Filed: Sep. 29, 2000
Latest Update: Mar. 02, 2020
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ No. 99-31124 Summary Calendar _ OAK RIDGE PARK, INC.; ET AL., Plaintiffs, OAK RIDGE PARK, INC., Plaintiff-Appellant, versus SCOTTSDALE INSURANCE COMPANY; ET AL., Defendants, SCOTTSDALE INSURANCE COMPANY; UNITED FIRE AND CASUALTY COMPANY, Defendants-Appellees. _ Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 98-CV-3348-N _ September 29, 2000 Before JOLLY, JONES, and BENAVIDES, Circuit Judges
Summary: IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _ No. 99-31124 Summary Calendar _ OAK RIDGE PARK, INC.; ET AL., Plaintiffs, OAK RIDGE PARK, INC., Plaintiff-Appellant, versus SCOTTSDALE INSURANCE COMPANY; ET AL., Defendants, SCOTTSDALE INSURANCE COMPANY; UNITED FIRE AND CASUALTY COMPANY, Defendants-Appellees. _ Appeal from the United States District Court for the Eastern District of Louisiana USDC No. 98-CV-3348-N _ September 29, 2000 Before JOLLY, JONES, and BENAVIDES, Circuit Judges...
More
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 99-31124
Summary Calendar
_____________________
OAK RIDGE PARK, INC.; ET AL.,
Plaintiffs,
OAK RIDGE PARK, INC.,
Plaintiff-Appellant,
versus
SCOTTSDALE INSURANCE COMPANY; ET AL.,
Defendants,
SCOTTSDALE INSURANCE COMPANY;
UNITED FIRE AND CASUALTY COMPANY,
Defendants-Appellees.
_________________________________________________________________
Appeal from the United States District Court for the
Eastern District of Louisiana
USDC No. 98-CV-3348-N
_________________________________________________________________
September 29, 2000
Before JOLLY, JONES, and BENAVIDES, Circuit Judges.
PER CURIAM:*
This appeal presents an insurance coverage case under
Louisiana law. The plaintiffs, Quarter House Oak Ridge Park, Inc.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
(“ORP”) and Quarter House Home Owners’ Association (“Quarter
House”) seek review of the district court’s grant of summary
judgment for the defendants, Scottsdale Insurance Company
(“Scottsdale”) and United Fire and Casualty Company (“United”),
which dismissed the plaintiffs’ bad faith claims.1 Specifically,
the plaintiffs argue that the district court erred in concluding
that the underlying lawsuits against the plaintiffs did not fall
within the insurance coverage provided by the defendants. We find
no error on the part of the district court and affirm.
A
The case has its genesis in two separate lawsuits filed
against the plaintiffs. The first suit was filed by Louisiana
Acorn Fair Housing (the “Acorn” suit). It alleged intentional
discrimination in violation of the Fair Housing Act, 42 U.S.C.
§ 3601, et seq., and the Louisiana Open Housing Act, La.Rev.Stat.
§ 51:2601., et seq. Specifically, Acorn alleged that ORP
“willfully,” ”maliciously,” and “intentionally” committed acts of
discrimination (based on race, religion, familial status and
national origin) in connection with the sale of real estate.2 The
second suit was filed by Richard J. Danenhower, a former field
1
The plaintiffs do not seek review of the district court’s
grant of summary judgment for the defendant, Coregis Insurance
Company (“Coregis”).
2
The Acorn suit was settled prior to trial.
2
marketing manager for ORP. It alleged violations of the Fair
Housing Act and the Louisiana Open Housing Act similar to those
alleged in the Acorn litigation. Specifically, Danenhower alleged
that he was required to train employees to carry out discriminatory
policies by presenting tours to a select group of “qualified”
prospective buyers based on race, religion, handicap, national
origin, and familial status. Because of these illegal practices,
Danenhower alleged, he was forced to resign.3 Danenhower sought
damages for loss of wages, humiliation, embarrassment, emotional
distress, mental anguish and ridicule.4 In both instances, the
defendants denied coverage to ORP and Quarter House.
On November 10, 1998, ORP and Quarter House filed the instant
suit against Scottsdale, United, and Coregis. The plaintiffs
alleged that its insurers wrongfully denied them a defense and
coverage in both the Acorn and Danenhower litigation.5 Following
a hearing, on September 17, 1999, the district court granted
3
Additionally, Danenhower alleges that he was slandered by ORP
in a public statement issued by ORP in response to a television
broadcast showing Danenhower instructing a putative marketing
trainee to discriminate in accordance with ORP’s “policies.”
4
Following removal to federal court, Danenhower’s suit was
dismissed for lack of standing to pursue the federal claims, and
declination to exercise pendant jurisdiction over the state law
claims. Subsequent to the district court’s dismissal, Danenhower
re-filed in state court. That state court action is still pending.
5
The bad faith claims stemming from the Danenhower litigation
are limited to the federal action that was dismissed. No claims
are brought with respect to the ongoing state court action.
3
summary judgment for the insurers. The plaintiffs filed a timely
notice of appeal.
B
After consideration of the briefs and the record, we hold that
the district court did not err in granting summary judgment for the
defendants. Louisiana law is clear: “The insurer’s duty to defend
is determined solely from the plaintiffs’ pleadings and the policy,
without consideration of extraneous evidence.” Selective Ins. Co.
of Southeast v. J.B. Mouton & Sons, Inc., 954 F.2d 1075, 1078 (5th
Cir. 1992)(citing Jensen v. Snellings,
841 F.2d 600, 612 (5th Cir.
1988); Alombro v. Salman,
536 So. 2d 764, 767 (La.Ct.App. 1988)).
The allegations contained in the complaint are to be liberally
construed and the rights of the insured are to be deemed paramount.
See
Jensen, 841 F.2d at 612. However, if after examining the
allegation in the complaint, coverage under the policy is
precluded, the insurer is relieved of its duty to defend. See
Resolution Trust Corp. v. Ayo,
31 F.3d 285, 293 (5th Cir.
1994)(citing
Jensen, 841 F.2d at 612).
Turning first to the coverage provided by the Scottsdale
policy, we think that the district court correctly concluded that
in the Acorn litigation, the acts alleged against the plaintiffs
were acts that were “intended or expected”; thus, they do not “fall
under the definition of ‘occurrence’ contained in the policy.”
Additionally, the plaintiffs have failed to identify any property
4
damages, bodily injuries, or personal injuries that are alleged by
the Acorn plaintiffs that arguably fall within the policy.
Finally, with respect to the Danenhower litigation, all of the
claims arose out of employment-related policies or acts that were
“unambiguously precluded under the Scottsdale employment-related
policy exclusion.” Thus, the district court was correct in
concluding that the plaintiffs were not entitled to coverage under
the Scottsdale policy.
With respect to the United policy, coverage in the Acorn
litigation was denied by United for the same reasons that it was
denied by Scottsdale under its policy--the policy excluded coverage
for intentional acts, which were the only acts alleged in the Acorn
litigation. Further, as in the Scottsdale policy, the United
policy contained an exclusion for bodily injury and property damage
caused by employment-related practices. As far as the Danenhower
suit is concerned, the record is bereft of any evidence indicating
that the suit was ever tendered by the plaintiffs to United for
defense. Even assuming, however, that United had “constructive
notice” of the Danenhower suit, as the plaintiffs argue, coverage
was expressly excluded by the “employment-related practices
exclusion.” Thus, the district court was correct in concluding
that “United bore no duty to defend ORP in the Danenhower suit.”
The judgment of the district court is therefore
A F F I R M E D.
5
6
