Hawkins v. RedmonHawkins v. Redmon
| TWe granted a writ in this matter to resolve the
res nova
issue of who, in purchasing a Motor Vehicle Liability Policy as defined in
FACTS AND PROCEDURAL HISTORY
Mervin and Sandra Redmon, husband and wife, lived with their children in Wave-land, Mississippi, for ten years prior to Hurricane Katrina in August 2005. |2After Katrina, the couple moved their family to Avoyelles Parish where they established a residence and opened a joint bank account upon which either of them could draw.
Mervin pursued his occupation as a construction superintendent. He testified that he was on the job almost 24 hours per day and was able to return home only two weekends, sometimes two days, per month. During his absence, Sandra lived at the family home in Bunkie, Louisiana, with two of their children, Andrew (then 18 years of age) and Rachel (then 14 years of age).
On January 11, 2006, Sandra, acting as head of the household and with her husband’s consent, went to the Cottonport Insurance Agency to obtain automobile insurance on two of the vehicles they owned, a 1995 Chevrolet S-10 and a 1996 Ford Ranger. 2 A policy with Safeway Insurance Company of Louisiana (Safeway) was issued with effective dates of January 11, 2006, through July 11, 2006. In the process of obtaining the insurance, which was issued in Mervin’s name, Sandra signed the “APPLICATION” on the line designated “Applicant”; her signature was certified by the insurance agent at 11:30 a.m., January 11, 2006. During this process, Sandra rejected uninsured/underinsured motorist coverage by her signature on a Safeway form on a line marked “Named Insured or Legal Representative.” Sandra also signed an excluded driver endorsement expressly excluding their son Andrew Redmon from coverage under the policy. The policy was renewed several times and was in effect by the last renewal from January 11, 2007, through July 11, 2007. The endorsement page with those dates shows policy limits of $10,000/$20,000 for the two vehicles, [¡¡lists the drivers as Mervin Redmon and Sandra Redmon, and lists the excluded driver as Andrew Red-mon.
The form most significant to the coverage issue in the instant case is a Safeway
On January 13, 2007, Andrew Redmon was involved in an automobile accident while operating the 1996 Ford Ranger owned by his father and insured under the Safeway policy obtained by his mother. Ella Hawkins, the driver of the other vehicle involved in the accident, filed suit, individually and on behalf of her minor child, against Andrew and Safeway, alleging the automobile Andrew was driving was insured by Safeway.
In response to the petition, Safeway filed a general denial and specifically contended that the policy at issue did not provide coverage to Andrew pursuant to the named driver exclusion endorsement. Thereafter, Hawkins filed a petition for declaratory judgment seeking a ruling by the district court that the Safeway policy did |4provide coverage. Safeway responded, seeking a ruling that Andrew was excluded from coverage under the policy.
The district court held the Safeway policy provided coverage because the named-driver exclusion was invalid, having been signed by Sandra rather than Mervin, in whose name the policy was issued. The court also concluded Mervin did not give Sandra authority to exclude Andrew and “was unaware that his son was not a covered driver.”
Safeway perfected an appeal. Rejecting Safeway’s arguments and agreeing with the district court, the third circuit affirmed.
Hawkins v. Redmon,
This court granted a writ to address the interpretation of
DISCUSSION
The Louisiana Motor Vehicle Safety Responsibility Law,
One way an owner may satisfy the requirement of security is by obtaining an automobile liability policy with specified liability limits as defined by statute.
However, almost two decades ago, the legislature created an exception by introducing the concept of a named driver exclusion into Louisiana insurance law. | sIn 1992, the legislature amended
Notwithstanding the provisions of Paragraph B(2) of this Section, an insurer and an insured may by written agreement exclude from coverage any named person who is a resident of the same household as the named insured.
The sole purpose for the exclusion in
In the cases that followed the enactment of
The enactment of
However, in
Bellard v. Johnson,
Another split among the appellate court circuits arose shortly thereafter over the issue of whether a person who purchases liability insurance to comply with
In considering the issue of whether the purchaser of liability insurance could exclude himself/herself, the second circuit, in
Williams v. U.S. Agencies Casualty Insurance Company, Inc.,
33,200 (La.App. 2 Cir. 5/15/00),
This court granted a writ and adopted the reasoning of the second circuit instead of that of the fifth circuit, and overruled
Smyre, supra,
thus achieving a narrow construction of
The legislature reacted promptly by enacting La. Acts 2001, No. 368, § 1, which rewrote subsection L of
We begin as we must with the words of the statute at issue. Although interpretation of
At all times pertinent to the instant case,
L. (1) Notwithstanding the provisions of Paragraph (B)(2) of this Section, an insurer and an insured may by written agreement exclude from coverage the named insured and the spouse of the named insured. The insurer and an insured may also exclude from coverage any other named person who is a resident of the same household as the named insured at the time that the written agreement is entered into, and the exclusion shall be effective, regardless of whether the excluded person continues to remain a resident of the same household subsequent to the execution of the written agreement. It shall not be necessary for the Imperson being excluded from coverage to execute or be a party to the written agreement. For the purposes of this Subsection, the term “named insured” means the applicant for the policy of insurance issued by the insurer.
(2) The form signed by the insured or his legal representative which excludes a named person from coverage shall remain valid for the life of the policy and shall not require the completion of a new driver exclusion form when a renewal, reinstatement, substitute, or amended policy is issued to the same named insured by the same insurer or any of its affiliates. Any changes to an existing policy, including but not limited to the addition of vehicles or insured drivers to said policy, regardless of whether these changes create new coverage, do not create a new policy and do not require the completion of a new agreement excluding a named person from coverage. For the purpose of this Subsection, a new policy shall mean an original contract of insurance which an insured enters into through the completion of an application on the form required by the insurer.
As justification for the result reached, the court of appeal cited the definition provided in the statute: “For the purposes of this Subsection, the term ‘named insured’ means the applicant for the policy of insurance issued by the insurer.”
Notwithstanding the provisions of Paragraph (B)(2) of this Section, an insurer and an insured may by written agreement exclude from coverage the [applicant] and the spouse of the [applicant]. The insurer and an insured may also exclude from coverage any other named person who is a resident of the same household as the [applicant] atthe time that the written agreement is entered into.
The statute does not state that an “applicant,” when substituted for the phrase “named insured,” can exclude someone from coverage. The statute states that “an insured” can sign that agreement. The lower courts’ conclusion that subsection L states that only an applicant for a policy can exclude someone from coverage under the policy is an erroneous rewriting of the statute. In the instant case, there is no debate that Sandra Redmon is “an insured” as provided by the policy’s definition of | ,2named insured and its reference to the declarations page of the Safeway policy. As “an insured,” she was entitled by statute to execute an exclusion which would result in a lower premium for the insurance purchased by her.
Likewise, by statute, Safeway is entitled to rely on Sandra’s completion of the exclusion form. It is undisputed that Safeway issued a new policy to the Redmons. According to
Thus, it is of no moment that
It is immaterial that Mervin Redmon did not know of the listing of his son as an excluded driver. The fact that Andrew was an excluded driver was clearly indicated on the declarations page. The cover sheet of the policy issued to the | ^Redmons has in large print: “PLEASE READ YOUR POLICY.” There is also the provision that the issuance of the policy is based upon reliance on the statements made on the application, which is attached to the policy. Mervin’s failure to read the policy has no effect on the fact that he agreed to allow Sandra to purchase the insurance as a convenience to himself and the household and to fill out the application forms provided by the insurance agent. Mervin cannot retroactively limit Sandra’s authority to bargain with the insurance company to the detriment of Safeway. In his deposition testimony, Mervin stated he had no contact whatsoever with Cottonport Insurance Agency or Safeway; he left all of the insurance procurement to Sandra in his absence from the household. Even after the accident, it was Sandra, not Mervin, who applied for their son to be added to the policy. Thus, a designation of Mervin or Sandra as the “applicant” is immaterial and cannot result in morphing the executed exclusion into one not authorized by
CONCLUSION
We conclude the lower courts erroneously interpreted
REVERSED AND REMANDED.
Notes
. Retired Judge Philip C. Ciaccio, assigned as Justice ad hoc, sitting for Chief Justice Catherine D. Kimball. Retired Judge Thomas C. Wicker, Jr., assigned as Justice ad hoc, sitting for Justice Jeannette Knoll, recused.
. The application reveals there were other vehicles in the household which were not listed in this application.
. Scholars have posited that this amendment was probably intended to supercede Lewis v. Narcisse, supra. 15 McKenzie & Johnson, Louisiana Civil Law Treatise: Insurance Law and Practice, § 83 at 290 n. 3 (2006).
. We acknowledge that the reading of this statute to allow "any insured” to execute the named driver exclusion has been criticized by the second circuit, in
Safeway v. Johnson,
28,150, p. 2 (La.App. 2 Cir. 1/24/96),
Requiring the written consent of each insured, as defined by the policy, would necessitate the signatures of at least every household member, even those not yet licensed to drive. Neither would the result be any more tenable if the statute were construed to allow any of these insureds to accomplish such a limitation. Even so, the named insured, who acts on behalf of all other insureds in procuring an insurance policy, should certainly be (and is) allowed to exercise this statutory option. We further conclude that the legislature, contemplating a rational construction of the statute, intended for the named insured alone to have the right and responsibility of excluding members of his household from coverage. [Emphasis in original.]
This observation was quoted with approval by the third circuit in the instant case,
Hawkins,
09-0215 at 4;
We acknowledge that the reading of the statute to allow "any insured” to execute the named driver exclusion could arguably lend itself to having a minor resident of the household, who is an insured under the liability policy, attempt to execute such an exclusion. However, considering the fact that subsection L(2) allows an insurance company the option of providing its own form to be completed by an insured, it is virtually impossible that an insurer would enter into such a contract unless it was satisfied that an insured was a responsible party. Further, the statute requires a written agreement to effectuate an exclusion. The mere possibility that some remote consequence may materialize in the future does not justify the courts' substitution of "named insured” for the statutory "an insured” used by the legislature.