Case Name: FARIS, ELLIS, CUTRONE, GILMORE & LAUTENSCHLAEGER v. JOBOB TOWING, INC.
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1977-02-15
Citations: 342 So. 2d 1284
Docket Number: No. 7885
Parties: FARIS, ELLIS, CUTRONE, GILMORE & LAUTENSCHLAEGER v. JOBOB TOWING, INC.
Judges: Before GULOTTA, SCHOTT and MORI-jj
Reporter: Southern Reporter, Second Series
Volume: 342
Pages: 1284–1289

Head Matter:
FARIS, ELLIS, CUTRONE, GILMORE & LAUTENSCHLAEGER v. JOBOB TOWING, INC.
No. 7885.
Court of Appeal of Louisiana, Fourth Circuit.
Feb. 15, 1977.
Greenberg & Dallam, Alan James Bou-dreaux, Gretna, for plaintiff-appellee,
whitei Fray & white> wmiam j_ white) Jr ¡ Robert H Frayj Gretna, for defendant-appellant
Before GULOTTA, SCHOTT and MORI-jj

Opinion:
GULOTTA, Judge.
Defendant appeals from a judgment for attorney's fees for professional services rendered by plaintiff to defendant in connection with maritime litigation.
Jobob carried liability insurance with Employers Commercial Union Insurance Company which contained a $5,000.00 deductible clause. The maritime claim against Jobob and its insurer was for a sum well in excess of the deductible amount. In a settlement of the claim, Jobob contributed the sum of $3,000.00. Subsequent to the compromise, plaintiff billed defendant the sum of $1,568.00 for attorney's fees. Defendant refused to pay the fees and this suit followed.
Defendant seeks to be exonerated from the payment of the fees on the ground that the insurer must bear the cost because it, not defendant, employed plaintiff.
In written reasons for judgment, the trial judge concluded that the insurance contract between Jobob and Employers Commercial confers upon the insurer the authority to name the attorney who will represent the assured in defense of the litigation. In this regard, he cited the following clause in the policy:
"This Company shall have the option of naming the attorneys who shall represent the assured in the prosecution or defense of any litigation or negotiations between the assured and third parties concerning any claim, loss or interest covered by this policy, and this Company shall have the direction of such litigation or negotiations. If the assured shall fail or refuse to settle any claim as authorized by the Company, the liability of the Company to the assured shall be limited to the amount for which settlement could have been made."
Because the sum of the amount of Jobob's contribution toward the settlement and the amount of attorney's fees did not exceed the $5,000.00 deductible amount in the insurance contract, the trial judge reasoned that Jobob was responsible for the payment of the attorney's fees. In this connection, he relied on another clause of the insurance contract:
"The sum of $5,000.00 shall be deducted from the total amount of any or all claims (including claims for sue and labor, collision liability, general average and salvage charges) resulting from any one accident. "
According to the trial judge, "the total amount of any or all claims" in the above quoted section includes not only the third party's claim for damages but also an insurer's claim for attorney's fees for providing representation of the insured growing out of the liability claim covered by the contract of marine insurance.
Defendant contends, on appeal: 1) that no privity of contract existed between Jo-bob and plaintiff; and, 2) that the policy of insurance does not contain any provisions which make the insured responsible for payment of attorney's fees. According to defendant, the $5,000.00 deductible clause applies only to the liability claims brought by third parties against defendant and does not apply to the fees of attorneys employed by the insurer in defense of those claims.
Clearly, no privity of contract exists between plaintiff and defendant. Although the policy, by its terms, confers upon the insurer the right to name the attorneys who shall represent the insured, this provision is silent on the payment of attorney's fees. It is clear that the purpose of the insurer's option to name the attorneys is to permit the insurance company to obtain counsel of its own choosing to represent not only its interests, but, the interests of the insured in order to assure that any defenses raised by the insured are not in conflict with the insurer's interests.
We do not agree with the trial court's interpretation that the provision of the policy stating, "The sum of $5,000.00 shall be deducted from the total amount of any or all claims . . . " includes claims for attorney's fees in addition to claims made by third parties for damages asserted against the insured. Indeed, we reach an opposite conclusion and do not interpret the phrase "any or all claims" to include a claim for attorney's fees growing out of representation of the named insured. Since we and the trial judge differ on the interpretation of this provision, it is safe to conclude the provision, at best, is ambiguous.
The trial judge, in interpreting the policy to mean that the deductible clause included attorney's fees, relied, to some extent, on the testimony of Oscar A. Paysse, a retired insurance broker and adjuster, regarding usage and custom in the marine insurance field. Irrespective of the testimony of this expert who stated that the deductible clause in marine insurance contracts includes attorney's fees, we are influenced and persuaded to reach a different result. In this connection, we rely on the settled jurisprudential rule that ambiguities in insurance contracts must be interpreted in favor of the insured and against the insur er. See Simon v. Switzerland General Insurance Co., 238 So.2d 257 (La.App.3d Cir. 1970), writ refused, 256 La. 897, 240 So.2d 232 (1970), where ambiguity in the term "Coastal Waters" as used in a marine insurance contract was interpreted favorably to the insured. See also: Jennings v. Louisiana and Southern Life Insurance Company, 290 So.2d 811 (La.1974); Schonberg v. New York Life Insurance Company, 235 La. 461, 104 So.2d 171 (1958); Albritton v. Fireman's Fund Ins. Co., 224 La. 522, 70 So.2d 111 (1953).
Applying the jurisprudence, we are led to the conclusion that the $5,000.00 deductible clause does not include a claim for attorney's fees incurred in representation of the insured where a claim is brought against the insured and the attorney is employed by the insurer. We are further persuaded by the fact that it would have been a relatively simple matter for the insurer to include in the policy a provision that the deductible amount was to be applied to claims "including fees of the attorneys selected by the insurer to represent the insured". The inclusion of this suggested phrase, or a similar one, would have erased any ambiguity concerning the payment of attorney's fees. In its absence, however, the policy must be interpreted against the insurer, and plaintiff is not entitled to recovery against Jobob. See LSA-C.C. art. 1958.
Accordingly, the judgment of the trial court is reversed and set aside. It is now ordered that plaintiff's suit against Jobob Towing, Inc., be dismissed at plaintiff's costs.
REVERSED AND RENDERED.
SCHOTT, J., concurred in result and filed opinion.
. Ordinarily, any claim for attorney's fees would be asserted by the attorney against the client who entered into the employment agreement and if the client (in this case, the insurer) claims entitlement for reimbursement for payment of these fees against a third party (in this case, the insured), reimbursement may be sought by a third party demand.
. However, the trial judge, in oral reasons, restricted the purpose of this testimony. He stated, during the course of the trial, when this expert's testimony was offered:
"I am going to permit this witness to testify purely as to what the custom of the trade is, and I think that is the only purpose of this witness' testimony. I think what is involved in the interpretation of the insurance policy is up to this Court, and I don't think that this witness should testify with regard to the interpretation of the policy. I will let this witness testify as to the custom of the trade, and I will give it such weight as I see fit."
. LSA-C.C. art. 1958 reads as follows:
Art. 1958. Interpretation against party responsible for doubt
"Art. 1958. But if the doubt or obscurity arise for the want of necessary explanation which one of the parties ought to have given, or from any other negligence or fault of his, the construction most favorable to the other party shall be adopted, whether he be obligor or obligee."