131 So. 3d 1020
La. Ct. App.2013Background
- May 30, 2010: Ramiro Farciert’s 2007 Ford F-150 (insured by U.S. Agencies) was damaged when his son Erik (B.A.C. 0.202%, later pled DWI) crashed it; stipulated damage value $18,500.00.
- Farciert contends Erik took the vehicle without permission. Erik lived with Farciert and was over age 15; Farciert did not list him on the insurance application and no premium was paid for him.
- The policy included (1) an exclusion for damage caused by a household member age 15+ who lived with the insured >30 days if not listed on the application and no premium paid, and (2) an intoxication exclusion barring coverage where the operator’s BAC exceeded the legal limit.
- Farciert signed the English application and applicant statement (which warranted disclosure of all household members age 15+), but testified he does not read English and that the agent spoke Spanish and did not translate the form line-by-line; his son Martin (English-speaking) accompanied him but did not translate.
- Trial court found the insured credible, concluded the agent failed properly to explain the policy, ruled the intoxication exclusion inapplicable (based on unauthorized use), and awarded $18,500. U.S. Agencies appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of household-member nondisclosure exclusion | Farciert: agent failed to explain form in Spanish; he did not know he needed to list adult children, so exclusion should not apply | U.S. Agencies: Farciert signed the application and applicant statement; agent spoke Spanish and son was present; insured is presumed to know what he signed | Court: Exclusion is clear and unambiguous; insured is bound by signed application; exclusion applies — no coverage |
| Presumption of knowing signature / need for translation | Farciert: limited English meant he couldn’t understand the disclosure he signed | U.S. Agencies: insured could have asked questions; agent spoke Spanish; presumption that signer understands document absent fraud/duress | Court: Presumption that signer knows contents; no allegation of fraud/duress; presumption unrebutted |
| Intoxication exclusion enforceability | Farciert: Erik took vehicle without permission, so intoxication exclusion shouldn’t bar coverage | U.S. Agencies: intoxication exclusion bars coverage because operator’s BAC was over limit | Court: Did not reach merits because coverage was barred by nondisclosure exclusion (case resolved on that ground) |
Key Cases Cited
- Carbon v. Allstate Insurance Co., 719 So.2d 437 (La. 1998) (principles for interpreting insurance contracts)
- Cadwallader v. Allstate Insurance Co., 848 So.2d 577 (La. 2003) (clear policy language is enforced as written)
- Louisiana Ins. Guar. Ass’n v. Interstate Fire & Cas. Co., 630 So.2d 759 (La. 1994) (insurers may limit liability by clear contractual terms)
- Garza v. Argueta, 113 So.3d 384 (La. App. 5 Cir. 2013) (insured presumed to know contents of signed waiver despite limited English absent fraud/duress)
- Pena v. Simeon, 96 So.3d 547 (La. App. 5 Cir. 2012) (similar holding on waiver/signed form where insured had limited English)
- Rizzo v. Ward, 32 So.3d 986 (La. App. 4 Cir. 2010) (rejecting challenge to English waiver when agent conversed in Spanish and no misconduct alleged)
Disposition: Judgment for Farciert (trial court) reversed and vacated; appellate court found policy exclusion for undisclosed household member controlled and denied coverage.