Articles Posted in Drunk Driving/DUI

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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.

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A case appealed from the Parish of Claiborne, arising from an incident in Homer, Louisiana, raises a couple of important issues regarding lawsuits against insurance providers.

In this case, the plaintiff was a passenger in a car that met the defendant, driving her own car, at an intersection. The plaintiff and the defendant were already at odds with each other, and the plaintiff claimed in trial that the defendant had tried earlier that day to strike the plaintiff with her car. Nonetheless, the plaintiff got out of the passenger side and walked to the side of the defendant’s car, where the plaintiff struck or attempted to strike the defendant with her hands. As the plaintiff returned to her own car, the defendant performed a U-turn, drove back towards the plaintiff and struck her with the vehicle, causing the plaintiff’s injuries.

The plaintiff sued the defendant’s liability insurer, as well as the agency providing underinsured motorist (UM) coverage for the vehicle in which the plaintiff was a passenger. An appeal of the first trial led to a retrial. In the retrial, the court held in favor of the defendant insurance companies, and the plaintiff appealed.

The first issue regards lawsuits against automobile insurance companies in general. The insurance policy itself is essential to establishing a case against an insurance provider. A plaintiff against an insurance company must enter the insurance policy into the record in order to prevail. As this case demonstrates, record of a court acknowledging an insurance policy and discussing the relevant parts of it in an earlier trial can sometimes serve as record of the policy in a subsequent trial.

In this case, the trial court held that the plaintiff had not entered the insurance policies into the record and so could not prove that the insurers were responsible for any payments. The appellate court decided that the defendant’s pleadings and stipulations, as well as records from the earlier trial and appeal served to prove the existence and contents of the insurance policies, even though the plaintiff did not re-enter the insurance policies during the second trial.

The second issue regards lawsuits to recover damages based on UM clauses. Uninsured motorist insurance, or underinsured motorist insurance, typically provides coverage to the policy-holder in the event that he is injured in an accident caused by a motorist with no insurance, or with insurance that does not cover all of the damage done.

Typically an “accident” must occur for the recovery of UM insurance benefits. When evaluating claims for UM insurance, courts examine incidents from the viewpoint of the injured party. If a vehicular assault is unprovoked or unexpected from the injured party’s perspective then it is “accidental” even if the aggressor acted intentionally.

In this case, the court found that the plaintiff provoked the incident when she struck or attempted to strike the defendant with her hands, so her injuries were not “accidental” and the provider of UM insurance was not liable.

Procedural details such as the need to file certain documents in order to make cases can destroy otherwise valid lawsuits. Further, the exact meaning and relevance of language in complex insurance contracts may be difficult to understand unless one knows how courts have interpreted the issues.

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Licensed attorneys in New Orleans were asked which attorney they would recommend to residents in the New Orleans area. Attorney Jeffrey Berniard, of the New Orleans-based Berniard Law Firm, LLC, was named one of the best mass litigation and class action attorneys in New Orleans in the November 2012 issue of the magazine. Propelled into success by holding insurance companies accountable in the wake of Hurricane Katrina, Berniard has built the Berniard Law Firm into one of the premiere personal injury law practices in not only New Orleans, but the entire state of Louisiana. Since Hurricane Katrina, Berniard Law Firm has focused on insurance disputes and class action litigation.

Jeffrey Berniard has been involved in several high-profile cases, solidifying his expertise in complex high risk litigation. He worked on the highly publicized Deep Water Horizon oil rig case in the Gulf Coast, representing a very large group of individuals affected by the sinking oil rig. In 2008, Berniard Law Firm secured a $35 million dollar settlement for a class of 70,000 members seeking bad faith penalties for tardy payments by a Louisiana insurance company in the wake of Hurricane Katrina and Hurricane Rita. In 2009, the Berniard Law Firm participated in five class actions against insurance companies and corporations. In the process of these major claims, the firm also helped many residents of the Gulf Coast with their personal injury concerns, insurance claims and business disputes.

– What is Mass Tort Litigation? –

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Settlements are an important part of the legal process. They save time, money, allow the parties to negotiate their own terms, and, above all, they keep the parties from having to go to court to litigate their claims. In the case of settling with insurance companies, the companies like to avoid court because it not only costs them time and money, but also may negatively affect their reputation in the community. As such, it is common practice for an injured person to sign a release form after they receive settlement money. This release form bars the person injured from any future claims against the insurance company. Both parties usually end up happy in this situation because the person who was injured gets some compensation and the insurance company avoids the negative effects of going to court.

What happens if an injured person settles and signs a release form before they realize how badly they are injured? For example, perhaps an individual thinks they only bruised their ribs, but actually suffered from more long term effects such as kidney injuries. In that case, the injuries are likely to be much more expensive than both parties originally anticipated. Then, the injured individual does not have enough money to cover medical expenses and the insurance company gets out of paying for the extra expenses.

In Louisiana, a general release will not necessarily bar recovery for aspects of the claim that the release was not intended to cover. However, most releases are very broad in that they cover any existing injuries and injuries that may occur because of the accident in the future. Louisiana law only allows settlements to be set aside if there was an error when the settlement was signed. Two major mistakes could set aside a settlement: 1) the injured party was mistaken as to what he or she was signing even if there was no fraud involved, or 2) the injured party did not fully understand the nature of the rights being released or that they did not intend to release certain rights. A settlement can also be set aside if there is fraud or misrepresentation involved.

Louisiana Civil Code Article 1953 defines fraud as “. . . misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss of inconvenience to the other. Fraud may also result from silence or inaction.” In order to determine if there is fraud involving a release, which is also a contract, the court will only look to the document itself to determine if fraud is evident. Evidence of fraud in this situation could include any intentionally incorrect statement of material fact, such as stating items that are not covered by the insurance company when those items are actually covered.

A recent case gives an excellent example of a settlement with an insurance company. In that case, an individual fell off a tractor and injured himself. Two insurance companies provided compensation for injuries relating to his fall. Once each insurance company provided compensation, they each had the injured party sign a release form to keep him from filing claims against them in the future should the injuries be worse than originally anticipated.

The injured individual did have complications with his injuries and tried to get the settlements set aside so that he could get more money based on the coverage, but because he signed the release forms and there was no evidence of fraud, the court would not set aside the settlement agreements. The court stated that the injured individual knew exactly what he was releasing and there was no mistake in the settlement. The insurance companies both provided clear statements of what they did and did not cover and provided compensation for the things they did cover. The release statements specifically said that the injured party could not sue again for the same fall even if the injuries got worse, so he could not file claims again.

One lesson to take away from this example is that it might be helpful to find out the extent of your injuries before you enter into any settlements or sign any release forms.

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Recently, in the State of Louisiana Court of Appeal for the Third Circuit, a case was decided that effectively laid out the requirements of a settlement agreement. These requirements are especially important because many cases are settled before they get to court. In fact, settlement is often preferable because it saves a significant amount of time, money, and it allows the parties to reach a compromise that they not only come up with themselves, but that is also acceptable to both parties. That way, the parties share the benefits instead of there being a clear-cut loser and clear-cut winner as is usually the situation should a case go to trial.

In this case, an individual was seeking to enforce a settlement agreement with an insurance company regarding a life insurance policy. The life insurance policy involved three beneficiaries; however, it was unclear as to when the money should go to each beneficiary. There may have been a contingent beneficiary. That is, the policy was set up so that if one of the beneficiaries had passed away prior to the money dispersion, then it would go to a different beneficiary. However, the insurance company was unsure of this stipulation, so they did not give out any money at all.

As a result of all of this confusion, one of the beneficiaries entered into negotiations with the insurance company in order to get at least some money out of the life insurance policy. Louisiana Civil Code, Article 3071, defines compromise as “a contract whereby the parties, through concession made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship.” Therefore, the parties in this case sought to compromise regarding the payment of the insurance policy.

In addition to defining compromise, the Court also points out that the settlement agreement must be in writing and signed by both parties as required by Louisiana Civil Code Article 3072. In this case, there was an oral agreement, but when the parties attempted to put the terms in writing, there was still dispute regarding the agreeability of quite a few of the terms of the settlement. They created drafts and sent them back and forth, but nothing was ever finalized by way of a signature from either party. The Court recognizes that there are no other cases where a settlement was validated even though neither party signed the final settlement agreement.

The Court also goes on to explain that contracts, which are the basis of a compromise, require that there be a “meeting of the minds.” That is, both parties should completely understand and agree to the terms in the contract. The contract embodies the intention of both parties and if the intention of both sides is not fully included in the settlement, then that settlement cannot be valid. In this case, both sides described other terms that were either not included in the agreement or that appeared, but they did not approve of their inclusion in the settlement. The Court notes that there was no “acceptance and acquiescent from both parties” in this case.

Although the settlement agreement can be included in more than one document, it is apparent that there was no such agreement. It based this conclusion on the testimony of both parties, lack of signature on the settlement agreement, and other communications between the parties at the negotiation stages in this case (such as letters between the attorneys that expressed displeasure with terms in the agreement). Therefore, the Court concluded that a settlement agreement did not actually exist and that it could not enforce a settlement agreement that does not actually exist.

Obtaining settlement agreements can be somewhat complicated because they involve getting both sides to agree to many different terms. However, they are very valuable because they allow the parties to avoid trial and get their conflicts resolved quickly. The Berniard Law Firm is always interested in solving our clients’ problems quickly and effectively.

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A summary judgment is rendered when a trial court decides that there are no genuine issues of material fact that need to be determined. “Manifestly erroneous” is the high standard under which summary judgments are reversed on appeal. Summary judgments are cheaper and less time consuming than full blown trials; they are a means toward the end of judicial expediency, a goal that becomes increasingly important to our judicial system over time. Despite the importance of this procedural device, many cases do not call for summary judgment. Sometimes trial courts grant full or partial summary judgments in error and are reversed. That is what occurred in the case of Jagneux v. Frohn, which you can read here.

The defendants in this case convinced the trial court that no issues of fact existed that required litigating. Their legal journey was not over though due to the plaintiff’s appeal. The court of appeals applied the standard promulgated by the Louisiana Supreme Court. This Louisiana Supreme Court’s standard initially places the burden of proof on the party that is moving for a summary judgment. The moving party must prove that one or more elements of the adverse party’s claim or defense lacks any factual support on the record so far. The opposing party is then granted an opportunity to prove that there have been facts alleged that support that party’s position. At the time of summary judgment the record is sparse so a granting of summary judgment represents a finding by the court that no facts supporting a particular party’s, in this case the plaintiff’s, position.

The appellate court reversed the trial court’s decision in this case because it found that the issue of whether Mrs. Kling, a defendant in this case, was the driver of the white SUV at the time that it, at least partially, caused the accident at issue in this case. Because there was conflicting evidence about where Mrs. Kling was and whether or not she was actually in control of the car at the time of the accident, summary judgment was not the right choice in this case. The trial court is not to weigh the merits of the case when addressing summary judgment. Summary judgment is only appropriate in cases where no potentially meritorious case is presented by one of the parties.

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Previously on our network of blogs, we have discussed uninsured/underinsured motorist (“UM”) coverage in auto policies. The statutory requirement for UM insurance “embodies a strong public policy to give full recovery for automobile accident victims.” Duncan v. U.S.A.A. Insurance Co. So strong is this public policy preference, in fact, that “the requirement of UM coverage is an implied amendment to any automobile liability policy, even when not expressly addressed, as UM coverage will be read into the policy unless validly rejected.” If a policyholder wishes to reject UM coverage, he must do so by filling out a form that is issued by the state commissioner of insurance. The Louisiana Supreme Court has explained that completing the form is no simple, routine matter; the insurance company must see that the insured: (1) initials the line in the form that sets out the rejection of UM coverage; (2) prints his name; (3) signs his name; (4) fills in the policy number; and (5) fills in the date. (The same requirements for declining UM coverage would apply to an official representative of a corporate entity that owns a vehicle.) Moreover,

“in order for the form to be valid, [the information] must be completed before the UM selection form is signed by the insured, such that the signature of the insured … signifies an acceptance of and agreement with all of the information contained on the form. An insurer who is unable to prove that the UM selection form was completed before it was signed by the insured simply cannot meet its burden of proving … that the UM selection form is valid.” Gray v. American National Property & Casualty Co.

Indeed, even when an insurance company uses the official form and confirms that it is properly completed, it will only “receive[] a presumption that the insured’s waiver of coverage was knowing” (emphasis supplied), which can be rebutted.

The effectiveness of a UM waiver was at the center of a recent decision by the Third Circuit Court of Appeal in Melder v. State Farm. On March 1, 2007, Naddia Melder was driving a 2006 Nissan pickup truck that belonged to her employer, Grimes Industrial Supply, LLC (“GIS”), in Alexandria. She was involved in a collision with another vehicle in which she sustained serious injuries. After the accident, Melder filed a suit against State Farm seeking to recover under the UM coverage provision of the policy which GIS maintained on the vehicle. State Farm filed a motion for summary judgment asserting that when Floyd Grimes, the owner of GIS, obtained the insurance policy on the Nissan, he rejected UM coverage. After a hearing, the trial court granted the motion and dismissed the action against State Farm. Melder appealed, alleging that genuine issues of material fact about the validity of the UM waiver existed. The Third Circuit agreed with Melder. It cited the inconsistent evidence in the record about Mr. Grimes’s authority to execute the UM waiver. The policy indicated that the Nissan was owned by Floyd Grimes and his brother, Frank Grimes. But other evidence pointed to the corporate entity, GIS, as the owner of the truck. The court concluded, “the record contains no evidence of the authority by which Mr. Grimes executed the UM rejection, either on behalf of the … company or the apparently non-existent partnership between himself and Frank Grimes.” Thus, the court held that a genuine, material issue existed about whether the waiver, though properly completed, was valid. It reversed the trial court’s granting of summary judgment for State Farm and remanded the case for trial.

The Melder case shows Louisiana’s strong policy toward including UM coverage in all auto policies. The significant steps required to waive UM coverage are intended to prevent unintentional or mistaken waivers by policyholders. Even though State Farm followed the requirements diligently, it failed to verify something even more fundamental–whether the person signing the form possessed the legal authority to make a decision about waiving coverage.

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