Desoto v. Beaty

Citations: 64 So. 3d 908; 10 La.App. 3 Cir. 1421; 2011 La. App. LEXIS 563; 2011 WL 1774144Docket: No. 10-1421

Court: Louisiana Court of Appeal; May 11, 2011; Louisiana; State Appellate Court

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A state employee, Wayne Desoto, was involved in an automobile accident while performing his job duties for the State of Louisiana. Desoto and his wife filed a lawsuit against the other driver, Debra Beaty, for damages. The State of Louisiana intervened to recover workers’ compensation benefits previously paid to Desoto. The Desotos subsequently sued the State's Self-Insurance Fund for uninsured/under-insured motorist (UM) coverage, arguing that the State’s rejection of UM coverage was not in technical compliance with Louisiana Revised Statutes (La.R.S.) 22:1295(3) due to the improper completion of the rejection form. The Desotos claimed entitlement to $5,000,000 in UM coverage based on the State’s self-insured limits.

The parties filed cross-motions for summary judgment. The trial court denied the State’s motion and granted the Desotos a declaratory judgment affirming their claim for UM coverage. The State contended that Desoto's only remedy was through workers’ compensation and argued that the Self-Insurance Fund did not provide UM coverage due to statutory exemptions. A hearing on these motions occurred on August 27, 2010, leading to a judgment favoring the Desotos on October 4, 2010. The State has appealed the trial court's ruling, presenting four assignments of error.

The trial court erred in multiple respects regarding the legal standing of the Desotos against the State of Louisiana Self-Insurance Fund. Key points include:

1. The court failed to recognize that the Desotos lack a legal cause of action against the Self-Insurance Fund as mandated by La.R.S. 39:1538(4), which explicitly prohibits direct actions against the Fund and denies claimants enforceable rights to recover from it.
2. Wayne Desoto's exclusive recovery option is limited to workers' compensation benefits due to his injury occurring during the course of his employment, as outlined in La.R.S. 23:1032 and La.R.S. 23:1034.
3. The ruling that Desoto's claim for damages falls under the Self-Insurance certificate coverage was incorrect, given the explicit exclusions in the certificate's language and relevant case law.
4. The court did not properly apply La.R.S. 22:46(9)(a), which states that the Self-Insurance Certificate is not classified as an insurance contract, thus relieving the State from the obligation to provide uninsured/underinsured motorist coverage without a formal waiver per La.R.S. 22:1295(3).

The appellate review indicated that the trial court made an error of law, leading to the reversal of its decision. The court ruled in favor of the State, granting its motion for summary judgment and dismissing the Desotos' claims against the Self-Insurance Fund with prejudice, while also ruling that the costs of the proceedings are to be borne by the Desotos.