Court Opinion

ID: 9692496
Source: CourtListenerOpinion
Date Created: 2023-08-25 15:55:42.773491+00
Date Added: 2024-06-11T18:19:34.849791
License: Public Domain

DIXON, Justice
(dissenting).
I respectfully dissent. I agree with the reasoning of the Court of Appeal, 235 So.2d 631 (La.App. 4th Cir. 1970). The rationale of the majority holding of this court is an attempted distinction between a contract of indemnity on the one hand, and a contract of liability insurance on the other. Yet, a Louisiana statute defines “insurance” as “a contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies.” Louisiana Revised Statutes 22:5(1). And Webster’s Seventh New Collegiate Dictionary (1965) defines insurance as “coverage by a contract whereby one party undertakes to indemnify another against loss by a specified contingency or peril.” Thus, it can be seen that “contract of indemnity” and “contract of insurance” are synonymous.
Having concluded that a contract of reinsurance is indeed “insurance,” the question remains whether it is a contract of liability insurance so as to fall within the direct action statute, Louisiana Revised Statutes 22:655. The Insurance Code defines liability insurance as “Insurance against the liability of the insured for the death, injury or disability of an employee or other person * * Louisiana Revised Statutes 22:6(4).
The direct action statute is substantive, not merely procedural. It creates a cause of action as well as a right of action against the insurer. Accordingly, because of the existence of the direct action statute, Miarquette is directly and primarily liable for personal injuries caused by the negligence of its policyholders. When Marquette purchases a contract of indemnity to protect itself against its liability for the injury of other persons caused by its policyholders, it is obtaining “insurance against the liability of the insured for the death, injury or disability of an employee or other person.” This contract of indemnity, therefore, is a contract of liability insurance, and in turn confers a direct right of action against the reinsurer pursuant to Louisiana Revised Statutes 22 :- 655.
Peerless Insurance Company bases it defense upon its own definition of its contract as an “indemnity.” But when it agreed with Marquette to pay it up to $300,000 for any accident, with no gross total limit (in fact limited only by the $10,000 deductible provision, for loss from any one accident), it wrote a policy of liability insurance. The definitions in the Louisiana statutes must control, and Peerless’ defenses fall.