Insurance

Simmons v. Weiymann

(1) 3 minors on a 4-wheeler ran a stop sign and hit a vehicle. (2) Homeowner's policy issued to ATV's owner excluded coverage for injury arising out of the use of motor vehicles (incl. "all-terrain vehicle") (3) Claim against ATV owner for negligent supervision was excluded b/c use of the motor vehicle was essential to that theory of liability

Lejeune v. Allstate

(1) Facts a. Funeral procession led by sheriff's deputy. Sheriff stopped at flashing red light at an intersection, then kept going. Car speeding through (had flashing yellow light) hit the driver of the hearse & killed him. b. Sheriff had two insurance policies that were sued over: i. Law enforcement officer's professional liability policy (a) Provided coverage for breach of law officer's duty (b) Excluded liability arising out of use of an auto ii. Sheriff had auto liability coverage (2) LSC a. Issue: Did the accident arise out of use of the auto? b. Held: No i. "Liability did not arise out of the 'use' of the auto, but rather out of the breach of his law enforcement duties." (a) The duty was to protect the intersection. This duty that was violated did not involve the use of an automobile. c. Ct says it did NOT arise out of the use of the auto—he was using the car, but the source of the fault didn't arise out of the vehicle, the source of the fault not connected w/auto b/c it was from lack of training and how he escorted the funeral procession. d. Professional liability policy, which excluded operation of a MV, did cover (3) Rule: Focus on the duty breached to determine if the violation arose out of the use of an automobile (?)

Edwards v. Horstman

(1) Facts a. Instead of applying the brakes, the driver kept driving close to the other vehicle, whose passenger was brandishing a shotgun. b. The other car's passenger shot the P passenger of the other car. (2) Court a. Duty: drive defensively in face of a known hazard. b. Duty breached was of the auto driver to not drive into a situation that would be dangerous for him and passengers. c. Liability did arise out of auto use. There was coverage under auto policy, not homeowner's policy. B/c use of the auto was essential to the theory of driver's liability (breach of duty to his passenger to drive defensively).

Francois v. Ybarzabal

(1) Facts a. Jury instruction that there would be coverage if the jury found that the defendant reasonably believed that he had permission to use the car. (2) LASC a. The policy provision applicable was not the reasonable belief test. Instead, required proof that operator had the permission of named insured. i. Two different insurance policy tests, depending on what the policy says: (a) Express/implied permission (b) Reasonable belief of permission ii. These are two different tests, and should not be merged, as trial court did in its jury instructions

Rogillio v. Cazedessus

(1) Facts a. Mom and dad owned an auto insurance policy. Kid had dad's permission to drive the car. Kid & friend went to friend's house and left the car there to pick up dates. Kid leaves keys w/ friend's little bro to move the car, who goes for joyride and wrecks the car. (2) Issue: Is there coverage for the Friend's Sibling under Dad's policy? (3) Permission? a. Policy language: "The following are insureds under Part I: With respect to the owned auto...any other person using such auto, provided the actual use thereof is w/ the permission of the NI." i. Policy required actual permission of NI (either Mom or Dad) b. LSC: "Under the express wording of the policy, only the NI may give permission and thus afford coverage on a permittee." c. NIs did not give permission for the second permittee to use the car. d. NI=person on declaration page, spouse if resident of same household. So insured may have broader meaning than NI. e. Ct says Wm couldn't give permission b/c he's not a NI, so little brother did not have permission. Policy language controls. NO reasonable belief requirement, it's a question of whether NI gave express permission. (4) No coverage

Bolton v. North River

(1) Facts a. Passenger's hand was slammed into door of the vehicle (2) Court a. The accident arose out of use of the vehicle, so there was coverage under the personal auto policy b. "The use contemplated in a provision for coverage while an auto is used w/ the owner's consent generally is regarded as not limited to physical operation or driving."

Waits v. Indemnity

(1) Facts a. Vehicle was truck owned by company making repairs to railroad tracks. Truck was assigned to employee to transport other employees. b. Employee at end of the workday took the company's truck (assigned to employee) to go out drinking. On way back, employee wrecked truck. (2) LSC a. In the instructions given the employee, a deviation from the initial permission will not defeat coverage b. Initial permission rule stands. Coverage b/c he had initial permission c. "Scope of Permission" (1) Insurers tried to overcome the initial permission rule w/ a policy provision requiring that the operation be w/in the scope of permission

Banquer case

(1) Halliburton Company was typed in on the form. Signed by an individual as representative. Nothing indicated who the individual was or his capacity (2) LSC a. This was acceptable - the form only required NI or legal representative. b. Signature of NI - this has to be a representative for a corporation. So the form was adequately signed. c. Current Form: Requires signature, followed by "print name." Does not specify whose name to print. 9. Name of Insurer - required to be on the form (per 2008 amendment)

Morgan v. Matlack

(1) Issue: What is a specific prohibition? (2) Facts a. Father allowed son to take car to LSU, with the instruction that he was not to allow anyone else to use the car except in an emergency b. Son's party ran out of beer, so he allowed someone else to drive to get more beer. The second permittee got in a wreck. (3) Court a. The instructions were not a specific prohibition! b. Dad gave son discretion as to when son could lend the car to someone else. Son exercised that authority. Therefore there was implied permission for second permittee.

Analyze the Policy

(1) Who is insured? a. THE most important question. b. For liability insurance, the question is, "Is the tortfeasor insured?" not whether the victim (3rd party) is insured (2) Against which risks or perils is the insured protected? a. What risks/perils trigger insurance coverage? (3) Are any exclusions / endorsements applicable? a. The risk may be covered, but exclusions limit the risks covered b. Endorsements change the policy (4) Do the conditions affect coverage or impose duties on the insured? b. TWO: Review statutory law (1) If the policy is not in compliance w/ the statute, the statute trumps the policy c. THREE: Research jurisprudence (1) Most of the questions have already been answered b/c courts have addressed a policy provision similar to the one you're looking at (2) Occasional but rare res nova issue. In such a case, the court may look to decisions in other states. (3) Note that insurance companies revise policies all the time, so that they have new language to avoid the result reached in a certain case.

Automobile Business Exclusion

1. Excludes coverage for any insured while employed or otherwise engaged in the business of selling, repairing, servicing, storing, or parking of autos 2. Purpose of exclusion a. Insurance company does not want to cover the crazy valet driver b. Personal Auto Policy of the owner should not have to pay just b/c he gave permission to the valet driver of a business. So if the valet driver hits somebody, you as the owner won't be liable and neither will your liability insurer.

Mandatory Coverage-Policies

3. Umbrella/Excess Policy a. Auto and general liability policies are "primary" policies, provide first level of coverage—this is where the injured person would look first for recovery. Can buy more insurance: can increase amount of policy limits, OR can buy an "excess" policy b. Excess policy provides another layer of coverage in addition to the primary policy. Covers whatever primary policy doesn't. From underwriting standpoint, can be cheaper. c. Umbrella policy: provide an excess layer when more than one layer of kinds of primary insurance. Would kick in if limit of either primary policy is exceeded. Multiple kinds of different insurance. d. Question: does the UM statute require the insurer to provide coverage for excess or umbrella policies? YES. e. Southern American Insurance Co: ct looks at the statute and sees that it mandates coverage for any insurer who issues auto policy in the state. If the excess/umbrella policy provides coverage for damage arising out of use of auto, then there's UM coverage, but there must be something in the underlying policy that provides for auto liability, and if there is, then the statute mandates coverage. 4. Applying law of other states to UM coverage: would LA's UM statute apply to an accident that occurs in LA but where the policy was issued or delivered in another state? Look to choice of law principles; if the laws are different, then it's an issue, would want to apply the law of the state that would give more favorable result.

"Resident"

An "insured" under the auto policy Very fact specific Different from Domicile Look to access Can be shrunk/expanded depending on coverage result

Homeowners/CGL

Will have auto/golfcart/vehicle exclusion

Pullen v. Employers

a. Facts (1) Southern Equipment buys auto liability insurance. Employee is to be covered if: a. Employee is driving w/in the course & scope of his employment, & have the express permission of the NI (SE). (2) Mitchell, as a customer, agreed to help load the drag line onto a truck. Pullen (employee) was the truck driver. Mitchell ran the drag line into an electrical line, which killed Pullen. Pullen's W sued. W can't sue SE b/c workers comp is exclusive remedy against employer. But he sues Mitchell and the insurer of SE. (3) W claims that Mitchell is an insured under SE's policy. a. Mitchell was using w/ SE's permission; so Mitchell is covered, unless an exclusion applies. b. Exclusions in this case: i. Any obligation for which insured liable under any workers compensation law (a) Not applicable ii. Liability for bodily injury of any employee of the insured while engaged in the employment of the insured. (a) Potentially applicable (b) "Insured" defined in policy as the NI & other people using vehicle w/ permission. VII. If payroll employee had been operating dragline, could recover because Mitchell would be insured. Omnibus, operating covered vehicle with permission. Insurer says there's exclusion. "Not to any obligation to which any insured..." employer/employee relationship blocks insurance. Court looks at relationship between independent contractor Mitchell and employer. If exclusion applies, widow limited to worker's comp. if not, she gets to sue insurer for tort liability. Court says Mitchell is not a co-employee. The/a/an/any- the insured says could be southern or payroll employee. An insured; any insured- possibly broader definition, omnibus; court doesn't go that far. Doesn't extend employer/employee relationship to Southern/Mitchell. Would eviscerate the policy otherwise. Good or bad policy in this case to extend when don't have traditional employer/employee relationship. Court: must extend to each inclusively and not to all. Mrs. Pullen can sue. a. Analysis (1) Ct looks to synchronize the def of insured w/in the policy w/the purpose of the exclusion. 2 employees working for same employer; coverage question of whether the P's survivors would have a cause of action against the liability insurer or whether the liability policy excluded coverage for him b/c he was an employee of the company. General liability policy and Worker's Comp policy at issue here. If no coverage under GLP, survivors can't recover under a policy under which he's an insured. Issue is that he's not an employee! So the exclusion doesn't apply; applying it would be contrary to the policy's purpose. (2) Had to see if he was an insured and also if he was an employee. (3) Have to carefully read the exclusion; if designed to exclude a particular activity or relationship of insured w/ another party, must apply exclusion for each individual who is claiming to be an insured. (4) Look at whether Pullen is the employee of THE insured who is seeking coverage. The insured in this case is Mitchell, potentially. a. Do not look at whether Pullen is an employee of any insured b. LSC (1) Mitchell clearly is not SE's employee, thus exclusion didn't apply to Mitchell. a. If the exclusion is in reference to "the" insured, then you have to analyze w/ regard to the particular person that the P is claiming is insured under the liability policy. b. Here, Mitchell is covered under Pullen's insurer's policy b/c Mitchell was just a permissive user (2) The insured must have the characteristics to be excluded from coverage. (3) Focus on the particular insured in a given case, if the exclusion is for "the" insured or "that" or some other form of saying "a particular" insured.

Business Auto Policy Exclusions

a. Intentional injury b. Certain contractual liabilities (1) Also in the CGL policy (2) Liability that is assumed under a contract. Not breach of contract, but liability assumed under a contract ("indemnity agreements" or "hold harmless agreements.") c. Workers' Compensation d. Other Liability to an Employee e. Fellow Employee (1) Exclusion of bodily injury to fellow employee of insured (2) Not important in La. b/c workers comp is exclusive remedy for injury by fellow employees (3) But for other states, important to say that policy does not cover liability of one employee to another f. Property in the care, custody or control of insured for property damage g. Movement of property by mechanical device h. Use of mobile equipment i. Completed operations (1) Applies more frequently to CGL coverage (2) If brakes fail after insured does work on the car, this is not covered under the auto policy j. Pollution k. War l. Racing 3. Many of the same exclusions apply to both

Budget v. Allstate

a. Permission requirement of the USAA policy (for use of non-owned autos) was not applicable b/c the statute (22:1296) mandated the same coverage for the rental vehicle as Driver's

22:1295

a. Makes coverage mandatory - all liability insurance policies must also protect those entitled to recover non-punitive damages for bodily injury [not property damage] b/c of legal liability of underinsured or uninsured vehicles. b. The statute is mandatory, except for giving the insured certain options. (1) If insured does nothing, he gets the mandatory coverage; the amount is not less than limits of bodily injury liability. (2) Insured may reject coverage completely. (3) Insured may select lower limits. a. If limits are 100/300 for liability, may select 25/50 for UM coverage. b. But if he does nothing, the UM limits will be 100/300. (4) Insured may elect economic only coverage. a. Economic losses - medical expenses, loss of wages, etc. b. Non-economic losses - general damages (physical pain and suffering, disability, etc.) 2. (1)(a)(ii) - Exercise of waiver options a. The form (Current Law): Commissioner of Insurance must promulgate a form that must be executed in order to: (1) Reject coverage, (2) Select economic only coverage, or (3) Lower the limits. 3. (1)(a)(iii) - Addresses out of state policies, where accident occurs in Louisiana a. This Subparagraph and its requirement for UM coverage shall apply to any liability insurance covering any accident which occurs in this state and involves a resident of this state. b. Can't exclude someone from policy who doesn't have license. Public policy. Narrow the class of people who can be excluded from the policy 4. (1)(c)(i) - Anti-stacking Provision a. Limits the insured's ability to stack multiple UM coverages 5. (1)(b) a. Can purchase uninsured property coverage. But don't do this b/c collision coverage is much better [covers you whether someone else is responsible or whether you are responsible.] UM property coverage covers you only if someone else is responsible. 6. (1)(e) - Limitation on selection of other coverages 7. (1)(f) - Phantom Vehicle Amendment a. Enacted to allow recovery for Miss and Run accidents under certain circumstances 8. (2)(a) - Person is uninsured if insurance company subsequently becomes insolvent. 9. (2)(b) - describes underinsured motorist coverage in Louisiana. a. This is where our UM statute differs from most other states. b. When auto liability insurance coverage is less than the amount of damages suffered by the injured, then the injured person may recover from his own UM policy b/c the tortfeasor was underinsured. (1) Example, tortfeasor has 15k liability coverage. P has 25k UM coverage. P's damages are 100k. (2) Here, the liability coverage of 15k is less than damages of 100k. Therefore, the insured P gets his full UM coverage in addition to liability coverage. (3) P gets 40k: 15k from other guy's liability insurer and 25k from his own UM insurer. a. In other states, UM coverage would only be 10k, instead of 25k. B/c you would subtract 25k UM - 15k liability to get 10k... b. This affects choice of law... 10. (3) Self insurance 11. (4) Reimbursement 12. (5) Arbitration is at the insured's option. Insurer cannot force it. 13. (6) Methods in which lack of insurance may be proved, to create prima facie case of inadequate insurance of the tortfeasor. a. Important, b/c P has burden of proving that other driver was underinsured or uninsured. b. Statute is complicated; it tries to explain the obligations of the insurance company. Insurance co must provide UM coverage up to whatever the liability limits are. The NI recovers and anyone who is injured as a result of the fault of an UM, who either meets def of insured under UM policy or whoever meets def of covered for liability. Can't get punitive damages, insurance co is not required to cover punitive damages, covers bodily injury only. UM does NOT apply to property damage (unless...). For persons insured thereunder=sort of an omnibus insured clause. Poses burden on the insurer to provide the coverage. c. However, it's not compulsory for the insured to purchase the coverage b/c it's coverage for them! Insured can reject UM coverage altogether and assume the risk. Insured can ask for a lower benefit than liability limits. Must reject in a certain form. d. If multiple insurance policies and get hit by UM, there's an anti-stacking provision: can't stack the UM policies for multiple vehicles. Statute won't allow it. If operating a vehicle you own, the coverage for the car you were operating (primary coverage), but if you were operating a non-owned vehicle then you can choose which of your policies you want to recover from—can be a driver or a passenger, look to the policy's language to check. e. UM coverage provides only for bodily injury, not for property damage—UNLESS you specifically buy that coverage. If you want coverage for property damage must purchase it specifically. f. Statute deals w/hit and run drivers or phantom drivers: they may be considered an UM, and if it's a phantom there are special provisions to make sure the system isn't abused. g. UM/underinsured motorist includes someone who's insolvent. h. So, not only do you need to look at the D's insurance coverage, but look at P's coverage too. i. Definitions section of UM coverage is extremely important; must also look to see if the driver rejected the insurance coverage. j. Does the policy exclude UM coverage if the driver would be insured under worker's comp? (6) UM coverage required to be offered by any insurer that issues an auto policy in the state, and the coverage is mandatory and will be read into the policy even if the policy itself doesn't provide for it (PD case, general liability policy, ct read UM coverage into it as long as person would have been an insured for liability purposes)—superimpose the statute on the existing liability policy. (7) Cts generally apply the policy language if the policy provides UM coverage, and if no UM coverage, analysis is: does the policy provide for auto insurance, and if yes, then looking to the liability sections of the policy, is the person seeking coverage an insured under the policy, and if yes, then the statute imposes upon the insurer UM coverage; if answer to either of those questions is no, then no UM coverage.

Public or Livery Conveyance

a. The current policies usually read "for that person's liability arising from operation of vehicle while it's being used to carry persons or property for a fee" b. Policies responded by excluding this sort of situation too c. The characteristic that triggers the exclusion is the actual use - what is it being used for at time the liability arose? (1) Ex: Station wagon was usually used for personal transportation but occasionally used as an ambulance, and was used as an ambulance at time of accident, it met the characteristic at time of accident, and therefore the exclusion was applicable. (2) Taxi case a. Taxi usually used to carry paying customers. But at time of accident, driver was on personal mission b. Exclusion did not apply, and there was coverage. d. The definition of "insured" can be different in different parts of a policy and that can change the outcome.

Joint tf- Casson

a. Two vehicles involved in accident, & both drivers were negligent. Each had liability & UM coverage. Guest Passenger in Car #1 injured by joint negligence of both drivers. b. Court (1) Guest passenger gets liability insurance recovery from both Autos. But this still does not compensate adequately, so P wants UM coverage. (2) Under Nall, P can't get UM recovery from Car #1. But Car #2 had inadequate liability insurance. Therefore, P may sue the UM insurer of Car #1 b/c Car #2 was underinsured. a. Car #1 (host vehicle) was not the underinsured auto. (3) This is the only case of being able to recover from liability and UM insurance under the same policy.

Public or Livery Conveyance Exception

ambiguity of "fee" in RPM pizza

Duncan v. USAA

i. Facts (a) Waiver had been executed by the insured on the old Commissioner form (b) At the bottom right hand corner, policy # was left blank (c) The insured only had one policy w/ the insurance company in this case; so there was no question as to which policy the form applied ii. LSC: UM coverage was not validly waived. Coverage applied. (a) The form required the completion of six tasks. If one task was not done properly, the form was invalid. Since the policy # was left out, the form was not completed. iii. Ct says there is NOT a valid waiver, so UM coverage; 6 things were required and one wasn't met so no valid waiver. Underlying policy is that UM coverage provides insurance to the NI, so burden is on the insurer to be sure that it's a valid rejection and the form is properly completed. Failure to put in policy number invalidates the rejection so there's coverage. 3. The Duncan Six Tasks a. Policy number was required to be placed in the lower right hand corner, according to the form (1) However, Commissioner issued a finding that many times the policy # is not available initially. For example, when first getting coverage, there is no policy # yet. The Commissioner recognized this in a bulletin subsequent to this case.

Auto policy quirk

no golf carts unless on course. same with homeowners

Representing both insurer and insured

Can one lawyer represent both insurer and insured in DAS claim? Normally insurer has duty to defend insured. General rule: if no dispute b/w them whether the policy affords coverage, then one lawyer can represent both (insurer would pay)—if dispute, insurer will pay but will retain policy (something), so same lawyer shouldn't represent both b/c of dispute so insurer must hire two separate lawyers

Frazier

Daughter accidentally backed over toddler (1) Two types of coverage in one case are possible: a. Daughter's negligencecovered under auto policy. b. Parent's liability (failure to properly supervise)covered under homeowners policy. (2) But this was only possible in this case b/c two different people had coverages. (3) Virtually all cases will come down to use or non-use; not under both. (4) Louisiana has no case where two policies might apply to one individual in one act. Though this is theoretically possible. (Apply Young v. E.L. Lumber if they were incredibly negligent in banding lumber).

Permission examples

Factual issue Permission in the first instance- chauffeur Scope of permission- car lot Rental Cars Cases w/rental cars: must look at the K to see what it says about permissive users and insurance (usually says only the people named in the K have permission to use it—so probably permissive users aren't allowed). Omnibus and reasonably foreseeable; subsequent permission (Czarniecki comp with Hughes) Rogilio and NI permission a. Permission requirement of the USAA policy (for use of non-owned autos) was not applicable b/c the statute (22:1296) mandated the same coverage for the rental vehicle as Driver's Express limitation or general admonition Business auto and express permission g. Permission can be either express or implied (1) Express - Did the person have actual permission to drive the covered auto? (2) Implied - Did the person have a reasonable belief that he had permission to drive the covered auto? h. On exam, in determining coverage for Auto Liability cases, answer the following questions: (1) Covered auto? (2) Is the person operating the auto an insured under the policy? (3) Does the operation of the vehicle fall w/in ownership/maintenance/use under the policy? i. If reasonably foreseeable that permittee will allow second permittee, without reckless disregard for the car, then there's going to be permission/coverage. Even if admonition from owner to permittee not to let another person drive. Public policy concerns Initial Permission Rule Permission by fraud-doesn't count (3) New rule: When permittee is given complete control and it is reasonably foreseeable that an admonition against subsequent permittees will not be followed, there is implied permission of the insured for subsequent permittees to drive the auto. i. This is the most recent and liberal of the LSC subsequent permittee cases ii. If covered vehicle is used exclusively by the parent and gives the child an admonition, will recognize that and it will defeat coverage. iii. Ct looked to see if there's express limitation, here there's just a general admonition, so the friend had coverage

Judicial Interest

From date of judicial demand to date of satisfaction of judgment a. Interest begins to run from the date of judicial demand (day the suit is filed) b. Judicial interest is important b/c the injured party is entitled to pre-judgment interest under Louisiana law (~5%). Since it often takes years for the case to make it through litigation, so interest can be a significant component of the claim. Thus, it's important to know whether or not the insurance company is responsible for paying interest. 2. Insurer's Responsibility for Interest a. The Insuring Agreement agrees whatever is w/in the policy limits, plus "interest accruing after a judgment is entered in any suit that we defend." b. So the insurer agrees to pay interest after the judgment is rendered. However, in LA, we have pre-judgment interest. The issue is whether an insurer is liable for this. (1) Problem: How much in excess of the policy limits is the insurer liable for? (2) Doty v. Central Mut. Ins. Co. (La. Ct. App. 1966) a. Judgment = $25,000; liability policy limits = $10,000. Excess$15,000. i. Policy: Insurer pays all interest on judgments in excess of the policy limits from the date that a judgment was rendered b. LSC: For interest in excess of the policy limits, obligation of insurer depends upon the language of the supplementary payments provision. i. Here: Insurer owes full amount of judicial interest ii. But general rule: Insured is responsible for paying legal interest in excess of the policy limits unless the policy states otherwise. (3) Date of Judicial Demand against Insured or Insurer a. P sues D on 1/1/09 and adds the insurer on 1/1/10. b. The insured and the insurer are solidary obligors; therefore, interest runs from the date of judicial demand against any solidary obligor. c. Thus, in this hypo, since they are both solidarily bound, insurer will owe pre-judgment interest from 1/1/09, the date that the insured was sued. H. How can insurer get court to resolve the coverage issues before dealing w/ the merits of the underlying tort claim? [Important b/c if no coverage, then insurer won't have to defend the suit] 1. File MSJ in the underlying tort suit & get the court to rule on coverage 2. File its own ordinary proceeding, seeking declaratory judgment establishing that there is no coverage under the policy a. Concurrent suits

Employer's Liability

Interaction between auto policy and WC; no coverage for "any insured for bodily injury to an employee of insured"

La Ins. Guar. Assoc v. Interstate v. Champion

Interpret insurance contracts under contract law

Opelousas Case

Made and reported to co during policy period; if not, no coverage—city didn't report it, and insurer says no coverage—then mother names insurer under DAS and says failure of city to notify shouldn't affect rights against insurer (would have changed the trigger), LASC said DAS is procedural, not substantive; the rights that the injured person has are subject to terms of the K, so injured party can't have more rights than insured would

Permission Cases

Miguez v. Platinum Underwriters Reinsurance: Mother was assigned company car by her employer pursuant to a signed, written agreement stating that the vehicle could be used only by company employees on company business. When her auto would not start, the daughter "borrowed" the company car to run her paper route. The court held that the daughter didn't have the requisite permission of the named insured for coverage under a business auto policy. Arceneaux v. Norman: drunk driver employee

Seymour v. Estate of Karp

Mother and child lived for four months in NOLA with her parents while father began new job in Indiana. Insurance provided coverage on the family car with the father in Indiana. Coverage excluded for mom because she was operating at the time of the accident was available for regular use. Use does not need to be for an indefinite period of time. With respect to UM coverage, the court noted that both mother and son would be UM insureds under teh CM policy if they were residents of the father's household. Temporary absence while the family was in transition to Indiana does not preclude a finding that they were still residents of the father's household. There was genuine issue of material fact whether they were residents of the father's household, the gp's household or both.

Compulsory MV Insurance

No "unlicensed driver" exclusion allowed Very limited named people who aren't covered Not for non-owned cars Business exclusion not completely ok; except if self-insured and adequate

UM

No punitive damages First party- anyone injured by an uninsured/underinsured person who fits policy definition No property damage (unless...?) any policy covering auto, whether mentioned or not, unless waived Includes excess and umbrella Limits are permissible evidence (unlike normal insurance) Hit and run presumption; hit other car that hits P Phantom-uninterested/objective witness Stacking-3 criteria Collateral Source Rule

Webb v. Zurich

Plane crash in Michigan; policy delivered in LA c. Webb Rule: The direct action may be brought if: (1) The policy is issued or delivered in Louisiana or (2) The accident occurred in Louisiana. DISJUNCTIVE RULE (3) Still have to consider jurisdiction and venue- separate issue

Direct Action Requirements

R.S. 22:1269 Procedural Right; attaches to claim the moment accident occurs However, USSC ruled substantive right to be applied under Erie Doctrine (A) No policy or contract of liability insurance shall be issued or delivered in this state, unless it contains provisions to the effect that the insolvency or bankruptcy of the insured shall not release the insurer from the payment of damages for injuries sustained or loss occasioned during the existence of the policy. a.The injured person or his or her survivors/heirs may sue either the insurer alone or both the insurer and insured jointly and in solido. c.Unless one of these exceptions, you must sue both the insured AND the insurer. They're solidarily obligated—can bring suit in any venue proper under 42. (1) When the insured has been adjudged bankrupt (by ct of competent jurisdiction) or when proceedings to adjudge an insured a bankrupt have been commenced before a ct of competent jurisdiction) (2) Insured is insolvent (3) Service of process cannot be made on the insured (4) The insured is family/ Cause of action between children and parents (5) The insurer is a UM carrier (6) The insured is deceased B)(2) Restrictions a.Accident occurred in Louisiana OR b.Policy was issued or delivered in Louisiana c.Issued in LA means issued by LA co (domiciled in the state and is authorized to do business in LA); delivered by co means it's not domiciled in LA but authorized to do business in LA Doesn't include indemnity policies Possibly show policy limits-exception to evidence rule-to prove person is insolvent

Compulsory Motor Vehicle Liability Security Law

R.S. 32:900 1. Generally a. Any vehicle registered in the state must be covered by a liability policy—liability coverage only, doesn't have to be personal injury, etc. Most states have this and LA is one of them. Statute mandates it. b. Requires liability coverage to be extended to others using the car w/NI's permission (express or implied). Obligation to get insurance belongs to owner of vehicle. c. Amount of liability coverage minimum limit: 15 (per person)/30 (per accident)/25 (property). (This is NOT adequate.) d. Designed to protect 3rd parties injured by negligence of a tortfeasor. These limits may be applied under the omnibus insured clause. There are some things that don't allow the insured to duck liability: some exclusions in the policy aren't allowed to apply here b/c the statute requires that the exclusions not apply b/c they're required by the statute. e. Business use exclusions: statute says nothing about the business use exclusion, but still, the exclusion isn't allowed to be enforced. f. Depends on who's asserting the claim—statute mandates coverage at the minimum level even if the ct says an exclusion DOES apply! *Note that the statute does allow some exceptions that approve of exclusions in the policy. g. Must prove that you have at least minimum limits required by law when you get driver's license, brake tags, etc. h. Until Jan. 1, 2010, the coverage required was 10/20/10 i. NEW Mandatory Minimum Policy Limits (1) 15/30/25. a. $15,000 - bodily injury; liability coverage per person per accident b. $30,000 - aggregate amount the insurer will pay for bodily injuries regardless of how many insureds were injured in the accident c. $25,000 - property damage to a 3rd person (2) provides repairs to insured vehicle if in accident; 1st party coverage (3) Every automobile owner is required to have a Motor Vehicle Liability Policy w/ at least these limits. 2. Companies who self-insure may satisfy this requirement. 3. 32:900 a. The policy must provide coverage for the owner and other persons using the vehicle w/ express or implied permission of the owner. (1) Coverage is required for owner and "statutory omnibus" persons. b. The statutory omnibus people provision does not take into account the auto or business use exclusions. c. What is the effect of failure to authorize these exclusions, on the enforceability of these exclusions?

Personal Auto Exclusions

Subpart A (1) Auto used as a murder weapon (2) Intentional acts are excluded (3) Property damage for property that is transported by an insured or that is in the care/custody of the insured a. Generally not covered under standard automobile policy (4) Liability to an employee who is injured a. Exclusion does not apply to domestic employees in this particular policy unless workers comp benefits are available or required for that domestic employee (5) Livery conveyance exclusion a. The policy will not cover someone using the vehicle for hire (as a taxi, ambulance, or some other way in which driver is compensated for use of vehicle) (6) Auto Business Exclusion (7) General Business Exclusion (8) Use of vehicle w/o reasonable belief that insured gave permission (9) Nuclear Energy Exclusion Subpart B (1) These tend to deal w/ the vehicle itself, rather than named insured a. Describes certain vehicles that are not covered b. For example, any vehicle which has fewer than 4 wheels i. For example, motorcycle is excluded from coverage (2) Specific types of vehicles excluded a. Four wheelers b. Vehicles owned by other members of the family or by the named insured i. These protect insurance company from multiple vehicles w/in the same family being covered w/o the family members having paid premiums for coverage c. Racing cars

Compulsory Liability 32:900D-L Policy include

Such motor vehicle liability policy shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged therefor, the policy period and the limits of liability, and shall contain an agreement or be endorsed that insurance is provided thereunder in accordance with the coverage defined in this Chapter as respects bodily injury and death or property damage, or both, and is subject to all the provisions of this Chapter. E. Such motor vehicle liability policy need not insure any liability under any worker's compensation law nor any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance or repair of any such motor vehicle nor any liability for damage to property owned by, rented to, in charge of or transported by the insured. F. Every motor vehicle liability policy shall be subject to the following provisions which need not be contained therein: (1) The liability of the insurance carrier with respect to the insurance required by this Chapter shall become absolute whenever injury or damage covered by said motor vehicle liability policy occurs; said policy may not be cancelled or annulled as to such liability by an agreement between the insurance carrier and the insured after the occurrence of the injury or damage; no statement made by the insured or on his behalf and no violation of said policy shall defeat or void said policy; (2) The satisfaction by the insured of a judgment for such injury or damage shall not be a condition precedent to the right or duty of the insurance carrier to make payment on account of such injury or damage; (3) The insurance carrier shall have the right to settle any claim covered by the policy, and if such settlement is made in good faith, the amount thereof shall be deductible from the limits of liability specified in paragraph (2) of Sub-section B of this Section: (4) The policy, the written application therefor, if any, and any rider or endorsement which does not conflict with the provisions of the Chapter shall constitute the entire contract between the parties. G. Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy and such excess or additional coverage shall not be subject to the provisions of this Chapter. With respect to a policy which grants such excess or additional coverage the term "motor vehicle liability policy" shall apply only to that part of the coverage which is required by this Section. H. Any motor vehicle liability policy may provide that the insured shall reimburse the insurance carrier for any payment the insurance carrier would not have been obligated to make under the terms of the policy except for the provisions of this Chapter. I. Any motor vehicle liability policy may provide for the prorating of the insurance thereunder with other valid and collectible insurance. J. The requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carriers which policies together meet such requirements. K. Any binder issued pending the issuance of a motor vehicle liability policy shall be deemed to fulfill the requirements for such a policy. L. (1) Notwithstanding the provisions of Paragraph (B)(2) of this Section, an insurer and an insured may by written agreement exclude from coverage the named insured and the spouse of the named insured. The insurer and an insured may also exclude from coverage any other named person who is a resident of the same household as the named insured at the time that the written agreement is entered into, and the exclusion shall be effective, regardless of whether the excluded person continues to remain a resident of the same household subsequent to the execution of the written agreement. It shall not be necessary for the person being excluded from coverage to execute or be a party to the written agreement. For the purposes of this Subsection, the term "named insured" means the applicant for the policy of insurance issued by the insurer. (2) The form signed by the insured or his legal representative which excludes a named person from coverage shall remain valid for the life of the policy and shall not require the completion of a new driver exclusion form when a renewal, reinstatement, substitute, or amended policy is issued to the same named insured by the same insurer or any of its affiliates. Any changes to an existing policy, including but not limited to the addition of vehicles or insured drivers to said policy, regardless of whether these changes create new coverage, do not create a new policy and do not require the completion of a new agreement excluding a named person from coverage. For the purpose of this Subsection, a new policy shall mean an original contract of insurance which an insured enters into through the completion of an application on the form required by the insurer.

Ownership, Maintenance, Use

Very fact-driven Connection with the auto Common-Sense Test Is auto essential to P's claim Stuff flying out of moving vehicle v. when vehicle stationary Look to the type of breach a. Event/occurrence usually must arise out of the ownership, maintenance, or use of the vehicle—connection/connexity b/w an auto and the negligence of the insured. Homeowner's policies often have liability policies—no tie to the premises/thing that's insured (same for business general liability policies, so no connection to premises required)—for both, will find exclusions for operation of an auto, also for motorcycles, golf carts, off the road vehicles, and airplanes, b/c there are specific policies for risks arising out of those unique things. Often fights ensue over which policy provides coverage, must answer what is the risk here and what does the policy say about ownership maintenance and use—sometimes must look to exclusions. Always very fact-driven. (4) Rule of these 4 Cases put together: a. Determine duty breached by the allegedly negligent driver. Once the duty is identified, then determine if the duty arose out of use of an auto. b. The duty arises out of use of the auto, if the use of the auto is essential to the theory of liability. c. If the duty breached exists independently of auto use, then it does not arise out of use. d. Use common sense.

Springer v. GEICO

a. Facts (1) Car A driving in inside of four lane highway. Car B cuts in front, hits him, flees. (2) Collision caused Car A to go out of control, spin into oncoming traffic, and hit P's car. (3) Policy - hit and run vehicle must physically contact the vehicle of the insured b. Court: (1) Car A's driver was not at fault, only the Car B phantom driver. a. P must prove that he is entitled to recover under his UM insurer. Has to prove that Car B is a hit and run car. But Car B did not hit P's car. (2) Held: Car B was a hit and run vehicle, as his reckless driving was part of a continuous chain of events that caused Car A to hit P's car. (3) Rule: The physical contact of a vehicle w/ an intermediary vehicle or other object (which is the same mechanism of the accident) constitutes a "hit" between the unidentified vehicle and the insured's vehicle. a. So if the hit and run vehicle does not physically contact the UM insured's vehicle, there still can be coverage if the intermediate object that contacted both the vehicles is part of the same sequence of events... c. Collins - only hit and run coverage is mandatory under the statute; not miss and run

Bearden v. Ruckers

a. Facts (1) H and W were separated; no final divorce. H stayed in the former family home. (2) 2 community property cars were in H's name. Both were insured in H's name. (3) W lived in apartment and was injured in someone else's car. She wants UM coverage from her H's policy on the two cars that were community property. She had possession of one of the cars. b. Resident (1) W must prove she is a resident of H's household to be considered a "spouse" and thus a "named insured" c. LSC: (1) They were not divorced. W was free to come and go to family home. (2) W testified that reconciliation was possible, although H denied it. (3) Held: The W could be found to be a resident of her H's household. d. The LSC is willing to liberally interpret "resident" in favor of coverage. (1) Some companies use different language now, like stating that the relative must "live w/ you" (2) Persons temporarily away from parents' household are invariably held to be residents of parents' household (Ex: college students)

Omnibus

a. Facts (1) H and W were separated; no final divorce. H stayed in the former family home. (2) 2 community property cars were in H's name. Both were insured in H's name. (3) W lived in apartment and was injured in someone else's car. She wants UM coverage from her H's policy on the two cars that were community property. She had possession of one of the cars. b. Resident (1) W must prove she is a resident of H's household to be considered a "spouse" and thus a "named insured" c. LSC: (1) They were not divorced. W was free to come and go to family home. (2) W testified that reconciliation was possible, although H denied it. (3) Held: The W could be found to be a resident of her H's household. d. The LSC is willing to liberally interpret "resident" in favor of coverage. (1) Some companies use different language now, like stating that the relative must "live w/ you" (2) Persons temporarily away from parents' household are invariably held to be residents of parents' household (Ex: college students)

Nall v. SF

a. Facts (1) Injured P is passenger in accident caused solely by the fault of the host driver (D) (2) Host driver's dad had both liability and UM coverage (3) P recovered under driver's liability insurer, but this was not enough to compensate him, so he also sued as an insured under the host driver's UM policy (4) GEICO said there was an exclusion: "An uninsured auto is not an insured auto." b. LSC (1) The UM statute does not require that the host vehicle become an underinsured vehicle when the liability insurance is exhausted. GEICO exclusion was valid. (2) UM statute's purpose is to provide separate coverage for separate vehicles a. (1) the uninsured/underinsured vehicle, and b. (2) the vehicle whose driver needs UM coverage. 2. Personal Auto Policy Exclusion a. A vehicle owned by the NI or made available for regular use of any family member (1) This exclusion is virtually the same as the GEICO provision in the Nall case b. Every UM policy attempts to exclude the insured automobile from the definition of an uninsured automobile. These exclusions are enforceable.

Esteve v. Allstate

a. Facts (1) Louisiana driver (P) in car owned by LA residents vacationing in FLA, car hit by FLA driver (D) (2) Suit brought in LA. Allstate (D's insurer) claimed it couldn't be sued under DAS. b. LSC (1) Not a question of jdx. There is jdx over Allstate thru minimum contacts. (2) But the policy was issued to D in Fla, and accident occurred in Fla. a. Thus, no coverage under the DAS (neither Webb criteria was satisfied)

Howard v. Ponthieux

a. Facts (1) Pickup truck broke down. Wrecker hooked up the pickup and drove away w/ the vehicle to go to wrecker's place of business for storage, until it could be repaired. (2) While being towed, the chain broke & pickup truck crashed into Ps' vehicle. Policy at issue is the towing cmpany's (3) P: wrecker driver at fault and is an insured under pickup truck owner's policy. a. The wrecker driver was "using" the pickup truck through towing it. This constitutes "use" of a vehicle! b. Court (1) Auto Business Exclusion applied b/c the wrecker driver was in the business of "storing" automobiles (2) Close case: Had driver not have been taking the towed car for storage, the exclusion might not have applied. But here, driver was in process of "storing" the vehicle, so exclusion applied.

Bond v. Commercial Union

a. Facts (1) Son has an apartment in Lafayette. Parents live in Alexandria and have an auto policy. (2) The parents want to recover for son's death under their UM coverage. a. To recover, the son must be an insured under the policy b. "Relative" = any blood relative of the NI who is a resident of the same household b. On Rehearing (1) The son used his apartment in Lafayette solely when he was required to be on call. When not on call, the son was at parents' home. Most of his clothes and personal items were in Alexandria. He had a key, could come and go as he pleased. (2) On the basis of these facts, trier of fact could reasonably find that son was still a resident of parents' household, even though he was 30ish years old and divorced. One key fact was free access to parents' home. (3) "Whether a person is or is not a resident of a particular place is a question of law as well as fact, and is to be determined from all of the facts of each case."

Cary v. Ory

a. Facts i. Driver and owner both lived in Vinton. Driver borrowed the car from owner to go to a doctor's appointment and was supposed to be back by noon. ii. The accident occurred at 5 pm and in the opposite direction that the driver was supposed to have driven. Clearly outside of the scope of permission (geographically and temporally) b. Court i. The initial permission rule was so firmly established, that it would take a legislative act to overcome it. ii. Initial permission rule trumps the "scope of permission" language in the insurance policy

Johnson Case???

a. Facts i. Man given possession of company car with written instructions that he was never to allow anyone else to drive the car ii. He violated this by permitting his date to drive the car when he was impaired. The date did drive, not even realizing that it was a company car. b. LASC i. No coverage because company's prohibition was enforceable ii. The test under the date's policy was whether she had a reasonable belief that she had permission of the owner (a) She did have reasonable belief that she thought she had permission. (b) Therefore, there was coverage under her policy, but not under the company's insurance policy. c. So two general tests for Family Auto Policy: i. For owned auto provision, focus on whether insured gave permission ii. For non-owned, focus on whether driver reasonably believed he/she had permission of insured d. Business Auto Policy requires permission of insured e. Personal Auto Policy has an exclusion for any person that does not reasonably believe he has permission i. This is a major change in coverage. ii. The burden shifts to the insurer to prove that the exclusion does apply. (a) Whereas with the FAP, the plaintiff would have to prove that the driver had permission With PAP, the insurer must prove that the driver did not have a reasonable belief in permission

Insuring Agreement

a. Generally (1) Insured must prove the insuring agreement (2) Must identify the elements of coverage that must be proven b. The Requirements (1) Insured (2) Legally entitled to recover (3) From the owner or operator of an uninsured motor vehicle (4) Because of bodily injury sustained by the insured (5) Caused by an accident. (6) Owner's/operator's liability must arise out of the ownership, use, or maintenance of the automobile. 2. Lee v. Hartford Ins. Co.: Where insured offered no proof that the other driver was uninsured, the insured could not recover and therefore lost the 90k judgment 1. Personal Auto Policy a. You (named insured and spouse, if a resident of same household) b. Any family member (relative of the named insured who is a resident of his household) ^^These persons do not have to be in any particular automobile (1) You and any family member are covered in any auto wherever they are injured. (2) The accident can occur while crossing the street, riding a bike, rocking on the front porch, riding in a car, etc. (3) There is no requirement that the insured have any association w/ the covered auto at time of accident. c. Any other person occupying your covered auto. (1) This is the second group of covered insureds. (2) They must be occupying the covered auto. a. "Occupying" - Definition G on page 1/13 i. In; upon; getting in, on, out or off d. The last category is the parent, etc. recovering for damages for injury to child, etc

Futch v. F&C Co of NY

a. Insurer driver did not show at trial, so the insurer claimed that b/c the insured breached the cooperation clause, there should be no coverage under the policy. b. LSC (1) The rights of the injured party are vested at the time of the accident/injury. No breach of the policy by the insured after the accident/injury is a defense for the insurer named in the direct action. 2. The insurer can still plead general defenses, like showing the P was at fault, comparative fault of P, prescription, etc. all the defenses available to insured except those that are strictly personal

Miss and Run

a. Phantom Vehicle Amendment (1) Insured can recover even though there is no physical contact if the insured can prove by an independent and disinterested witness that the accident was caused by the action of another driver who is unknown. (2) Presumption that a vehicle that hits you and runs is underinsured or uninsured. Will potentially trigger UM provisions. (3) Phantom accidents are more problematic. No physical contact w/the car, and no physical evidence. Statute provides additional proof requirements. (4) Who counts as an independent & disinterested witness? a. Minor daughter? - No (Stracener) b. PO (in accident) who had settled w/ P? Yes (O'Boyle) c. Expert accident reconstructionist? - No (Snowden) d. Eyewitness? - Yes e. Person overhearing insured's accident over the phone? - No (Matthews) 7. Stationary Objects (Harrison): if an object was left in the highway, this is not a "hit" between the unidentified vehicle and the insured's vehicle; no coverage 8. Falling Objects (Fore): objects falling out of a vehicle and crashing into the insured's vehicle is sufficient physical contact to trigger hit and run coverage.

Carter v. City Govt

a. Severe flooding; police barricaded entrance ramps to the interstate. b. Davis was driving his niece home, drove thru barricade, car flooded, & both drowned. Davis was intoxicated. c. Suit brought against State Farm under two different policies: i. Auto insurer of uncle ii. UM insurer of niece and parents d. Both polices required the accident to arise out of use of the automobile. (2) Issue: Did the niece's death arise out of the use of the automobile? (3) LSC - Niece died due to Davis's use of the vehicle. Niece covered under Davis's policy. a. Determination of use is a two step process: i. Determine legal cause of the accident. What alleged duty was breached by insured? ii. Determine if this breach arose out of auto use. b. This case i. Duty risk analysis. (a) Uncle's breach of the duty to not drive around barricades was the legal cause. ii. Breaching the driving duty obviously arose out of auto use. iii. Ct says under these circumstances; concludes that use of the car was essential to this cause of action, the driving of the vehicle and bypass of barricades leads to reasonable conclusion that he negligently drove into deep water. So coverage under auto policy.

No Pay No Play

a. The policy has always said that a new waiver is not necessary for a renewal, substitute, etc., unless there is a change in the liability limits. (1) Changes in autos covered, NIs, etc. don't require a new form to be signed. (2) Interesting case where a renewal was done and didn't need a new form, but insured filled out new form that was filled out invalidly. LSC said that there was still a valid waiver. b. Insured must prove (to be provided UM coverage): (1) Insolvency of the tortfeasor (or that TF is underinsured) (2) Introduce the policy c. Insurer has the burden of proving that it's a renewal to the policy, which does not require a new waiver form to be completed 11. Reformation a. Legal theory that if there is a mutual error in the policy, the insured and insurer can reform the form to reflect their intent b. This theory is now limited: the insured and insurer must execute the waiver before the accident. The form cannot be reformed to injure the insured

Exclusion of Other Business Use

a. This uses the Family Auto Policy language (old language) in this case b. Look at Personal Auto Policy: any insured using any vehicle while that insured is employed or otherwise engaged in any business (1) The exclusion does not apply to maintenance or use of a private passenger automobile, pickup, van, or trailer. (2) Personal auto policy only excludes when using employer's vehicle...unless it's a private pickup or van that is being used. Then you'll be covered. (3) If driving an 18-wheeler for employer, this is exactly what the personal auto policy is aiming to exclude. c. Facts (1) Insured's son had summer job for a company. One time, he was asked to take employer's vehicle and run an errand. He had a wreck while on the errand. (2) Literally, the policy said that son driving employer's vehicle would not be covered under his father's auto policy. (3) Employer had no insurance, so this was important for dad (vicarious liability). (4) Issue: did business exclusion apply to one time use of vehicle by child of NI? d. Court (1) Exclusion did not apply under these circumstances. Coverage. This one-time use of the car by the minor son was not "business use" a. Business is an undertaking engaged in for profit w/ regularity. (2) Other case: Student had own car; court found exclusion applied for one time use. (3) Other case: One time use of bigger truck. Hired & paid $50 to drive truck to different city; wrecked. Court: business use, so the exclusion applied. (4) Ct says there's coverage and doesn't apply the business use exclusion. Phillips thinks the ct is stretching it by looking at the frequency of the use.

Westerfield v. Lefleur

bus) an insured under the bus's UM policy? a. "Insured" under the policy: i. "Named Insured" - girl does not qualify ii. "Person occupying a covered vehicle at the time of the accident" (a) "Occupying" = in, exiting, or entering a vehicle (b) LSC: This definition was ambiguous under these facts (2) LSC: Physical contact w/ the covered auto is not necessary a. "Entering into" - a reasonable interpretation in this case is when a child entering a bus is in the zone of protection established by law for a child who is boarding a school bus. b. Child was "entering into" the bus at time of accident; thus she was occupying the bus, and thus was an insured under the bus' UM policy c. . Language of the bus's policy: ct said girl didn't have to touch the car, "occupying"="in or upon or entering into or alighting from." Is she occupying as defined in the policy? Ct says the language is ambiguous, so it's interpreted against the insurer. Relationship b/w P and vehicle: ct creates a zone of protection using the policy's language and says once in the zone, you're afforded the protection of the policy. Could easily make the argument she wasn't occupying the bus. Important point is that the ct doesn't require physical contact b/w P and the vehicle under this policy's language.

Auto Policy Non-owned vehicle

i. AKA "Drive other cars" coverage ii. Provides persons insured under the policy protection when driving someone else's car iii. Who is covered (a) Named insureds (b) Any relative (a relative of named insured who is a resident of the household) provided they have permission or reasonable belief of permission (c) Vicarious liability a. You and Your refer to the "named insured" in the Declarations and a spouse if a resident of the same household. b. Relative is now a "family member," instead. i. Family member is a person related by blood/marriage/adoption who is a resident of the same household. c. Covered Auto (2) Insuring Agreement - pay damages for bodily injury or property damage for which any "covered person" becomes legally responsible b/c of an auto accident a. "Covered person" - you and your family member for the ownership, maintenance, or use of any auto or trailer b. Any person using your covered auto i. Notice the absence of a permission requirement - this is in the exclusions (3) Exclusions a. Persons w/o a reasonable belief that they are entitled to use the vehicle

Champagne v. Ward

(1) Accident occurred in LA & involved LA residents, but the insured was a MS resident at the time of the accident. (2) Issue: Can the UM statute be applied to foreign insurance policies? a. Statute: UM coverage required to apply to any liability insurance covering any accident that occurs in LA & involves a resident of LA. (3) LSC a. Mandatory coverage is only for policy issued in Louisiana b. Nothing prohibits application of La. statute to out of state policies, but you have to do a choice of law analysis i. Is the interest of MS in applying its policy greater or less than interest in LA of applying LA law to the policy? ii. Choice of law analysis (a) LA interests (b) MS interests i. P is MS resident ii. Ins. contract was delivered in MS iii. Vehicle garaged in MS c. Held: MS's interest exceeded LA's interest; therefore the provisions of the MS policy were enforceable (4) All the cases since this case have reached the result that the place where policy was issued has superior interest. a. One exception: national contractor domiciled in IL w/ full time office in LA. Car licensed in LA and policy was assigned to LA resident to drive. In these circumstances, a court found that LA had a greater interest in applying its law to that vehicle garaged in LA.

Compulsory Case Law

(1) Adams v. Thomas - policy said it did not provide coverage for unlicensed drivers. a. LSC: this policy was illegal. The statute requires there to be coverage for the unlicensed driver, so exclusion is unenforceable. (2) Marcus v. Hanover Ins. Co. a. Business use exclusion that would have applied where there were 100k limits. b. The exclusion was held to be invalid b/c it was not listed in 32:900. But the compulsory insurance is only 10k. c. LSC: Exclusion was unenforceable as to first 10k that is required, but can be enforced as to the remaining 90k (100k - 10k). d. So an exclusion that is invalid under this compulsory law is only invalid for the limits of liability required by the statute (15/30/25 now). (3) Kinchen v. Lewis a. Compulsory insurance requirement is placed on the owner of the vehicle. b. Issue: Coverage for insured's use of someone else's car? c. LSC: Compulsory requirement only applies to coverage of the owned vehicle; it does not apply when the insured drives non-owned cars.

Picou v. Ferrara

(1) Facts a. Collision b/w auto and motorcycle; employee operating vehicle in course and scope and employer is sued for negligent entrustment. General policy has an "auto exclusion" that excludes the risk. TC found coverage b/c employee was in course and scope; LASC reverses, elaborates on common sense analysis. b. Company vehicle c. P sued the company on two theories: i. Vicariously liable for the employee's negligence in operating the vehicle ii. Company was guilty of negligent entrustment of the vehicle to an employee who should not have been driving the vehicle d. Company had a CGL policy that had an auto use exclusion (2) LSC a. Whenever use of the vehicle was essential to the theory of liability, the liability arose out of use of the vehicle b. In this case, the use of the vehicle was essential to both theories of liability: negligent driving and negligent entrustment of use of the vehicle to the employee. Therefore, the liability arose out of auto use, and there is no coverage under the CGL policy. Asks whether auto and auto's involvement in the incident is an essential part of P's claim, ie but for the presence of the auto, would the accident have occurred, but for the auto's involvement could the P state a cause of action? If no, then the auto is essential to the cause of action and the claim arises out of owner/m/use of the auto. If yes, and can draft a claim w/out mention of the auto, then there is no coverage b/c doesn't arise out of ownership/m/use. Auto must be essential to the cause of action for there to be coverage. i. CGL Policy: excluded coverage for "bodily injury or property damage arising out of the O/M/U...of any other auto operated by any person in the course of his employment by any insured." (3) Rule: Determine if use is essential to the theory of liability

Ramsey v. Continental

(1) Facts a. Driver, Marty (minor), had shotgun in his truck, moved it to the backseat of his truck and it discharged, hitting 2 friends near the truck. (2) Issue: Did the accident arise out of use of the auto? (3) Court a. Held: Accident did not arise out of use of the truck i. Truck itself played no role in the cause of the accident (would not have even had to be pleaded in the action). The auto usage was not relevant to the type of liability ii. Duty to exercise gun safety existed independently of use of the auto. Use of the car was not essential to the theory of liability iii. Ct says no coverage under auto policy; might be under homeowner's or general liability policy. b. This was a close case i. Cagle v. Playland - held to be auto use where driver got security guard to smash his butt of a gun b/c keys were locked in the car. Injury, when the gun discharged, did arise out of auto use. ii. The present case is distinguishable in that the gun did not go off in an attempt to gain entry to the car. Could argue this case either way

Spurlock v. Boyce-Harvey

(1) Facts a. Employee Jones was assigned to help Spurlock load the vehicle i. One was tagging the blades as they were placed into the truck ii. Allegedly due to negligence of Jones, the band holding the blades broke and released them b. Suit over Jones' negligence i. Jones said it was insured under the truck auto policy ii. Theory: Jones was loading the truck at time of accident (2) Court a. The accident arose out of use of auto b. Accident occurred during the "complete operation" of loading the truck c. Usually loading/unloading is considered O/M/U (3) This case led insurers to revise insurance policies a. Business auto policies have been revised to redefine the scope of loading and unloading i. Exclusion for injury before the goods are placed in motion or after they come to rest ii. Preliminary act of tagging the blades would be excluded b. Covers accident arising out of use of mechanical device if is connected to the truck

Carrier v. Reliance

(1) Facts a. Employee using own car in C&S of employment b. Policy provides UM coverage. Therefore, no issue of whether it's mandatory or not. So look to the UM coverage policy itself. i. Who is an insured? (a) You, Family member, Any one occupying covered auto..., Anyone for damages vicarious..., Anyone else occupying an auto you do not own that is a covered auto under this coverage part for liability insurance... ii. Under UM policy, Covered Autos were autos described in the policy. They were not ones that were owned by employees. iii. The liability coverage covered ANY AUTO. (a) P-employee argued that "covered auto" means any auto is covered, so he has coverage. (2) LSC a. This is ambiguous, but there is only one reasonable interpretation b. The covered auto in the UM coverage was for described autos. Therefore, despite the poor language of the policy, LSC held that there is only UM coverage for described autos. Employee's auto not described. i. Therefore, employee argues that he is a mandatory insured. ii. But to be a mandatory UM insured, he must prove that he is covered under liability coverage. (a) Liability provision excluded coverage for employee using his own auto. (b) Therefore, he's not a liability insured, and so he is not a mandatory UM insured. (3) Rule a. First ask whether policy covers a particular person as UM insured. b. If no coverage, ask whether he's a mandatory insured

Perkins v. McDow

(1) Facts a. Father purchased auto and insured in his name; gave to 18 year old son b. Son used the car and allowed a friend to drive the car. Friend wrecks c. Father had told the son that he was not allowed to let others drive the car. (2) LSC a. General authority i. Dad had given the car over to son's general and continuous use ii. Under these circumstances where son had general use, Dad's instructions were an "admonition" rather than a "specific prohibition" b. The father gave the vehicle to the son w/ a general admonition; it was reasonably foreseeable to the father that the son would violate the instructions under these conditions.

Tillman v. Canal Ins.

(1) Facts a. Gravel truck spilled gravel in the road, and the driver made no effort to remove it or watch out for other motorists to direct them around it. Just left the gravel sitting there. b. Another truck hit the gravel and lost control, hitting an oncoming car and killing the driver. c. Issue: Did the death arise out of the use of the automobile by the initial driver who negligently left the gravel on the road? (2) Court a. The initial driver's negligence was covered by the CGL policy because his failure to clean up the gravel breached a duty to respond to the spill. His duty was to mark the road as a hazardous area to protect others. b. The breach of duty that caused the injury did not pertain to driving (using) the truck, but to the failure to clear the roadway c. Duty-risk analysis issues i. Can we decide the case on how the duty is phrased? ii. Does common sense test save us? iii. Would we be influenced by the limits of the CGL policy over the auto policy?

Am Home Ins v. Czarniecki

(1) Facts a. Jesse (registered owner of car) is stepfather of Randy (car's true owner) i. Randy had general & exclusive use of the car b. Randy gave permission to Hans to drive the car for use on a double date. c. Charley said his date had to be home, and so Hans gave permission to Charley to drive the car. Charley wrecked the car. (2) Permission a. Omnibus coverage extended as far as it was reasonably foreseeable that the car would be let to other individuals. b. Jesse is owner; Randy is 1st permittee. For coverage, there must be permission flowing through Randy to Hans to Charley. i. Reasonably foreseeable that Randy (who had exclusive use of car) would lend the car to other persons (i.e. Hans) ii. Not reasonably foreseeable that Hans would lend car to Charley; thus no coverage iii. Owner and insurance policyson w/blanket permission use so he's an insuredloans car to Hans for stated purpose of shopping and double date, goes on double dateCharley borrows car and gets into wreck iv. Various levels of potential liability and insurance coverage. Is Charley an insured under someone's omnibus insured clause? v. Ct says Jessie and Randy are insured. Not reasonably foreseeable that Hans would let Charley borrow car. (3) Test: Foreseeability a. Was it reasonably foreseeable that the 1st permittee would lend his car to a 3rd person under the circumstances?

Malmay v Sizemore

(1) Facts a. Mom allowed Son to use her truck solely to move into a new apartment; expressly told him no one else was allowed to use the car. b. Son had someone else in the car, went out drinking, Friend drove w/o Son in the truck and Friend wrecked the car. (2) LSC a. When there has been an express prohibition, it is not reasonably foreseeable that there will be a second permittee, unless there is some reason to believe that the prohibition is no longer in effect (as in the insured having knowledge of previous violations and not contesting) b. Held: No coverage b/c friend did not have mom's permission to drive

Parks v. Hall

(1) Facts a. NI was a salesman; had a chauffeur b. Tortfeasor is chauffeur of the car owner. Drops off boss, and has permission to get car washed and serviced, then goes on personal errand and gets in wreck. Problem is the deviation from the normal course and scope of employment and what the owner granted permission for. c. Chauffeur was routinely authorized to get the car serviced and washed at the end of the day and bring it back. Issue is that he goes on own errand, not boss's errand. d. On day of accident, NI instructed chauffeur to take the car for servicing and then take the car home, but chauffeur made a personal errand to collect a personal debt and then got into an accident. e. Suit was filed against the chauffeur, the salesman (NI), and the insurer (2) Ct. App. a. NI not vicariously liable b/c chauffeur was not in course and scope of employment i. LSC agreed b. Insurer not responsible b/c permission was only to use the car w/in course and scope of employment i. LSC disagreed (3) Policy Language a. Insured = any other person while legally operating such vehicle, provided it is being used w/ the permission of the named insured b. Salesman had to give permission for there to be coverage. (4) LSC a. Omnibus coverage - an extension of coverage to others using the vehicle w/ permission b. Permission in the First Instance: all that is required to trigger omnibus coverage is that the person operating the vehicle have the initial permission of the NI, even though he may have deviated from the scope of that permission c. Since chauffeur had initial permission, he was covered even though he deviated from scope of permission

RPM Pizza

(1) Facts a. Pizza delivery drivers were not paid a special fee, but paid compensation for use of their cars to deliver pizzas. Got in accident. b. Insurer of delivery guys claimed it didn't cover vehicles for use in business c. RPM's insurer paid the claims & was subrogated into the driver's claims against their insurer d. Issue: Was this operation of a vehicle "carrying property for a fee" such that they were excluded under their own policy? (2) Analysis a. There is more than one reasonable interpretation of "for a fee" b. Could be the limited sense of being paid a sum for use of the car, a one-time charge possibly c. B/c of ambiguity, have to construe the exclusion narrowly. d. Exclusion does not apply in this case, so the P may sue the pizza drivers' insurer b/c they are not excluded under those policies (3) Held: In this case, "fee" means a per-delivery item, [not general compensation]. Exclusion not applicable b/c drivers weren't carrying pizzas for a fee. b. Policies responded by excluding this sort of situation too

Taylor v. Rowell

(1) Facts a. Rental company provided coverage to authorized drivers b. Unauthorized driver drove negligently and there was an accident (2) LSC: UM coverage was mandated, but only for those who were provided liability insurance a. Rental agreement only provided liability insurance to authorized drivers; unauthorized drivers were not insureds under UM coverage provisions

Fertitta v. Palmer

(1) Facts a. Sign company was putting a sign up. Employee knocked a glass jar off the shelf, and it hit P in the head. b. P alleges that the liability policy on the truck covers this accident, arguing that "loading/unloading the truck" constituted an "operation/ maintenance/use" under the policy. Trying to use the "coming to rest" doctrine. The car used to hold sign while hanging. The sign itself has not yet come to a stop. Court says allowing coverage in this case would lead to absurd results. (2) Issue: Was this use of an automobile? (3) LSC - applies a Common Sense Test a. Court should decide whether the act constituted an "unloading" of the truck, as the term "unloading" is commonly understood. Loading/unloading generally considered to be part of the use of the vehicle. b. Employees had finished unloading the truck, so no coverage i. Unloading is not the same as installation (4) Result depended on the language of the policy

Hughes v. SE Fidelity

(1) Facts a. Two friends: Andrews (car) and Cates (truck) swap vehicles regularly b. On one day, Andrews swapped vehicles and Cates decided to use Andrews' car. Cates picked up Coleman, a friend, and two women, and went out drinking. Cates allowed Coleman to drive; Coleman wrecked. (2) Issue: Is Coleman covered under Andrews' insurance? a. LSC: Under these circumstances it was reasonably foreseeable to Andrews that Cates would let Coleman drive. (3) Concurrence, Judge Tate a. Speculation on scope of foreseeability is inappropriate. Treat a deviation in driver just like a deviation in route. Find initial permission exists even when there is a change in drivers.

Aucoin and Ashy

(1) Facts a. Two guys in two separate trucks owned by employers. They pull off on the side of the road b/c they're friends and want to say "hey." b. Driver out of car #1 walks over to car #2; someone hits driver #1. c. Issue #1: Coverage under policy for truck driver by friend (car #2). i. Had to be occupying the truck at time of accident. ii. He was leaning on the door at the time. d. Issue #2: Wanted more recovery, so wanted to say he was also occupying his employer's vehicle (car #1). (2) Court a. Leaning on the window = "occupying"; coverage under car #2's policy b. Court said he had not distanced himself in time or space from car #1 - he intended to return shortly; coverage under car #1's policy c. Held: He was occupying both cars at the time of the accident and therefore could recover under both policies! (3) Ashy v. Migues (La. Ct. App. 3d 2000) a. Deputy setting up traffic flares was "occupying" his vehicle, and thus was covered under the policy.

Valentine v. Bonneville

(1) Facts a. Two police officers making DWI stop b. One officer doing sobriety test; other officer standing behind both vehicles directing traffic at time of being hit by car. c. Policy: "occupying" = in, upon, getting in, on out or off (2) LSC: This provision was not ambiguous; PO was not occupying the vehicle; he was off directing traffic.

Young v. E.&L.

(1) Facts a. Unloading of lumber truck. Band around unloaded bundle of lumber broke, w/ loose lumber then striking P's legs (2) Court a. The breaking of a band holding lumber on a truck caused the accident. b. stuff flying out of the back of trucks definitely arises out of the use of a truck. When vehicle is NOT moving: in this case, the material being loaded was being banded; does that arise out of use? Probably not, it's a separate and distinct operation that could occur elsewhere, the vehicle wasn't an essential component of what happened. c. Here, was the presence/involvement of the vehicle essential to P's ability to sustain burden of proof on theory of liability, can the P state a cause of action w/out mentioning the vehicle? d. Problem is we don't know why the band broke. Liability could be due to: i. Improper banding of the lumber onto the truckcoverage under the CGL policy ii. Improper loading of the truckcoverage under the BAP policies iii. Bothcoverage under both CGL and BAP policies (3) Held: There is a genuine issue of material fact, so no summary judgment. a. Negligence in banding would mean that the accident did not arise out of use of auto, so CGL policy would apply b. Negligence in loading or unloading would mean that the accident did arise out of auto use, so auto policy would apply

Auto exclusions in other policies

(1) Homeowners policy a. The insuring agreement is very broad b. Motor Vehicle Liability is excluded from coverage (2) CGL policy a. Insuring agreement is very broad, like homeowners' policy b. Excludes coverage for use of autos c. The personal auto policy covers accidents arising out of the use of an auto d. Therefore, the personal auto and other types of policies are designed to be mutually exclusive e. Business auto coverage has a similar provision, covering accidents arising out of the use of autos, like the personal auto policy (1) Facts a. Employee Jones was assigned to help Spurlock load the vehicle i. One was tagging the blades as they were placed into the truck ii. Allegedly due to negligence of Jones, the band holding the blades broke and released them b. Suit over Jones' negligence i. Jones said it was insured under the truck auto policy ii. Theory: Jones was loading the truck at time of accident (2) Court a. The accident arose out of use of auto b. Accident occurred during the "complete operation" of loading the truck c. Usually loading/unloading is considered O/M/U (3) This case led insurers to revise insurance policies a. Business auto policies have been revised to redefine the scope of loading and unloading i. Exclusion for injury before the goods are placed in motion or after they come to rest ii. Preliminary act of tagging the blades would be excluded b. Covers accident arising out of use of mechanical device if is connected to the truck

Southern American Insurance Co v. Dobson

(1) Issue: Umbrella policies a. Policy that pays over & above two different types of policies b. Ex: Umbrella policy may cover more than the limits of your auto policy & your homeowner's policy (2) Facts a. UM coverage for auto policy of up to 100k for company. Employee injured by uninsured motorist, and damages vastly exceeded 100k. b. Company also had "umbrella coverage": a policy of excess insurance that provided excess insurance i. Umbrella coverage is common: umbrella over various other policies (CGL, WC, others) ii. Company had Umbrella of 1.0M, and another umbrella of 1.0M iii. Neither umbrella policy said anything about UM coverage. (3) Issue: Does the UM statute apply to umbrella policies? a. LSC: Any policy providing auto liability insurance is mandated to provide UM coverage unless effectively waived i. Since the umbrella policy provided auto liability insurance, the two umbrella policies were mandated to provide UM coverage

Carter v. SF

(1) LSC considered the new Commissioner bulletin, & recognized that now the policy # is not a requirement if the policy # was not available 4. Commissioner then changed the form, says the 6 Duncan factors don't apply anymore: signature, printed name, date, etc. Form and requirements changed. 5. Trigger for having to deal with this: buy policy on new car and don't reject UM coverage, but if you reject UM coverage and the policy renews, then you don't have to reject again at the renewal, the rejection carries forward into subsequent renewals. BUT if you change the policy, eg add a car or change limits, then the insurer is required to get you to reject UM coverage again. So if nothing changes, you don't have to do anything, the rejection carries forward; if change anything, then you must reject again.

Norton v. Lewis

(1) LSC's most recent look at Initial Permission (2) Facts a. Off-duty car dealer (who didn't come into work that day) showed up and drove one of the cars. Wrecked it. b. General permission in course and scope of employment to move vehicles (3) Issue: Was there initial permission given by the dealership? (4) LSC: a. Plaintiff must establish initial permission, which can be express or implied b. The rule is part of public policy of the state, to compensate innocent victims and protect those liable for their torts. c. P must establish initial permission, which can be express or implied d. Although the rule is still viable, the burden of proof is to prove that there was initial permission and is placed upon the P. There are no presumptions available to assist in meeting that burden. e. No initial permission to use a vehicle on that day. [No reasonable belief] f. There was no initial permission to use any vehicle in this case because the employee merely took a car off the lot i. Trial court sided with supervisor's testimony that employee had not received permission to take the vehicle e. Express or Implied Permission (1) Implied - look at facts and circumstances (2) Either kind can establish initial permission (3) As long as the initial use is with the consent, express or implied, of insured, any subsequent changes in character or scope of use do not require additional specific consent; coverage is only precluded only where the deviation from the use consented to amounts to theft or other conduct displaying utter disregard for safekeeping of the vehicle

Magnon v. Collins

(1) LSC: UM coverage is mandatory, but only for persons who are liability insureds under the policy. a. If the policy does not provide liability insurance to the person, then that person is not a mandatory UM insured. (2) Facts a. Employee of law firm was using own vehicle in C&S of law firm's employment. b. Law firm had CGL policy w/ non-owned auto endorsement. c. Collins (tortfeasor) was insured, but his insurer was insolvent d. Employee sues SF (his UMC); SF files 3rd party demand against employer's insurer (3) LSC a. For employee to be mandatory UM insured, employee would have to be an insured under employer's auto liability coverage. b. Issue: Was this employee an insured under the endorsement? i. NO! ii. Under policy, insured = employee in C&S of employment, but there was an exclusion for if employee was driving his own auto c. This employee was not a liability insured and therefore UM coverage was not mandated for him. (4) Two takeaways: UM policy even for auto provisions of GL policies. Is the person seeking coverage an insured under the policy? Look for definitions (5) Ct said the employee IS an insured, but b/c he's not covered under the liability policy he can't get UM coverage (look to language of GL first; if no definition of UM under that provision, look to GL language).

Dunn v. Geico

(1) Mother, who owns an auto, insured by GEICO (2) Son, Graeme (age 22), owns an auto, w/ no insurance for that auto (3) Ron (age 16) drives Graeme's auto & gets in an accident (4) Issue: Is Ronald covered under the GEICO policy? b. This is essentially the Family Auto Policy (1) There is coverage for owned and non-owned autos (2) The mother's auto is the owned auto, but the car driven by Ron is non-owned. a. "Non-owned" auto is an auto not owned by or furnished for the regular use of either named insured or any resident relative b. There is no coverage under the non-owned or owned auto provisions i. Basically, Graeme is a resident relative of his mother; therefore his car is not a "non-owned auto," and so the brother, Ron has no coverage since this is neither an owned or non-owned auto c. Argument that there is coverage under the divorced father's policy (1) That the mother is not in father's policy, and minor child (Ron) is presumed to be a resident of father's household (not of mom's), and therefore is covered (2) But here, Mother and Graeme were residents of the same household b/c they both live together, so there is no coverage d. The non-owned provision (that there is no coverage for a non-owned auto that is used by resident of household) is meant to require all residents of the household to have policies

Ehrhard v. SF

(1) Policy #1 (issued to Sr.) insures the vehicle that Jr. is driving. Policy #2 issued to Jr. a. For omnibus insured purposes, coverage for permission to drive the covered auto (2) Jr. came home on leave, driving Father's car (Auto#1) (3) Parents of guest passenger want to recover, when Jr. wrecks the car, dies and injures passenger (4) Jr. can only be covered as a resident or a permittee under SF#1, which is doable since Jr. had permission (5) Sr.'s policy: provides coverage probably b/c Jr. is driving it w/permission of the insured (ie Dad) (6) Jr.'s policy: policy for non-owned automobile (auto not owned or furnished for the regular use of either the NI or any relative). Relative=relative of NI who is resident of same household. (7) Is Jr. a resident of Sr.'s household? He's an unemancipated minor; ct says he's NOT a resident b/c he's in the Navy and stationed elsewhere, though his legal domicile is still with dad. (8) Inconsistent w/Dunn? Probably not b/c the military is controlling where son lives. (9) Way relative is defined is very important! (10) Issue: Can there be liability under SF#2 - under the theory that Sr. is a relative of Jr. for Auto#2? a. SF says Jr. & Sr. were residents of the same household; thus, there can't be coverage under the non-owned auto policy b. Court: (1) Jr. has not changed domicile (still w/ Sr.). However, since Jr. was an adult & was in the military, he is not considered a resident relative of Sr.'s household. (2) Thus, there is coverage under SF#2 for a non-owned auto. c. Inconsistent w/ Taylor? (1) Not in the sense that both cases apply the rules for interpretation of ambiguous provisions in an insurance policy (2) Ambiguous provisions are interpreted to effect coverage (3) Since "resident" is an exclusionary term in this case, "resident" should be interpreted narrowly as the "place where most of the time is spent"

Simms v. Butler

(1) Simms v. Butler a. Facts i. Renter allowed Unauthorized Driver to drive. ii. Issue: Does the Driver's dad's policy provide coverage? iii. Policy excluded coverage if no permission of the owner was given. b. LSC i. No coverage under dad's policy; the permission required should have come from the rental company. ii. Renter's policy (a) R.S. 32:900(B)(2) applies to coverage for the NI's autos, not for other autos. iii. If rental company provides coverage, there is potential coverage of unauthorized driver under rental company's policy. (a) However, the rental company only gives permission to the renter. iv. Holding: No coverage of unauthorized driver under the rental company's policy.

Slain v. Thomas

(1) White asked Thomas to drive him to hospital in BR after White was shot. Thomas keeps car for 3 weeks, gets in an accident in Ferriday. (2) Holding: Initial permission rule does not apply to such deviation "displaying utter disregard for the return or safekeeping of the vehicle." g. Rental cars (1) Schematic a. Rental company has contract w/ insurance company (which probably won't provide coverage to the person w/ permission). b. Renter may give unauthorized access to the vehicle to someone (under his policy's omnibus insured clause) c. The renter may own a policy, and the driver may own a policy. Rental company also has a policy. d. La. R.S. 32:900(B)(2) - mandatory omnibus clause of the Compulsory Insurance Law i. Renter's policy (a) R.S. 22:1296 Every insurance policy shall extend all coverage to temporary substitute vehicles and rental vehicles. Renter's policy must provide that coverage for that car that is exactly the same as for other covered vehicles under the policy. (b) Several circuits have held that if suit is against renter's insurance and renter gave permission to unauthorized driver, there is coverage for unauthorized driver under renter's policy. However, there is a circuit split on this issue. (c) So there is the potential for coverage under renter's policy. ii. If rental company provides coverage, there is potential coverage of unauthorized driver under rental company's policy. (a) However, the rental company only gives permission to the renter. (b) So in this case, there would be no coverage of unauthorized driver under rental company's policy.

UM 22:1295(1)(a)(i)

(1)(a)(i) No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle designed for use on public highways and required to be registered in this state or as provided in this Section unless coverage is provided therein or supplemental thereto, in not less than the limits of bodily injury liability provided by the policy, under provisions filed with and approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover nonpunitive damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, sickness, or disease, including death resulting therefrom; however, the coverage required under this Section is not applicable when any insured named in the policy either rejects coverage, selects lower limits, or selects economic-only coverage, in the manner provided in Item (1)(a)(ii) of this Section. In no event shall the policy limits of an uninsured motorist policy be less than the minimum liability limits required under R.S. 32:900, unless economic-only coverage is selected as authorized in this Section. Such coverage need not be provided in or supplemental to a renewal, reinstatement, or substitute policy when the named insured has rejected the coverage or selected lower limits in connection with a policy previously issued to him by the same insurer or any of its affiliates. The coverage provided under this Section may exclude coverage for punitive or exemplary damages by the terms of the policy or contract. Insurers may also make available, at a reduced premium, the coverage provided under this Section with an exclusion for all noneconomic loss. This coverage shall be known as "economic-only" uninsured motorist coverage. Noneconomic loss means any loss other than economic loss and includes but is not limited to pain, suffering, inconvenience, mental anguish, and other noneconomic damages otherwise recoverable under the laws of this state.

22:1295(1)(a)(ii)

(ii) Such rejection, selection of lower limits, or selection of economic-only coverage shall be made only on a form prescribed by the commissioner of insurance. The prescribed form shall be provided by the insurer and signed by the named insured or his legal representative. The form signed by the named insured or his legal representative which initially rejects such coverage, selects lower limits, or selects economic-only coverage shall be conclusively presumed to become a part of the policy or contract when issued and delivered, irrespective of whether physically attached thereto. A properly completed and signed form creates a rebuttable presumption that the insured knowingly rejected coverage, selected a lower limit, or selected economic-only coverage. The form signed by the insured or his legal representative which initially rejects coverage, selects lower limits, or selects economic-only coverage shall remain valid for the life of the policy and shall not require the completion of a new selection form when a renewal, reinstatement, substitute, or amended policy is issued to the same named insured by the same insurer or any of its affiliates. An insured may change the original uninsured motorist selection or rejection on a policy at any time during the life of the policy by submitting a new uninsured motorist selection form to the insurer on the form prescribed by the commissioner of insurance. Any changes to an existing policy, regardless of whether these changes create new coverage, except changes in the limits of liability, do not create a new policy and do not require the completion of new uninsured motorist selection forms. For the purpose of this Section, a new policy shall mean an original contract of insurance which an insured enters into through the completion of an application on the form required by the insurer.

UM Waiver

1. Generally a. Materials: Page 164 is the new 2008 form, becoming mandatory as of 1/1/2010. b. Historically (1) Legislature amended UM statute to provide that the waiver must be in writing (2) Amendment to require form issued by insurance company. c. Insurer must offer UM coverage in same limits unless the NI rejects (I don't want to purchase or pay for this) or unless the NI elects lower limits than what the statute would require (statute requires same as the limits), or coverage that is economic only (covers only special damages, not general damages, just medical and special damages, no pain and suffering). d. Statute's language regarding form of the rejection: must use the form prescribed by commissioner of insurance, must be signed and completed, if sign form and do it right it creates a rebuttable presumption that the NI either rejected UM or elected lower limits or chose economic only. e. Rebuttable Presumption: properly completed form creates this, but NI can put on evidence to show that wasn't his true intent. Cts have become more lax than what was ruled in Duncan. Where something is missing that's not consequential to the rejection, it won't invalidate the waiver. Cts generally uphold it if the NI understood what he was doing when he rejected it; question really becomes what you can do to invalidate a waiver short of not signing it or the like. f. Lesson for rejection: UM coverage is mandatory in at least the limits for liability coverage unless you buy less, or waive/reject it, or buy economic only—if do this, must be a valid rejection, which is applicable to renewals of policy unless you change something in the policy. If form is properly filled out, burden shifts to insured to prove they didn't mean to reject UM. 2. Current Law a. Commissioner of Insurance must design the waiver form b. Versions of the Waiver Form from the Commissioner of Insurance (1) Page 152 was the initial form that was required a. As the jurisprudence evolved, this form had to be properly completed b. Elements i. Description of UM coverage ii. Choice of coverage: (a) Full coverage (b) Selection of lower limits and insured fills in the limits (c) Economic only coverage in accordance w/ liability limits (d) Economic only w/ lower limits (e) Full rejection of coverage

UM Coverage

1. Invented by insurance industry in early 1960s; states adopted some form of UM coverage statute 2. There was a crisis, states pushing for compulsory insurance 3. The industry saw compulsory insurance as a problem: felt that it was not feasible for the industry to write coverage for everyone, which would lead to socialized insurance run by the states. a. So the solution was to head off this movement, but also to recognize the problem of uninsured motorists on the highways. 60% of vehicles did not have any insurance!!!!! b. The states developed this strange form called "UM" coverage. Not liability coverage for everyone, but when agree to insure someone under auto liability policy, also agree to protect that person for damages sustained as result of uninsured motorist. c. It's a first party policy in sense that it's relationship between insured and insurer, but triggered by negligence of driver of other vehicle and other driver's legal liability to the insured. 4. In 1962, the only limits available were 5/10, that was the compulsory insurance at the time. Um insurance. a. Only was for an uninsured motorist. But over the years, the mandatory coverage has increased to where it is the same as bodily liability under the policy. b. Now covers uninsured and underinsured motorists. 5. 22:680 became 22:1406(D), and now is La. R.S. 22:1295 a. There have been 30 amendments over the years in La.! b. There have been 90 LSC decisions involving UM coverage and hundreds of C.A. decisions. 6. Equally important as auto liability insurance B. You can exclude someone by name, as long as very narrow category C. You cannot exclude business purposes. Negates omnibus. Interplay between statutory requirement and policy language. Tension between policy and statute- modify policy to meet statute. Exception-can exclude omnibus if you have satisfactory self-insurance plan. D. Obligation on driver to prove insurance on vehicle (even non-owner

Miller v. Marcantel v. Employer's Liability

1. Miller v. Marcantel v. Employers Liability Assurance Corp. a. Facts (1) D in the case defended for 5 months. Then D remembered he had liability insurance and asked the insurer to come defend the suit. Third party claim (2) Insurer refused b/c of breach of contract - there was no timely notice to insurer of suit filed against the insured. (3) Issue: Is the breach of the notice provision a defense to the insurer's liability? b. Court (1) Breach of a notice provision should not be a technical escape hatch for the insurance company. Can only get out of coverage if the insurer can prove that it was actually prejudiced by breach of the policy by insured. (2) The LSC rarely finds actual prejudice to the insurer. No LSC case thus far has found failure to give timely notice of suit to prejudice the insurer. (3) it's substantive b/c it overrides the policy provisions by giving injured greater substantive rights than the insured has against insurer Some inconsistent federal cases

Taylor v. SF

1. Taylor v. State Farm (La. 1965) a. Facts (1) Minor nephew (living w/ & working for uncle), driving w/ uncle's permission, fell asleep & crashed the car. Uncle injured; sues his own and nephew's dad's insurer. Main issue is whether nephew qualifies as relative who's member of same household of his father a. Non-owned auto (his uncle's). b. Omnibus insured (2) The policy provided for coverage for father's use of other cars, as well as for non-owned automobile, any relative. (3) Relative defined as relative of named insured who is a resident of the same household. Ct focuses on policy language, use of "residence" and not "domicile," so uncle wins. (1) Not a defined term in the policy, therefore it was ambiguous a. Under rules of interpretation, if there is a reasonable interpretation of "resident" that will afford coverage, this must be the construction given b. A person can be a resident of more than one place (2) Son was domiciled w/ the father. So it would be reasonable to say that he was also a resident of Arkansas, w/ the father, and therefore a relative. (3) Nephew covered under Dad's policy b/c he is driving a non-owned auto, and was a resident relative of his father's household (4) Resident of "household" does not require being under the roof at all times, but merely being part of the "family group" that lives in the house.

Hit and Run

2. 3 cars. Claim that a car pushed him over the median; P seeks UM coverage on basis that the phantom car is a hit and run driver—problem is, no physical contact b/w the two vehicles. Issue is whether there can be physical contact through the phantom car—answer is YES. Hit and run driver didn't make physical contact w/the person seeking coverage; it hit another car, which was a phantom for the P. Ct extends interpretation of physical contact, says the physical contact doesn't have to be w/P's car. 3. On rehearing: when hit and run and there's physical evidence, entitled to recover on presumption that the car is underinsured or uninsured. Once you prove that, you have a claim. Miss and run=phantom. In 1991, statute language amended to include w/in the ambit of a hit and run driver the ability of a driver to recover w/out physical contact b/w the two vehicles BUT a higher standard of proof: must prove w/corroborating testimony from an independent and disinterested witness, who must establish that the injury was caused by a driver who is unknown. 4. Disinterested and independent witness: Stracener: daughter wasn't disinterested and independent, must look at relationship b/w witness and D. Expert witnesses aren't independent. Matthews: P explains the accident to a friend on the phone, friend wasn't disinterested and independent (probably more of a hearsay issue though). Intended to put a heavy burden of proof upon P/claimant in phantom accidents. 5. Stuff falling off cars: if in the roadway and don't know why it's there, probably no UM coverage; but if it falls off the truck in front of you and you have physical contact, then probably UM coverage. Look to see what happened, whether physical contact, and if no physical contact then look to see proximity and proof. Still must look at the policy language! Statute gives you a right of action, but the policy defines the cause of action.

Commissioner Waiver

4 Things Required for Insured to Waive UM Coverage: [p. 166] a. Sign it b. Print your name c. Date it d. Initial to select the type of coverage/lack thereof that you want 7. Blanks Filled in By Others a. ONLY the insured may fill in the blanks b. Gray - Insured signed the form in blank and agent filled in the rejection of coverage. LSC held this to be invalid b/c not properly executed. c. Johnson - agent filled in the blanks and insured signed. LSC said invalid. d. Lynch - secretary of insured dated the form and insured signed everything else. LSC: valid waiver 8. Legal Representative a. The form has a blank for "named insured or legal representative" (1) Corporate insured must have signature made by legal representative of insured (2) So Joe Smith prints his name and dates it, but nothing ever identifies the insured under the policy as being the corporation.

Business Auto

4. Business Auto Policy a. All sums insured legally must pay as damages b/c of accident resulting from ownership, maintenance, or use of a covered auto b. Insureds: (1) You for any covered auto (2) Anyone else using covered auto w/ permission (3) Those vicariously liable 5. There are no statutorily imposed forms for auto liability insurance. Companies may use their own forms. Commissioner of Insurance may review them and disapprove, though. Where there's an utter disregard for the scope of the permission (eg permitted to drive owner to hospital, then takes the car and spends 3 or 4 days driving it and gets in accident—scope was exceeded, so it didn't apply, it wasn't reasonably foreseeable).

More Compulsory

4. No Pay No Play Amendment (1997) a. Penalty placed on owners who do not purchase compulsory insurance (1) If owner did not pay for liability insurance, the owner cannot "play" by suing another liability insurer for his own injury/damage (2) Rule: If you have no liability insurance on your car involved in the accident, then you cannot recover from the negligent driver (or his insurer) the first $15,000 of bodily injury coverage or the first $10,000 of property damage 5. Named Driver Exclusion a. 32:900 was amended to allow certain named persons to be excluded from liability coverage b/c people w/ bad records were uninsurable for any reasonable amount. (1) Therefore, if child in the family was a problem driver, the cost to family of insurance would be prohibitively high. b. 32:900(L) (2001) (1) Several cases narrowed the scope of the exclusion. Legislature reacted quickly and said their intent was to overrule these cases! (2) Under the statute, you can exclude the named insured! (the drunk may be the owner of the car, and he can exclude himself from coverage). Can be the spouse, or any other resident of the household. Exclusion is good for life of the policy. (3) Person only need be resident of household when the policy is taken out. All these provisions addressed renegade court decisions! VIII. Owner or operator (guest passenger: amendment doesn't apply, so they can assert the claim). IX. If you filed suit for $10K, can't get anything! X. If damages are $100K, first $15K will be deducted. XI. So you either don't get anything, or the tortfeasor gets a credit for the minimum amt of coverage you should have had. XII. If you're the defense, you must plead this! Find out in discovery. XIII. Applies to liability and can affect UM benefits.

Compulsory Liability 32:900A-C

A. A "Motor Vehicle Liability Policy" as said term is used in this Chapter, shall mean an owner's or an operator's policy of liability insurance, certified as provided in R.S. 32:898 or 32:899 as proof of financial responsibility, and issued except as otherwise provided in R.S. 32:899, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named therein as insured. B. Such owner's policy of liability insurance: (1) Shall designate by explicit description or by appropriate reference all motor vehicles with respect to which coverage is thereby to be granted; and (2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs with respect to each such motor vehicle as follows: (a) Fifteen thousand dollars because of bodily injury to or death of one person in any one accident, and (b) Subject to said limit for one person, thirty thousand dollars because of bodily injury to or death of two or more persons in any one accident, and (c) Twenty-five thousand dollars because of damage to or destruction of property of others in any one accident. (d) An owner may exclude a named person as an insured under a commercial policy if the owner obtains and maintains in force another policy of motor vehicle insurance which provides coverage for the person so excluded which is equal to that coverage provided in the policy for which the person was excluded. The alternative coverage is required for both primary and excess insurance. C. Such operator's policy of liability insurance shall insure the person named as insured therein against loss from the liability imposed upon him by law for damages arising out of the use by him of any motor vehicle not owned by him, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner's policy of liability insurance.