Opinion ID: 1834936
Heading Depth: 1
Heading Rank: 5

Heading: Jurisprudential Background

Text: In Normand v. Hertz Corp., 254 La. 1075, 229 So.2d 104 (1969), we concluded an omnibus clause in Hertz's insurance policy did not apply to a driver who was not listed as a qualified driver in the rental agreement. However, in Jones v. Breaux, 289 So.2d 110 (La.1974), we overruled Normand, and held a non-named driver could fall under the omnibus clause in the rental agency's insurance policy under certain circumstances. In Jones, the rental car was operated by an unauthorized driver in violation of a provision in the lease agreement which prohibited use except by the lessee or others named in the agreement. We held the rental agreement, which limited the application of the omnibus insured clause contained in the lessor's insurance policy, changed the contract of insurance in violation of La.R.S. 22:628. [4] Thus, the lessor's policy, which included an omnibus clause, was found to supersede the provisions in the rental agreement which attempted to avoid liability arising from the unauthorized use of the car. We went on to find the unauthorized driver was covered under the omnibus clause because she had the lessee's permission to operate the vehicle. We agree with the appellate court that the instant case is distinguishable from Jones. Obviously, the existence of the lessor's insurance policy in Jones played an important role in the outcome of the case, as the omnibus clause contained in the lessor's policy was the major reason behind the court's refusal to honor the prohibitory provisions in the rental agreement. [5] Thus, the Jones decision and its progeny provide little insight into this case involving a self-insured rental agency because there is no lessor's liability policy. We add it is questionable whether the Jones holding is viable today because its reasoning is no longer accurate based on changes in the statutory law. The Court of Appeal, Third Circuit, in Whittington v. Sowela Technical Institute, 438 So.2d 236 (La.App. 3rd Cir.), writ denied, 443 So.2d 591 (La.1983), suggested the Jones holding was overruled by a 1977 amendment of La.R.S. 22:628 which allowed insurance contracts to incorporate by reference terms of another policy. Accordingly, the Whittington court enforced a provision in the rental agreement which limited liability coverage afforded by the lessor's insurer to the liability limits provided in the lessee's personal automobile liability insurance policy. With the exception of Whittington, the appellate courts of this state have skirted the legal issue concerning the validity of unambiguous provisions in rental agreements which prohibit operation by unauthorized drivers. Instead, the lower courts have treated this legal issue as a factual one by enforcing specific prohibitions when the unauthorized driver operated the vehicle without the lessee's permission, while holding the same prohibitions unenforceable when the unauthorized driver had the lessee's implied or express permission to operate the vehicle. [6] Absent statutory regulations to the contrary, there would appear to be no basis for the lower courts' disregard of the unambiguous restrictive language in the rental contracts.