No Right to UM Coverage if You are not an Insured

Barry Zalma
Oct 9, 2023

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WRIT PRACTICE OFTEN UNSUCCESSFUL BUT NOT ALWAYS

The Louisiana Court of Appeals was asked to do what it normally would not do: determine if the trial court erred in denying a motion for summary judgment filed by Employers Mutual Casualty Company before trial (“Employers Mutual”). In Lee Mallahan, III v. Employers Mutual Casualty Co., et al, No. 55,136-CW, Court of Appeals of Louisiana, Second Circuit (September 27, 2023) Employers received its request.

FACTS

On June 1, 2020, Erick Guevara (“Guevara”), drove to Mallahan’s house who was standing in the driveway picking up worms from the pavement and throwing them into the grass, only to strike Mallahan with Guevera’s truck. Mallahan alleged the pickup truck knocked him into the air and caused him to lose consciousness. Mallahan sued on April 21, 2021 and named as defendants Guevera and Employers Mutual.

As the managing member and an employee of Tadpole, LLC (“Tadpole”), Mallahan alleged that Employers Mutual provided “insurance coverage, excess coverage, umbrella coverage, or other coverage” for Mallahan’s damages.

Employers Mutual filed a motion for summary judgment and urged no uninsured/underinsured (“UM”) coverage existed for Mallahan’s injuries under the terms of the commercial auto policy or the commercial umbrella policy issued to Tadpole.

The trial court ordered that Mallahan raised genuine issues of material fact and denied the motion. Employers Mutual Sought a writ from the Court of Appeals to order the trial court to grant its motion for summary judgment.

DISCUSSION

Employers Mutual urged that, because it made a showing that Mallahan was not an insured under the policies issued to Tadpole there was no genuine issue of material fact to preclude the granting of summary judgment.

A genuine issue is one about which reasonable people could disagree. A material fact is one that potentially ensures or precludes recovery, affects the ultimate success of the litigant, or determines the outcome of the dispute. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material for summary judgment purposes can be seen only in light of the substantive law applicable to the case.

Summary judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence supporting the motion, under which coverage could be afforded.

The extent of coverage is determined from the intent of the parties as reflected by the words of the insurance policy. For Mallahan to be insured under the commercial auto policy, he must be using Tadpole’s covered vehicle that Tadpole owned, hired, or borrowed with Tadpole’s permission. The undisputed facts established that Mallahan was not using any automobile at the time of the accident. As a result, Mallahan is not entitled to UM benefits as he would not be considered an insured for purposes of Tadpole’s Employers Mutual commercial auto policy.

Tadpole’s Employers Mutual commercial umbrella policy required that to be considered an insured under this policy, Mallahan must use, with permission, one of Tadpole’s covered autos that he did not personally own.

The policies were clear: Mallahan was not qualified as an insured; Tadpole was the named insured. Furthermore, Mallahan was not using a covered auto with Tadpole’s permission when the accident occurred. In fact, no use of a vehicle was involved on Mallahan’s part. Instead, Mallahan was standing in his driveway throwing worms into the grass when Guevara’s Chevy truck came into contact with Mallahan’s person.

Employers Mutual’s policies clearly define who is considered an “insured” under the policies and who is entitled to UM coverage. A contrary interpretation of the policy language would be unreasonable. The Court of Appeals concluded that the policies must be enforced as written. As a result of its analysis the Court of Appeals concluded that Employers Mutual’s writ application needed to be, and was, granted. The trial court was ordered to grant Employers Mutual’s summary judgment motion and to dismiss Mallahan’s claims against Employers Mutual.

ZALMA OPINION

Contracts of insurance are interesting documents. They tell the parties to the contract what will happen in the event of injury to an insured, who is insured, and what benefits were available. Mr. Mallahan was severely injured when he – as a pedestrian standing in his own driveway – was not an insured of the Employers Mutual policy and was not entitled to UM/UIM coverage.

(c) 2023 Barry Zalma & ClaimSchool, Inc.

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