation of law.

COVERAGE FOR DAMAGE TO YOUR AUTO

PART D - COMPREHENSIVE LOSS COVERAGE

PART E – COLLISSION COVERAGE

As used in Parts D and E, of this Policy, subject to any applicable
provision or exclusion in this Policy or endorsement to this Policy:

“Collision” means:

1. your insured auto’s or temporary substitute vehicle’s
coming into direct physical contact with another object which
is not otherwise excluded herein; or

2. your insured auto’s or temporary substitute vehicle’s
upset or overturning.

Exclusions for Parts, D, E, F and G

There is no coverage For Damage To Your Auto for:

1. Arising out of the operation or use of any auto insured under
Parts D, E, F, and/or G by a named excluded operator…

11. Loss occurring while any auto insured under Parts D, E, F,
and/or G is used in the commission of any crime by any person
to whom you granted express or implied permission to operate
the auto.

15. Loss caused by the theft or conversion of any auto
insured under Parts D, E, F, and/or G by a person to whom
you have voluntarily entrusted your insured auto. This
exclusion does not apply when the auto is stolen from the
person to whom you have loaned it…

Limits of Liability for Parts D, E and F

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Our limit of liability for loss covered under this Part shall not
exceed the lesser of:

1. The actual cash value of the stolen or damaged property at
the time of loss; reduced by the applicable deductible; or

2. The amount necessary to repair or replace the property with
other of the like, kind and quality less depreciation, reduced
by the applicable deductible.

Under the express terms of the GoAuto policy set forth above, Mrs. Thibeaux

is not covered for the loss of her vehicle as the result of a collision when the “loss

[is] caused by the theft or conversion of any auto insured [under the policy] by a

person to whom [she] [] voluntarily entrusted [her] insured auto” (emphasis added).

This provision in the insurance contract means that Mrs. Thibeaux is covered for

loss by conversion (or theft) when she has not given permission to such an

individual. This is precisely the circumstance we have here and nothing

distinguishes it from the same circumstance we decided in Khaliq.

The trial court found that on the day of the accident Jairi took the car without

Mrs. Thibeaux’s permission and he knew he was forbidden from driving the car.

Nothing in the record suggests any reason to upset the factual findings of the trial

court. Interpreting this policy language to provide coverage for conversion by an

unauthorized named excluded driver is consistent with other policy provisions that

exclude coverage when the owner authorizes a named excluded driver to use the

vehicle. Under any of the policy provisions regarding coverage for loss of the

vehicle there is no coverage when the loss is caused either by theft, conversion, for

criminal purposes, or by a named excluded driver, when such is done with the

owner’s permission or authorization. Likewise, the policy consistently provides

coverage in a variety of circumstances when damage or loss results from the actions

of an unauthorized user.

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To understand the application of the applicable language in the policy to

Jairi’s actions it is necessary to examine the jurisprudence concerning the tort of

conversion as that term is used in the legal context.

The tort of conversion is an intentional act done in
derogation of the plaintiff’s possessory rights. It is committed
when one wrongfully does any act of dominion over the property of
another in denial of or inconsistent with the owner’s rights. Any
wrongful exercise or assumption of authority over another’s goods,
depriving him of the possession, permanently or for an indefinite
time, is a conversion. . . Kinchen v. Louie Dabdoub Sell Cars,
Inc., 05–218 (La.App. 5 Cir. 10/6/05), 912 So.2d 715, 718 (emphasis
added) (citations omitted), writ denied, 05–2356 (La.3/17/06), 925
So.2d 544.

Louisiana Health Care Grp., Inc. v. Allegiance Health Mgmt., Inc., 09-1093 p. 7

(La.App. 3 Cir. 3/10/10), 32 So.3d 1138, 1143 (emphasis added).

There can be no question that Jairi’s taking of the car without Mrs.

Thibeaux’s knowledge or permission was a tortious conversion of her property.

The insurance policy clearly includes coverage for such conversion of Mrs.

Thibeaux’s property by an unauthorized user. The only caveat to this coverage

provided in the policy is that this coverage is forfeited if the person who commits

the tortious conversion was a permissive user. This provision in the policy does not

include any language in the policy excluding coverage for conversion by a named

excluded driver acting without permission. It would have been easy to include such

a provision, but the contract is silent.

The provisions in this insurance contract are consistent with Louisiana law on

conversion. “Issues of fault, intent, negligence, knowledge or ignorance, and/or

good faith are not involved in actions for tortious conversion.” Labbe v. Premier

Bank, 618 So.2d 45, 46 (La. Ct. App. 1993) citing Hagberg v. Manuel, 525 So.2d

19 (La.App. 3 Cir.1988). Thus, in the case of the unauthorized user’s tortious

conversion of the insured’s property there is no need to explore any “issue of fault,

intent, negligence, knowledge, ignorance and/or good faith.” Id. The only dispositive

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fact is the determination that Jairi was an unauthorized user who damaged the car

while possessing it through tortious conversion. Questions of whether his mom

should have employed more heroic efforts to foreclose the possibility of his tortious

conversion or whether she was negligent in failing to foreclose all possibility of Jairi

taking the car against her instruction cannot form a basis in determining her right to

recover for the loss of her property due to tortious conversion. This loss by

conversion is exactly one of the types of coverage for which Mrs. Thibeaux paid her

premiums. Thus, GoAuto’s argument that requiring it to pay for the loss of the car

under these circumstances gives Mrs. Thibeaux the benefit of something she did not

pay for is simply not true. Because this insurer provided coverage for damages

occasioned by unauthorized users in several circumstances, they have undoubtedly

considered such loss in the calculation of premiums. Thus, it seems disingenuous

for GoAuto to assert that if it is made to pay for Mrs. Thibeaux’s car, she would be

getting such coverage free. The majority implicitly accepts this argument stating:

“Under the provisions of La.R.S. 32:900(L), an individual and its insurer are free to

contract for no coverage for certain named excluded drivers in exchange for a

reduced premium.” The supreme court expressly rejected this notion in Bryant.

The policy provisions for determining the amount of the insured’s recovery

for loss by conversion is also consistent with the jurisprudential determination of

damages for conversion: “The measure of damages for tortious conversion, when

the property cannot be returned to the plaintiff[], is the value of the property at the

time of conversion. See Dual Drilling [Co. v. Mills Equipment Investments, Inc.,

[98-343 (La. 12/1/98),] 721 So.2d [853] at 857–858; Matherne v. Terrebonne Parish

Police Jury, 462 So.2d 274, 279 (La.App. 1st Cir.1984), writs denied, 463 So.2d

1321 (La.1985). See also, Gurst v. City of Natchitoches, 428 So.2d 502, 504–505

(La.App. 3d Cir.1983).” Commercial Flooring & Mini Blinds, Inc. v. Edenfield, 13-

0523 p. 13 (La.App. 1 Cir. 2/14/14), 138 So. 3d 30, 39. This is precisely the

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recompense provided for in this insurance policy, and it is exactly the measure of

damages Mrs. Thibeaux seeks, and to which she is entitled, less the “applicable

deductible” or “depreciation” as provided in the policy.

Likewise, had the damage to Mrs. Thibeaux’s vehicle been caused by a thief

the policy provides coverage for loss occasioned by such an unauthorized user. Not

only does the policy provide such coverage, we made it clear in our holding in

Khaliq, 955 So. 2d 688, that loss caused by a thief is covered. Our decision in Khaliq

was guided by the Louisiana State Supreme Court’s holding and rationale in Bryant,

881 So.2d 1214 and both are applicable here. The majority errs in finding otherwise.

Subsequent to Khaliq, a panel of this court was again confronted with the

question of coverage when a named excluded driver was driving a car at the time of

an accident. In Martin v. Safeway Insurance Co. of La., 08-1419 (La.App. 3 Cir.

11/5/09), 26 So.3d 777, another panel of this court rejected the claim for coverage

from the “tortfeasor, a named excluded driver, seek[ing] protection from personal

liability by seeking to become an insured, under a Safeway policy which specifically

excluded him from coverage.” There is no indication in that opinion as to whether

the excluded driver was driving the vehicle with or without permission. That panel

reasoned that “to allow plaintiff to recover from the defendant, Safeway, in this case

would make the terms of La.R.S. 32:900(L) meaningless.” Id. at 780. That statute

deals with motor vehicle liability coverage and provides in pertinent part:

Notwithstanding the provisions of Paragraph (B)(2) of this
Section, an insurer and an insured may by written agreement exclude
from coverage the named insured and the spouse of the named insured.
The insurer and an insured may also exclude from coverage any other
named person who is a resident of the same household as the named
insured at the time that the written agreement is entered into, and the
exclusion shall be effective, regardless of whether the excluded person
continues to remain a resident of the same household subsequent to the
execution of the written agreement. . .

La.R.S. 32:900(L)1.

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The panel in Martin said it “did not disagree with the outcome in Khaliq”

Supra. at 779, but found it was not applicable to that case. It also discussed the

Bryant decision but likewise found it inapplicable. The decision in Martin is not

inconsistent with Bryant and Khaliq nor with my position here.

The insurance contract here provides coverage for the damages caused by the

tortious conversion of Mrs. Thibeaux’s property by an unauthorized user who was a

named excluded driver. Mrs. Thibeaux is entitled to coverage for the loss of her

Mustang as provided in the GoAuto insurance policy. For the reasons stated I

believe there was no error in the trial court’s ruling.

Furthermore, we must certainly all be aware that in today’s world many

households have any number of licensed drivers residing with their parent and/or

grandparents. One can easily imagine a household of three, four and five individuals

residing with their parent or grandparent and the extremely burdensome dilemma

the majority decision will impose on many people. To interpret the insurance

contract at issue and the cited jurisprudence as the majority has will mean that no

one can take the risk that will now be included in failing to insure all persons of

driving age living in the owner’s residence at the time the policy is issued. The cost

would be prohibitive for many. Because the decision of this panel is at odds with a

decision by a previous panel of this court and with the prior holdings of the Louisiana

Supreme Court, I believe this case merits an en banc hearing. I respectfully dissent.

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