Case Name: Albert J. TREADAWAY and Audrey Treadaway v. PROGRESSIVE NORTHWESTERN INSURANCE, Shane McCabe and Vincent McCabe
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1998-09-09
Citations: 720 So. 2d 693
Docket Number: No. 97-CA-2356
Parties: Albert J. TREADAWAY and Audrey Treadaway v. PROGRESSIVE NORTHWESTERN INSURANCE, Shane McCabe and Vincent McCabe.
Judges: Before KLEES, ARMSTRONG, PLOTKIN, JONES and MURRAY, JJ.
Reporter: Southern Reporter, Second Series
Volume: 720
Pages: 693–700

Head Matter:
Albert J. TREADAWAY and Audrey Treadaway v. PROGRESSIVE NORTHWESTERN INSURANCE, Shane McCabe and Vincent McCabe.
No. 97-CA-2356.
Court of Appeal of Louisiana, Fourth Circuit.
Sept. 9, 1998.
John L. Young, David Maldow, New Orleans, for Appellants Albert J. Treadaway and Audrey Treadaway.
Kenan S. Rand, Jr., Christovich & Kear-ney, L.L.P., New Orleans, for Appellee Progressive Northwestern Insurance Company.
Before KLEES, ARMSTRONG, PLOTKIN, JONES and MURRAY, JJ.

Opinion:
hJONES, Judge.
Plaintiffs appeal the judgment of the trial court granting summary judgment in favor of the defendant's insurer regarding a signed endorsement excluding coverage for accidents arising from the operation of the insured vehicle by the defendant's spouse. After reviewing the insurance policy, together with the endorsement at issue, we affirm the judgment of the trial court granting summary judgment.
On April 4,1996, plaintiff-appellants Albert and Audrey Treadway were injured in an automobile accident with a 1988 GM truck. The truck was owned by the defendant, Vincent McCabe, and driven by his wife, Shane McCabe. Mr. McCabe was the front seat passenger in this vehicle. The McCabes were residents of Storrs, Connecticut, and were in New Orleans visiting Mrs. McCabe's father.
This accident occurred at the intersection of Wall Boulevard and General DeGaulle Drive when Mrs. McCabe collided with a vehicle in front of her, jumped an adjacent neutral ground, and struck a 1995 Ford Crown Victoria, owned and operated by Mr. Treadway. Mrs. Treadway was guest passenger in this vehicle.
^Before the accident both Mr. and Mrs. McCabe had consumed several alcoholic beverages. After consuming these drinks, Mrs. McCabe received a telephone call from her sister who requested that Mrs. McCabe come over to her house. Mr. McCabe acknowledged he allowed his wife to drive the truck to his sister-in-law's house because he was too intoxicated to drive. Mrs. McCabe did not possess a valid driver's license at the time of the accident, nor was she familiar with the traffic at this particular intersection.
Mr. McCabe executed a Named Driver Exclusion Endorsement (hereinafter referred to as Endorsement) under an automobile insurance policy with Progressive Northern Insurance Company (Progressive) on January 29, 1996. This endorsement explicitly excluded coverage for any and all accidents caused by the operation of the insured vehicle by Mrs. McCabe. As a result of executing this endorsement, Mr. McCabe received a reduction in his insurance premiums.
On October 28, 1996, plaintiffs filed their Petition for Damages against the McCabes and their insurer, Progressive, alleging that their injuries from this collision resulted from Mrs. McCabe's intoxication and incompetence. Plaintiffs also alleged that Mr. McCabe was negligent in entrusting his vehicle to his wife.
Progressive timely answered the petition, and later filed a motion for summary judgment asserting that the endorsement signed by the McCabes excluded liability coverage for accidents caused by Mrs. McCabe while operating the insured vehicle. Progressive also sought to dismiss the plaintiffs' claim with prejudice. Plaintiffs responded by filing a motion in opposition to the summary judgment stating that the endorsement was against public policy and did not pertain to claims for negligent entrustment brought against the named insured. The trial court granted the motion and dismissed the plaintiffs' claim against Progressive, with prejudice.
I ^ASSIGNMENT OF ERROR NO. 1
In their first assignment of error, the plaintiffs allege the trial court committed manifest error in finding the endorsement signed by Mr. McCabe excluded coverage for this accident.
Plaintiffs argue the endorsement executed by Progressive which excluded coverage for claims arising from Mrs. McCabe's operation of the insured vehicle violates the Louisiana Motor Vehicle Safety Responsibility Law. See LSA-R.S. 32:861. Plaintiffs further argue that though the insured may have excluded coverage of a particular named person in his household, the endorsement goes beyond what the law permits by excluding coverage for any liability imposed by law upon Mr. McCabe as the owner of the vehicle. In support of their argument, plaintiffs cite LSA-R.S. 32:900(B)(2) which requires that all permissive users of the insured vehicle be "insured against any loss from the liability imposed by law for damages arising out of the . use of such motor vehicle." In essence, plaintiffs argue that when Mr. McCabe allowed his wife to use the insured vehicle, her negligent driving and the subsequent accident arose from his use of the vehicle thereby allowing coverage under his insurance policy.
Progressive argues the endorsement which was validly signed by both Mr. McCabe and his spouse specifically excluded coverage for Mrs. McCabe, and the exclusion applied to any liability which resulted from her use of the insured vehicle. Progressive further argues that LSA-R.S. 32:900(L) allows the insurer and the insured to exclude coverage for any individual that is a resident in the insured's household, and the omnibus coverage clause found in LSA-R.S. 32:900(B)(2) is inapplicable in light of the endorsement. Progressive further argues that this Court should affirm the trial court's decision because the language of the agreement at issue is valid, clear and unambiguous. We agree.
|4The premise for granting a motion for summary judgment is determining whether there exist a genuine issue of material fact necessary to have a trial on the merits. However, following the 1996 amendments to LSA-C.C.P. 966, this Court must review this initial determination liberally because summary judgments are now "favored" by the judiciary. Oakley v. Thebault, 96-0937 (La. App. 4 Cir. 11/18/96), 684 So.2d 488, 490. The language of the amendment tracks the language of Rule 56 of the Federal Rules of Civil Procedure, and is designed to allow courts to decide whether enough evidence exists to go to trial, thus giving judges an opportunity to weed out meritless litigation. Id.
In the ease subjudice, we must examine the face of the endorsement to determine whether there exist any ambiguity in the agreement regarding coverage of the excluded individual. Summary judgment declaring a lack of coverage under an insurance policy may not be rendered unless there is no reasonable interpretation of the policy, when applied to the undisputed material facts shown by the evidence supporting the motion, under which coverage could be afforded. Bilbo v. Shelter Insurance Company, 96-1476 (La.App. 1 Cir. 7/30/97), 698 So.2d 691, 694; citing Reynolds v. Select Properties, Ltd., 616 So.2d 742 (La.App. 1 Cir.1993); writ granted 93-1480 (La.4/11/94), 634 So.2d 1180, revised 634 So.2d 1180.
The endorsement provides:
NAMED DRIVER EXCLUSION ENDORSEMENT
Your policy is changed as follows:
In consideration of the premium charged for your policy, it is agreed we will not provide coverage, defend, or pay any claim arising out of an accident or loss which occurs while any vehicle is driven by:
Shane McCabe DOB: 9-18-72
This endorsement is issued to reduce your premium by excluding drivers who would be considered in determining your premium. This I sendorsement applies to this policy and all future renewals unless otherwise directed in writing.
Notice: If you are held liable when the excluded driver(s) named above operate(s) a vehicle, your policy does not insure you against this liability.
If we are required to make any payment under your policy because of an accident which occurs while a vehicle is being driven by the above named person(s), you must repay us for all payments and expenses.
This endorsement supersedes any contrary provisionfs) contained in your policy.
Named Insured: s/Vincent McCabe Date: 1/29/96 Excluded Driver: s/Shane McCabe Date: 1/29/96
Attached to and forms part of policy number: 55006841-0
(Emphasis theirs)
The insurance policy signed by the McCabes must also be read in conjunction with the above endorsement because the endorsement has been made an integral part of the insurance policy under LSA-R.S. 32:900(L) which provides:
Notwithstanding the provisions of Paragraph B(2) of this Section, an insurer and an insured may by written agreement exclude from coverage any named person who is a resident of the same household as the named insured.
Though the statute does not require the reasons for excluding an individual, it is presumed that a person who does not possess a valid driver's license would be one of the persons likely to be excluded.
Moreover, according to the endorsement, it is clear as to why the parties entered into this agreement. Progressive agreed to reduce Mr. McCabe's insurance premiums if Mr. McCabe agreed not to allow his wife, who did not have a driver's license, to operate the insured vehicle. Once Mr. McCabe endorsed this agreement, he became bound by its contents and could not rescind without a showing of error, fraud or duress. A person who signs a written instrument is presumed to know its contents and cannot claim that he did not read or understand |6the document. Myers v. Burger King Corp., 618 So.2d 1123, 1125 (La.App. 4 Cir.1993). If the language in an insurance contract is clear and unambiguous, the agreement must be enforced as written. Bilbo 698 So.2d at 694. An insurance policy 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. Reynolds, 634 So.2d at 1183. (Emphasis ours).
Plaintiffs' attempt to show that Mr. McCabe was somehow using the vehicle by allowing his excluded spouse to drive is without merit. It is painfully obvious that coverage would be denied if Mrs. McCabe operated/used this vehicle in any manner. Therefore, we cannot, in light of the endorsement, consider the subsequent accident as having resulted from Mr. McCabe's use of the vehicle.
ASSIGNMENT OF ERROR NO. 2
In their second assignment of error, plaintiffs argue that because Mr. McCabe entrusted his vehicle to an excluded, unlicensed driver, Progressive should be liable for their injuries under the theory of negligent en-trustment as recognized by this Court's decision in Harris v. Hamilton, 569 So.2d 1 (La.App. 4 Cir.1990). We disagree.
In Harris, this Court noted that owners of motor vehicles are not personally liable for damages arising out of automobile accidents when "permitted drivers" are operating the vehicle, unless the permitted driver is an agent, on a mission for the owner, or is incompetent. Harris, 569 So.2d at 3. However, Harris did not address "excluded" drivers as does the ease subjudiee. This Court found the negligent entrustment theory did not apply in Harris. Likewise, the negligent entrustment theory does not apply here because Mrs. McCabe was not an agent, or on a mission for her husband, and further she was specifically excluded as an ^insured driver. Because of the novelty of this issue, we hereby limit the scope of negligent entrustment to extend only to those instances were the permitted drivers are not excluded by the insured's automobile liability policy.
DECREE
For the foregoing reasons, we find it was proper for the trial court to grant summary judgment in favor of Progressive. This Court also limits the scope of the negligent entrustment theory to extend only to situations where the permitted driver is not excluded in the insured's automobile liability policy.
AFFIRMED.
ARMSTRONG, J., dissents with reasons.
PLOTKIN, J., dissents with written reasons.