United Services Auto. Ass'n v. DugasUnited Services Auto. Ass'n v. Dugas
- Reporters:
- , ,
- Before:
- Ward, Gulotta, Hufft
This matter originally came beforе this court in an application for supervisory writs filed by defendant, Dr. Joseph E. Dugas, Jr. That application asked this Court to review and reverse the trial court decisions which overruled Dugas‘s peremptory exceptions and denied his motion for summary judgment. This court denied the writ application, but the Supreme Court remanded it to this court for briefing, argument,
The writ raises the question of whether an insurance carrier can recover from its insured the payment of a thing not due. When an insured is injured through the fault of an uninsured or underinsured motorist, if the insurer provides uninsured or underinsured motorist coverage, then the insurance contract obligates the insurer to pay underinsured dаmages. As a sign of good faith in fulfilling that obligation,
We hold that the insurer can recover the overpayment because the contraсt of insurance is the law between the parties. The provision of that contract relating to underinsured motorist coverage requires the insurer to pay only the uninsured portion of the actual damages, and we intеrpret this to mean damages judicially determined, in this case by a jury, just as the liability provisions mean an insurer is liable to third parties only for judicially determined damages.
Neither party disputes the relevant facts. This case is related to an earlier suit that resulted from an automobile accident involving Dr. Dugas and an underinsured motorist. At the time of that accident, United Services Automobile Association (USAA) insured Dr. Dugas and provided liability and underinsured motоrist coverage to him. Dr. Dugas sued the underinsured motorist, her insurer, and his insurer, USAA, claiming the negligent third party was underinsured as to his damages. The underinsured motorist‘s insurer paid its policy limits of $20,000.00, and Dr. Dugas dismissed his suit against that insurer and its insured. Dr. Dugas‘s brought to trial befоre a jury his underinsured motorist claim against his insurer, USAA.
Before trial actually commenced, however, pursuant to
Dr. Dugas, as the defendant, filеd exceptions of res judicature, estoppel by judgment, no cause of action, and a motion for summary judgment. USAA filed a motion for summary judgment. The trial court denied all exceptions and both motions for summary judgment. We now deny Dr. Dugas‘s application for writs because we agree with the trial court decision which overruled his exceptions and refused his motion for summary judgment. USAA has not applied for writs of review of the trial court‘s decision denying its motion for summary judgment.
Turning to the exceptions of res judicature and estoppel by judgment, Dr. Dugas contends these exceptions are applicable to the present suit because USAA did not seek a set off or reimbursement of its payment in the earlier suit wherein Dugas claimed underinsured motorist coverage.
Dr. Dugas‘s exception of no cause of action is so intertwined with the motions for summary judgment that it would not be of any use to distinguish them, even if it were possible to do so. There is no factual dispute, the issue is the same: Does a UM insurer have a cause of action to recover the difference between an unconditional tender and the uninsured damages awarded by a jury?
A UM insurer is rеquired by law to promptly pay the amount of any claim due after receipt of satisfactory proof of loss.
This amount would be unconditionally tendered to the [insured] not in settlement of the case, but to show their good faith in thе matter and to comply with the duties imposed upon them under their contract of insurance with the insured. The amount due would be a figure over which reasonable minds could not differ.
McDill v. Utica Mutual Insurance Co., 475 So.2d at 1092-1093.
Nonetheless, the McDill requirement for an “unconditional tender” does not create an obligation separate from the insurance contract. On the contrary, McDill emphasizes the insurance contract, explaining that
“Unconditional” does not mean “final” or “conclusive” as if ending the litigation. It is not an accord and satisfaction, сompromise or settlement. Johnson v. Protective Casualty Insurance Co., 572 So.2d 355, 357 (La.App. 1st Cir.1990). And it does not release the insured‘s claims when the insured accepts the tender. An insured may continue pursuing his claim against the insurer, seeking additional damages. Gallagher v. State Farm Insurance Co., 760 F.Supp. 562, 564 (E.D.La. 1991). Nor does it mean “irrevocаble” or “forever binding” as a separate obligation, one that would be in addition to or supersede the insurance contract. We believe unconditional means just that: an insurer cannot condition its tender. As an еxample, an insurer cannot place conditions on its tender by requiring a release, or by demanding that the funds be placed in escrow, or by limiting their use to payment of medical bills. The tender is unconditional in the sense the insured can use it as his own, but it is not conclusively his until a judge or jury says that it is his as the amount due for underinsured damages.
Turning then to the contract, it is clear the insurance contract obligates the insurer to pay only actual damages.
“We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured [or underinsured] motor vehicle because of bodily injury:”
Since the “unconditional tender” is only a good faith act acknowledging a UM insurer‘s contractual obligation to pay damages, when an insurer pays more than the underinsured damages, or what is required by contract, then an insurer has a right to recover from its insured for mistaken or
More importantly, the Louisiana Civil Code provides for restoration of mistaken or excessive payments:
He who receives what is not due to him, whether he receives through error or knowingly, obliges himself to restore it to him from whom he has unduly received it.
La.C.C. art. 2301 .
He who has paid through mistake, believing himself a debtor, may reclaim what he has paid.
La.C.C. art. 2302 .
Leаrned commentators support the above articles, one of whom is Planiol: Among other circumstances, an obligation to reimburse the payor arises when the eventual debt in view of which payment is made never arises. 2 Pt. 1 Planiol, Treatise on the Civil Law, section 842.
Louisiana courts have already held that a judgment debtor may recover an overpayment made to the judgment creditor when the judgment is reduced by an appellate court. Great American Indemnity Company v. Dauzat, 157 So.2d 308 (La. App. 3rd Cir.1963). This is closely analogous to the present case, because a McDill tender presuppоses that the amount tendered will be contractually due as a result of a judgment. However, when the tender is in excess of the damages awarded, the excess payment is for a debt that never arises and is a payment of a thing not due. Hence, the insured has an obligation to restore the excess to the insurer,
We believe this holding is consistent with the Legislative intent of
We therefore sustain the trial court‘s rulings which denied the exceptions and motion for summary judgment of Dr. Dugas. We remand to the trial court for further proceedings consistent with this decision. We assess all costs of this writ to Dr. Joseph E. Dugas, Jr.
AFFIRMED AND REMANDED.
PRESTON H. HUFFT, J. Pro Tem., dissents with reasons.
PRESTON H. HUFFT, Judge Pro Tem., dissenting.
I respectfully dissent.
The majority decision places a “condition” on the “unconditional” payment pursuant to
The payment under
If the legislature had intended for the “unconditional” payment under