Opinion ID: 1652872
Heading Depth: 1
Heading Rank: 3

Heading: Liability Coverage under the Lafayette Policy

Text: Plaintiffs and intervenors claim the Lafayette policy is confusingly ambiguous and is reasonably interpreted in multiple ways. Specifically, they argue the policy is confusing and ambiguous because Section B of the endorsement provided liability coverage for bodily injury arising out of the use of a non-owned auto by any person, other than Tucker, in furtherance of Tucker's business, but the succeeding sections of the endorsement take away coverage. Plaintiffs and intervenors state: Section D conflicts with Section B because Section B covers any person using a `non-owned auto' in the policyholder's business and then Section D takes that coverage away. We disagree with plaintiffs and intervenors, and find that the Lafayette policy is clear and unambiguous. Plaintiffs and intervenors focus merely on the insuring agreement, which broadly provides non-owned auto liability coverage for `bodily injury' or `property damage' arising out of the use of a `non-owned auto' by any person other than [Tucker] in the course of [Tucker's] business. However, such a narrow focus is improper. In keeping with the well-established jurisprudence recited above, an insurance policy is construed as a whole and each provision in the policy must be interpreted in light of the other provisions. One provision of the policy should not be construed separately at the expense of disregarding other provisions. See LSA-C.C. art.2050; Peterson, 729 So.2d at 1029. Thus, in determining whether an insurance policy provides coverage, every provision of the policy must be read and interpreted, particularly the provisions relating to what is insured, usually contained in a section entitled Insuring Agreement, the provisions relating to who is insured, usually contained in a section entitled Who Is An Insured, and the provisions relating to what is excluded from coverage, usually contained in a section entitled Exclusions. Only then can a determination of coverage be made. See Magnon v. Collins, 98-2822 (La.07/07/99), 739 So.2d 191. In this case, the Lafayette policy does not provide liability coverage for Mr. Brown because he is not an insured under the provisions of the policy relating to who is insured for non-owned auto liability. For Mr. Brown to be an insured under the provisions of the policy for non-owned auto liability, he would need to be a partner or executive officer of Tucker operating the non-owned auto in furtherance of Tucker's business. The district court found, and plaintiffs and intervenors concede, that the occupants of the Brown automobile, including Mr. Brown, were independent contractors for Tucker. Because Mr. Brown is neither a partner nor executive officer of Tucker, he simply is not an insured for purposes of non-owned auto liability. Moreover, even if Mr. Brown was a partner or executive officer of Tucker, he would still not be an insured under the provisions of the policy for non-owned auto liability because he owned the automobile he was operating. The Lafayette policy clearly provides [t]he owner ... of a `nonowned auto' is not an insured. We recently upheld this type of exclusion in Magnon, supra, wherein an employee was operating his own automobile while in the course and scope of his employment when he was rear-ended by an underinsured motorist. There the employee sought UM coverage under his employer's commercial general liability policy with Vigilant Insurance Company which contained an endorsement entitled Non-Owned and Hired Auto Liability Insurance. The parties agreed the employee's automobile was a covered auto pursuant to the policy. Nevertheless, because the employee was not an insured under the liability provisions of the policy, we concluded the employee was not entitled to UM coverage. The policy defined insured to include anyone else while using, with your permission, a covered auto, but excepted from coverage any employee of the named insured if the covered auto is owned by that employee or a member of his or her household. We explained the apparent purpose of the exception is to provide the named insured protection for liability arising out of the use of non-owned autos, but to preclude coverage for the owner who should have purchased liability coverage for his own automobile. Id. at 198 (citing 15 Louisiana Civil Law Treatise, Insurance Law and Practice, William Shelby McKenzie & H. Alston Johnson, III, § 58, at 164 (2nd Ed.1996)). We concluded the employee never achieved insured status for auto liability coverage under the Vigilant policy, and thus is not entitled to UM coverage. Id. at 199. In this case, Mr. Brown was operating his own automobile at the time of the accident. Mr. Brown's automobile is a covered non-owned auto pursuant to the Lafayette policy because it was not owned, leased, hired, rented, or borrowed by Tucker, and it was used in connection with Tucker's business at the time of the accident. However, even though Mr. Brown's automobile is a covered non-owned auto pursuant to the Lafayette policy, because Mr. Brown was operating the automobile at the time of the accident, Mr. Brown is not an insured under the provisions of the policy for non-owned auto liability. Consequently, as in Magnon, supra, the Lafayette policy does not provide liability coverage for Mr. Brown.