Louisiana Supreme Court Rules on Bond an Insurer Must Post for Suspensive Appeal

Under Louisiana law, all automobile liability policies include uninsured/underinsured motorist coverage (“UM coverage”) unless the insured affirmatively rejects such coverage, selects lower limits, or selects economic only coverage in writing. The question of what qualifies as a valid rejection of UM coverage has been debated in numerous lawsuits across the state. In Barbera v. Andrade, examination of this issue continued, and the court ruled that an initial rejection of UM coverage remains effective until changed by the insured’s written request.

In Barbera, the court examined whether UM coverage was triggered under a policy when the insured, who previously waived coverage, failed to respond to the insurer’s request to complete a new UM waiver form. It was undisputed that the insured executed a valid waiver of UM coverage in 2001. In 2014, the insurer sent the insured a letter that asked the insured to complete an updated coverage selection form and return it to the insurer’s office. The insured did not execute the updated form. A driver insured under the policy was involved in a motor vehicle accident in 2017 and filed a claim for UM benefits.

The insured argued the letter sent with the waiver form in 2014 was ambiguous and could be read to mean that failure to respond would mean that UM coverage would be read into the policy by default. Evidence also showed that some of the insurer’s employees also thought the failure to respond with the updated form would result in UM coverage.

However, La. R.S. 22:1295(1)(a)(ii) provides, “An insured may change the original uninsured motorist selection or rejection on a policy at any time during the life of the policy by submitting a new uninsured motorist selection form to the insurer on the form prescribed by the commissioner of insurance.” Thus, the Court ruled that the insured’s initial rejection of UM coverage could only be changed via written request by submitting a waiver form to the insurer. The intent of the parties was inconsequential.

Because the insured executed a valid UM waiver in 2001, it remained part of the existing policy. No event, such as a change in the policy’s liability limits, occurred that required the execution of a new UM selection waiver form, and the insured did not submit a new form to the insurer to obtain UM coverage. Therefore, UM coverage was not afforded under the policy, and summary judgment was affirmed in favor of the insurer.

Case Reference: Barbera v. Andrade, 22-147 (La. App. 5 Cir. 11/30/22), 2022 WL 1733087, --- So.3d ---.

In a previous blog, we outlined developing law in the Louisiana appeals courts, and federal district courts in Louisiana on the issue of whether a claimant may maintain a separate cause of action against an employer for independent negligence when it is stipulated that the employee was in the course and scope of employment.¹ Most courts held a claimant could not maintain a separate action against the employer under these circumstances, reasoning that the employee’s fault would impute to the employer, and therefore, additional inquiry was not appropriate. However, the Louisiana Supreme Court recently addressed the issue and stated:

“(A) plaintiff may pursue both a negligence cause of action against an employee for which the employer is vicariously liable and a direct claim against the employer for its own negligence in hiring, supervision, training, and retention as well as a negligent entrustment claim, when the employer stipulates that the employee was in the course and scope of employment at the time of the injury.” (Emphasis added) See Martin v. Thomas et al., 21-1490 (La. 12/21/21), 328 So. 3d 1164.

This holding notably overturned the 1^st Circuit Court of Appeal ruling in Elee v. White, - - So.3d - - (La. App. 1 Cir 7/24/20), 2020 WL 4251974 and other Louisiana 5^th Circuit Court of Appeals decisions. The Supreme Court in Martin reasoned that “the initial assessment of fault required by the law is not bypassed due to the employer-employee relationship” and “shielding a potential tortfeasor from liability is not compatible with a comparative negligence regime.” The Court further stated that the possibility that both the employee and employer may be at fault is not “subsumed” by the employer’s admission on course and scope. In fact, if the fault of the employee is shown, then the issue of whether there is also fault on the part of the employer remains and must be decided by the evidence on a case-by-case basis.

The consequences of this decision remain to be seen, but it is expected that claimants may also pursue employers separately on theories such as negligent hiring, supervision, and entrustment. The scope of such discovery will remain within the sound discretion of the trial judge.

By: John P. Wolff, III and Richard W. Wolff

¹Louisiana Appeal Courts Prohibit Direct Negligence Claims Against Employer; US District Court Uses Rule to Limit Discovery - Keogh Cox

COVID-19 stretched our legal system and raised questions not easily answered by existing law. One recent question surrounds a dispute between the Governor and the State Legislature regarding the constitutionality of the Governor’s proclamation of a public health emergency in response to COVID-19. Recently, in Governor John Bel Edwards v. Louisiana State Legislature, Louisiana House of Representatives, & Clay Schexnayder, in his official capacity as Speaker of the House of Representatives, 2020-CA-1407, the Louisiana Supreme Court was asked to gauge the validity of the legislature’s termination of Governor Edwards’ proclamation. However, the Court did not reach the constitutional questions and remanded the case.

The Governor filed suit to challenge the Legislature’s termination of his COVID-19 proclamation. He argued that the termination was null and void citing both constitutional and non-constitutional grounds. Because the trial court found the termination unconstitutional, it did not address the procedural and non-constitutional challenges raised.

On appeal, the Supreme Court held that the trial court erred in reaching the issue of constitutionality prior to determining whether the dispute could be resolved on non-constitutional grounds. Louisiana law dictates that courts should avoid decisions based upon constitutional grounds unless the constitutional issue is essential to resolution of the case. Although the issues to be addressed were important to the citizens of Louisiana, the Court stated “it is critical a case must reach this court in the proper procedural posture to warrant our review of a ruling on constitutionality.”

The case highlights the role of the Louisiana Supreme Court and reminds both attorneys and the public of how issues are addressed and decided. The Court was express that the issues presented in Edwards were novel and important and may ultimately be issues the high court will choose to address. However, the Court recognized that its powers of constitutional review are constrained by procedure. A civics lesson in the midst of the COVID-19 pandemic.

Virginia “Jenny” McLin is a partner at Keogh Cox who practices in the fields of corporate litigation, insurance defense and workers compensation defense. When she is not practicing law, Jenny can be found volunteering with the Junior League of Baton Rouge; cheering for the LSU Tigers with her husband Ryan; or shuffling her two kids to and from dance practice.