Duran v. Allmerica Fin. Benefit Ins. Co.

306 So.3d 611

Monica D. DURAN, Appellant

v.ALLMERICA FINANCIAL BENEFIT INSURANCE COMPANY, The Mer Rouge State Bank, Louisiana Farm Bureau Mutual Insurance Company and Gerald Farrar, Appellees

No. 53,615-CA

Court of Appeal of Louisiana, Second Circuit.

Judgment rendered November 18, 2020

Rehearing Denied January 7, 2021

THE DOWNS LAW FIRM, A.P.C., By: E. Ross Downs, Jr., Earl R. Downs, III, Hayden S. Downs, Counsel for Appellant

STREET & STREET, By: Daniel R. Street, Counsel for Appellant

NELSON, ZENTNER, SARTOR & SNELLINGS, By: George M. Snellings, IV, F. Williams Sartor, Jr., Counsel for Appellee, Allmerica Financial Benefit Insurance Company and The Mer Rouge State Bank

COTTON, BOLTON, HOYCHICK & DOUGHTY, LLP, By: John B. Hoychick, Counsel for Appellee, Louisiana Farm Bureau Mutual Insurance Company

MURPHY, ROGERS, SLOSS, GAMBEL & TOMPKINS, By: Ronald J. White, Counsel for Appellee, Gerald Farrar

MASON L. OSWALT, Counsel for Appellee, Gerald Farrar

Before GARRETT, COX, and THOMPSON, JJ.

COX, J.

The suit arises out of the Fourth Judicial District Court, Morehouse Parish, Louisiana. Monica Duran filed suit after a vehicle accident against Allmerica Financial Benefit Insurance Company, The Mer Rouge State Bank ("MRSB"), Louisiana Farm Bureau Mutual Insurance Company, and Gerald Farrar. Ms. Duran appeals the trial court's granting of two partial motions for summary judgment in favor of MRSB and dismissal of her claims against MRSB. For the following reasons we affirm the trial court's judgment granting MRSB's partial motions for summary judgment on the issues of vicarious liability and punitive damages and respectfully reverse the trial court's judgment granting MRSB's partial motion for summary judgment on the issue of negligent entrustment.

FACTS

For the purpose of this review of MRSB's motion for summary judgment, the following facts are not in dispute. On October 26, 2016, Mr. Farrar, President of MRSB, was operating a 2015 Chevrolet Silverado, owned by MRSB, on US Highway 425. As Mr. Farrar was traveling north on the highway, the right front wheel of the vehicle became dislodged and came to rest in the northbound lane. Ms. Duran and her guest passenger, Brandon Burton, were traveling north on US Highway 425 when Ms. Duran's vehicle struck Mr. Farrar's dislodged tire. Mr. Farrar was charged by the investigating officer with driving while intoxicated.

On July 25, 2017, Ms. Duran filed a petition for damages against Allmerica Financial, MRSB, Louisiana Farm Bureau, and Mr. Farrar. Allmerica Financial provided general liability coverage to MRSB and Mr. Farrar. Louisiana Farm Bureau provided a general liability policy with uninsured/underinsured motorist protection to Ms. Duran.

Ms. Duran claimed that Mr. Farrar did nothing to warn motorists of the tire or remove the tire from the travel lane. She pointed out that at the time of the accident, there was total darkness in the area. Ms. Duran was driving her 2000 Toyota Tacoma north on U.S. Hwy 425 and came upon the tire in the middle of the road. She stated that she could not see the dark tire on the dark asphalt and struck the tire. She claimed there was a "tremendous impact" after hitting the tire. Her injuries include permanent brain damage, closed head injury, cognitive deficits, post-concussion headaches, injuries to her lumbar and cervical spines, as well as the disc and muscles, depression, and other injuries.

Ms. Duran alleged that Mr. Farrar's wanton and reckless disregard for the safety of others was the cause in fact of her injuries and MRSB is responsible under the theory of respondeat superior . She also alleged that the crash was caused by the independent fault of MRSB for negligently entrusting the vehicle to Mr. Farrar, who it knew or should have known was not competent to safely operate the vehicle.

MRSB, Mr. Farrar, and Allmerica Financial filed their answer and denied the allegations. On January 14, 2019, MRSB filed a memorandum in support of their motion for judgment on the pleadings and/or motion for partial summary judgment. The issue raised by MRSB in its motion for summary judgment is whether it can be liable for exemplary damages, under La. C.C. art. 2315.4 and theories of vicarious liabilities and/or negligent entrustment. MRSB also filed a motion for partial summary judgment as to punitive damages.

Mr. Farrar's deposition transcript is attached to MRSB's motion. He stated that he had a couple of accidents driving home from hunting land while in a bank-owned vehicle. He stated, "A couple because Everglades is barely a pig tail... You slide off the road there on Everglades once it gets wet. I've had to pull several people out." He stated that when he slid off of the road, the police were not called because there was no accident and his brother was able to pull him out of the ditch. He stated that he had one other incident in a bank-owned vehicle before October 2016, which was when he hit a "corduroyed spot" in the gravel and hit a tree. He described a "corduroy spot" as a series of bumps in a gravel road, like a washboard. Mr. Farrar stated that the truck was totaled, the sheriff's office responded to the accident, sobriety tests were not performed, a police report was filed, and he informed at least one board member of the accident.

Mr. Farrar stated that in June of 2016, the vehicle had about 50 miles on it and he took it to a dealership because the front right hub was making noise. The dealership fixed the bearings that had gone out in the front right hub. On October 22, 2016, Mr. Farrar stopped at a tire center with a flat. When the technician at the tire center plugged the hole in the tire, he noticed the axle nut had come loose so he fixed that as well. Mr. Farrar did not take the vehicle for a follow-up inspection at the dealership before the accident on October 26, 2016.

Mr. Farrar stated that he was prescribed Lorazepam in the spring of 2016 for anxiety and took it on the day of the accident. He stated that on the day of the accident, he had a cocktail in a "short tumbler" before he left his parents’ house. He stated that his cocktail contained one and one-half or two ounces of bourbon, water, and ice. He stated that he may have one drink before driving, but will not drive if he has more than one drink. Mr. Farrar admitted that it was a violation of an unwritten bank policy for him to be driving the vehicle after having one drink. He stated that he was on vacation from the bank the week of the accident, and he was preparing for a hunting trip out of town when he needed to go by MRSB to pick up the travel itinerary for the trip before meeting his friend. He stated that on his way to MRSB, about 6:30 p.m., the right front wheel came off of his vehicle, causing him to hit a guardrail. He did not recall if there were any noises or indications that the wheel was about to come off.

Mr. Farrar was taken by ambulance to the hospital and was found to have a right ankle fracture. He stated that a state trooper came to the hospital about two hours after the accident and asked him for a sobriety test. Mr. Farrar stated he refused the test because he was already on an IV drip with pain medicine. He did not recall having a conversation about his alcohol consumption with an officer at the scene of the accident. Mr. Farrar's medical records note that he admitted to having a beer that evening.

Mr. Farrar stated that he suggested to MRSB's Board of Directors ("the Board") that MRSB did not need to continue to provide vehicles to employees because there was already insurance coverage in place for employees driving their own vehicles to and from meetings and training.

Louisiana State Trooper Patrick Morris investigated the October 26, 2016 accident and arrested Mr. Farrar for DWI. He stated in his deposition that he was notified of the accident at 7:28 p.m. He stated that he did not believe that Mr. Farrar's wheel came off and caused him to hit a bridge. His investigation revealed that the bridge rail tore the wheel off of the hub assembly and brake lines. He stated there would have been skid marks on the road if the wheel had fallen off and the brake hub had hit the ground, but the road was clear until Mr. Farrar hit the guardrail.

Trooper Morris stated he could smell alcohol on Mr. Farrar at the scene, but did not administer a sobriety test at the scene because Mr. Farrar was injured. He measured the distance from the impact with the guardrail to Mr. Farrar's stopped vehicle, which was 880 feet. Trooper Morris administered a sobriety test on Mr. Farrar at the hospital after Mr. Farrar admitted to having a few drinks earlier in the day. Because of Mr. Farrar's injury, the only field sobriety test he could administer was the horizontal gaze nystagmus test, which Mr. Farrar did not pass.

Holly Farrar, Mr. Farrar's wife, stated in her deposition that there was a time when she was concerned about Mr. Farrar's alcohol consumption. She stated that she is not a drinker so any type of drinking is too much to her. She recalled speaking with John Shackelford, a member of the Board, about her marriage and concerns about Mr. Farrar's drinking. Mrs. Farrar was not aware of her husband's DWI charge or his alcohol test result of 0.346.

Phillip McCready, vice president and a Board member of MRSB, stated in his deposition that he did not know of any of the officers or directors of MRSB consuming alcohol while on the job. He stated that he had heard a general rumor in the community that Mr. Farrar had a problem with alcohol. Pamela Farrar Turner, Mr. Farrar's first cousin and MRSB vice president, recalled Mr. McCready asking her once if she thought Mr. Farrar was drinking, and she told him she did not know.

Mr. Shackelford, a board member of MRSB, stated in his deposition that he had a conversation with Mrs. Farrar, who was concerned about Mr. Farrar's drinking, but when he spoke with her again later, she was no longer concerned about it. He stated that before the October 26, 2016 acci...