Copes v. American Central Insurance , 85 F. App'x 391 ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS January 15, 2004
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
_______________________
No. 03-30664
Summary Calendar
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ARTHUR COPES, ORTHOTIST, INC.,
Plaintiff-Appellant,
versus
AMERICAN CENTRAL INSURANCE COMPANY,
Defendant-Appellee.
________________________________________________________________
Appeal from the United States District Court
for the Middle District of Louisiana
Civil Docket No. 01-CV-128-A
_________________________________________________________________
Before JONES, BENAVIDES, and CLEMENT, Circuit Judges.
PER CURIAM:*
Arthur Copes, Orthotist, Inc. (“Plaintiff”) appeals the
district court’s grant of summary judgment in favor of defendant
American Central Insurance Company. The instant appeal revolves
around a dispute over insurance coverage for the named plaintiff.
*
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this opinion should not be published and is not precedent except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.
Because we agree that the insurance policy did not cover all
operations conducted at the insured premises, we affirm.
Arthur Copes, Ph.D., currently operates various corporate
entities for the treatment of scoliosis patients. In 1998, Copes
took out an insurance policy with American Central which named
“Dr. Arthur Copes Office,” a corporation, as the named insured.
Eventually, the policy insured the premises at 8108 Picardy Avenue,
Baton Rouge, Louisiana, which the policy’s declarations page
described as a doctor’s office. In February 2000, a fire at the
insured premises caused property damage and a temporary suspension
of business operations. Pursuant to its policy, American Central
paid the insured, Dr. Arthur Copes Office, sums relating to
property damage, business losses and increased expenses related to
the interruption of patient treatments through the office.
However, American Central refused to make additional payments and
the instant suit followed.
American Central moved for summary judgment on two
grounds: (1) the plaintiff, Arthur Copes, Orthotist, Inc., was not
the named insured on the policy, and (2) the plaintiff sought
payment for business operations beyond the terms of the policy.
The district court granted summary judgment in favor of American
Central, finding that Arthur Copes, Orthotist, Inc. had no
insurable interest in the policy and that the policy’s terms did
not extend to business activities beyond those regularly occurring
in a doctor’s office.
2
We review a district court’s grant of summary judgment de
novo. Principal Health Care of La., Inc. v. Lewer Agency, Inc.,
38 F.3d 240, 242 (5th Cir. 1994). Summary judgment is only proper
if the pleadings, depositions, answers to interrogatories, and
admissions on file together with the affidavits indicate that no
genuine issue of material fact exists and the moving party is
entitled to judgment as a matter of law. Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). Because the interpretation of an
insurance policy is a question of law, we review the district
court’s determination de novo. Principal Health Care, 38 F.3d at
242.
It is undisputed that when applying for the American
Central policy, the plaintiff provided the agent with a former
policy listing “Dr. Arthur Copes Office” as the named insured. The
plaintiff argues that no legal entity called “Dr. Arthur Copes
Office, Inc.” ever existed. However, the plaintiff does not
dispute that the checking account for the office was drawn in the
name of “Dr. Arthur Copes, Inc.” In addition, Copes controlled
various corporate entities other than “Arthur Copes, Orthotist,
Inc.,” including Copes Clinics, Inc., Copes Enterprises, Inc.,
Copes Foundation, Copes Laboratories, Inc., and STRS (Scoliosis
Treatment Recovery System) and STRC (Scoliosis Treatment Recovery
Centers). Each corporate entity listed 8108 Picardy Avenue as its
mailing address.
3
The plaintiff admits that three distinct business
activities take place on the Picardy Avenue premises: (1) treatment
of scoliosis patients, (2) manufacturing and production of custom
scoliosis braces for in-state and out-of-state patients, and
(3) physician training, or a residency program, to prepare doctors
to open satellite clinics outside of Louisiana. Indeed, at the
time the fire occurred, Dr. Copes’ entities included a Tampa
office, a San Diego office, and a Houston office. However, the
Baton Rouge office was the “hub” of the operation and all income
was directed to that office. At the time the American Central
policy was executed, neither the company nor its agent was aware of
the multiple corporate entities or business activities taking place
at the insured location.
An insurance policy is a contract and is subject to the
general rules of contract interpretation. Clements v. Folse ex
rel. Succession of Clements, 830 So. 2d 307, 312 (La. Ct. App.
2002). Courts must endeavor to discern the common intent of the
insurer and insured. Id. To this end, courts must look to the
words of the insurance contract and infuse them with their
generally prevailing meaning. Id. The insurance contract must be
enforced as written when the words are clear and explicit and lead
to no absurd results. Id.
The insurance policy at issue here covers the actual loss
of business income due to the necessary suspension of the insured’s
“operations.” In addition, “operations” is defined by the policy
4
as “business activities occurring at the described premises.” The
policy’s declarations page describes the insured premises as a
doctor’s office. The generally prevailing meaning of “doctor’s
office” includes neither prosthetic manufacturing facilities for
patients not treated at the office nor residency training programs.
In addition, to the extent that the covered premises served as a
hub for out-of-state operations, that lost income would not be
covered by the policy’s plain terms.1 Thus, the only business
losses to which the plaintiff is entitled flow from the necessary
suspension of the treatment of scoliosis patients at the Baton
Rouge location. The plaintiff has already received compensation
for such loss.2
For the foregoing reasons, the judgment of the district
court is AFFIRMED.
1
The only relevant physical location covered by the policy is
8108 Picardy Avenue in Baton Rouge.
2
The district court also held that, because Arthur Copes,
Orthotist, Inc. was not the named insured on the policy, the
plaintiff could not recover under the policy. We do not reach this
issue because we resolve the case on the policy interpretation
ground. It is likely, however, that, to expand the policy’s
coverage to include the myriad business interests of Arthur Copes,
doing business as Arthur Copes, Orthotist, Inc., would be to assign
to the defendant risks it did not initially foresee when issuing
the policy to a doctor’s office. This result is untenable. See,
e.g., Bonadona v. Guccione, 362 So. 2d 740 (La. 1978) (noting that
an insurance policy may not be reformed when the risks assumed
would be substantially greater or different in nature).
5