Articles Posted in Settlement

car_divorce_netherlands_joke-scaledDivorce can be tumultuous, marked by significant stress and numerous life changes. Amidst the emotional and practical adjustments, it is crucial not to overlook a critical task: updating the beneficiary of your life insurance policy. In Claiborne Parish, a compelling case serves as a cautionary tale, underscoring the paramount importance of understanding and verifying your designated beneficiary on all insurance plans. The story unravels the unsettling reality that the proceeds from your life insurance policy may not end up in the hands of the intended recipient.

In this case, Hillie Patrick Cox took out a whole-life insurance policy with Southern Farm Bureau, where he listed his mother, Ruby G. Cox, as a beneficiary. Later, he amended the beneficiary to list his wife, Connie Gonzales Cox. Seven years later, however, Hillie and Connie obtained a divorce judgment. Hillie then died approximately 14 years later without executing another change of beneficiary form.  

Southern Farm Bureau subsequently filed a petition for concursus in the 2nd Judicial District Court for the Parish of Claiborne, claiming that a judgment of possession awarded Ruby usufruct over the entire estate and recognized Debra Cox Diffey, Hillie’s sister as the sole surviving heir. As a result of the judgment, Ruby, Debra, and Connie all presented claims for the insurance proceeds. 

harry_potter_car_1176447-scaledCar accidents are traumatic experiences that occur every day across Louisiana. An accident can cause initial damage upon impact, but many accident victims also spend months and sometimes years coping with accident-related injuries.

 On June 27, 2014, Jasmine Raymond, a twenty-four-year-old driver who did not have auto insurance as required by Louisiana law, was heading eastbound on Interstate 10. Her car was rear-ended by Lance Cook, a truck driver for Rubber & Specialties, Inc. when he took his eyes off the road to check the GPS on his phone. Over the next two years following the accident, Raymond required numerous surgeries and procedures to address injuries she sustained in the crash.

 Raymond filed a lawsuit against Cook and his employer, seeking damages for injuries arising from the accident. Before trial, Cook, his employer, and his insurance company filed an affirmative defense to Raymond’s claims under the “no pay, no play statute.” This law states that the victim of a car accident without proper insurance may not recover the first $15,000 of bodily injury damages and the first $25,000 of property damages in any claim related to the accident. La. R.S. 32:866. The rule does not apply when the accident is caused by a drunk driver, a driver who flees the scene, or a driver who otherwise intentionally causes the accident. According to a 2012 report by the Insurance Research Council, the no pay, no play rule intends to provide relief for at-fault drivers who nevertheless complied with state insurance requirements. Raymond filed a motion to dismiss the defendant’s affirmative defense. However, the trial court deferred the issue and proceeded to trial.

 

It is extremely important to review your home insurance policy to determine what types of damages the policy will actually cover, especially in areas prone to suffer from hurricane damages. Under Louisiana law, the insured individual is required to first prove that the insurance policy covers the cause of the claim. For example, if the policy only covers certain types of causes of damage, such as wind and hail, then the insured must prove that the damage was in fact caused by either wind or hail. Once the insured has done this, then the insurance company can argue that the incident is not covered by the policy. Therefore, it is extremely important that the insured take the time to determine the cause of the damage in order to prove that the policy covers their claim.

 

A case arising from Lake Charles, Louisiana illustrates this point. In this case, a homeowner suffered roof damage that they believed was caused by Hurricane Ike around September 13, 2008. Four shingles were missing and the insured claimed that this resulted in leakage in several rooms of the home. However, State Farm, the homeowner’s insurance company, determined that the leakage was not caused by Hurricane Ike and reclassified the claim as a “non-hurricane” claim.

 

State Farm, using several experts, determined that the leakage resulted from normal wear and tear on the roof, and therefore the homeowner’s insurance policy did not cover the leakage damage. Instead, State Farm concluded that only the four missing shingles were the result of wind and that they were the only damages that State Farm should reimburse to the insured; State Farm did not reimburse the insured for the damages caused by the leakage, but just the replacement value of the four damaged or missing shingles. The total damages that State Farm paid were under $500.00.

 

The insured had damages that were estimated at $9,385.00 by one expert and $204,717.78 by another expert. However, while these experts estimated what the cost of the leakage damage and repairing the roof would be, neither expert determined the actual cause of the damages. One of the insured’s experts thought that the wind had lifted the house’s flat roofing, which allowed water to enter the home. However, the expert could not explain why the nails on the flat roofing were still in place if the wind had lifted it. The State Farm expert, on the other hand, determined that the wind damage only included those four damaged or missing shingles and the leakage was actually caused by normal wear and tear. The State Farm expert concluded that there was “no evidence of roof damage that would be caused by severe weather . . . . The roofs, both asbestos shingle and built up roofs and all associated flashings are past their life cycle and are in need of replacement.”

 

The insured’s policy did not cover “poor workmanship; wear, tear, deterioration, or latent defect; settling, cracking, or expansion of walls, roofs, or ceilings; or leakage of water from air conditioning systems, household appliances, or plumbing.” Since the State Farm expert determined that the cause of the damage was from normal wear and tear, there was no way that the insured could satisfy the requirement to prove that the policy covered his claim. As such, the court granted State Farm summary judgment.

 

The court will grant summary judgment where one party cannot meet their required burden as a matter of law at trial. Summary judgment allows the court to avoid costly trials where there is one clear winner before the trial even begins. In this case, where the insured had no evidence that all of the damage he was claiming was caused by an occurrence included in the insurance policy, the court determined that summary judgment was appropriate. If the insured had employed experts that specifically testified as to the cause of the leakage damage, then the court may have allowed the case to proceed to trial. Further, the insured could have made a more diligent effort to report leakage as it occurred, which would help prevent the damage from spreading in the long run.

 

This case illustrates several very important points for the average homeowner. First, you should carefully read your policy so that you know what type of damage is covered. Second, if necessary, you may need to acquire experts that can explain what caused the damage to your home. Lastly, report damages immediately so that you can avoid costly repairs later on.  Continue reading

Louisiana has a Direct Action Statute that allows injured third parties to sue an insurance company directly when the insurance company’s insured causes an injury. For example, if you are involved an automobile accident where you are not at fault, you can sue the at-fault driver’s insurance company directly instead of suing the at-fault driver themselves. The Direct Action Statute is beneficial because it gives injured third parties access to the entity that will actually pay compensation for the injuries. It can be especially helpful where the insured fails to file a claim with their insurance company themselves. However, the injured third-party’s ability to sue the insurance company directly is limited by the insurance contract between the insurance company and the insured.

Despite the fact that the insurance contract is between the insurance company and the insured, an injured third party must still comply with most of the terms of the contract. This overarching rule applies specifically to whether the policy covers the insured and whether the policy covers a particular event. The insurance company will ask: Did this person have coverage when this accident happened? and Does this policy cover this type of event? For example, in insurance contracts limited to specific times, the insurance company will not cover a claim that occurred outside the time frame of the contract, regardless of who brings the claim. In a related example, automobile coverage that is limited to only certain vehicles will cover only those vehicles, regardless of who brings the claim. That is, the injured third party can have no greater rights than the insured would have had if he or she brought the complain themselves.

In a United States Fifth Circuit Court of Appeals case, the court determined that specific requirements of the contract also extend to injured third parties. That case involved a “claims-made-and-reported” policy. That type of policy not only requires that a claim arise within the policy period, but also that the insured (or another party under the Direct Action Statute) had to have reported the claim within the policy period. This type of notice requirement helps insurance companies avoid claims that are reported years after they happen; instead, this policy requires notice within a certain amount of time.

When you signed up for automobile insurance, you might have noticed that many states now require automobile insurance agencies to include some sort of uninsured motorist (“UM”) clause in your insurance agreement. Oftentimes, the only way to get out of including this in your coverage, and therefore having to pay a higher premium, is by explicitly rejecting this additional coverage. How exactly do you reject this additional coverage, though? While this might seem like an easy question, most states, including the state of Louisiana, require very specific requirements to be met in order for rejection of UM coverage to be proper.

In the State of Louisiana, that is exactly the case: In order to get out of paying a higher premium for this uninsured motorist coverage, the insured has to explicitly reject that coverage. And the state of Louisiana has many rules with regard to how to properly complete this task.

In order for an uninsured motorist rejection to be considered proper, Louisiana courts have found six tasks that must be completed by the insured. In Duncan v. U.S.A.A Ins. Co., 06-0363 (La. 11/29/06), 950 So. 2d 544, the court outlines these six tasks as follows:

1) initialing the selection or rejection of coverage chosen;
2) if limits lower than the policy limits are chosen (available in options 2 and 4), then filling in the amount of coverage selected for each person and each accident;
3) printing the name of the named insured or legal representative;
4) signing the name of the named insured or legal representative;
5) filling in the policy number; and
6) filling in the date.

While the Court in Duncan did not explicitly deal with the timing of these tasks, a couple years later, the Court in Gray v. American National Propery & Cas. Co., 07-1670 (La. 2/26/08), 977 So. 2d 839, discussed the requisite timing in which the above tasks need to be completed. According to the Court in Gray, all six of these tasks have to be completed before the UM selection form is signed by the insured. The Court also went on to say that the completion of these tasks has to be done in a manner showing that the insured’s signature signifies that he or she agrees with all of the information that is contained in the insurance form. While the Court said that the tasks have to be completed before the UM selection form is signed by the insured, that was not the most important part of the Court’s findings. Rather, the most important part of the Court’s holding was that the insured’s signature needs to signify agreement with all that is contained in the form.

In the recent case decided by the Louisiana Supreme Court, Edward Morrison v. U.S.A.A Casualty Ins. Co., No. 2012-CC-2334, the Court really focused on the fact that the most important part of the timing of the UM selection form is that the insured’s signature is affirming agreement to all the clauses contained therein. This case primarily deals with task #1 listed above which requires that an individual properly initial the selection or rejection of coverage chosen in order for UM rejection to be considered proper.

In this case, the insured’s representative clearly meant to reject UM coverage but accidentally did not initial the line that stated such in the agreement form. When the insurer received the form, he or she noticed that the form was incomplete and sent it back to the insured’s representative. At that time, the representative initialed the proper line rejecting UM coverage and returned the form to the insurer. This clearly showed that the insured agreed with all of the clauses and various information contained in the form. Furthermore, all of this was completed before the relevant accident, so the court held the UM rejection valid.

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If you have ever been injured on the job or if you have ever known an employee who broke the law while on the job, you might know something about an employee-employer relationship and the legal obligations that come with such a relationship. Typically, if you are working for an employer and one of the two above-mentioned scenarios happens (in addition to several other possible scenarios), the employer can be held vicariously liable for the actions of the employee. Furthermore, the employer’s insurer might also be held liable if the accident or unlawful behavior happened while on the job.

A recent case that took place in the Parish of Lafayette helps illustrate some of the issues of the employee-employer relationship and when exactly an employer might be held liable for the actions of someone else. In this Lafayette case, a lady had been riding on the back of a motorcycle when the driver of her motorcycle suddenly collided with another motorcycle. At the time of the accident, the driver was pulling into the parking lot of a truck stop. As a result of the collision, the female rider suffered severe brain injuries and was permanently disabled.

In response to the serious injuries suffered by their daughter, the woman’s parents each sued several parties and insurers seeking recovery for the damages suffered by both their daughter and themselves individually. One of the parties was a business owner of the truck stop who the parents argued was the employer of one or both of the motorcycle operators involved in the collision. According to the parents’ lawsuits, under the employee-employer relationship, the truck stop owner was vicariously liable because the motorcycle operators were working for the owner of the truck stop at the time of the accident. Despite these allegations, the parents’ suits against the employer were dismissed when the employer filed a motion for summary judgment, which was granted.

On appeal, the parents argued that the motion for summary judgment should not have been granted for several different reasons, one of them being that there was an issue of fact as to whether or not the two motorcycle operators were employees of the truck stop owner. In response to their appeal, the court shed light on some of the important considerations that must be made when analyzing an employee-employer relationship.

First, the court looked to another Louisiana case, Savoie v. Fireman’s Fund Ins. Co., 347 So.2d 188 (La. 1977), in order to determine if an employee-employer relationship exists. In determining the existence of such a relationship, one of the main issues that has to be analyzed is whether or not the employer exercises sufficient right of control and supervision over the employee.

Some of the factors that might result in a court determining that right of control does exist are selection and engagement of a a worker, whether or not the individual receives wages, the power of control the employer exercises over the worker, and whether or not the employer has the power to dismiss the individual.

Ultimately, the court found that neither motorcycle operator was an employee of the truck stop owner and that the motion for summary judgment was proper. Neither driver received wages from the truck stop owner, and even if one of the motorcycle operators had been delivering a part to the owner, as was alleged, that alone was not enough to make him an employee, especially in light of the fact that the owner and the operator had been friends for years.

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One area where lawyers must continue to improve is drafting contracts. It is imperative that lawyers learn the intricacies of legal writing and the different meanings words have in the legal community and their ordinary meaning. If a word or phrase in a company’s contract is ambiguous, it is susceptible to multiple interpretations and might result in litigation at some point. A common example of litigation like this involves insurance policies. Therefore, it’s important to draft clear and concise contracts in order to save the time, money, and effort associated with litigation.

Ambiguous contractual provisions are to be strictly construed against the insurer and in favor of coverage for the insured. Insurance coverage is meant to protect the insured, so the public policy reflects this favoring. However, this strict construction rule applies only if the ambiguous policy provision is susceptible to two or more reasonable interpretations. The key is that it must be reasonable, not just another interpretation. If the word or phrase is clear, then no further interpretation is necessary. The words and phrases used in insurance policies are to be construed using their plain, ordinary, and generally prevailing meaning unless the words have acquired a technical meaning.

This seems to be a clear explanation of how contract terms are to be interpreted, but even so, many cases arise with an insured claiming that a certain phrase is ambiguous and they should not be denied relief under their policy. For example, Herbert Farms, who conducts a rice farming operation in St. Landry Parish, Louisiana, claimed the phrase “rice drying house” in their policy was ambiguous and other reasonable interpretations of the phrase was possible. Herbert Farms filed a claim for losses under its policy when its rice was damaged while in storage, seeking coverage under a section that listed “grain tanks” as covered property. However, there is a clear and unambiguous exclusionary clause that states that property covered in certain sections, including the section listing grain tanks, is not covered. The two pertinent pieces of property not covered in Herbert Farms’ policy were the contents of a rice warehouse and rice drying houses.

Regardless of your level of legal training, we’re all guilty of ignoring the fine print but insurance coverage is often determined by the placement of an unnoticed word or punctuation mark in the language of the policy. Under Louisiana law, the insured bears the burden of proving that an incident falls within the terms of the policy. In contrast, an insurer seeking to avoid coverage through a motion for summary judgment bears the burden of proving that a provision or exclusion precludes coverage. Courts treat insurance policies like other contracts and therefore strive to interpret each term according to its true meaning. As straightforward as it sounds, a contract’s true meaning is always disputed even if on its face the language appears clear. This requires courts to hear creative arguments on the meaning of particular terms buried in the policy.

On June 8, 2010, in an unfortunate incident at the Library Lounge in Monroe, McKenzie A. Hudson (Mr. Hudson) was approached by an intoxicated patron and struck in the head. In December 2010, Mr. Hudson died from severe brain injuries allegedly suffered during the attack. Mr. Hudson’s mother filed a wrongful death/survival suit against several defendants including the entity that owned the bar as well as its principals. Several weeks later Ms. Hudson added First Financial Insurance Company (FFIC), insurer of the bar.

Recognizing the language of the bar’s insurance policy, Ms. Hudson admitted that her son’s assailant did not intend or expect her son’s death but instead it resulted when he lost consciousness, fell to the pavement, and fractured his skull. The particular provision at issue in the policy read that it did not provide coverage for assault, battery, or other physical altercation. The policy defined assault in part as “a willful attempt or threat to inflict injury upon another” and battery as “wrongful physical contact with a person without his or her consent that entails some injury or offensive touching.”

Ms. Hudson differentiated between the FFIC’s old policy language which was ambiguous as to “extraordinary” injuries and its current policy which included amendments intended to broaden and clarify exclusions. Ms. Hudson specifically pointed to the removal of an “or” between the assault and battery provisions which had the effect of causing the provisions to be read together. This eliminated coverage for all “intended” or “expected” injuries. Since her son was not intentionally killed or expected to die she argued coverage should be provided. In response, FFIC submitted numerous cases where similar assault and battery exclusions were upheld.

Like the trial court, the court of appeals granted summary judgment in favor of FFIC for several reasons. First, the court reviewed the cases submitted by the FFIC and concluded that the “overwhelming” majority of insurers were dismissed from suits arising from injury or death after an assault or battery. Furthermore, the court pointed to a similar case where it was determined that the presence of an “and” or “or” did not necessarily indicate that the provisions should or should not be read together. The court concluded that the provisions were clear in their language and that there was no question Mr. Hudson was the victim of battery. Therefore, the policy excluded insurance coverage for his death.

Although the courts demonstrate a reluctance to rule against the insurance companies in policy exclusion cases this does not mean a particular result is guaranteed. The terms of each insurance policy varies and requires careful review of its language before any legal action is taken.

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La. R.S. 30:29 (“Act 312”) was in enacted in 2006 and became effective in June of that year. Act 312 provides a procedure for the remediation of oil field sites as well as oil exploration and production sites. Generally, remediation is “the action of remedying something, in particular of reversing or stopping environmental change.” Before the Louisiana legislature enacted Act 312, most remediation requirements were through private party contracts; therefore, Act 312 did not change the normal trial procedures established by the Louisiana Code of Civil Procedure.

The Louisiana Supreme Court recently discussed Act 312 at length, explaining what it did change, in a case involving the Vermilion Parish School Board. The Court explained that Act 312 was enacted because of serious concerns with the state of the land and ground water after an area was used for oil exploration and production. Parties would use the land and ground water under a mineral lease for several years, and leave the property in terrible shape by the time that they were done. Mineral leases allow the parties to contract for only the minerals or the potential oil that is located on that property. The party with the mineral lease, then, does not rent the entire property, but just the ability to find minerals or oil within or upon that property.

Before Act 312, parties could still sue if one party left the land in terrible shape. Occasionally, however, it does not make sense economically to force a party to fix the land they damaged. Instead, the renting party would have to give the “landlord” the difference between the value of the land when they received it and the value of the land when it was returned after the lease, under a tort law theory. However, the person who owned the land, the “landlord,” was not required to use the funds to fix damage done to the land. As a result, property that had serious environmental problems often went without remediation because the landlord was not required to fix it. This creates health and safety concerns for the general public.

In January, the Louisiana Supreme Court considered an appeal from the Vermilion Parish School Board. The appeal centered on environmental damage to land that was subject to a mineral lease. The mineral lease allowed those leasing the land to look for and remove any mineral, including oil, that they found on the land. However, once they did this, they left the land in a state that was environmentally hazardous.

Louisiana has special procedures for dealing with restoring land so that we do not harm the environment, specifically when removing oil. The remediation of the land, this restoring process, was one of the major issues in the Vermilion Parish case. The defendants included Union Oil Company of California, Union Exploration Partners, Carrollton Resources, LLC, Chevron USA, Inc., and Chevron Midcontinent, L.P.

The Court faced two major issues in this case. The first was whether the parties could receive damages in excess of the amount it would take to restore the property, thereby correcting the environmental damage. The Court determined that the language of the legislation (La. R.S. 30:29) was clear and that the parties could receive a larger amount.

Under Louisiana law, when a case arises where a party is required to correct an environmental wrong, the funds are deposited into the court’s registry. The court will then disperse the funds to repair the land. This is a relatively new development because this act was put into effect in 2006. The legislature was concerned that parties who received funds to help correct the damage done to their land would not use it for that purpose if they were not so required. Leaving property that is damaged could create serious issues for the health, safety, and welfare of the surrounding population.

The legislation focuses on the role of the fact finder in determining whether there was environmental damage, and how much that environmental damage will cost to fix. As such, the court determined that the case should continue so that the fact finder could make those determinations.

The second issue was whether Chevron should be dismissed from the case. According to the facts, Union Oil had the mineral lease first, but Chevron subsequently acquired Union Oil and all of their assets, including the lease. As such, Chevron became responsible for any environmental damage that Union Oil may have caused. Chevron admitted responsibility initially, but then denied that they should be legally responsible later.

Chevron explained that while Chevron Corp. owns both Chevron USA and Union Oil Company of California, the two sections do not overlap. That is, Union Oil had $18 billion in assets, and should they be found liable for environmental damage, the amount that they will pay will come from their assets and not Chevron’s. Chevron explained that those assets were never transferred out of Union Oil, so Union Oil remained somewhat independent even after Chevron acquired them.

Therefore, Chevron argued that Chevron USA should be removed from the case so that those assets are not adversely affected. Nonetheless, Frank Soler, the senior liaison in the subsidiary governance unit of the corporate governance department for Chevron Corp. admitted that Union Oil does not have any employees and there may be service agreements between the two sections for day-to-day activities.

The Plaintiffs in the case were only allowed to discover a very limited amount of information from Chevron regarding this case. The court restricted the information until they determined whether or not Chevron should remain in the case a defendant. As such, many facts remained unknown regarding the relationship between Chevron and Union Oil. Therefore, the court determined that Plaintiffs should be allowed to gather more information and the case should continue.

Both of these issues failed the summary judgment test. The test is whether there is an absence of material facts in the case. If there is such an absence, then the court will only determine the questions of law and one side will receive a summary judgment. In this case, however, the court determined that there may be facts in dispute because they did not have enough information; therefore, the case continued.

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