Maister Associates v. State Farm Fire & Casualty Co. ( 2009 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 28, 2009
No. 09-30453 Charles R. Fulbruge III
Summary Calendar Clerk
MAISTER ASSOCIATES,
Plaintiff - 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-589
Before REAVLEY, JOLLY, and OWEN, Circuit Judges.
PER CURIAM:*
Appellant Maister Associates ("Maister") appeals the district court's
summary judgment dismissing Maister's claims against Appellee State Farm
Fire & Casualty Company ("State Farm"). For the reasons set forth below, we
AFFIRM.
We review a district court's grant of summary judgment de novo, using the
same standard as the district court. Ikossi-Anastasiou v. Bd. of Supervisors of
*
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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .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. 09-30453
La. State Univ., 579 F.3d 546, 549 (5th Cir. 2009) (citation omitted). Summary
judgment is appropriate only when "there is no genuine issue as to any material
fact and . . . the movant is entitled to judgment as a matter of law." F ED. R. C IV.
P. 56(c).
Maister argues that it is entitled to damages for lost rental income under
the insurance policy issued by State Farm. Maister states that the lost rental
income stems from its cooperation with State Farm's alleged request to refrain
from making certain repairs to its apartments during the pendency of the
underlying litigation. Maister also argues that by compelling Maister to delay
repairs, State Farm breached its fiduciary duty and duty of good faith by
subordinating Maister's interest to its own in the defense of the underlying
claims. Both of Maister's arguments fail.
The uncontroverted evidence shows that it was Maister's own lawyer, not
State Farm, who recommended a delay in making certain repairs to the
apartments to prevent spoliation of evidence. While State Farm paid for
Maister's lawyer, Maister chose the lawyer State Farm employed. Maister has
presented no evidence that State Farm ever controlled the actions of Maister's
lawyer, nor has Maister pointed to any evidence showing Maister's lawyer acted
to represent State Farm's interests.
In addition, the magistrate judge correctly concluded that Maister has
failed to demonstrate an "identity of interest" between Maister and State Farm.
State Farm issued Maister three letters expressing a reservation of rights
regarding Maister's coverage. Therefore, a conflict of interest potentially existed
between the parties, making State Farm's choice to provide Maister independent
counsel proper. See, e.g., Smith v. Reliance Ins. Co. of Ill., 807 So. 2d 1010, 1022
(La. App. 2002) (holding that when an insurer denies coverage, there is a conflict
of interest between the insured and insurer, entitling the insured to select its
own independent counsel) (citing Belanger v. Gabriel Chems., Inc., 787 So. 2d
2No. 09-30453
559, 563, 566 (La. App. 2001)); Nat'l Union Fire Ins. Co. v. Circle, Inc., 915 F.2d
986, 991 (5th Cir. 1990) ("An insurer that elects to reserve its rights to deny
coverage may nevertheless discharge its contractual obligation to defend its
insured by engaging separate counsel to represent the insured . . . ."). Even if
no conflict of interest existed, Maister has pointed to no authority obligating
State Farm to employ the same lawyers in the defense of both parties.
In conclusion, there is no evidence that State Farm acted in bad faith by
employing the very lawyer Maister selected to defend Maister in the underlying
action. Moreover, Maister has failed to demonstrate that the allegedly negligent
advice of its lawyer can be imputed to State Farm, such that any alleged harm
stemming from the advice became State Farm's responsibility under the policy.
Accordingly, the district court's ruling is AFFIRMED.
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