Munsterman v. Unitrin Auto & Home Ins. Co.

307 So.3d 297

ESTATE OF John F. MUNSTERMAN and Marie S. Munsterman

v.UNITRIN AUTO & HOME INSURANCE COMPANY

20-209

Court of Appeal of Louisiana, Third Circuit.

November 18, 2020

Sidney W. Degan, III, Travis L. Bourgeois, Karl H. Schmid, Degan, Blanchard & Nash, 400 Poydras Street, Suite 2600, New Orleans, Louisiana 70130, (504) 529-3333, Counsel for Defendant/Appellant: Unitrin Auto & Home Insurance Company

William M. Ford, Susan F. Fiser, The Ford Law Firm, 1630 Metro Drive, Alexandria, Louisiana 71301, (318) 442-8899, Counsel for Plaintiffs/Appellees: John W. Munsterman, Independent Executor of the Estate of John F. Munsterman Marie S. Munsterman

Court composed of Billy H. Ezell, Phyllis M. Keaty, and D. Kent Savoie, Judges.

KEATY, Judge.

Appellant seeks review of the trial court's judgment granting Appellees’ claim for property damage coverage under an insurance policy. For the following reasons, the trial court's judgment is affirmed.

FACTS AND PROCEDURAL HISTORY

This insurance coverage issue arises from a fire, windstorm, and extended coverage insurance policy regarding a house located at 4304 Wellington Boulevard in Alexandria, Louisiana. The policy was purchased by John W. Munsterman, as the executor of the estate of his deceased father, John F. Munsterman, to provide coverage to a home that is occupied by his father's elderly widow, Marie S. Munsterman. The policy was issued by Unitrin Auto & Home Insurance Company and provided coverage from February 4, 2017 through February 4, 2018. On April 2, 2017, a hail storm occurred and damaged the roof. The damaged roof was not discovered by the executor until July 8, 2018. At that time, a notice of loss was reported to Unitrin. Unitrin's policy contains an exclusionary clause and a notice provision, both of which require that a notice of loss be reported within 365 days of its occurrence. On August 27, 2018, Unitrin denied the claim because it did not receive notice of loss before April 2, 2018, i.e., within 365 days of the hail storm on April 2, 2017.

On January 10, 2019, the Estate and Ms. Munsterman (hereinafter collectively referred to as "the Estate") filed a suit for coverage under the policy. Therein, the Estate sought $20,868.00 for the cost of replacing the roof, along with penalties, attorney fees, and court costs. Unitrin filed an answer. Unitrin subsequently filed a motion for summary judgment, arguing that the policy does not provide coverage for the claims asserted by the Estate because it reported the loss more than 365 days after the date of loss. Unitrin's motion for summary judgment was heard on September 13, 2019, after which the trial court took the matter under advisement. On October 30, 2019, the trial court denied Unitrin's motion for summary judgment with respect to coverage. However, it granted Unitrin's partial motion for summary judgment dismissing the Estate's other "bad faith" claims. Unitrin's subsequent Application for Supervisory Writs seeking a reversal of the trial court's denial of its motion for summary judgment was denied by this court in Estate of John S. Munsterman v. Unitrin Auto & Home Insurance Co ., 19-760 (La.App. 3 Cir. 12/2/19) (unpublished writ)

This matter proceeded to trial on December 11 and 19, 2019. On January 3, 2020, the trial court entered a judgment in favor of the Estate and against Unitrin for $20,868.00, plus legal interest from date of judicial demand until paid, and for all court costs. Unitrin appealed and filed an appellant brief. In response to Unitrin's appeal, the Estate filed an answer and appellee brief. Unitrin filed a reply brief and response to the Estate's answer.

On appeal, Unitrin asserts the following assignments of error:

1. The trial court erred in granting judgment in favor of the Estate.

2. The trial court erred in finding that the Unitrin policy provides coverage for the claim and damages asserted in this lawsuit.

3. The trial court erred in denying summary judgment.

STANDARD OF REVIEW

"Interpretation of an insurance policy is a question of law[.]" Hardie v. Prof'l Physical Rehab. Hosp., LLC , p. 2 (La.App. 3 Cir. 9/29/04), 883 So.2d 510, 512. Questions of law are reviewed under the de novo standard of review. Boes Iron Works, Inc. v. Gee Cee Grp., Inc ., 16-207 (La.App. 4 Cir. 11/16/16), 206 So.3d 938, writ denied , 17-40 (La. 2/10/17), 216 So.3d 45.

DISCUSSION

I. Assignments or Error

Unitrin's three assignments of error address the same issue, i.e., the validity of an exclusionary clause and condition in a contract which provides a one-year limitation from the date of loss within which the notice of loss must be reported to the insurer, in light of statutory authority which extends the time to assert a right of action against the insurer to two years from the date of loss. In its judgment, the trial court found that coverage exists pursuant to statutory authority despite the policy language which excludes coverage for claims where the notice of loss is made more than 365 days after the date of loss. The policy language at issue provides:

SECTION I - EXCLUSIONS

....

The following Paragraph 3. is added:

3. In case of a loss to covered property, we will not provide coverage under this policy unless your notice of loss is received by us no later than 365 days after the date of the loss.

SECTION I - CONDITIONS

2. Your Duties After Loss

The lead-in sentence is replaced by the following:

In case of a loss to covered property, we have no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to us. You or an "insured" seeking coverage are responsible for the following duties:

Paragraph 2.a. is replaced by the following:

2.a. Give prompt notice to us or our agent. However, if a loss is reported to us more than 365 days after the date of the loss, even if the delay in notice is not prejudicial to us, coverage is excluded as stated under Section I – Exclusions[.]

Unitrin maintains that the foregoing policy provisions were not complied with because the Estate reported the loss more than 365 days after the date of loss. As such, Unitrin contends the trial court should have found that coverage for the Estate's damage was excluded under the policy.

According to the evidence in the record, the policy provided coverage from February 4, 2017 through February 4, 2018. On April 2, 2017, a hail storm occurred and damaged the roof. It is undisputed that the loss occurred during the period of coverage. The damaged roof was not discovered by the executor until July 8, 2018, at which time the loss was immediately reported to Unitrin. This delay in reporting the loss, according to Munsterman's testimony, arose because the homeowner is elderly and was unaware of the hail damage to the roof. Unitrin denied the claim because it did not receive notice of the loss before April 2, 2018, i.e., within 365 days of the date of loss as required in the policy. Evidence reveals that the roof was repaired during the policy period. In light of the foregoing, we must determine whether the insurance policy provides coverage or whether an exclusion prohibits it.

"An insurance policy is an agreement between the parties and should be interpreted by using ordinary contract principles." Smith v. Matthews , 611 So.2d 1377, 1379 (La.1993). "If the language in an insurance contract is clear and unambiguous, the agreement must be enforced as written." Dunn v. Potomac Ins. Co. of Ill. , 94-2202, p. 6 (La.App. 1 Cir. 6/23/95), 657 So.2d 660, 663. The "courts should not strain to find ambiguity where none exists." Strickland v. State Farm Ins. Cos. , 607 So.2d 769, 772 (La.App. 1 Cir. 1992). However, if there is any doubt or ambiguity as to the meaning of a provision in an insurance policy, it must be construed in favor of the insured and against the insurer. Kirby v. Ashford , 15-1852 (La.App. 1 Cir. 12/22/16), 208 So.3d 932. "When the ambiguity relates to an exclusionary clause, the law requires that the contract be interpreted liberally in favor of coverage." Borden, Inc. v. Howard Trucking Co., Inc ., 454 So.2d 1081, 1086 (La.1983). "Whether a contract is ambiguous or not is a question of law." Strickland , 607 So.2d at 772.

An insurer has the burden of proving that a loss falls within a policy exclusion. La. Maint. Servs., Inc. v. Certain Underwriters at Lloyd's of London , 616 So.2d 1250 (La.1993). Additionally, in determining whether an exclusion applies to preclude coverage, courts are guided by the well-recognized rule that an exclusionary clause in an insurance policy must be strictly construed. Calogero v. Safeway Ins. Co. of La. , 99-1625 (La. 1/19/00), 753 So.2d 170. Nonetheless, "an insurance policy, including its exclusions, should not be interpreted in an unreasonable or strained manner so as to enlarge or to restrict its provisions beyond what is reasonably contemplated by its terms or so as to achieve an absurd conclusion." N. Am. Treatment Sys., Inc. v. Scottsdale Ins. Co. , 05-81, p. 20 (La.App. 1 Cir. 8/23/06), 943 So.2d 429, 443, writs denied , 06-2918 (La. 2/16/07), 949 So.2d 423, 06-2803 (La. 2/16/07), 949 So.2d 424. "In the absence of a statutory prohibition, a clause in an insurance policy fixing a reasonable time to institute suit is valid." Taranto v. La. Citizens Prop. Ins. Corp ., 10-105, p. 8 (La. 3/15/11), 62 So.3d 721, 728.

In this case, the policy language clearly and unambiguously excludes coverage for a loss if the notice of loss is made more than 365 days after the date of loss. Thus, at first glance, it seems the Estate would be excluded from coverage because the loss was discovered and reported more than 365 days after the date of loss. However, in 2007, the Legislature enacted La.R.S. 22:868(B), which extends the time in which a right of action can be made to two years after the inception of the loss. Specifically, La.R.S. 22:868 (emphasis added) provides in pertinent part:

B. No insurance contract delivered or issued for delivery in this state and covering

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