Wanda TRAUTMAN, et. al., Plaintiffs-Appellees, v. Larry T. POOR, et al., Defendants-Appellants.
No. 96-627.
Court of Appeal of Louisiana, Third Circuit.
December 11, 1996.
685 So.2d 516
Before THIBODEAUX, COOKS and GREMILLION, JJ.
Leon Elzear Roy, III, New Iberia, for Larry T. Poor, et al.
Nicholas Gachassin, Jr., Gerald J. Dartez, Lafayette, for Victoria Fire & Casualty Co.
COOKS, Judge.
Victoria Fire and Casualty Company (Victoria) appeals the district court‘s grant of Wanda Trautman‘s motion for partial summary judgment. Applying Louisiana Conflicts of Law,
FACTS
A vehicle owned by a Louisiana resident and operated by another Louisiana resident struck a vehicle owned and operated by a Tennessee resident in the Parish of St. Martin. At all relevant times, Victoria had in full force and effect a policy of automobile insurance providing uninsured motorist coverage for plaintiff, the Tennessee resident, and the vehicle she was operating in Louisiana on the day of the mishap. Plaintiff was residing in Tennessee when the policy was secured, which covered her vehicle registered in that state. The Victoria policy, in the part pertinent to this dispute, contained a clause excluding uninsured/underinsured motorist (UM) coverage if the insured failed to obtain prior consent from it before settling with the primary parties.1 Plaintiff settled her primary claims against the tortfeasor without securing Victoria‘s prior consent.
When plaintiff notified Victoria of her intent to claim UM benefits pursuant to the terms of its policy, Victoria denied that coverage existed. Plaintiff filed suit in Louisiana. Victoria answered plaintiffs UM claim against it asserting she breached an exclusionary
Plaintiff then filed a “Motion for Partial Summary Judgment” seeking a determination from the trial court on whether this state‘s or Tennessee‘s law applied in assessing the validity of the “prior consent to settle” clause found in Victoria‘s policy.
Finding Louisiana
Victoria appeals the district court‘s partial summary judgment, asserting the following assignments of error:
1. The district court committed manifest error in concluding that Article 3544 governs the factual situation of this case.
2. The district court committed manifest error in concluding Tennessee law does not govern the validity of the contract of insurance issued to a resident of Tennessee in the State of Tennessee.
LAW & DISCUSSION
Appellate courts review summary judgments de novo using the same criteria that the trial court used in determining whether summary judgment is appropriate. Bertrand v. Metropolitan Life Ins. Co., 93-1123 (La.App. 3 Cir. 4/6/94), 635 So.2d 579. If the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue of material fact and the mover is entitled to judgment as a matter of law, then summary judgment shall be rendered forthwith.
The issues raised by Victoria do not survive or fail based on our review of the facts which are, in the main, undisputed. Though Victoria bifurcated the argument it urges us to accept as meritorious, the real issue presented for our consideration is singular in scope. The question is whether the law of Louisiana barring inclusion of “prior consent clauses” in automobile insurance contracts should apply, where the accident occurred and was caused by a tortfeasor residing and operating a vehicle registered in Louisiana versus the law of the State of Tennessee allowing such clauses, where the plaintiff resided and was operating a Tennessee registered vehicle at the time insured by a policy issued by Victoria, an Ohio company.
Generally, absent constitutional restrictions, a court will follow the statutory direction of its own state on choice of law issues. Restatement (Second) of Conflicts of Law § 6 (1971); Levy v. Jackson, 612 So.2d 894 (La.App. 4 Cir.1993). Victoria does not quarrel with this accepted principle of law. Rather, Victoria‘s discontent hinges on its insistence that the trial court misapplied Louisiana‘s choice of law
As Victoria notes Louisiana revised, amended, and re-enacted its conflict of laws provisions, previously consisting of Articles 14 and 15, to consist of
Victoria directs our attention to
Except as otherwise provided in this Title, an issue of conventional obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties; (2) the nature, type, and purpose of the contract; and (3) the policies referred to in
However, an old familiar caveat to most rules, be they specific or general, is they do not apply to all cases.
The residual nature of the provisions of Book IV is established by the introductory phrase of this Article “[u]nless otherwise expressly provided by the law of this state“. This phrase means that the provisions of Book IV are not intended to supersede more specific choice-of-law rules contained in other Louisiana statutes, such as the Insurance Code (see La.R.S. 22:611 et seq.), the Commercial Code (see, e.g.,
Therefore, when language exists in the Insurance Code indicating an intent by the legislature to apply Louisiana law to the “issue” in controversy “as between” the parties, the more specific expression trumps any provision found in Book IV which may sway in favor of applying the law of a foreign state. The pertinent Revision Comments, thus referenced, are sound, accord with
We stated in Willett v. National Fire and Marine Ins. Co., 594 So.2d 966, 968 (La.App. 3 Cir.), writ denied, 598 So.2d 355 (La.1992), “the object of the Louisiana Uninsured Motorist Statute,
“Perhaps the Legislature could have enacted a law which under modern conflict of laws theories would affect insurance policies written in other states when the accident occurs in Louisiana, but the Legislature did not include such a provision in
La.R.S. 22:1406(D)(1) .”
Shortly after rendition of the Snider decision, the Louisiana legislature amended
“This Subparagraph and its requirement for uninsured motorist coverage shall apply to any liability insurance covering any accident which occurs in this state and involves a resident of this state.” Id. at 1053. (Emphasis added)
In Willett, 594 So.2d 966, we found this addition reflected the legislature‘s intent to overrule Snider and to broaden the reach of Louisiana‘s uninsured/underinsured motorist law on coverage questions. The added language no longer restricts application of Louisiana law on issues involving UM coverage to policies delivered or issued for delivery in this state attaching to vehicles registered or principally garaged in this state. The
“The mandatory uninsured motorist coverage of
R.S. 22:1406(D) may not be thwarted by policy exclusions serving no legitimate purpose.* * * * * *
It is not the best legal interest of the public to require that legal representatives of parties to these actions first consent from the client‘s own uninsured motorist carrier before settling actions with other parties who may or may not be found ultimately liable for plaintiffs injuries.”
See also, Bond v. Commercial Union Assur. Co., 407 So.2d 401 (La.1981).
Finding mandatory requirements of
As mentioned, the legislature revised, amended, and redesignated the conflict of laws provisions in 1991 by placing them in a newly created Book IV of the Civil Code. Although the provisions in Book IV, in most multi-state cases, require courts to utilize a step by step “interest analysis” approach in resolving conflict questions,
Victoria does not argue any “full faith and credit” or like constitutional infringements will occur if Louisiana law is applied to the coverage issue. Instead, Victoria stressed, during oral argument, that application of Louisiana law in this case will result in uncertainty in the insurance business by subjecting insurers to greater underinsured motorist liability than the “insureds” bargained for, depending on the laws of multiple jurisdictions, and render them unable to protect their interest during the negotiation phase. Victoria‘s apprehensions are not new. We have heard them before. In answer, the courts of this state have said “in our mobile society the insurer could not reasonably contemplate the insured driving only in [the state where the policy was issued] and being subject to [that state‘s] interpretations of the policy provisions at all times.” Sutton v. Langley, 330 So.2d 321 (La.App. 2 Cir.), writ denied, 332 So.2d 805 (La.1976); See also, Willett, 594 So.2d 966; Bell v. State Farm F. & C. Co., 527 F.Supp. 300 (W.D.La.1981), aff‘d 680 F.2d 435 (5th Cir.1982); Browner v. Kaufman, 496 F.Supp. 961 (E.D.La.1980).
The legislature has “spoken” and expressed its choice that
“On the basis alone of statutory interpretation, we find that the UM insurer has no right under
R.S. 22:1406(D)(4) other than the right to reimbursement from the proceeds, if any, that the insured in fact recovers from such underinsured tortfeasor.The policy‘s subrogation clause, and the consent to settle clause, which protects that purported right of subrogation, serve no legally authorized purpose. They simply impede the insured‘s assertion of that part of his damage claim (against the tortfeasor‘s liability insurer) which the carrier in writing underinsured motorist coverage effectively acknowledged would be an independent or supplemental right of recovery of its insured. And assuming the insured is compelled, in the interest of securing sure and early settlement with the tortfeasor‘s liability insurer, to settle without the UM carrier‘s consent (a consent which may be arbitrarily withheld if full import is afforded the clause), the consent to settle clause serves as a bar to the UM coverage mandated by statute.” Id. at 1007.
Reiterating its position, the supreme court one more expressed in Bosch, 520 So.2d at 723:
“This court has declined to interpret the inexplicit language of the statute [
LSR.S. 22:1406(D)(4) ] so as to grant the (UM) insurer an independent right of action against an underinsured motorist or his liability insurer, Hebert v. Green, 311 So.2d 223, 228 (La.1975), or permit the uninsured motorist carrier to enforce a clause excluding uninsured motorist coverage in the event of its insured‘s failure to obtain its consent before entering a reasonable settlement with an underinsured tortfeasor and his insurer, Niemann v. Travelers Insurance Co., supra, at 1008 (La.1979) ...”
Accordingly, the trial court‘s partial summary judgment declaring invalid, as a matter of law, Victoria‘s “prior consent clause” was legally sound.
Even if we exercised our full authority and independently reviewed the “choice-of-law” question presented, without giving any presumptive weight to the Legislature‘s choice expressed in
Except as otherwise provided in this Title, an issue of conventional obligations is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of the involved states in the light of: (1) the pertinent contacts of each state to the parties and the transaction, including the place of negotiation, formation, and performance of the contract, the location of the object of the contract, and the place of domicile, habitual residence, or business of the parties; (2) the nature, type and purpose of the contract, and (3) the policies referred to in
The new provision which incorporates by reference the preceding
We are satisfied Louisiana‘s interests prime those of Tennessee and require application of Louisiana law in resolving the underlying coverage issue. Though we are mindful Tennessee‘s insurance rates for underinsured motorist coverage might be affected, this interest is overshadowed by the realities of the insurance industry and the reasonable expectations of parties. Neither Tennessee nor insurers who do business in that state reasonably could expect those who are residents and who obtain automobile insurance policies there to travel only the highways of that state without a thought of venturing beyond its borders. The interests of Louisiana mentioned in Sutton and Willett are just as significant and weighty in this case. The only factual difference between these cases and the present is the place of the policy‘s issuance and the residence of plaintiff. The views expressed in both cases are still sound and we adopt them here.
Louisiana‘s interest in regulating awards to victims on this state‘s highways, in protecting persons traveling on its highways from damage caused by uninsured and underinsured motorists, and in equally assessing the burden of awards to all culpable parties outweighs those of Tennessee. Further, as found in the cited cases, the interest of the Louisiana resident could be adversely affected by application of Tennessee law which may render valid the “prior consent” exclusion of Victoria‘s policy; and, in consequence, reduce the funds available to satisfy plaintiff‘s claims. Furthermore, a contrary holding would undercut and weaken Louisiana‘s long standing policy of requiring uninsured and underinsured motorist coverage to protect victims who travel on this state‘s highways and are injured by Louisiana residents.
DECREE
For the foregoing reasons, we affirm the district court‘s grant of plaintiff-appellee‘s, Wanda Trautman, partial summary judgment motion. All costs of the appeal are assessed to defendant-appellant, Victoria Fire and Casualty Company.
AFFIRMED.
Notes
“A. We do not provide uninsured motorist coverage for bodily injury sustained by any person:
* * * * * *
2) If that person or the legal representative settles the bodily injury claim without our consent.”
“Except as otherwise provided in this Book, an issue in a case having contacts with other states is governed by the law of the state whose policies would be most seriously impaired if its law were not applied to that issue.
That state is determined by evaluating the strength and pertinence of the relevant policies of all involved states in the light of: (1) the relationship of each state to the parties and the dispute; and (2) the policies and needs of the interstate and international systems, including the policies of upholding the justified expectations of parties and of minimizing the adverse consequences that might follow from subjecting a party to the law of more than one state.”