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FOR IMMEDIATE NEWS RELEASE NEWS RELEASE # 22 FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 25th day of February, 2004 , are as follows:

BY JOHNSON, J.:

2003-CC-1801

SCOTTY L. MAYO AND MELISSA DENISE MAYO v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, ET AL. (Parish of Rapides) For the foregoing reasons, the judgment of the court of appeal is reversed, and the judgment of the trial court denying State Farm's motion for summary judgment is reinstated. Because of our conclusions, this matter is remanded to the trial court for further proceedings. REVERSED AND REMANDED. VICTORY, J., concurs in the result.

02/25/04

SUPREME COURT OF LOUISIANA
No. 03-CC-1801 SCOTTY L. MAYO AND MELISSA DENISE MAYO Versus STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, ET AL.

ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, THIRD CIRCUIT, PARISH OF RAPIDES
JOHNSON, Justice We granted this writ of certiorari to determine whether this plaintiff, who was injured while riding as a passenger in a vehicle owned by her husband as his separate property, is entitled to recover damages under an uninsured/underinsured motorist ("UM") policy issued to cover a vehicle owned by her as her separate property. For the reasons that follow, we reverse the court of appeal's decision to grant the insurer's motion for summary judgment, and we remand this matter to the trial court for further proceedings. FACTS AND PROCEDURAL HISTORY Scotty Mayo ("Scotty") and Melissa Mayo ("Melissa") were married on June 22, 1996. Prior to their marriage, Scotty purchased a 1992 Isuzu pickup truck, which was his separate property. Scotty's Isuzu pickup was insured by Allstate Insurance Company ("Allstate"), and he had rejected UM coverage. Also prior to the marriage, Melissa purchased a 1989 GEO Spectrum automobile, which was her separate property. Melissa's GEO Spectrum was insured by State Farm Mutual Automobile Insurance Company ("State Farm"), and she selected the UM insurance.

The instant case arises from an automobile accident which occurred on February 16, 1997, in which the Isuzu pickup truck, driven by Scotty and occupied by Melissa, was hit by a vehicle driven by Dianne Knapp. The vehicle that Knapp was driving was owned by Hixson Autoplex of Alexandria, Inc. ("Hixson") and was insured by Reliance Insurance Company ("Reliance"). State Farm was Knapp's automobile liability insurer. At the time of the accident, Melissa was pregnant, but she suffered a miscarriage on March 20, 1997. On February 13, 1998, the Mayos filed a personal injury and wrongful death suit against Knapp, Hixson, and State Farm as Knapp's liability insurer and as Melissa's UM insurer. Subsequently, plaintiffs filed a First Supplemental and Amended Petition, adding Reliance as a defendant. Plaintiffs settled their claims with the other defendants, including State Farm as Knapp's liability insurer.1 State Farm, as Melissa's UM carrier, filed a motion for summary judgment, arguing that Scotty was an insured under the terms of its policy with Melissa because the definition of "insured" included a "spouse." Therefore, State Farm contended that because Melissa was occupying a vehicle owned by an insured, her husband, she was precluded from recovering UM insurance under LSA- R.S. 22:1406(D)(1)(e). Following a hearing, the trial court denied State Farm's motion without assigning reasons. State Farm filed an application for supervisory writs with the court of appeal. A five judge panel of the appellate court granted the writ application, and in a 3-2 decision, reversed the trial court's ruling and rendered summary judgment in favor of State Farm. Mayo v. State Farm Mutual Automobile Ins. Co., 02-0775

According to the Partial Judgment of Dismissal, Knapp remained in the suit as "a nominal defendant . . . only to the extent required to satisfy the Louisiana Direct Action Statute and to allow plaintiffs to prosecute claims against [Knapp's] liability insurers other than State Farm . . .."
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(La.App. 3 Cir. 5/21/03), 846 So.2d 973. Judge Cooks, joined by Judge Woodard, dissented, opining that Melissa is not barred from recovery under her own UM policy. Scott and Melissa filed an application for certiorari in this Court. By order dated November 7, 2003, this Court granted the writ. Mayo v. State Farm Mutual Automobile Ins. Co., 03-1801 (La. 11/7/03), ___ So.2d ___. DISCUSSION An insurance policy is a contract between the parties and should be construed by using the general rules of interpretation of contracts set forth in the Louisiana Civil Code. Cadwallader v. Allstate Ins. Co., 02-1637, p. 3 (La. 6/27/03), 848 So.2d 577, 580; Carbon v. Allstate Ins. Co., 97-3085, p. 4 (La.10/20/98), 719 So.2d 437, 439; Louisiana Ins. Guar. Ass'n v. Interstate Fire & Cas. Co., 93-0911, p. 5 (La. 1/14/94), 630 So.2d 759, 763. The judiciary's role in interpreting insurance contracts is to ascertain the common intent of the parties to the contract. See LSA-C.C. art. 2045; Cadwallader, 848 So.2d at 580; Carbon, 719 So.2d at 439; Louisiana Ins., 630 So.2d at 763. Words and phrases used in an insurance policy are to be construed using their plain, ordinary and generally prevailing meaning, unless the words have acquired a technical meaning. See LSA-C.C. art. 2047; Cadwallader, 848 So.2d at 580; Peterson v. Schimek, 98-1712, p. 5 (La.3/2/99), 729 So.2d 1024, 1028-29; Carbon, 719 So.2d at 440-441; Reynolds, 634 So.2d at 1183. An insurance contract, however, should not be interpreted in an unreasonable or strained manner under the guise of contractual interpretation to enlarge or to restrict its provisions beyond what is reasonably contemplated by unambiguous terms to achieve an absurd conclusion. Cadwallader, 848 So.2d at 580; Carrier v. Reliance Ins. Co., 99-2573, p. 11 (La.4/11/00), 759 So.2d 37, 43; Peterson, 729 So.2d at 1029. The rules of

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construction do not authorize a perversion of the words or the exercise of inventive powers to create an ambiguity where none exists or the making of a new contract when the terms express with sufficient clarity the parties' intent. Cadwallader, 848 So.2d at 580; Succession of Fannaly v. Lafayette Ins. Co., 01-1355, p. 4 (La.1/15/02), 805 So.2d 1134, 1138; Peterson, 729 So.2d at 1029. Ambiguous policy provisions are generally construed against the insurer and in favor of coverage. LSA-C.C. art. 2056; Cadwallader, 848 So.2d at 580; Carrier, 759 So.2d at 43; Louisiana Ins., 630 So.2d at 764. Under this rule of strict construction, equivocal provisions seeking to narrow an insurer's obligation are strictly construed against the insurer. Cadwallader, 848 So.2d at 580; Carrier, 759 So.2d at 43. The strict construction principle applies only if the ambiguous policy provision is susceptible to two or more reasonable interpretations; for the rule of strict construction to apply, the insurance policy must be not only susceptible to two or more interpretations, but each of the alternative interpretations must be reasonable. Cadwallader, 848 So.2d at 580; Carrier, 759 So.2d at 43-44, (emphasis in original); Louisiana Ins., 630 So.2d at 770. If the policy wording at issue is clear and unambiguously expresses the parties' intent, the insurance contract must be enforced as written. Cadwallader, 848 So.2d at 580; Fannaly, 805 So.2d at 1137; Louisiana Ins., 630 So.2d at 764. Courts lack the authority to alter the terms of insurance contracts under the guise of contractual interpretation when the policy's provisions are couched in unambiguous terms. Cadwallader, 848 So.2d at 580; Peterson, 729 So.2d at 1029; Louisiana Ins., 630 So.2d at 764. The determination of whether a contract is clear or ambiguous is a question of law. Cadwallader, 848 So.2d at 580; Louisiana Ins., 630 So.2d at 764. Uninsured motorist coverage is governed by LSA-R.S. 22:1406(D). In 1988,

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the Louisiana Legislature passed Act No. 203, which, inter alia, added LSA-R.S. 22:1406(D)(1)(e), which provides: D. The following provisions shall govern the issuance of uninsured motorist coverage in this state: *** (1)(e)The uninsured motorist coverage does not apply to bodily injury, sickness, or disease, including death of an insured resulting therefrom, while occupying a motor vehicle owned by the insured if such motor vehicle is not described in the policy under which a claim is made, or is not a newly acquired or replacement motor vehicle covered under the terms of the policy. This provision shall not apply to uninsured motorist coverage provided in a policy that does not describe specific motor vehicles. *** (Emphasis added). When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made in search of the intent of the legislature. LSA-C.C. art. 9. When the language of the law is susceptible of different meanings, it must be interpreted as having the meaning that best conforms to the purpose of the law. LSA-C.C. art. 10. The legislative intent of LSA-R.S. 22:1406 has been explored by the courts in various instances. In Haltom v. State Farm Mut. Auto. Ins. Co., 588 So.2d 792 (La.App. 2 Cir. 1991),2 the Court stated:

In Haltom, William Haltom, accompanied by this wife and daughter ("the Haltoms"), was driving a vehicle owned by Jerry and Joyce McDonald ("the McDonalds"). Joyce McDonald and her daughter were also passengers in the vehicle. They were involved in an accident in which the other driver was solely at fault. The other driver and his insurer settled with the plaintiffs. State Farm also settled with the plaintiff as the McDonalds' UM carrier. Subsequently, the plaintiffs sought to recover under a second State Farm UM policy covering another vehicle owned by the McDonalds. The trial court concluded that the Haltoms could not recover under the second policy because they were not "insureds" under that policy because they were not named in the declarations, none of them were the spouse or relatives of the McDonalds, and they were not
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[T]he amendment to the UM statute was clearly designed to keep vehicle owners from carrying UM coverage on only one of two or more owned vehicles, thus obtaining the benefit of UM coverage regardless of which vehicle they occupied, at the cost of only one UM policy. Whereas the legislature probably intended only to preclude an insured from collecting more than the limits of the UM policy covering the vehicle in which he was riding, which in this case was equal to the coverage on the other vehicle, such is the result under the instant circumstances and pertinent statutes. (Emphasis added). Haltom, 588 So.2d at 795. In Taylor v. Sider, 97-1841 (La.App. 4 Cir. 4/29/98), 714 So.2d 783, writ denied 98-1769 (La. 10/9/98), 726 So.2d 406, the court stated: Through this amendment [of LSA-R.S. 22:1406], the Legislature intended to preclude owners from carrying UM coverage only on selected family vehicles, while still gaining benefit of such protections regardless of which vehicle happens to be involved in an accident. Instead, in such circumstances, the lawmakers restricted UM coverage to that policy covering the occupied automobile. (Citations omitted). Thus, the owner occupying his own vehicle at the time of the accident is entitled to coverage only under the policy, if any, covering that vehicle. Further, Louisiana courts have not distinguished between the owner and other family members. (Citation omitted). Therefore, even though the vehicle involved in the accident was not owned by [the plaintiff], it was owned by her resident daughter . . ., and Subsection (e) prohibits recovery under [the husband's] policy as the vehicle was not described in that policy. Taylor, 714 So.2d at 786. LSA-R.S. 22:1406(D)(1)(e) provides a statutory exclusion of coverage for an insured suffering bodily injury while occupying a motor vehicle owned by the insured that is not a vehicle insured under the policy. William Shelby McKenzie and H. Alston Johnson, III, LOUISIANA CIVIL LAW TREATISE VOL. 15: INSURANCE LAW AND

occupying that vehicle at the time of the accident. The court of appeal affirmed that decision, stating, "Louisiana law requires that insurance policies provide UM coverage only for persons insured under the policy." Haltom, 588 So.2d at 794 (citations omitted). The court further held that the McDonalds could not recover under the second policy, as they were not occupying the vehicle covered under that policy at the time of the accident.
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PRACTICE,

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