56 So. 3d 1236
La. Ct. App.2011Background
- Excess insurer National Union provided coverage under a following-form excess policy issued to the State via ORM and Aon as broker; policy period at issue July 1, 1991–July 1, 1992.
- The underlying claim arose from a 1991 accident involving DOTD’s overpass guardrail; Williams sustained catastrophic injuries.
- DOTD was joined as a defendant in 1993; plaintiffs settled with initial defendants, leaving DOTD as sole defendant.
- ORM notified Aon of a possible excess claim in 1998 after judgment against DOTD; no timely notice to National Union occurred.
- National Union denied coverage in 2002, claiming lack of timely and adequate notice; the State sued in 2002 seeking indemnity and penalties.
- The trial court granted partial summary judgment for the State on notice adequacy to Aon; appeal followed, with National Union challenging both liability and summary judgment rulings.
- The appellate court affirmed in part (notice to Aon suffices) and reversed in part (prejudice-based liability denial remained).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timely notice to insurer under excess policy | Odom claims notice to Aon satisfied notice to National Union | Notice must be timely to National Union; Aon status unclear | Notice to Aon satisfied notice to National Union |
| Aon as National Union’s agent for notice | Aon contractually authorized to receive notice per bid and policy terms | Aon’s broker status may not bind insurer without agency | Aon acted as National Union’s agent for notice |
| Imputation of State’s notice to insurer | Notice to Aon imputed to National Union under policy terms | Imputation depends on agency and policy language | Notice to Aon adequately imputed to National Union under the excess policy |
| Law of the case | Prior decision law should govern current appeal | Law of the case does not apply due to changed facts | Law of the case does not apply |
| Prejudice from late notice | State’s delay did not prejudice insurer; no need for penalties | Late notice caused actual prejudice to National Union | Genuine issue of material fact as to actual prejudice remains |
Key Cases Cited
- Miller v. Marcantel, 221 So.2d 557 (La.App. 3rd Cir.1969) (prejudice requires more than naked delay in notice)
- Branzaru v. Millers Mut. Ins. Co., 252 So.2d 769 (La.App. 1st Cir.1971) (prejudice cannot be presumed from delay absent unusual circumstances)
- Jackson v. State Farm Mut. Auto. Ins. Co., 29 So.2d 177 (La.1946) (factors for late notice and prejudice to insurer)
- Lafauci v. Jenkins, 844 So.2d 19 (La.App. 1st Cir.2003) (insurer bound by policy terms despite broker status)
- Toston v. Nat’l Union Fire Ins. Co. of La., 942 So.2d 1204 (La.App. 2nd Cir.2006) (following-form policy governs terms of excess coverage)