Forvendel v. State Farm Mutual Automobile Insurance Co.Forvendel v. State Farm Mutual Automobile Insurance Co.
Lead Opinion
hln the instant appeal, defendant-appellant, State Farm Automobile Insurance Company (“State Farm”) seeks review of the trial court’s judgment in favor of plaintiff-appellee, Brandon Forvendel. For the foregoing reasons, we find that the trial court did not manifestly err in finding that Mr. Forvendel could recover under both his own and his mother’s uninsured motorist insurance policies. Accordingly, the judgment of the trial court is affirmed.
Factual & Procedural History
On July 19, 2013, Mr. Forvendel was involved in a three-car accident while driving a vehicle he owned and which was insured by State Farm. Mr. Forvendel’s State Farm automobile insurance policy included uninsured motorist (“UM”) coverage. Following the July 2013 accident, State Farm allowed Mr. Forvendel to recover the policy limits of his UM policy. However, Mr. Forvendel, who lived with his mother, Deborah Forvendel, at the tíme of the accident, also sought to recover under her State Farm UM policy, which carried significantly higher policy limits. State Farm refused to allow him to recover under his mother’s policy. Mr. Forven-del subsequently filed suit against State Farm.
In his Petition, Mr. Forvendel argued that he is entitled to recover UM benefits pursuant to his mother’s policy because of State Farm’s actions with regard to a 2007 accident which took place under strikingly similar circumstances. The two accidents share several' important commonalities. First, in both accidents, Mr. Forvendel was injured while occupying his own vehicle, insured by State Farm. Second, at the time of both accidents, Mr. Forvendel carried UM coverage under his State Farm insurance policy. Third, Louisiana’s “anti-stacking statute,” discussed below, was in effect at the time of both accidents. Finally, at the time of both accidents, Mr. For-vendel resided with his mother, who also carried UM coverage pursuant to her own State Farm policy. . -
^Following the 2007 accident, Mr. For-vendel recovered the limits of his own State Farm UM policy. Subsequently, he sought additional recovery under his mother’s Státe Farm UM policy. On June 9, 2008, a State Farm manager wrote Mr. Forvendel’s attorney a letter with reference to the 2007 accident and Deborah Forvendel’s UM policy, stating that, “given the language in the policy ,., your client does qualify as an insured for Uninsured Motorist coverage.” Consequently, State Farm allowed Mr. Forvendel to recover under both policies in effect at the time of the 2007 accident.
Mr. Forvendel argues that State Farm, in allowing him to recover under both policies following the 2007 accident, waived its defense to allowing him to recover under his mother’s UM policy with regard to the July 2013 accident. In response to this argument, State Farm contends, that its behavior subsequent to the 2007 accident is irrelevant and cannot be used to create or expand UM coverage or recovery for Mr. Forvendel under his mother’s policy with regard to the 2013 accident.
The matter proceeded to a bench trial on August 18, 2016. Prior to trial, the parties entered into, inter alia, the following stipulations. First, the parties stipulated that Mr. Forvendel was the owner and operator of the Chevrolet Equinox involved in the motor vehicle accident that occurred on July 19, 2013. Second, the parties stipulated that Mr. Forvendel had UM coverage through State Farm, and that State Farm had allowed Mr. Forven-del to recover the limits of his own UM policy prior tó trial. Finally, Mr. Forvendel stipulated that “his cause of action does
At trial, Mr. Forvendel and Deborah Forvendel both testified. Mr. Forvendel testified that after sustaining back injuries in his more recent accident, he had been forced to stop treatment because .he was unable to afford further treatment. Deborah Forvendel testified that she had been a State Farm customer for over twenty five years, and that her insurance policy had remained essentially unchanged during that Istime. She further testified that she was never notified that State Farm’s decision to allow Mr. Forvendel to recover under her policy for his 2007 accident had been in error.
. Two State Farm employees also testified at trial. Aaron Angel, an underwriting team manager, confirmed that only minor changes to Deborah Forvendel’s policy had been made since 2007.
Paul Robichaux, the State Farm manager who handled Mr. Forvendel’s claim for recovery under his mother’s UM policy in connection with the 2007 accident, also testified at trial. Mr. Robichaux testified that “the claim handler conducted an investigation and submitted a report.to me and unfamiliar with the coverage, I contacted team managers in Louisiana.” He further testified that, being presented with the question of “whether or not a resident relative could select” UM 'coverage, he received “conflicting information” but ultimately decided to extend coverage to Mr. Forvendel under his mother’s policy. Mr. Robichaux also testified that although he now believes that the decision following the 2007 accident was incorrect, he had no knowledge of any attempt by State Farm to inform the Forvendel family of the error.
LOn September 27, 2016, the trial court entered written judgment in favor of Mr. Forvendel, awarding him fifty thousand dollars ($50,000.00) in general and special damages, plus court costs and judicial interest. In its written reasons for judgment, the trial court found that, “under the same circumstances and with the same anti-stacking statute in effect, State Farm previously interpreted the agreement between the parties to cover plaintiff under his mother’s UM policy,” therefore finding that Mr. Forvendel “may collect UM benefits on an automobile insurance policy issued to his mother ... just as State Farm allowed him to do in 2007.” The instant appeal follows.
Discussion
On appeal, State Farm asserts three assignments of error. First, State Farm claims that the trial court erred in finding that its previous payment to Mr. Forven-del with reference to his 2007 accident allows Mr. Forvendel to collect uninsured motorist benefits in reference to his 2013 accident. In its second and third assignments of error, State Farm claims that the trial court erred in allowing Mr. Forvendel
In general, a trial court’s finding of fact may not be reversed absent manifest error or unless clearly wrong. Lasyone v. Kan. City S. R.R.,
, La. R.'S. 22:1295(D)(l)(c),- otherwise described as the “anti-stacking statute,” is contained within Louisiana’s statutory provisions on uninsured motorist coverage. In pertinent part, it provides:
If the insured has any limits of uninsured motorist coverage in a policy of automobile liability insurance, in accordance with the terms of Subsection D(l), then such limits of liability shall not be increased because of multiple motor vehicles covered under said policy of insurance and such limits of uninsured motorist coverage shall not be increased when the insured has insurance available to him under more than one uninsured motorist coverage provision or policy; provided, however, that with respect to other insurance available, the policy of insurance or endorsement shall provide the following: With respect to bodily injury to an injured party while occupying an automobile not owned by said injured party, the following priorities of recovery under uninsured motor: . ist coverage shall apply:
(i) The uninsured motorist coverage on the vehicle in which the injured party was an occupant is primary;
(ii) Should that primary uninsured motorist coverage be exhausted due to the extent of damages, then the injured occupant may recover as excess from other uninsured motorist- coverage available to him. In no instance shall more than one coverage from more than one uninsured motorist policy be available as excess over and above the primary coverage available to the injured occupant.
Louisiana’s public policy strongly favors UM coverage and a liberal construction of the UM statutes. Hoefly v. Government Employees Ins. Co.,
Stacking of UM coverage occurs when the amount available under one policy is inadequate to satisfy the damages alleged or awarded the 'insured and the same insured seeks to combine or stack one coverage on top of'anothér for the same loss covered under multiple policies or under multiple coverage's contained in a single policy. Id. at 742. The issue of stacking arises exclusively once it has been determined that an individual insured has two or more policies or ■ a ■ single policy covering multiple vehicles applying to the same-loss. Id. at 743. Accordingly, in order to analyze the application of the anti-stacking statute, we must first addre'ss whether Mr. Forvendel was an insured -pursuant to his mother’s State Farm Policy.
State Farm raises this issue in then-second and third assignments of error.'In their second and third assignments of error, State Farm claims that the trial- court erred in allowing Mr. Forvendel to recover under his mother’s- UM policy because he was the owner and operator of -the vehicle in question, the vehicle' was not the described vehicle listed in his mother’s- automobile policy, and “coverage is excluded by the Louisiana UM statute and the policy language.”
It is undisputed that Mr. For-vendel was not listed as an insured in his mother’s State Farm automobile insurance policy, and that his vehicle was hot the vehicle described in that policy. However, we find that the trial court was not manifestly erroneous in determining that State Farm waived its right to deny coverage to Mr. Forvendel under his. mother’s policy, and that he was insured-under his mother’s policy. Under Louisiana law, “[w]aiver occurs when there is an existing right, a knowledge of its existence and an actual intention to relinquish it or conduct so inconsistent with the intent to enforce the right as to induce a reasonable belief that |7it has been relinquished,” Tate v. Charles Aguillard Ins. & Real Estate, Inc.,
In Steptore, an employee was injured while, working on a cargo vessel and sued the vessel’s owner, Masco Construction Co, (“Masco”) and Masco’s insurer, Ocean Marine Indemnity Co. (“Ocean Marine”), who immediately began representing the owner at his defense. Id. at 1215. After six months of actively defending Masco, Ocean Marine denied further coverage after discovering that Masco' had apparently breached a condition in its navigation warranty of its Ocean Marine policy, limiting Masco’s protection to a specified location. Id, at 1217. Maseo sought coverage from Ocean Marine on the grounds that Ocean Marine had waived its .coverage defense by defending Masco for six months before realizing it had the right to void coverage due to Masco’s breach. Id, Despite Ocean Marine’s notice of facts indicating non-coverage, it continued to assume Masco’s defense without taking precautions to reserve its coverage defense by obtaining a non-waiver agreement. Id. at 1216. In holding that Ocean Marine “possessed facts indicating a possible defense to coverage,” thereby effectively waiving any coverage defense that may have existed under the policy, the Court reasoned that
In this case, State Farm argues that its past behavior with regard to a past claim cannot be used by the trial court in order to determine that a waiver has taken place. However, other appellate courts have found that an insurer’s past behavior may | «waive terms in its contact. For example, in Green v. Brown, 51-152 (La. App. 2 Cir. 02/15/17),
In its arguments in support of its appeal, State Farm relies heavily on this Court’s decision in Monju v. Continental Casualty Co.,
Therefore, we turn to the .question of whether State Farm’s conduct in this ease satisfies the elements of waiver, as set forth in Tate, supra. It is undisputed that Mr. Forvendel was listed as a “household member” rather than an “insured” in Deborah Forvendel’s policy, both at. the time of the 2007 accident and at the time of the accident that, is the subject of this litigation. Accordingly, State Farm would, under normal circumstances, -have a right to deny coverage based on this distinction. See, e.g., Howell v. Balboa Ins. Co.,
Next, having found that Mr. Forvendel is an insured under both his mother’s and his own UM policies, we turn to State Farm’s first assignment of error, which | inaddresses whether the trial court manifestly erred in allowing Mr. Forvendel to stack UM coverage. We find no manifest error in the trial court’s determination that State Farm waived its defense under the anti-stacking statute.
As a preliminary matter, we note that an insurance company may extend insurance coverage beyond that required by Louisiana law, including the anti-stacking statute. In Livas v. State Farm Mut. Auto. Ins. Co., 99-1169 (La. App. 1 Cir. 07/17/00),
Accordingly, we turn to the question of whether State Farm’s conduct waived its defense to coverage pursuant to the anti-stacking statute. With regard to the first element of waiver, there is no dispute that ordinarily, State Farm would have “an existing right” to deny coverage to Mr. For-vendel based on Louisiana’s anti-stacking statute. See Nall v. State Farm Mut. Auto. Ins. Co.,
Next, we consider whether the trial court erred in finding that State Farm had notice of Louisiana’s anti-stacking statute. We find no reason to disturb the trial court’s finding with'regard to this issue. The trial court heard testimony from multiple State Farm employees concerning State Farm’s internal processes in reference to Mr. Forvendel’s 2007 accident. That testimony reflects that, following the 2007 accident, State Farm knew there was a question concerning Mr. Forvendel’s ability to recover under both his own policy and Deborah Forvendel’s policy. In Steptore, supra, the Louisiana Supreme Court found the notice requirement of waiver to be met where the pleadings filed in the case clearly demonstrated the basic facts needed by the insurer to deny coverage. Similarly, in this case, it is uncontested Inthat State Farm was aware of Mr. Forvendel’s intent to recover under both policies following his accident in 2007. Accordingly, we find that the trial court did not err in finding that State Farm had sufficient notice in this ease to knowingly waive this defense.
Finally, State Farm’s conduct with regard to Mr. Forvendel’s 2007 accident clearly meets the third element of waiver set forth in Tate. State Farm not only allowed Mr. Forvendel to stack UM coverage under essentially identical circumstances, it overtly confirmed his ability to do so in writing. Furthermore, despite its clear knowledge of its error regarding payment of the claim for the 2007 accident,
In his response to State Farm’s appellate brief, Mr. Forvendel argues that he is entitled to an award in excess of fifty thousand dollars ($50,000.00) pursuant to La. R.S. 22:1973. Mr! Forvendel did not advance this argument either in his petition or at trial, and sighed a stipulation prior to trial confirming that his damages in this case did not exceéd fifty thousand dollars ($50,000.00). Louisiana courts have repeatedly held that La. R.S. 22:1973 is penal in nature, and its provisions 'are therefore to be strictly construed. Hernandez v. Continental Cas. Ins. Co.,
For the foregoing reasons, we find that the trial court did not manifestly err in its judgment allowing Mr. Forvendel to recover under his mother’s UM policy. Accordingly, we affirm the judgment of the trial court in this matter.
AFFIRMED
DISSENTS WITH REASONS MEJ
Notes
. Mr. Angel testified that Deborah Forvendel’s ex-husband and his vehicle had been removed from the policy in October 2007, and that her address had been updated. None of the changes made to Deborah Forvendel’s policy in 2007 involved her son, Brandon Forvendel.
. The terms "waiver” and “estoppel” are often used interchangeably, as both are equitable principles that may result in modification of coverage provided by a policy based on the conduct of the parties involved. However, waiver and estoppel are significantly distinct concepts that must be discussed independently, See e.g. Orleans Parish Sch. Bd. v. Lexington Ins. Co., 12-CA-1686 (La. App. 4 Cir. 06/05/13),
Dissenting Opinion
DISSENTS WITH REASONS
I iSI, respectfully, dissent from the majority opinion in this matter for the following reasons.
First; although the majority relies upon Livas v. State Farm Mut. Auto. Ins. Co., 99-169 (La. App. 1 Cir. 7/17/00);
In Livas, the plaintiffs, Larry and Linda Livas, brought the suit individually and on behalf of their minor daughter, Quanita Livas, against their second UM insurance carrier, National General Insurance Company (“National General”). This issue on summary judgment in that matter was whether the plaintiffs could stack additional coverage under the National General policy as compensation for Quanita’s injuries sustained during an accident" in which her mother was driving the vehicle. Quani-ta was an insured under the policy as a family member of the named insureds (her parents), but she was not the owner of the vehicle she was occupying when injured.
In its ruling,-the appellate court found that National General’s policy did not exclude UM coverage to Quanita and reversed the summary judgment that dismissed the plaintiffs’ UM claim. In my opinion, the finding aligned with the version of anti-stacking law that existed at the time which provided an exception for an injured party occupying a vehicle not owned by him/her. Quanita did not own the vehicle shé was occupying at the time of the accident; thus, the exception would have applied to a UM claim on her behalf. For that reason, I would not interpret
| ^Furthermore, and more importantly, I find that State Farm could not waive its right to deny coverage to Mr. Forvendel when the .coverage relied upon circumvents the provisions of a state statute, namely La. R.S. 22:1295(l)(c) and (e). “While it is true that persons may waive personal rights that the law has established, they cannot by their contracts violate prohibitory law or derogate from law enacted for the protection of the public interest.” Goulas v. B & B Oilfield Sevs., 10-934 (La. App. 3 Cir. 8/10/11);
La. [C.C.] art. 1996 provides that “an obligation cannot exist without a lawful cause.” La. C.C. art. 1968 provides that “the cause of an obligation is unlawful when the enforcement of the obligation would produce a result prohibited'by law or against public policy.” Thus, if a con'tract has as its cause or its object the violation or circumvention of a state statute, it is an 'absolute nullity in contravention of public order.”
Louisiana law prohibits the stacking of UM policies for coverage for instances like the one in this case. .As properly cited in the majority opinion, “[sjtacking of UM coverage occurs when the amount available under. policy is inadequate to satisfy the damages alleged or awarded the. insured and the same insured seeks to combine or stack one coverage on top of another for the same loss covered under multiple policies or under multiple coverages contained in a single policy.” Boult v. State Farm Mut. Auto. Ins. Co., 99-0942 (La. 10/19/99);
Here, even the majority opinion recognizes that State Farm would have the right to deny coverage to Mr. Forvendel under his mother’s UM policy based on Louisiana’s anti-stacking statute. Because of the anti-stacking statute, State Farm |1scould not legally, extend the mother’s UM policy coverage to Mr, Forvendel, under these circumstances, because it would be in derogation of the law. In my opinion, this means that State Farm could not waive, the use of the anti-stacking statute as a defense for the 2013 accident- because State Farm’s actions, e.g., extending coverage to Mr. Forvendel under his mother’s UM policy in 2007, were not based upon a lawful cause and were in contravention of the. statute.
Therefore, ,1 would find that the trial court legally erred
. Questions of law, such as the proper interpretation of a statute, are reviewed under the de novo standard of reyiew. City of Gretna v. Morice, 14-301 (La. App. 5 Cir. 12/30/14);