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Category: Accidents

  • The Importance of Reading Your Insurance Policy: Louisiana Court of Appeals Denies Coverage in Logging Accident Case

    In a recent Louisiana Court of Appeals case, an injured logger was not able to collect damages from his employer’s insurance company because the subcontractor at fault for the accident was found to be not covered.

    Travis Palmer was working for A.T. Martinez (ATM), LLC, as a logging truck driver and was injured when he was struck by a log while his employer’s truck was being loaded with timber. Palmer sued his employer’s insurer, Royal Indemnity Company (Royal), alleging that they provided general liability coverage even though a subcontractor, KLM Logging (KLM) was at fault. The trial court granted a motion for summary judgment in favor of the Palmer and found that the insurance policy in question covered KLM but the court of appeals disagreed on appeal.

    Royal denied coverage here on the primary grounds that KLM did not meet the definition of “an insured” or an “additional insured” under the terms of the policy issued to ATM. In addition, there was no agreement between ATM and KLM that required ATM to name KLM as an insured for the timber cutting/loading operations or for any other subcontractor work. KLM and ATM did allege, however, that had an oral agreement that ATM’s insurance would also cover KLM. The two owners of the respective corporations (who happen to be parent and child) claim that KLM paid insurance premiums to Royal for this coverage by virtue of ATM withholding part of the payments they owed to KLM. ATM believed that the policy covered their subcontractors, even though the owners admitted they never read it.

    ATM’s insurance agent, Mac Pace, also thought subcontractors were covered. Pace had been ATM’s agent for over 25 years. According to Pace, he obtained the policy through George Pusey of O’Donovan and Associates, Royal’s Managing General Agent and requested the same coverage for subcontractors as he had previously obtained for ATM from the Hartford insurance company. The trial court found that ATM had an agreement with KLM to provide KLM with coverage and that ATM and Pace had intended to get coverage, reforming the contract to provide coverage.

    Interpreting an Insurance Policy: Plain Language or Latitude?

    An insurance policy is a contract between the insured and the insurer. As such, the intent of the parties to the contract is deemed through the plain meaning of the language of the policy under La.C.C. art. 2047. If the language is clear, the policy must be enforced as written.

    The crux of the case here is the meaning of the provision in the policy regarding “who is an insured” and whether the language of the policy requires a written contract to add an additional insured or whether an oral agreement, as existed here to name KLM as an additional insured, would suffice.

    The policy contains the following provision:

    12. ADDITIONAL INSUREDS-BY CONTRACT, AGREEMENT OR PERMIT
    …
    5. a. Any person or organization you are required by a written contract, agreement or permit to name as an insured is an insured but only with respect to liability arising out of:
    1. “Your work” performed for that insured at the location designated in the contract, agreement or permit; or
    2. Premises owned or used by you.
    b. This insurance does not apply unless the contract, agreement or permit is executed prior to the “bodily injury” or “property damage.”

    Royal contends that the word “written” in the policy at 5.a. modifies the words “contract, agreement, or permit”, requiring something in writing to add an insured. Palmer and the other appellees, however, contend that the provision contemplates the possibility of an oral agreement because the word “written” should not be read to modify “agreement” or conversely, that the policy is ambiguous and must be construed in favor of coverage.

    The Court of Appeals disagreed with the appellees and found that the policy requires a written document.

    Although there is no hard fast rule stating that an adjective before a series of nouns modifies all nouns in the series, in this context, such would be the only reasonable construction of the phrase “written contract, agreement, or permit.” According to the Court, to read the phrase otherwise would be “strained and implausible.” The appellees make other efforts to argue that an agreement does not need to be written, such as stating that because the terms “contract” and “agreement” are separated by commas, the term “written contract” is separate from “agreement,” which is not modified by “written.” Despite a protracted effort, however, the Court does not deviate from the standard interpretation of the phrase.

    The Court found that when reading the phrase in the context of the policy provision, the only reasonable way to interpret the construction would be that there must be a written document–whether it be a contract, agreement, or permit. One exception to this rule would be in the case where there is written evidence of an oral agreement. Either way, there must be something written.

    Here, there was no written document that met the requirement of the policy, but what about deposition testimony indicating that ATM and KLM had a longstanding oral agreement that ATM would procure general liability insurance coverage that covered KLM? There was also testimony that KLM paid for coverage through their payroll, and the trial court relied on an insurance application as “written” evidence of ATM’s intent to provide coverage. The Court of Appeals did not accept these arguments and disagreed with the trial court.

    First, the “application” actually related to Owner’s and Contractor’s Protective Insurance, not CGL insurance which applies here. Second, this was not a situation when reformation of an insurance policy is permitted due to mutual mistake or error, which must be proven by clear and convincing evidence. The self-serving deposition testimony that evidenced ATM’s intent to provide coverage and that ATM had an oral agreement with KLM did not meet the high clear and convincing standard.

    The bottom line is that because the policy requiring a writing was clear and unambiguous and the undisputed facts were that this requirement was not met, coverage should not be provided and the decision had to be reversed. Complicated in of itself, the legal complexities illustrate why a qualified and experienced attorney is necessary.

  • Baton Rouge Car Accident Leads to Conflict of Interest and Defense Waiver by Insurance Company

    Automobile insurance policies commonly include a clause that requires the insurer to provide a legal defense for claims made against the insured driver. Insurers have a right to contest coverage for any claim, though, and when this happens the insurer is faced with the dilemma between its contractual duty to defend the insured and its interest in avoiding coverage. This is because the insurer has a duty to defend its insured even though it may ultimately be determined that it does not have any liability for coverage. This duty is avoided only in cases where it is absolutely clear from the facts that coverage does not apply; where the existence of coverage could turn on the resolution of the plaintiff’s allegations, however, the insurer is obligated to provide a defense.

    The Louisiana State Bar Association’s Committee on Professional Ethics and Grievances has stated in a formal opinion that “[w]here the insurer either denies coverage to the insured or reserves its rights to do so subsequently, … the Committee is of the opinion that it would be improper … for the same attorney to represent both the insurer and the insured” See Opinion No. 342 (May 30, 1974). Accordingly, under Louisiana law, if the insurer chooses to represent the insured but deny liability coverage, it must employ separate counsel. See, e.g., Belanger v. Gabriel Chemicals, Inc., 787 So.2d 559 (La. App. 1st Cir. 2001).

    This issue was central to the resolution of Wrights v. Progressive Casualty Insurance Co., No. 2010-CA-0327 (La. App. 1st. Cir. 2010). On April 25, 2006, the vehicle in which Nedra Wrights was traveling was rear-ended by a car driven by Joshua Tourere. The impact sent Wrights’s vehicle off the road where it struck a sign and two parked cars. When the crash occurred, Tourere was running an errand for his employer, T&T Seafood. Progressive Insurance had issued an automobile libility policy to T&T which listed coverage for several specific vehicles. The car Tourere was driving was not among those listed on the policy. Thus, after being informed of the accident and investigating, Progressive sent T&T a letter concluding that there was “no coverage available for this loss.” This letter did not inform T&T that it should consult its own attorney if it wished to dispute Progressive’s decision about coverage. Despite having sent this correspondence to T&T, Progressive subsequently appointed a single attorney to defend both Progressive and T&T when Wrights filed her lawsuit on February 21, 2007. In fact, this attorney represented both T&T and Progressive through the answering of the complaint and part of discovery. Not until some 17 months later did Progressive provide a second attorney for T&T’s separate defense. Shortly after doing so, the attorney then solely representing Progressive obtained critical information about the case through an affidavit from the owner of T&T without informing the owner that he, the attorney, no longer represented T&T. After obtaining the affidavit, Progressive filed a motion for summary judgment asserting that there was no coverage under the policy. T&T responded by arguing that Progressive had waived any defense it may have had over coverage by initially appointing the single attorney to represent both itself and T&T in the matter. After a hearing, the trial court denied Progressive’s motion and granted T&T’s.

    On appeal, the First Circuit noted that the “actions on the part of Progressive not only constituted a conflict of interest, but they constituted conduct so inconsistent with an intent to enforce its right to assert its coverage defense as to induce a reasonable belief that the right had been relinquished.” Additionally, the court observed that “T&T was represented by an attorney who actively took steps detrimental and prejudicial to its position in the lawsuit.” Accordingly, the court found that “Progressive waived its coverage defenses by assigning only one attorney to represent itself and its insured for seventeen months despite having knowledge of facts indicating noncoverage under the policy,” and affirmed the trial court’s decision.

    This case offers a reminder that when a car wreck occurs, insurance coverage may not be clear and straightforward. While clearly a crucial question for the defendant, it is also important for the plaintiff, as the defendant himself may not have sufficient assets with which to satisfy a judgment for damages. Either way, bringing an attorney into the situation is crucial because they can spot such conflicts of interest and make sure that your legal interests are maintained and protected.

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  • New Drunk Driving Law Further Penalizes Repeat Offenders

    Drinking and driving is a problematic issue, one which has been aggressively confronted in order to prohibit repeat offenders from getting back on the road. On August 15, 2010, House Bill by Republican representative from LaPlace, Nickie Monica, went into effect and will cause substantial changes for second time DWI offenders in the state of Louisiana. This bill is specifically directed at repeat offenders for drinking and driving or vehicular negligent injury.

    Previously, a second time offender would still drive legally if they obtain permission from the Department of Motor Vehicles, who would grant an offender upon being petitioned, a restricted license (also known as a hardship license). This type of license allows the offender to drive a vehicle only to certain destinations, such as work, school, a medical emergency, or church. The Louisiana Department of Motor Vehicles declares such a license as a “means to earn a livelihood or to maintain the necessities of life.” However, the restricted license requires the individual to have an ignition Interlock device installed into the vehicle they will be driving. The ignition interlock device is connected to the vehicle’s ignition, and once the person blows into a tube which screens for the presence of alcohol, the car may or may not turn on depending on the result. This device has been criticized because the offender may have another person who has not been drinking breathe into the tube, thus, allowing the vehicle to start, despite the fact that the offender may have been drinking. Thus, drinking and driving has continued to plague the state of Louisiana.

    Furthermore, Louisiana in 2008 had the 11th highest drunken driving fatalities in the nation, with over 912 people killed due to drinking and driving. It was this type of statistic that motivated Representative Monica to propose the repeat offender bill in order to initiate change. Specifically, the new bill will not allow the repeat offender to obtain a restricted license for at least 45 days. This time period will be known as a “hard suspension” that cannot be waived or shortened for any repeat DWI offender. But that is not the only significant change with House Bill 1274, if an offender has three or more convictions there will be a three year suspension upon the persons license. Moreover, unlike a second time offender who has to wait 45 days to petition for a restricted license, a three or more time offender has to wait 12 months before they can petition for such license and have the ignition interlock device installed. The new bill will institute stronger oversight and rigid time requirements in order to crack down on repeat offenders ability to get back on the road so soon after multiple convictions.

    Additionally, offenders of drinking and driving accidents face multiple liabilities including negligent vehicular manslaughter and drinking and driving, as well as driving under the influence citations. However, the state, a state agency, or a political subdivision of the state may not be held liable for any person who operates a motor vehicle, an aircraft, water craft, or vessel who was operating it with a blood alcohol concentration of 0.08 percent or more. (La. R.S. 9:2798.4). Further, it is interesting that the offender may owe damages, including those recoverable in a wrongful death action (personal injury, death, or loss) if they are found to be twenty-five percent negligent as a result of being intoxicated, or if the person is found to be in excess of twenty-five percent if under the influence of any controlled dangerous substance listed in Schedule I, II, III, IV, or V. Thus, when an eighteen year old bartender attempted to hold her employer liable for allowing her to consume alcohol on the business’ property, the court held that the owner had immunity from liability since the underage woman’s fault exceeded the twenty-five percent as a result of being intoxicated over the limit (Stewart v. Daiquiri Affair, Inc., 20 So. 3d 1041 (La. App. 1 Cir. 2009)). The person left with responsibility, is the one behind the wheel, and the consequences become increasingly more serious with each subsequent DWI conviction.

    As a result, the new bill will prohibit repeat DWI offenders from driving on the road for extended lengths of time, regardless of whether or not they need to drive to obtain the “means to earn a livelihood or to maintain the necessities of life.” Whether or not this is an actual deterrent for recidivist, time has yet to tell. However, the two time offender will have to halt driving for 45 days, while the three time offender will have their license suspended for three years. These time requirements are in addition to the fines and/or jail time that may be imposed. The House Bill’s goal is to act as a deterrent to state residents, that if they choose to continually jeopardize themselves and others on the roadways, they will have to pay the price, both in time and in money.

    Drunk drivers put many lives at risk when they get behind the wheel. Injuries that result from an individual driving drunk carry with them a high burden of culpability and responsibility in future litigation. Liability, as a result, is highly slanted against that driver.

  • Boating Safety Rules for Personal Watercraft: If Broken, Liability Can Result

    Boating and Personal Watercraft provide thrills and excitement for Louisiana residents and visitors every summer. As much fun as it can be, there is danger involved as well. For that reason, the Louisiana Department of Wildlife and Fisheries has provided rules for personal watercraft (PWC) operators that can help people stay safe.

    PWC Rules
    1. Each person riding a PWC must wear a U.S. Coast Guard approved Tyep I, II, III, or V life jacket (this includes anyone towed behind a PWC).
    2. If the PWC has a lanyard-type ignition safety switch, the lanyard must be attached to the operator’s person.
    3. A PWC may not be operated between sunset and sunrise.
    4. It is illegal for PWC operators to: weave through congested waterways, jump the wake of another vessel when visibility is obstructed, operate in a manner that involves swerving to avoid collision.
    5. It is illegal to operate a PWC if you are under the age of 16.
    6. You may not chase, harass, or disturb wildlife with a PWC.
    7. PWC’s should not be operated around fishermen, anchored boats, or swimmers.
    8. You may not allow anyone else to operate a PWC in a way that violates Louisiana law.
    9. PWC operators towing a person on water skis or any similar device must also obey these rules.
    10. If a PWC is towing a skier and another person is onboard, the PWC must be rated for at least three people.
    11. A vessel towing someone must have at least two competent persons on board-one to operate the vessel, and one to observe. If the vessel has a wide-angle convex rearview mirror at least 7 x 14 inches, the operator may observe the person being towed.
    12. You may not tow someone from one hour before sunset to one hour before sunrise.
    13. The operator of a towing vessel and skier must keep a reasonable distance from other vessels and people, and property must be maintained so as to not endanger others.

    If followed, these rules can also help to prove or disprove liability in the event of an accident. For example, if you are in an accident and injured on a PWC operated by someone else, you could bring a lawsuit against them and recover damages to pay for medical expenses and pain and suffering (among other damages) if you can prove they acted negligently and the negligence led to your injury.

    Proving negligence requires proving that someone’s behavior fell below the acceptable standard of care in a given situation. It someone has adhered to the Rules described above, it will be more difficult to prove that their behavior fell below the appropriate standard of care. Conversely, if the rules were not followed precisely, a good attorney would use each rule violation as evidence of negligent behavior. A successful lawyer will have knowledge of not only the law, but administrative rules like these as well.

    Rules regarding the use of a watercraft can also be important in the insurance claims process of the owner. For this reason it is similarly important to utilize a lawyer that can help you receive the financial compensation you feel entitled to.