IDS Property Casualty Ins v. Carrie Meeks , 537 F. App'x 513 ( 2013 )

Case: 12-60605 Document: 00512327089 Page: 1 Date Filed: 07/31/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 31, 2013
No. 12-60605
Summary Calendar Lyle W. Cayce
Clerk
IDS PROPERTY CASUALTY INSURANCE COMPANY,
Plaintiff–Appellant,
versus
CARRIE MEEKS,
Defendant–
Cross–Defendant–
Appellee,
versus
MISSISSIPPI FARM BUREAU CASUALTY INSURANCE COMPANY,
Defendant–
Cross-Claimant–
Appellant.
Appeals from the United States District Court
for the Southern District of Mississippi
USDC No. 3:09-CV-697
Case: 12-60605 Document: 00512327089 Page: 2 Date Filed: 07/31/2013
No. 12-60605
Before SMITH, PRADO, and HIGGINSON, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Carrie Meeks filed insurance claims with two companies, IDS Property
Casualty Insurance Company (“IDS”) and Mississippi Farm Bureau Casualty
Insurance Company (“Farm Bureau”), without telling either of her policy with
the other. IDS and Farm Bureau sought a judgment declaring, as relevant
here, that they were entitled to recover money paid to Meeks because she had
violated her policies’ concealment clauses, rendering the policies void. The
companies appeal a mixed judgment based on a jury verdict. We amend the
judgment and affirm it as amended.
I.
In 2009, an oak tree crashed onto Meeks’s home during a windstorm.
Meeks had the tree removed, covered the hole with a tarp, and reported the
damage to IDS and Farm Bureau but failed to inform either company of her
policy with the other. Both companies began their investigations on April 6.
It was not until September 28 that Meeks told Farm Bureau about the
IDS policy and not until October 7 that she informed IDS of the Farm Bureau
policy. The companies learned of the existence of each other’s policies by other
means in late July, after they had paid Meeks $11,536.19 in duplicate
payments for food spoilage, hotel bills, and other expenses. All told, IDS paid
Meeks $68,531, a portion of which was paid to Chase Home Finance (“Chase”),
her mortgagee. Farm Bureau paid Meeks $34,681.48, some of which was paid
to Chase.
*
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 R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR.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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Meeks’s policy with IDS contains a “concealment clause” that states,
“This entire policy is void if an insured person has intentionally concealed or
misrepresented any material fact or circumstance relating to this insurance,
or acted fraudulently or made false statements relating to this insurance.”
Similarly, the Farm Bureau policy’s concealment clause states, “This policy is
void in any case of fraud by you as it relates to the policy at any time. It is also
void if any ‘insured’ intentionally conceals or misrepresents a material fact”
concerning the policy or a claim thereunder.
II.
IDS asked for a declaratory judgment against Meeks and Farm Bureau,
arguing that it had fulfilled its obligations to Meeks; Farm Bureau filed a coun-
terclaim against IDS and a crossclaim against Meeks. After a four-day trial,
the jury found that IDS and Farm Bureau owed no further obligations under
their respective policies other than $24,224.46, which had been paid to Chase.
The jury also returned a verdict in favor of Meeks but assessed her additional
damages at $0.00 and further found that she had violated the concealment
clauses.
At the close of trial, the companies moved for a declaration that the poli-
cies were void as a matter of law, so Meeks was obligated to reimburse them
the amounts paid to her before they knew her home was doubly insured.
Specifically, IDS and Farm Bureau requested an order declaring that Meeks
was obligated to repay IDS $52,912.39 plus costs and Farm Bureau $26,611
plus costs. The court entered judgment “in favor of IDS and Farm Bureau on
their claims and cross-claims and that Meeks take nothing” and pay costs.
Because the judgment said nothing explicitly about the duplicate pay-
ments and did not declare the policies void, the companies moved for an
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amended judgment. Following a hearing, the court amended, awarding IDS
and Farm Bureau $11,536.19SSthe amount of the duplicate paymentsSSfrom
Meeks. The amended judgment did not declare the policies void or order
Meeks to reimburse the companies, who therefore appeal both the judgment
and the refusal to enjoin Meeks from proceeding in a new and separate, but
substantively identical, state-court lawsuit filed after the federal jury trial.
III.
We review for abuse of discretion a decision to amend a judgment. Sw.
Bell Tel. Co. v. City of El Paso, 346 F.3d 541, 549 & n.26 (5th Cir. 2003). A
motion to amend “must clearly establish either a manifest error of law or fact
or must present newly discovered evidence.” Simon v. United States, 891 F.2d
1154, 1159 (5th Cir. 1990). “A district court abuses its discretion if it bases its
decision on an erroneous view of the law or on a clearly erroneous assessment
of the evidence.” Ross v. Marshall, 426 F.3d 745, 763 (5th Cir. 2005) (internal
quotation marks and citation omitted). We also review for abuse of discretion
a refusal to issue an injunction. Moore v. State Farm Fire & Cas. Co., 556 F.3d
264, 269 (5th Cir. 2009).
IV.
IDS and Farm Bureau maintain that because the jury found that Meeks
had violated the concealment clauses, the policies are void as a matter of
Mississippi law. “The interpretation of an insurance policy is a question of law,
not one of fact.” Noxubee Cnty. Sch. Dist. v. United Nat’l Ins. Co., 883 So. 2d
1159, 1165 (Miss. 2004). “[U]nder Mississippi law, when the words of an
insurance policy are plain and unambiguous, the court will afford them their
plain, ordinary meaning and will apply them as written.” Id.
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The plain and unambiguous language of each policy provides that it is
“void” if the insured intentionally conceals or misrepresents a material fact.
In Mississippi, “[i]t is well established that [concealment] clauses . . . are
reasonable and valid, and are to be given a reasonable interpretation. If
breached, the insurer would be deprived of a valuable right for which it
contracted.” Taylor v. Fireman’s Fund Ins. Co., 306 So. 2d 638, 644 (Miss.
1974).1
The jury was properly instructed that, for a policy to be voided under a
concealment clause, the insured’s statements, representations, misrepresenta-
tions, or omissions must have been false, material, and knowingly and wilfully
made. See Clark v. Aetna Cas. & Sur. Co., 778 F.2d 242, 245 (5th Cir. 1985).
The jury found that Meeks had violated the concealment clauses in both
policies, which, as a matter of Mississippi law, rendered the policies void as to
the windstorm loss. Therefore, because IDS and Farm Bureau were under no
obligation to pay Meeks for her losses, she is obligated to reimburse IDS
$52,912.39 and Farm Bureau $26,611.2
Meeks does not contend that the jury’s finding was clearly erroneous,
that concealment clauses are invalid or unenforceable under Mississippi law,
or that the plain and unambiguous language of the policies does not render
them void if the insured conceals a material fact. Instead, she asserts that the
verdict was ambiguous, requiring a new trial. The district court denied
Meeks’s motion for a new trial, and she did not appeal or cross-appeal, so she
1
See also Watkins v. Cont’l Ins. Cos., 690 F.2d 449, 451 n.2 (5th Cir. 1982) (noting that
concealment clauses are “far from new”).
2
Because this obligation includes all duplicate payments made by IDS and Farm Bureau,
a separate award of $11,536.19, included in the amended judgment, is unnecessary and would
be duplicative.
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“cannot attack the district court’s decree with a view either to enlarging [her]
own rights thereunder or lessening the rights of [her] adversary.” Arvie v.
Broussard, 42 F.3d 249, 250 (5th Cir. 1994). This court cannot, therefore, grant
a new trial.
Although we cannot order a new trial, “it is an elementary proposition,
and the supporting cases too numerous to cite, that this court may affirm the
district court’s judgment on any grounds supported by the record.” Morales v.
Thaler, 714 F.3d 295, 302 n.3 (5th Cir. 2013), petition for cert. filed (U.S. May
10, 2013) (No. 13-59). Meeks’s arguments about ambiguity in the verdict are
therefore not irrelevant; she asserts that the district court did not declare the
policies void, because it was attempting to reconcile the verdict with what it
believed to be the jury’s intent.
“The Seventh Amendment fashions [a] federal policy favoring jury deci-
sions of disputed fact questions. Thus, the courts must attempt to reconcile the
jury’s findings, by exegesis if necessary.” Carr v. Wal-Mart Stores, Inc., 312
F.3d 667, 672 (5th Cir. 2002) (internal quotation marks and citations omitted,
alteration in original). If the court was attempting to reconcile the jury’s
findings and conform the judgment to those findings by refusing to declare the
policies void, it was unnecessary to do so.
There is no inconsistency between the jury’s finding that IDS and Farm
Bureau “owe[d] no further obligations under their respective [p]olicies other
than $24,224.46” and finding that Meeks violated the concealment clauses. The
former finding did not require the jury to infer, contra Meeks, that coverage
under the policies was valid. IDS and Farm Bureau paid that sum not to
Meeks but to Chase. Each policy contained a “union” or “standard mortgage
clause” incorporated into every fire insurance policy pursuant to Mississippi
Code Annotated § 83-13-9. Such clauses create “a separate contract of
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insurance between the mortgagee and the insurer,” Lumbermens Mut. Cas. Co.
v. Thomas, 555 So. 2d 67, 69 (Miss. 1989), so “the mortgagee is entitled to the
proceeds of the policy, and the mortgagee’s right to recover will not be
invalidated by the act or negligence of the mortgagor of the insured’s property,”
Hartford Fire Ins. Co. v. Assocs. Capital Corp., 313 So. 2d 404, 407 (Miss. 1975).
That is to say, Chase’s right to recover on the policies was not invalidated by
Meeks’s concealment of material information. The jury’s finding that IDS and
Farm Bureau owed no further obligations, except what they paid to Chase, is
therefore not only consistent with but supports the jury’s finding that Meeks
violated the concealment clauses.
Likewise, there is no inconsistency between the jury’s finding “for the [sic]
Carrie Meeks in the amount of $0.00” and finding that she had violated the con-
cealment clauses. The former finding was the jury’s response to a question
entirely separate from potential concealment, namely, whether Meeks had
proven by preponderance of the evidence that additional damage was caused
by the windstorm, rather than by her neglect, and, if so, how much. The jury’s
answerSSthat additional damage, albeit $0.00 in amount, was caused by the
windstorm and not Meeks’s neglectSSis not inconsistent with the finding that
she had violated the concealment clause. Because there was no inconsistency
in the jury’s findings, there was no reason for the district court to refrain from
declaring the insurance policies void under Mississippi law based on the jury’s
finding that Meeks had violated the concealment clauses.
V.
“A court of the United States may not grant an injunction to stay
proceedings in a State court except as expressly authorized by Act of Congress,
or where necessary in aid of its jurisdiction, or to protect or effectuate its
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judgments.” 28 U.S.C. § 2283. “The relitigation exception is intended to
prevent state litigation of an issue that previously was presented to and
decided by the federal court.” Moore, 556 F.3d at 273 (internal quotation marks
and citation omitted). For the relitigation exception to apply,
(1) parties in the later action must be identical to or in privity with
the parties in the previous action; (2) judgment in the prior action
must have been rendered by a court of competent jurisdiction;
(3) the prior action must have concluded with a final judgment on
the merits; and (4) the same claim or cause of action must be
involved in both suits.
Id. IDS and Farm Bureau assert that, because Meeks’s state-court suit meets
all four parts of the relitigation test, the district court abused its authority by
failing to enjoin Meeks from proceeding.
The conclusion does not follow from the premise. Assuming, arguendo,
that this case falls squarely within the parameters of the relitigation exception,
we cannot conclude, for that reason alone, that the court abused its discretion.
“Deciding whether and how prior litigation has preclusive effect is usually the
bailiwick of the second court . . . . So issuing an injunction under the
relitigation exception is resorting to heavy artillery. For that reason, every
benefit of the doubt goes toward the state court.” Smith v. Bayer Corp., 131
S. Ct. 2368, 2375–76 (2011) (internal citation omitted). The insurance
companies do not cite a case holding that a court abused its discretion merely
by declining to exercise its authority to enjoin state-court proceedings. In light
of the Anti-Injunction Act’s “core message . . . of respect for state courts,” id. at
2375, we cannot say that the district court abused its discretion by trusting the
state court to apply the principle of res judicata.
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VI.
Based on the jury’s finding that Meeks violated the concealment clauses,
the policies are void as a matter of Mississippi law. IDS and Farm Bureau
were under no obligation to pay $52,912.39 and $26,611, respectively, and are
entitled to be reimbursed those amounts. We therefore AMEND the judgment
to declare Meeks’s insurance policies with IDS and Farm Bureau void as to the
2009 windstorm and to award $52,912.39 to IDS and $26,611 to Farm Bureau.
Those amounts replace the $11,536.19 awarded by the district court. We make
no other alterations to the judgment appealed from.3 That judgment, as
amended, is AFFIRMED.
3
To the extent the judgment in favor of Meeks is inconsistent with the judgment as
amended on appeal, we VACATE the judgment in favor of Meeks.
9