Hyatt v. Mutual of Omaha Ins. Co.
149 So. 3d 406
La. Ct. App.2014Background
- Hyatt sought disability benefits under Mutual of Omaha policy; trial court reformed policy to grant $2,000/month for two years and awarded penalties and attorney fees.
- Policy ambiguity centered on whether ‘earnings’ meant gross or net income; trial court found ambiguity and reformed to gross earnings.
- Mutual argued earnings meant net income; Hyatt contended gross earnings aligned with application and intent to cover truck note.
- Hyatt settled with agent Perron for $25,000; Mutual sought remittitur credit for this settlement claiming solidary liability.
- Court held Hyatt totally and permanently disabled; offset for social security benefits addressed under policy terms; remittitur reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Earnings meaning ambiguity | Hyatt (insured) argues gross earnings should be used. | Mutual argues earnings means net income. | Ambiguity found; gross earnings favored. |
| Offset for social security benefits | Offset as part of calculation; not a pleaded defense. | Offset is a policy calculation; not an exclusion needing pleading. | Offset treated as affirmative defense; evidence excluded for lack of pleading. |
| Remittitur against Perron settlement | Remittitur error; Perron solidary obligor should not reduce Hyatt’s judgment. | Remittitur appropriate due to Perron settlement. | Remittitur reversed; no credit for Perron settlement; Mutual wholly liable. |
| Attorney fees | Award should include appellate work; challenge to remittitur. | Originally proper allocation of fees. | Additional $5,000 attorney fees awarded for appellate work; overall reversal of remittitur. |
Key Cases Cited
- Peterson v. Schimek, 729 So.2d 1024 (La. 1999) (interpretation of insurance contracts; policy language dominates)
- Highlands Underwriters Ins. Co. v. Foley, 691 So.2d 1336 (La.App. 1 Cir. 1997) (ambiguity standard in insurance policy interpretation)
- Stobart v. State through the Dept. of Transp. & Dev., 617 So.2d 880 (La. 1993) (clear error standard for factual findings on appeal)
- Palmer v. Martinez, 42 So.3d 1147 (La.App. 2 Cir. 2010) (interpretation when words are clear; no further search for intent)
- Fishbein v. State ex rel. LSU Health Sciences Ctr., 960 So.2d 67 (La.App. 1 Cir. 2007) (affirmative defense pleading requirements in benefits calculations)
- Bates v. City of New Orleans, 137 So.3d 774 (La.App. 4 Cir. 2014) (affirmative defense considerations in statutory scheme calculations)
- Taylor v. U.S. Fidelity & Guar. Ins. Co., 630 So.2d 237 (La. 1993) (allocation of responsibility in insurance disputes)