State Farm Mutual Automobile Ins. Co. v. Chanson ( 1990 )

SCHOTT, Chief Judge.

Plaintiff, State Farm Mutual Automobile Insurance Company, was the collision insurer of an individual who had an automobile accident with defendant, Frederick Chanson. State Farm paid its insured $3,233.00 and demanded payment from Chanson who was insured against liability by Champion Insurance Company. Chanson gave State Farm a promissory note for the amount of its claim and made one payment for $157.00. This is a suit on the note and a third party demand by Chanson against Champion for any amount he is found to owe State Farm. The trial court rendered judgment in favor of State Farm against Chanson, and in favor of Chanson against Champion and the Louisiana Insurance Guaranty Association (LIGA) on Chanson’s third party demand. LIGA has appealed.

Champion had become insolvent and was succeeded by LIGA under the provisions of LSA-R.S. 22:1379 et seq. In this court LIGA argues principles of subrogation and contends that the policy behind its creation prevents the assertion of a claim against it by an insurer such as State Farm.

In its answer to Chanson’s third party demand, LIGA pled Champion’s policy including all its terms, conditions and limitations. R.S. 22:1382 places LIGA in the shoes of the failed company. Champion’s policy contained the following pertinent conditions applicable to Part I of the policy insuring against liability:

6. Action Against Company — Part I.

No action shall lie against the company unless, as a condition precedent thereto, the insured shall have fully complied with all the terms of this policy, nor until the amount of the insured’s obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company, (emphasis added).

Since Chanson neither pled nor proved that either of these conditions occurred he has no cause of action to collect from LIGA the amount he voluntarily paid to State Farm.

Accordingly, the judgment on the third party demand is reversed and set aside and there is judgment in favor of the Louisiana Insurance Guaranty Association and against Frederick Chanson, Jr. dismissing the third party demand at his cost.

REVERSED AND RENDERED.