Dale Kennett v. USAA General Indemnity Company ( 2020 )

Case: 19-30656 Document: 00515390486 Page: 1 Date Filed: 04/21/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 21, 2020
No. 19-30656 Lyle W. Cayce
Clerk
DALE A. KENNETT,
Plaintiff - Appellant
v.
USAA GENERAL INDEMNITY COMPANY,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC No. 2:16-CV-14765
Before JONES, ELROD, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:*
Dale Kennett sued USAA General Indemnity Company (“USAA”),
claiming that it wrongfully denied him coverage for the loss of his property,
located at 705 Virginia Avenue in Bogalusa, Louisiana (“the house”), in a fire.
The district court held a three-day jury trial, and seven jurors returned a
unanimous verdict in favor of USAA. The jury found that the damage was not
covered by Kennett’s USAA policy because the house was not his “residence
* 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
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premises” at the time of the fire. Kennett now appeals the district court’s denial
of his renewed motion for judgment as a matter of law and his alternative
motion for a new trial. Because the jury could reasonably have found that
Kennett did not reside at the house when the fire occurred, we AFFIRM.
I
On March 28, 2016, the house was damaged by fire that both parties
agree was the result of arson. Kennett had a USAA homeowner’s insurance
policy that was in effect. Relevantly, the policy provides $590,000 in “Dwelling
Protection” for “[t]he dwelling on the ‘residence premises’ shown in the
Declarations, including structures attached to the dwelling.” The policy defines
“residence premises” as:
1. The one family dwelling, other structures, and grounds; or
2. That part of any other building;
Where you reside and which is shown as the “residence premises”
in the Declarations.
“Residence premises” also means a two, family dwelling where you
reside in at least one of the family units and which is shown as the
“residence premises” in the Declarations.
The declarations list “DALE KENNETT 705 VIRGINIA AVE BOGALUSA,
WASHINGTON, LA 70427-3344” as the “Named Insured and Residence
Premises.”
Additionally, the policy provides for total loss dwelling coverage “[i]n the
event that your dwelling is completely destroyed by Fire or Windstorm to the
extent that it has lost its identity and specific character as a building.” The
policy does not provide coverage “for damage consisting of or caused directly or
indirectly by,” inter alia, “vandalism and malicious mischief . . . and any
ensuing loss caused by any intentional and wrongful act committed in the
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course of the vandalism or malicious mischief, if the dwelling has been vacant
for more than 180 consecutive days immediately before the loss.”
Kennett sought payment under this policy, and USAA rejected his claim.
As a result, Kennett brought suit. He claimed that USAA denied his claim
wrongfully and in bad faith and that the damage to his house constituted a
total loss. In defense, USAA asserted that the house was not Kennett’s
“residence premises” at the time of the fire, the house had been vacant for at
least 180 consecutive days prior to the fire, and Kennett intentionally caused
or conspired to cause the fire. The district court held a jury trial on February
4–6, 2019.
At the close of evidence, Kennett moved for judgment as a matter of law
on three issues: (1) the house was his “residence premises” at the time of the
fire, (2) the house had not been vacant for at least 180 consecutive days prior
to the fire, and (3) he did not intentionally cause or conspire to cause the fire.
The district court denied the motions, and the jury returned a verdict in favor
of USAA. Because the jury found that the house was not Kennett’s “residence
premises” at the time of the fire, it did not reach the other issues in the case.
Kennett renewed his motion for judgment as a matter of law and
alternatively moved for a new trial. The district court denied both motions.
Relevantly, the district court found that (1) Kennett failed to preserve any
argument that the insurance policy was ambiguous in its use of the term
“residence premises,” (2) there was sufficient evidence to support the jury’s
finding that the house was not Kennett’s “residence premises” at the time of
the fire, (3) the verdict was not against the great weight of the evidence, and
(4) it was not necessary to reach Kennett’s claims regarding the 180-day
vacancy and the cause of the fire. Kennett filed a timely notice of appeal.
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II
We review the denial of Kennett’s Rule 50(b) motion for judgment as a
matter of law de novo, “but our standard of review with respect to a jury verdict
is especially deferential.” Apache Deepwater, L.L.C. v. W&T Offshore, Inc., 930
F.3d 647, 652–53 (5th Cir. 2019) (citation omitted). A party is entitled to
judgment as a matter of law if no reasonable jury would have had a legally
sufficient evidentiary basis to reach a different outcome. Id. at 653. In
evaluating the evidence, “[w]e credit the nonmoving party’s evidence and
disregard all evidence favorable to the moving party that the jury is not
required to believe.” Janvey v. Romero, 817 F.3d 184, 187 (5th Cir. 2016)
(quoting Carroll v. Ellington, 800 F.3d 154, 168 (5th Cir. 2015)).
The district court may grant a Rule 59 motion for a new trial for a
number of reasons, including that the verdict is against the weight of the
evidence. Smith v. Transworld Drilling Co., 773 F.2d 610, 612–13 (5th Cir.
1985). We review the district court’s decision only for an abuse of discretion.
Apache Deepwater, L.L.C., 930 F.3d at 653. Here too, we view the evidence in
the light most favorable to the jury verdict. Wellogix, Inc. v. Accenture, L.L.P.,
716 F.3d 867, 881 (5th Cir. 2013) (internal quotation marks and citation
omitted).
III
First, we address Kennett’s arguments that no reasonable jury could
have found that the house was not his “residence premises” at the time of the
fire. Because we disagree, we need not address Kennett’s additional arguments
regarding the 180-day vacancy and the cause of the fire.
At trial, Kennett testified that before he was incarcerated in October of
2015, he was staying in Gulfport, Mississippi with someone named Jake Casey.
Kennett admitted that during his earlier deposition, he testified that he
“moved in” with Casey in August of 2015, seven months before the fire. Kennett
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also testified that he helped Casey pay cable, electricity, and food bills. Kennett
further testified that he was incarcerated from October 13, 2015 through
February 23, 2016. Kennett testified that after he was released from custody,
he stayed at the house “when [he] needed to go back and forth to do [his] work.”
Kennett testified that there was no water service at the house when he was
released from custody, and he also admitted that at his earlier deposition, he
testified that water service was never turned back on prior to the fire. Finally,
Kennett admitted that at his earlier deposition, he testified that there was “no
set date” for him to return to the house.
Kennett owned a number of other properties near the house. At trial, one
of Kennett’s lessees and his property manager, Albert Jones, also testified. He
said that he was “one hundred percent certain” that no one lived at the house
between the time he began renting property from Kennett around September
2015 and the time of the fire. Finally, Christian Mulkey, USAA’s fire-origin-
and-cause expert, testified that he did not believe anyone had been living at
the house prior to the fire because the contents of the premises showed no signs
of residency. On the left side of the house, Mulkey observed stored contents
and construction materials. On the right side of the house, he discovered that
the only furnished bedroom contained the remains of an empty chest of
drawers and an empty dresser. Viewing this evidence in the light most
favorable to the verdict, it was reasonable for the jury to find that Kennett was
not residing at the house at the time of the fire, and consequentially, that the
house was not Kennett’s “residence premises.”
Kennett makes two arguments to the contrary. First, Kennett argues
that because the house was listed as the “residence premises” on the
declarations page of the insurance policy, the jury was compelled to find that
it was Kennett’s “residence premises,” regardless of whether he was actually
residing there at the time of the fire. At best, he argues, the policy is ambiguous
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and should be interpreted to effect rather than deny coverage. Kennett’s
interpretation appears to conflict with the plain language of the policy, which
defines “residence premises” as “where you reside and which is shown as the
‘residence premises’ in the Declarations” (emphasis added). Moreover,
Kennett’s briefing does not address the district court’s finding that he failed to
adequately raise this argument when he made his initial motion for judgment
as a matter of law. Review of that decision is therefore waived. See, e.g.,
Sanders v. Unum Life Ins. Co. of Am., 553 F.3d 922, 926 (5th Cir. 2008);
Patterson v. Mobil Oil Co., 335 F.3d 476, 483 n.5 (5th Cir. 2003).
Next, Kennett argues that the jury was compelled to find that he was
residing at the house at the time of the fire, because, under Louisiana law,
residency “is a matter of intention and choice rather than one of location.” For
this proposition, Kennett cites two Louisiana Supreme Court decisions—
Gedward v. Sonnier, 728 So. 2d 1265 (La. 1999), and Bearden v. Rucker, 437
So. 2d 1116 (La. 1983). In both opinions, the court interpreted the term
“residency” in an insurance contract, and it stressed the importance of
“intention and choice” over “location.” Gedward, 728 So. 2d at 1270 (finding
that a child who primarily resided with his mother was a “resident” of his
father’s home); Bearden, 437 So. 2d at 1121 (“[T]he question of whether a
spouse is a ‘resident of the same household’ as the spouse named in the policy
. . . is not solely dependent upon whether the couple is living under the same
roof.”). The court in Gedward also stressed that “[w]hether a person is or is not
a resident of a particular place is a question of law and fact and is to be
determined from the facts of each particular case.” 728 So. 2d at 1270.
We considered the meaning of “reside” under Louisiana law in Korbel v.
Lexington Ins. Co., 308 F. App’x 800 (5th Cir. 2009). There, the insured’s newly
purchased house in New Orleans, Louisiana was damaged during Hurricane
Katrina while the insured was in the process of conducting extensive
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renovations. Korbel, 308 F. App’x at 801. The insurance policy at issue covered
additional living expenses if a loss made the “part of the ‘residence premises’
where you reside not fit to live in.” Id. at 805. Using language similar to that
of the policy at issue here, the policy defined “residence premises” as:
a. The one family dwelling, other structures, and grounds; or
b. That part of any other building;
where you reside and which is shown as the “residence premises”
in the Declarations.
Id.
We noted that, under Louisiana law, “[w]ords in an insurance contract
are to be construed using their plain, ordinary and generally prevailing
meaning.” Id. (quoting Cadwallader v. Allstate Ins. Co., 848 So. 2d 577, 580
(La. 2003)). The generally prevailing meaning of “reside,” according to the 1989
Oxford English Dictionary, was “to dwell permanently or for a considerable
time, to have one’s settled or usual abode, to live, in or at a particular place.”
Id. Applying that definition to the facts of the case, we upheld the district
court’s grant of summary judgment for the insurer, finding that “there is no
question that [the insured] did not reside at the house.” Id. at 806. “[A]lthough
[the insured] spent a great deal of time working on the house and intended it
to be his residence in the future,” he did not yet reside there because he only
sometimes slept at the house, two-thirds of the house was gutted such that it
lacked a finished kitchen and bathroom and received electricity via a
temporary pole, there was only a minimal amount of furniture at the house,
and he did not engage in leisure activities at the house. Id. at 805.
Based in part on that decision, the district court in this case instructed
the jury:
The words of a contract must be given the meaning which they
generally have in everyday use. If a word is a term of art or has a
technical meaning within the context of the contract, you should
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give it that special meaning. If a word may have several meanings,
you should interpret it as having the meaning which is most in line
with the object or objective of the contract.
The district court then provided the jury with the definition of “residence
premises” that appears in the contract and informed the jury that “[a]s
generally understood, the word reside means to dwell permanently or for a
considerable time, to have one’s settled or usual home in or at a particular
place.” Kennett “takes no issue” with these instructions.
Based on these instructions and the facts discussed above, it was
reasonable for the jury to conclude that the house was not Kennett’s
“residence,” and therefore “residence premises,” at the time of the fire. The
district court did not prevent the jury from considering Kennett’s intentions
with regards to living at the house, and Kennett does not argue that the jury
should have been instructed to prioritize such intent. As the finder of fact, the
jury was free to discredit Kennett’s testimony about his intention to have the
house remain his primary residence at all times. Contrary evidence—including
the lack of running water at the house, Jones’s testimony that no one was living
at the house, and Mulkey’s testimony that the remains of the house showed no
signs of residency—was presented from which the jury was also free to
conclude, and apparently did conclude, that Kennett was not residing at the
house at the time of the fire. Because there was a reasonable evidentiary basis
for the jury’s verdict, the district court did not err in denying Kennett’s
renewed motion for judgment as a matter of law. The district court also did not
abuse its discretion by failing to order a new trial. Therefore, we AFFIRM, and
we need not reach Kennett’s additional arguments regarding the 180-day
vacancy and the cause of the fire.
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IV
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
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