Anthony Chenevert and Cindy Langwell v. Rodney Lee Johnson, Jr.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

17-561

ANTHONY CHENEVERT AND CINDY LANGWELL

VERSUS

ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY

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ON WRIT OF CERTIORARI FROM THE
TWELFTH JUDICIAL DISTRICT COURT,
AVOYELLES PARISH, STATE OF LOUISIANA
CIVIL SUIT NO. 2016-2822, Div. “A”
HONORABLE KERRY SPRUILL, PRESIDING JUDGE

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JOHN E. CONERY
JUDGE

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Court composed of John D. Saunders, Shannon J. Gremillion, and John E. Conery,
Judges.

WRIT GRANTED AND MADE PEREMPTORY.

L. Lyle Parker
Christina S. Slay
P.O. Box 11590
Alexandria, Louisiana 71315-1590
(318) 445-8236
COUNSEL FOR DEFENDANT/APPLICANT:
Allstate Property and Casualty Insurance Company

Cory P. Roy
Brandon J. Scott
Benjamin D. James
Renee Y. Roy
107 North Washington Street
Marksville, Louisiana 71351
(318) 240-7800
COUNSEL FOR PLAINTIFFS/RESPONDENTS:
Anthony Chenevert and Cindy Langwell

CONERY, Judge.

Defendant-Relator, Allstate Property and Casualty Insurance Company

(Allstate), seeks supervisory writs from the judgment of the Twelfth Judicial

District Court, Parish of Avoyelles, the Honorable Kerry Spruill presiding, which

denied Allstate’s motion for summary judgment on the issue of insurance

coverage. For the following reasons, Allstate’s writ is granted and made

peremptory. All claims made against Allstate by Plaintiffs/Respondents, Anthony

Chenevert and Cindy Langwell are dismissed with prejudice. All costs are

assessed to Plaintiffs/Respondents, Anthony Chenevert and Cindy Langwell.

STATEMENT OF THE CASE

This suit arises out of an automobile accident that occurred on October 15,

2015, involving plaintiffs, Anthony Chenevert and Cindy Langwell, and a vehicle

driven by Rodney Lee Johnson, Jr., but owned by Katelin Firmin.

Plaintiffs/Respondents, Anthony Chenevert and Cindy Langwell filed suit against

Allstate, alleging it provided coverage to Mr. Johnson under its policy issued to

Ms. Firmin. In November 2016, Allstate filed its motion for summary judgment,

asserting that coverage was not in place for Ms. Firmin or Mr. Johnson on the date

of the accident because the policy previously issued to Ms. Firmin had been

cancelled due to non-payment of her insurance premium on September 15, 2015.

Notice Of Non-Payment of Insurance Premium
The facts are undisputed that on August 15, 2015, Ms. Firmin forwarded a

payment to Allstate for a premium due on the subject policy. 1 The automatic

payment form Ms. Firmin’s account was not honored due to insufficient funds on

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In reviewing the cancellation notice, it appears payment was attempted by automatic
electronic withdrawal from Ms. Firmin’s checking account, and not an actual written check
payment.

August 20, 2015, and Allstate forwarded a notice of cancellation to the insured on

August 26, 2015. The notice provided:

Auto policy cancellation notice for non-payment of
premium
...
If you want your insurance coverage to continue and do not want it to
cancel, please make sure we receive the minimum amount due by the
end of the day (midnight) on September 14, 2015 or your policy will
cancel at 12:01 a.m. Standard Time on September 15, 2015.
...
For your convenience, you can make a payment by Check-By-Phone
or Credit/Debit Card 24 hours a day, 7 days a week . . . or visit My
Account at www.allstate.com.
...
The Minimum Amount due includes a Past Due Amount of $404.85.
As a result of being unable to collect your premium from your
account, you have been removed from the automatic payment plan.
You must remit payment so that it is received on or before the Cancel
Date indicated on this notice or your policy will be cancelled.

A $15.00 fee has been applied as a result of the unsuccessful bank
transaction.

Despite the notice of payment due from Allstate, the extra time given for

payment and the multiple ways that payment could be made to insure that the

policy remained in force and effect, Ms. Firmin did not make the required payment

of her insurance premium, which would have reinstated her policy, until October

16, 2015, the day after the accident.

Plaintiffs/Respondents opposed Allstate’s motion for summary judgment,

arguing issues of material fact existed as to whether the cancellation letter met the

strict requirements of La.R.S. 22:1266(D), namely (1) whether notice was sent

“immediately” after the receipt of the returned check, and (2) whether the notice

advised Ms. Firmin, as per the statutory language in La.R.S. 22:1266 (D)(3)(b)(ii),

“that the policy shall be reinstated effective from the date the premium payment

was due for the term of the policy only if the named insured or his legal

representative presents to the insurer a cashier’s check or money order for the full
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amount of the returned check or other negotiable instrument within ten days of the

date that the notice of cancellation was mailed.”

After hearing oral argument of counsel, the trial court denied Allstate’s

motion for summary for the following reasons stated on the record:

As you all know we’re at summary judgment stage, we’re at
preliminary stages in these proceedings. And I do believe that the
statute has to be strictly construed under the circumstances and I do
not find that as a matter of law though it is a very technical defense,
that there was an effective cancellation consistent with the provisions
contained in Louisiana Revised Statute 22:1266, this particular part of
the statute that says that the insurer shall advise the named insured
that the policy shall be reinstated effective from the date that the
premium payment was due for the term of the policy only if the
named insured or it’s legal representative presents to the insured a
cashier’s check or money order for the full amount of the returned
check or other negotiable instrument within ten days of the notice of
cancellation was mailed. I think there are certain strict requirements
that have been placed on the insurance company and have to be met in
order to provide with what’s called an effective cancellation of the
policy.
It is not an effective cancellation and accordingly, the Motion
for Summary Judgment falling short of the legal requirements of
statute, summary judgment is denied under these circumstances. And
this is a fact limited case, the decision is fact limited to this situation
on this particular statute.

SUPERVISORY RELIEF
A court of appeal has plenary power to exercise supervisory jurisdiction over

trial courts and may do so at any time, according to the discretion of the court.

When the trial court’s ruling is arguably incorrect, a reversal will terminate the

litigation, and there is no dispute of fact to be resolved, judicial efficiency and

fundamental fairness to the litigants dictate that the merits of the application for

supervisory writs should be decided in an attempt to avoid the waste of time and

expense of a possibly useless future trial on the merits. Herlitz Const. Co., Inc. v.

Hotel Investors of New Iberia, Inc., 396 So.2d 878 (La.1981) (per curiam). This

supervisory jurisdiction may also be exercised to reverse a trial court’s denial of a

motion for summary judgment and to enter summary judgment in favor of the
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mover. Csaszar v. Nat’l Cas. Co., 14-1273 (La.App. 3 Cir. 11/14/15), 177 So.3d

807.

ON THE MERITS

Standard of Review

Appellate courts review motions for summary judgment de novo, using the

identical criteria that govern the trial court’s consideration of whether summary

judgment is appropriate. Samaha v. Rau, 07-1726 (La. 2/26/08), 977 So.2d 880.

The reviewing court, therefore, is tasked with determining whether “the motion,

memorandum, and supporting documents show that there is no genuine issue as to

material fact and that the mover is entitled to judgment as a matter of law.”

La.Code Civ.P. art. 966(A)(3).

An insurer seeking to avoid coverage through summary judgment bears the

burden of proving that some provision or exclusion applies to preclude coverage.

Halphen v. Borja, 06-1465, (La.App. 1 Cir. 5/4/07), 961 So.2d 1201, writ denied,

07-1198 (La. 9/21/07), 964 So.2d 338. The issue of whether an insurance policy,

as a matter of law, provides or precludes coverage is a dispute that can be resolved

on summary judgment. Green v. State Farm Mut. Auto. Ins. Co., 07-94, (La.App.

1 Cir. 11/2/07), 978 So.2d 912, writ denied, 08-74 (La. 3/7/08), 977 So.2d 917.

However, summary judgment declaring a lack of coverage under an insurance

policy may only be rendered if there is no reasonable interpretation of the policy

when applied to the undisputed material facts shown by the evidence supporting

the motion under which coverage could be afforded. Id.

Statutory Interpretation

The issue before us is strictly one of statutory interpretation. Does the

notice sent to the insured have to meet the exact wording of the statute to be
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effective? We must decide whether the statutory notice requirements must be

complied with verbatim to effect a valid cancellation pursuant to La.R.S. 22:1266,

or whether the notice in this case is sufficient. Neither party disputes that the

notice sent by Allstate comports with the “spirit” of the law. Plaintiffs even

concede their argument is “absolutely a technical argument.”

Undeniably, the notice sent by Allstate to Ms. Firmin provides more time for

payment, more continued coverage, and more convenient and modern methods for

payment than statutorily required, but it does not contain the exact wording set

forth in the statute. Therefore, we are called upon to determine what level of

compliance is required in the application of the statutorily mandated cancellation

notice.

Jurisprudence has long held that the rules of statutory construction require

our courts to determine the intent and purpose of the legislature in enacting the law

and to give effect, if possible, to that intent and purpose. The supreme court has

long cautioned that “[c]ourts will not apply the rule of strict construction with such

technicality as to defeat the purpose of ascertaining the true meaning and intent of

the statute.” McElveen v. Goings, 116 La. 977, 41 So. 229 (1906).

The Louisiana Civil Code commands the courts to apply the letter of the law

unless the words or expressions are unclear, or its application leads to absurd

results, in which case only then may the courts look to the context of the words,

other statutes, and the spirit of the law. La.Civ.Code arts. 9, 10, 11, 12, and 13.

Therefore, while it is the court’s province to “consider the reason and spirit of a

law that brought about its enactment, Keelen v. State Dept. of Culture, Recreation,

and Tourism, 463 So.2d 1287 (La.1985), it is not free to rewrite the law to effect a

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purpose that is not otherwise expressed.” Backhus v. Transit Cas. Co., 549 So.2d

283, 291 (La.1989).

Pursuant to this rule, it is the duty of the court to apply the statute as written

unless a literal application would lead to an absurd result, at which point the letter

of the law must give way to the spirit so as to produce a reasonable result. Smith v.

State, Through Dep’t of Pub. Safety, 366 So.2d 1318 (La.1978); Dore v. Tugwell,

84 So.2d 199 (La.1955).

Applicable Statutes

Louisiana Revised Statute 22: 1266(B)(1) provides the applicable statutory

law on the issue of cancellation of an automobile liability insurance policy and

provides, in pertinent part, “A notice of cancellation of a policy shall be effective

only if it is based on one or more of the following reasons:

(a) Nonpayment of premium.”

The pertinent parts of La. R.S. 22:1266(D) state the requirements for an

effective notice of cancellation of an insurance policy for nonpayment of a policy

premium at issue in this case:

(3)(a)(i) Payment of an initial, renewal, or installment insurance
premium by the insured to an insurer or a producer with a check or
other negotiable instrument which is returned to the payee by the
institution upon which it is drawn for insufficient funds available in
the account, for lack of credit, for the reason the account is closed, for
stopped payment, or for any other reason shall be deemed grounds for
the insurer to cancel the binder or policy from the date the premium
payment was due for the initial or renewal term, whichever is
applicable.

(ii) The provisions of this Paragraph shall apply to automobile liability
policies and to property, casualty, and liability policies.

(b)(i) The producer shall immediately, and in no case later than ten
days after the producer or premium finance company has received
notice of the returned check or negotiable instrument, notify the
insurer of the receipt of the returned check or negotiable instrument.

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(ii) The insurer shall immediately, and in no case later than ten days
after the producer or premium finance company has notified the
insurer, notify the named insured, by certified mail or delivering to the
named insured a written notice that the policy is canceled from the
date the premium payment was due. The insurer shall advise the
named insured that the policy shall be reinstated effective from the
date the premium payment was due for the term of the policy only if
the named insured or his legal representative presents to the insurer a
cashier's check or money order for the full amount of the returned
check or other negotiable instrument within ten days of the date that
the notice of cancellation was mailed.
...
F. Proof of mailing of notice of cancellation, or of intention not to
renew or of reasons for cancellation, to the named insured at the
address shown in the policy, shall be sufficient proof of notice.

These requirements are “mandatory and are designed to notify the insured

his policy is being terminated, to provide the reason for the termination and to

afford him ample time to obtain other insurance protection.” Lemons v. Safeway

Ins. Co. of La., 02-687 (La.App. 3 Cir. 12/27/02), 835 So.2d 908, writ denied, 03-

0285 (La. 4/4/03), 840 So.2d 1217 (interpreting La.R.S. 22:636.1 renumbered

La.R.S. 22:1266 by 2008 La. Acts No. 415, § 1).

Although conceding its cancellation letter did not contain the exact statutory

language, Allstate argues the trial court erred in denying its summary judgment

motion because the cancellation notice did in fact comply with all the statutory

requirements: (1) the notice was forwarded on August 26, 2015, at least ten days

prior to the date the cancellation would become effective, September 15, 2015; (2)

the notice was forwarded with proof of mailing to the named insured at the address

shown in the policy; (3) the notice advised the insured, Ms. Firmin, that her

insurance coverage would not be canceled effective August 15, 2015, the date of

the premium for which payment was returned, but instead that the cancellation of

her policy would be effective at 12:01a.m. Standard Time on September 15, 2015.

Therefore, Allstate’s cancellation notice, in effect gave its insured, Ms. Firmin, and

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the driver of her vehicle, defendant, Mr. Johnson, continued coverage for a full

month past the August 15, 2015 date her policy premium was due; (4) the notice

contained a transaction history outlining the return of her policy premium payment

on August 20, 2015, due to the insufficiency of funds, and an explanation of the

minimum amount due; and (5) the notice explained the methods available for

making said payment, which methods, i.e., credit/debit card or checking account

payments by phone or website, which are more generous than the statutory

methods of cashier’s check, money order, or “other negotiable instrument.”

While strict construction is required in the application of La.R.S. 22:1266,

there is no requirement that the cancellation notice quote the exact language from

the statute. The information contained in the notice sent by Allstate to Ms. Firmin

was more than sufficient to advise her of the steps she needed to take to maintain

her automobile insurance coverage, and fully complied with the intent and

provisions of the statute. The language of the notice clearly stated that failure to

pay her automobile insurance premium by one of the several options listed in the

notice would result in the cancellation of her automobile insurance coverage at

12:01 a.m. on September 15, 2015.

In compliance with La.R.S.22:1266 (D)(3)(b)(ii), the notice sent to Ms.

Firmin specifically stated, “If you want your coverage to continue and do not want

it to cancel, please make sure that we receive the minimum amount due by the end

of the day (midnight) on September 14, 2015 or your policy will cancel at 12:01

a.m. Standard Time on September 15, 2015.”

It is undisputed that Ms. Firmin did not pay her automobile insurance

premium by midnight on September 14, 2015, but instead paid her premium more

than one month later on October 16, 2015, the day after the accident. This,

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despite a complete explanation of the methods available for payment of the

minimum amount due, and the date the notice of cancellation of the policy was

effective.

In opposition, plaintiffs argue that there is a genuine issue of material fact as

to whether the notice of cancellation was sent “immediately,” given that the check

was returned on August 20, 2015, but Allstate did not forward the notice of

cancellation until August 26, 2015. However, we find there is no genuine issue of

material fact on the timeliness of Allstate’s notice, given the notice was actually

sent within the 10-day timeframe allowed by the statute. Therefore, this argument

by the plaintiffs is without merit.

Plaintiffs further point out that the notice does not contain the necessary

notification regarding reinstatement of the insurance policy upon payment by

cashier’s check, money order or “other negotiable instrument.” Therefore,

plaintiffs claim the notice was ineffective, and the policy at issue remained in

effect on the date of the accident.

The statute at issue requires the insured be given an opportunity to reinstate

the policy, within 10 days of the mailing of the notice, by paying the amount of the

returned check by either cashier’s check, money order, or “other negotiable

instrument within ten days of the date that the notice of cancellation was made.”

In this instance, Allstate has actually given more options to its insured than

statutorily required. The notice sent to Ms. Firmin did not state an intention to

cancel her policy effective on August 15, 2015, the due date of the premium

payment, and for which the payment was returned due to insufficient funds. In

fact, the notice stated her insurance coverage would continue in force and effect

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until 12:01 a.m. Standard Time on September 15, 2015 if payment of the premium

was made on or before midnight on September 14, 2015.

Accordingly, there would have been no reason for the notice sent by Allstate

to Ms. Firmin to state that the policy “shall be reinstated effective from the date the

premium payment was due for the term of the policy only if the named insured or

his legal representative presents to the insurer a cashier’s check or money order for

the full amount of the returned check or other negotiable instrument within ten

days of the date that the notice of cancellation was mailed.” La.R.S. 1266

D(3)(a)(ii) The insurance policy issued to Ms. Firmin by Allstate was still in full

force and effect until September 15, 2015 at 12:01 a.m. Standard Time.

It is undisputed that Ms. Firmin chose not to take advantage of any of the

many different opportunities presented by Allstate for payment of her insurance

premium. Therefore, we find that Allstate’s cancellation notice more than fully

complied with the legislative provisions and the intent of the statute. Smith, 366

So.2d 1318 (La.1978). We find than an insured cannot simply ignore a valid

notice of cancellation with provisions for re-instatement more favorable than the

statute actually requires, wait more than thirty days after the effective date of

cancellation, and then try to send in a policy payment the day after a non-covered

accident occurs. Such a statutory construction would produce an absurd result.

Accordingly, the plaintiffs’ second argument in opposition to Allstate’s motion for

summary judgment is also without merit.

CONCLUSION

For the foregoing reasons, we reverse the trial court’s denial of the motion

for summary judgment and enter summary judgment in favor of Allstate Property

and Casualty Insurance Company. The plaintiffs, Anthony Chenevert and Cindy

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Langwell’s claims against Allstate Property and Casualty Insurance Company are

dismissed with prejudice. All costs of this proceeding are assigned to the

plaintiffs, Anthony Chenevert and Cindy Langwell.

WRIT GRANTED AND MADE PEREMPTORY.

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