Lennox v. Hallmark Capital Group, LLC ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
March 13, 2009
No. 08-30563 Charles R. Fulbruge III
Summary Calendar Clerk
ANNE VICTORIA LENNOX, etc.; ET AL.,
Plaintiffs,
v.
HALLMARK CAPITAL GROUP, LLC,
Intervenor–Appellant,
v.
STATE FARM FIRE & CASUALTY COMPANY,
Defendant–Appellee.
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:06-CV-7222
Before KING, DENNIS, and OWEN, Circuit Judges.
PER CURIAM:*
Hallmark Capital Group, LLC d/b/a Paul Davis Restoration of Southwest
Houston (Hallmark) appeals the oral judgment of the district court granting
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .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.
No. 08-30563
judgment as a matter of law to State Farm Fire & Casualty Company (State
Farm) on Hallmark’s breach of contract claim. We affirm.
I
Victoria Lennox and Joseph Bartels are the owners of an office building
located at 3900 Canal Street in New Orleans. In 2005, the building was severely
damaged as a result of Hurricane Katrina. Hallmark and Bartels subsequently
entered into a two-part Emergency Repairs Authorization (ERA). Bartels signed
the first portion of the ERA, authorizing Hallmark to perform emergency
construction repairs and remedial work on the office building. However, upon
completion of the repairs, Bartels refused to sign the second portion of the ERA,
which contained a payment directive authorizing Lennox and Bartels’s
insurance company, State Farm, to pay Hallmark directly for the repair costs.
Prior to the ERA, Hallmark entered into a Premier Service Contractor
Agreement (PSCA) with State Farm. Pursuant to the PSCA, after abiding by
contractually required procedures, Hallmark could participate in the Premier
Service Program. Under that program, Hallmark could perform construction
and repair work on property of State Farm’s insureds, and State Farm would
pay Hallmark directly for such work. The PSCA was not an exclusive agreement
and did not preclude Hallmark from performing other outside work.
Lennox and Bartels brought suit against State Farm for claims to
insurance proceeds as a result of damages sustained to the their property during
Hurricane Katrina. Hallmark intervened, asserting its interest in the office
building for the repair work it performed. At the conclusion of all testimony and
evidence, the district court granted judgment as a matter of law, eliminating
Hallmark’s breach-of-contract claim against State Farm from the jury’s
consideration. The court explained that it found insufficient evidence upon
which a reasonable jury could find in favor of Hallmark on any of its contract
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No. 08-30563
claims and that there was undisputed evidence that the PSCA did not apply.
Hallmark timely appealed.
II
We review a district court’s ruling on a motion for judgment as a matter
of law de novo.1 Under this standard, we view all of the evidence “in the light
and with all reasonable inferences most favorable to the party opposed to the
motion.” 2 A district court may not grant a motion for judgment as a matter of
law “unless a party has been fully heard on an issue and there is no legally
sufficient evidentiary basis for a reasonable jury to find for that party on that
issue.” 3 Determining whether the PSCA applies in this case is a question of law
that we also review de novo.4
According to the PSCA, to participate in the Premier Service Program the
contractor must follow several requirements and procedures. First, before
inspecting the property in question, the contractor must accept or reject an offer
from State Farm to provide repair services to a State Farm policyholder. The
contractor must then inspect and assess the damage to the building and
generate an estimate using a version of an estimating product compatible with
the system utilized by State Farm. Additionally, before commencing any work,
the contractor must obtain a repair authorization from the policyholder and send
the form to State Farm by facsimile.
1
Hagan v. Echostar Satellite, L.L.C., 529 F.3d 617, 622 (5th Cir. 2008) (quoting Delano-
Pyle v. Victoria County, 302 F.3d 567, 572 (5th Cir. 2002)).
2
Id. (quoting Delano-Pyle, 302 F.3d at 572).
3
Id. (quoting Delano-Pyle, 302 F.3d at 572).
4
See Advocare Int’l LP v. Horizon Labs., Inc., 524 F.3d 679, 685 (5th Cir. 2008) (“We
also review de novo ‘the interpretation of a contract, including the question of whether the
contract is ambiguous.’” (quoting Barnard Constr. Co. v. City of Lubbock, 457 F.3d 425, 427
(5th Cir. 2007))).
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No. 08-30563
Instead of accepting or rejecting an offer from State Farm, Hallmark
solicited the repair work on the office building when it was repairing another
property owned by Lennox and Bartels. Additionally, Hallmark did not use an
approved estimating product to estimate the costs for the repairs. Finally,
Hallmark did not submit a repair authorization to State Farm before
commencing the repairs. It is undisputed that Hallmark did not comply with the
requirements and procedures of the PSCA. Therefore, the PSCA did not apply
to Hallmark’s repairs of Lennox and Bartels’s office building.
Moreover, Hallmark’s statements in its pleadings to the district court also
show that it cannot recover from State Farm. In its “Statement of Material
Facts,” Hallmark explained that Lennox and Bartels’s “assignment of their
rights under its insurance contract was a condition precedent to Hallmark’s
recovery from the insurer.” Hallmark then stated that Lennox and Bartels
“have refused to execute the assignment to insurance proceeds to Hallmark.”
We agree with Hallmark that because Lennox and Bartels refused to execute the
portion of the ERA assigning their rights under their insurance contract, the
condition precedent was not satisfied and Hallmark cannot recover from State
Farm.
Because we conclude that the PSCA did not apply to the repair work of the
office building and Lennox and Bartels never assigned their rights to the
insurance proceeds, there can be no breach of contract as between Hallmark and
State Farm.
AFFIRMED.
4