Louisiana Appellate Court Limits Homeowner Insurance Coverage in Lawsuit Involving Tort Claims Against Driver of Off Road Vehicle on Non-Insured Location

Recently, the Louisiana Second Circuit Court of Appeal analyzed whether the lower court properly dismissed an injured woman’s tort claims against a driver and the insurance company that provided coverage for a vehicle that flipped on its side, leaving her permanently disfigured and partially disabled.


Michael Smith, Danielle Schelmety, and James Johnson, law students at the time of the underlying accident, went to Michael’s home in Ruston, Louisiana, to attend his birthday celebration. They stayed at Michael’s parents’ house, and before the celebration, James and Danielle went driving in a Rhino “side by side” four-wheel off-road vehicle.  James drove, and Danielle was his passenger.

While on a residential street half a mile from the Smiths’ home, the Rhino flipped onto its side.  Danielle’s arm was pinned between the vehicle and the pavement.  Her forearm, wrist, and hand were shattered and crushed.  She underwent emergency surgery, and since the accident has undergone multiple surgeries and extensive physical therapy.

Safeco denied the Smiths’ claim for coverage for Danielle’s injuries because the loss did not occur at an insured location.  Danielle filed a tort case, bringing product liability claims against the Rhino’s manufacturer, negligent entrustment claims against William and Michael Smith, and a negligence claim against James Johnson for turning too sharply or too quickly.  Danielle added Safeco as a defendant, based on Safeco’s liability for negligent entrustment of the Rhino to James and his operational negligence.

Safeco moved to dismiss Danielle’s claims, on the grounds that neither the Smiths’ homeowners’ policy nor their umbrella policy covered James or the accident and Danielle’s injuries.  The trial court granted the motion, and Danielle and James appealed, contending the trial court erred in finding no coverage existed under the Smiths’ homeowners’ policy.

The appellate court stated that an insurance policy is a contract between the parties, and it must be construed according to the rules of interpretation of contracts.  Insurance companies are allowed to limit coverage, provided there is no conflict with statutory provisions or public policy.

First, the court stated no coverage could extend to James, who was a non-family member and a weekend houseguest, as an insured or a resident.  The court stated that insurance policies must be interpreted in a reasonable manner that does not enlarge or restrict their provisions.

Next, the court turned to the homeowners’ policy and its motor vehicle exclusion.  Danielle and James argued that the policy language containing a “while on an insured location” exception to the motor vehicle use exclusion failed to specifically require that the loss or the accident take place on the insured location.  The court rejected this argument, stating that the policy has a description of liability losses and exclusions that are not covered, and one of these is the motor vehicle use exclusion.

The issue, according to the appellate court, was which act triggered or excluded liability coverage.   Here, Danielle’s injury occurred when James drove the Rhino, flipped it, and pinned Danielle to the pavement.  The Safeco policy exclusion at issue here was designed to prevent liability coverage for the use of a motor vehicle that was owned by an insured but used on a non-insured location.

If the interpretation of the exclusion broadened to include the Rhino’s use by James on a residential street, it would defeat the purpose of the exclusion.  The purpose of the exclusion was to limit the insurer’s geographic area of risk.  Here, the accident took place half a mile away from the Smiths’ home.  This was not an insured location.   According to other Louisiana courts, even when the public street where an accident occurred is adjacent to the residence, there is no coverage when an exclusion applies.   Here, if the court found that the location of the accident was an insured location, anywhere the Rhino was ridden would be an “insured location.”  The court stated this was not the intention behind Safeco’s homeowners’ policy.

The court turned to Danielle’s negligent entrustment and supervision allegations against Dr. William Smith and Michael Smith.  Louisiana law holds that for liability coverage to apply to these claims, the use of a motor vehicle must not be essential to the theory of liability.  In this case, the trial court found that James’ use of the Rhino caused Danielle’s injuries.  The duty in question arose from the use of the Rhino.  The duty was breached when James operated the Rhino recklessly.  Therefore, the use of the vehicle was an essential element of the negligent entrustment and supervision claim.  The court of appeal held that the lower court properly found no liability coverage under the Safeco policy.

The trial court’s judgment granting Safeco’s motion for summary judgment and dismissing Danielle’s claims was affirmed.

At Lavis Law, our Louisiana personal injury attorneys provide personal attention and dedicated representation to accident victims throughout the state.  If you or a loved one has been injured due to the negligence of someone else, we can help you seek compensation for your harm. We provide a free consultation and can be reached by calling (866) 558-9151 or completing our online form.

More Blog Posts:

Louisiana Appellate Court Upholds Damages Award for Disabled Individual Injured on Transit Bus Boarding Ramp, Louisiana Injury Lawyer Blog

Louisiana Appellate Court Affirms Jury’s Determination of Comparative Fault and Damages Award for Plaintiff in Multi-Vehicle Collision, Louisiana Injury Lawyer Blog


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