Butts v. Aetna Cas & Sur Co ( 1998 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 97-30583
Summary Calendar
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BRENDA BUTTS and RICHARD BUTTS,
Plaintiffs-Appellants,
VERSUS
ÆTNA CASUALTY AND SURETY COMPANY,
Defendant-Appellee.
_________________________
LOUISIANA UNITED BUSINESS SELF INSURERS FUND,
Intervenor Plaintiff-Appellant,
VERSUS
ÆTNA CASUALTY AND SURETY COMPANY,
Intervenor Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Western District of Louisiana
(96-CV-1777)
_________________________
January 22, 1998
Before JONES, SMITH, and STEWART, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
*
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should not be published and is not precedent except under the limited
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Brenda Butts sued Aetna Casualty and Surety Company (“Aetna”),
demanding coverage under her employer's automobile insurance
policy. The district court found that the employer, Kilpatrick
Life Insurance Company (“Kilpatrick”), had waived uninsured
motorist (“UM”) coverage and granted summary judgment for Aetna.
We affirm.
I.
Butts was driving her car in the course and scope of her
employment with Kilpatrick when she was struck broadside by a car
driven by James Chatman. Chatman's liability insurance provided a
policy limit of $25,000SSan amount Butts says was insufficient to
compensate her for the serious injuries she suffered in the
accident. Butts then sought compensation under Kilpatrick's
automobile insurance policy, issued by Aetna.
Aetna denied coverage, arguing that Kilpatrick had waived UM
coverage. Butts sued Aetna, but the court agreed that Kilpatrick
had waived UM coverage and granted Aetna summary judgment. The
court found that a valid waiver had been executed by Max Corley,
who, although not an employee of Kilpatrick, had been granted
implied actual authority to waive UM coverage on Kilpatrick's
behalf.
We review grants of summary judgment de novo. Knight v. U.S.
*
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circumstances set forth in 5TH CIR. R. 47.5.4.
2
Fidelity & Guar. Ins. Co., 65 F.3d 34, 36 (5th Cir. 1995). All
facts must be viewed in the light most favorable to the non-movant
and all reasonable inferences drawn in his favor. Texas v.
Thompson, 70 F.3d 390, 392 (5th Cir. 1995). The parties agree that
Louisiana law governs this diversity case.
II.
The central issue is whether there is a disputed material fact
concerning Corley's authority to waive UM coverage on behalf of
Kilpatrick. We conclude that no material facts regarding this
issue are in dispute and that the district court properly granted
summary judgment.
A.
In Louisiana, UM coverage is included in every liability
policy unless it is rejected “clearly, unambiguously, and
unmistakably.” Henson v. Safeco Ins. Cos., 585 So. 2d 534, 538
(La. 1991). Both sides agree that the waiver language was plain
and unambiguous and that Corley knowingly signed the waiver. The
disputed question is whether Corley enjoyed the authority to
execute a waiver that is binding on Kilpatrick.
Under Louisiana law, one may bind a corporation if he has
implied actual authority to do so. Louisiana courts have
recognized that an agency relationship may be created by
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implication when
from the nature of the principal's business and the
position of the agent within that business, the agent is
deemed to have permission from the principal to undertake
certain acts which are reasonably related to the agent's
position and which are reasonable and necessary con-
comitants of the agent's express authorization. Implied
authority connotes permission from the principal for the
agent to act, though that permission is not expressly set
forth orally or in writing. Generally, one should look
from the viewpoint of the principal and the agent to
determine whether the agent has implied authority.
AAA Tire & Export, Inc. v. Big Chief Truck Lines, Inc., 385 So. 2d
426, 429 (La. App. 1st Cir. 1980). Written documents, such as a
contract or corporate minutes, are not necessary to prove agency,
nor is it necessary that the board of directors expressly authorize
the agent to act for the corporation. Agency may be established
through proof of a course of business or through proof that the
board of directors knew of, or acquiesced in, the agent's authority
and actions. Karam v. Travelers Ins. Co., 813 F.2d 751, 754 (5th
Cir. 1987) (quoting 2 W. FLETCHER, CYCLOPEDIA OF THE LAW OF PRIVATE
CORPORATIONS § 444, at 346 (rev. perm. ed. 1982)).
B.
Corley is not Kilpatrick's employee. He is, however, the vice
president of the Rose-Neath Funeral Home (“Rose-Neath”), a company
that is commonly managed with Kilpatrick. Virginia Shehee is the
link between the two businesses, serving as chief executive officer
and president of both.
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Aetna argues that Corley was an authorized agent of Kilpatrick
because Shehee orally instructed Corley to waive UM coverage on
behalf of Kilpatrick and because Corley had routinely signed
insurance policies for Kilpatrick. Shehee testified that Corley
had “handled the insurance” for both Kilpatrick and Rose-Neath for
at least a dozen years. In his deposition, Corley corroborated
Shehee's understanding. Roughly a year after Corley signed the
waiver, the Kilpatrick shareholders passed a resolution providing
that “all acts of Officers and Directors of Kilpatrick Life
Insurance Company, or any other designated individual, in handling
the affairs, investments, and contributions of said Corporation
since the last Annual Meeting of Shareholders are hereby ratified
and approved.”
It is undisputed that Corley regularly signed insurance
policies on behalf of Kilpatrick with Shehee's permission. It is
undisputed that both Shehee and Corley believed that he had the
authority to continue this longstanding practice when he signed the
waiver at issue here. That Corley executed a binding waiver is
further supported by the shareholders' subsequent ratification of
his actions. Despite Butts's argument that a dispute exists
regarding Shehee's express grant of authority,1 we find nothing in
1
Butts rebuts Aetna's claim that no disputed material facts exist by
pointing to the testimony of Crystal Baer, an Aetna employee. Baer testified
that Shehee “was not sitting” at the meeting where Shehee says she granted Corley
express authority to waive coverage. Butts argues that the district court
improperly accepted Aetna's facts when it erroneously concluded that Butts failed
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the record to contradict Aetna's claim that Corley enjoyed implied
actual authority to waive UM coverage on Kilpatrick's behalf.
Accordingly, the summary judgment is AFFIRMED.
1
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timely to file her separate statement of disputed facts. Because we conclude
that even given Baer's testimonySSand other facts Butts says were wrongly
excludedSSthere exists no disputed material fact concerning Corley's implied
authority, we see no need to revisit the question of timeliness.
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