Martin Baack and Brenda Baack v. Michael McIntosh

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

19-657

MARTIN BAACK AND BRENDA BAACK
VERSUS

MICHAEL MCINTOSH, ET AL.

RKEKKK RK

APPEAL FROM THE
TENTH JUDICIAL DISTRICT COURT
PARISH OF NATCHITOCHES, NO. 87,843 A
HONORABLE DESIREE DUHON DYESS, DISTRICT JUDGE

REKKREKEKHEEE

VAN H. KYZAR
JUDGE

Wet kh ve k tek eke

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Van H. Kyzar, and
Jonathan W. Perry, Judges.

REVERSED AND RENDERED;
AND REMANDED.

Dorwan G. Vizzier

Broussard, Halecomb & Vizzier

P. O. Box 11875

Alexandria, LA 71315

(318) 487-4589

COUNSEL FOR PLAINTIFFS/APPELLANTS:
Martin Baack, Individually and on Behalf of Estate of Allissah Baack
Brenda Baack, Individually and on Behalf of Estate of Allissah Baack

Jack E. Truitt

The Truitt Law Firm

149 North New Hampshire Street

Covington, LA 70433

(985) 327-5266

COUNSEL FOR DEFENDANT/APPELLEE:
Zurich American Insurance Company

KYZAR, Judge.

The plaintiffs, Martin and Brenda Baack, appeal from a jury verdict finding
that an insurance policy issued by the defendant, Zurich American Insurance
Company, did not provide uninsured motorist coverage for injuries Mr. Baack
suffered in an automobile accident. For the following reasons, we reverse and render
judgment in favor of the Baacks and remand for further proceedings.

DISCUSSION OF THE RECORD

On July 18, 2014, Mr. Baack, an employee of Pilgrim’s Pride Corporation
(Pilgrim’s), was driving his work vehicle west on Louisiana Highway 6 near
Natchitoches, Louisiana, when a vehicle, attempting to make a U-turn from the
shoulder of the westbound lane, struck his vehicle. Michael McIntosh, the vehicle’s
driver, was determined to be solely at fault in causing the accident and pled guilty to
improper lane usage, a violation of La.R.S. 32:79.

Mr. Baack was a long-time employee of Pilgrim’s, and the vehicle he was
operating belonged to PPC Transportation Company (PPC Transportation). Both
Pilgrim’s and PPC Transportation are subsidiaries of JBS USA Holdings, Inc.
(JBS).' The defendant, Zurich American Insurance Company (Zurich), is both the
workers’ compensation (WC) insurer and the auto insurer of JBS. As a result of this
accident, Zurich paid WC benefits to Mr. Baack.

Pursuant to La.R.S. 23:] 101,” Mr. Baack and his wife, Brenda, filed suit,
individually and on behalf of their minor child, Allissah Baack, against Mr.

McIntosh, his insurer, Allstate Property and Casualty Insurance Company (Allstate),

' JBS USA Holdings, Inc. is a successor to Swift Foods Company.

*LaRS. 23:1 101(A) allows an employee. injured in the course and scope of employment,
to file suit against the third party who caused his injury, even though he is receiving workers’
compensation benefits. A third person is someone against whom the employee’s rights are not
limited to workers’ compensation.

and Zurich, the uninsured motorist (UM) provider for PPC Transportation’s vehicle.
In JBS’s auto policy with Zurich, PPC Transportation Company is listed as Broad
Named Insured. The Baacks sought damages under Zurich’s UM coverage based
on the alleged uninsured or underinsured status of Mr. McIntosh’s vehicle. They
also sought penalties and attorney fees pursuant to La.R.S. 22:1973 and La.R.S.
22:1892, based on Zurich’s failure to timely settle his claim.

Upon Allstate’s tender of Mr. MclIntosh’s $15,000.00 policy limits, the
Baacks dismissed their claims against Allstate and Mr. McIntosh, to the extent of his
policy limits, but reserved their rights against Zurich. An order of partial dismissal
was rendered on May 19, 2016.

Zurich sought judgments on various issues prior to trial. It moved for
summary judgment on the issue of UM coverage, on the grounds that JBS had
waived UM coverage in its policy. The Baacks opposed the motion. Judgment was
rendered denying the motion on April 28, 2017, and writs to both this court and the
supreme court were denied. Baack v. McIntosh, 17-501 (La.App. 3 Cir. 7/31/17)
(unpublished writ), writ denied, 17-1489 (La. 11/13/17), 229 So.3d 926.

Zurich also filed three motions seeking partial summary judgment. The first
and second motion sought dismissal of the Baacks’ penalty and attorney fee claims.
These motions were opposed by the Baacks. A December 22, 2017 judgment denied
the first motion, but the record does not contain a judgment specifically addressing
the second motion.

Zurich’s third motion sought dismissal of Mr. Baacks’ claims for past medical
expenses and lost wages based on an exclusion in its policy excluding coverage for
WC claims. It further argued that because its obligations towards Mr. Baack (as WC
insurer and UM provider) were solidary in nature, it was entitled to a credit for all

WC benefits (past and future) that Mr. Baack received as a result of this accident.

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The Baacks opposed this motion. On June 25, 2018, judgment was granted in
Zurich’s favor, finding that because its obligations towards Mr. Baack were solidary
in nature, the collateral source rule did not apply. Thus, it held that Zurich, as UM
provider, was entitled to a credit for all past WC benefits paid to Mr. Baack, with
the amount to be proven at trial, and a credit towards all future WC benefits he would
receive as a result of the accident. However, the judgment held that because Zurich
failed to plead the policy exclusion as an affirmative defense in its answer, the
defense was waived.

Zurich also moved to bifurcate the coverage issue from the liability and
damage issues. The Baacks opposed this motion, and judgment denying the motion
was rendered on July 27, 2018.

Prior to trial, the Baacks filed a motion in limine seeking to prevent Zurich
from mentioning or referencing to the jury any funds that they had obtained from a
collateral source independent of Zurich. On August 24, 2018, judgment was
rendered, granting the motion, in part, holding that any evidence pertaining to Mr.
Baack’s WC claim would only be admissible to the trial court outside of the jury’s
presence.

This matter proceeded to a jury trial, which lasted five days. After the Baacks
rested their case, Zurich moved for a directed verdict on the issue of UM coverage,
which was denied. The Baacks, in turn, moved for a directed verdict on this issue
after Zurich rested, which was also denied. Following deliberations, the jury reached
a verdict finding that Zurich’s policy did not provide UM coverage for Mr. Baack’s
claims because JBS had rejected coverage. A judgment in conformance with the
jury’s verdict was rendered on September 25, 2018, dismissing the Baacks’ claims
against Zurich, with prejudice, and casting them with all costs. The Baacks then

moved for a judgment notwithstanding the verdict or, in the alternative, for new trial

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on the issues of UM coverage and damages. Judgment denying both motions was
rendered on December 21, 2018. Thereafter, the Baacks perfected this appeal.
On appeal, the Baacks assert six assignments of error:

}. The jury committed both an error of law and manifest error when
on the undisputed facts and evidence, it failed to find that
underinsured motorist coverage was provided by the Zurich
policy by statute.

2. The trial court committed an error of law when it overruled
plaintiffs’ Motion for Directed Verdict on the issue of
underinsured motorist coverage at the close of defendant’s case.

3. The trial court committed an error of law when it denied
plaintiff's Motion for Judgment Notwithstanding the Verdict or
In the Alternative Motion for New Trial.

an

The trial court committed [an] error of law in ruling on defendant,

Zurich’s[,] Motion for Partial Summary Judgment by ordering
that Zurich was entitled to a credit for past and future workers’
compensation payments of indemnity and medical expenses.
[Record citation omitted. ]

5. The jury and trial court committed legal error and manifest error
in failing to find uninsured motorist coverage under Zurich’s
policy, and thereby failing to address the remaining issues of
liability[,] damages, penalties and attorney’s fees. This Court
should determine these facts de novo on the entire record and
render judgment on the merits. Rosell v. Esco, [549 So.2d 840,
844 (La.1989)].

6. The trial court erred as a matter of law and abused its discretion
when it cast plaintiff for all costs for these proceedings for
reasons that plaintiffs should have prevailed on the merits and
the defendant should have been cast with all costs of these
proceedings. [Record citation omitted. ]

OPINION
The appellate standard of review applicable in this matter was set out by this
court in Stelly v. Bergeron, 19-102, pp. 13-14 (La.App. 3 Cir. 10/30/19), 283 So.3d
536, 545-46 (alteration in original):
The applicable standard of review as to the merits of this case is

set forth in Monlezun v. Lyon Interests, Inc., 11-576, pp. 4-5 (La.App.
3 Cir. 11/2/11), 76 So.3d 628, 632-633:

Louisiana appellate courts review both law and
facts. S.J v. Lafayette Parish Sch. Bd., 09-2195 (La.
7/6/10), 41 So.3d 1119. Factual findings are reviewed
under the “manifestly erroneous or clearly wrong”
standard. /d. at 1127. In order to reverse a factual
determination of the trial court, the appellate court must
first find that a reasonable factual basis does not exist for
the finding and that the record establishes that the finding
is clearly wrong. /d. In cases where there are two
permissible views of the evidence, the fact finder’s choice
between them cannot be manifestly erroneous. /d.
“However, where documents or objective evidence so
contradict a witness’s story, or the story itself is so
internally inconsistent or implausible on its face that a
reasonable fact finder would not credit the witness’s story,
a reviewing court may well find manifest error.” /d. at
1127.

If the court of appeal finds that the trial court
committed a manifest error of fact or a reversible error of
law, the appellate court must then conduct a de novo
review of the record and render a judgment on the merits.
Siverd v. Permanent Gen. Ins. Co., 05-973 (La. 2/22/06),
922 So.2d 497. In making such a finding, the appellate
court “must do more than simply review the record for
some evidence which supports or controverts the trial
court’s findings; it must instead review the record in its
entirety to determine whether the trial court’s finding was
clearly wrong or manifestly erroneous.” Jd. at 499. Thus,
the appellate court may not reverse if the trial court’s
findings are reasonable in light of the record as a whole,
even if the appellate court is convinced that it would have
weighed the evidence differently if sitting as the trier of
fact. Id.

We further keep in mind the following as set forth by LeBlanc v.
Allstate Insurance Co., 00-1128, p. 4 (La.App. 5 Cir. 11/28/00), 772
So.2d 400, 403, writ denied, 00-3522 (La. 2/9/01), 785 So.2d 831:

If the fact finder does not reach an issue because of
an earlier finding which disposes of the case, the appellate
court, in reversing the earlier finding, must make a de novo
determination of undecided issues from the facts presented
in the record. Austin v. Fibrebond Corp., 25,565 (La.App.
2 Cir. 2/23/94), 638 So.2d 1110; Craven v. Universal Life
Ins. Co., 95-1168 (La.App. 3 Cir. 3/6/96), 670 So.2d 1358,
writ denied, 96-1332 (La. 9/27/96), 679 So.2d 1355.
Generally, if the appellate court makes a finding that the
trial court was manifestly erroneous or that there is a legal
error and the record is, otherwise, complete, the appellate
court should render judgment on the record. In such cases,

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the appellate court is not subject to the manifest error rule,
but decides the case de novo. Rosell v. ESCO, [549 So.2d
840 (La.1989)]; McLean v. Hunter, 495 So.2d 1298
(La.1986).

UNDERINSURED MOTORIST COVERAGE

In their first assignment of error, the Baacks argue that the jury legally and
factually erred by finding that UM coverage was waived under Zurich’s policy.
They assert that the 2012, 2013, and 2014 UM selection forms executed by JBS’s
representative, Stephany A. Rockwell, are valid forms that provide UM coverage at
the same limits as the $5,000,000.00 bodily injury liability limits provided in the
underlying auto policy. The Baacks also argue that Zurich is precluded from arguing
that these UM selection forms are invalid based on the law of the case doctrine. We
will address these arguments in reverse order.
Law of the Case Doctrine

In denying Zurich’s motion for summary judgment on the UM coverage issue,
the trial court stated:

In this case, the UM selection forms submitted in connection
with the issuance of policy Nos. 10, 11 and 12 were completed in
accordance with statutory requirements, and in accordance with the
instructions set forth in the form, and therefore must be given legal
effect. As filled out, dated and signed, as provided in the form, by law,
the policy was changed to provide UM coverage with the same limits
as the policy’s liability limits. LSA-R.S. 22:1295(1 )(a)(ii) provides that,
although the original UM selection is valid for the life of the policy, the
original selection or rejection may be changed by submitting a new UM
selection form on the form prescribed by the Commissioner of
Insurance. The UM selection form for policy No. 12 was also amended
by endorsement effect [sic] June 1, 2014, to provide public liability
coverage under the Motor Carrier Act which increased the amount to
[sic] coverage under the policy by $750,000.00 No new UM rejection
was submitted. The accident did not occur until July 18, 2014. The
court finds that there are genuine issues of material facts. For these
reasons and after considering the competent summary judgment
evidence submitted, the law and the arguments presented, the defendant,
Zurich’s [sic] Motion for Summary [Judgment] is denied at the
defendant’s costs.

6

Zurich filed an application for supervisory writs to this court, which was
denied. In denying the writ application, this court simply stated, “We find no error
in the trial court’s judgment.” Baack, 17-501, p. 1. The Baacks argue that based on
the language of the trial court judgment and our writ denial, the law of the case
doctrine requires us to find that the 2012, 2013, and 2014 UM selection forms are
valid. We disagree that the law of the case doctrine is applicable here.

In this instance, Zurich was the only party who sought a “declaration of
coverage by way of motion for summary judgment.” Rodgers v. State Farm Mut.
Auto. Ins., 15-868, p. 3 (La. 6/30/15), 168 So.3d 375, 376. Rather than filing a cross
motion for summary judgment on the issue of UM coverage, the Baacks only
opposed the motion. In Smith v. Brooks, 96-1085, p. 5 (La.App. 3 Cir. 2/5/97), 689
So.2d 544, 547, this court noted that the Louisiana Code of Civil Procedure “does
not authorize the trial court to render a judgment on the merits in favor of a
nonmoving party upon denial of the moving party’s motion for summary judgment.”
Thus, despite the language contained in the trial court judgment, the only effect the
April 28, 2017 judgment had was to find that genuine issues of material fact existed
such that Zurich was not entitled to judgment, as a matter of law, finding a valid
waiver of UM coverage. Accordingly, we find no merit in the Baacks argument on
this issue.

Validity of the UM Selection Forms

By statute, all Louisiana insurance policies that provide liability coverage
“arising out of the ownership, maintenance, or use of any motor vehicle,” shall
include UM coverage in amounts “not less than the limits of bodily injury liability
provided by the policy,” unless the insured “rejects coverage, selects lower limits,
or selects economic only coverage” on a UM selection form prescribed by the

Louisiana Commissioner of Insurance. La.R.S. 22:1295(] )(a)(i), (il). “A properly

7

completed and signed form creates a rebuttable presumption that the insured
knowingly rejected coverage, selected a lower limit, or selected economic-only
coverage.” La.R.S. 22:1295(1 )(a)(ii).

Furthermore, a properly completed UM selection form remains valid for the
life of the policy, including policy renewals, reinstatements, substitutions, or
amendments. La.R.S. 22:1295(1)(a)(ii). However, an insured may change its
original coverage selection at any time by submitting a new UM selection form to
the insurer on the form prescribed by the commissioner of insurance. /d. With
regard to an existing policy, a new UM selection form is only required when the
insured changes the policy’s limits of liability. /d.

Uninsured motorist coverage embodies a strong public policy,
which is to provide full recovery for innocent automobile accident

victims who suffer damages caused by a tortfeasor who has no coverage
or is not adequately covered by liability insurance. Cutsinger [v.
Redfern], [08-2607 (La. 5/22/09),] 12 So.3d [] 949 (citing Duncan v.
U.S.A.A. Ins. Co., 06-363 (La.11/29/06), 950 So.2d 544, 547). The
underlying purpose of uninsured motorist coverage “is to promote and
effectuate complete reparation, no more or no less.” /d. (citing Hoefly
v. Government Employees Ins. Co., 418 So.2d 575, 579 (La.1982)).

Bernard v. Ellis, 11-2377, p. 10 (La. 7/2/12), 111 So.3d 995, 1002-03.

Courts resolve coverage issues by application of the rules utilized in contract
interpretation and the provisions of La.R.S. 22:1295. Jd. “Thus, under the UM
statute, the requirement of UM coverage is an implied amendment to any automobile
liability policy, even when not expressly addressed, as UM coverage will be read
into the policy unless validly rejected.” Duncan v. U_S.A.A. Ins. Co., 06-363, p. 3
(La. 11/29/06), 950 So.2d 544, 547. Based on Louisiana’s strong public policy
regarding UM coverage, the provisions of La.R.S. 22:1295 are liberally construed,
while “statutory exceptions to coverage” are strictly construed and must be “clear

and unmistakable.” /d.

Proof of an insured’s rejection of UM coverage, selection of lower limits, or
selection of economic-only limits is satisfied solely by the existence of a properly
completed and signed UM selection form, and the insured’s intent is irrelevant in
this determination. /d. As the supreme court stated, “‘The expression of a desire
not to have UM coverage, however clear, does not necessarily constitute a valid
rejection if the expression of rejection does not meet the formal requirements of
law[.]’” Jd. at 553 (quoting Cohn v. State Farm Mut. Auto Ins. Co., 03-2820, p. 5
(La.App. | Cir. 2/11/05), 895 So.2d 600, 602, writ denied, 05-1000 (La. 6/17/05),
904 So.2d 705). “Whether the policy unambiguously excludes coverage for the
damages claimed is solely a question of law to be decided from the four corners of
the policy[.}” Burmaster v. Plaquemines Parish Gov't, 10-1543, p. 13 (La.App. 4
Cir. 3/30/11), 64 So.3d 312, 321.

In Duncan, 950 So.2d at 552, the supreme court laid out six tasks that the
insured must perform on the UM selection form in order to effectuate a valid
rejection of UM coverage:

The insured initials the selection or rejection chosen to indicate that the

decision was made by the insured. If lower limits are selected, then the

lower limits are entered on the form to denote the exact limits. The

insured or the legal representative signs the form evidencing the intent

to waive UM coverage and includes his or her printed name to identify

the signature. Moreover, the insured dates the form to determine the

effective date of the UM waiver. Likewise, the form includes the policy

number to demonstrate which policy it refers to. Thus, the policy
number is relevant to the determination of whether the insured waived

UM coverage for the particular policy at issue.

These tasks corresponded to the six tasks required by the insurance commissioner
for the proper completion of the UM selection form issued by Bulletin LIRC 98-01.
On August 29, 2008, the insurance commissioner, in Bulletin No. 08-02,

issued a revised UM selection form and explained the reasons behind the revision:

The revision is in response to the myriad of issues that Louisiana courts
have recently examined regarding the current UM form, including, but

9

not limited to, what constitutes a properly completed form, what
information must be included prior to the insured’s signature, policy
identification, company identification and backdating. The revised UM
form incorporates changes designed to address these issues and assist
both insureds and insurers as well as Louisiana courts.

Bulletin No. 08-02 requires the insured to initial the coverage option selected and, if
lower limits are selected, enter those limits before signing the UM selection form.
Additionally, it is no longer necessary to include the policy, binder, or application
number on the form. However, the insurance company’s name, group name, or logo
must be placed in the form’s lower right-hand corner.

Bulletin No. 08-02 noted three important changes in the revised UM selection
form, the first of which is pertinent to this matter:

Option to “select” UMBI coverage — The revised UM form removes

the option to “select” UMBI coverage with the same bodily injury

liability limits set forth in the policy. An insured is not required to

“select” UMBI coverage at the same limit as the bodily injury liability

coverage set forth in the policy under LSA-R.S. 22:680,'"! because such

coverage is statutorily presumed absent a properly completed and
signed UM form indicating a different choice.

Accordingly, the UM selection form, as revised, no longer includes an option to
select UM coverage equal to the policy’s bodily injury liability limits because this
coverage occurs by operation of law unless the insured indicates otherwise.

In Barras v. Cardinal Services, LLC, 19-530, p. 15 (La.App. 3 Cir. 4/1/20), _
So.3d_, , we recently held that the number of tasks Duncan required for a valid
rejection or selection of UM coverage is reduced from six to five by Bulletin No.
08-02:

1) initialing the selection or rejection of UMBI coverage; 2) if lower

limits are selected, filling in the amount of coverage selected; 3) signing

the name of the insured or legal representative; 4) printing the name of

the insured or the legal representative; and 5) filling in the date the form
was completed.

* La.R.S. 22:680 was renumbered to La.R.S. 22:1295 by 2008 La. Acts No. 415, § 1.
10

Zurich, as the insurer, bore the burden of proving that JBS waived UM
coverage. Duncan, 950 So.2d 544. During the jury trial, Zurich introduced the
following copies of its insurance policy into evidence: 1) No. 9305603-00 (Swift
Foods), effective September 19, 2002—September 19, 2003; 2) No. 9305603-09
(JBS), effective June 1, 201 1—June |, 2012; and 3) No. 9305603-12 (JBS), effective
June 1, 2014—June 1, 2015. Zurich also introduced the November 15, 2002 (Swift
Foods) and June 30, 2011 (JBS) UM selection forms and the affidavit of William
Trupiewicz, the representative of Swift Foods and JBS that executed the forms. Both
Mr. Trupiewicz’s affidavit and the UM selection forms indicate that UM coverage
was rejected.

Zurich further introduced the deposition of Aibert Edward Margis, an
insurance underwriter for Zurich North America, who has handled JBS and its
predecessors’ accounts for the last fourteen years. He testified that Swift Foods first
obtained auto insurance from Zurich in 2002, and that it rejected UM coverage via
the November 15, 2002 UM selection form executed by Mr. Trupiewicz. The 2002
UM selection form contains the following statement:

The choice I made by my initials on this form will apply to all persons

insured under my policy. My choice shall apply to the motor vehicles

described in the policy and to any replacement vehicles, to all renewals

of my policy, and to all reinstatement or substitute policies until I make

a written request for a change in my Bodily Injury Liability Coverage

or UMBI Coverage.

Mr. Margis testified that after JBS increased its liability limits in 2011, Mr.
Trupiewicz executed a new UM selection form on June 30, 2011, which also rejected
UM coverage. He described the June 30, 2011 form as “a standard form that would

go out annually.” Mr. Margis agreed that the 2011 UM selection form, which

rejected coverage, was still in effect at the time of Mr. Baack’s July 18, 2014

accident. He further stated that JBS’s auto policy, No. 9305603-12, which was
effective June 1, 2014, indicated that it did not provide UM coverage in Louisiana.

In opposition to Zurich’s claim, the Baacks introduced copies of JBS’s 2012,
2013, and 2014 UM selection forms. These forms, just like the 2011 UM selection
form, were based on the revised UM selection form and contained four coverage
options: 1) UM coverage at lower limits, with blanks for the insertion of the amount
of coverage requested; 2) economic-only UM coverage at the same limits as bodily
injury coverage; 3) economic-only UM coverage at limits lower than the bodily
injury coverage, with blanks for the insertion of the amount of coverage requested;
and 4) rejection of UM coverage. The forms also contained the following statement:

By law, your policy will include UMBI Coverage at the same limits as

your Bodily Injury Liability Coverage unless you request otherwise. If

you wish to reject UMBI Coverage, select lower limits of UMBI

Coverage, or select Economic-Only UMBI Coverage, you must

complete this form and return it to your insurance agent or insurance

company.

The UM selection forms, dated May 7, 2012, July 1, 2013, and June 1, 2014,
were executed by Ms. Rockwell, and contained both her signed and printed name.
The blank located next to the second and third UM coverage options contained a
pre-printed “N/A,” indicating that these coverage options were unavailable.
However, Ms. Rockwell failed to select either of the two remaining coverage options,
rejection of UM coverage or selection of UM coverage at lower limits, because she
failed to initial the blank located next to either of these options. Thus, the Baacks
argue that based on this form, JBS selected UM coverage at the same limits as its
bodily injury liability limits.

The Baacks further argued that because JBS changed its policy limits in 2014,

by adding an endorsement under the Motor Carrier Act, it was required to submit a

new UM selection coverage form. Thus, the 2011 UM selection form was no longer
valid even if the 2014 UM selection form was found invalid.

In response, Zurich argues, as it did before the trial court, that the 2012, 2013,
and 2014 UM selection forms were rendered invalid pursuant to Duncan, because
Ms. Rockwell failed to select one of the two available coverage options listed on the
forms. Thus, based on our opinion in Rashal/ v. Pennington, 08-1 (La.App. 3 Cir.
4/30/08), 982 So.2d 301, writ denied, 08-1543 (La. 10/10/08), 993 So.2d 1286, it
argues that the 2011 UM selection form, which properly rejected UM coverage, was
still in effect when Mr. Baack’s accident occurred.

In Rashall, we held that a valid UM selection form remained in effect until
substituted with a new, valid selection form. Because the insured’s subsequent UM
selection form was undated, we held that it was invalid; thus, it failed to revoke the
prior valid UM selection form, which rejected coverage. After quoting the
provisions of La.R.S. 22:680(1 )(a)(1), (ii), we stated:

Thus, there is no question that “an initial valid rejection of UM
coverage is also valid for renewal, reinstatement, or substitute policies.”
Stephenson v. Van Vleit, 96-1407, p. 12 (La.App. 3 Cir. 4/30/97), 693
So.2d 858, 865, writ denied, 97-1431 (La.9/19/97), 701 So.2d 174.
Absent evidence that IES] submitted a new UM selection form to
American Casualty as required by La.R.S. 22:680(1 )(a)(i1), the original
rejection of UM coverage was still valid at the time of Ms. Rashall’s
accident. In reaching this conclusion, we disagree with Ms. Rashall’s
argument that when IESI submitted an invalid rejection of UM
coverage for the 2004-2005 policy, it effectively revoked the prior
rejection. The clear language of La.R.S. 22:680(1 )(a){ii) requires an
affirmative act on the part of IESI, i.e., the submission of a new UM
selection form to American Casualty “on the form prescribed by the
commissioner of insurance.” The evidence establishes only that IESI

did not properly execute the form reaffirming the original decision to
reject UM coverage.

Id. at 305.
While we agree with our holding in Rashail, we reach a different result under

the facts before us. As noted in Rashall, the revocation of a prior UM selection form

13

occurs when the insured submits a new, valid UM selection form “to the insurer on
the form prescribed by the commissioner of insurance.” La.R.S. 22:1295(1)(a)(ii).
Thus, whether the 2011 UM selection form was revoked by the 2012, 2013, or 2014
UM selection forms depends on each form’s validity, which in turn hinges on
whether the tasks required by Bulletin No. 08-02 were satisfied.

As noted, the supreme court, in Duncan, recognized the authority of the
insurance commissioner, as ceded by the legislature, “to determine what the form
would require.” Duncan, 950 So.2d at 552. Although the supreme court has not
revisited the Duncan tasks in light of Bulletin No. 08-02, it reaffirmed the insurance
commissioner’s authority to specify the tasks required for completing a UM
selection form in Chicas v. Doe, 15-147, p. 1 (La. 5/1/15), 166 So.3d 238, 238 (per
curiam), where it stated:

The regulations of the Commissioner of Insurance, as contained in

LDOI Bulletin 08-02, provide for a box on the UM selection form

which the insurer may use for policy information purposes, such as

policy number, binder number, application number, etc. The
regulations further provide, “[t]his box does not need to be filled in for

the form to be properly completed.” In light of this provision, the

absence of a blank box for the policy number does not create a question

of fact concerning the form’s validity. Accordingly, the judgment of

the district court is reversed, and summary judgment is granted in favor

of relator.

As we noted in Barras, the revised UM selection form now requires the
insured to 1) initial the selection or rejection of UM coverage; 2) fill in the amount
of coverage if lower limits are selected; 3) sign the name of the insured or legal
representative; 4) print the name of the insured or legal representative; and 5) date
the form. Although Barras did not address this specific issue, we find that an insured
is not required to select UM coverage at the same limits as its bodily injury coverage,

as “such coverage is statutorily presumed absent a properly completed and signed

UM form indicating a different choice.” Bulletin No. 08-02. This is not a new

14

concept as the supreme court, in Duncan, 950 So.2d at 547, noted that “UM coverage
is an implied amendment” to any auto policy and “will be read into the policy unless
validly rejected.” Thus, if otherwise properly completed and signed, a UM selection
form is still valid even though it does not indicate a coverage selection. To hold
otherwise would repudiate the commissioner of insurance’s authority, as recognized
by Duncan.

Just as the insurer bears the burden of proving that the insured rejected UM
coverage, it also bears the burden of ensuring that the UM selection form is properly
completed. /d. In Gray v. American National Property & Casualty Co., 07-1670,

pp. 15-16 (La. 2/26/08), 977 So.2d 839, 849-50, the supreme court discussed this
burden:

This court has also previously rejected arguments similar to
Coregis’s argument that Ms. Johnson’s actions were a valid reformation
of the policy. In both Samuels v. State Farm Mut. Auto. Ins. Co., 06-
0034, p. 9 (La.10/17/06), 939 So.2d 1235, 1241, and Duncan [v.
U.S.A.A. Insurance Co.}, 06-0363 at 15 [(La. 11/29/06)], 950 So.2d
[544,] 553, this court distinguished failures to comply with the UM
selection form requirements established by the Insurance
Commissioner from other types of clerical errors in insurance contracts
that might be subject to reform. The failure to comply with the
requirements for confecting a valid UM selection form are not subject
to reformation.

Any perceived unfairness to the insurer resulting from this
decision is, we believe, offset by the fact that the insurer had both the
authority and the opportunity to assure that the UM selection form in
this case was completed properly. In fact, we note that the language of
Ms. Johnson’s cover letter to the school board when she sent the UM
selection form for Dr. Rudd’s signature seemed to invite Dr. Rudd to
do exactly what he did. That letter instructed Dr. Rudd that if he wanted
to change the selection of UM coverage limits from the $100,000
previously chosen by the school board, he should “mark the form
accordingly.” However, the letter then stated that “if no change in
limits are requested, please sign, date and return the form with the
proper selection marked within 10 days.” With the exception of
providing the date of his signature, Dr. Rudd did exactly as he was
instructed. Nowhere in the letter was Dr. Rudd instructed to fill in the
space for the amount of lower UM limits, or any of the other blank
spaces. Further, once the incomplete form was received from the
school board, nothing prevented the agent from returning the form to

15

Dr. Rudd with instructions for properly completing the form. The

insurer, not the insured, has the responsibility of assuring that the form

is completed properly, and Coregis did not fulfill that responsibility in

this case.

Clearly, based on a plain reading of Bulletin No. 08-02 and the revised UM
selection form, Zurich should have known that Ms. Rockwell’s failure to select one
of the two remaining UM coverage options would result in JBS selecting UM
coverage at the same limits as its $5,000,000.00 bodily injury liability limits. The
bulletin, with the revised UM selection form, was issued on August 29, 2008.
Furthermore, an insured is not required to submit a new UM selection form in order
to renew an auto policy. Both La.R.S. 22:1295(1)(a)(ii) and the jurisprudence are
clear on this point. See Rashall, 982 So.2d 301. However, Zurich clearly required
JBS to submit a new UM selection form every year when it renewed its policy.

The record establishes that JBS renewed Policy Number 9305603 twelve
times between September 19, 2002 and June 1, 2014. The record also contains the
2002, 2011, 2012, 2013, and 2014 UM selection forms associated with the policy.
Mr. Margis described the 2011 UM selection form as “it’s kind of -- this is a standard
form that would go out annually.” Thus, if Zurich requires its insured to execute a
new UM selection form at each policy renewal, contrary to La.R.S. 22:1295(1 )(a)(i1),
it bears the consequences of the form being completed, as it was in this matter, in
accordance with Bulletin 08-02.

Furthermore, if Zurich knew that JBS intended to reject UM coverage in 2012,
2013, and 2014, as indicated by Mr. Margis, nothing prevented it from sending the
selection forms back to Ms. Rockwell with instructions that she select the option
rejecting UM coverage. Gray, 977 So.2d 839. In Morrison v. USAA Casualty

Insurance Co., 12-2334, p. 2 (La. 1/11/12), 106 So.3d 95, 95-96, the supreme court

discussed just this scenario:

16

In the instant case, it is undisputed the insured’s representative
attempted to complete the required tasks to reject UM coverage, but
mistakenly failed to initial the line rejecting UM coverage at the time
he returned the form to the insurer. Consistent with our suggestion in
Gray [v. American National Property & Casualty Co., 07-1670 (La.
2/26/08), 977 So.2d 839], the insurer returned the incomplete form to
the insured’s representative. The insured’s representative then initialed
the line rejecting UM coverage and returned the form to the insurer,
thereby confirming an acceptance of, and agreement with, all of the
information contained on the form. Although the exact date of the
initialing is unclear, the evidence presented by relator establishes it
occurred prior to the subject accident. Therefore, the rejection of UM
coverage is valid.

Zurich failed to comply with this suggestion. Instead, Zurich required its
insured to submit new UM selection forms at each policy renewal, which were on
forms prescribed by the commissioner of insurance. Thus, these UM selection forms
are valid and, as signed documents, they have legal consequences. Draayer v. Allen,
15-1150 (La.App. 1 Cir. 4/15/16), 195 So.3d 78; see also Judge Pettigrew’s dissent
in Hughes v. Zurich Am. Ins. Co., 13-2167 (La.App. 1 Cir. 8/20/14), 153 So.3d 477,
writ denied, 14-2220 (La. 1/915), 157 So.3d 1107. As we noted in Alexander v.
Estate of McNeal, 10-66, p. 5 (La.App. 3 Cir. 6/30/10), 44 So.3d 338, 341, writ
denied, 10-1807 (La. 10/29/10), 48 So.3d 1093:

The insurer cannot pick and choose which one of the rejection forms to

enforce and required Mr. Dupar to sign for both. There are legal

consequences flowing from signed documents; and certainly Republic,

as the drafter and presenter of the July 31, 2007 waiver form, should be

held to those consequences.

Moreover, the only way to find these forms invalid is to rely on JBS’s intent,
which Duncan specifically held was irrelevant in UM coverage determinations.
Finally, we note the well-settled rule “that a party who signs a written instrument is
presumed to know its contents and cannot avoid its obligations by contending that
he did not read it, that he did not understand it, or that the other party failed to explain

ittohim.” Aguillard v. Auction Mgmt. Corp., 04-2804, 04-2857, p. 22 (La. 6/29/05),

908 So.2d 1, 17. Here, JBS is bound by the UM selection form, as completed by its

17

representative, and Zurich, as insurer, cannot avoid its obligations as established by
the signed UM selection form.

Accordingly, we find that the 2014 UM selection form, which was effective
June 1, 2014, is valid and provides UM coverage equal to the $5,000,000.00 bodily
injury liability coverage contained in JBS’s auto policy. Zurich stipulated that Mr.
Baack was an insured under the auto policy if it was determined that the policy
provided UM coverage. Consequently, we find that the jury legally erred in finding
that Zurich’s policy did not provide UM coverage to Mr. Baack for his claims arising
from the July 18, 2014 accident. Therefore, the judgment of the trial court is
reversed on this issue. Based on this finding, we need not address the Baacks second
and third assignments of error. Because the record before us is complete, we will
conduct a de novo review of the Baacks’ remaining liability and damage claims and
render judgment on the record.

DE NOVO REVIEW—LIABILITY

After reviewing the record, we find that it is uncontested that Mr. McIntosh
was solely at fault in causing this accident. The parties stipulated that he pled guilty
to improper lane usage, a violation of La.R.S. 32:79, and that this violation caused
the accident. Furthermore, Mr. McIntosh testified that he never saw Mr. Baack’s
vehicle before he attempted the U-turn. Accordingly, we find Mr. McIntosh one
hundred percent at fault in causing the July 18, 2014 accident.

We further find that Mr. Baack’s injuries were caused by this accident.
Commencing the morning after the accident, he consistently complained of pain in
his left lumbar spine, hip, and thigh and down into his left leg. He was diagnosed
with bilateral lumbar radiculopathy, an annular tear at L5-S1, and lateral recess
stenosis at L4-5. Mr. Baack underwent a two-level 360-degree fusion at L4-5 and

L5-S1!, with the insertion of cages and screws and bone grafts; a laminectomy at L4;

18

a subtotal laminectomy at L5; and a left posterolateral fusion with bone graft from
L4 to the sacrum. Although his condition improved after surgery, he was still
experiencing pain in his left buttock and leg at the time of trial.

Dr. Eubulus Kerr, III, Mr. Baack’s treating orthopedic surgeon, opined that
more likely than not the July 18, 2014 accident was the cause of his injuries.
Although the medical records indicated that Mr. Baack complained of back pain on
at least four occasions prior to the accident, Dr. Kerr noted that Mr. Baack’s pain
complaints differed after the accident in that he complained of left hip and leg pain,
which diagnostic testing determined emanated from his L4-5 and L5-S1 disk levels.
While Dr. Kerr agreed that Mr. Baack’s preexisting condition was aggravated by the
accident, he strongly disagreed that Mr. Baack had significant preexisting
degenerative arthritis in his lower back. He said that he only observed normal age-
related findings in Mr. Baack’s lower back after reviewing his August 19, 2014 MRI.

It is settled law that “a defendant takes his victim as he finds him and is
responsible for all natural and probable consequences of his tortious conduct.”
Lasha v. Olin Corp., 625 So.2d 1002, 1005 (La.1993). Mr. Baack was physically
able to work as a truck driver prior to the accident, but commencing with the accident,
he could no longer do so. Accordingly, we find that Mr. Baack has proven that more
probably than not the July 18, 2014 accident was the cause of his injuries. Maranto
v. Goodyear Tire & Rubber Co, 94-2603, 94-2615 (La. 2/20/95), 650 So.2d 757.

DE NOVO REVIEW—QUANTUM

The Baacks sought the following damages: past and future medical expenses;
past lost wages, future lost wages and future loss of earning capacity; past and future
disability; past and future mental pain and suffering; past and future physical
suffering; past and future loss of enjoyment of life; and past and future loss of

consortium.

19

General Damages

General damages “are speculative in nature and incapable of being fixed with
mathematical certainty.” /vory v. Safeway Ins. Co. of La., 19-521, p. 10 (La.App. 3
Cir. 12/18/19), 287 So.3d 807, 815. They “include pain and suffering, physical
impairment and disability, and loss of enjoyment of life[.|” Ja.

Pain and suffering, both physical and mental, refers to the pain,

discomfort, inconvenience, anguish, and emotional trauma _ that

accompanies an injury. Loss of enjoyment of life, in comparison, refers

to detrimental alterations of the person’s life or lifestyle or the person’s

inability to participate in the activities or pleasures of life that were

formerly enjoyed prior to the injury. In contrast to pain and suffering,
whether or not a plaintiff experiences a detrimental lifestyle change
depends on both the nature and severity of the injury and the lifestyle

of the plaintiff prior to the injury.

McGee v. AC & S, Inc., 05-1036, p. 5 (La. 7/10/06), 933 So.2d 770, 775.

“The primary objective of general damages is to restore the party in as near a
fashion as possible to the state he was in at the time immediately preceding injury.”
McDowell v. Diggs, 17-755, 17-595, p. 20 (La.App. | Cir. 10/3/18), 264 So.3d 489,
502. The assessment of general damages must include consideration of “the severity
and duration of the injured party’s pain and suffering.” LeBlanc v. Stevenson, 00-
157, p. 6 (La. 10/17/00), 770 So.2d 766, 772.

Mr. Baack endured approximately thirty-nine months of constant severe pain
in his left lower back, hip, thigh, and leg prior to his November 6, 2017 surgery.
Although his condition improved following surgery, he still experienced left buttock
and leg pain in the ten months prior to trial. During his testimony, he described his
pain, on a scale of one to ten, as being a five on good days and a six on bad days.
He takes pain medication three and sometimes four times a day and sees a pain
management physician once a month.

Dr. Kerr testified that he thought the residual pain Mr. Baack experienced

following his surgery was caused by left-sided sacroiliac joint dysfunction, which

20

more probably than not would require physical therapy, injections, or possibly
surgery to fuse the joint. Furthermore, Dr. Kerr and Dr. Gerald LeGlue, a specialist
in physical medicine and rehabilitation, both agreed that the fusion of L4-5 and L5-
S1 would cause significant degeneration at L3-4. Dr. LeGlue explained that the
fusion would place increased stress on L3-4, causing that level to deteriorate more
quickly and eventually develop lumbar spinal stenosis. Although Dr. LeGlue, who
examined him once, thought it predictable that Mr. Baack would require surgery in
twelve to fifteen years due to the anticipated stenosis, Dr. Kerr stated that the
necessity of the future surgery was still to be determined. Dr. Kerr and Dr. LeGlue
both agreed that Mr. Baack was permanently restricted to light-duty work as a result
of his physical impairment.

Mr. Baack has definitely suffered a detrimental alteration to his lifestyle
because of this accident. He can no longer drive trucks for a living and was
terminated from his position with Pilgrim’s because of his disability. Sexual
intercourse hurts his back, and back pain disturbs his sleep. Back pain prevents Mr.
Baack from socializing, hunting, fishing, riding his ATV, mowing his yard, tilling
his garden, taking out the trash, performing vehicle maintenance, and playing with
his six-year-old daughter. It has further curtailed his attendance at his Masonic
Lodge and visits to his fish camp. Mr. Baack is unable to drive long distances
without stopping to stretch his legs; sit or stand for very long; or walk more than two
hundred yards. He also suffers from diabetes, and prior to his accident, he was able
to lose weight and stop taking diabetes medication. Since the accident, he has
regained the weight he had lost, and consequently, is taking diabetes medication

again.

2]

Considering the severity and duration of his pain and suffering, his disability,
and the detrimental alteration to his lifestyle as a result the accident, we award Mr.
Baack $425,000.00 in general damages.

Special Damages
Affirmative Defense

At the outset, we note the Baacks’ argument that Zurich failed to plead, as an
affirmative defense in its answer, the extinguishment of its obligation through Mr.
Baack’s receipt of WC benefits. However, under the facts of this case, we find that
Zurich was not required to affirmatively plead this defense because it did not raise a

new issue. Hooper v. La. Pigment Co., LP, 19-816 (La.App. 3 Cir. 5/13/20), So.3d

Louisiana Code of Civil Procedure Article 1005 requires a defendant to
specifically plead all affirmative defenses in its answer, and the failure to plead a
defense results in a waiver of the defense. Davis v. Nola Home Constr., L.L.C., 16-
1274 (La.App. 4 Cir. 6/14/17), 222 So.3d 833.

However, an issue does not automatically become an affirmative
defense, as that term is defined by Louisiana caselaw, simply because
it appears among the items listed in La. C.C.P. art. 1005, or because
courts have recognized it as an affirmative defense in other cases.
Whether an issue is an affirmative defense is a question of fact,
determined by the circumstances of the individual case. Louisiana
jurisprudence defines an affirmative defense as a defense that “raises a
new matter, which assuming the allegations in the petition are true,
constitutes a defense to the action.” Allvend, Inc. v. Payphone
Commissions Co., Inc., 2000-0661, p. 3 (La.App. 4 Cir. 5/23/01), 804
So.2d 27, 29 (emphasis added). Implicit in that definition is the
conclusion that a defendant is not required to raise an issue as an
affirmative defense if it does not raise a “new matter.” Moreover, the
purpose of the rule established by La. C.C.P. art. 1005, requiring that
defendants specially plead affirmative defenses, is “to give fair notice
of the nature of the defense and thereby prevent a last minute surprise
to the plaintiff.” Jd.

Bienvenu y. Allstate Ins. Co., 01-2248, pp. 5-6 (La.App. 4 Cir. 5/8/02), 819 So.2d
1077, 1080.

bho
ba

Based on the fact that Zurich was both the WC insurer and UM provider in
this matter, we find that the Baacks had fair notice of the credit issue and were not
surprised when Zurich raised the issue in its partial summary judgment motion. It is
undisputed that Mr. Baack was employed by Pilgrim’s. The trial court noted this in
its April 28, 2017 judgment denying Zurich’s summary judgment motion on the UM
coverage issue. Additionally, the Baacks admitted in the August 13, 2018 joint pre-
trial order, that Mr. Baack was injured while in the course and scope of his
employment, and the Baacks and Zurich both listed the credit issue as a legal issue
to be decided at trial. Finally, Mr. Baack admitted that beginning in August 2015,
he began receiving $619.00 per week in workers’ compensation benefits as a result
of this accident. He admitted that he “still [receives] 619 [sic] from somebody. |
don’t know who it’s from.”

In Boudreaux v. State, Department of Transportation and Development, 00-
50 (La.App. | Cir. 2/16/01), 780 So.2d 1163, writ granted, 01-1329 (La. 6/29/01),
794 So.2d 804, writ dismissed, 01-1329 (La. 2/26/02), 815 So.2d 02 (per curiam),
the first circuit held that a defense raised in a joint pre-trial order properly placed the
defense at issue in the trial. Accordingly, we find that the Baacks had fair notice of
the credit issue, and the requirements of La.Code Civ.P. art. 1005 were satisfied.

Collateral Source Rule

The Baacks, in their fourth assignment of error, argue that the trial court erred
in granting partial summary judgment in Zurich’s favor, finding it was entitled to a
credit for all past and future WC benefits Mr. Baack would receive as a result of the
accident. While we agree that Zurich was not entitled to partial summary judgment
based on the evidence introduced in support of its motion, on the merits, we find that
it is entitled to a credit for the past medical expenses and lost wages Mr. Baack

received in WC benefits.

In Bellard v. American Central Insurance Company, 07-1335, 07-1399 (La.
4/18/08), 980 So.2d 654, the supreme court held that an employer’s UM carrier and
WC insurer were solidarily liable to an employee injured at the hands of an
underinsured tortfeasor, to the extent of the employee’s claim for medical expenses
and lost wages. Thus, the employee’s receipt of medical expenses and lost wages
through WC benefits exonerated the UM carrier’s liability for those same damages.
The supreme court further held that the collateral source rule would not apply to
deny the credit because under the facts of the case, the rule’s application did not
advance the public policy goals of tort deterrence and accident prevention and
because application would result in the employee receiving double recovery of his
damages for medical expenses and lost wages. In summation, the supreme court
stated, “The collateral source rule has no application in cases where the plaintiff is
injured in the course and scope of his employment at the hands of a third party
tortfeasor and the employer is without fault.” Jd. at 670. In Simmons v. Cornerstone
Investments, LLC, 18-735, p. 6 (La. 5/8/19), 282 So.3d 199, 203, the supreme court
further held that “it is clear that the collateral source rule is tethered to payments
actually received by the plaintiff.”

The facts in this case differ from those in Bellard only to the extent that the
UM provider and WC insurer are one and the same rather than different insurers as
in Bellard. Thus, we find an even greater reason for finding that the collateral source
rule does not apply in this instance. To hold otherwise would not only allow Mr.
Baack double recovery of his damages for past medical expenses and lost wages, it
would require Zurich to pay these damages twice. Accordingly, we find that Zurich
is entitled to a credit in the amount that Mr. Baack has actually for received medical

expenses and lost wages as WC benefits.

Past and Future Medical Expenses
In Menard v. Lafayette Insurance Co., 09-1869, pp. 12-13 (La. 3/16/10), 31
So.3d 996, 1006 (alterations in original), the supreme court set forth the
jurisprudence pertaining to awards for past and future medical expenses:

Under Louisiana law, a tort victim may recover past (from injury
to trial) and future (posttrial) medical expenses caused by tortious
conduct. Frank L. Maraist & Thomas C. Galligan, Jr., Louisiana Tort
Law § 7.02[1], 7-5(Michie 2009). The victim must, however, establish
he incurred past medical expenses in good faith as a result of his injury
and future medical expenses will more probably than not be incurred.
Stiles v. K Mart Corp., 597 So0.2d 1012, 1012 (La.1992)(remanding for
a determination of “an award for future medical expenses which the
medical evidence established that plaintiff, more probably than not, will
be required to incur”); Maraist & Galligan, supra, § 7.02[1], 7-5-7-6.
A plaintiff shows the probability of future medical expenses with
supporting medical testimony and estimations of their probable cost.
Smith v. Municipality of Ferriday, 05-755, pp. 11-12 (La.App. 3 Cir.
2/1/06), 922 So.2d 1222, 1231, writ denied, 06-0934 (La.9/29/06), 937
So.2d 860; Highlands Ins. Co. v. Missouri Pacific R. Co., 532 So.2d
317, 324 (La.App. 3d Cir.1988), judgment affirmed sub nom. Lee v.
Missouri Pacific R. Co., 540 So.2d 287 (La.1989); see also, Stiles, 597
So.2d at 1012 (referring to future medical expenses established by
medical evidence). Importantly, future medical expenses must be
established with some degree of certainty. Highlands, 532 So.2d at 324.
Nevertheless,

[w]hen the record establishes that future medical expenses
will be necessary and inevitable, the court should not
reject an award of future medical expenses on the basis
that the record does not provide the exact value of the
necessary expenses, if the court can examine the record
and determine from evidence of past medical expenses and
other evidence a minimum amount that reasonable minds
could not disagree will be required.

Stiles, 597 So.2d at 1012. The proper standard for determining whether
a plaintiff is entitled to future medical expenses is proof by a
preponderance of the evidence the future medical expense will be
medically necessary. Hoskin v. Plaquemines Parish Gov't, 97-0061
(La.App. 4 Cir. 12/1/97), 703 So.2d 207, 211, writ denied, 98-270, 98-
271 (4/3/98), 717 So.2d 1129.

Notably, it is well acknowledged an award for future medical
expenses is in great measure highly speculative and not susceptible to
calculation with mathematical certainty. Highlands, 532 So.2d at 324.
It follows, therefore, such awards “generally do not involve
determining the amounts, but turn on questions of credibility and

25

inferences, i.e., whose experts and other witnesses does the jury
believe?” Maraist & Galligan, supra, § 7.02, 7-4.

A summary introduced by the Baacks totaled Mr. Baack’s past medical
expenses at $259,210.17. However, the parties stipulated that the amount actually
paid through WC was $79.038.11. All WC medical expenses are paid based on a
reimbursement schedule, and any expense in excess of the reimbursement schedule
amount is not “recoverable against the employee, employer, or workers’
compensation insurer.” La.R.S. 23:1034.2(A), (D). Moreover, medical expenses
paid in excess of the reimbursement schedule do not qualify as collateral source
funds recoverable by the employee. Simmons, 282 So.3d 199. In Simmons, the
supreme court stated:

[T]here is no basis to differentiate between the “written off’ amount
created by a reduced reimbursement fee under the Workers’
Compensation Act and those of a Medicaid program or an attorney-
negotiated medical discount. (See Bozeman [v. State, 03-1016 (La.
7/2/04), 879 So.2d 692,] and Hoffman [v. 21st. Century N. Am. Ins. Co.,
14-2279 (La. 10/12/15), 209 So.3d 702]). The bottom line is that the
plaintiffs in each of these situations did not actually incur, and need not
repay, the “written off’ amounts at issue. Such amounts are illusory in
that they are never statutorily susceptible of being paid by the plaintiffs.
In the instant case, Plaintiff did not contribute to his employer’s
workers’ compensation insurance premiums nor did he otherwise pay
any consideration for the benefits. The healthcare providers, by law,
cannot charge him for more than what the fee schedule allows. La. R.S.
23:1034.2(D). This reduction is not the benefit of some bargain struck
by Plaintiff; rather, in much the same way that medical expenses
covered by Medicaid are limited by statute, so too are the medical
expenses limited purely by operation of the Workers’ Compensation
Act. Thus, Plaintiff's patrimony was not diminished. Therefore, any
recovery in addition to the reduced amount of medical bills would be a
windfall to Plaintiff and against the rationale behind the collateral
source rule. The discounted rate accurately reflects Plaintiff's
compensatory damages, and anything beyond that rate would amount
to punitive damages. Plaintiff's ability to fully recover and to be made
whole is adequately represented by the availability of the reduced
medical bills.

Id. at 205.

Accordingly, we find that Mr. Baack has incurred $79,038.11 in past medical
expenses. However, after applying Zurich’s credit for this amount, the award is
reduced to zero.

With regard to future medical expenses, we find that Mr. Baack has proven,
by a preponderance of the evidence, that he will require annual follow-up visits,
including radiographs, with Dr. Kerr for two years and a CT scan at the end of the
two-year period. He will also require sixteen weeks of physical therapy over the
next two years and, at the least, two sacroiliac joint injections. We further find that
Mr. Baack will require future treatment by Dr. Kerr, physical therapy, and, at least,
two steroid injections ten years out as a result of the anticipated degeneration at L3-
4. Although Drs. LeGlue and Kerr both discussed the possibility of future back
surgery, Dr. Kerr, Mr. Baack’s treating physician, could not say that more probably
than not the surgery would be necessary. We further find that the Baacks failed to
prove that more probably than not Mr. Baack would require future pain management
treatment. Although Dr. Kerr was happy for this treatment to continue, he twice
stated that he left the decision for future treatment to the pain management physician.
Because no evidence presenting this physician’s opinion was introduced into the
record, we find that the Baacks failed to prove the future medical necessity of this
treatment.

Accordingly, based on our review of the medical billing records introduced
into evidence, we find that Mr. Baack will require $29,497.00 in future medical
expenses. Thus, we award him $27,890.83 as the present value thereof.

Lost Wages and Future Loss of Earning Capacity

A plaintiff is entitled to damages for lost wages upon proof that, but for the

accident, he would have been earning wages. Boyette v. United Servs. Auto. Ass'n,

00-1918 (La. 4/3/01), 783 So.2d 1276. The award is based upon the plaintiff's past

27

earnings and the length of time he was unable to work because of the accident. /d.
Although the accident occurred on July 18, 2014, Mr. Baack continued working
approximately one year following the accident. He was terminated by Pilgrim’s and
then began receiving WC indemnity benefits on August 11, 2015. Accordingly,
based on Mr. Baack’s earnings of $52,618.28 per year and the 3.1 years he was
unable to work, we find that he incurred $163,116.67 in past lost wages. The parties
stipulated that Mr. Baack received $100,278.00 in WC wage benefits as of
September 4, 2018. Thus, based on Zurich’s credit in this amount, we award Mr.
Baack $62,838.67 in damages for past lost wages.

Determining an award for future loss of earning capacity is not as simple a
calculation as an award for past lost wages. In Meyers v. Broussard, 96-1634, pp.
18-19 (La.App. 3 Cir. 5/21/97), 696 So.2d 88, 98, this court reviewed the burden of
proof and the factors to be considered for awarding these damages:

Before [the plaintiff] can recover for her loss of future earning capacity,
she must prove the loss, not with mathematical certainty, but with
reasonable certainty. Gauthier v. Kansas City S. R. Co., 96-529
(La.App. 3 Cir. 11/6/96); 682 So.2d 993, writ denied, 96-2918
(La.1/24/97); 686 So.2d 867. Future loss of earnings is inherently
speculative and must be proven with a reasonable degree of certainty;
purely conjectural or uncertain future lost earnings will not be allowed.
Perritt v. Commercial Union Ins. Co., 95-1274 (La.App. 3 Cir. 3/13/96);
673 So.2d 215, writ denied, 96-1751 (La.10/11/96); 680 So.2d 644. An
award for loss of future earning capacity is not based merely upon the
difference between the injured person’s pre-accident wages and post-
accident wages but rather it should be based on the difference between
the injured person’s earning capacity before and after the accident.
Hollie v. Beauregard Parish Police Jury, 96-198 (La.App. 3 Cir.
8/28/96); 680 So.2d 1218.

In determining the proper amount to be awarded, the trier of fact
should consider the injured person’s age, life expectancy, work life
expectancy, investment income factor, productivity increase, prospects
for rehabilitation, probable future earning capacity, loss of future
earning capacity, loss of earning ability, and inflation. Gauthier, 96-
529; 682 So.2d 993. Our review of this award is governed by the
manifest error standard. Veazey v. State Farm Mut. Auto. Ins., 587
So0.2d 5 (La.App. 3 Cir.1991). “The appellate question is not whether

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a different award may have been more appropriate, but whether the trial
court’s award can be reasonably supported by the record.” /d. at 7.

Mr. Baack turned fifty-nine the last day of the trial, and he had a life
expectancy of 23.3 years and a work-life expectancy of 6.9 years. He quit school in
the ninth grade and worked for Country Pride until 1981.’ He then worked as a
roughneck in the oilfield for approximately five years, before returning to ConAgra.
During his twenty-eight-year stretch of employment with ConAgra and then
Pilgrim’s, he caught chickens, worked as a yard hand, welder’s helper, utility hand,
forklift operator, and truck driver. He was employed as a truck driver at the time of
the accident.

A July 2, 2018 functional capacity examination (FCE), performed by Dr.
Steve Allison, restricted Mr. Baack to modified light duty work, with the following
accommodations and restrictions. Frequent sitting, standing, and walking, with
hourly interruptions to stand, walk, or sit. Lifting floor to waist—occasionally
fifteen pounds for objects located at least twelve inches above floor level; no lifting
for objects located below twelve inches above floor level. Lifting waist to
shoulder—twenty pounds occasionally and ten pounds frequently. Lifting above the
shoulder—twenty pounds occasionally. Carrying at waist level—twenty pounds
occasionally and ten pounds frequently; pushing/pulling twenty-pounds force
occasionally and ten pounds-force frequently. Climbing, balancing, and stooping
occasionally, but no kneeling, crouching, or crawling. Reaching with left and right
arm—forward constantly and overhead frequently.

Dr. Allison determined that Mr. Baack’s lower back was at its maximum
rehabilitation potential, which left him with a severe and permanent functional

impairment. He further opined that “Mr. Baack’s prognosis for adjusting to other

" Country Pride and ConAgra were both earlier iterations of Pilgrim’s.

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work is poor based on his age, education, work experience, and the severity of his

”

functional limitations.” Dr. Allison opined that Mr. Baack could no longer safely
drive trucks unless his employer accommodated his limitations and restrictions,
which included driving no more than four hours a day, with hourly interruptions to
stand and walk. Dr. Kerr agreed with these findings. Dr. LeGlue suggested that Mr.
Baack should be restricted from lifting more than twenty pounds for the rest of his
life.

Testing administered by both parties’ vocational rehabilitation experts
revealed that Mr. Baack is functionally illiterate. Mr. Baack reads and comprehends
at the first grade or just below the first grade level; he performs math at the second
grade level; his verbal skills are below average; and his nonverbal skills and his
overall IQ composite are in the lower extreme. Ted Deshotels, the Baacks’ expert,
opined that because Mr. Baack lacks a high school degree and is illiterate, the only
employment available to him is entry-level employment. Thus, he felt that Mr.
Baack’s best chance for employment would be in the fast food industry, but for the
fact that these jobs, which require four to eight hours of standing and lifting up to
fifty pounds, exceed his physical restrictions. Mr. Deshotels stated that he found no
jobs that he felt more probably than not would allow Mr. Baack to maintain secure
employment. Although he agreed that cashier, security guard, and production
assembly line jobs are usually light duty, he stated that these jobs were beyond Mr.
Baack’s physical restrictions and educational limitations.

Although Zurich’s vocational rehabilitation expert identified four potential
jobs, Mr. Deshotels testified that they also exceeded Mr. Baack’s restrictions and
educational limitations. The four jobs were for a driver/transporter for a car rental

company; a food service worker at the university; a delivery driver for a restaurant;

and a custodian, to clean offices. Mr. Deshotels stated that the driver/transporter job

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required a high school degree; the food service worker job exceeded Mr. Baack’s
standing/walking restrictions; a typical delivery driver job is medium duty, involving
loading/unloading, quick stops, time constraints, and the ability to read; and
custodial jobs are typically medium duty, requiring the ability to lift up to fifty
pounds.

Considering the foregoing, we find that Mr. Baack’s permanent physical
impairment and physical restrictions, when combined with his functional illiteracy,
render him unemployable. Based on his $52,618.28 per year earnings and his 6.9
years of work-life expectancy, we find that Mr. Baack will lose $363,066. 13 in future
earnings. Thus, we award him $354,026.02 as the present value of this award.

Accordingly, Mr. Baack is awarded $425,000.00 in general damages and
$444,755.52 in special damages, for a total damage award of $869,755.52. Applying
the settlement credit of $10,449.27° to this amount, judgment is rendered awarding
Mr. Baack a total of $859,306.25 in damages. Based on our damage awards and the
proof introduced establishing the $15,000.00 policy limits of Mr. McIntosh’s vehicle,
the Baacks established their right to proceed against the UM coverage provided by
Zurich’s policy.

Loss of Consortium

The Baacks sought damages for loss of consortium on behalf of Mrs. Baack
and their six-year-old daughter, Allissah. In addition to the “loss of general overall
happiness,” loss of consortium encompasses “love and affection, society and
companionship, sexual relations, the right of performance of material services, the

right of support, aid, and assistance, and felicity.” Bellard v. S. Cent. Bell Tel. Co.,

: Although the Baacks’ settled with Mr. McIntosh for his $15,000.00 policy limits, the
parties stipulated that Zurich, as WC insurer, was reimbursed $4,550.76 from the settlement
proceeds. According, we reduce Mr. Baack’s damage award by $10,449.24.

~

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96-1662, p. 21 (La.App. 3 Cir. 8/27/97), 702 So.2d 695, 707, writ denied, 97-2415
(La. 12/12/97), 704 So.2d 1202. A spouse’s burden of proof for loss of consortium
is three-fold. She must prove the defendant’s liability, her spouse’s damages, and
her resulting loss of consortium. Detraz v. Hartford Accident & Indem. Co., 94-708
(La.App. 3 Cir. 12/7/94), 647 So.2d 576. A minor child bears the same burden of
proof absent “the sexual component.” /d. at 581.

The record reveals that Mrs. Baack and Allissah have both suffered a loss of
consortium because of Mr. Baack’s injuries. They no longer socialize with their
relatives or friends, hold fish fries, or attend crawfish boils. Mr. Baack no longer
hunts with Mrs. Baack or fishes with her and Allissah, and their visits to their Toledo
Bend fish camp have greatly decreased.

Mrs. Baack stated that she and Mr. Baack have no sex life since the accident
because of his back pain. She said that he is no longer able to play ball with Allissah;
thus, she stated that Allissah is always questioning why he no longer plays with her.
She stated that Mr. Baack can no longer perform maintenance on or wash their
vehicles, mow the grass, till the garden, or lift anything. Mrs. Baack testified that
since his surgery, Mr. Baack is unable to do anything at home and that he stays more
to himself. She said that he is harder to get along with since the accident, and as a
result, they quarrel more now than they did previously.

Based on the foregoing, we award damages in the amount of $35,000.00 and
$7,500.00 to Mrs. Baack and Allissah, respectively, for loss of consortium.
Penalties and Attorney Fees

The Baacks also sought penalties and attorney fees pursuant to La.R.S.
22:1973 and La.R.S. 22:1892. The Insurance Code requires an insurer to pay a claim
within thirty days after receipt of satisfactory proof of loss, and the failure to pay

within that time period, if found to be arbitrary, capricious, or without probable cause,

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subjects the insurer to penalties and reasonable attorney fees. La.R.S. 22:1892(A),
(B)(1). Under the fraud and unfair trade practices chapter of the Insurance Code, an
insurer has an affirmative duty to adjust claims fairly and promptly, and the failure
to pay within sixty days after receiving satisfactory proof of loss, if found to be
arbitrary, capricious, or without probable cause, may result in the assessment of
penalties against the insurer. La.R.S. 22:1973{A), (B)(5), (C).

In Guidry v. USAgencies Casualty Insurance Co., Inc., 19-602, pp. 8-9
(La.App. 1] Cir. 12/27/19), 294 So.3d 13, 21, writ denied, 20-343 (La. 5/1/20), _
So.3d__, the first circuit stated:

One who claims entitlement to penalties and attorney fees has the
burden of proving the insurer received satisfactory proof of loss as a
predicate to a showing that the insurer was arbitrary, capricious, or
without probable cause. Reed [v. State Farm Mut. Auto. Ins. Co.],
[03-107 (La. 10/21/03),] 857 So.2d [1012,] 1020. A “satisfactory proof
of loss” is that which is sufficient to fully apprise the insurer of the
insured’s claim. Louisiana Bag Co., Inc. v. Audubon Indem. Co.,
2008-0453 (La. 12/2/08), 999 So.2d 1104, 1119; MeDill v. Utica Mut.
Ins. Co., 475 So.2d 1085, 1089 (La. 1985). To establish a “satisfactory
proof of loss, “the insured must show that the insurer received sufficient
facts which fully apprise the insurer that (1) the owner or operator of
the other vehicle involved in the accident was uninsured or
underinsured, (2) that he was at fault, (3) that such fault gave rise to
damages, and (4) establish the extent of those damages. McDill, 475
So.2d at 1089. The sanctions of penalties and attorney fees are not
assessed unless a plaintiff's proof is clear that the insurer was in fact
arbitrary, capricious, or without probable cause in refusing to pay.
Reed, 857 So.2d at 1021. The phrase “arbitrary, capricious, or without
probable cause” is synonymous with “vexatious,” and a “vexatious
refusal to pay” means “unjustified, without reasonable or probable
cause or excuse.” Louisiana Bag, 999 So.2d at 1114.

An insurer’s conduct depends on the facts known to the insurer
[at] the time of its action. Penalties should not be assessed when the
insurer has a reasonable basis to defend the claim and acts in good-faith
reliance on that defense. Louisiana Bag, 999 So.2d at 1114.
Especially when there is a reasonable and legitimate question as to the
extent and causation of a claim, bad faith should not be inferred from
an insurer’s failure to pay within the statutory time limits when such
reasonable doubts exist. Reed, 857 So.2d at 1021. In those instances
where there are substantial, reasonable, and legitimate questions as to
the extent of an insurer’s liability or an insured’s loss, failure to pay

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within the statutory time period is not arbitrary, capricious or without
probable cause. Louisiana Bag, 999 So.2d at 1114.

After a de novo review, we find that Zurich’s failure to pay Mr. Baack’s claim
was not arbitrary, capricious, or without probable cause. Although Zurich based its
refusal to pay in part on its interpretation of the 2014 UM selection form, it also
based it on the grounds that the Baacks failed to establish satisfactory proof of loss.
We agree.

Counsel for the Baacks faxed a total of eleven letters to Zurich requesting
payment for medical expenses incurred by Mr. Baack as a result of the July 18, 2014
accident. The first letter was sent to Zurich one day before the Baacks’ amended
their petition to add Zurich, as the UM provider of Mr. Baack’s work vehicle, as a
defendant and alleged they were entitled to penalties and attorney fees based on
Zurich’s failure to timely settle Mr. Baack’s claim pursuant to La.R.S. 22:1973 and
La.R.S. 22:1892.

The Baacks bore the burden of proving that Zurich failed to comply with the
time constraints contained in these statutes. Ullah Inc. v. Lafayette Ins. Co., 09-1566
{La.App. 4 Cir. 12/17/10), 54 So.3d 1193, writs denied, 11-100, 11-134 (La.
3/25/11), 61 So.3d 665. Based on the medical billing records introduced into
evidence, we find that a large number of the medical expenses had already been paid
by Zurich, as WC insurer, before the Baacks’ sent their requests. In fact, counsel for
the Baacks admitted, in an October 13, 2017 faxed letter to Zurich’s counsel,
“Regarding Mr. Baack’s medical expenses, I am not aware of any medical expenses
that have not been submitted to Zurich for payment nor am | aware of any medical
bills that have not been paid by Zurich.” Mr. Baack, when asked if his past medical

expenses had been paid by his employer or WC insurer, stated, “I assume they have.”

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He further admitted that he had not paid any of his medical expenses resulting from
this accident.

Accordingly, because Mr. Baack admitted that his medical expenses are the
responsibility of his employer and its WC insurer (also Zurich), we find that the
Baacks failed to prove that Zurich, as UM provider, was arbitrary, capricious, or
without probable cause in failing to pay the requested medical expenses within the
statutory time limit. Whether these medical expenses were timely paid is a matter
that should be taken up under Mr. Baack’s WC claim. Thus, their claim for penalties
and attorney fees is denied.

Court Costs

Finally, the Baacks argue that the trial court erred in assessing them with all
court costs. Following the jury verdict, the trial court rendered judgment on
September 25, 2018, dismissing the Baacks’ claims against Zurich and casting them
with all costs. On April 23, 2019, the trial court granted Zurich’s motion to tax the
Baacks with $15,606.05 in court costs. This judgment is the subject of a separate
appeal. Baack v. McIntosh, 19-657 (La.App. 3 Cir. _/_/20), _So.3d_. Based on the
reversal of the jury verdict and our judgment in their favor, we reverse the trial court
judgment assessing the Baacks with all court costs and render judgment assessing
Zurich with these costs. Accordingly, we remand the matter to the trial court for a
cost determination.

DISPOSITION

For the foregoing reasons, the judgment of the trial court, based on the jury’s
verdict finding that the auto policy issued by Zurich American Insurance Company
did not provide uninsured motorist coverage, is reversed; and judgment is rendered
in favor of Martin and Brenda Baack, individually and on behalf of their minor child

Allissah, finding that Zurich American Insurance Company’s auto policy provides

35

up to $5,000,000.00 in uninsured motorist coverage for the injuries Mr. Baack
suffered as a result of the July 18, 2014 accident. Judgment is rendered in favor of
Martin Baack, awarding him $425,000.00 in general damages and $444,755.52 in
special damages, for a total damage award of $859,306.25. Judgment is further
rendered in favor of Brenda Baack, awarding her $35,000.00 in damages for loss of
consortium, and in favor of Allissah Back, awarding her $7,500.00 in damages for
loss of consortium. The judgment of the trial court assessing the Baacks with
$15,606.05 in court costs is reversed, and judgment is rendered assessing Zurich
American Insurance Company with all court costs from the trial court proceeding,
with the matter remanded to the trial court for a determination of those costs. All
costs of this appeal costs are assessed to Zurich American Insurance Company.

REVERSED AND RENDERED; AND REMANDED.

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