Dardar v. Prudential Property & Casualty Insurance Co.

Citations: 672 So. 2d 298; 95 La.App. 1 Cir. 1574; 1996 La. App. LEXIS 798; 1996 WL 155287Docket: No. 95 CA 1574

Court: Louisiana Court of Appeal; April 3, 1996; Louisiana; State Appellate Court

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An appeal arises from a trial court judgment related to a 'Joint Motion To Submit Issues Of Insurance Coverage For Separate Trial.' On October 7, 1991, Terry Dardar was driving a 1987 Isuzu truck owned by Master Electric Service, Inc. when his vehicle collided with a vehicle driven by Nelwyn G. Robinson, who failed to stop at a stop sign. Dardar sustained serious injuries. At the time of the accident, Allstate Insurance Company held a $50,000 liability insurance policy for Robinson, while State Farm had a $500,000 uninsured/underinsured motorist (UM) insurance policy for Dardar's vehicle, but Dardar had opted for reduced UM coverage of $100,000.

After the accident, the Dardars settled claims against Robinson and Allstate for $50,000 and against State Farm for $90,000, which did not fully cover their damages. Subsequently, on August 11, 1992, the Dardars sued Prudential Property and Casualty Insurance Company for UM coverage. Prudential denied coverage, arguing its policy specifically excluded bodily injury claims for non-owned vehicles regularly used by the insured, which applied to Dardar since he was driving his employer's truck with permission.

On December 29, 1994, the parties filed a 'Joint Pre-Trial Stipulation' affirming the accident details and the settlements. They agreed that if the court upheld State Farm's selection of lower UM limits and found Prudential's policy did not exclude coverage, Dardar could claim the $100,000 UM limit from Prudential. In exchange, Dardar would waive claims for penalties and attorney’s fees against Prudential. On January 17, 1995, Prudential moved for summary judgment, asserting Dardar was not an insured under its policy and that the policy exclusions were clear. Additionally, Prudential argued the State Farm UM limits selection form was ambiguous and thus invalid under Louisiana law.

Prudential contended that the Uninsured Motorist (UM) form was ambiguous and invalid, asserting that the UM limits of the State Farm policy should be $500,000.00, instead of the $100,000.00 selected. Prudential argued that Dardar could not recover under its policy unless damages exceeded $550,000.00, combining the $50,000.00 liability limits from Allstate with the claimed $500,000.00 UM limits from State Farm. The trial court denied Prudential’s motion for summary judgment on February 22, 1995. Subsequently, a Joint Motion was filed by the Dardars and Prudential, stipulating that the Dardars would waive claims for penalties and attorney fees, while Prudential admitted that Nelwyn Robinson caused the accident resulting in at least $250,000.00 in damages. 

If the trial court upheld State Farm’s UM limits selection as valid and Prudential’s policy did not exclude UM coverage, Prudential agreed to pay the Dardars $100,000.00. The court ruled on April 5, 1995, that State Farm’s selection of lower limits was valid and that Prudential’s policy did not exclude UM coverage, thus ordering Prudential to pay the Dardars the $100,000.00 limit plus interest. Prudential appealed, raising two main errors: the trial court's determination that Dardar was an insured under Prudential’s policy and the validity of State Farm’s UM limits form. The appellate court noted that State Farm was not included as a party in this action, which raised concerns about the ability to adjudicate the validity of the UM selection/rejection form.

Joinder of parties necessary for just adjudication is governed by LSA-C.C.P. art. 641, which mandates the inclusion of a person in an action if their absence prevents complete relief or if their interest in the subject matter may be impaired, risking inconsistent obligations for existing parties. The court can independently recognize the failure to join a necessary party (LSA-C.C.P. art. 645). In the current case, the Dardars released State Farm under the assumption that its uninsured motorist (UM) limits were $100,000, but reserved the right to proceed against State Farm if those limits were higher. The appellate review concluded that State Farm’s absence hinders complete relief and jeopardizes its ability to defend its interests, especially regarding the validity of the UM selection/rejection form. Consequently, the judgment from the trial court was vacated, and the case was remanded for the Dardars to amend their petition to include State Farm as a party. The appeal costs will be deferred until a final determination is made. The text also notes amendments to LSA-C.C.P. arts. 641 and 642 by Acts 1995, No. 662, which altered the classification of parties based on their interests.