F. J. Roberts, Jr. and his wife, Margaret B. Roberts filed suit against Neil B. Burris and his employer, Pat's Furniture Showroom of New Orleans, Inc., seeking damages sustained by them as a result of an accident on July 13, 1978 between an automobile driven by Mrs. Roberts and owned by her husband and an automobile driven by Burris allegedly in the course and scope of his employment. American International Insurance Company (A.I.U.), plaintiffs' uninsured motorist carrier, was added as a party defendant by an amended and supplemental petition. It was alleged that Burris was uninsured at the time of the accident. A.I.U. answered generally denying the allegations of plaintiffs' petition and amended petition and third partied Burris seeking indemnity for any amounts paid by A.I.U. to plaintiffs. Plaintiffs' demands against Pat's Furniture Showroom were dismissed in a summary judgment.
Subsequently, A.I.U. filed a petition for declaratory judgment against Mr. and Mrs. Roberts seeking to limit its uninsured motorist coverage to $5,000. Upon motion of A.I.U., the two suits were consolidated for trial.
After trial on the merits, the judge, finding the accident was caused solely by the negligence of Burris, rendered judgment in favor of Mr. Roberts and against Burris for $1,825 for property damage and $943.39 for medical expenses and in favor of Mrs. Roberts and against Burris and A.I.U. for $14,000. The liability of A.I.U. was limited to $5,000. Judgment was rendered on the third party demand in favor of A.I.U. and against Burris for $5,000. All awards included legal interest from date of judicial demand until paid and costs. In a separate judgment, the liability of A.I.U. was limited to $5,000 under the uninsured motorist coverage applicable to Mrs. Roberts. Mrs. Roberts appealed from both judgments. The only issue on appeal was the limitation of A.I.U.'s liability to $5,000. The court of appeal affirmed the judgments of the district court.
The sole issue presented for our resolution is whether the liability of A.I.U. should be limited to $5,000 under the uninsured motorist coverage
Under Louisiana law, uninsured motorist coverage is provided for by statute and embodies a strong public policy. Therefore, the question of uninsured motorist coverage must be determined in light of La.R.S. 22:1406. This statute has been amended several times with regard to the right to reject coverage or to select lower limits and the form and effect of such rejection or selection.
By Act 137 of 1972,
The extent of coverage was further provided for in Act 154 of 1974,
Act 494 of 1975,
Act 438 of 1977,
In the instant case, A.I.U. originally issued an automobile liability insurance policy to Mr. Roberts on June 6, 1974, with bodily injury liability coverage of $25,000 per person and uninsured motorist coverage of $5,000 per person. On July 31, 1974, the uninsured motorist coverage was increased to the same limits as the bodily injury liability coverage by operation of Act 154 of 1974. uninsured motorist coverage was dropped as per oral request of Mr. Roberts in December of 1974. In January of 1975, Mr. Roberts orally requested that the uninsured motorist coverage be reinstated in the amount of $5,000 per person. Mr. Roberts continuously renewed the policy at six-month intervals until the accident of July 13, 1978.
A.I.U. contends that at the time of Mr. Roberts' selection of $5,000 uninsured motorist coverage in January of 1975, the law did not require that rejection of coverage or selection of lower limits be in writing. A.I.U. argues that the oral request for lower limits constituted a valid selection and was applicable to subsequent renewals. Thus, when the policy in effect on the date of the accident was last renewed on June 6, 1978, the lower limits originally selected by Mr. Roberts automatically applied. We do not agree.
Uninsured motorist coverage is to be determined not only by the provisions of the contract but also by applicable statutes. In the absence of a specific rule, general insurance law controls. While it is true that prior to 1977, La.R.S. 22:1406 did not require selection of lower limits to be in writing, La.R.S. 22:628 then provided:
In determining the applicability of La.R.S. 22:628, the provisions of La.R.S. 22:1406 must be examined more closely. La.R.S. 22:1406 mandates the inclusion of uninsured motorist coverage in any automobile liability policy delivered or issued for delivery in this state. Coverage is required in limits not less than the limits of bodily injury liability provided in the policy unless the insured selects lower limits. It is of no moment that the policy in the instant case provided lower limits since the coverage was read into the policy by the terms of the statute. Since selection of lower limits conflicted with the coverage written into the policy law, such selection was required to be
In the instant case, there was never a written selection of lower limits. Thus, Mr. Roberts' oral request for lower limits in January 1975 was ineffective and not applicable to subsequent renewals. Accordingly, plaintiff is entitled to uninsured motorist coverage in an amount not less than the limits of bodily injury liability of $25,000 provided in the policy. The courts below erred in limiting A.I.U.'s liability to $5,000. We must reverse.
In the alternative, plaintiff contends that under the authority of La.R.S. 22:1406(D)(1)(c), she is entitled to stacked coverage of $10,000 over the primary coverage awarded. Since we find that plaintiff is entitled to $25,000 uninsured motorist coverage under the A.I.U. policy, we do not reach this issue.
For the reasons assigned, the judgment of the court of appeal is reversed insofar as it limits the liability of American International Insurance Company to $5,000 and amended to permit third party plaintiff, American International Insurance Company, to recover against Neil B. Burris all sums paid by said third party plaintiff to Margaret B. Roberts; otherwise, it is affirmed in all other respects.