Dukes v. DeclouetteDukes v. Declouette
|2Plaintiffs, Chadwick Dukes and Dana Green on behalf of Skylah Dukes, appeal a judgment granting a motion for summary judgment filed by defendant, Imperial Fire and Casualty Insurance Company. We reverse and remand.
BACKGROUND
On June 8, 2007, a vehicle driven by Chadwick Dukes, in which his daughter, Skylah, was riding, and a vehicle driven by Paul Declouette collided on Louisiana Highway 983. On May 23, 2008, Dukes and Skylah’s mother, Dana Green, filed this lawsuit against Declouette, an unnamed insurer providing coverage to De-clouette, and USAgencies Insurance Company, Dukes’ underinsured motorist carrier, on behalf of Skylah, seeking to recover damages sustained by Skylah in the accident. Plaintiffs filed a supplemental petition adding Imperial Fire and Casualty Insurance Company (Imperial Fire), the insurer of Declouette, as a defendant in the litigation.
Imperial Fire admitted that it had issued an automobile liability policy to De-clouette covering Declouette’s liability. Subsequently, plaintiffs filed a motion seeking to dismiss Declouette from the lawsuit. On November 20, 2008, the trial court entered judgment dismissing plaintiffs’ claims against Declouette, with preju
Imperial Fire filed a motion for summary judgment, acknowledging that it did have in force and effect a policy of automobile liability insurance which was issued to Declouette, but asserted that it could not be found liable as a matter of law because plaintiffs released its insured without a reservation of rights. In support of the motion for summary judgment, Imperial Fire attached a settlement agreement executed on February 19, 2008, entitled “PARENT-GUARDIAN RELEASE AND INDEMNITY AGREEMENT.” Therein, in consideration for the Instated sum, plaintiffs settled their daughter’s claims against Declouette, Direct General Insurance Company of Louisiana, the insurer of the vehicle Declouette was driving, and Sheryl Rogers, the owner of the vehicle. The agreement stated as follows:
I/we, the undersigned parents/guardians of Sky’La Dukes, a minor, do forever release, acquit, discharge and covenant to hold harmless Direct General Insurance Company of Louisiana and Sheryl Royers and Paul Declouette, their heirs, successors and assigns of and from any and all actions, causes of action, claims, demands, damages, costs, loss of services, expenses and compensation, on account of, or in any way growing out of, any and all known and unknown personal injuries, which we may now or hereafter have as the parents of said minor, and also all claims or rights of action for damages which the said minor has or may hereafter have, either before or after she has reached her majority, resulting or to result from a certain accident which occurred on or about June 8, 2007 in West Baton Rouge Parish, LA. (Emphasis in original)
Imperial Fire asserted that it was clear from the language of the release that plaintiffs failed to reserve rights against Declouette or any other party. Imperial Fire pointed to the language of the insurance policy, in which it agreed to pay damages for bodily injury for which “an insured person becomes legally responsible because of an accident arising out of the ownership, maintenance, or use of a covered vehicle.” (Emphasis added.) Imperial Fire urged that Declouette could never be found liable as a result of this accident because he was specifically released by way of settlement, and because Declouette could not become legally responsible for the accident in question, neither could his liability insurance carrier.
On June 3, 2009, a peremptory exception raising the objection of res judicata was filed on behalf of Declouette on the basis of plaintiffs’ settlement of all claims on behalf of their child with Declouette and release of Declouette without a reservation of rights. The exception sought dismissal of all claims against Declouette with prejudice. However, as noted above, all of plaintiffs’ claims against Declouette had previously been dismissed, with prejudice, by the | atrial court.
In opposition to the motion for summary judgment and the exception of
res judica-ta,
plaintiffs filed a memorandum in which they argued that they only intended to release Direct General, Rogers, the owner of the vehicle, and Declouette in his capacity as an omnibus insured of Direct General. They pointed out that the release document did not include any broad language showing any intent on their part to release any and all other parties liable as a result of the accident. Instead, plaintiffs urged, the release language was limited to Direct General, Sheryl Rogers, and Declouette, along with their heirs, successors and assigns. Plainly, plaintiffs asserted, there
Following a hearing, the trial court granted the peremptory exception of res judicata and the motion for summary judgment, dismissing all claims against Declouette and Imperial Fire with prejudice. The trial court expressed the opinion that because Declouette had been released from liability, Declouette could not be found to be legally liable for damages, and therefore, plaintiffs could not maintain an action against his insurer. This appeal, taken by plaintiffs, followed.
\-JtES JUDICATA
At the outset, we find that the trial court clearly erred in granting the exception of
res judicata.
At the time the exception was filed on behalf of Declouette, Declouette was no longer a party in this litigation, having been previously dismissed with prejudice by order of the court. Therefore, as to Declouette, the exception is clearly moot. Moreover, Imperial Fire could not raise the exception on its own as it was not a party to the release. It is well established that a claim of
res judicata
on a compromise agreement must be brought by a party to the compromise agreement.
Carrie v. Louisiana Farm Bureau Casualty Insurance Company,
2004-1001, p. 5 (La.App. 4th Cir.2/16/05),
SUMMARY JUDGMENT
A motion for summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966. In this appeal, we are asked to decide the legal effect of Declouette’s release with respect to plaintiffs’ rights against Imperial Fire. The issue presented is whether the release of Imperial Fire’s insured, Declouette, resulted in the discharge of Imperial Fire’s obligation under the policy of insurance to provide coverage for plaintiffs’ damages. This issue presents a question of law, which is appropriate for decision by summary judgment.
Sumrall v. Bickham,
2003-1252, p. 7 (La.App. 1st Cir.9/8/04),
Louisiana law establishes that the scope of a compromise agreement extends to the differences clearly contemplated by the parties, not to differences that the | (,parties never intended to include. La. C.C. art. 3073;
Sumrall,
2003-1252 at p. 6,
Nor did plaintiffs have to, as a matter of law, specifically reserve rights against Imperial Fire in order to maintain an action against Imperial Fire following the release of Declouette. Louisiana law has consistently held that a liability insurer and its insured are co-debtors in solido.
Sumrall,
2003-1252 at p. 10,
Having concluded that plaintiffs did not intend to release Imperial Fire from pliability and that the failure to specifically reserve rights against Imperial Fire when releasing its insured did not destroy the solidary obligation, we must decide what effect the release of Declouette had on Imperial Fire’s contractual obligation to pay any claim for which Declouette became “legally responsible.” In addressing this issue, both sides rely on cases from this circuit which they claim are determinative. Plaintiffs rely on
Sumrall,
while Imperial Fire insists that
Boatman v. Gorman,
2005-1369 (La.App. 1st Cir.2/7/06),
Sumrall
involved a remand from the Louisiana Supreme Court for an “opinion
solely
on the issue of whether a plaintiffs settlement with an insured eliminates an insurer’s obligation to pay the plaintiff according to the terms that the policy would otherwise require.”
Sumrall,
2003-1252 at p. 5,
In
Sumrall,
this court held that an insured-tortfeasor could be “legally liable” for the victim’s damages, even though he cannot be cast in judgment due to his release from liability. Under the circum
Additionally, this court observed, the Direct Action Statute creates solidary liability on the part of the insurer and the insured, although the solidary obligation arises from different sources, and that the statute was passed for the very purpose of protecting plaintiffs from insurers who attempt to avoid coverage after collecting premiums from insured-tortfeasors.
Sumrail,
2003-1252 at pp. 9-11,
Plaintiffs contend that the question of whether Imperial Fire can be cast in judgment where its insured has been released from liability has been addressed and answered by this court in
Sumrall.
Imperial Fire points out differences between |9the facts of this case and
Sumrall,
which it insists mandate a different result. First, it states that in a footnote in
Sumrall,
this court observed that it was important to note that the insurer was not an excess or uninsured motorist carrier, and therefore, the jurisprudence maintaining actions against excess insurers or uninsured motorists insurers after the insured-tortfea-sor had been released was not applicable. Imperial Fire claims that it is an excess insurer and urges that the distinction as to the type of insurer is of critical importance, but does not explain in what way. We note that it has long been held that a plaintiff-victim does not forfeit any right against his UM carrier by releasing the tortfeasor. See
Martin v. Champion Insurance Company,
95-0030, p. 13 (La.6/30/95),
Imperial Fire urges that the second distinction between this case and Sumrall is that the plaintiff in Sumrall specifically reserved rights against the | mtortfeasor’s liability insurer, naming the insurer in the release document, whereas in this case, there was no express reservation of rights as to the non-settling insurer. Of further significance, Imperial Fire urges, in Sum-rall, there was apparently never a determination of liability on behalf of the alleged tortfeasor, a fact stressed by this court throughout the opinion. However, in this case, Imperial Fire claims, there has been a determination of liability because the tortfeasor’s liability carrier made a payment exhausting its policy limits.
Because of these distinctions, Imperial Fire submits that the
Boatman
case is on point and controls the resolution of the issue before this court. In
Boatman,
decided after
Sumrall,
the plaintiff was involved in an accident with a vehicle driven by Chad Rivere and owned by his employer, Doug Gorman. The plaintiff filed suit against Gorman and his insurer, State Farm. Thereafter, plaintiff settled with State Farm and signed a release discharging Gorman, Rivere and State Farm with no reservation of rights. The plaintiff later amended her petition to add as defendants Doug Jackson, the owner of the vehicle in which she was riding as a guest passenger, and the owner’s uninsured motorist insurer, USAgeneies. Thereafter, the plaintiff dismissed Gorman and State Farm with prejudice and reserved all rights against USAgeneies and all parties, whether named or unnamed. Finally, the plaintiff filed a third amended petition naming USAgeneies as the insurer of Riv-ere pursuant to the Direct Action Statute. USAgeneies filed an exception of no right of action, which was overruled by the trial court after considering the exception within the confines of
Sumrall.
This court reversed, holding that under the circumstances of that case, once the insured, Rivere, had been released, there was no cause of action against him or his insurer under the express terms of the release. In so doing, this court noted that the insured was not mentioned in the motion to dismiss filed in the - litigation, was never named in the petition, and had been released in the settlement documents without any Inreservation of rights against his insurer.
Boatman,
2005-1369 at p. 2,
We find Boatman to be distinguishable from the case before us. In Boatman, the plaintiff released the insured without any reservation of rights against his insurer and did not name the insured as a party to the action. Under these circumstances, this court held that the plaintiff had no cause of action to proceed directly against the insurer. However, in this case, plaintiffs joined the insured as a party to the litigation, and when dismissing the insured, specifically reserved rights against all other parties in the litigation. Under these circumstances, plaintiffs procedurally preserved their right to proceed against Imperial Fire following the dismissal of its insured from the litigation.
While
Sumrall
is distinguishable from this case in some respects, we find that the pronouncements of this court in
Sumrall
apply with equal force to the instant case. Although plaintiffs did not specifically reserve the right to proceed against Imperial Fire in the settlement, it is evident that they intended to release Direct General
Furthermore, this court squarely rejected the argument that the release of an insured automatically extinguishes the insurer’s contractual obligation to pay | ^damages caused by the insured’s conduct in
Sumrall.
In so doing, this court observed that the term “legally liable” means “[l]iable under law as interpreted by courts.”
Sumrall,
2003-1252 at p. 9,
For all these reasons, we conclude that by entering into the settlement agreement and releasing Declouette and Direct General, plaintiffs waived their right to pursue Declouette personally and his settling insurer for a money judgment in a judicial proceeding, but did not waive the right to have Declouette’s liability judicially adjudicated for the purpose of pursuing a claim against Declouette’s nonsettling insurer. We hold that the settlement agreement between plaintiffs and Declouette did not bar plaintiffs’ separate right to pursue De-clouette’s non-settling insurer, Imperial Fire. Therefore, we find that the trial court erred in granting Imperial Fire’s motion for summary judgment.
CONCLUSION
For the foregoing reasons, that portion of the judgment sustaining the peremptory exception of res judicata is reversed as moot. The summary judgment rendered in favor of Imperial Fire & Casualty Insurance Company is hereby reversed and the case is remanded for proceedings consistent with this opinion. All costs of this appeal are assessed to appellee, Imperial Fire and Casualty Insurance Company.
REVERSED AND REMANDED.