Articles Posted in Insurance Dispute

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In a previous post, we discussed Uninsured/Underinsured Motorist (“UM”) coverage provisions in auto insurance policies. In short, UM coverage is intended to protect the policyholder in cases of injury or loss inflicted by another driver who has inadequate insurance or no insurance at all. UM coverage is not without limitation; however, as most policies apply the coverage only to the named policyholder himself and in cases when the loss or injury occurs through use of the vehicle covered by the policy. In Cadwallader v. Allstate Ins. Co., the court stated that an insurance policy is “a contract between the parties and should be construed using the general rules of interpretation of contracts set forth in the Civil Code.” Thus, the policy language will control the details of UM coverage, so long as any limitations in the provision do not violate public policy.

The general rules of contract interpretation were applied by Louisiana’s Second Circuit Court of Appeal in the case of Kottenbrook v. Shelter Mutual Insurance Co. On June 29, 2009, Jack Kottenbrook, an Ouachita Parish sheriff’s deputy, was involved in a car accident while riding as a passenger in a police cruiser. He suffered serious injuries in the crash and sought damages before eventually settling with the at-fault driver and the driver’s insurer. Kottenbrook then filed a lawsuit against Shelter Mutual Insurance Company, alleging he was covered under the underinsured motorist provision in a policy for which he was identified as an “additional listed insured.” This policy was issued to Jack Armstrong, Inc., a corporation, and specifically covered a Ford Mustang owned by the corporation. Kottenbrook was, however, not driving this Ford Mustang when the accident occured, so the court must look to the direct policy language to determine if he was occupying a “covered vehicle” in which the policy would provide him coverage.

Shelter disputed that the policy’s UM coverage extended to Kottenbrook, given that he was not “occupying” the “covered vehicle” at the time of his injuries. The Second Circuit declared that “the coverage extended to Kottenbrook is defined and limited under the policy.” A reading of the definitions contained within the policy led the court to find that UM coverage “was limited to Kottenbrook’s use of the [Mustang,]” not any other vehicle such as the police cruiser. The court found nothing impermissible about this limitation from a public policy perspective, and affirmed the trial court’s judgment for Shelter. It is important to read and understand the coverage of a UM insurance policy because they are often equipped with a variety of limitations. As in Caldwater v. Allstate Insurance Co., insurance policies are contracts that must be looked at with a careful set of eyes to truly understand how every provision hidden in the contract applies to unfortunate circumstances like Mr. Kottenbrook.

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After filing a lawsuit, plaintiffs are required to notify defendants of the impending suit so that they may defend and respond to the claim. Without notice that a lawsuit has been filed against them, defendants’ due process rights may be violated if an unfavorable judgment is entered or rendered without their knowledge. The time frame for this requirement – commonly known as “service of process” – varies among state and federal jurisdictions. In Louisiana, plaintiffs have ninety days from filing a lawsuit to request service of process, which is known in Louisiana as “citation and service.” The lawsuit officially begins once a defendant receives citation and service because only then will a court have jurisdiction over all of the parties. If service is not completed within the statutory period, defendants may justifiably make a motion to dismiss the case. Plaintiffs, however, may be able to defeat a motion to dismiss if they can show good cause for being untimely with the requirement. This issue was recently before the Supreme Court of Louisiana in George Igbinoghene and Sebastian Busari v. St. Paul Travelers Ins. Co.

In the seminal case, Igbinoghene and Busari (hereinafter “plaintiffs”) filed their petition in the parish of Orleans on May 18, 2007, but failed to request service within ninety days of the filing date. St. Paul Travelers Insurance Company (hereinafter “St. Paul”) filed a motion to dismiss for insufficient service of process. The district court denied the motion and St. Paul appealed.

On appeal, the plaintiffs argued that denying the motion to dismiss was proper because good cause was shown for being untimely since they agreed to St. Paul’s request to extend the time to file responsive pleadings. The Supreme Court found this argument unpersuasive given that such events occurred in 2008 and 2009, which were outside of the relevant period. Moreover, the Supreme Court stated that requesting an extension to file pleadings did not act as an express, written waiver of citation and service. In addition, the Supreme Court declared that St. Paul’s knowledge of the suit did not make citation and service unnecessary. To support this assertion, the Supreme Court relied on Naquin v. Titan Indemnity Co., a Louisiana Fourth Circuit Court of Appeals case, which held that “defendant’s actual knowledge of a legal action cannot supply the want of citation because proper citation is the foundation of all actions.”

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On the evening of October 29, 2004, Jeanine Pryor, then 69, attended a football game between Barbe High School and New Iberia High School at Lloyd G. Porter Stadium in Iberia Parish. Pryor, who was there to see her grandson play, was recovering from hip surgery and required a cane to get around. She sat in the bleachers on the visitors’ side of the stadium to be with the other fans of the Barbe High Bucs. The seat boards on the visitors’ side bleachers were uniform and approximately eight inches apart in height, except that the space between the first and second seat boards had 18 inches between them. When Pryor first arrived, she realized she could not step up the distance between the first row and the second, so she “grabbed the second board and lay on her side so she could swing one leg up at a time.” Then she stood up and was assisted by her daughter the rest of the way up the rows to her seat. At halftime, when Pryor descended the bleachers in order to visit the restroom, she attempted to simply step down the distance between the first and second seats, rather than use the same maneuver she had executed on the way up. In the process, she fell and was severely injured. Pryor filed suit against the New Iberia school board alleging that the bleachers were defective. After a bench trial, the district court entered a judgment for the school board, having determined under a risk/utility analysis that the condition of the bleachers was not unreasonably dangerous. Pryor appealed and the court of appeal reversed. It rejected the district court’s analysis, finding there was “no utility or social value in exposing visiting patrons to an eighteen-inch vertical differential between the seat boards in question.” The court apportioning 70 percent fault to the school board and 30 percent fault to Pryor, awarding her damages of over half a million dollars. The school board appealed.

The Louisiana Supreme Court recited the general rule that “the owner or custodian of property has a duty to keep the property in a reasonably safe condition,” though the owner generally has “no duty to protect against an open and obvious hazard.” It is the trial court’s role to decide which risks are unreasonable based upon the facts and circumstances of each case, and review of its determination on appeal is subject to the manifest error standard. Louisiana courts have adopted a risk-utility balancing test for this analysis, which requires weighing four factors:

(1) the utility of the thing. Here, the court concluded, “it is undisputed that the bleachers serve a social utility purpose by providing seating for patrons of the stadium,” and further, that “the eighteen-inch gap between the first and second seat is not a defect in the bleachers per se, but simply part of their design.”

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In previous posts on this blog, we have discussed the elements that the victim of a car accident must prove in order to recover from an at-fault driver. Whether the defendant’s negligent conduct caused the accident and the victim’s injuries is a question to be resolved by the fact-finder. This role is usually assumed by the jury, but can also be left to the judge in the case of a bench trial. Much deference is given to a fact-finder’s decision on such issues: the appropriate standard for appellate review of factual determinations is the “manifest error/clearly wrong standard.” This high standard means that an appellate court can set aside the trial court’s factual determination only if it is “clearly wrong in light of the record reviewed in its entirety.” In order to overturn a factual finding, the appellate court must make a two-part inquiry: (1) the court must find from a review of the trial record that no reasonable factual basis exists for the finding; and (2) the record must establish that the trial court’s finding was clearly wrong. It is important to note that the appellate court is not merely asked to determine whether the trier of fact was objectively right or wrong; instead the court must decide if the factfinder’s conclusion was reasonable in light of the evidence. The Second Circuit Court of Appeal’s opinion in the recent case of Hopkins v. Nola provides an example of an appellate court’s application of this analysis to overturn a critical factual finding of the trial court.

On January 17, 2008, Sharnetta Hopkins was involved in a car accident with Brian Nola near the intersection of Desoto Street and Cole Avenue in Monroe, Louisiana. In her complaint, Hopkins alleged that the accident occurred when Nola struck her car after executing an illegal pass. Nola countered that he did nothing wrong, but was actually struck by Hopkins’s car when she ran a stop sign. At the bench trial in March, 2010, the parties offered conflicting testimony on the incident. Also, Shawn Maynard, an officer with the Monroe Police Department who responded to the accident and issued Hopkins a citation for running the stop sign, offered testimony as to Hopkins’s fault. Nevertheless, the trial court entered a judgment against Nola, awarding Hopkins damages after apportioning 80 percent of the fault to Nola. In its decision, the trial court noted that it effectively ignored Officer Maynard’s testimony because he “did not take any photographs, diagram the location of any debris from the accident, and did not talk to all of the witnesses.”

On appeal taken by Nola, the Second Circuit reviewed the trial record according to the manifest error standard. The court found that “the trial court committed reversible error in its wholesale dismissal of Officer Maynard’s testimony due to deficiencies in his investigation of the accident.” The court reached this conclusion because “the trial court’s articulation in its written ruling of perceived deficiencies is unfounded.”

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Louisiana law requires all motor vehicle liability insurance policies to extend coverage not only to the insured, but also to any other person with express or implied permission to drive the motor vehicle. Once the insured gives permission, coverage will be denied only if the driver deviates from the permissive use. Consequently, at issue in most lawsuits of this kind is whether the damages caused by the driver are covered by the policy.

A recent case involved Ellen Van, who was driving her car on McReight Street in the city of Bastrop on the same day that minor April Canada was driving a truck owned by the defendant, Steven Ferrell, her live-in boyfriend. April allegedly failed to stop at an intersection and collided with the Van’s vehicle. Ellen and her husband, claiming that the collision caused injuries to her back and body, filed suit against Steven Ferrel and his insurer, Safeway Insurance Company of Louisiana. In Ellen T. Van and Ralph E. Van v. Steven Ferrell and Safeway Ins. Co., the lower court granted Safeway’s motion for summary judgment on the basis of the affirmative defense of nonpermissive use. Safeway contended that April did not have permission to use the truck on the day in question, and, therefore, the damages caused by the accident were not covered by the policy.

On appeal, the plaintiffs challenged the lower court’s determination that there was no genuine issue of material fact in the case. Specifically, the plaintiffs contested that April’s implied permission from Ferrell to drive the truck on the day of the accident was an unresolved, material issue in the case. The Louisiana Second Circuit Court of Appeals, agreeing with the plaintiffs, reversed and remanded the lower court’s judgment because the deposition testimony established that an issue remained in the case as to whether April had implied permission to drive Ferrell’s truck.

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From the Courts of Equity of the England of yore to Louisiana’s Third Circuit, fairness is and has been for a long time an essential component of the law. Civil concepts of fairness still exist today, especially in Louisiana courts dedicated to making whole the victim of a crime.

Edward Signal, like many injury victims, acquired the right to sue at the time of his injury. This right is a commodity of sorts and can be bargained away in an agreement known as a release. Mr. Signal signed one of these agreements with BellSouth Telecommunications after a BellSouth employee, Jared Romero, struck Mr. Signal’s vehicle on the on-ramp of Highway 90 from Willow Street in Lafayette. Mr. Signal received a check from BellSouth for the exact amount of the damage to his car. When he cashed this check, he failed to consider an important phrase in the letter that accompanied it. BellSouth indicated that this check was intended to be a “full and final settlement of [Mr. Signal’s] claim.” There was also language on the back of the check that indicated the check was for “property damages and/or bodily injury.” After cashing the check, Mr. Signal discovered the check to not fully cover his damages and filed suit in this matter. In response, BellSouth raised the affirmative defense of res judicata claiming that Mr. Signal’s claim was already settled.

The trial court determined that Mr. Signal, a 73-year-old man with a self-assessed third grade reading level, was not quite on even footing with the more sophisticated corporate defendant. In so concluding, the trial court found that Mr. Signal’s behavior was reasonable. A reasonable man in his situation would assume that a check for the amount of damage to his car would not also be intended to cover personal damages. The State of Louisiana Court of Appeal, Third Circuit affirmed Mr. Signal’s right to sue BellSouth for damages arising out of his personal injuries.

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Over the course of the last century, products liability law has become more detailed and specific in terms of protecting consumers from injury caused by products. If a product is found to be defective, in most cases any sellers along the chain of sale can be held liable. This means that, from the manufacturers to the retailer, all parties can be held liable if damage is caused by a product. The reason for this trend in the law is to give the benefit of the doubt to the consumer because the consumer needs protection. Further, stricter laws force manufacturers to produce better products. If they know that a defective product could potentially results in a multi-million dollar law suit, they will make sure the products they produce are safe.

This protection is especially true as it pertains to young children. Because children have less experience in life, there is a higher chance that they can make a mistake which would be unreasonable to make if it were an adult. However, even the law does not extend such benefits fully to all actions by children and teenagers. In a recent case, Payne v. Gardner, the Louisiana Supreme Court identified a point at which even a teenager could not be protected.

In 2004, in Rapides Parish, Henry Goudeau was playing around an oil well pump. The oil well pumps on oil wells move back and forth like a pendulum. As Henry was playing around the oil well pump, he noticed the movement of the pump and decided to use the pump as a pendulum type swing for recreational purposes. Afer he jumped on the pump when it reached its highest point, his leg got caught in another part of the pump which unfortunately lead Henry to be seriously injured. Henry’s mother decided to sue the manufacturer of the pump, Lufkin Industries. A serious battle arose as to whom the blame should fall upon. Should Lufkin have know that their pumps would be used as a ride? Should Henry have used better care in making a determination of whether it was safe to ride on the pump?

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The term “venue” refers to the particular court where a plaintiff should file his suit. In the case of car accidents and other tort actions, the Louisiana Code of Civil Procedure gives the plaintiff a choice of venue. The plaintiff can file the suit in the parish where the accident occurred or, alternatively, in the parish where the defendant driver resides. When a liability insurer is involved as a defendant, the suit can also be filed in the parish where the insurance company is registered. The case of Lopez v. Richard illustrates how the misapplication of the venue rules can have serious, undesirable consequences for a plaintiff.

On March 31, 2006, Gil Lopez was rear-ended by another driver in Lafayette Parish. The driver was Josette Richard, a resident of Lafayette Parish who was insured by Allstate. On the last day of the one-year prescriptive period (April 2, 2007), Lopez filed suit in Iberia Parish, which is the parish where he and his wife live. Richard and Allstate filed an exception for improper venue, and the parties agreed to transfer the case to Lafayette Parish in August of 2007. Once the case was transferred, Richard and Allstate filed an exception of prescription, arguing that Lopez’s action was not properly filed before the expiration of the prescription period. The Third Circuit agreed, stating that “it is well settled that the transfer of an action to a correct venue, after prescription has run, does not resurrect the plaintiff’s lawsuit.” In an attempt to preserve his cause of action, Lopez offered the novel argument that venue in his home parish was proper under the state’s “joint obligor” statute. That is, Lopez argued that because he was a beneficiary under Richard’s Allstate policy, he was also an “insured” under the terms of the policy which provided Allstate’s connection to Iberia Parish and permitted suit there. The court deemed this theory a misapplication of the law which was intended for suits involving Uninsured Motorist coverage, but not a direct policy such as the one Allstate had issued to Richard. Instead, Lopez is merely a “claimant” who will “be paid by Allstate on behalf of their insured, Richard, if Richard is found liable” for the accident. Thus, because Lopez filed his suit in the wrong parish and did not transfer it to a proper parish before the running of the prescription period, his case was dismissed.

The lesson from the Lopez case is that proper venue should be identified as early as possible to ensure that the prescriptive period does not expire before the suit can be filed in the correct court. Misfiling a suit does not toll the running of the period. Had Lopez not waited until the very last minute to file his original suit, he may have been able to transfer to the correct venue and avoid losing his case on a mere (but critically important) technicality.

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A person’s worst fear when undergoing an invasive surgery, is for something to go wrong. For one patient, this fear came true when his doctor operated on the wrong knee. This severe error was not disputed by the Doctor, who admitted he erroneously operated on the plaintiff’s right knee when he intended to treat the plaintiff patient’s left knee with arthoscopic surgery. What was at issue in this recent Louisiana Second Circuit Court of Appeals decision, is whether or not the injured plaintiff was awarded an appropriate amount in damages. Numerous factors are weighed when determining damages. However, in Louisiana, as well as numerous other states, there is a cap on how much a person may recover in a medical malpractice suit. Patients who have been injured face a litany of complicated issues and standards that are difficult to understand, thus, obtaining legal representation as soon as possible is highly recommended in order to protect legal rights throughout the process.

In a recent Louisiana Second Circuit Court of Appeals decision, the court explored the amount of damages a patient was initially awarded for damages they sustained from an erroneously performed surgical procedure. The plaintiff patient complained on appeal that the trial court abused its discretion in awarding inadequate damages for past lost wages, past medical expenses, as well as pain and suffering. Additionally, the victim contended that the trial court erred in failing to award future lost wages and future medical expenses for the patient plaintiff and loss of consortium for his wife. The appellate court affirmed the trial courts damages award for numerous reasons, many based on statutory limits that are in place restricting the amount a patient may obtain. Yet, the decision is in large part held by the jury. The jury has the duty to hear the evidence and determine a price that may “make the plaintiff whole again.” In this case, the jury decided that the patient plaintiff had $40,000 in pain and suffering and $10,000 in loss of income. It may seem a harsh factor in the legal process, that despite the severity of a patients injuries, the numerical value given such injuries is designed to “fix” such issues. The plaintiff in this case felt that the jury’s damages award did not adequately resolve any of the issues he was experiencing after having the botched surgical procedure. Since the accident, the victim of this botched surgery had been experiencing serious issues in almost every part of his life, including that the knee which was erroneously operated on was in constant pain, decreased his range of motion, his sense of instability caused him to limp, insomnia, impaired ability to work, back pain induced by the limp which resulted in a herniated disk, and loss of consortium with his wife. Thus, the problems went deeper then the categorical terms such as “pain and suffering and loss of income.” The court however, explains and supports their decision by exploring the governing statutes at issue.

Juries factual finding decisions are highly regarded, and under Louisiana law such decisions may not be set aside unless the appellate court finds that it is manifestly erroneous or clearly wrong. The appellate court will review the witnesses testimony at trial in order to determine whether or not their may have been an erroneous decision. Here, the plaintiff alleged he had to undergo four surgeries due to the Doctor operating on the wrong knee plus a discogram of his back. To support the additional damages that were a result of the erroneous surgical procedure performed by the defendant doctor, the plaintiff offered the testimony of a doctor who contended that the plaintiff would need two back and neck surgeries and would have pain in his right knee for the rest of his life. Further, the plaintiff would have to get a total knee replacement at some point in his life. In consequence to the erroneous surgery, the plaintiff was declared disabled by Social Security and began receiving Social Security Income payments. Additionally, the plaintiff was unable to perform the part time work he was previously able to and the couple eventually went bankrupt. Despite these very sad consequences, the court has to abide by the regulations and statutes that are in place and govern medical malpractice issues.

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As discussed previously on this blog, the primary duty of Louisiana’s Department of Transportation and Development (DOTD) is to maintain the public roadways in a condition that is reasonably safe and which does not present an unreasonable risk of harm to motorists who exercise ordinary care. As outlined in this recent post, a plaintiff must prove the following elements in order to hold the DOTD liable for damages arising from an accident on the roadway: (1) that the condition that caused the damage was in DOTD’s control; (2) that the condition amounted to a defect that presented an unreasonable risk of harm; and (3) that the DOTD was aware or should have been aware that the defect existed. In addressing the extent of the risk of harm, litigants often rely on the standards established by the American Association of State Highway and Transportation Officials (“AASHTO”) which, while not mandatory in Louisiana, offer a point of reference for whether DOTD’s design of a particular roadway presented an unreasonable risk. The AASHTO’s standards have evolved over time, however, and in many cases they have become stricter and more elaborate as vehicular traffic volume has increased. In light of this, the Louisiana Supreme Court has held that DOTD does not have duty to bring old highways up to modern standards unless a major reconstruction of the highway is undertaken. The question of what qualifies as a “major reconstruction” was at the center of the recent case in the First Circuit Court of Appeal, Davis v. Travelers Property Casualty Insurance Co.

On the evening of April 22, 2003 Nathaniel Davis, a flatbed truck driver for the Purpera Lumber Company, legally parked his truck in the northbound lane of La. Hwy. 308 so he could deliver a load of lumber to a residential construction site adjacent to the highway. Davis parked in the travel lane because there was no driveway at the site that would accommodate his truck and because the road, which was maintained by DOTD, had no shoulder. Davis was severely injured when his truck was rear-ended by an elderly driver who made no attempt to slow down before she collided with the truck. Davis filed suit naming DOTD as a defendant. His theory of recovery was based on the road’s lack of a shoulder, a deisgn which violated the then-current AASHTO standards requiring an eight-foot extension of the highway. Presumably, the shoulder would have offered a safer location for parking his truck. Ultimately, the First Circuit reviewed a verdict in the trial court in which the jury determined that the lack of a shoulder posed an unreasonably dangerous risk to Davis. However, the jury also found that DOTD did not know (and had no duty to have known) about this condition and thereofre had no duty to cure the defect by constructing a shoulder. Davis argued that a resurfacing project undertaken by the DOTD some years prior to the accident qualified as “major reconstruction” which put DOTD on notice of its duty to upgrade the roadway to include a shoulder. The First Circuit court disagreed, noting that “there is no evidence from which to conclude that the roadway underwent a major reconstruction at that location or even that the State had obtained additional rights of way [necessary for such significant work] in the area of the accident site.” Accordingly, the court affirmed the jury’s verdict in favor of DOTD.

This is another example in a long line of cases that demonstrates the challenge of winning a claim against DOTD under an ordinary negligence theory. The Louisiana legislature and courts have made clear that DOTD is not the “guarantor for the safety of all of the motoring public [n]or the insurer for all injuries or damages resulting from any risk posed by obstructions on or defects in the roadway.” As a result, an injured plaintiff must have a skilled attorney who understands the nature of DOTD’s responsibilities to those who use the highways.

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