Lafferty v. Vaughn

330 So.3d 644

Edward LAFFERTY

v.Nicholas T. VAUGHN, Tyler A. Veazey, State Farm Mutual Automobile Insurance Company and Mississippi Farm Bureau Casualty Insurance Company

No. 2021 CA 0084

Court of Appeal of Louisiana, First Circuit.

Judgment Rendered: JULY 20, 2021

Rehearing Denied December 6, 2021

G. Brice Jones, Paul D. Hesse, L. Jason Cuccia, Slidell, Louisiana, Counsel for Plaintiff/Appellant Edward Lafferty

Dan Richard Dorsey, Patricia P. Barattini, Covington, Louisiana, Counsel for Defendant/Appellee Mississippi Farm Bureau Casualty Insurance Company

BEFORE: GUIDRY, McCLENDON, AND LANIER, JJ.

LANIER, J.

This matter is before us on appeal by plaintiff, Edward Lafferty, from the district court's summary judgment, dismissing his claims against defendant, Mississippi Farm Bureau Casualty Insurance Company ("Mississippi Farm Bureau"), with prejudice. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL BACKGROUND

This case arises out of vehicular collision that occurred on January 20, 2017, in Pearl River County, Mississippi, when Mr. Lafferty was operating a vehicle, owned by The Estate of Edward T. Lafferty Revocable Trust, westbound on Highway 26. At the same time, Nicholas T. Vaughn was operating a vehicle, owned by Edward Friedlander¹ and insured by State Farm Mutual Automobile Insurance Company ("State Farm"), south on the exit off-ramp of I-59, preparing to turn west onto Highway 26. Mr. Vaughn failed to yield the right of way to Mr. Lafferty and struck the Lafferty vehicle in the right passenger door.

According to the record, Mr. Lafferty's counsel advised Mississippi Farm Bureau, Mr. Lafferty's underinsured/uninsured ("UM") insurer, that he represented Mr. Lafferty in connection with a possible UM claim resulting from the accident. In response thereto, counsel for Mississippi Farm Bureau informed Mr. Lafferty's counsel that if they "settle[d] with another person or insurer without [Mississippi Farm Bureau's] express written consent, then additional coverage, including uninsured motorist coverage, may be excluded."

Mr. Lafferty filed suit on January 11, 2018, seeking to recover damages for his injuries, naming, among others, Mississippi Farm Bureau. On February 2, 2018, Mississippi Farm Bureau was advised of a possible settlement with State Farm. On February 20, 2018, Mississippi Farm Bureau filed an answer, generally denying Mr. Lafferty's allegations and asserting that the Mississippi Farm Bureau policy in question was issued in favor of The Edward T. Lafferty Irrevocable Trust in Mississippi and that Mississippi law governed all claims concerning the policy.

Thereafter, on February 27, 2018, Mr. Lafferty's counsel provided Mississippi Farm Bureau with additional information indicating that Mr. Lafferty had settled his claim directly the with the State Farm adjustor, but that executed affidavits of no other insurance were needed before the release and settlement agreement could be finalized. On March 2, 2018, Mr. Lafferty's counsel provided a copy of an affidavit of no other insurance executed on March 1, 2018, by Mr. Friedlander. However, according to the record, Mississippi Farm Bureau had no notice that a settlement agreement was finalized until after Mr. Lafferty provided answers to written discovery in January 2019, which prompted counsel for Mississippi Farm Bureau to inquire with the Washington Parish Clerk of Court's office as to whether there had been a dismissal filed. It was at this time that counsel for Mississippi Farm Bureau learned that a "Motion and Order of Partial Dismissal" was filed and signed on January 11, 2019, dismissing Mr. Vaughn, Mr. Veazey, Mr. Friedlander, and State Farm.² Moreover, according to the record, Mr. Lafferty executed the release on May 4, 2018, discharging Mr. Vaughn, Mr. Friedlander and his estate, and State Farm (hereinafter collectively referred to as "State Farm"), for the policy limits of $100,000.00.³

On July 29, 2019, Mississippi Farm Bureau filed a motion for leave to amend its answer to assert a defense based on the consent-to-settle exclusion of the policy. Leave was granted by the district court on July 29, 2019, and Mississippi Farm Bureau filed its supplemental and amended answer. In response thereto, Mr. Lafferty advised the district court that he opposed the motion for leave and requested that a hearing be set. The matter proceeded to hearing on September 20, 2019, at which time the district court heard argument from counsel and, adopting its previous order signed on July 29, 2019, ordered that Mississippi Farm Bureau be allowed to file its supplemental and amended answer. A judgment was signed accordingly on October 16, 2019.

In response to Mr. Lafferty's claims, Mississippi Farm Bureau filed a motion for summary judgment asserting that there was no genuine issue as to any material fact in dispute and that Mississippi Farm Bureau was entitled to summary judgment as a matter of law because the policy in question does not provide UM coverage for Mr. Lafferty's claims. Mississippi Farm Bureau argued that Mr. Lafferty failed to comply with the terms of the policy by failing to request or obtain the express written agreement of Mississippi Farm Bureau prior to settling.

Mr. Lafferty opposed the motion for summary judgment, arguing that there were genuine issues of material fact remaining that precluded summary judgment in this case. Although Mr. Lafferty did not dispute that Mississippi law should be applied to the insurance contract in question, he argued that under Mississippi jurisprudence, a valid consent-to-settle clause can be waived by the inaction of an UM insurer. He maintained that Mississippi Farm Bureau's conduct in this case constituted an implied waiver of the enforcement of the consent-to-settle clause.

Following a hearing on the motion for summary judgment, the district court signed a judgment on June 30, 2020, granting summary judgment in favor of Mississippi Farm Bureau and dismissing, with prejudice, all claims filed by Mr. Lafferty against Mississippi Farm Bureau. This appeal by Mr. Lafferty followed, wherein the following specifications of error were assigned for our review:

1. The [district] court did not apply the correct legal standard under Mississippi jurisprudence as to an uninsured/underinsured motorist insurance carrier's obligations to maintain and enforce a consent-to-settle clause.

2. The [district] court abused its discretion in granting a summary judgment where disputed material facts existed regarding whether Mississippi Farm Bureau's acts and omission constituted waiver of its consent-to-settle clause found within its policy.

3. The [district] court abused its discretion in permitting Mississippi Farm Bureau to amend its answer to include new affirmative insurance policy defense almost 18 months after its original answer.

AMENDMENT OF ANSWER

Mr. Lafferty argues on appeal that the district court erred in allowing Mississippi Farm Bureau to amend its answer "considering the lengthy delay filled with conduct completely inconsistent with the very defense they wished to supplement their answer with." He further asserts that Mississippi Farm Bureau failed to comply with the procedural requirements to file an amended answer.

Citing Wallace v. Hanover Ins. Co. of New York , 164 So.2d 111 (La. App. 1 Cir. 1964), Mr. Lafferty argues that Mississippi Farm Bureau failed to comply with the notice requirement of La. Code Civ. P. art. 1155 when it presented an ex parte motion and order for leave to file its supplemental and amended answer, rather than service by the sheriff in accordance with La. Code Civ. P. art. 1314. Mr. Lafferty further asserts that the rule and contradictory hearing were only set after his counsel filed a motion to set for hearing, noting the objection to the motion.

After an answer has been filed, the authorization of the filing of an amending petition or answer is within the discretion of the district judge. La Code Civ. P. arts. 1151 and 1155 ; Barringer v. Robertson , 2015-0698 (La. App. 1 Cir. 12/2/15), 216 So.3d 919, 926, writ denied, 2016-0010 (La. 2/26/16), 187 So.3d 1004. Thus, a district court's ruling granting an amendment to the pleadings will not be disturbed on appeal unless an abuse of discretion has occurred that indicates a possibility of resulting injustice. Plant Performance Services, LLC v. Harrison , 2017-1286 (La. App. 1 Cir. 4/6/18), 249 So.3d 1, 9. Amendments should be permitted if: (1) the movant is acting in good faith; (2) the amendment is not being used as a delaying tactic; (3) the opponent will not be unduly prejudiced; and (4) the trial will not be unduly delayed. Id. Good faith is a reasonable belief that the facts alleged in the proposed amendment are true. Barringer , 216 So.3d at 926.

Whether Mississippi Farm Bureau's pleading entitled "Supplemental and Amended Answer" met the requirements of the Code of Civil Procedure hinges on whether the revision made in the pleading constitutes an "amendment" or "supplement." A supplemental pleading differs from an amended pleading in that an amended pleading involves matters that occurred before the original complaint was filed, which were either overlooked by the pleader or were unknown to him at the time, while a supplemental pleading covers issues or causes of action that have arisen since the filing of the original petition, which relate to the issues or actions contained in the original petition. Harris v. Union Nat. Fire Ins. Co. , 2014-1603 (La. App. 1 Cir. 6/18/15), 175 So.3d 1008, 1012. Under La. Code of Civ. P. art. 1151, "[a] defendant may amend his answer once without leave of court at any time within ten days after it has been served. Otherwise, the ... answer may be amended only by leave of court or by written consent of the adverse party." La. Code Civ. P. art. 1151. On July 29, 2019, the district court signed an order that Mississippi Farm Bureau was "allowed to file the First Supplemental and Amended Answer." Thus, it...