Gaspard v. United Statesa Cas. Ins. Co.

EWELL J. GASPARD, ET UX. v. USAA CASUALTY INS. CO., ET AL.

16-1018

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

May 24, 2017

NOT DESIGNATED FOR PUBLICATION

APPEAL FROM THE ALEXANDRIA CITY COURT PARISH OF RAPIDES, NO. 134,511

HONORABLE RICHARD ERIC STARLING, JR., CITY COURT JUDGE

BILLY HOWARD EZELL JUDGE

Court composed of Sylvia R. Cooks, Billy Howard Ezell, and Van H. Kyzar, Judges.

AFFIRMED AS AMENDED.

Eugene Paul Cicardo, Jr.

P. O. Box 1128

Alexandria, LA 71309

(318) 445-2097

COUNSEL FOR PLAINTIFFS/APPELLEE:

Ewell J. Gaspard

LeeAnn Gaspard

Michael Royce Sistrunk

Kyle P. Kirsch

E. Madison Walker

McCranie, Sistrunk, Anzelmo, Hardy, McDaniel & Welch, LLC

909 Poydras Street, Suite 1000

New Orleans, LA 70112

(504) 831-0946

COUNSEL FOR DEFENDANT/APPELLANT:

Axis Surplus Insurance Company

EZELL, Judge.

Axis Surplus Insurance Company appeals a default judgment rendered in the Alexandria City Court pursuant to La.Code Civ.P. art. 4904(A) in favor of LeeAnn Gaspard. Axis claims that the default judgment was in error because the amount of the judgment was in excess of the jurisdictional limits of the trial court. Axis also claims that the judgment was based on incomplete and inadmissible evidence. Lastly, Axis argues that the trial court erred in finding it in bad faith and awarding penalties and attorney fees. Mrs. Gaspard answered the appeal asking for additional attorney fees and an increase in damages and penalties.

FACTS

On September 4, 2015, LeeAnn and Ewell Gaspard were involved in an automobile accident at the intersection of MacArthur Drive and Coliseum Boulevard in Alexandria, Louisiana, when Ashley Robinson attempted to switch lanes and collided with the Gaspard vehicle. Mrs. Gaspard, who was the passenger in the vehicle driven by her husband, was injured and was transferred to the Rapides Regional Medical Center emergency room. Following the accident, she experienced back, neck, and major hip pain.

Ms. Robinson's vehicle was covered by insurance issued by USAA Garrison Property and Casualty Insurance Company with limits of $25,000.00 for any one person for an accident. On May 10, 2016, Mrs. Gaspard settled her claim with Garrison Insurance Company for $25,000.00, specifically reserving her rights to any UM coverage.

The vehicle the Gaspards were travelling in was owned by Linwell Enterprises and covered by insurance issued by Axis Surplus Insurance Company, through its agent, Strickland General Agency of LA, Inc. On May 17, 2016,counsel for Mrs. Gaspard sent a letter of representation by email to Strickland General Agency, who sets up the claim for Axis, requesting an unconditional tender of the UM limits under the policy explaining that the policy limits of $25,000.00 of liability insurance had been tendered. Attached to the email were copies of the accident report, the Axis policy declarations page, the settlement with Ms. Robinson and Garrison Insurance Company, affidavits of no other insurance, Mrs. Gaspard's medical records and medical bills, and estimated surgery costs. In response, Mrs. Gaspard's attorney's office received a read receipt verifying that the email was received.

On June 3, 2016, Katie Johns emailed a request to the attorney's office for a copy of the title or bills of sale to show ownership of the vehicle. She attached a letter to the email informing them that she was an authorized claims examiner with York Risk Services Group, an authorized claims administrator for Axis, and she was assigned to the Gaspards' case. She stated Linwell's UM coverage under the Axis policy was in the amount of $30,000.00. She then stated that, "We are not aware as to any coverage defenses at this time. We are still investigating. We will amend this statement if or when a coverage issue arises." The declarations and application page of the Axis policy was also attached to the email.

That same day, the attorney's office sent a copy of the accident report to Ms. Johns, specifically noting the VIN number of the vehicle and indicating that Linwell was the owner of the vehicle. On June 10, 2016, a bill of sale was attached to an email to Ms. Johns indicating that the vehicle had been sold. On June 21, 2016, Ms. Johns sent an email requesting that York be given time to review the extensive medical records.

On July 5, 2016, the Gaspards filed suit against USAA¹, Ms. Robinson, Axis, and Linwell. On July 29, 2016, Ms. Robinson and Garrison Insurance Company answered the petition, stating that any claims that Mrs. Gaspard had against them were settled so that she no longer had a right of action against them. A hearing on a default judgment against Axis was held on September 16, 2016.

Following the hearing, the trial court determined that the evidence clearly established that Mrs. Gaspard's damages exceeded $55,000.00, the amount tendered as the liability limits by Garrison Insurance Company ($25,000.00) and the amount of UM coverage under Axis's policy ($30,000.00). The trial court further found that Axis received sufficient notice of the claim and was arbitrary and capricious in failing to tender payment to Mrs. Gaspard. The trial court awarded $15,000.00 as additional damages pursuant to La.R.S. 22:1892 and La.R.S. 22:1973. Additionally, the trial court awarded penalties in the amount of $30,000.00 and attorney fees in the amount of $20,000.00. The trial court also awarded expert witness fees to Dr. Robert Rush in the amount of $750.00 and to Phillip Hunter in the amount of $750.00.

Axis filed the present appeal alleging the trial court committed several errors. Axis first argues that the trial court erred in rendering a default judgment in excess of its jurisdictional limits. Axis's next argument is that the trial court erred in rendering a default judgment against it when the insurance policy introduced into evidence was incomplete, hearsay, and a proper foundation was not laid for its admission. Axis also argues that the trial court erred in rendering a default judgment based on inadmissible evidence. Finally, Axis argues that the trial courterred in finding it in bad faith when the record evidence revealed conflicting medical opinions on whether Mrs. Gaspard had a labral tear necessitating surgery.

JURISDICTIONAL LIMITS

Axis argues that the claims of Mrs. Gaspard exceeded the jurisdictional limits of the Alexandria City Court. Axis claims that even though Mrs. Gaspard settled with Garrison Insurance Company and Ms. Robinson, she still filed suit against them. She also filed suit against Linwell. Citing Swayze v. State Farm Mutual Automobile Insurance Co., 14-1899 (La. 6/30/15), 172 So.3d 1026, Axis argues that Mrs. Gaspard still had pending claims against Garrison Insurance Company, Ms. Robinson, and Linwell when the default judgment was entered. This resulted in Ms. Gaspard seeking combined insurance amount of $55,000.00, which is greater than the trial court's $50,000.00 jurisdictional limit as established by La.Code Civ.P. art. 4843(H). For this reason, Axis argues the trial court lacked subject matter jurisdiction because Mrs. Gaspard's claim exceeded its jurisdictional limit. Axis further argues that Mrs. Gaspard failed to stipulate the amount sought did not exceed the trial court's jurisdictional limit.

Swayze involved an automobile accident case filed in the Monroe City Court, which has a $30,000.00 jurisdictional limit. Prior to trial, the plaintiff settled with the tort feasor and the tort feasor's insurer for the policy limits of $25,000.00. The UM insurer made a voluntary medical payment of $5,000.00 and moved for summary judgment arguing that city court's jurisdictional limit was now exhausted. Agreeing with the plaintiff that settlement with the defendants should not be considered in determining the jurisdictional amount available for an award against the UM insurer, the city court eventually entered a judgment of $22,700.04 against the UM insurer. On appeal, the appellate court reversed the city court, finding thatthe city court did not have jurisdiction of the matter because the amount in dispute, which included the settlement amount, exceeded the city court's jurisdictional limit of $30,000.00. Swayze v. State Farm Mut. Auto. Ins. Co., 49,079 (La.App. 2 Cir. 6/4/14), 142 So.3d 369. The UM insurer appealed to the supreme court, which addressed the issue.

The supreme court first looked to La.Code Civ.P. arts. 4 and 4841, both of which state that the "amount in dispute" is determined by the "amount demanded" by the plaintiff in the petition. However, the supreme court further recognized that La.Code Civ.P. art 5 provides that "'[w]hen a plaintiff reduces his claim on a single cause of action to bring it within the jurisdiction of a court and judgment is rendered thereon, he remits the portion of his claim for which he did not pray for judgment, and is precluded thereafter from demanding it judicially.'" Swayze, 172 So.3d at 1030 (alteration in original).

The supreme further observed that a time frame was not imposed by the legislature in La.Code Civ.P. arts. 4, 4841, and 4843 for determining the "amount in dispute" or the "amount demanded" by a plaintiff for the purposes of jurisdiction. Id. at 1032. The supreme court looked to its decision in Benoit v. Allstate Insurance Co., 00-424 (La. 11/28/00), 773 So.2d 702, which addressed the monetary threshold for a party's right to a trial by a jury. In Benoit, 773 So.3d at 708, the supreme court held "that the right to a jury trial is determined by 'the value of the plaintiff's cause of action against the defendant or defendants who are before the court at the time the right to a jury trial is litigated.'" Swayze, 172 So.2d at 1032.

The supreme court then went on to hold that:

In light of the legislative trends, observed in Benoit, that "expand the jurisdiction of courts of limited jurisdiction" and "generally . . . limit the availability of the more costly methods of litigating claims and . . . encourage more efficient methods," we interpret the "amount in dispute"

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