Eric Lewis Versus Charles Julien and Goauto Insurance Company ( 2020 )


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  • ERIC LEWIS                                            NO. 20-CA-152
    VERSUS                                                FIFTH CIRCUIT
    CHARLES JULIEN AND GOAUTO                             COURT OF APPEAL
    INSURANCE COMPANY
    STATE OF LOUISIANA
    ON APPEAL FROM THE FORTIETH JUDICIAL DISTRICT COURT
    PARISH OF ST. JOHN THE BAPTIST, STATE OF LOUISIANA
    NO. 73,351, DIVISION "B"
    HONORABLE KIRK A. VAUGHN, JUDGE PRO TEMPORE, JUDGE
    PRESIDING
    December 16, 2020
    JUDE G. GRAVOIS
    JUDGE
    Panel composed of Judges Jude G. Gravois,
    Marc E. Johnson, and Robert A. Chaisson
    AFFIRMED
    JGG
    MEJ
    RAC
    COUNSEL FOR PLAINTIFF/APPELLANT,
    ERIC LEWIS
    Vercell Fiffie
    COUNSEL FOR DEFENDANT/APPELLEE,
    GOAUTO INSURANCE COMPANY
    Michelle DeLoach Brooks
    Davis R. Peltier
    GRAVOIS, J.
    Plaintiff/appellant, Eric Lewis, appeals the trial court’s judgment of January
    3, 2020 which granted summary judgment in favor of defendant/appellee, GoAuto
    Insurance Company, dismissing Mr. Lewis’s suit against it with prejudice. For the
    following reasons, we affirm.
    FACTS AND PROCEDURAL HISTORY
    Eric Lewis filed suit seeking damages for injuries he allegedly sustained in
    an automobile accident that occurred on January 27, 2018, when a vehicle being
    operated by Charles Julien collided with his vehicle on Belle Terre Boulevard in
    St. John the Baptist Parish. Mr. Lewis named as defendants Mr. Julien; Mr.
    Julien’s insurer, GoAuto Insurance Company; and ABC Insurance Company.
    Thereafter, on September 9, 2019, GoAuto filed a motion for summary
    judgment with attachments, arguing that it was entitled to judgment as a matter of
    law because the insurance policy it issued to Mr. Julien was no longer in effect on
    January 27, 2018, the date of the accident, due to nonpayment of a premium
    installment. GoAuto argued that Mr. Julien’s policy, which was financed through
    Auto Premium Assistance Company, L.L.C. (“APAC”), was properly canceled on
    January 23, 2018 at 12:01 a.m. after Mr. Julien failed to make his installment
    payment due on January 12, 2018.
    In support of its motion for summary judgment, GoAuto submitted the
    affidavit of Kim McCloud, Underwriting Manager for GoAuto, certifying that Mr.
    Julien was issued GoAuto policy number 325888-17, which became effective on
    October 17, 2017. Attached to Ms. McCloud’s affidavit was a certified copy of the
    declarations page of Mr. Julien’s GoAuto policy. Additionally, GoAuto attached
    the affidavit of Angela Pittman, manager for APAC, with the following attached
    exhibits: the Consumer Insurance Premium Finance Agreement; the Affidavit
    20-CA-152                                1
    Proof of Emailed Notices; the Ten Day Notice of Cancellation; and the January 23,
    2018 letter from APAC to GoAuto requesting cancellation of Mr. Julien’s policy.
    According to the Consumer Insurance Premium Finance Agreement entered
    into between Mr. Julien and APAC, Mr. Julien was to pay four equal monthly
    installments of $142.00 due on the 12th day of each month beginning on November
    12, 2017, and one installment of $141.00 due on March 12, 2018. The Consumer
    Insurance Premium Finance Agreement also included within it a power of attorney
    in which Mr. Julien agreed that if he failed to pay “even one installment,” APAC
    was authorized to cancel his insurance policy and notify his insurance company.
    After Mr. Julien failed to pay the January 12, 2018 installment, according to the
    affidavit of Ms. Pittman, on January 13, 2018, Ms. Pittman emailed Mr. Julien at
    his last known email address a Ten Day Notice of Cancellation. The Ten Day
    Notice of Cancellation stated that Mr. Julien’s policy was canceled effective
    January 23, 2018 at 12:01 a.m. due to nonpayment of an installment unless he
    remitted his balance of $227.00 before that date. Ten days later, on January 23,
    2018, APAC sent GoAuto a request that it cancel Mr. Julien’s policy effective
    January 23, 2018 at 12:01 a.m. In the letter, APAC certified that the premium
    finance agreement contains a valid power of attorney; the premium finance
    agreement is in default and the default had not been timely cured; upon default, a
    Ten Day Notice of Cancellation was sent to Mr. Julien and a copy of that notice
    was enclosed; and a copy of the Ten Day Notice of Cancellation was sent to all
    persons shown by the premium finance agreement to have an interest in any loss
    which may occur thereunder.
    In his opposition to the motion for summary judgment, Mr. Lewis argued
    that summary judgment should be denied because GoAuto failed to comply with
    La. R.S. 22:1266(D) in that it failed to mail a physical copy of the cancellation
    letter to Mr. Julien.
    20-CA-152                                 2
    In reply, GoAuto argued that cancellation of Mr. Julien’s policy was
    properly made in accordance with La. R.S. 9:3550(G), as evidenced by the
    documents attached to its motion for summary judgment.
    Following a hearing on November 22, 2019, the trial court signed a
    judgment on January 3, 2020, finding that GoAuto did not provide coverage for the
    January 27, 2018 accident and Mr. Lewis cannot recover any amount from GoAuto
    for the injuries sustained in the accident. The judgment granted GoAuto’s motion
    for summary judgment and dismissed GoAuto with prejudice. This appeal
    followed.
    LAW AND ANALYSIS
    “The summary judgment procedure is designed to secure the just, speedy,
    and inexpensive determination of every action, except those disallowed by Article
    969. The procedure is favored and shall be construed to accomplish these ends.”
    La. C.C.P. art 966(A)(2). “After an opportunity for adequate discovery, a motion
    for summary judgment shall be granted if the motion, memorandum, and
    supporting documents show that there is no genuine issue as to material fact and
    that the mover is entitled to judgment as a matter of law.” La. C.C.P. art
    966(A)(3). “The burden of proof rests with the mover. Nevertheless, if the mover
    will not bear the burden of proof at trial on the issue that is before the court on the
    motion for summary judgment, the mover’s burden on the motion does not require
    him to negate all essential elements of the adverse party’s claim, action, or defense,
    but rather to point out to the court the absence of factual support for one or more
    elements essential to the adverse party’s claim, action, or defense. The burden is
    on the adverse party to produce factual support sufficient to establish the existence
    of a genuine issue of material fact or that the mover is not entitled to judgment as a
    matter of law.” La. C.C.P. art. 966(D)(1).
    20-CA-152                                  3
    Appellate courts review summary judgments de novo using the same criteria
    applied by the trial courts to determine whether summary judgment is appropriate.
    Pizani v. Progressive Ins. Co., 98-225 (La. App. 5 Cir. 9/16/98), 
    719 So.2d 1086
    ,
    1087. The decision as to the propriety of a grant of a motion for summary
    judgment must be made with reference to the substantive law applicable to the
    case. Muller v. Carrier Corp., 07-770 (La. App. 5 Cir. 4/15/08), 
    984 So.2d 883
    ,
    885.
    On appeal, Mr. Lewis argues that when an insurance finance company is
    involved, there is a two-part notice requirement to effectuate cancellation of the
    insurance policy. Mr. Lewis argues that first, pursuant to La. R.S. 9:3550(G),
    APAC was required to send notice to Mr. Julien that payment was not received and
    notify him of when APAC would request that the policy be canceled. This can be
    done by e-mail. After the passage of ten days, APAC may alert GoAuto to cancel
    the policy. Mr. Lewis argues that subsequently, pursuant to La. R.S. 22:1266(D),
    GoAuto was required to mail a copy of the notice of cancellation to Mr. Julien by
    certified mail. Mr. Lewis argues that there was no evidence presented that GoAuto
    mailed a notice of cancellation to Mr. Julien by certified mail or by regular mail.
    Additionally, Mr. Lewis also argues that no evidence was presented as to Mr.
    Julien’s premium payment history related to his policy with GoAuto.
    La. R.S. 22:1266 sets forth the notice requirements that must be followed by
    an insurance company in order to effect a cancellation of an insurance policy.
    Blandino v. Pierre, 16-150 (La. App. 5 Cir. 11/15/17), 
    230 So.3d 697
    , 699, writ
    denied, 17-2093 (La. 2/9/18), 
    236 So.3d 1265
    .1 La. R.S. 9:3550 governs the
    1
    Specifically, La. R.S. 22:1266 (D)(1) provides:
    D.(1) No notice of cancellation of a policy to which Subsection B or C of this Section
    applies shall be effective unless mailed by certified mail or delivered by the insurer
    to the named insured at least thirty days prior to the effective date of cancellation;
    however, when cancellation is for nonpayment of premium at least ten days notice
    of cancellation accompanied by the reason shall be given. In the event of
    nonpayment of premiums for a binder, a ten-day notice of cancellation shall be
    required before the cancellation shall be effective. Notice of cancellation for
    20-CA-152                                            4
    regulation of premium finance companies. Premium finance agreements are
    agreements entered into by an insured with a premium finance company wherein
    the insured promises to pay the premium finance company the amount advanced or
    to be advanced to an insurer, or an insurance broker or agent for payment of
    premiums on an insurance policy. La. R.S. 9:3550(B)(4). La. R.S. 9:3550(G)
    allows a premium finance agreement to contain a power of attorney enabling the
    premium finance company to cancel any insurance policy when an insured defaults
    on payments and the premium finance company elects to exercise that authority to
    effect cancellation of an insurance policy. KMJ Servs., Inc. v. Hood, 12-757 (La.
    App. 5 Cir. 4/10/13), 
    115 So.3d 34
    , 37.
    It is a well-established rule of statutory interpretation that when two statutes
    appear to conflict with one another, the more specific statute will prevail over the
    more general one. Nunez v. Superior Hosp. Sys., Inc., 14-668 (La. App. 5 Cir.
    12/23/14), 
    166 So.3d 1004
    , 1009. Because La. R.S. 9:3550 specifically regulates
    the cancellation of insurance policies procured through a premium finance
    agreement with an insurance premium finance company, it is generally applicable
    where insurance premiums are financed. Jones v. Anderson, 16-1361 (La. App. 1
    Cir. 6/29/17), 
    224 So.3d 413
    , 418, citing Stephens v. LeBlanc, 03-1460 (La. App.
    1st Cir. 5/14/04), 
    879 So.2d 262
    , 264; Hodges v. Colonial Lloyd’s Insurance, 
    546 So.2d 898
    , 901 (La. App. 1st Cir. 1989); KMJ Servs., Inc., supra; Nions v.
    Richardson, 10-610 (La. App. 5th Cir. 3/9/11), 
    62 So.3d 217
    , 219; see also Benitez
    v. Elsayed, 19-122 (La. App. 5 Cir. 12/4/19), 
    285 So.3d 572
    .2
    nonpayment of premiums shall not be required to be sent by certified mail. Unless
    the reason accompanies the notice of cancellation, the notice of cancellation shall
    state or be accompanied by a statement that upon written request of the named
    insured, mailed or delivered to the insurer within six months after the effective date
    of cancellation, the insurer will specify the reason for such cancellation. This
    Subsection shall not apply to nonrenewal.
    2
    In Jones, the plaintiffs made an argument similar to Mr. Lewis’s argument on appeal. There, the
    plaintiffs argued on appeal that the defendant, GoAuto, could not have effectively canceled coverage of
    the insurance policy because the ten-day notice of cancellation was not sent by mail or delivered by the
    insurer as required by La. R.S. 22:1266. The plaintiffs argued that reliance on the notice sent by the
    20-CA-152                                            5
    Thus, employing the rules of statutory construction, we find that since La.
    R.S. 9:3550 deals specifically with the cancellation of insurance policies procured
    through a premium finance agreement, it, and not La. R.S. 22:1226, is controlling
    in the present case. We accordingly find no merit to Mr. Lewis’s argument that
    GoAuto was required to send a notice of cancellation by certified mail to Mr.
    Julien.
    La. R.S. 9:3550(G) provides, in pertinent part:
    G. Insurance contracts may be canceled upon default as follows:
    (1) When a premium finance agreement contains a power of
    attorney enabling the insurance premium finance company to
    cancel any insurance contract, or contracts, or endorsements
    listed in the agreement, the insurance contract, or contracts, or
    endorsements shall not be canceled by the insurance premium
    finance company unless such cancellation is effectuated in
    accordance with this Subsection.
    (2) Upon default of the insurance premium finance agreement by
    the debtor, the premium finance company shall mail or send an
    electronic notice of cancellation to the insured, at his last
    known mailing or electronic address as shown on the records
    of the insurance premium finance company. In the event the
    default is timely cured, the premium finance company shall,
    within three business days from the time the default was cured,
    mail or send electronic notice of rescission of the cancellation
    notice to the insured, at his last known mailing or electronic
    address as shown on the records of the premium finance
    company and to all other parties who had previously been sent
    notice of cancellation. In the event the default is not timely
    cured as provided herein and the insurance policy is canceled
    pursuant to the terms of the insurance premium finance
    agreement, a copy of the notice of cancellation of the insurance
    contract shall also be sent to the insurance agent negotiating
    the related insurance contract whose name and place of
    business appears on the insurance premium finance agreement.
    Such notice of cancellation shall also state the name of any
    governmental agency, holder of a security interest in the
    insured property, or third party also requiring notice of
    cancellation as shown on the insurance premium finance
    agreement.
    (3)(a) Ten days after notice of cancellation has been mailed to the
    insured, if the default has not been cured, the insurance
    premium finance company to the insured via email was misplaced since it was not compliant with the
    applicable requirements of law. The First Circuit disagreed, and in its analysis, the court applied La. R.S.
    9:3550 to determine if there was an effective notice of cancellation. Jones, 
    224 So.3d at 417-419
    .
    20-CA-152                                            6
    premium finance company may thereafter effect cancellation
    of such insurance contract, or contracts, or endorsements by
    sending to the insurer, by depositing in the mail or with a
    private carrier, or via electronic mail, within five business
    days after the date of cancellation, except when the payment
    has been returned uncollected, a copy of the notice of
    cancellation together with a statement certifying that:
    (i) The premium finance agreement contains a valid power
    of attorney as provided in Paragraph (1) of this
    Subsection.
    (ii) The premium finance agreement is in default and the
    default has not been timely cured.
    (iii) Upon default, a notice of cancellation was sent to the
    insured as provided in Paragraph (2) of this Subsection,
    specifying the date of sending by the premium finance
    company to the insured.
    (iv) Copies of the notice of cancellation were sent to all
    persons shown by the premium finance agreement to
    have an interest in any loss which may occur
    thereunder, specifying the names and addresses of any
    governmental agencies, holders of a security interest in
    the insured property, or third parties to whom the
    insurance premium finance company has sent notice of
    cancellation.
    (b)(i) Upon receipt of such notice of cancellation and
    statement from the premium finance company, the
    insurer shall consider that cancellation of the insurance
    contract or contracts has been requested by the insured
    but without requiring the return of the insurance contract
    or contracts and the insurer may proceed to cancel such
    contract or contracts as provided in R.S. 22:885. The
    effective date of cancellation shall be as of 12:01 a.m.
    on the tenth day after the date of sending of the notice
    of cancellation as shown in said statement furnished to
    the insurer by the premium finance company.
    (Emphasis added.)
    (ii) The time period between the date of the late notice and
    notice of cancellation was sent shall commence upon the
    date the late notice is sent.
    (iii) Payment of an insurance premium installment by the
    insured, or on behalf of the insured, with a check or
    other instrument, which is returned to the premium
    finance company by the financial institution or other
    entity upon which it is drawn for insufficient funds
    available in the account, lack of credit, closed account,
    stopped payment, or for any other reason, shall be
    deemed grounds for the premium finance company to
    cancel the insurance policy pursuant to the terms of the
    20-CA-152                                7
    power of attorney from the date the insurance policy
    could have been canceled upon default for nonpayment.
    (c) The receipt of such notice of cancellation and statement by
    the insurer shall create a conclusive presumption that the
    facts stated in said notice and statement are correct, that the
    insurer is entitled to rely on such facts and that the
    cancellation of the insurance contract or contracts is
    concurred in and authorized by the insured. No liability of
    any nature whatsoever either in favor of the insured, any
    governmental agency, holder of a security interest in the
    insured property, or third party shall be imposed upon the
    insurer as a result of any misstatement of fact contained in
    said notice of cancellation or statement furnished by the
    insurance premium finance company to the insurer, or as a
    result of failure by the insured, any governmental agency,
    holder of a security interest in the insured property, or third
    party to receive the notice of cancellation required by
    Paragraph (2) of this Subsection, or as a result of failure of
    the insurance premium finance company to comply with
    any of the requirements of this Subsection. Upon mailing
    of any unearned premium and unearned commission to the
    insurance premium finance company as soon as practicable
    following such cancellation, the insurer shall be fully
    discharged from all liability under the insurance contract or
    contracts for any loss occurring subsequent to the effective
    date of cancellation.
    The burden of proof is on the insurance company to show that the policy had
    been canceled prior to the date of the loss that gave rise to the denied claim. Nions,
    
    62 So.3d at 219
    .
    There must be strict compliance with the following conditions to allow
    cancellation of an insurance policy under La. R.S. 9:3550(G):
    (1) the debtor/insured has defaulted on the premium finance contract;
    (2) there is a power of attorney clause in the debtor’s contract with the
    premium finance company;
    (3) the premium finance company has mailed notice of cancellation to the
    insured and the insured’s insurance agent;
    (4) either the premium finance company or the insurer has notified any
    mortgagee, governmental agency, or other interested third party
    indicated by the policy; and
    (5) after a ten-day delay in which the debtor had not made a payment, the
    premium finance company sent a copy of the notice of cancellation to
    the insurer, with a statement certifying compliance with 9:3550(G)(3).
    KMJ Servs., Inc.,
    115 So.3d at 37
    .
    20-CA-152                                  8
    In the present case, the documents in support of GoAuto’s motion for
    summary judgment demonstrate that GoAuto complied with La. R.S. 9:3550(G).
    The affidavit of Angela Pittman certified that on October 13, 2017, Mr. Julien
    signed a Consumer Insurance Premium Finance Agreement with APAC. The
    agreement stated that Mr. Julien would pay four equal payments of $142.00 on the
    12th day of each month, commencing on November 12, 2017, and one payment of
    $141.00 on March 12, 2018. The agreement also included a power of attorney, in
    which Mr. Julien agreed that if he failed to pay “even one installment,” APAC was
    authorized to cancel his insurance policy and notify his insurance company. Ms.
    Pittman attested that on January 13, 2018, she sent Mr. Julian an email to his last
    known email address that contained the Ten Day Notice of Cancellation. The Ten
    Day Notice of Cancellation stated that Mr. Julien’s policy was canceled effective
    January 23, 2018 at 12:01 a.m. for nonpayment of an installment unless he
    remitted his balance of $227.00 before that date. After ten days, on January 23,
    2018, pursuant to the requirements set forth in La. R.S. 9:3550(G)(3)(a), APAC
    sent a letter to GoAuto requesting that it cancel Mr. Julien’s policy for non-
    payment of his monthly installment due under their premium finance agreement
    after he was notified on January 13, 2018. APAC certified in the letter that the
    premium finance agreement contained a valid power of attorney; the premium
    finance agreement was in default and the default had not been timely cured; upon
    default, a Ten Day Notice of Cancellation was sent to Mr. Julien and a copy of that
    notice was enclosed; and a copy of the Ten Day Notice of Cancellation was sent to
    all persons shown by the premium finance agreement to have an interest in any
    loss which may occur thereunder.
    Upon receipt of the notice of cancellation and certifying statement from
    APAC, GoAuto was to consider that “cancellation of the insurance contract … has
    been requested by the insured,” and GoAuto could proceed with canceling the
    20-CA-152                                 9
    policy. See La. R.S. 9:3550(G)(3)(b)(i). The effective date of cancellation was
    “12:01 a.m. on the tenth day after the date of sending of the notice of cancellation.”
    
    Id.
     Accordingly, Mr. Julien’s GoAuto policy was properly canceled on January
    23, 2018 at 12:01 a.m.
    Further, under La. R.S. 9:3550(G)(3)(c), upon its receipt of the notice of
    cancellation and certifying statement, GoAuto was entitled to the “conclusive
    presumption” that the facts stated in the notice and statement were correct.
    Stephens, 879 So.2d at 265.
    Therefore, based on our de novo review, we find that there are no genuine
    issues of material fact that Mr. Julien’s policy was canceled prior to the date of the
    subject accident, and that GoAuto is entitled to summary judgment as a matter of
    law.
    CONCLUSION
    Accordingly, we affirm the trial court’s grant of summary judgment in favor
    of GoAuto, dismissing Mr. Lewis’s suit against it with prejudice.
    AFFIRMED
    20-CA-152                                 10
    SUSAN M. CHEHARDY                                                            CURTIS B. PURSELL
    CHIEF JUDGE                                                                  CLERK OF COURT
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    ROBERT A. CHAISSON                                                           SUSAN BUCHHOLZ
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    20-CA-152
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    40TH DISTRICT COURT (CLERK)
    HONORABLE KIRK A. VAUGHN, JUDGE PRO TEMPORE (DISTRICT JUDGE)
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    (APPELLEE)
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Document Info

Docket Number: 20-CA-152

Judges: Kirk A. Vaughn, Judge Pro Tempore

Filed Date: 12/16/2020

Precedential Status: Precedential

Modified Date: 10/21/2024