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FOR IMMEDIATE NEWS RELEASE

NEWS RELEASE #048

FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 6th day of July, 2010, are as follows:

BY WEIMER, J.:

2009-C -2418

ELLA HAWKINS, ET AL. Avoyelles)

v. ANDREW JOHN REDMON, ET AL. (Parish of

Retired Judge Philip C. Ciaccio, assigned as Justice ad hoc, sitting for Chief Justice Catherine D. Kimball. Retired Judge Thomas C. Wicker, Jr., assigned as Justice ad hoc, sitting for Justice Jeannette Knoll, recused. Accordingly, we find the district court erred in holding the exclusion of Andrew Redmon as a driver of a vehicle insured by Safeway was invalid. Likewise, the court of appeal erred in affirming that judgment. We reverse and remand to the district court for further proceedings consistent with this opinion. REVERSED AND REMANDED.

7/6/10

SUPREME COURT OF LOUISIANA
No. 2009-C-2418 ELLA HAWKINS, ET AL. VERSUS ANDREW JOHN REDMON, ET AL.

On Writ of Certiorari to the Court of Appeal, Third Circuit Parish of Avoyelles

WEIMER, Justice1 We granted a writ in this matter to resolve the res nova issue of who, in purchasing a Motor Vehicle Liability Policy as defined in LSA-R.S. 32:900, may execute an excluded driver endorsement which results in a resident of the household being excluded pursuant to the provisions of LSA-R.S. 32:900(L) as amended in 2001. We find the exclusion of a resident, 19-year-old son executed by his mother was valid based on the language of the statute. Thus, we reverse the contrary decisions of the lower courts and render judgment in favor of the insurer, holding there was no coverage for the excluded driver who, with the permission of his father, was driving a vehicle identified in the insurance policy in question. FACTS AND PROCEDURAL HISTORY

Retired Judge Philip C. Ciaccio, assigned as Justice ad hoc, sitting for Chief Justice Catherine D. Kimball. Retired Judge Thomas C. Wicker, Jr., assigned as Justice ad hoc, sitting for Justice Jeannette Knoll, recused.

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Mervin and Sandra Redmon, husband and wife, lived with their children in Waveland, Mississippi, for ten years prior to Hurricane Katrina in August 2005. After Katrina, the couple moved their family to Avoyelles Parish where they established a residence and opened a joint bank account upon which either of them could draw. Mervin pursued his occupation as a construction superintendent. He testified that he was on the job almost 24 hours per day and was able to return home only two weekends, sometimes two days, per month. During his absence, Sandra lived at the family home in Bunkie, Louisiana, with two of their children, Andrew (then 18 years of age) and Rachel (then 14 years of age). On January 11, 2006, Sandra, acting as head of the household and with her husband's consent, went to the Cottonport Insurance Agency to obtain automobile insurance on two of the vehicles they owned, a 1995 Chevrolet S-10 and a 1996 Ford Ranger.2 A policy with Safeway Insurance Company of Louisiana (Safeway) was issued with effective dates of January 11, 2006, through July 11, 2006. In the process of obtaining the insurance, which was issued in Mervin's name, Sandra signed the "APPLICATION" on the line designated "Applicant"; her signature was certified by the insurance agent at 11:30 a.m., January 11, 2006. During this process, Sandra rejected uninsured/underinsured motorist coverage by her signature on a Safeway form on a line marked "Named Insured or Legal Representative." Sandra also signed an excluded driver endorsement expressly excluding their son Andrew Redmon from coverage under the policy. The policy was renewed several times and was in effect by the last renewal from January 11,

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The application reveals there were other vehicles in the household which were not listed in this application. 2

2007, through July 11, 2007. The endorsement page with those dates shows policy limits of $10,000/$20,000 for the two vehicles, lists the drivers as Mervin Redmon and Sandra Redmon, and lists the excluded driver as Andrew Redmon. The form most significant to the coverage issue in the instant case is a Safeway form entitled "EXCLUSION OF NAMED DRIVER(S)." The form provides that this endorsement was effective on the date signed and that it formed a part of the policy that was being issued to Mervin Redmon, with a policy number to be assigned at a later date. The EXCLUSION provides, in pertinent part, that "[pursuant to Louisiana Revised Statute 32:900(L) it is agreed that the insurance afforded by this policy shall not apply with respect to loss, damage, or injury to person(s) or property while the excluded driver(s), [Andrew Redmon] who is a member of the same household as the named insured at the time that this exclusion is executed, is operating the automobile(s) described in the policy." The EXCLUSION contains the signature of Sandra Redmon on a line marked "Signature of Named Insured," as well as signatures of the insurance agent and an authorized representative of the insurance company. On January 13, 2007, Andrew Redmon was involved in an automobile accident while operating the 1996 Ford Ranger owned by his father and insured under the Safeway policy obtained by his mother. Ella Hawkins, the driver of the other vehicle involved in the accident, filed suit, individually and on behalf of her minor child, against Andrew and Safeway, alleging the automobile Andrew was driving was insured by Safeway. In response to the petition, Safeway filed a general denial and specifically contended that the policy at issue did not provide coverage to Andrew pursuant to the named driver exclusion endorsement. Thereafter, Hawkins filed a petition for
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declaratory judgment seeking a ruling by the district court that the Safeway policy did provide coverage. Safeway responded, seeking a ruling that Andrew was excluded from coverage under the policy. The district court held the Safeway policy provided coverage because the named-driver exclusion was invalid, having been signed by Sandra rather than Mervin, in whose name the policy was issued. The court also concluded Mervin did not give Sandra authority to exclude Andrew and "was unaware that his son was not a covered driver." Safeway perfected an appeal. Rejecting Safeway's arguments and agreeing with the district court, the third circuit affirmed. Hawkins v. Redmon, 09-0215 (La.App. 3 Cir. 10/7/09), 19 So.3d 1252. Looking to the provision of LSA-R.S. 32:900(L) that defines "named insured" as the "applicant for the policy of insurance issued by the insurer," the appellate court concluded only the applicant could exclude someone from coverage under the policy. The appellate court found Mervin was the "applicant" and, therefore, the excluded driver endorsement signed by Sandra was invalid. In support of its decision, the court cited Oliver v. Ste. Marie, 97-1469 (La.App. 3 Cir. 7/1/98), 715 So.2d 722, writ denied, 98-2077 (La. 11/13/98), 730 So.2d 936, and Safeway Insurance Company v. Johnson, 28,150 (La.App. 2 Cir. 1/24/96), 666 So.2d 1300. (See discussion, note 4, infra.) This court granted a writ to address the interpretation of LSA-R.S. 32:900(L). Hawkins v. Redmon, 09-2418 (La. 2/5/10), 27 So.3d 287. DISCUSSION The Louisiana Motor Vehicle Safety Responsibility Law, LSA-R.S. 32:851 through LSA-R.S. 32:1043, sets forth a mandatory, comprehensive scheme to
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provide financial protection to those involved in motor vehicle accidents. See Adams v. Thomas, 98-2005, pp. 3-4 (La.4/13/99), 729 So.2d 1041, 1043; Simms v. Butler, 97-0416, p. 2 (La.12/2/97), 702 So.2d 686, 687. The statutes require that the owner of every motor vehicle registered in this state, with limited exceptions, obtain proof of security prior to registration, renewal of registration, application for an inspection certificate, and/or application for a driver's license. LSA-R.S. 32:861(A)(1) and (2); LSA-R.S. 32:862(C) and (D); see also Adams, 98-2003 at 4, 729 So.2d at 1043; Simms, 97-0416 at 2, 702 So.2d at 687. One way an owner may satisfy the requirement of security is by obtaining an automobile liability policy with specified liability limits as defined by statute. LSA-R.S. 32:861(A)(1). An owner's policy of liability insurance shall designate all covered vehicles and "[s]hall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle." LSA-R.S. 32:900(B)(2). Pursuant to the mandatory provisions of LSA-R.S. 32:900, Louisiana courts historically held that the exclusion of a named driver who was a member of the insured's household was unenforceable on public policy grounds. Williams v. US Agencies Casualty Insurance Company, Inc., 00-1693, p. 4 (La. 2/21/01), 779 So.2d 729, 731; see Lewis v. Narcisse, 595 So.2d 329 (La.App. 3 Cir. 1992) (Exclusions of "unlisted household members" are not enforceable in a motor vehicle liability policy certified under LSA-R.S. 32:900.) However, almost two decades ago, the legislature created an exception by introducing the concept of a named driver exclusion into Louisiana insurance law.
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In 1992, the legislature amended LSA-R.S. 32:900 by adding subsection L3 which consisted of one sentence: Notwithstanding the provisions of Paragraph B(2) of this Section, an insurer and an insured may by written agreement exclude from coverage any named person who is a resident of the same household as the named insured. The sole purpose for the exclusion in LSA-R.S. 32:900(L) was and is premium reduction. Williams v. Watson, 01-0495, p. 7 (La.10/16/01), 798 So.2d 55, 59. As we recognized in Joseph v. Dickerson, 99-1046, p. 9 (La.1/19/00), 754 So.2d 912, 917, the purpose of the exclusion "is to allow the named insured the option of paying a reduced premium in exchange for insurance that affords no coverage while a covered vehicle is operated by the excluded driver." In the cases that followed the enactment of LSA-R.S. 32:900(L), the courts focused on balancing two dichotomous, public policies: the competing purposes underlying the requirements of financial responsibility mandated by LSA-R.S. 32:900(B) and the exclusions allowed under LSA-R.S. 32:900(L) to achieve reduced insurance premiums for vehicle owners. Compare, Bryant v. United Services Automobile Association, 03-3491, p. 11 (La. 9/9/04), 881 So.2d 1214, 1220, wherein this court balanced the competing policies of the "no pay, no play" law, LSA-R.S. 32:866, with the provisions of LSA-R.S. 32:900(L). The enactment of LSA-R.S. 32:900(L) soon led to a split among the appellate court circuits concerning whether a named driver exclusion trumped the requirement of omnibus liability coverage in LSA-R.S. 32:900(B). In Carter v. Patterson Insurance Co., 96-0111, p. 8 (La.App. 4 Cir. 5/22/96), 675 So.2d 736,

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Scholars have posited that this amendment was probably intended to supercede Lewis v. Narcisse, supra. 15 MCKENZIE & JOHNSON, LOUISIANA CIVIL LAW TREATISE: INSURANCE LAW AND PRACTICE,

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