Clifford DEANE and Adeline Deane v. Roger O. McGEE et al.
No. 51944, 51946
Supreme Court of Louisiana
March 27, 1972
Rehearings Denied May 1, 1972
260 So. 2d 669
SUMMERS, Justice.
Horace C. Lane, Baton Rouge, for defendant-applicant (No. 51,944).
Durrett, Hardin, Hunter, Dameron & Fritchie, Emile C. Rolfs, III, Keogh, Krousel & Ervin, Joseph F. Keogh, Baton Rouge, for defendants-respondents.
SUMMERS, Justice.
We granted certiorari, 260 La. 106, 255 So. 2d 92, on the basis of applications by Clifford Deane and State Farm Mutual Automobile Insurance Company. The case presents for review the interpretation of almost identical “other insurance” clauses in three uninsured motorist policies under which plaintiff Clifford Deane claims recovery.
While visiting in Baton Rouge, Clifford Deane and his wife, who were residents of Florida, were injured in an automobile collision. At the time, they were riding as guest passengers in the automobile owned and being driven by their son-in-law Eugene Dunetz. The collision occurred as a result of the negligence of 17-year-old Roger McGee while driving an automobile belonging to his father, Walden McGee.
As a result of the accident, Clifford Deane received injuries and damages amounting to $22,902.63. His wife‘s damages amounted to $6,000. The wife‘s claim has been settled and is no longer at issue.
At the time of the accident, no automobile liability insurance covered the McGees
Hanover Insurance Company and Allstate Insurance Company each had automobile liability policies in force providing uninsured motorist coverage for the Dunetz vehicle. Each policy provided for coverage in the amount of $5,000 per person and $10,000 per accident for bodily injury. State Farm Mutual Automobile Insurance Company insured the Deane automobile under a liability policy issued to the Deanes in Florida. This latter policy contained an uninsured motorist endorsement in the amount of $10,000 per person and $20,000 per accident.
The “other insurance” clause of the Hanover policy reads as follows:
OTHER INSURANCE. With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under Part IV (uninsured motorist clause) shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobiles as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance. (Parentheses added.)
The Allstate and State Farm “other insurance” clauses are substantially the same as the quoted clause insofar as the problems this case presents.
The relationship which these clauses create is that of an “excess” and “primary” insurer—that is, an insured who is injured while occupying a nonowned automobile must first look to the insurer of the automobile he occupies as “primary” insurer. In this case, therefore, Hanover and Allstate as insurers of the Dunetz automobile would be “primary” insurers. A person‘s own insurance, when he is not occupying his own automobile, under this clause, is considered “excess” insurance over and above such primary insurance, and then only to the extent that the limits of liability of his policy exceed the limits of liability of the primary policy. In the context of this case this clause makes State Farm Deane‘s excess insurer.
The rationale of the decisions we reverse is that Louisiana‘s Insurance Code (
We rejected this basis for decision in the recent case of Graham vs. American Casualty Company, 261 La. 85, 259 So. 2d 22 (1972), No. 51,201 on the docket of this court. Our decision was predicated upon a contrary premise. We held that the $5,000 insurance required by the uninsured motor
Louisiana‘s Motor Vehicle Safety Responsibility Law (
Thus in Graham v. American Casualty Company we said that the uninsured motorist statute requires uninsured motorist protection and sets forth the minimum coverage policies issued in this State must provide. We observed that this mandate did not prohibit or prevent an insurer from
In effect we held that the statute declared the public policy of the State and imposes a mandatory minimum insurance liability under uninsured motorist coverage for every policy issued. Any effort to reduce the mandatory minimum coverage of each policy by “pro rata” clauses cannot be given effect by the courts. See Johnson v. Travelers Indemnity Co., 269 N.E.2d 700 (Mass.1971), and authorities there cited.
Florida has an uninsured motorist statute almost identical with the Louisiana uninsured motorist statute,
We consider that it (the uninsured motorist statute) provides for a limited type of compulsory automobile liability coverage. It appears to require coverage for bodily injury caused by the negligence of an uninsured motorist to the extent of specific limited amounts. It does not permit “other insurance” clauses in the policy which are contrary to the statutorily limited amounts of coverage. (Parentheses added.) 185 So. 2d at 692.
The Court of Appeal, applying the Florida law, held that the “other insurance” clauses in the State Farm policy issued to Deane were illegal and invalid ab initio and never formed a part of the contractual agreement. Accordingly the Court granted recovery to the full extent of the State Farm policy, that is $10,000. This, added to the $2,500 recovery awarded against Hanover and the $2,500 recovery awarded against Allstate, resulted in a total award of $15,000 by the Court of Appeal to Clifford Deane. The Court of Appeal holding with regard to the award against State Farm was correct and we approve it. In
The contention has been made on this review that the law of Louisiana, and not that of Florida, should have been applied in this case. The contention is without merit. The Court of Appeal properly applied Florida law to the State Farm policy.
Article 10 of the
The form and effect of public and private written instruments are governed by the laws and usages of the places where they are passed or executed.
But the effect of acts passed in one country to have effect in another country, is regulated by the laws of the country where such acts are to have effect.
Generally the nature, validity and interpretation of an insurance contract is governed by the law of the place where made unless the parties clearly appear to have had some other place in view. Metropolitan Life Ins. Co. v. Haack, 50 F. Supp. 55 (W.D.La.1943). Thus it has been held that where a Mississippi automobile owner applied for an automobile liability policy which was executed and issued from
however, the decision to apply Florida law is not too significant here. By our decisions casting Hanover and Allstate, and our decision in Graham v. American Casualty Company, and the principles announced there, we would reach the same result reached by Florida in the Sellers case if we applied Louisiana law. That is, we would cast State Farm to the full extent of its policy limits. For under principles announced here and in Graham v. American Casualty Company we would also hold that the “excess” provision of the “other insurance” clause in State Farm‘s policy is invalid insofar as they are in derogation of a mandatory requirement in our uninsured motorist statute. (
By this decision we do not mean to imply that an insured may “pyramid” or “stack” coverages under separate automobile liability insurance policies so as to recover more than his actual bodily injury loss or damage. On the other hand, if his loss is under the limits of a policy covering him, and he is covered by more than one automobile liability policy equally responsible for his loss, or if his loss in an automobile liability covered accident is more than the limit of one policy, but less than the sum of the limits of multiple policies protecting him, then, in such situations, the “pro rata” provision of the “other insurance” clause would permit proration among the insurers.
No effort has been made to review the issue of liability or quantum, for we are satisfied from the record that these find-
For the reasons assigned, judgment is rendered herein in favor of Clifford Deane and against Hanover Insurance Company and Allstate Insurance Company in the amount of $5,000 against each of said insurers; and judgment is rendered in favor of Clifford Deane and against State Farm Mutual Automobile Insurance Company in the amount of $10,000, with legal interest on all of said amounts from date of judicial demand until paid and for all costs, costs to be prorated among the insurers.
The judgment of the trial court on the third party demands is affirmed with the amounts amended in accordance with the reasons assigned here.
SANDERS, J., concurs in the result.
BARHAM, J., concurs in the result.
DIXON, J., concurs.
TATE, J., also assigns additional concurring reasons.
TATE, Justice (concurring).
The writer has reservations that the law of Florida must necessarily determine the construction of a standard insurance policy issued in Florida, insofar as it applies
The writer is not prepared to say that the majority errs in its indication that Florida law should govern the interpretation of a standard automobile liability insurance policy issued in Florida. Nevertheless, in the absence of a choice of Florida law by the parties, the writer is likewise not prepared to agree, without full consideration of the issues, that Louisiana may not have the most significant relationship to the transaction, insofar as determining the policy‘s application to an accident in Louisiana. See Restatement of Conflict of Laws 2d, Sections 6, 188, 205 (1971).
In the mobile society of today, an insurer issuing a standard liability policy may well be held to the contemplation that such standard policy may apply to an accident in another state in the same manner that identical standard policies issued in this forum state apply. Louisiana‘s governmental interest in the regulation of awards to victims of traffic on its highways may be sufficient to justify application of its own standard-policy construction in preference to Florida‘s construction—Louisiana‘s governmental interest may outweigh Florida‘s interest, if any, in application of a Florida-issued policy outside the borders of Florida.