HUETE-HERNANDEZ v. ZERON, 584 So.2d 727 (La.App. 4 Cir. 1991)

NORMA HUETE-HERNANDEZ v. ANTONIO J. ZERON, ET AL.

No. 91-C-0570.Court of Appeal of Louisiana, Fourth Circuit.
August 13, 1991.

APPEAL FROM CIVIL DISTRICT COURT, PARISH OF ORLEANS, STATE OF LOUISIANA, HONORABLE MAX N. TOBIAS, J.

Frederick W. Bradley, Inger M. Sjostrom, Liskow Lewis, New Orleans, for relator.

Stephen B. Murray, Patricia R. Murray, Murray Law Firm, Salvador G. Longoria, Gaudin Longoria, New Orleans, for respondent, Zeron, El Sol, Inc., et al.

Before SCHOTT, C.J., and BARRY and LOBRANO, JJ.

BARRY, Judge.

[1] On the application of Canal Indemnity Company, we grant certiorari in order to consider the trial court’s judgment which denies relator’s motion for summary judgment. The question is whether there are issues of material fact such as to preclude summary judgment in relator’s favor or whether there is insurance coverage on the wrongful death claim. [2] The application for insurance determines the intent of the parties. Whether a policy reflects that intent is a question of material fact. The subject application provides: [3] I also agree that if a policy is issued pursuant to this application, the application and any restrictive and/or exclusion, which is included on the application and signed by me, shall become a part of the policy. [4] Query: Would a reasonable person believe that a restrictive/exclusionary amendment, not bargained for or specified on the application, can be added to a policy without the insured’s knowledge? [5] The trial court reviewed the application’s language and concluded that any restrictive/exclusionary endorsement should be specified on the application and its presence would be acknowledged by the insured. [6] Was the trial court clearly wrong? Is the application ambiguous? [7] The application does not provide that all restrictive/exclusions must be specified on the application. However, the form does state that any restriction/exclusion which is specified shall become a part of the policy. The applicant is required to acknowledge which restriction/exclusion will apply, an indication that those specified are exclusive. [8] The application does not inform the applicant that the insurer reserved the right to add a restriction/exclusion. [9] The insured and Mr. Geraci, the insurance agent,
submitted affidavits which state that the insured and the agent never intended that the insurer could unilaterally add an exclusionary endorsement. Mr. Geraci stated that he did not know the

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exclusion had been added to the policy. This case is not about an insured who wants to broaden coverage. The record clearly shows that the insured relied upon its application and the professional advice of Mr. Geraci.

[10] The questioned application’s language is ambiguous and should be construed against the insurer. Pareti v. Sentry Indemnity Company, 536 So.2d 417 (La. 1988); Williamson v. Historic Hurstville Association, 556 So.2d 103 (La.App. 4th Cir. 1990). [11] It is undisputed that the application is a part of the policy. [12] What did the parties intend? The record reflects a conflict which amounts to a genuine issue of material fact. [13] AFFIRMED. [14] LOBRANO, Judge, concurring in the writ denial for the following reasons. [15] I respectfully decline to exercise supervisory jurisdiction in this matter. The legal issue of whether an application for insurance must contain all of the policy’s terms, conditions and/or exclusions is more properly addressed after a trial on the merits, briefing and argument. [16] SCHOTT, Chief Judge, dissenting: [17] The accident occurred on April 29, 1988. Plaintiff’s daughter was a passenger in a truck owned by El Sol, Inc. and driven by its employee, Zeron. Relator’s policy was issued on January 21, 1988 and it contained an “Occupant Hazard Excluded” endorsement excluding coverage for bodily injury or death sustained by a person occupying the vehicle. [18] The trial judge denied relator’s motion for summary judgment for two reasons: first, because there was an issue of fact as to whether the driver, Zeron, knew that non employees were not allowed to ride in company trucks; and, second, because the application for the policy on relator’s form, completed on January 21, 1988 contained the following language: [19] “. . . I also agree that if a policy is issued pursuant to this application, the application and any restrictive and/or Exclusion Endorsement Text, which is included on the application and signed by me, shall become a part of the policy. . . .” [20] The trial judge reasoned that this language on the application raised the question of whether the Occupant Hazard Excluded endorsement applied to the facts of the case. [21] Whether Zeron knew about the alleged company policy against passengers may be an issue of fact, but it is not an issue as t material fact such as to preclude summary judgment. C.C.P. art. 966. Whether El Sol had such a policy or not and if so whether it made its employees aware of the policy or not has no bearing on the question of insurance coverage in this case. The policy clearly excludes the coverage regardless of the company’s policy. [22] As to the language in the application this simply states that any exclusion in the application must be in the policy; it does not require that all conditions and exclusions in the policy must be in the application. The application in no way purports to be the policy stating at one point in bold print, “The following Information Necessary If Applicant To Be Accepted” and stating in the portion of the application quoted above, “I also agree tha if a policy is issued . . .”. Stamped on the application is the caveat, “This Is Not A Binder.” Consequently, the application is just that and no more. It does not purport to contain all the conditions of the policy and it cannot be construed to prevent the insurer, if it issues a policy, from including such exclusions that are not prohibited by law. [23] Although not the basis for the trial court’s judgment, respondents contend that summary judgment is inappropriate because El Sol and its insurance agent did not intend to be a party to an insurance contract which did not insure a passenger in an El Sol truck. El Sol and its agent had this policy over three months before the accident. The disputed endorsement is prominent and clear. I know of no law which conditions the efficacy of a policy exclusion on the knowledge of the exclusion by the insured or the intent of the

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insured not to have the exclusion in the contract. If this were so an insured could broaden coverage and avoid exclusions by the simple expedient of failing to examine the policy upon delivery and pleading ignorance of its contents.

[24] As in Kiefer v. Whittaker, 468 So.2d 587 (La.App. 4th Cir. 1985), writ denied 469 So.2d 979 relator is entitled to a summary judgment because there is no issue of material fact and the language of the policy clearly and unambiguously precludes coverage as to this claim. [25] I respectfully submit that relator’s motion for summary judgment should be granted.