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Melder v. State Farm Mutual Auto. Ins. Co.

Court of Appeal of Louisiana, Third Circuit

February 11, 2015

NADDIA MELDER, ET UX.
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, ET AL

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[Copyrighted Material Omitted]

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APPEAL FROM THE NINTH JUDICIAL DISTRICT COURT, PARISH OF RAPIDES, NO. 234,239. HONORABLE MARY LAUVE DOGGETT, DISTRICT JUDGE.

Roy S. Halcomb, Jr., Broussard, Halcomb & Vizzier, Alexandria, Louisiana, Counsel for Plaintiffs/Appellants: Naddia Melder, Randel Melder.

Joseph P. Williams, Williams Family Law Firm, L.L.C., Natchitoches, Louisiana, Counsel for Defendant: Louisiana Farm Bureau Casualty Insurance Company.

Bonita K. Preuett-Armour, Sheridan Hogue, Armour Law Firm, Alexandria, Louisiana, Counsel for Defendant/Appellee: State Farm Mutual Automobile Insurance Company.

Court composed of Sylvia R. Cooks, Billy Howard Ezell, and Phyllis M. Keaty, Judges. Cooks, J., dissents and assigns written reasons.

OPINION

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[14-934 La.App. 3 Cir. 1] KEATY, Judge.

Plaintiffs, Naddia and Randel Melder, appeal the trial court's judgment in favor of Defendant, State Farm Mutual Automobile Insurance Company. For the following reasons, the trial court's judgment is affirmed.

FACTS AND PROCEDURAL BACKGROUND

The issue in this case is whether the rejection of uninsured motorist and/or underinsured (UM) insurance coverage was executed by a person with the authority to waive coverage. In that regard, Mrs. Melder was injured in an automobile collision occurring in Alexandria, Louisiana, on March 1, 2007, when the vehicle she was driving, a 2006 Nissan truck, was struck by another vehicle driven by Connie Turlington. Turlington ran a stop sign prior to striking Mrs. Melder's vehicle. Mrs. Melder was working in the course and scope of her employment with Grimes Industrial Supply, L.L.C., at the time of the collision. Mrs. Melder's vehicle was provided to her by her employer although it was owned by another company, Grimes True Value Hardware, L.L.C.

At the time of the collision, State Farm provided an automobile liability insurance policy insuring the vehicle being driven by Mrs. Melder, which afforded UM coverage to Plaintiffs as insureds. Plaintiffs also maintained a separate policy with Louisiana Farm Bureau Casualty Insurance Company which provided additional UM coverage to them as insureds. Since Turlington's vehicle was uninsured, Plaintiffs filed suit against State Farm and Farm Bureau for UM coverage.

State Farm filed a motion for summary judgment seeking dismissal of Plaintiffs' claims against it. State Farm argued that Floyd Grimes (Floyd), the owner of Grimes Industrial Supply, L.L.C., declined UM coverage under the State [14-934 La.App. 3 Cir. 2] Farm policy which provided coverage for the vehicle driven by Mrs. Melder. Attached to its motion for summary judgment was the following: Plaintiffs' Petition for Damages; a certified copy of the State Farm policy issued to " GRIMES, FLOYD & GRIME[S], FRANK DBA GRIMES TRUE VALUE HDW STORE 8322 HIGHWAY 71 N PINEVILLE LA 71360-2751[; ]" Floyd's affidavit; and Vera Beckham's affidavit. Plaintiffs filed an opposition and cross-motion for summary judgment, seeking a judicial determination that State Farm provided UM coverage. State Farm then filed a reply and a supplemental memorandum in support of its motion for summary judgment and attached the following additional exhibits, including but not limited to: Floyd's supplemental affidavit; Floyd's deposition taken on July 10, 2013, on behalf of Grimes True Value Hardware, L.L.C.; and Vera Beckham's supplemental and amending affidavit. State Farm also filed a second supplemental memorandum.

Following a hearing on the cross-motions for summary judgment which took

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place on October 18, 2010, the trial court denied Plaintiffs' motion and granted State Farm's motion for summary judgment, dismissing it as a defendant. Plaintiffs appealed. On appeal, this court reversed and remanded the trial court's judgment, finding that genuine issues of material fact existed as to Floyd's authority to reject UM coverage on the subject vehicle. Melder v. State Farm Mut. Auto. Ins. Co., 11-98 (La.App. 3 Cir. 6/1/11), 66 So.3d 603. Specifically, we held that:

Simply stated, the policy purports to insure a vehicle belonging to Floyd and Frank Grimes, but Mr. Grimes['] sworn affidavit states that the vehicle belongs to a limited liability company. Furthermore, the record contains no evidence of the authority by which Mr. Grimes executed the UM rejection, either on behalf of the limited liability company or the apparently non-existent partnership between himself [14-934 La.App. 3 Cir. 3] and Frank Grimes. Given that unresolved material fact, the burden never shifted to the Melders in the summary judgment hearing.

Melder, 66 So.3d at 608. The genuine issue of material fact regarding Floyd's authority to execute the waiver stems from the fact that although the State Farm policy covering the vehicle was issued to Floyd Grimes and Frank Grimes DBA Grimes True Value Hardware Store, the vehicle was titled to Grimes True Value Hardware, L.L.C., and used by Grimes Industrial Supply, L.L.C.

On remand, State Farm filed a second supplemental memorandum in support of its motion for summary judgment. After a hearing which took place on June 23, 2014, the trial court granted State Farm's renewed motion for summary judgment and dismissed Plaintiffs' claims against it with prejudice.

Plaintiffs appeal this new judgment and assign as error the following:

(1) Whether a material issue of fact exists as to the named insured's identity under the State Farm policy such that the trial court legally erred by resolving this factual issue rather than holding that such factual issue precludes summary judgment;
(2) Whether a material issue of fact exists as to the capacity in which Floyd signed the UM rejection form such that the trial court legally erred by not holding that such factual issue precludes summary judgment;
(3) Whether Floyd, in his capacity as manager of Grimes True Value Hardware, L.L.C., and pursuant to its Operating Agreement, is contractually authorized to reject UM coverage on its behalf and, if so, does having such authority matter if he failed to sign the UM rejection form in a representative capacity on behalf of Grimes True Value Hardware, L.L.C.;
(4) Whether ambiguity and lack of clarity invalidates the UM rejection form because of the uncertain identity of the named insured and whether Floyd signed the UM rejection form individually and under the trade name Grimes True Value Hardware, as alleged by State Farm, or as a legal representative of Grimes True Value Hardware, L.L.C., as testified to by Floyd, and;
[14-934 La.App. 3 Cir. 4] (5) Whether the trial court legally erred by deciding the validity of the UM rejection form based on the intentions of the parties.

DISCUSSION

When reviewing a trial court's judgment on a motion for summary judgment, an appellate court employs the de novo standard of review " using the same criteria that govern the trial court's consideration

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of whether summary judgment is appropriate, i.e., whether there is a genuine issue of material fact and whether the mover is entitled to judgment as a matter of law." Supreme Servs. & Specialty Co., Inc. v. Greer, 06-1827, p. 4 (La. 5/22/07), 958 So.2d 634, 638. The burden of proof remains with the movant. La.Code Civ.P. art. 966(C)(2). If the moving party, however, will not bear the burden of proof at trial and shows that there lacks " factual support for one or more elements essential to the adverse party's claim, action, or defense[,]" then the non-moving party must produce " factual support sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial[.]" Id. If the opponent of the motion fails to do so, there is no genuine issue of material fact, and summary judgment will be granted. Id. The motion for summary judgment is granted " if the pleadings, depositions, answers to interrogatories, and admissions, together with the affidavits, if any, admitted for purposes of the motion for summary judgment, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law." La.Code Civ.P. art. 966(B)(2). Thus, we must analyze the substantive law governing the instant matter to determine whether a material fact exists. Jagneaux v. Lafayette City-Parish Consol. Gov't Parks & Recreation, 13-768 (La.App. 3 Cir. 12/11/13), 128 So.3d 681.

[14-934 La.App. 3 Cir. 5] " In Louisiana, UM coverage . . . embodies a strong public policy." Roger v. Estate of Moulton, 513 So.2d 1126, 1130 (La. 1987). Determination of UM coverage is by contractual provisions and applicable statutes, including La.R.S. 22:1295. Duncan v. U.S.A.A. Ins. Co., 06-363 (La. 11/29/06), 950 So.2d 544. The UM coverage requirement is an implied amendment to any automobile liability policy, and such coverage will be read into the policy unless validly rejected. Duncan, 950 So.2d 544. This statute is liberally construed, and the statutory exceptions to coverage are strictly interpreted. Id. " Any exclusion from coverage in an insurance policy must be clear and unmistakable." Id. at 547. The burden of proof remains with the insurer who must prove that the " insured named in the policy rejected in writing the coverage equal to bodily injury coverage or selected lower limits." Id. The law imposes UM coverage unless validly waived despite the policy language, the parties' intentions, or the presence or absence of payment or a premium charge. Johnson v. Gov't Emples. Ins. Co., 07-1391 (La.App. 3 Cir. 4/9/08), 980 So.2d 870, writ denied, 08-1031 (La. 8/29/08), 989 So.2d 105. A waiver form failing to meet the formal requirements is not a valid rejection of UM coverage. Id.

A valid UM waiver form, which must be complied with by the insurer, requires the following six formalities as enunciated in Duncan, 950 So.2d 544:

(1) the insured must initial the selection or rejection chosen to indicate that the decision was made by the insured; (2) if lower limits are selected, then the lower limits are entered on the form to denote the exact limits; (3) the insured or legal representative must sign the form evidencing the intent to waive UM coverage; (4) the form must include his or her printed name to identify the signature; (5) the insured dates the form to determine the effective date of the UM waiver; and (6) the form must include the policy number to demonstrate which policy it refers to.

Johnson, 980 So.2d at 874.

[14-934 La.App. 3 Cir. 6] I. First Assignment of Error

In their first assignment of error, Plaintiffs contend that the trial court legally erred by finding that Floyd and Frank are

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the named insureds under the State Farm policy. The declarations page states the insureds as: " GRIMES, FLOYD & GRIME[S], FRANK DBA GRIMES TRUE VALUE HDW STORE 8322 HIGHWAY 71 N PINEVILLE LA 71360-2751[.]" Plaintiffs allege that the ...


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