Click It: The Seat Belt Defense In Louisiana

Sometimes in law, the facts of a case may threaten to eclipse the legal issue. However, Louisiana law instructs the fact finder to see through the facts, and their sometimes tragic nature, and apply the law as written. As Aristotle once wisely said, “The Law is reason free from passion.”

In Kazan, et. al. v. Red Lion Hotels Corporation, et. al., 2021-CC-01820 (La. 6/29/22), the Louisiana Supreme Court recently ruled on a case with tragic facts, and its ruling provides an example of Aristotle’s description of law in action. In Kazan, a female patron was in the parking lot of a motel when a male patron approached her and used Kazan’s vehicle to abduct her from the premises. The car was later found submerged in a lake, and Kazan’s body was recovered from the water. The family filed a tort suit against several parties, including the motel’s owner and its insurer, the Great Lakes Insurance Company SE.

Great Lakes filed a motion for summary judgment and asked to be dismissed on grounds that coverage for the event was excluded from its policy. Specifically, the insurer argued that bodily injury caused by an “assault,” “battery,” or “physical altercation” was excluded under the policy’s terms. Great Lakes further argued that the kidnapping and ultimate death of the patron was excluded under the policy as bodily injury caused by an assault, battery, or physical altercation. The Louisiana Supreme Court agreed and reversed the decision of the trial and appellate courts.

Under Louisiana law, “[a]n insurance policy is a contract between the parties and should be construed using the general rules for the interpretation of contracts.” Id. at p. 3. “When the words of an insurance policy are clear and explicit and do not lead to absurd consequences, courts must enforce the language as written.” Id. at p. 3. “Courts lack authority to alter the terms of an insurance policy under the guise of interpretation and should not create an ambiguity where none exists.” Id. at p. 3.

With these basic rules in mind, the Court carefully reviewed the wording of the exclusion in the Great Lakes policy which stated as follows: “This insurance does not apply to ‘bodily injury,’ ‘property damage,’ or ‘personal advertising injury’ arising out of an ‘assault,’ ‘battery,’ or ‘physical altercation.’” “Physical altercation” was defined in the policy as “a dispute between individual [sic] in which one or more persons sustain bodily injury arising out of the dispute.” Citing Merriam-Webster’s dictionary, the Court defined the term “dispute” as “verbal controversy” or “quarrel.”

Based upon the evidence in the case, the Court found the female patron was involved in a “dispute” with her male attacker, and ultimately sustained bodily injury as a result of the dispute. Therefore, the patron was injured in a physical altercation, as defined under the specific terms of the Policy, and coverage for the event was excluded under the policy’s terms.

The Court noted as follows: “The facts of this case are undoubtedly tragic. Nonetheless, absent a conflict with statutory provisions or public policy, insurers are entitled to limit their liability by imposing reasonable conditions upon the policy obligations they contractually assume. That is what Great Lakes did in the insurance policy at issue here.” Despite the tragic facts presented in the case, in so holding, it appears the court agreed with Aristotle’s belief that the Law is Reason Free from Passion.

The United States Attorney for the Eastern District of Louisiana recently announced that two defendants, Doniesha Gibson and Erica Lee, had been sentenced for crimes related to staging automobile collisions with tractor-trailers. The sentences were announced as part of a criminal investigations known as "Operation Sideswipe." The years-long operation has produced multiple pleas and convictions, including a guilty plea from an involved attorney last year.

Gibson admitted that she was a passenger in a staged accident that occurred on October 15, 2015. A co-defendant intentionally drove the vehicle she occupied into a bus on the interstate. Gibson retained an attorney and filed a suit for damages. Claims related to this accident later settled for $667,500.00

Lee also admitted to filing a suit to claim injuries after the driver of the vehicle she occupied intentionally crashed into a tractor trailer on September 6, 2017. The claims for this suit settled for $30,000.00

United States District Judge Sarah S. Vance sentenced Gibson to 17 months incarceration plus 3 years of supervised release and ordered Gibson to pay restitution in the amount of the settlement. Lee was sentenced to serve 3 years of probation and 100 hours of community service. She was also ordered to pay restitution.

While “Operation Sideswipe” did not involve the typical claimants, it reminds of the need for vigilance in assessing accident claims.

The period of time before the contract is signed in one of optimism. After all, few sign a contract expecting problems. But if you do not consider the many "what ifs," you may be left holding the bag. And this "bag" may include indemnity provisions which could force you respond for the actions of other parties.

Many contracts include "indemnity" or "hold harmless" provisions. Black's Law Dictionary defines indemnity as "a duty to make good any loss, damage, or liability incurred by another." Like many states, Louisiana allows one party to agree to pay for the damages caused by the fault of the other, if this intention is sufficiently expressed. However, there are broad statutory exceptions that can nullify the indemnity requirement.

Parties to construction contracts should be careful not to blindly rely upon indemnity provisions because the Louisiana legislature in La. R.S. 9:2780.1 declared invalid any indemnity provision where a party seeks indemnity from another for its own fault.

Despite the broad nullification of certain types of indemnity provisions in construction contracts, current Louisiana law allows a party to be indemnified for its own fault when the other party obtains insurance to cover the risk, and recovered the cost of insurance in the contract price. For example, a general contractor can require a subcontractor to indemnify the general contractor for the general contractor’s fault, as long as the subcontractor obtains insurance for this obligation, and was paid that amount under the contract.

Indemnity obligations are not always as they seem. Even in the pre-contract period of optimism, you may want to contact an attorney so you won't be left holding the bag.

Chelsea Payne is an associate at Keogh Cox and has been practicing for three years. Her practice mainly relates to construction law and complex litigation. Chelsea enjoys playing tennis and spending time with her family.