Rains v. Jones - 38977 ( La. App. 2 Cir 12/22/04), 890 So. 2d 747

Rule:

An insurance policy is a contract between the parties and should be construed employing the general rules of interpretation of contracts set forth in the Louisiana Civil Code. The parties' intent, as reflected by the words of the policy, determines the extent of coverage.

Facts:

Randall Rains, a Major in the United States Air Force, was stationed in Missouri via military orders, but was domiciled in Washington. After leaving the Air Force Base in their rental vehicle, Randall and Camille Rains (“the Rainses”) traveled west, eventually stopping behind a vehicle at a traffic signal at a south Shreveport intersection. While waiting there, the Rainses were rear-ended by a pickup truck driven by Dustin Jones, a Louisiana minor. The force of the impact pushed their vehicle into the sports utility vehicle stopped in front of them and occupied by Louisiana residents. Both Randall and Camille sustained injuries from the mishap. Thereafter, the Rainses instituted suit against Dustin Jones and his father, Darrell Jones, and their automobile liability insurer, State Farm Mutual Automobile Insurance Co. ("State Farm"). At the time of the accident, Jones had liability coverage of $50,000/100,000. Additionally, United Services Automobile Association ("USAA"), was named in the suit as the Rainses' uninsured/underinsured motorist insurer. In the insurance policy issued and delivered in Missouri, the Rainses selected uninsured motorist coverage of $25,000/50,000, the minimum liability coverage allowed by Missouri law, but rejected underinsurance coverage. The USAA sought a summary judgment seeking to be dismissed from the suit, arguing that under the Louisiana uninsured motorist law, specifically, La. R.S. 22:1406 D, a conflict of law analysis was required to determine whether Louisiana or Missouri law applied to the interpretation of the Rainses' policy. USAA contended that under that analysis, Missouri law should apply. USAA further urged that the policy clearly defined an "uninsured" motor vehicle as one which was insured for less than the minimum liability limits required under Missouri law. Because Jones had coverage in amounts greater than the Missouri minimum liability limits, USAA argued that the Rainses could not take advantage of their uninsured coverage. Moreover, USAA argued that underinsurance coverage was excluded from the Rainses' policy. The trial court granted summary judgment in favor of USAA. The Rainses appealed.

Issue:

Under the circumstances, could the Rainses avail themselves of La. R.S. 22:1406 D to utilize Louisiana's uninsured motorist requirements upon their Missouri policy?

Answer:

No.

Conclusion:

The court affirmed the judgment of the trial court, noting that the lower court considered the interest Missouri had in regulating insurance in accordance with the laws of that state and the minimum contacts of Louisiana. According to the court, the Rainses purchased limited UM coverage and they and their insurer had not had contractual expectations that Louisiana's or any other state's UM law would have been imposed on their Missouri contract, changing their mutual intent on that subject. The court held that the out of state provisions in the policy did not govern UM coverage. A separate part of the policy addressed uninsured/underinsured motorist coverage and contained no such provision. From the placement of those provisions in the policy, it was obvious that the redactors intended to apply the out of state provision only to liability coverage. Therefore, the trial court did not err in finding that the couple could not avail themselves of § 22:1406 D to utilize Louisiana's uninsured motorist requirements upon their Missouri policy.