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Barron v. Hutzler

Court of Appeals of Louisiana, Fifth Circuit

August 30, 2017

JOHNNA BARRON, ON BEHALF OF HER HUSBAND, MICHAEL BARRON
v.
KRYSTAL HIMEL HUTZLER, GOLDSTAR ELECTRIC, INC. AND PROGRESSIVE SECURITY INSURANCE COMPANY

         ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT PARISH OF JEFFERSON, STATE OF LOUISIANA NO. 734-677, DIVISION "H" HONORABLE GLENN B. ANSARDI, JUDGE PRESIDING

          COUNSEL FOR DEFENDANT/APPELLEE, KRYSTAL HIMEL HUTZLER AND PROGRESSIVE SECURITY INSURANCE COMPANY John J. Erny, III.

          COUNSEL FOR DEFENDANT/APPELLANT, LIBERTY MUTUAL INSURANCE COMPANY H. Minor Pipes, III Susan M. Rogge.

          Panel composed of Judges Fredericka Homberg Wicker, Jude G. Gravois, Marc E. Johnson, Robert A. Chaisson, Stephen J. Windhorst, and Hans J. Liljeberg.

          FREDERICKA HOMBERG WICKER JUDGE.

         Liberty Mutual Insurance Company ("Liberty Mutual") appeals the trial court's judgment denying its motion for summary judgment and granting the motion for summary judgment filed by Progressive Security Insurance Company ("Progressive") and Krystal Himel Hutzler. At issue before this Court is whether Ms. Hutzler's verbal cancellation of her Liberty Mutual policy was sufficient to effect cancellation of the policy. Because we find that the trial court correctly determined that Ms. Hutzler's verbal request to cancel her Liberty Mutual insurance policy was insufficient to effect cancellation, we affirm the trial court judgment.[1]

         FACTS AND PROCEDURAL HISTORY

         Ms. Hutzler obtained an automotive policy of insurance from Liberty Mutual, with an effective policy period from May 13, 2012 to May 13, 2013. On June 25, 2012, Ms. Hutzler purchased an automotive policy of insurance covering the same vehicle from Progressive, with an effective policy period beginning on June 25, 2012. On July 10, 2012, Ms. Hutzler called Liberty Mutual to cancel her Liberty Mutual policy. While on the phone, Liberty Mutual conducted a policy review with Ms. Hutzler, after which Ms. Hutzler maintained her verbal request to cancel her policy. At Ms. Hutzler's request, Liberty Mutual backdated her cancellation to June 25, 2012 (the date Ms. Hutzler purchased the Progressive policy). On July 10, 2012, Liberty Mutual sent Ms. Hutzler a final bill for $232.04, being the prorated premium amount due on her cancelled policy (i.e., premium for the period from the policy's May 13, 2012 inception date through the policy's June 25, 2012 cancellation date).[2] When Ms. Hutzler failed to pay the bill, Liberty Mutual sent her an automated email on July 31, 2012, advising her that the prorated premium balance due on her policy after cancellation needed to be paid immediately to avoid the bill being sent to a collection agency. On August 20, 2012, Liberty Mutual sent Ms. Hutzler's account to a collection agency. On September 7, 2012, the collection agency received payment in the amount of $232.04 for the prorated premium amount due on Ms. Hutzler's cancelled policy.

         On July 31, 2012, Ms. Hutzler was involved in a tragic automobile accident in which her vehicle collided with a motorcycle being driven by Michael Barron, resulting in serious personal injuries to Mr. Barron. On August 25, 2012, Mr. Barron died and on June 18, 2013, Johnna Barron, as plaintiff on behalf of herself and her deceased husband, filed a survival and wrongful death action against Ms. Hutzler and Progressive.[3], [4]

         On September 25, 2015, Progressive and Ms. Hutzler filed a third-party demand against Liberty Mutual, alleging that Ms. Hutzler's Liberty Mutual policy was in effect on July 31, 2012, the date of the subject accident. The third-party demand sought indemnity and/or contribution from Liberty Mutual for any and all amounts for which Ms. Hutzler was found liable.

         On March 4, 2016, Liberty Mutual filed a motion for summary judgment, arguing that there was no indemnity or contribution available to Progressive or Ms. Hutzler under the Liberty Mutual policy at issue because that policy had been cancelled by Ms. Hutzler before the date of the subject accident. In response, Progressive and Ms. Hutzler filed a counter-motion for summary judgment, seeking a ruling that Liberty Mutual provided coverage to Ms. Hutzler for the subject accident, and asking the trial court to order Liberty Mutual to indemnify her for all amounts she is found liable to Mrs. Barron on the main demand as a result of the subject accident.

         Following a hearing on the motions for summary judgment, in a written partial final judgment rendered on June 2, 2016, the trial court denied Liberty Mutual's motion for summary judgment, granted the motion for summary judgment filed by Progressive and Ms. Hutzler, and found that Liberty Mutual's policy provided coverage to Ms. Hutzler for the July 31, 2012 accident. In its written reasons for judgment dated June 23, 2016, the trial court stated that it was "controlled" by the rulings of this Court and did not "have the option of ignoring [this Court's] interpretation of La. R.S. 22:885" in Gandy v. United States Automobile Association, 97-1095 c/w 98-215 (La.App. 5 Cir. 10/14/98), 721 So.2d 34, writ denied, 98-2836 (La. 1/15/99), 736 So.2d 208. The trial court consequently found that La. R.S. 22:885 requires that an insured's request to cancel his or her policy be in writing and, thus, Ms. Hutzler's verbal request for cancellation was ineffective. Pursuant to this Court's order, the trial court issued an amended judgment, further ordering that Liberty Mutual indemnify Ms. Hutzler for any amounts she may be found liable to plaintiff, "up to the [Liberty Mutual policy's] limits." This timely appeal followed.

         ANALYSIS

         Appellate courts review a district court's grant of summary judgment de novo, viewing the record and all reasonable inferences that may be drawn from it in the light most favorable to the non-movant. Parish of Jefferson v. Davie Shoring, Inc., 14-701 (La.App. 5 Cir. 2/11/15), 167 So.3d 925, 929, citing Bourgeois v. Boomtown, LLC of Delaware, 10-553 (La.App. 5 Cir. 2/15/11), 62 So.3d 166, 169. A motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(3).

         Summary judgment procedure is favored and designed to secure the just, speedy, and inexpensive determination of every action, with specific exceptions. La. C.C.P. art. 966(A)(2). The burden of proof rests with the mover.

         Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover's burden on the motion does not require him to negate all essential elements of the adverse party's claim, action, or defense, but rather to point out to the court the absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. C.C.P. art. 966(D)(1); see also Paternostro v. Wells Fargo Home Mortg., Inc., 09-469 (La.App. 5 Cir. 12/8/09), 30 So.3d 45, 47-48.

         La. R.S. 22:885, entitled "Cancellation by the insured; surrender, " provides, in pertinent part:

A. Cancellation by the insured of any policy which by its terms may be cancelled at the insured's option or of any binder based on such policy may be effected by written notice thereof to the insurer and surrender of the policy or binder for cancellation prior to or on the effective date of such cancellation. In the event the policy or binder has been lost or destroyed and cannot be surrendered, the insurer may in lieu of such surrender accept and in good faith rely upon the insured's written statement setting forth the fact of such loss or destruction.

(Emphasis added)

         Likewise, La. R.S. 22:637, the precursor to La. R.S. 22:885, stated, in pertinent part:

A. Cancellation by the insured of any policy which by its terms is cancelable at the insured's option or of any binder based on such policy may be effected by written notice thereof to the insurer and surrender of the policy or binder for cancellation prior to or on the effective date of such cancellation. In event the policy or binder has been lost or destroyed and cannot be so surrendered, the insurer may in lieu of such surrender accept and in good faith rely upon the insured's written statement setting forth the fact of such loss or destruction.

(Emphasis added)

         In its first assignment of error, Liberty Mutual argues that the trial court erred in relying on this Court's decision in Gandy, supra, and its interpretation of La. R.S. 22:637, asserting that Gandy erroneously interpreted La. R.S. 22:637 (now La. R.S. 22:885) as mandating that the exclusive manner in which an insured can cancel his or her policy is by written request or surrender of the policy to the insurer. Liberty Mutual argues that Gandy is factually distinguishable and, thus, is not instructive to the facts of this case.

         In Gandy, while the plaintiff was trading in a leased vehicle, the salesman at the dealership called the plaintiff's insured, United Services Automobile Association ("USAA"), to confirm that insurance was available and to inform USAA of the trade. The plaintiff asked the salesman to further inform USAA that he wanted to terminate the coverage on another vehicle, a Suzuki motorcycle, as of October 10, 1995. Sometime between 10:30 p.m. on October 10, 1995, and 6:00 a.m. on October 11, 1995, while the plaintiff was at work, his Suzuki motorcycle was stolen. The plaintiff made a claim with USAA, but the claim was ultimately denied because the plaintiff could not prove that the theft occurred during the policy period, that is before 12:01 a.m. on October 11, 1995. The plaintiff filed suit against USAA and then filed a motion for summary judgment on coverage. The trial court granted the plaintiff's motion for summary judgment. Gandy, 721 So.2d at 35.

         On appeal, this Court considered La. R.S. 22:637 (now La. R.S. 22:885) to determine whether a verbal request to cancel a policy by the insured was sufficient to effect cancellation of the policy. Gandy, 721 So.2d at 37. This Court found that the legislature, in La. R.S. 22:637, set forth a mechanism by which an insured could validly cancel his or her policy. This Court specifically addressed the identical issue presently before us and held, "we find that a verbal request by the insured party to cancel the policy is not sufficient to ...


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