Imagine you are in an accident with a negligent driver. You seek to recover from the negligent driver’s insurance company, only to discover that he or she does not carry any insurance. If you are in Louisiana, you are in luck. Louisiana’s uninsured motorist (“UM”) law protects drivers from the negligence of uninsured motorists. It allows automobile accident victims to recover damages even when the other driver is without insurance. It even provides additional or excess coverage when the other driver is inadequately insured. But how do you know if you have UM or not? UM coverage is implied in every automobile policy and will be read into the policy unless it is validly rejected. In a recent case, the Louisiana Third Circuit Court of Appeal examined exactly who has the authority to waive or reject UM coverage and the requirements of a valid waiver.
In 2007, Naddia Melder was injured in an automobile accident in Alexandria, Louisiana. Ms. Melder was driving her 2006 Nissan truck when she was struck by another vehicle driven by Connie Turlington. Ms. Turlington was uninsured. Ms. Melder’s vehicle was provided to her by her employer, Grimes Industrial Supply, L.L.C., although it was owned by another company, Grimes True Value Hardware, L.L.C. State Farm insured Ms. Melder’s vehicle and provided uninsured motorist coverage to her. Ms. Melder also held a separate policy with Louisiana State Farm Bureau Casualty Insurance Company which provided additional uninsured motorist coverage to her as an insured.
Ms. Melder and Randel Melder filed a lawsuit against State Farm and Farm Bureau for uninsured coverage. State Farm responded with a motion for summary judgment seeking dismissal of the Melders’ claims. It argued that the owner of Grimes Industrial Supply, Floyd Grimes, declined uninsured motorist coverage under the State Farm policy which provided coverage for the vehicle Ms. Melder drove during the collision. The Trial Court granted State Farm’s motion for summary judgment, dismissing it as a defendant. The Melders appealed, arguing that the Trial Court erroneously held that Floyd and Frank Grimes were the named insureds under the State Farm policy. More specifically, the Melders argued that Grimes True Value Hardware, L.L.C. was the named insured.