James Sims VS US Agencies Casualty Insurance Company and McHenry Jackson

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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2010 CA 1120 JAMES SIMS VERSUS USAGENCIES CASUALTY INSURANCE COMPANY AND MCHENRY JACKSON Judgment Rendered December 22 2010 On Appeal from the 19 Judicial District Court In and for the Parish of East Baton Rouge Docket No 567 414 Honorable R Michael Caldwell Judge Presiding Stephanie M Possa Joseph C Possa Baton Rouge LA Counsel for PlaintiffAppellant Anthony M Butler Counsel for DefendantsAppellees USAgencies Casualty Insurance Company and McHenry Jackson Shonda D LeGrande Baton Rouge LA James Sims BEFORE PARRO GUIDRY AND HUGHES JJ HUGHES J This is an appeal from a summary judgment in an action arising out of a vehicular accident for personal injuries property damage and penalties for the alleged breach of a settlement agreement For the reasons that follow we affirm the judgment which awarded property damages as having been unconditionally tendered but dismissed the remaining claims which were found to have been barred by Louisiana No Pay No Play Statute LSAR 32 s S 866 FACTS AND PROCEDURAL HISTORY On November 22 2007 James Sims and McHenry Jackson were involved in an automobile accident on North Foster Drive in Baton Rouge when Mr Jackson s vehicle rearended Mr Sims vehicle At the time of the accident Mr Jackson was insured by USAgencies Casualty Insurance Company USAgencies was uninsured Mr Sims Mr Sims allegedly suffered both personal injury and property damage as a result of the accident Although USAgencies had initially denied Mr Sims claim for damages on the basis that he was uninsured and therefore in violation of the No Pay No Play Statute and not entitled to recover the first 10 of his damages counsel for 00 000 Mr Sims represented that Mr Jackson had been intoxicated at the time of the accident which provided an exception to the penalty provisions of the statute At the time of the instant accident LSAR 32 provided S 866 1 A There should be no recovery for the first ten thousand dollars of bodily injury and no recovery for the first ten thousand dollars of property damage based on any cause or right of action arising out of a motor vehicle accident for such injury or damages occasioned by an owner or operator of a motor vehicle involved in such accident who fails to own or maintain compulsory motor vehicle liability security See also Progressive Security Insurance Company v Foster 972985 p 2 La 4 711 So 98 23 2d 675 678 z Subsection 3 of LSAR 32 provides in pertinent part a S 866 A The limitation of recovery provisions of this Subsection do not apply if the driver of the other vehicle 0 Is cited for a violation of R 14 operating a vehicle while intoxicated as a result S 98 of the accident and is subsequently convicted of or pleads nolo contendere to such offense Thereafter USAgencies agreed to settle Mr Sims claim for damages for the amount of 10 for his personal injuries and 4 for his property 00 000 81 126 damage On May 8 2008 USAgencies forwarded settlement documents and checks in the amounts of 10 and 4 to Mr Sims attorney but 00 000 81 126 stopped payment on the checks on May 15 2008 stating that it had determined that the assertion that its insured was intoxicated at the time of the accident was incorrect that any agreements reached based upon this assertion have been vitiated and Louisiana No Pay No Play Statute applied to exclude coverage for s the accident On May 28 2008 Mr Sims filed suit against Mr Jackson and USAgencies for the damages he sustained in the accident and for additional penalties and attorney fees against USAgencies for failure to fund the settlement agreement USAgencies filed a motion for summary judgment contending that because Mr Sims did not have compulsory motor vehicle liability coverage on the date of the accident LSAR 32 required that he forfeit the first 10 of S 866 A 00 000 recovery of both personal injuries and property damages and asserting it was entitled to dismissal of the suit Mr Sims also filed a motion for summary judgment contending that a transaction and compromise had been agreed to by the parties but was breached by USAgencies and that he was entitled to judgment in his favor enforcing the settlement and awarding penalties and attorney fees Following an October 5 2009 hearing on the motions judgment was rendered in favor of Mr Sims for his property damage in the amount of 4 on a 81 126 finding by the court that this amount had been unconditionally tendered to Mr Sims by USAgencies 00 000 10 settlement The court further rendered judgment decreeing that the of Mr Sims bodily injury claim was invalid and unenforceable as it violated public policy the court further declared that James Sims shall not be entitled to recover the first ten thousand dollars of bodily injury K and any further damages up to the first ten thousand dollars of property damage as a result of his failure to own or maintain compulsory motor vehicle liability security Following signing of the trial court judgment on November 30 2009 s Mr Sims filed an application for a supervisory writ which resulted in the following March 16 2010 ruling by this court WRIT GRANTED WITH INSTRUCTIONS The judgment rendered by the trial court disposes of all issues and parties in this matter which would render it a final and appealable judgment not appropriate for this court review as a supervisory writ However it s appears that the judgment as written lacks the requisite decretal language pursuant to LSAC arts 1911 and 1918 in that it fails to P C dismiss the defendants in whose favor the summary judgment was rendered and to dismiss plaintiffs claim for the liability policy limits Accordingly we remand the matter back to the trial court with instructions to amend the judgment to include the requisite decretal language Once amended the judgment will be final and appealable and the trial court is further instructed to grant the relator an appeal pursuant to the December 3 2009 pleading notifying the trial court of s relator prior intention to seek writs Thereafter an amended judgment was signed by the trial court on May 3 2010 reiterating its previous rulings and additionally dismissing the claims of Mr Sims against both Mr Jackson and USAgencies Mr Sims has appealed the trial court rulings contending that summary judgment was inappropriate in this case and asserting that the trial court erred in failing to enforce the transaction and compromise agreement between the parties Mr Sims further contends that the trial court erred in failing to order penalties attorney fees and costs against USAgencies for refusing to pay the agreed settlement amount within thirty days in accordance with LSAR 22 and S 1892 LSA R 22 S 1973 LAW AND ANALYSIS Motion for Summar Judgment The summary judgment procedure is designed to secure the just speedy and inexpensive determination of every action except those disallowed by LSA C P F11 art 969 the procedure is favored and shall be construed to accomplish these ends LSA C art 966 Summary judgment shall be rendered in favor of the P 2 A mover if the pleadings depositions answers to interrogatories and admissions on file together with the affidavits if any show that there is no genuine issue as to material fact and that mover is entitled to judgment as a matter of law LSAC P C art 966 B Appellate courts review summary judgments de novo under the same criteria that govern a district court consideration of whether summary judgment is s 08 26 2d appropriate Samaha v Rau 2007 1726 pp 3 4 La 2 977 So 880 882 Allen v State ex rel Ernest N MorialNew Orleans Exhibition Hall Authority 20021072 p 5 La 4 842 S0 373 377 Boudreaux v 03 9 2d Vankerkhove 20072555 p 5 La App 1 Cir 8 993 So 725 72930 08 11 2d In ruling on a motion for summary judgment the judge role is not to s evaluate the weight of the evidence or to determine the truth of the matter but instead to determine whether there is a genuine issue of triable fact All doubts should be resolved in the non moving party favor Hines v Garrett 20040806 s p 1 La 6 876 So 764 765 04 25 2d A fact is material if it potentially insures or precludes recovery affects a s litigant ultimate success or determines the outcome of the legal dispute A genuine issue is one as to which reasonable persons could disagree if reasonable persons could reach only one conclusion there is no need for trial on that issue and summary judgment is appropriate Id 20040806 at p 1 876 So at 765 66 2d On motion for summary judgment the burden of proof remains with the movant However if the moving party will not bear the burden of proof on the issue at trial and points out that there is an absence of factual support for one or more elements essential to the adverse party claim action or defense then the s non moving party must produce factual support sufficient to establish that he will 9 be able to satisfy his evidentiary burden of proof at trial If the opponent of the motion fails to do so there is no genuine issue of material fact and summary judgment will be granted See LSAC art 966 P C 2 C When a motion for summary judgment is made and supported as provided in LSA C art 967 an adverse party may not rest on the mere allegations or P denials of his pleadings but his response by affidavits or as otherwise provided in LSA C art 967 must set forth specific facts showing that there is a genuine P issue for trial If he does not so respond summary judgment if appropriate shall be rendered against him LSA C art 967 See also Board of Supervisors P B of Louisiana State University v Louisiana Agricultural Finance Authority 2007 0107 p 9 La App l Cir 2 984 So 72 7980 Cressionnie v 08 8 2d Intrepid Inc 2003 1714 p 3 La App 1 Cir 5 879 So 736 738 04 14 2d Because it is the applicable substantive law that determines materiality whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case Richard v Hall 2003 1488 p 5 La 04 23 4 874 So 131 137 Dyess v American National Property and 2d Casualty Company 2003 1971 p 4 La App 1 Cir 6 886 So 448 04 25 2d 451 writ denied 20041858 La 10 885 So 592 Cressionnie v 04 29 2d Intrepid Inc 2003 1714 at p 3 879 So at 738 39 Accordingly we first 2d examine whether there was a valid and enforceable settlement in this case Settlement of Claims A settlement or compromise is a contract whereby the parties through concessions made by one or more of them settle a dispute or an uncertainty concerning an obligation or other legal relationship LSAGC art 3071 An out ofcourt oral agreement is unenforceable See LSAC art 3072 Felder v C Article 3072 provides A compromise shall be made in writing or recited in open court in which case the recitation shall be susceptible of being transcribed from the record of the proceedings Georgia Pacific Corp 405 So 521 523 La 1981 Bennett v Great Atlantic 2d Pacific Tea Company 95 0410 pp 3 4 La App 1 Cir 11 665 So 95 9 2d 84 86 writ denied 95 2981 La 2 667 So 536 The purpose of the 96 9 2d writing requirement is to serve as proof of the agreement and the acquiescence therein Bourgeois v Franklin 389 So 358 361 La 1980 Bennett v Great 2d Atlantic Pacific Tea Company 95 0410 at p 4 665 So at 86 2d A compromise as any other contract may be contained in two writings rather than one See LSAC art 3072 2007 Revision Comment c Felder v Georgia C Pacific Corp 405 So at 523 24 Brasseaux v Allstate Insurance Company 2d 97 0526 p 5 La App 1 Cir 4 710 So 826 829 98 8 2d In the instant case Mr Sims contends that the letters that passed between his attorney and USAgencies constituted a written settlement agreement between the parties The letters between the parties in this case were filed into the record and reveal the following facts On March 24 2008 USAgencies representative Gilbert Sumba forwarded a letter to Mr Sims attorney which stated After careful consideration of the facts surrounding the loss we find that we must respectfully deny your claim for the following reason your client did not have an active s liability insurance coverage on the date of lossLA No Pay No Play statute Counsel for Mr Sims responded in a letter dated April 3 2008 in pertinent part Please be advised that your insured was drunk at the time of the accident therefore the Louisiana No Pay No Play Statute does not apply in this case Further on April 23 2008 Mr Sims attorney forwarded a letter to USAgencies enclosing the medical bills of Mr Sims amounting to 2 disclosing that 00 981 he had been diagnosed with a cervicallumbar strain and demanding that USAgencies tender the policy limits to settle the matter On May 8 2008 USAgencies representative Mia Williams sent a letter to Mr Sims attorney which stated Please allow this letter to confirm settlement reached on behalf of James rA Sims for the amount of 10 We have enclosed the Release of all Claims 00 000 and Indemnity Agreement for your client signature s Please be advised that the 5 settlement draft will follow under separate cover Thereafter on May 1 2008 USAgencies Casualty Claims Director Eric C Raby communicated in a letter to Mr Sims attorney USAgencies decision to stop payment on the settlement checks based on its information that Mr Jackson was not intoxicated and the applicability of the No Pay No Play Statute After a careful review of the facts of this case applicable law and jurisprudence we find the correspondence between USAgencies and Mr Sims attorney insufficient to constitute a valid contractual settlement of Mr Sims damage claims It is of no moment that a party attorney finds a negotiated settlement s satisfactory a settlement must be in writing Nor is the requirement of a writing to effect a compromise satisfied by the signature of a party attorney alone unless s such authorization is express under LSAC art 2997 C The general authority granted to an attorney in an attorneyclient contract of employment to settle the s client case constitutes only authority to negotiate a settlement Bennett v Great Atlantic Pacific Tea Company 95 0410 at p 4 665 So at 86 2d See also Lizama v Williams 991040 P 5 La App 5 Cir 3 759 So 865 868 00 22 2d In the instant case the correspondence that Mr Sims relies on to establish a compromise in this case did not contain his signature and no evidence was submitted to establish that Mr Sims expressly authorized his attorney to settle his claims 4 Article 2997 provides in pertinent part Authority also must be given expressly to e into a nter compromise or refer a matter to arbitration s We note that this court has previously held that a draft may serve as a written compromise where it recites that it is in full payment for all claims as a result of an accident and the draft is endorsed and negotiated However no evidence was submitted in this case to establish that Mr Sims endorsed and negotiated the USAgencies drafts that were forwarded to his attorney See Doiron v Louisiana Farm Bureau Mutual insurance Company 98 2818 p 5 La App 1 Cir 2 753 So 357 361 00 18 2d l Until the parties signed a written document or documents evincing their consent to the terms of their earlier negotiated agreement either party was free to change his mind Doiron v Louisiana Farm Bureau Mutual Insurance Company 982818 p 7 La App 1 Cir 2 753 So 357 362 In light of 00 18 2d USAgencies timely withdrawal of its written offer Mr Sims has failed to prove the existence of a valid compromise in compliance with LSAC art 3071 See C Doiron v Louisiana Farm Bureau Mutual Insurance Company 982818 at p 7 753 So at 362 The offer was withdrawn before accepted Therefore we are 2d unable to say the trial court erred in refusing to enforce the uncompleted settlement in this case insofar as Mr Sims personal injury damages were concerned Further since Mr Sims does not contend on appeal that he was in fact insured at the time of the accident so that the provisions of the No Pay No Play Statute LSAR 32 were inapplicable to him we find no error in the S 866 1 A dismissal of this suit e We find City of Baton Rouge v Douglas 20071153 La App 1 Cir 2 984 So 746 writ 08 8 2d denied 20080939 La 6 983 So 1284 cited by Mr Sims to this court distinguishable on the 08 20 2d facts as the parties in Douglas had entered a settlement agreement on the record in open court at the hearing the trial court questioned Mr Douglas on the record regarding his understanding that the settlement agreement puts an end to all of the litigation between you and the CityParish Mr Douglas indicated that he understood and that he desired to put an end to the litigation Mr Douglas agreed to the CityParish condition of settlement that he must never seek employment with the CityParish in the s future and the trial court stated a right This case is fully settled Il 7 Since USAgencies filed no appeal or answer to this appeal to contest the trial court award of s 81 126 4 for Mr Sims property damage or the court finding that this amount had been unconditionally s tendered to Mr Sims by USAgencies the propriety of this award is not before this court s Because of our disposition of the issues on appeal on the basis stated we find it unnecessary to address other issues raised by the parties in particular Mr Sims argument as to penalties and attorney fees and USAgencies argument in support of the judgment in its favor that a settlement agreement cannot create obligations that conflict with the No Pay No Play Statute LSAR 32 S 866 c CONCLUSION For the reasons assigned herein the summary judgment in favor of USAgencies Casualty Insurance Company and McHenry Jackson dismissing the plaintiffs suit is affirmed All costs of this appeal are to be borne by the plaintiff James Sims AFFIRMED 10

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